BROCKTON, Mass.--(BUSINESS WIRE)--HarborOne Bancorp, Inc. (the “Company”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $2.3 million, or $0.07 per basic and diluted share, for the first quarter of 2018, compared to $1.6 million, or $0.05 per basic and diluted share, for the prior quarter and net income of $2.7 million, or $0.09 per basic and diluted share, for the same quarter last year.
Selected highlights for the first quarter of 2018 include:
- Net interest margin increased to 3.26% from 3.07% for the prior quarter and 2.99% for the first quarter of 2017.
- Announcement of an agreement to acquire Coastway Bancorp, Inc. (“Coastway”) in an all cash transaction valued at approximately $125.6 million.
- Total commercial loans (including commercial construction) grew by 6% in the first quarter.
- Total deposits grew by 6% in the first quarter and amounted to $2.13 billion at March 31, 2018.
Additionally, effective April 3, 2018, the Bank’s wholly owned subsidiary, Merrimack Mortgage Company, LLC, became HarborOne Mortgage, LLC (“HarborOne Mortgage”). HarborOne Mortgage consolidates the Bank’s residential mortgage lending division with the legacy Merrimack Mortgage Company, LLC.
The increase in net income from the prior quarter primarily reflects a $692,000 increase in net interest income, a $2.1 million decrease in noninterest expense and a $726,000 decrease in income tax provision partially offset by a $2.8 million decrease in noninterest income.
The Coastway transaction is expected to close in the second half of 2018 and is subject to customary closing conditions, including the approval of the stockholders of Coastway and required regulatory approvals.
James W. Blake, President and CEO stated, “We are excited as we start 2018, looking forward to welcoming the Coastway customers, employees and communities to HarborOne. We anticipate another robust year, despite a challenging residential mortgage market, with a continued focus on organic balance sheet growth and building commercial loan relationships.”
Net Interest Income
The Company’s net interest and dividend
income was $20.1 million for the quarter ended March 31, 2018, up
$692,000, or 3.6%, from $19.4 million for the quarter ended December 31,
2017 and up $2.7 million, or 15.4%, from $17.4 million for the quarter
ended March 31, 2017. The tax-equivalent interest rate spread and net
interest margin were 3.07% and 3.26%, respectively, for the quarter
ended March 31, 2018 compared to 2.90% and 3.07%, respectively, for the
quarter ended December 31, 2017 and 2.83% and 2.99%, respectively, for
the quarter ended March 31, 2017.
The increase in net interest income from the previous quarter reflects an $876,000, or 3.7%, increase in total interest and dividend income and an increase of $184,000, or 4.2% in total interest expense. The increase in interest and dividend income is primarily due to commercial loan growth that provided an increase in average outstanding loans of $57.7 million partially offset by decreases in the average balances of residential real estate and consumer loans. The yield on loans was 4.13% for the quarter ended March 31, 2018 and 3.94% for the quarter ended December 31, 2017. The increase in interest expense is due to an increase in average interest-bearing deposits of $14.4 million with a 10 basis point increase in the cost of those funds offset by a decrease in average FHLB advances of $26.7 million and a 7 basis point decrease in total cost of borrowed funds.
The increase in net interest income over the prior year quarter is primarily due to growth in the Company’s average loan balances to $2.25 billion from $2.11 billion and an increase in the yield on loans to 4.13% from 3.78%, again primarily driven by commercial loan growth as well as higher rates on variable rate loans. Total interest and dividend income increased $3.5 million, or 16.5%, and total interest expense increased $843,000, or 22.7%, over the prior year quarter as a result of rising interest rates.
Noninterest Income
Noninterest income decreased to $11.3
million for the quarter ended March 31, 2018, down $2.8 million, or
19.8%, from the quarter ended December 31, 2017. The decrease is
primarily due to a decrease in mortgage banking income of $1.8 million
as mortgage originations decreased 39.4% from the prior quarter. Changes
in the mortgage servicing rights fair value amounted to a $1.0 million
increase in the first quarter of 2018 compared to a $74,000 decrease in
the fourth quarter of 2017. Also, other income decreased $760,000 as the
prior quarter income included a $1.2 million reversal of contingent
consideration for the HarborOne Mortgage earn out that was settled in
full in the fourth quarter of 2017.
Noninterest income decreased $105,000, or 0.9%, as compared to the quarter ended March 31, 2017. The change in mortgage servicing rights fair value was an increase of $1.5 million, offset by a $1.6 million decrease in other mortgage banking income during the prior year quarter. Compared to the same quarter prior year, mortgage originations by HarborOne Mortgage decreased 13.9% in 2018 primarily as a result of higher residential mortgage interest rates, low housing inventories and reduced refinancing volume.
Noninterest Expense
Noninterest expenses were $27.6 million
for the quarter ended March 31, 2018, a decrease of $2.1 million, or
7.1%, from the quarter ended December 31, 2017 due to decreases in
compensation and benefits of $1.3 million, $490,000 in loan expense and
$538,000 in other expenses. The decrease in compensation and benefits
and loan expenses reflects the decrease in loan production volumes. The
decrease in other expenses primarily reflects a fourth quarter expense
accrual of $925,000 to freeze the director postretirement benefit plan
that was partially offset by additional expenses in the first quarter
related to the acquisition of Coastway.
