Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 01, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Entity File Number | 001-38955 | |
Entity Registrant Name | HarborOne Bancorp, Inc. | |
Entity Incorporation, State or Country Code | MA | |
Entity Tax Identification Number | 81-1607465 | |
Entity Address, Address Line One | 770 Oak Street | |
Entity Address, City or Town | Brockton | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02301 | |
City Area Code | 508 | |
Local Phone Number | 895-1000 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | HONE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001769617 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 53,228,410 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and due from banks | $ 42,589 | $ 31,777 |
Short-term investments | 277,050 | 174,093 |
Total cash and cash equivalents | 319,639 | 205,870 |
Securities available for sale, at fair value | 390,552 | 276,498 |
Federal Home Loan Bank stock, at cost | 6,828 | 8,738 |
Assets held for sale | 881 | |
Loans held for sale, at fair value | 77,052 | 208,612 |
Loans | 3,457,744 | 3,494,642 |
Less: Allowance for loan losses | (47,988) | (55,395) |
Net loans | 3,409,756 | 3,439,247 |
Accrued interest receivable | 10,880 | 11,874 |
Other real estate owned and repossessed assets | 28 | 595 |
Mortgage servicing rights, at fair value | 36,540 | 24,833 |
Property and equipment, net | 50,480 | 49,580 |
Retirement plan annuities | 14,065 | 13,747 |
Bank-owned life insurance | 89,466 | 87,950 |
Goodwill | 69,802 | 69,802 |
Intangible assets | 3,399 | 4,370 |
Other assets | 87,726 | 81,899 |
Total assets | 4,567,094 | 4,483,615 |
Deposits: | ||
Demand deposit accounts | 756,917 | 689,672 |
NOW accounts | 300,577 | 218,584 |
Regular savings and club accounts | 1,144,595 | 998,994 |
Money market deposit accounts | 832,441 | 866,661 |
Term certificate accounts | 659,850 | 732,298 |
Total deposits | 3,694,380 | 3,506,209 |
Short-term borrowed funds | 0 | 35,000 |
Long-term borrowed funds | 55,720 | 114,097 |
Subordinated debt | 34,128 | 34,033 |
Mortgagors' escrow accounts | 8,412 | 7,736 |
Accrued interest payable | 567 | 1,262 |
Other liabilities and accrued expenses | 93,855 | 88,964 |
Total liabilities | 3,887,062 | 3,787,301 |
Commitments and contingencies (Notes 9 and 10) | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 59,083,187 and 58,834,970 shares issued; 53,232,110 and 57,205,458 shares outstanding at September 30, 2021 and December 31, 2020, respectively | 585 | 584 |
Additional paid-in capital | 468,526 | 464,176 |
Retained earnings | 315,683 | 277,312 |
Treasury stock, at cost, 5,851,077 and 1,629,512 shares at September 30, 2021 and December 31, 2020, respectively | (73,723) | (16,644) |
Accumulated other comprehensive income | (1,118) | 2,185 |
Unearned compensation - ESOP | (29,921) | (31,299) |
Total stockholders' equity | 680,032 | 696,314 |
Total liabilities and stockholders' equity | $ 4,567,094 | $ 4,483,615 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common Stock, shares issued | 59,083,187 | 58,834,970 |
Common stock, shares outstanding | 53,232,110 | 57,205,458 |
Treasury, shares | 5,851,077 | 1,629,512 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Interest and dividend income: | ||||
Interest and fees on loans | $ 33,680 | $ 34,496 | $ 101,646 | $ 102,491 |
Interest on loans held for sale | 665 | 1,060 | 2,841 | 2,625 |
Interest on taxable securities | 1,293 | 1,312 | 2,671 | 4,446 |
Interest on non-taxable securities | 5 | 103 | ||
Other interest and dividend income | 170 | 175 | 384 | 1,173 |
Total interest and dividend income | 35,808 | 37,048 | 107,542 | 110,838 |
Interest expense: | ||||
Interest on deposits | 2,050 | 4,520 | 7,072 | 19,018 |
Interest on FHLB borrowings | 431 | 835 | 1,514 | 2,933 |
Interest on subordinated debentures | 524 | 524 | 1,571 | 1,571 |
Total interest expense | 3,005 | 5,879 | 10,157 | 23,522 |
Net interest and dividend income | 32,803 | 31,169 | 97,385 | 87,316 |
(Credit) provision for loan losses | (1,627) | 13,454 | (5,822) | 27,207 |
Net interest and dividend income, after provision (credit) for loan losses | 34,430 | 17,715 | 103,207 | 60,109 |
Mortgage banking income: | ||||
Gain on sale of mortgage loans | 12,756 | 34,055 | 51,820 | 77,195 |
Changes in mortgage servicing rights fair value | (992) | (193) | (135) | (5,691) |
Other | 3,882 | 4,258 | 12,472 | 10,650 |
Total mortgage banking income | 15,646 | 38,120 | 64,157 | 82,154 |
Deposit account fees | 4,658 | 3,451 | 13,056 | 10,351 |
Income on retirement plan annuities | 108 | 104 | 318 | 308 |
Gain on sale and call of securities, net | 241 | 241 | 2,533 | |
Bank-owned life insurance income | 515 | 560 | 1,516 | 1,665 |
Other income | 842 | 2,203 | 2,234 | 4,642 |
Total noninterest income | 22,010 | 44,438 | 81,522 | 101,653 |
Noninterest expense: | ||||
Compensation and benefits | 24,760 | 29,839 | 77,360 | 78,493 |
Occupancy and equipment | 4,765 | 4,581 | 14,723 | 13,296 |
Data processing | 2,205 | 2,119 | 6,910 | 6,576 |
Loan expenses | 1,323 | 3,166 | 5,008 | 7,121 |
Marketing | 880 | 817 | 2,524 | 2,750 |
Deposit expenses | 431 | 475 | 1,209 | 1,435 |
Postage and printing | 396 | 455 | 1,215 | 1,386 |
Professional fees | 1,362 | 1,458 | 4,432 | 4,204 |
Prepayment penalties on Federal Home Loan Bank advances | 1,095 | 1,095 | ||
Foreclosed and repossessed assets | (308) | 27 | (332) | 165 |
Deposit insurance | 341 | 310 | 993 | 860 |
Other expenses | 2,024 | 2,452 | 5,537 | 8,350 |
Total noninterest expense | 39,274 | 45,699 | 120,674 | 124,636 |
Income before income taxes | 17,166 | 16,454 | 64,055 | 37,126 |
Income tax provision | 4,907 | 4,561 | 18,128 | 9,934 |
Net income | $ 12,259 | $ 11,893 | $ 45,927 | $ 27,192 |
Earnings per common share: | ||||
Basic | $ 0.25 | $ 0.22 | $ 0.89 | $ 0.50 |
Diluted | $ 0.24 | $ 0.22 | $ 0.88 | $ 0.50 |
Weighted average shares outstanding: | ||||
Basic | 49,801,123 | 54,465,339 | 51,362,252 | 54,436,090 |
Diluted | 50,663,415 | 54,465,339 | 52,094,749 | 54,436,090 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Consolidated Statements of Comprehensive Income | ||||
Net income | $ 12,259 | $ 11,893 | $ 45,927 | $ 27,192 |
Unrealized gain/loss on cash flow hedge: | ||||
Unrealized holding gains (losses) | 22 | 32 | 1,392 | (1,581) |
Reclassification adjustment for net losses (gains) included in net income | 140 | 82 | 373 | (67) |
Net change in unrealized gains (losses) on derivatives in cash flow hedging instruments | 162 | 114 | 1,765 | (1,648) |
Related tax effect | (46) | (32) | (494) | 461 |
Net-of-tax amount | 116 | 82 | 1,271 | (1,187) |
Unrealized gain/loss on securities available for sale: | ||||
Unrealized holding (losses) gains | (2,406) | (1,335) | (5,626) | 4,212 |
Reclassification of unrealized gain on securities transferred to available for sale | 522 | |||
Reclassification adjustment for net realized gains | (241) | (241) | (2,533) | |
Net unrealized (losses) gains | (2,647) | (1,335) | (5,867) | 2,201 |
Related tax effect | 584 | 132 | 1,293 | (718) |
Net-of-tax amount | (2,063) | (1,203) | (4,574) | 1,483 |
Total other comprehensive (loss) income | (1,947) | (1,121) | (3,303) | 296 |
Comprehensive income | $ 10,312 | $ 10,772 | $ 42,624 | $ 27,488 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock, at Cost | Accumulated Other Comprehensive Income (Loss) | Unearned Compensation - ESOP | Total |
Balance at beginning of period at Dec. 31, 2019 | $ 584 | $ 460,232 | $ 237,356 | $ (721) | $ 1,480 | $ (33,137) | $ 665,794 |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 58,418,021 | ||||||
Comprehensive income (loss) | 27,192 | 296 | 27,488 | ||||
Dividends declared per share | (3,244) | (3,244) | |||||
ESOP shares committed to be released | 156 | 1,378 | 1,534 | ||||
Restricted stock awards forfeited (in shares) | (8,679) | ||||||
Share-based compensation expense | 3,143 | 3,143 | |||||
Treasury stock purchased | (612) | (612) | |||||
Treasury stock purchased (in shares) | (66,878) | ||||||
Balance at end of period at Sep. 30, 2020 | $ 584 | 463,531 | 261,304 | (1,333) | 1,776 | (31,759) | 694,103 |
Balance, end of period (in shares) at Sep. 30, 2020 | 58,342,464 | ||||||
Balance at beginning of period at Jun. 30, 2020 | $ 584 | 462,881 | 251,032 | (721) | 2,897 | (32,218) | 684,455 |
Balance, beginning of period (in shares) at Jun. 30, 2020 | 58,418,021 | ||||||
Comprehensive income (loss) | 11,893 | (1,121) | 10,772 | ||||
Dividends declared per share | (1,621) | (1,621) | |||||
ESOP shares committed to be released | 33 | 459 | 492 | ||||
Restricted stock awards forfeited (in shares) | (8,679) | ||||||
Share-based compensation expense | 617 | 617 | |||||
Treasury stock purchased | (612) | (612) | |||||
Treasury stock purchased (in shares) | (66,878) | ||||||
Balance at end of period at Sep. 30, 2020 | $ 584 | 463,531 | 261,304 | (1,333) | 1,776 | (31,759) | 694,103 |
Balance, end of period (in shares) at Sep. 30, 2020 | 58,342,464 | ||||||
Balance at beginning of period at Dec. 31, 2020 | $ 584 | 464,176 | 277,312 | (16,644) | 2,185 | (31,299) | $ 696,314 |
Balance, beginning of period (in shares) at Dec. 31, 2020 | 57,205,458 | 57,205,458 | |||||