Noninterest expenses increased $3.2 million, or 13.1%, from the quarter ended March 31, 2017. The increase was primarily due to increases in compensation and benefits of $1.4 million, marketing of $517,000, and other expenses of $962,000. The compensation and benefits and other expense increase reflects expenses related to the management and Board equity plans that were established in August 2017. The first quarter of 2018 includes $974,000 in compensation and benefits related to the management’s equity plan expense and $392,000 in other expenses related to the Board’s equity plan. There were no such expenses in the first quarter of 2017. Also contributing to the increase in other expenses was $486,000 in expenses related to the Coastway acquisition.
Income Tax Provision
The effective tax rate was 26.5% for
the quarter ended March 31, 2018, 49.2% for the quarter ended December
31, 2017 and 35.1% for the quarter ended March 31, 2017. The enactment
of the Tax Cuts and Jobs Act of 2017 resulted in significant changes to
the U.S. tax code, including a reduction in the top corporate income tax
rate from 35% to 21% effective January 1, 2018. As a result of the
reduction in tax rate, the Company revalued its net deferred tax asset
and recorded a one-time additional $243,000 tax provision in the fourth
quarter of 2017 and reduced the effective tax rate in 2018.
Asset Quality
The Company recorded a provision for loan
losses of $808,000 for the quarter ended March 31, 2018, $760,000 for
the quarter ended December 31, 2017 and $265,000 for the quarter ended
March 31, 2017. The provisions in these quarters were primarily due to
commercial loan growth. Changes in the provision for loan losses are
based on management’s assessment of loan portfolio growth and
composition changes, historical charge-off trends, and ongoing
evaluation of credit quality and current economic conditions. The
allowance for loan losses was $18.9 million, or 0.84%, of total loans at
March 31, 2018, compared to $18.5 million, or 0.84%, of total loans, at
December 31, 2017 and $16.9 million, or 0.82%, of total loans at March
31, 2017. Net charge-offs totaled $434,000 for the quarter ended March
31, 2018, or 0.08%, of average loans outstanding on an annualized basis,
compared to $204,000, or 0.04%, for the quarter ended December 31, 2017
and $349,000, or 0.07%, for the quarter ended March 31, 2017.
Nonperforming assets were $17.2 million at March 31, 2018 compared to $18.6 million at December 31, 2017 and $23.5 million at March 31, 2017. Nonperforming assets as a percentage of total assets were 0.63% at March 31, 2018, 0.69% at December 31, 2017 and 0.91% at March 31, 2017. The steady decline reflects the Company’s continued efforts to minimize nonperforming assets through diligent collection efforts, prudent workout arrangements and strong underwriting.
Balance Sheet
Total assets increased $50.7 million, or 1.9%,
to $2.74 billion at March 31, 2018 from $2.68 billion at December 31,
2017. Net loans increased $37.8 million, or 1.7%, to $2.21 billion at
March 31, 2018 from $2.18 billion at December 31, 2017. The net increase
in loans for the three months ended March 31, 2018 was primarily due to
increases of $31.7 million in commercial real estate loans, $16.3
million in construction loans and $1.5 million in commercial and
industrial loans partially offset by a decrease of $4.6 million in
residential real estate loans and $6.2 million in consumer loans. Loans
held for sale decreased $25.3 million, or 42.6%, to $34.1 million at
March 31, 2018 from $59.5 million at December 31, 2017 due to the
decrease in residential mortgage originations.
Total deposits increased $113.5 million, or 5.6%, to $2.13 billion at March 31, 2018 from $2.01 billion at December 31, 2017. Compared to the prior quarter, non-certificate accounts increased $27.5 million, term certificate accounts increased $89.3 million and brokered deposits decreased $3.3 million. The increase in certificate accounts was in part due to certificate promotions during the quarter. Borrowings were $226.4 million at March 31, 2018 and $290.4 million at December 31, 2017.
Total stockholders’ equity was $344.9 million at March 31, 2018 compared to $343.5 million at December 31, 2017 and $332.7 million at March 31, 2017. The tangible common equity to tangible assets ratio was 12.17% at March 31, 2018, 12.35% at December 31, 2017 and 12.50% at March 31, 2017. At March 31, 2018, the Company and the Bank exceed all regulatory capital requirements.
About HarborOne Bancorp, Inc.
HarborOne Bancorp, Inc. is the
holding company for HarborOne Bank, the largest co-operative bank in New
England. HarborOne Bank serves the financial needs of consumers,
businesses, and municipalities throughout Southeastern Massachusetts
through a network of 14 full-service branches, two limited service
branches, a commercial loan office in Providence, Rhode Island, a
residential lending office in Westford, Massachusetts, and 13
free-standing ATMs. The Bank also provides a range of educational
services through “HarborOne U,” with classes on small business,
financial literacy and personal enrichment at two campuses located
adjacent to our Brockton and Mansfield locations. HarborOne Mortgage,
LLC, a subsidiary of HarborOne Bank, is a full-service mortgage lender
with 34 offices in Massachusetts, New Hampshire and Maine, and also does
business in seven additional states.
Forward Looking Statements
Certain statements herein
constitute forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act and are intended to be covered by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such
statements may be identified by words such as “believes,” “will,”
“would,” “expects,” “project,” “may,” “could,” “developments,”
“strategic,” “launching,” “opportunities,” “anticipates,” “estimates,”
“intends,” “plans,” “targets” and similar expressions. These statements
are based upon the current beliefs and expectations of the Company’s
management and are subject to significant risks and uncertainties.
Actual results may differ materially from those set forth in the
forward-looking statements as a result of numerous factors. Factors that
could cause such differences to exist include, but are not limited to,
the Company and Coastway’s ability to achieve the synergies and value
creation contemplated by the proposed acquisition; the Company and
Coastway’s ability to successfully integrate operations in the proposed
acquisition; the effect of the announcement of the proposed acquisition
on the ability of Coastway to maintain relationships with its key
partners, customers and employees, and on its operating business
generally; adverse conditions in the capital and debt markets and the
impact of such conditions on the Company’s business activities; changes
in interest rates; competitive pressures from other financial
institutions; the effects of general economic conditions on a national
basis or in the local markets in which the Company operates, including
changes that adversely affect borrowers’ ability to service and repay
the Company’s loans; changes in the value of securities in the Company’s
investment portfolio; changes in loan default and charge-off rates;
fluctuations in real estate values; the adequacy of loan loss reserves;
decreases in deposit levels necessitating increased borrowing to fund
loans and investments; operational risks including, but not limited to,
cybersecurity, fraud and natural disasters; changes in government
regulation; changes in accounting standards and practices; the risk that
goodwill and intangibles recorded in the Company’s financial statements
will become impaired; demand for loans in the Company’s market area; the
Company’s ability to attract and maintain deposits; risks related to the
implementation of acquisitions, dispositions, and restructurings; the
risk that the Company may not be successful in the implementation of its
business strategy; changes in assumptions used in making such
forward-looking statements and the risk factors described in the Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the
Securities and Exchange Commission (the “SEC”), which are available at
the SEC’s website, www.sec.gov.
Should one or more of these risks materialize or should underlying
beliefs or assumptions prove incorrect, HarborOne Bancorp, Inc.’s actual
results could differ materially from those discussed. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release. The Company
disclaims any obligation to publicly update or revise any
forward-looking statements to reflect changes in underlying assumptions
or factors, new information, future events or other changes, except as
required by law.
Use of Non-GAAP Measures
In addition to results presented in
accordance with generally accepted accounting principles (“GAAP”), this
press release contains certain non-GAAP financial measures. The
Company’s management believes that the supplemental non-GAAP
information, which consists of the tax equivalent basis for yields, the
efficiency ratio, tangible common equity to tangible assets ratio and
tangible book value per share is utilized by regulators and market
analysts to evaluate a company’s financial condition and therefore, such
information is useful to investors. These disclosures should not be
viewed as a substitute for financial results determined in accordance
with GAAP, nor are they necessarily comparable to non-GAAP performance
measures which may be presented by other companies. Because non-GAAP
financial measures are not standardized, it may not be possible to
compare these financial measures with other companies’ non-GAAP
financial measures having the same or similar names.
|
HarborOne Bancorp, Inc. Consolidated Balance Sheet Trend (Unaudited) |
||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||
| (Dollars in thousands) | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 15,205 | $ | 16,348 | $ | 15,393 | $ | 17,492 | $ | 18,621 | ||||||||||||||||||||
| Short-term investments | 92,105 | 64,443 | 79,412 | 84,105 | 83,778 | |||||||||||||||||||||||||
| Total cash and cash equivalents | 107,310 | 80,791 | 94,805 | 101,597 | 102,399 | |||||||||||||||||||||||||
| Securities available for sale, at fair value | 182,173 | 170,853 | 166,122 | 160,795 | 165,348 | |||||||||||||||||||||||||
| Securities held to maturity, at amortized cost | 46,095 | 46,869 | 47,752 | 45,660 | 46,531 | |||||||||||||||||||||||||
| Federal Home Loan Bank stock, at cost | 13,538 | 15,532 | 16,356 | 16,356 | 17,863 | |||||||||||||||||||||||||