Comprehensive income (loss) | 45,927 | (3,303) | $ 42,624 | ||||
Dividends declared per share | (7,556) | (7,556) | |||||
ESOP shares committed to be released | 955 | 1,378 | 2,333 | ||||
Restricted stock awards granted (in shares) | 185,377 | ||||||
Share-based compensation expense | 2,753 | 2,753 | |||||
Stock option exercised | $ 1 | 642 | 643 | ||||
Stock option exercised (in shares) | 62,840 | ||||||
Treasury stock purchased | (57,079) | (57,079) | |||||
Treasury stock purchased (in shares) | (4,221,565) | ||||||
Balance at end of period at Sep. 30, 2021 | $ 585 | 468,526 | 315,683 | (73,723) | (1,118) | (29,921) | $ 680,032 |
Balance, end of period (in shares) at Sep. 30, 2021 | 53,232,110 | 53,232,110 | |||||
Balance at beginning of period at Jun. 30, 2021 | $ 585 | 467,194 | 305,831 | (38,588) | 829 | (30,380) | $ 705,471 |
Balance, beginning of period (in shares) at Jun. 30, 2021 | 55,735,623 | ||||||
Comprehensive income (loss) | 12,259 | (1,947) | 10,312 | ||||
Dividends declared per share | (2,407) | (2,407) | |||||
ESOP shares committed to be released | 340 | 459 | 799 | ||||
Restricted stock awards forfeited (in shares) | (3,000) | ||||||
Share-based compensation expense | 992 | 992 | |||||
Treasury stock purchased | (35,135) | (35,135) | |||||
Treasury stock purchased (in shares) | (2,500,513) | ||||||
Balance at end of period at Sep. 30, 2021 | $ 585 | $ 468,526 | $ 315,683 | $ (73,723) | $ (1,118) | $ (29,921) | $ 680,032 |
Balance, end of period (in shares) at Sep. 30, 2021 | 53,232,110 | 53,232,110 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Consolidated Statements of Changes in Stockholders' Equity | ||||
Dividends declared per share | $ 0.05 | $ 0.03 | $ 0.15 | $ 0.06 |
ESOP shares committed to be released (in shares) | 57,680 | 57,680 | 173,042 | 173,042 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 45,927 | $ 27,192 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
(Credit) provision for loan losses | (5,822) | 27,207 |
Net amortization of securities premiums/discounts | 3,098 | 1,371 |
Proceeds from sale of loans | 1,826,818 | 1,715,878 |
Loans originated for sale | (1,625,647) | (1,712,957) |
Net (accretion) amortization of net deferred loan costs/fees and premiums | (1,881) | 984 |
Depreciation and amortization of premises and equipment | 3,406 | 2,997 |
Change in mortgage servicing rights fair value | 135 | 5,691 |
Mortgage servicing rights capitalized | (11,842) | (8,700) |
Accretion of fair value adjustment on loans and deposits, net | (2,817) | (2,848) |
Amortization of other intangible assets | 971 | 1,341 |
Amortization of subordinated debt issuance costs | 95 | 95 |
Gain on sale and call of securities, net | (241) | (2,533) |
Net gains on mortgage loan sales, including fair value adjustments | (69,611) | (82,741) |
Bank-owned life insurance income | (1,516) | (1,665) |
Income on retirement plan annuities | (318) | (308) |
Disposal of asset held for sale | 8,536 | |
Net loss on disposal of premises and equipment | 101 | |
Net (gain) loss on sale and write-down of other real estate owned and repossessed assets | (215) | 57 |
ESOP expense | 2,333 | 1,534 |
Share-based compensation expense | 2,753 | 3,143 |
Net change in: | ||
Increase in operating lease right-of-use assets | (2,053) | |
Increase in operating lease liabilities | 2,436 | |
Change in other assets | 21,567 | (39,116) |
Change in other liabilities | (20,360) | 30,940 |
Net cash provided (used) by operating activities | 167,216 | (23,801) |
Activity in securities available for sale: | ||
Maturities, prepayments and calls | 124,307 | 69,870 |
Purchases | (286,406) | (153,747) |
Sales | 39,321 | 67,586 |
Activity in securities held to maturity: | ||
Maturities, prepayment and calls | 432 | |
Sales | 4,759 | |
Net redemption of FHLB stock | 1,910 | 5,490 |
Participation-in loan purchases | (30,742) | (21,994) |
Net loan payments (originations) | 70,452 | (322,973) |
Proceeds from sale of other real estate owned and repossessed assets | 1,455 | 855 |
Additions to property and equipment | (5,187) | (4,546) |
Net cash used by investing activities | (84,890) | (354,268) |
Cash flows from financing activities: | ||
Net increase in deposits | 187,799 | 422,436 |
Net change in short-term borrowed funds | (35,000) | (88,000) |
Proceeds from other borrowed funds and subordinated debt | 3,400 | 40,000 |
Repayment of other borrowed funds | (61,777) | (70,026) |
Net change in mortgagors' escrow accounts | 676 | 1,926 |
Proceeds from exercise of stock options | 643 | |
Treasury stock purchased | (57,079) | (612) |
Dividends paid | (7,219) | (1,753) |
Net cash provided by financing activities | 31,443 | 303,971 |
Net change in cash and cash equivalents | 113,769 | (74,098) |
Cash and cash equivalents at beginning of period | 205,870 | 211,616 |
Cash and cash equivalents at end of period | 319,639 | 137,518 |
Supplemental cash flow information: | ||
Interest paid on deposits | 7,079 | 19,282 |
Interest paid on borrowed funds | 3,728 | 5,146 |
Income taxes paid, net | 18,715 | 13,040 |
Transfer of loans to other real estate owned and repossessed assets | 673 | 1,093 |
Transfer of securities held to maturity to available for sale, fair value | 22,051 | |
Transfer of asset to assets held for sale | 881 | |
Dividends declared | 7,556 | $ 3,244 |
Supplemental disclosure related to adoption of ASU 2016-02, detailed in Note 1: | ||
ROU asset | 23,189 | |
Operating lease liabilities | $ 24,370 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The unaudited interim Consolidated Financial Statements of HarborOne Bancorp, Inc. (the “Company”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by the U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying Consolidated Financial Statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2020 and 2019 and notes thereto included in the Company’s Annual Report on Form 10-K. The unaudited interim Consolidated Financial Statements include the accounts of the Company; the Company’s subsidiaries, Legion Parkway Company LLC (a security corporation) and HarborOne Bank (the “Bank”); and the Bank’s wholly-owned subsidiaries, which consist of HarborOne Mortgage, LLC (“HarborOne Mortgage”), a passive investment corporation, and two security corporations. The passive investment corporation maintains and manages certain assets of the Bank. The security corporations were established for the purpose of buying, holding and selling securities on their own behalf. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. These changes and reclassifications did not impact previously reported net income or comprehensive income. Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 27 full-service branches in Massachusetts and Rhode Island, and commercial lending offices in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains more than 30 offices in Massachusetts, Rhode Island, New Hampshire, and Maine and is licensed to lend in six additional states. The Company’s primary deposit products are checking, money market, savings, and term certificate of deposit accounts, while its primary lending products are commercial real estate, commercial, residential mortgages, home equity, and consumer loans. The Company also originates, sells and services residential mortgage loans through HarborOne Mortgage. Risks and Uncertainties ● Net interest income could be reduced. In accordance with regulatory guidance, the Company worked with borrowers impacted by the COVID-19 pandemic to defer payments. While interest will continue to be recognized in accordance with GAAP, should eventual credit losses on these deferments emerge, interest income would be negatively impacted. At September 30, 2021, $7.9 million in loans were in an active deferral period and $1.5 million in loans with an expired deferral period were delinquent more than 30 days. ● Continued uncertainty regarding the severity and duration of the COVID-19 pandemic and the related economic effects on credit quality could continue to affect the accounting for loan losses. Although credit quality has not been a severely impacted so far, it is possible that asset quality could worsen, and loan charge-offs could increase as government aid expires or if new variants result in renewed business restrictions. The Bank participated in the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) providing loans to small businesses negatively impacted by the COVID-19 pandemic. PPP loans are fully guaranteed by the U.S. government and continue to be forgiven. As of September 30, 2021, PPP loans amounted to $54.3 million and there was $2.1 million of deferred processing fee income. We expect to complete the forgiveness process on most of the remaining PPP loans by year end. ● Noninterest income could be reduced. Uncertainty regarding the severity and duration of the COVID-19 pandemic could cause further volatility in the financial markets. The COVID-19 pandemic and the measures taken to control its spread may disrupt the mortgage loan origination process. Mortgage banking revenues are dependent on mortgage origination volume and are sensitive to interest rates