| Loans held for sale, at fair value | 34,129 | 59,460 | 96,201 | 91,849 | 51,932 | |||||||||||||||||||||||||
| Loans: | ||||||||||||||||||||||||||||||
| Residential real estate | 762,361 | 766,917 | 769,418 | 771,121 | 765,368 | |||||||||||||||||||||||||
| Commercial real estate | 687,121 | 655,419 | 623,054 | 592,325 | 557,174 | |||||||||||||||||||||||||
| Construction | 144,949 | 128,643 | 76,668 | 66,908 | 69,134 | |||||||||||||||||||||||||
| Total mortgage loans on real estate | 1,594,431 | 1,550,979 | 1,469,140 | 1,430,354 | 1,391,676 | |||||||||||||||||||||||||
| Commercial | 111,013 | 109,523 | 111,627 | 114,234 | 111,849 | |||||||||||||||||||||||||
| Consumer | 521,634 | 527,820 | 533,707 | 543,394 | 551,603 | |||||||||||||||||||||||||
| Loans | 2,227,078 | 2,188,322 | 2,114,474 | 2,087,982 | 2,055,128 | |||||||||||||||||||||||||
| Less: Allowance for loan losses | (18,863 | ) | (18,489 | ) | (17,933 | ) | (17,181 | ) | (16,884 | ) | ||||||||||||||||||||
| Net deferred loan costs | 6,075 | 6,645 | 8,035 | 8,682 | 9,041 | |||||||||||||||||||||||||
| Net loans | 2,214,290 | 2,176,478 | 2,104,576 | 2,079,483 | 2,047,285 | |||||||||||||||||||||||||
| Mortgage servicing rights, at fair value | 22,696 | 21,092 | 20,376 | 20,313 | 20,839 | |||||||||||||||||||||||||
| Goodwill and other intangible assets | 13,675 | 13,497 | 13,519 | 13,541 | 13,563 | |||||||||||||||||||||||||
| Other assets | 101,671 | 100,348 | 99,752 | 102,476 | 100,384 | |||||||||||||||||||||||||
| Total assets | $ | 2,735,577 | $ | 2,684,920 | $ | 2,659,459 | $ | 2,632,070 | $ | 2,566,144 | ||||||||||||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||||
| NOW and demand deposit accounts | $ | 419,776 | $ | 395,153 | $ | 395,728 | $ | 395,150 | $ | 392,012 | ||||||||||||||||||||
| Regular savings and club accounts | 378,818 | 356,300 | 404,465 | 398,883 | 338,338 | |||||||||||||||||||||||||
| Money market deposit accounts | 701,360 | 721,021 | 666,613 | 641,776 | 646,123 | |||||||||||||||||||||||||
| Brokered deposits | 70,176 | 73,490 | 73,127 | 92,803 | 77,774 | |||||||||||||||||||||||||
| Term certificate accounts | 557,082 | 467,774 | 463,612 | 465,179 | 470,490 | |||||||||||||||||||||||||
| Total deposits | 2,127,212 | 2,013,738 | 2,003,545 | 1,993,791 | 1,924,737 | |||||||||||||||||||||||||
| Short-term borrowed funds | — | 44,000 | 10,000 | 30,000 | 75,000 | |||||||||||||||||||||||||
| Long-term borrowed funds | 226,364 | 246,365 | 266,366 | 235,117 | 200,118 | |||||||||||||||||||||||||
| Other liabilities and accrued expenses | 37,144 | 37,333 | 38,947 | 36,527 | 33,554 | |||||||||||||||||||||||||
| Total liabilities | 2,390,720 | 2,341,436 | 2,318,858 | 2,295,435 | 2,233,409 | |||||||||||||||||||||||||
| Common stock | 327 | 327 | 327 | 321 | 321 | |||||||||||||||||||||||||
| Additional paid-in capital | 148,559 | 147,060 | 145,525 | 144,705 | 144,555 | |||||||||||||||||||||||||
| Unearned compensation - ESOP | (10,536 | ) | (10,685 | ) | (10,833 | ) | (10,982 | ) | (11,130 | ) | ||||||||||||||||||||
| Retained earnings | 209,946 | 207,590 | 205,997 | 203,159 | 199,946 | |||||||||||||||||||||||||
| Treasury stock | (742 | ) | (280 | ) | — | — | — | |||||||||||||||||||||||
| Accumulated other comprehensive loss | (2,697 | ) | (528 | ) | (415 | ) | (568 | ) | (957 | ) | ||||||||||||||||||||
| Total stockholders' equity | 344,857 | 343,484 | 340,601 | 336,635 | 332,735 | |||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 2,735,577 | $ | 2,684,920 | $ | 2,659,459 | $ | 2,632,070 | $ | 2,566,144 | ||||||||||||||||||||
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HarborOne Bancorp, Inc. Consolidated Statements of Net Income - Trend (Unaudited) |
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| Quarters Ended | |||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | 2018 |
2017 |
2017 | 2017 | 2017 | ||||||||||||||||||||||||
| Interest and dividend income: | |||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 22,504 | $ | 21,349 | $ | 20,990 | $ | 19,640 | $ | 19,135 | |||||||||||||||||||
| Interest on loans held for sale | 411 | 777 | 796 | 620 | 546 | ||||||||||||||||||||||||
| Interest on securities | 1,496 | 1,389 | 1,334 | 1,332 | 1,216 | ||||||||||||||||||||||||
| Other interest and dividend income | 274 | 294 | 294 | 320 | 252 | ||||||||||||||||||||||||
| Total interest and dividend income | 24,685 | 23,809 | 23,414 | 21,912 | 21,149 | ||||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||
| Interest on deposits | 3,523 | 3,151 | 2,812 | 2,567 | 2,432 | ||||||||||||||||||||||||