and the condition of housing markets. ● Valuation and fair value measurement challenges may occur. Changes in the COVID-19 pandemic could cause a decline in the Company’s stock price or other triggering events could occur that would cause management to perform a goodwill impairment test that may result in an impairment charge being recorded to earnings for that period. Summary of Significant Accounting Policies and Recently Adopted Accounting Standards Updates (“ASU”) As an “emerging growth company”, as defined in Title 1 of the Jumpstart Our Business Startups (“JOBS”) Act, the Company has elected to use the extended transition period to delay the adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company’s emerging growth company status is scheduled to end December 31, 2021 unless a triggering event occurs sooner. Significant accounting policies in effect and disclosed within the Company’s most recent audited consolidated financial statements as of December 31, 2020 remain substantially unchanged with the exception of the accounting policy for leases as a result of adopting ASU 2016-02, Leases (Topic 842) and subsequent related updates (collectively ASU 2016-02) as described below. The Company adopted ASU 2016-02 on January 1, 2021, which requires lessees to recognize most leases on their balance sheet. Lessor accounting is largely unchanged. ASU 2016-02 requires both quantitative and qualitative disclosures regarding key information about lease arrangements from both lessees and lessors. The Company elected the effective date transition method utilizing the adoption date as the first date of application of the revised guidance. As a result, prior period amounts have not been restated. Upon adoption, the Company elected certain transitional practical expedients offered through the guidance, including the “package of practical expedients” whereby it did not reassess (i) whether any expired or existing contracts contain leases, (ii) the lease classification of any expired or existing leases, and (iii) initial direct costs for any existing leases, which resulted in the Company not recognizing a cumulative effect adjustment to retained earnings. Management evaluated the leasing contracts and activities and developed methodologies and processes to estimate and account for the right-of-use (“ROU”) assets and lease liabilities for building leases based on the present value of future lease payments. On January 1, 2021, the Company recorded right-of-use (“ROU”) assets, included in other assets, and lease liabilities, included in other liabilities, totaling $23.2 million and $24.4 million, respectively. The impact to capital ratios as a result of increased risk-weighted assets was immaterial. The adoption of this guidance did not result in a material change to lessee expense recognition. The Company is committed to rent premises and equipment used in business operations under non-cancelable operating leases and determines if an arrangement meets the definition of a lease upon inception. Leases that transfer substantially all of the benefits and risks of ownership to the Company are classified as finance leases, while all others are classified as operating leases. At lease commencement, a lease liability and ROU asset are calculated and recognized on both types of leases. The lease liability is equal to the present value of the future minimum lease payments. The ROU asset is equal to the lease liability, plus any initial direct costs and prepaid lease payments, less any lessor incentives received. Operating lease ROU assets are included in other assets and finance lease ROU assets are included in premises and equipment, net. The Company’s leases do not provide an implicit interest rate; therefore, the Company used the appropriate Federal Home Loan Bank (“FHLB”) term rate commensurate with the underlying lease terms to determine the present value of operating lease liabilities. The lease term used in the calculation includes any options to extend that the Company is reasonably certain to exercise, determined on a lease-by-lease basis. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. At September 30, 2021, the Company had no finance lease ROU assets or lease liabilities . For operating leases, total lease cost is comprised of lease expense, short-term lease cost, and variable lease cost. Lease expense includes future minimum lease payments, which are recognized on a straight-line basis over the lease term, as well as common area maintenance charges, real estate taxes, insurance and other expenses, where applicable, which are expensed as incurred. Total lease cost for operating leases is recorded in occupancy and equipment noninterest expense. See Note 11, Operating Lease Right-of-Use Assets and Liabilities, for further information. The Company also adopted the following ASU on January 1, 2021, which did not have a material impact on the Company’s Consolidated Financial Statements: ASU 2017-12 Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities ASUs not yet Adopted ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting These provisions apply to contract modifications that reference the London InterBank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. Qualifying modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification would be considered “minor” so that any existing unamortized deferred loan origination fees and costs would carry forward and continue to be amortized. Qualifying modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for hedge accounting. In January 2020, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which clarifies the scope of Topic 848 to include derivative instruments impacted by the discounting transition. ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022, with adoption permitted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected, the amendments must be applied prospectively for all eligible contract modifications. is evaluating the effect that this ASU will have on the Company’s consolidated financial statements. ASU 2019-12 , Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes. The amendments in this ASU are intended to simplify the accounting for income taxes. ASU 2019-12 is effective for public companies for fiscal years beginning after December 15, 2020, with early adoption permitted. For all other entities the guidance is effective for fiscal years beginning after December 15, 2021. Certain provisions under ASU 2019-12 require prospective application, some require modified retrospective application through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption, while other provisions require retrospective application to all periods presented in the consolidated financial statements upon adoption. The Company expects to adopt ASU 2019-12 on December 31, 2021 and it is not expected to have a material impact on the Company’s consolidated financial statements. ASU 2016-13 Financial Instruments—Credit Losses (Topic 326) |
DEBT SECURITIES
DEBT SECURITIES | 9 Months Ended |
Sep. 30, 2021 | |
DEBT SECURITIES | |
DEBT SECURITIES | 2. DEBT SECURITIES The amortized cost and fair value of securities with gross unrealized gains and losses is as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (in thousands) September 30, 2021: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 38,155 $ — $ 426 $ 37,729 U.S. government agency and government-sponsored residential mortgage-backed securities 345,737 1,355 2,983 344,109 U.S. government-sponsored collateralized mortgage obligations 4,543 152 — 4,695 SBA asset-backed securities 3,882 137 — 4,019 Total securities available for sale $ 392,317 $ 1,644 $ 3,409 $ 390,552 December 31, 2020: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 5,002 $ 93 $ — $ 5,095 U.S. government agency and government-sponsored residential mortgage-backed securities 234,819 3,113 305 237,627 U.S. government-sponsored collateralized mortgage obligations 16,326 330 — 16,656 SBA asset-backed securities 16,249 871 — 17,120 Total securities available for sale $ 272,396 $ 4,407 $ 305 $ 276,498 In February 2020, with the intention to reduce credit risk in the investment portfolio and to support the Bank’s credit risk policy, the Bank executed the sale of six held-to-maturity investments. The securities had a total amortized cost of $4.5 million and a $357,000 gain on sale was recorded during the three months ended March 31, 2020. As a result, the remaining held-to-maturity securities, with an amortized cost of $21.5 million and an unrealized gain of approximately $522,000, were transferred to the available for sale category at a fair value of $22.1 million. Sixteen mortgage-backed securities with a combined fair value of $20.5 million are pledged as collateral for interest rate swap agreements as of September 30, 2021 (see Note 10). Twenty-six mortgage-backed securities with a combined fair value of $40.3 million were pledged as collateral for interest rate swap agreements as of December 31, 2020. The amortized cost and fair value of debt securities by contractual maturity at September 30, 2021 is as follows: Available for Sale Amortized Fair Cost Value (in thousands) After 1 year through 5 years $ — $ — After 5 years through 10 years 38,155 37,729 Over 10 years — — 38,155 37,729 U.S. government agency and government-sponsored residential mortgage-backed securities 345,737 344,109 U.S. government-sponsored collateralized mortgage obligations 4,543 4,695 SBA asset-backed securities 3,882 4,019 Total $ 392,317 $ 390,552 U.S. government-sponsored residential mortgage-backed securities, collateralized mortgage obligations and securities whose underlying assets are loans from the SBA have stated maturities of 6 months to 30 years ; however, it is expected that such securities will have shorter actual lives due to prepayments. U.S. government and government-sponsored enterprise obligations are callable at the discretion of the issuer. The U.S. government and government-sponsored enterprise obligations with a total fair value of $37.7 million have a final maturity of 10 years and a call feature of five months to two years . At September 30, 2021 there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholder equity. The following table shows proceeds and gross realized gains and losses related to the sales and calls of securities for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Sales Proceeds $ 39,321 $ — $ 39,321 $ 72,333 Gross gains 241 — 241 2,521 Gross losses — — — — Calls Proceeds $ 5,000 $ 2,000 $ 5,000 $ 8,635 Gross gains — — — 12 Gross losses — — — — Information pertaining to securities with gross unrealized losses at September 30, 2021 and December 31, 2020 aggregated by investment category and length of time that individual securities have been in a continuous loss position follows: Less Than Twelve Months Twelve Months and Over Gross Gross Unrealized Fair Unrealized Fair Losses Value Losses Value (in thousands) September 30, 2021: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 426 $ 37,729 $ — $ — U.S. government agency and government-sponsored residential mortgage-backed securities 2,771 261,886 212 19,759 $ 3,197 $ 299,615 $ 212 $ 19,759 December 31, 2020: Securities available for sale U.S. government agency and government-sponsored residential mortgage-backed securities $ 283 $ 67,460 $ 22 $ 3,668 Management evaluates securities for other-than-temporary impairment (“OTTI”) at each reporting period, and more frequently when economic or market concerns warrant such evaluation. As of September 30, 2021, the Company’s security portfolio consisted of 118 debt securities, 63 of which were in an unrealized loss position. The unrealized losses are primarily related to the Company’s mortgage-backed securities and were issued by U.S. government-sponsored entities and agencies. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2021. |
LOANS HELD FOR SALE
LOANS HELD FOR SALE | 9 Months Ended |
Sep. 30, 2021 | |
LOANS HELD FOR SALE | |
LOANS HELD FOR SALE | 3. LOANS HELD FOR SALE The following table provides the fair value and contractual principal balance outstanding of loans held for sale accounted for under the fair value option: September 30, December 31, 2021 2020 (in thousands) Loans held for sale, fair value $ 77,052 $ 208,612 Loans held for sale, contractual principal outstanding 75,009 198,984 Fair value less unpaid principal balance $ 2,043 $ 9,628 The Company has elected the fair value option for mortgage loans held for sale to better match changes in fair value of the loans with changes in the fair value of the forward sale commitment contracts used to economically hedge them. Changes in fair value of mortgage loans held for sale accounted for under the fair value option election amounted to a decrease of $7.6 million in the nine months ended September 30, 2021 to $2.0 million, compared to an increase of $5.5 million in the nine months ended September 30, 2020. These amounts are offset in earnings by the changes in fair value of forward sale commitments. The changes in fair value are reported as a component of gain on sale of mortgage loans in the Unaudited Consolidated Statements of Income. Underwriting fees on mortgage loans held for sale are recognized when earned and included in other mortgage banking income. Underwriting fees amounted to $2.0 million and $7.0 million, respectively, for the three and nine months ended September 30, 2021 and $3.0 million and $7.5 million, respectively, for the respective prior year periods. At September 30, 2021 and December 31, 2020, there were no loans held for sale that were greater than 90 days past due. |
LOANS
LOANS | 9 Months Ended |
Sep. 30, 2021 | |
LOANS | |
LOANS | 4. LOANS A summary of the balances of loans follows: September 30, December 31, 2021 2020 (in thousands) Residential real estate: One- to four-family $ 993,725 $ 928,934 Second mortgages and equity lines of credit 135,147 145,672 Residential real estate construction 31,817 31,217 Total residential real estate loans 1,160,689 1,105,823 Commercial: Commercial real estate 1,573,284 1,551,265 Commercial construction 152,685 99,331 Commercial and industrial 414,814 464,393 Total commercial loans 2,140,783 2,114,989 Consumer loans: Auto 149,019 265,266 Personal 7,253 8,564 Total consumer loans 156,272 273,830 Total loans 3,457,744 3,494,642 Allowance for loan losses (47,988) (55,395) Loans, net $ 3,409,756 $ 3,439,247 As of September 30, 2021 and December 31, 2020, the commercial and industrial loans include $54.3 million and $126.5 million, respectively, of PPP loans and $2.1 million and $2.7 million, respectively, of deferred fees on the PPP loans. PPP loans are fully guaranteed by the U.S. government. The Company has transferred a portion of its originated commercial loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying unaudited interim Consolidated Balance Sheets. The Company and participating lenders share ratably in cash flows and any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders and disburses required escrow funds to relevant parties. At September 30, 2021 and December 31, 2020, the Company was servicing commercial loans for participants in the aggregate amount of $297.0 million and $284.2 million, respectively. Acquired Loans The loans acquired in the merger with Coastway Bancorp, Inc. included $5.4 million in purchased credit impaired (“PCI”) loans. PCI loans were primarily residential real estate loans. The following table provides certain information pertaining to PCI loans: September 30, December 31, 2021 2020 (in thousands) Outstanding balance $ 3,701 $ 4,307 Carrying amount $ 3,485 $ 4,079 The following table summarizes activity in the accretable yield for PCI loans: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Balance at beginning of period $ 136 $ 145 $ 141 $ 149 Additions — — — — Accretion (1) (3) (6) (7) Reclassification from nonaccretable difference — — — — Balance at end of period $ 135 $ 142 $ 135 $ 142 The following is the activity in the allowance for loan losses for the three and nine months ended September 30, 2021 and 2020: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at June 30, 2020 $ 5,857 $ 18,389 $ 3,215 $ 3,562 $ 2,204 $ 2,880 $ 36,107 Provision for loan losses 1,721 7,771 962 1,617 643 740 13,454 Charge-offs — (62) — (213) (140) — (415) Recoveries 22 — — — 55 — 77 Balance at September 30, 2020 $ 7,600 $ 26,098 $ 4,177 $ 4,966 $ 2,762 $ 3,620 $ 49,223 Balance at June 30, 2021 $ 5,434 $ 32,991 $ 1,937 $ 8,059 $ 853 $ 1,999 $ 51,273 Provision (credit) for loan losses (2,009) 2,059 615 (815) (478) (999) (1,627) Charge-offs — (381) — (1,277) (61) — (1,719) Recoveries 8 1 — 18 34 — 61 Balance at September 30, 2021 $ 3,433 $ 34,670 $ 2,552 $ 5,985 $ 348 $ 1,000 $ 47,988 Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2019 $ 3,178 $ 12,875 $ 2,526 $ 2,977 $ 1,010 $ 1,494 $ 24,060 Provision for loan losses 4,270 14,458 1,651 2,560 2,142 2,126 27,207 Charge-offs (52) (1,236) — (790) (519) — (2,597) Recoveries 204 1 — 219 129 — 553 Balance at September 30, 2020 $ 7,600 $ 26,098 $ 4,177 $ 4,966 $ 2,762 $ 3,620 $ 49,223 Balance at December 31, 2020 $ 7,419 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Provision (credit) for loan losses (4,214) 293 597 2,101 (2,129) (2,470) (5,822) Charge-offs — (393) — (1,463) (147) — (2,003) Recoveries 228 5 — 36 149 — 418 Balance at September 30, 2021 $ 3,433 $ 34,670 $ 2,552 $ 5,985 $ 348 $ 1,000 $ 47,988 Allocation of the allowance to loan segments at September 30, 2021 and December 31, 2020 follows: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) September 30, 2021: Loans: Impaired loans $ 26,971 $ 18,155 $ — $ 6,183 $ — $ 51,309 Non-impaired loans 1,133,718 1,555,129 152,685 408,631 156,272 3,406,435 Total loans $ 1,160,689 $ 1,573,284 $ 152,685 $ 414,814 $ 156,272 $ 3,457,744 Allowance for loan losses: Impaired loans $ 662 $ 6,969 $ — $ 1,340 $ — $ — $ 8,971 Non-impaired loans 2,771 27,701 2,552 4,645 348 1,000 39,017 Total allowance for loan losses $ 3,433 $ 34,670 $ 2,552 $ 5,985 $ 348 $ 1,000 $ 47,988 December 31, 2020: Loans: Impaired loans $ 24,384 $ 12,513 $ — $ 9,359 $ — $ 46,256 Non-impaired loans 1,081,439 1,538,752 99,331 455,034 273,830 3,448,386 Total loans $ 1,105,823 $ 1,551,265 $ 99,331 $ 464,393 $ 273,830 $ 3,494,642 Allowance for loan losses: Impaired loans $ 802 $ 1,845 $ — $ 31 $ — $ — $ 2,678 Non-impaired loans 6,617 32,920 1,955 5,280 2,475 3,470 52,717 Total allowance for loan losses $ 7,419 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 The following is a summary of past due and non-accrual loans at September 30, 2021 and December 31, 2020: 90 Days 30-59 Days 60-89 Days or More Total Loans on Past Due Past Due Past Due Past Due Non-accrual (in thousands) September 30, 2021 Residential real estate: One- to four-family $ 778 $ 1,646 $ 3,458 $ 5,882 $ 11,754 Second mortgages and equity lines of credit 203 203 263 669 437 Commercial real estate 8,843 — 338 9,181 18,000 Commercial construction — — — — — Commercial and industrial 37 3 3,683 3,723 6,183 Consumer: Auto 533 109 84 726 111 Personal 55 18 1 74 1 Total $ 10,449 $ 1,979 $ 7,827 $ 20,255 $ 36,486 December 31, 2020 Residential real estate: One- to four-family $ 12,148 $ 2,223 $ 6,418 $ 20,789 $ 11,611 Second mortgages and equity lines of credit 460 46 433 939 834 Residential real estate construction 471 — — 471 — Commercial real estate 416 — 3,369 3,785 12,486 Commercial construction — — — — — Commercial and industrial 444 191 1,243 1,878 8,606 Consumer: Auto 1,657 397 488 2,542 557 Personal 88 11 2 101 7 Total $ 15,684 $ 2,868 $ 11,953 $ 30,505 $ 34,101 At September 30, 2021 and December 31, 2020, there were no loans past due 90 days or more and still accruing. The following information pertains to impaired loans: September 30, 2021 December 31, 2020 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance (in thousands) Impaired loans without a specific reserve: Residential real estate $ 17,445 $ 18,922 $ — $ 12,284 $ 13,039 $ — Commercial real estate 493 495 — 3,552 4,741 — Commercial construction — — — — — — Commercial and industrial 1,463 3,591 — 9,243 11,604 — Total 19,401 23,008 — 25,079 29,384 — Impaired loans with a specific reserve: Residential real estate 9,526 10,324 662 12,100 12,355 802 Commercial real estate 17,662 24,888 6,969 8,961 8,961 1,845 Commercial construction — — — — — — Commercial and industrial 4,720 5,625 1,340 116 181 31 Total 31,908 40,837 8,971 21,177 21,497 2,678 Total impaired loans $ 51,309 $ 63,845 $ 8,971 $ 46,256 $ 50,881 $ 2,678 Three Months Ended September 30, 2021 2020 Interest Interest Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 22,268 $ 279 $ 121 $ 26,542 $ 272 $ 270 Commercial real estate 12,455 60 60 4,287 — — Commercial construction — — — 10,971 — — Commercial and industrial 7,834 13 13 10,334 9 9 Total $ 42,557 $ 352 $ 194 $ 52,134 $ 281 $ 279 Nine Months Ended September 30, 2021 2020 Interest Interest Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 23,973 $ 822 $ 280 $ 26,454 $ 847 $ 788 Commercial real estate 13,894 125 125 3,202 1 1 Commercial construction — — — 11,039 — — Commercial and industrial 7,802 149 149 7,863 16 16 Total $ 45,669 $ 1,096 $ 554 $ 48,558 $ 864 $ 805 Interest income recognized and interest income recognized on a cash basis in the tables above represent interest income for the three and nine months ended September 30, 2021 and 2020, not for the time period designated as impaired. No additional funds are committed to be advanced in connection with impaired loans. There were no material troubled debt restructuring (“TDR”) loan modifications for the three months ended September 30, 2021 and 2020. The recorded investment in TDRs was $13.2 million and $15.1 million at September 30, 2021 and December 31, 2020, respectively. Commercial TDRs totaled $2.3 million and $2.5 million at September 30, 2021 and December 31, 2020, respectively. The remainder of the TDRs outstanding at the end of these periods were residential loans. Non-accrual TDRs totaled $3.0 million and $3.6 million at September 30, 2021 and December 31, 2020, respectively. Of these loans, $2.1 million and $2.5 million were non-accrual commercial TDRs at September 30, 2021 and December 31, 2020, respectively. All TDR loans are considered impaired and management performs a discounted cash flow calculation to determine the amount of impairment reserve required on each loan. TDR loans which subsequently default are reviewed to determine if the loan should be deemed collateral dependent. In either case, any reserve required is recorded as part of the allowance for loan losses. During the three and nine months ended September 30, 2021 and 2020, there were no payment defaults on TDRs. Credit Quality Information The Company uses a ten -grade internal loan rating system for commercial real estate, commercial construction and commercial loans, as follows: Loans rated 1 – 6 are considered “pass” rated loans with low to average risk. Loans rated 7 are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management. Loans rated 8 are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected. Loans rated 9 are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. Loans rated 10 are considered “uncollectible” (loss), and of such little value that their continuance as loans is not warranted. Loans not rated consist primarily of certain smaller balance commercial real estate and commercial loans that are managed by exception. On an annual basis, or more often if needed, the Company formally reviews on a risk adjusted basis, the ratings on all commercial real estate, construction and commercial loans. Semi-annually, the Company engages an independent third party to review a significant portion of loans within these segments. Management uses the results of these reviews as part of its annual review process. On a monthly basis, the Company reviews the residential construction, residential real estate and consumer installment portfolios for credit quality primarily through the use of delinquency reports. The following table presents the Company’s loans by risk rating at September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Commercial Commercial Commercial Commercial Commercial Commercial Real Estate Construction and Industrial Real Estate Construction and Industrial (in thousands) Loans rated 1 - 6 $ 1,530,051 $ 152,685 $ 408,277 $ 1,524,105 $ 99,331 $ 452,665 Loans rated 7 25,078 — 354 14,674 — 3,122 Loans rated 8 18,155 — 438 9,455 — 7,080 Loans rated 9 — — 5,745 3,031 — 1,526 Loans rated 10 — — — — — — $ 1,573,284 $ 152,685 $ 414,814 $ 1,551,265 $ 99,331 $ 464,393 |
MORTGAGE LOAN SERVICING
MORTGAGE LOAN SERVICING | 9 Months Ended |
Sep. 30, 2021 | |
MORTGAGE LOAN SERVICING | |
MORTGAGE LOAN SERVICING | 5. MORTGAGE LOAN SERVICING The Company sells residential mortgages to government-sponsored entities and other parties. The Company retains no beneficial interests in these loans, but may retain the servicing rights of the loans sold. Mortgage loans serviced for others are not included in the accompanying unaudited interim Consolidated Balance Sheets. The risks inherent in mortgage servicing rights (“MSRs”) relate primarily to changes in prepayments that primarily result from shifts in mortgage interest rates. The unpaid principal balance of mortgage loans serviced for others was $3.63 billion and $3.05 billion as of September 30, 2021 and December 31, 2020, respectively. The Company accounts for MSRs at fair value. The Company obtains valuations from independent third parties to determine the fair value of MSRs. Key assumptions used in the estimation of fair value include prepayment speeds, discount rates, and default rates September 30, December 31, 2021 2020 Prepayment speed 10.20 % 14.30 % Discount rate 9.21 9.23 Default rate 1.78 2.27 The following summarizes changes to MSRs for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Balance, beginning of period $ 35,955 $ 16,127 $ 24,833 $ 17,150 Additions 1,577 4,225 11,842 8,700 Changes in fair value due to: Reductions from loans paid off during the period (1,613) (1,083) (4,713) (2,773) Changes in valuation inputs or assumptions 621 890 4,578 (2,918) Balance, end of period $ 36,540 $ 20,159 $ 36,540 $ 20,159 Contractually specified servicing fees, net of subservicing expense, included in other mortgage banking income amounted to $2.0 million and $5.5 million for the three and nine months ended September 30, 2021, respectively, and $1.3 million and $3.3 million for the three and nine months ended September 30, 2020, respectively. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | 6. GOODWILL AND INTANGIBLE ASSETS As of September 30, 2021, the Company had $69.8 million in goodwill, of which $59.0 million was allocated to the Bank reporting unit and $10.8 million was allocated to the HarborOne Mortgage reporting unit. The Company typically performs its goodwill impairment test during the fourth quarter of the year, unless certain indicators suggest earlier testing to be warranted. Other intangible assets were $3.4 million and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company determined that there was no triggering event that warranted an interim impairment test at September 30, 2021. |
DEPOSITS
DEPOSITS | 9 Months Ended |
Sep. 30, 2021 | |
DEPOSITS | |