| Interest on borrowed funds | 1,038 | 1,226 | 1,333 | 1,130 | 1,285 | ||||||||||||||||||||||||
| Total interest expense | 4,561 | 4,377 | 4,145 | 3,697 | 3,717 | ||||||||||||||||||||||||
| Net interest and dividend income | 20,124 | 19,432 | 19,269 | 18,215 | 17,432 | ||||||||||||||||||||||||
| Provision for loan losses | 808 | 760 | 921 | 470 | 265 | ||||||||||||||||||||||||
| Net interest income, after provision for loan losses | 19,316 | 18,672 | 18,348 | 17,745 | 17,167 | ||||||||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||||||
| Mortgage banking income: | |||||||||||||||||||||||||||||
| Changes in mortgage servicing rights fair value | 1,022 | (74 | ) | (488 | ) | (1,052 | ) | (442 | ) | ||||||||||||||||||||
| Other | 6,261 | 9,134 | 11,071 | 11,200 | 7,846 | ||||||||||||||||||||||||
| Total mortgage banking income | 7,283 | 9,060 | 10,583 | 10,148 | 7,404 | ||||||||||||||||||||||||
| Deposit account fees | 2,967 | 3,223 | 3,172 | 3,071 | 2,845 | ||||||||||||||||||||||||
| Income on retirement plan annuities | 113 | 118 | 114 | 113 | 110 | ||||||||||||||||||||||||
| Gain on sale of consumer loans | — | — | — | — | 78 | ||||||||||||||||||||||||
| Bank-owned life insurance income | 239 | 246 | 260 | 261 | 257 | ||||||||||||||||||||||||
| Other income | 747 | 1,507 | 498 | 706 | 760 | ||||||||||||||||||||||||
| Total noninterest income | 11,349 | 14,154 | 14,627 | 14,299 | 11,454 | ||||||||||||||||||||||||
| Noninterest expenses: | |||||||||||||||||||||||||||||
| Compensation and benefits | 16,352 | 17,655 | 17,325 | 16,319 | 14,924 | ||||||||||||||||||||||||
| Occupancy and equipment | 3,275 | 3,047 | 2,954 | 2,726 | 2,988 | ||||||||||||||||||||||||
| Data processing | 1,553 | 1,560 | 1,547 | 1,528 | 1,522 | ||||||||||||||||||||||||
| Loan expense | 1,262 | 1,752 | 1,884 | 1,882 | 1,363 | ||||||||||||||||||||||||
| Marketing | 999 | 936 | 1,136 | 1,041 | 482 | ||||||||||||||||||||||||
| Professional fees | 968 | 1,097 | 1,126 | 1,080 | 930 | ||||||||||||||||||||||||
| Deposit insurance | 494 | 412 | 397 | 446 | 462 | ||||||||||||||||||||||||
| Other expenses | 2,696 | 3,234 | 2,069 | 1,856 | 1,734 | ||||||||||||||||||||||||
| Total noninterest expenses | 27,599 | 29,693 | 28,438 | 26,878 | 24,405 | ||||||||||||||||||||||||
| Income before income taxes | 3,066 | 3,133 | 4,537 | 5,166 | 4,216 | ||||||||||||||||||||||||
| Income tax provision | 814 | 1,540 | 1,699 | 1,953 | 1,481 | ||||||||||||||||||||||||
| Net income | $ | 2,252 | $ | 1,593 | $ | 2,838 | $ | 3,213 | $ | 2,735 | |||||||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||||||||
| Basic | $ | 0.07 | $ | 0.05 | $ | 0.09 | $ | 0.10 | $ | 0.09 | |||||||||||||||||||
| Diluted | $ | 0.07 | $ | 0.05 | $ | 0.09 | $ | 0.10 | $ | 0.09 | |||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||||||||
| Basic | 31,569,811 | 31,582,069 | 31,303,281 | 31,013,002 | 30,998,163 | ||||||||||||||||||||||||
| Diluted | 31,569,811 | 31,582,069 | 31,303,281 | 31,013,002 | 30,998,163 | ||||||||||||||||||||||||
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HarborOne Bancorp, Inc. Consolidated Statements of Net Income (Unaudited) |
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| Three Months Ended March 31, | |||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||
| Interest and dividend income: | |||||||||||||||||||||||
| Interest and fees on loans | $ | 22,504 | $ | 19,135 | $ | 3,369 | 17.6 | % | |||||||||||||||
| Interest on loans held for sale | 411 | 546 | (135 | ) | (24.7 | ) | |||||||||||||||||
| Interest on securities | 1,496 | 1,216 | 280 | 23.0 | |||||||||||||||||||
| Other interest and dividend income | 274 | 252 | 22 | 8.7 | |||||||||||||||||||
| Total interest and dividend income | 24,685 | 21,149 | 3,536 | 16.7 | |||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||
| Interest on deposits | 3,523 | 2,432 | 1,091 | 44.9 | |||||||||||||||||||
| Interest on borrowed funds | 1,038 | 1,285 | (247 | ) | (19.2 | ) | |||||||||||||||||
| Total interest expense | 4,561 | 3,717 | 844 | 22.7 | |||||||||||||||||||
| Net interest and dividend income | 20,124 | 17,432 | 2,692 | 15.4 | |||||||||||||||||||
| Provision for loan losses | 808 | 265 | 543 | 204.9 | |||||||||||||||||||
| Net interest income, after provision for loan losses | 19,316 | 17,167 | 2,149 | 12.5 | |||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||
| Mortgage banking income: | |||||||||||||||||||||||
| Changes in mortgage servicing rights fair value | 1,022 | (442 | ) | 1,464 | 331.2 | ||||||||||||||||||
| Other | 6,261 | 7,846 | (1,585 | ) | (20.2 | ) | |||||||||||||||||
| Total mortgage banking income | 7,283 | 7,404 | (121 | ) | (1.6 | ) | |||||||||||||||||
| Deposit account fees | 2,967 | 2,845 | 122 | 4.3 | |||||||||||||||||||
| Income on retirement plan annuities | 113 | 110 | 3 | 2.7 | |||||||||||||||||||
| Gain on sale of consumer loans | — | 78 | (78 | ) | (100.0 | ) | |||||||||||||||||
| Bank-owned life insurance income | 239 | 257 | (18 | ) | (7.0 | ) | |||||||||||||||||
| Other income | 747 | 760 | (13 | ) | (1.7 | ) | |||||||||||||||||
| Total noninterest income | 11,349 | 11,454 | (105 | ) | (0.9 | ) | |||||||||||||||||
| Noninterest expenses: | |||||||||||||||||||||||
| Compensation and benefits | 16,352 | 14,924 | 1,428 | 9.6 | |||||||||||||||||||
| Occupancy and equipment | 3,275 | 2,988 | 287 | 9.6 | |||||||||||||||||||
| Data processing | 1,553 | 1,522 | 31 | 2.0 | |||||||||||||||||||
| Loan expense | 1,262 | 1,363 | (101 | ) | (7.4 | ) | |||||||||||||||||
| Marketing | 999 | 482 | 517 | 107.3 | |||||||||||||||||||
| Professional fees | 968 | 930 | 38 | 4.1 | |||||||||||||||||||
| Deposit insurance | 494 | 462 | 32 | 6.9 | |||||||||||||||||||
| Other expenses | 2,696 | 1,734 | 962 | 55.5 | |||||||||||||||||||
| Total noninterest expenses | 27,599 | 24,405 | 3,194 | 13.1 | |||||||||||||||||||
| Income before income taxes | 3,066 | 4,216 | (1,150 | ) | (27.3 | ) | |||||||||||||||||
| Income tax provision | 814 | 1,481 | (667 | ) | (45.0 | ) | |||||||||||||||||
| Net income | $ | 2,252 | $ | 2,735 | $ | (483 | ) | (17.7 | ) | % | |||||||||||||
| Earnings per common share: | |||||||||||||||||||||||
| Basic | $ | 0.07 | 0.09 | (0.02 | ) | (22.2 | ) | % | |||||||||||||||
| Diluted | $ | 0.07 | 0.09 | (0.02 | ) | (22.2 | ) | ||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | 31,569,811 | 30,998,163 | 571,648 | 1.8 | % | ||||||||||||||||||
| Diluted | 31,569,811 | 30,998,163 | 571,648 | 1.8 | |||||||||||||||||||
|
HarborOne Bancorp, Inc. Average Balances / Yields (Unaudited) |
|||||||||||||||||||||||||||||||||||||||||||
| Quarters Ended | |||||||||||||||||||||||||||||||||||||||||||
| March 31, 2018 | December 31, 2017 | March 31, 2017 | |||||||||||||||||||||||||||||||||||||||||
| Average | Average | Average | |||||||||||||||||||||||||||||||||||||||||
| Outstanding | Yield/ | Outstanding | Yield/ | Outstanding | Yield/ | ||||||||||||||||||||||||||||||||||||||
| Balance | Interest | Cost (6) | Balance | Interest | Cost (6) | Balance | Interest | Cost (6) | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||||
| Loans (1) | $ | 2,248,119 | $ | 22,915 | 4.13 | % | $ | 2,230,303 | $ | 22,126 | 3.94 | % | $ | 2,111,768 | $ | 19,681 | 3.78 | % | |||||||||||||||||||||||||
| Investment securities (2) | 227,362 | 1,541 | 2.75 | 214,127 | 1,465 | 2.71 | 197,525 | 1,292 | 2.65 | ||||||||||||||||||||||||||||||||||
| Other interest-earning assets | 37,346 | 274 | 2.97 | 73,014 | 294 | 1.60 | 67,428 | 252 | 1.52 | ||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 2,512,827 | 24,730 | 3.99 | 2,517,444 | 23,885 | 3.76 | 2,376,721 | 21,225 | 3.62 | ||||||||||||||||||||||||||||||||||
| Noninterest-earning assets | 125,640 | 127,374 | 124,148 | ||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 2,638,467 | $ | 2,644,818 | $ | 2,500,869 | |||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||
| Savings accounts | $ | 332,414 | 137 | 0.17 | $ | 353,350 | 159 | 0.18 | $ | 326,731 | 151 | 0.19 | |||||||||||||||||||||||||||||||
| NOW accounts | 125,602 | 20 | 0.06 | 126,661 | 20 | 0.06 | 123,340 | 19 | 0.06 | ||||||||||||||||||||||||||||||||||
| Money market accounts | 716,380 | 1,383 | 0.78 | 716,862 | 1,287 | 0.71 | 627,073 | 753 | 0.49 | ||||||||||||||||||||||||||||||||||
| Certificates of deposit | 496,839 | 1,718 | 1.40 | 464,139 | 1,444 | 1.23 | 469,774 | 1,350 | 1.17 | ||||||||||||||||||||||||||||||||||
| Brokered deposit | 78,930 | 265 | 1.36 | 74,783 | 241 | 1.28 | 65,698 | 159 | 0.98 | ||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 1,750,165 | 3,523 | 0.82 | 1,735,795 | 3,151 | 0.72 | 1,612,616 | 2,432 | 0.61 | ||||||||||||||||||||||||||||||||||
| FHLB advances | 253,359 | 1,038 | 1.66 | 280,092 | 1,226 | 1.74 | 291,896 | 1,285 | 1.79 | ||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 2,003,524 | 4,561 | 0.92 | 2,015,887 | 4,377 | 0.86 | 1,904,512 | 3,717 | 0.79 | ||||||||||||||||||||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 260,455 | 256,522 | 237,056 | ||||||||||||||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 31,457 | 31,459 | 28,981 | ||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 2,295,436 | 2,303,868 | 2,170,549 | ||||||||||||||||||||||||||||||||||||||||