DEPOSITS | 7. DEPOSITS A summary of deposit balances, by type, is as follows: September 30, December 31, 2021 2020 (in thousands) NOW and demand deposit accounts $ 1,057,494 $ 908,256 Regular savings and club accounts 1,144,595 998,994 Money market deposit accounts 832,441 866,661 Total non-certificate accounts 3,034,530 2,773,911 Term certificate accounts greater than $250,000 116,427 135,190 Term certificate accounts less than or equal to $250,000 443,423 497,108 Brokered deposits 100,000 100,000 Total certificate accounts 659,850 732,298 Total deposits $ 3,694,380 $ 3,506,209 The Company has established a relationship to participate in a reciprocal deposit program with other financial institutions. The reciprocal deposit program provides access to FDIC-insured deposit products in aggregate amounts exceeding the current limits for depositors. At September 30, 2021 and December 31, 2020, total reciprocal deposits were $42.3 million and $104.9 million, respectively, consisting primarily of money market accounts. A summary of certificate accounts by maturity at September 30, 2021 is as follows: Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 571,378 0.51 % Over 1 year to 2 years 54,430 0.78 Over 2 years to 3 years 8,381 1.05 Over 3 years to 4 years 23,100 0.96 Over 4 years to 5 years 2,823 0.74 Total certificate deposits 660,112 0.56 % Less unaccreted acquisition discount (262) Total certificate deposits, net $ 659,850 |
BORROWED FUNDS
BORROWED FUNDS | 9 Months Ended |
Sep. 30, 2021 | |
BORROWED FUNDS | |
BORROWED FUNDS | 8. Borrowed funds at September 30, 2021 and December 31, 2020 consist of Federal Home Loan Bank (“FHLB”) advances. Short-term advances were $35.0 million with a weighted average rate of 0.42% at December 31, 2020. There were no short-term advances at September 30, 2021. Long-term advances are summarized by maturity date below. September 30, 2021 December 31, 2020 Amount by Weighted Amount by Weighted Scheduled Amount by Average Scheduled Amount by Average Maturity* Call Date (1) Rate (2) Maturity* Call Date (1) Rate (2) (dollars in thousands) Year ending December 31: 2021 $ — $ 40,000 — % $ 41,750 101,750 2.47 % 2022 — — — — — — 2023 186 186 1.48 20,190 190 3.48 2024 13,400 13,400 1.39 10,000 10,000 1.68 2025 40,987 987 1.32 40,987 987 1.32 2026 and thereafter 1,147 1,147 2.00 1,170 1,170 2.00 $ 55,720 $ 55,720 1.35 % $ 114,097 $ 114,097 2.16 % * Includes an amortizing advance requiring monthly principal and interest payments. (1) (2) On September 30, 2021, the Company prepaid $20.0 million in FHLB borrowings that had maturity dates in 2023 and an aggregate prepayment penalty of $1.1 million was incurred and expensed, as the advances were not replaced with other FHLB borrowings. The FHLB advances are secured by a blanket security agreement which requires the Bank to maintain certain qualifying assets as collateral, principally residential mortgage loans and certain multi-family and commercial real estate loans held in the Bank’s portfolio. The carrying value of the loans pledged as collateral for these borrowings totaled $1.22 billion at September 30, 2021 and $1.25 billion at December 31, 2020. As of September 30, 2021, the Company had $863.6 million of available borrowing capacity with the FHLB. The Company also has additional borrowing capacity under a $25.0 million unsecured federal funds line with a correspondent bank and a secured line of credit with the Federal Reserve Bank of Boston secured by 66% of the carrying value of indirect auto and commercial loans with principal balances amounting to $103.6 million and $107.1 million at September 30, 2021 and December 31, 2020, respectively. No amounts were outstanding under either line at September 30, 2021 or December 31, 2020. Because a participating lender in the PPP, the Company also has access to additional borrowing capacity through the Board of Governors of the Federal Reserve System’s (the “Federal Reserve”) Paycheck Protection Program Liquidity Facility. Only loans issued under the PPP may be pledged as collateral. On August 30, 2018, the Company issued $35.0 million in fixed-to-floating rate subordinated notes due 2028 (the “Notes”) in a private placement transaction to institutional accredited investors. The Notes bear interest at annual fixed rate of 5.625% until September 1, 2023 at which time the interest rate resets quarterly to an interest rate per annum equal to the three–month LIBOR plus 278 basis points. Interest is payable semi-annually on March 1 and September 1 each year through September 1, 2023 and quarterly thereafter. The Notes can be redeemed partially or in whole, prior to the maturity date beginning September 1, 2023 and on any scheduled interest payment date thereafter, at par. The Notes are carried on the Consolidated Balance Sheets net of unamortized issuance costs of $872,000 and $967,000 at September 30, 2021 and December 31, 2020, respectively, which are being amortized over the period to maturity date using the interest method. At September 30, 2021 and December 31, 2020, the Notes qualified as Tier 2 capital for regulatory capital purposes. |
OTHER COMMITMENTS AND CONTINGEN
OTHER COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
OTHER COMMITMENTS AND CONTINGENCIES | |
OTHER COMMITMENTS AND CONTINGENCIES | 9. OTHER COMMITMENTS AND CONTINGENCIES Loan Commitments The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and advance funds on various lines of credit. Those commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the accompanying unaudited interim Consolidated Financial Statements. The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments. The following off-balance sheet financial instruments were outstanding at September 30, 2021 and December 31, 2020. The contract amounts represent credit risk. September 30, December 31, 2021 2020 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 261,201 $ 485,428 Commitments to grant other loans 93,132 53,714 Unadvanced funds on home equity lines of credit 204,439 178,432 Unadvanced funds on revolving lines of credit 205,074 169,907 Unadvanced funds on construction loans 148,000 127,776 Commitments to extend credit and unadvanced portion of construction loans are agreements to lend to a customer, as long as there is no violation of any condition established in the contract. Commitments to grant loans generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for unadvanced funds on construction loans and home equity and revolving lines of credit may expire without being drawn upon; therefore, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. Commitments to grant loans, and unadvanced construction loans and home equity lines of credit are collateralized by real estate, while revolving lines of credit are unsecured. |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Sep. 30, 2021 | |
DERIVATIVES | |
DERIVATIVES | 10. DERIVATIVES The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally to manage the Company’s interest rate risk. Additionally, the Company enters into interest rate derivatives to accommodate the business requirements of its customers. All derivatives are recognized as either assets or liabilities on the balance sheet and are measured at fair value. The accounting for changes in the fair value of a derivative instrument depends upon whether or not it qualifies as a hedge for accounting purposes, and further, by the type of hedging relationship. Interest Rate Swaps Designated as a Cashflow Hedge As part of its interest rate risk management strategy, the Company utilizes interest rate swap agreements to help manage its interest rate risk positions. The notional amount of the interest rate swaps do not represent the amount exchanged by the parties. The exchange of cash flows is determined by reference to the notional amounts and the other terms of the interest rate swap agreements. The changes in fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income and subsequently reclassified to earnings when gains or losses are realized. As of September 30, 2021, the Company had one interest rate swap agreement with a notional amount of $100.0 million that was designated as a cash flow hedge of certificates of deposits. The interest rate swap agreement has an average maturity of 3.52 years, the current weighted average fixed rate paid is 0.67% , the weighted average 3-month LIBOR swap receive rate is 0.12% , and the fair value is $358,000 . The Company expects approximately $506,000 related to the cash flow hedge to be reclassified to interest expense, from other comprehensive income, in the next twelve months. Derivative Loan Commitments Mortgage loan commitments qualify as derivative loan commitments if the loan that will result from exercise of the commitment will be held for sale upon funding. The Company enters into commitments to fund residential mortgage loans at specified times in the future, with the intention that these loans will subsequently be sold in the secondary market. A mortgage loan commitment binds the Company to lend funds to a potential borrower at a specified interest rate and within a specified period of time, generally up to 60 days after inception of the rate lock. Outstanding derivative loan commitments expose the Company to the risk that the price of the loans arising from exercise of the loan