| Total equity | 343,031 | 340,950 | 330,320 | ||||||||||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 2,638,467 | $ | 2,644,818 | $ | 2,500,869 | |||||||||||||||||||||||||||||||||||||
| Tax equivalent net interest income | 20,169 | 19,508 | 17,508 | ||||||||||||||||||||||||||||||||||||||||
| Tax equivalent interest rate spread (3) | 3.07 | % | 2.90 | % | 2.83 | % | |||||||||||||||||||||||||||||||||||||
| Less: tax equivalent adjustment | 45 | 76 | 76 | ||||||||||||||||||||||||||||||||||||||||
| Net interest income as reported | $ | 20,124 | $ | 19,432 | $ | 17,432 | |||||||||||||||||||||||||||||||||||||
| Net interest-earning assets (4) | $ | 509,303 | $ | 501,557 | $ | 472,209 | |||||||||||||||||||||||||||||||||||||
| Net interest margin (5) | 3.25 | % | 3.06 | % | 2.97 | % | |||||||||||||||||||||||||||||||||||||
| Tax equivalent effect | 0.01 | 0.01 | 0.02 | ||||||||||||||||||||||||||||||||||||||||
| Net interest margin on a fully tax equivalent basis | 3.26 | % | 3.07 | % | 2.99 | % | |||||||||||||||||||||||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 125.42 | % | 124.88 | % | 124.79 | % | |||||||||||||||||||||||||||||||||||||
| Supplemental information: | |||||||||||||||||||||||||||||||||||||||||||
| Total deposits, including demand deposits | $ | 2,010,620 | $ | 3,523 | $ | 1,992,317 | $ | 3,151 | $ | 1,849,672 | $ | 2,432 | |||||||||||||||||||||||||||||||
| Cost of total deposits | 0.71 | % | 0.63 | % | 0.53 | % | |||||||||||||||||||||||||||||||||||||
| Total funding liabilities, including demand deposits | $ | 2,263,979 | $ | 4,561 | $ | 2,272,409 | $ | 4,377 | $ | 2,141,568 | $ | 3,717 | |||||||||||||||||||||||||||||||
| Cost of total funding liabilities | 0.82 | % | 0.76 | % | 0.70 | % | |||||||||||||||||||||||||||||||||||||
(1) Includes loans held for sale, nonaccruing loan balances
and interest received on such loans.
(2) Includes
securities available for sale and securities held to maturity. Interest
income from tax exempt securities is computed on a taxable equivalent
basis using a tax rate of 21% for the period ended March 31, 2018 and
35% for the periods ended December 31, 2017 and March 31, 2017. The
yield on investments before tax equivalent adjustments for the quarters
presented were 2.67%, 2.57%, and 2.50%, respectively.
(3)
Net interest rate spread represents the difference between the yield on
average interest-earning assets and the cost of average interest-bearing
liabilities.
(4) Net interest-earning assets represents
total interest-earning assets less total interest-bearing liabilities.
(5)
Net interest margin represents net interest income divided by average
total interest-earning assets.
(6) Annualized
|
HarborOne Bancorp, Inc. Average Balances and Yield Trend (Unaudited) |
||||||||||||||||||||||||||
| Average Balances - Trend - Quarters Ended | ||||||||||||||||||||||||||
| March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||
| Loans (1) | $ | 2,248,119 | $ | 2,230,303 | $ | 2,190,303 | $ | 2,129,280 | $ | 2,111,768 | ||||||||||||||||
| Investment securities (2) | 227,362 | 214,127 | 206,761 | 209,691 | 197,525 | |||||||||||||||||||||
| Other interest-earning assets | 37,346 | 73,014 | 102,589 | 81,370 | 67,428 | |||||||||||||||||||||
| Total interest-earning assets | 2,512,827 | 2,517,444 | 2,499,653 | 2,420,341 | 2,376,721 | |||||||||||||||||||||
| Noninterest-earning assets | 125,640 | 127,374 | 128,966 | 129,281 | 124,148 | |||||||||||||||||||||
| Total assets | $ | 2,638,467 | $ | 2,644,818 | $ | 2,628,619 | $ | 2,549,622 | $ | 2,500,869 | ||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||
| Savings accounts | $ | 332,414 | $ | 353,350 | $ | 402,470 | $ | 351,948 | $ | 326,731 | ||||||||||||||||
| NOW accounts | 125,602 | 126,661 | 125,636 | 128,794 | 123,340 | |||||||||||||||||||||
| Money market accounts | 716,380 | 716,862 | 646,873 | 654,127 | 627,073 | |||||||||||||||||||||
| Certificates of deposit | 496,839 | 464,139 | 463,077 | 469,249 | 469,774 | |||||||||||||||||||||
| Brokered deposit | 78,930 | 74,783 | 82,976 | 76,555 | 65,698 | |||||||||||||||||||||
| Total interest-bearing deposits | 1,750,165 | 1,735,795 | 1,721,032 | 1,680,673 | 1,612,616 | |||||||||||||||||||||
| FHLB advances | 253,359 | 280,092 | 287,858 | 254,832 | 291,896 | |||||||||||||||||||||
| Total interest-bearing liabilities | 2,003,524 | 2,015,887 | 2,008,890 | 1,935,505 | 1,904,512 | |||||||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||||
| Noninterest-bearing deposits | 260,455 | 256,522 | 251,579 | 250,654 | 237,056 | |||||||||||||||||||||
| Other noninterest-bearing liabilities | 31,457 | 31,459 | 30,815 | 29,432 | 28,981 | |||||||||||||||||||||
| Total liabilities | 2,295,436 | 2,303,868 | 2,291,284 | 2,215,591 | 2,170,549 | |||||||||||||||||||||
| Total equity | 343,031 | 340,950 | 337,335 | 334,031 | 330,320 | |||||||||||||||||||||
| Total liabilities and equity | $ | 2,638,467 | $ | 2,644,818 | $ | 2,628,619 | $ | 2,549,622 | $ | 2,500,869 | ||||||||||||||||
| Annualized Yield Trend - Quarters Ended | ||||||||||||||||||||||||||
| March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||
| Loans (1) | 4.13 | % | 3.94 | % | 3.95 | % | 3.82 | % | 3.78 | % | ||||||||||||||||
| Investment securities (2) | 2.75 | % | 2.71 | % | 2.70 | % | 2.69 | % | 2.65 | % | ||||||||||||||||
| Other interest-earning assets | 2.97 | % | 1.60 | % | 1.14 | % | 1.58 | % | 1.52 | % | ||||||||||||||||
| Total interest-earning assets | 3.99 | % | 3.76 | % | 3.73 | % | 3.64 | % | 3.62 | % | ||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||
| Savings accounts | 0.17 | % | 0.18 | % | 0.19 | % | 0.17 | % | 0.19 | % | ||||||||||||||||
| NOW accounts | 0.06 | % | 0.06 | % | 0.06 | % | 0.06 | % | 0.06 | % | ||||||||||||||||
| Money market accounts | 0.78 | % | 0.71 | % | 0.59 | % | 0.50 | % | 0.49 | % | ||||||||||||||||
| Certificates of deposit | 1.40 | % | 1.23 | % | 1.18 | % | 1.17 | % | 1.17 | % | ||||||||||||||||
| Brokered deposit | 1.36 | % | 1.28 | % | 1.17 | % | 1.08 | % | 0.98 | % | ||||||||||||||||
| Total interest-bearing deposits | 0.82 | % | 0.72 | % | 0.65 | % | 0.61 | % | 0.61 | % | ||||||||||||||||
| FHLB advances | 1.66 | % | 1.74 | % | 1.84 | % | 1.78 | % | 1.79 | % | ||||||||||||||||
| Total interest-bearing liabilities | 0.92 | % | 0.86 | % | 0.82 | % | 0.77 | % | 0.79 | % | ||||||||||||||||
(1) Includes loans held for sale, nonaccruing loan balances
and interest received on such loans.
(2) Includes
securities available for sale and securities held to maturity.
|
HarborOne Bancorp, Inc. Selected Financial Highlights (Unaudited) |
||||||||||||||||||||||||||
| Quarters Ended | ||||||||||||||||||||||||||
|
March 31, |
December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||
| Performance Ratios (annualized): | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||
| Return on average assets (ROAA) | 0.34 | % | 0.24 | % | 0.43 | % | 0.50 | % | 0.44 | % | ||||||||||||||||
| Return on average equity (ROAE) | 2.63 | % | 1.87 | % | 3.37 | % | 3.85 | % | 3.31 | % | ||||||||||||||||
| Efficiency ratio (1) | 87.62 | % | 88.34 | % | 83.83 | % | 82.60 | % | 84.41 | % | ||||||||||||||||
(1) This non-GAAP measure represents noninterest expense divided by the sum of net interest income and noninterest income
| At or for the Quarters Ended | ||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||
| Asset Quality | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||
| Total nonperforming assets | $ | 17,171 | $ | 18,617 | $ | 20,627 | $ | 22,522 | $ | 23,471 | ||||||||||||||||
| Nonperforming assets to total assets | 0.63 | % | 0.69 | % | 0.78 | % | 0.86 | % | 0.91 | % | ||||||||||||||||
| Allowance for loan losses to total loans | 0.84 | % | 0.84 | % | 0.84 | % | 0.82 | % | 0.82 | % | ||||||||||||||||
| Net charge offs | $ | 434 | $ | 204 | $ | 169 | $ | 173 | $ | 349 | ||||||||||||||||
| Annualized net charge offs/average loans | 0.08 | % | 0.04 | % | 0.03 | % | 0.03 | % | 0.07 | % | ||||||||||||||||
| Allowance for loan losses to nonperforming loans | 115.51 | % | 103.55 | % | 91.47 | % | 80.04 | % | 78.17 | % | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||
| Capital and Share Related | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||
| Common stock outstanding | 32,622,695 | 32,647,395 | 32,662,295 | 32,120,880 | 32,120,880 | |||||||||||||||||||||
| Book value per share | $ | 10.57 | $ | 10.52 | $ | 10.43 | $ | 10.48 | $ | 10.36 | ||||||||||||||||
| Tangible book value per share (1) | $ | 10.15 | $ | 10.11 | $ | 10.01 | $ | 10.06 | $ | 9.94 | ||||||||||||||||
| Tangible common equity / tangible assets (2) | 12.17 | % | 12.35 | % | 12.36 | % | 12.34 | % | 12.50 | % | ||||||||||||||||
(1) This non-GAAP ratio is total stockholders' equity less
goodwill and other intangible assets divided by common stock outstanding.
(2)
This non-GAAP ratio is total stockholders' equity less goodwill and
other intangible assets to total assets less goodwill and other
intangible assets.