commitment might decline from inception of a rate lock to funding of the loan due to increases in mortgage interest rates. If interest rates increase, the value of these loan commitments decreases. Conversely, if interest rates decrease, the value of these loan commitments increases. Forward Loan Sale Commitments The Company utilizes both “mandatory delivery” and “best efforts” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. With a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the number of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay a “pair-off” fee, based on then-current market prices, to the investor to compensate the investor for the shortfall. With a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. Generally, the price the investor will pay the seller for an individual loan is specified prior to the loan being funded (e.g., on the same day the lender commits to lend funds to a potential borrower). The Company expects that these forward loan sale commitments will experience changes in fair value opposite to the change in fair value of derivative loan commitments. Interest Rate Swaps The Company enters into interest rate swap agreements that are transacted to meet the financing needs of its commercial customers. Offsetting interest rate swap agreements are simultaneously transacted with a third-party financial institution to effectively eliminate the Company’s interest rate risk associated with the customer swaps. The primary risks associated with these transactions arise from exposure to the ability of the counterparties to meet the terms of the contract. Mortgage-backed securities with a fair value of $20.5 million are pledged to secure the Company’s liability for the offsetting interest rate swaps (see Note 2). The interest rate swap notional amount is the aggregate notional amount of the customer swap and the offsetting third-party swap. Risk Participation Agreements The Company has entered into risk participation agreements with the correspondent institutions and shares in any interest rate swap losses incurred as a result of the commercial loan customers’ termination of a loan-level interest rate swap agreement prior to maturity. The Company records these risk participation agreements at fair value. The Company’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap. Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer. Although the Company has determined that the majority of the inputs used to value its interest rate swaps and risk participation agreements fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with interest rate contracts and risk participation agreements utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of September 30, 2021 and December 31, 2020, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments a re not significant to the overall valuation of its derivatives. As a result, the Company has classified its derivative valuations in their entirety as Level 2. The following tables presents the outstanding notional balances and fair values of outstanding derivative instruments: Assets Liabilities Balance Balance Notional Sheet Fair Sheet Fair Amount Location Value Location Value (in thousands) September 30, 2021: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 Other assets $ 358 Other liabilities $ — Derivatives not designated as Hedging Instruments Derivative loan commitments $ 261,202 Other assets $ 3,147 Other liabilities $ 43 Forward loan sale commitments 173,725 Other assets 884 Other liabilities 29 Interest rate swaps 764,430 Other assets 22,506 Other liabilities 22,506 Risk participation agreements 139,506 Other assets — Other liabilities — Total $ 26,895 $ 22,578 December 31, 2020: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 — $ — Other liabilities $ 1,407 Derivatives not designated as Hedging Instruments Derivative loan commitments $ 485,428 Other assets $ 12,623 Other liabilities $ 341 Forward loan sale commitments 356,500 Other assets — Other liabilities 2,204 Interest rate swaps 867,728 Other assets 39,320 Other liabilities 39,320 Risk participation agreements 132,379 Other assets — Other liabilities — Total $ 51,943 $ 43,272 The following table presents the recorded net gains and losses pertaining to the Company’s derivative instruments: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Derivatives designated as hedging instruments Gain (loss) in OCI on derivatives (effective portion), net of tax $ 116 $ 82 $ 1,271 $ (1,187) Loss reclassified from OCI into interest income or interest expense (effective portion) $ (140) $ (82) $ (373) $ 67 Derivatives not designated as hedging instruments Changes in fair value of derivative loan commitments Mortgage banking income $ (1,897) $ 4,738 $ (9,178) $ 14,266 Changes in fair value of forward loan sale commitments Mortgage banking income 1,064 755 3,059 (1,075) Total $ (833) $ 5,493 $ (6,119) $ 13,191 |
OPERATING LEASE RIGHT-OF-USE AS
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | 11. OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES Operating lease ROU assets, included in other assets , were $25.2 million at September 30, 2021. Operating lease liabilities, included in other liabilities and accrued expenses , were $26.8 million at September 30, 2021. As of September 30, 2021, the Company does not have leases that have not yet commenced. At September 30, 2021, lease expiration dates ranged from 6 month s to 36.4 years and have a weighted average remaining lease term of 17.2 years. Future minimum lease payments under non-cancellable leases as of September 30, 2021 and December 31, 2020 September 30, 2021 December 31, 2020 (in thousands) 2021 $ 737 $ 2,452 2022 2,898 2,239 2023 2,733 1,847 2024 2,247 1,644 2025 2,113 1,684 Thereafter 21,951 13,134 Total lease payments 32,679 $ 23,000 Imputed interest (5,873) Total present value of operating lease liabilities $ 26,806 The weighted-average discount rate and remaining lease term for operating leases were as follows: September 30, 2021 Weighted-average discount rate 1.94 % Weighted-average remaining lease term (years) 17.20 Rental expense for operating leases is recognized on a straight-line basis over the lease term and amounted to $ and $701,000 , respectively, for the three months ended September 30, 2021 and 2020, and $2.2 million and $1.9 million, respectively, for the nine months ended September 30, 2021 and 2020, respectively. Variable lease components, such as fair market value adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities. The following table presents the components of total lease expense: Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 (in thousands) Lease Expense: Operating lease expense $ 742 $ 2,032 Short-term lease expense 52 122 Variable lease expense 2 21 Total lease expense $ 796 $ 2,175 Other Information Cash paid for amounts included in the measurement of lease liabilities- operating cash flows for operating leases 751 2,108 Operating Lease - Operating cash flows (Liability reduction) 624 1,745 Right-of-use assets obtained in exchange for new operating lease liabilities 276 27,267 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 12. STOCK-BASED COMPENSATION Under the HarborOne Bancorp, Inc. 2020 Equity Incentive Plan (the “2020 Equity Plan”), adopted on September 29, 2020, the Company may grant stock options, restricted stock awards, performance restricted stock units and other equity incentives to its directors, officers and employees. Total shares reserved for issuance under the 2020 Equity Plans are 4,500,000. The 2017 Stock Option and Incentive Plan (the “2017 Equity Plan” and together with the 2020 Equity Plan, the “Equity Plans”), adopted on August 9, 2017, was discontinued upon the adoption of the 2020 Equity Plan, and as such, the Company may only award shares from the 2020 Equity Plan. Expense related to awards granted to employees is recognized as compensation expense, and expense related to awards granted to directors is recognized as directors’ fees within noninterest expense. Total expense for the Equity Plans was $992,000 and $2.8 million, for the three and nine months ended September 30, 2021, respectively, and $617,000 and $3.1 million, respectively, for the three and nine months ended September 30, 2020. Stock Options Stock options are generally granted with the exercise price equal to the market price of the Company’s common stock at the date of the grant with vesting periods ranging from one to three years and have ten-year contractual terms. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions: ● Volatility is based on peer group volatility due to lack of sufficient trading history for the Company. ● Expected life represents the period of time that the option is expected to be outstanding, taking into account the contractual term and the vesting period. ● Expected dividend yield is based on the Company’s history and expectation of dividend payouts. ● The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period equivalent to the expected life of the option. During the three and nine months ended September 30, 2021, the Company made no awards of nonqualified options to purchase shares of common stock. A summary of the status of the Company’s stock option grants for the nine months ended September 30, 2021, is presented in the table below: Outstanding Nonvested Weighted Average Weighted Weighted Remaining Aggregate Average Stock Option Average Contractual Intrinsic Stock Option Grant Date Awards Exercise Price Term (years) Value Awards Fair Value Balance at January 1, 2021 2,106,403 $ 9.86 473,445 $ 2.55 Granted — — — — Exercised (62,840) 10.23 — — Vested — — (192,849) 2.51 Forfeited — — — — Expired — — — — Balance at September 30, 2021 2,043,563 $ 9.85 6.49 $ — 280,596 $ 2.59 Exercisable at September 30, 2021 1,762,967 $ 9.94 6.35 $ — Unrecognized cost inclusive of directors' awards $ 251,116 Weighted average remaining recognition period (years) 0.46 Restricted Stock and Performance Restricted Stock Units Shares issued upon vesting may be either authorized but unissued shares or reacquired shares held by the Company. Any shares not issued because vesting requirements are not met will again be available for issuance under the plan. The fair market value of shares awarded, based on the market price at the date of grant, is unearned compensation to be amortized over the applicable vesting period. Performance restricted stock units vest based on a combination of performance and service requirements. The number of performance restricted stock units granted reflects the target number able to be earned under a given award. Non-vested performance restricted stock unit compensation expense is based on the most recent performance assumption available and is adjusted as assumptions change. The following table presents the activity in non-vested restricted stock awards under the Equity Plans for the nine months ended September 30, 2021: Restricted Weighted Average Stock Awards Grant Price Non-vested stock awards at January 1, 2021 384,692 $ 9.33 Vested (15,464) 10.00 Granted 188,377 11.95 Forfeited (3,000) 9.24 Non-vested stock awards at September 30, 2021 554,605 $ 10.20 Unrecognized cost inclusive of directors' awards $ 3,415,803 Weighted average remaining recognition period (years) 1.67 The following table presents the activity in non-vested performance restricted stock units under the 2020 Equity Plan for the nine months ended September 30, 2021: Performance Weighted Average Restricted Stock Units Grant Price Non-vested performance restricted stock units at January 1, 2021 — $ — Vested — — Granted 85,066 11.95 Forfeited — — Non-vested performance restricted stock units at September 30, 2021 85,066 $ 11.95 Unrecognized cost $ 818,235 Weighted average remaining recognition period (years) 2.42 |
MINIMUM REGULATORY CAPITAL REQU
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 9 Months Ended |
Sep. 30, 2021 | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 13. The Company and Bank are subject to various regulatory capital requirements administered by the Federal Reserve and the FDIC. Failure to meet minimum capital requirements can result in mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s Consolidated Financial Statements. Under the capital rules, risk-based capital ratios are calculated by dividing Tier 1, common equity Tier 1, and total risk-based capital, respectively, by risk-weighted assets. Assets and off-balance sheet credit equivalents are assigned to one of several risk-weight categories, based primarily on relative risk. The rules require banks and bank holding companies to maintain a minimum common equity Tier 1 capital ratio of 4.5%, a minimum Tier 1 capital ratio of 6.0% and a total capital ratio of 8.0%. In addition, a Tier 1 leverage ratio of 4.0% is required. Additionally, the capital rules require a bank holding company to maintain a capital conservation buffer of common equity Tier 1 capital in an amount above the minimum risk-based capital requirements equal to 2.5% of total risk weighted assets, or face restrictions on the ability to pay dividends, pay discretionary bonuses, and to engage in share repurchases. Under the FDIC’s prompt corrective action rules, an insured state nonmember bank is considered “well capitalized” if its capital ratios meet or exceed the ratios as set forth in the following table and is not subject to any written agreement, order, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. The Bank must meet well capitalized requirements under prompt corrective action provisions. Prompt corrective action provisions are not applicable to bank holding companies. A bank holding company is considered “well capitalized” if the bank holding company (i) has a total risk-based capital ratio of at least 10.0%, (ii) has a Tier 1 risk-based capital ratio of at least 6.0%, and (iii) is not subject to any written agreement order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. At September 30, 2021, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The capital levels of both the Company and the Bank at September 30, 2021 also exceeded the minimum capital requirements, including the currently applicable capital conservation buffer of 2.5%. The Company’s and the Bank’s actual regulatory capital ratios as of September 30, 2021 and December 31, 2020 are presented in the table below. Minimum Required to be Considered "Well Capitalized" Minimum Required for Under Prompt Corrective Actual Capital Adequacy Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) HarborOne Bancorp, Inc. September 30, 2021 Common equity Tier 1 capital to risk-weighted assets $ 608,882 17.1 % $ 160,129 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 608,882 17.1 213,505 6.0 N/A N/A Total capital to risk-weighted assets 688,405 19.3 284,673 8.0 N/A N/A Tier 1 capital to average assets 608,882 13.5 180,139 4.0 N/A N/A December 31, 2020 Common equity Tier 1 capital to risk-weighted assets $ 621,153 17.7 % $ 158,050 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 621,153 17.7 210,733 6.0 N/A N/A Total capital to risk-weighted assets 700,197 19.9 280,978 8.0 N/A N/A Tier 1 capital to average assets 621,153 14.5 171,578 4.0 N/A N/A HarborOne Bank September 30, 2021 Common equity Tier 1 capital to risk-weighted assets $ 559,819 15.7 % $ 160,182 4.5 % $ 231,374 6.5 % Tier 1 capital to risk-weighted assets 559,819 15.7 213,576 6.0 284,768 8.0 Total capital to risk-weighted assets 604,357 17.0 284,768 8.0 355,960 10.0 Tier 1 capital to average assets 559,819 12.4 180,113 4.0 225,141 5.0 December 31, 2020 Common equity Tier 1 capital to risk-weighted assets $ 506,822 14.4 % $ 158,081 4.5 % $ 228,339 6.5 % Tier 1 capital to risk-weighted assets 506,822 14.4 210,775 6.0 281,033 8.0 Total capital to risk-weighted assets 550,875 15.7 281,033 8.0 351,291 10.0 Tier 1 capital to average assets 506,822 11.8 171,501 4.0 214,377 5.0 |
COMPREHENSIVE INCOME (LOSS)
COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2021 | |
COMPREHENSIVE INCOME (LOSS) | |
COMPREHENSIVE INCOME (LOSS) | 14. Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities are reported as a separate component of the stockholders’ equity section of the Consolidated Balance Sheets, such items, along with net income, are components of comprehensive income (loss). The components of accumulated other comprehensive income (loss), included in stockholders’ equity, are as follows: September 30, December 31, 2021 2020 (in thousands) Cash flow hedge: Net unrealized gain (loss) $ 358 $ (1,407) Related tax effect (100) 394 Total accumulated other comprehensive income (loss) $ 258 $ (1,013) Securities available for sale: Net unrealized (loss) gain $ (1,765) $ 4,102 Related tax effect 389 (904) Total accumulated other comprehensive (loss) income $ (1,376) $ 3,198 The following tables present changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2021 and 2020: Three Months Ended September 30, 2021 2020 Available Cash Available Cash for Sale Flow for Sale Flow Securities Hedge Total Securities Hedge Total (in thousands) Balance at beginning of period $ 687 $ 142 $ 829 $ 4,166 $ (1,269) $ 2,897 Other comprehensive (loss) income before reclassifications (2,406) 22 (2,384) (1,335) 32 (1,303) Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale — — — — — — Amounts reclassified from accumulated other comprehensive income (loss) (241) 140 (101) — 82 82 Net current period other comprehensive (loss) income (2,647) 162 (2,485) (1,335) 114 (1,221) Related tax effect 584 (46) 538 132 (32) 100 Balance at end of period $ (1,376) $ 258 $ (1,118) $ 2,963 $ (1,187) $ 1,776 Nine Months Ended September 30, 2021 2020 Available Cash Available Cash for Sale Flow for Sale Flow Securities Hedge Total Securities Hedge Total (in thousands) Balance at beginning of period $ 3,198 $ (1,013) $ 2,185 $ 1,480 $ — $ 1,480 Other comprehensive (loss) income before reclassifications (5,626) 1,392 (4,234) 4,212 (1,581) 2,631 Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale — — — 522 — 522 Amounts reclassified from accumulated other comprehensive income (loss) (241) 373 132 (2,533) (67) (2,600) Net current period other comprehensive (loss) income (5,867) 1,765 (4,102) 2,201 (1,648) 553 Related tax effect 1,293 (494) 799 (718) 461 (257) Balance at end of period $ (1,376) $ 258 $ (1,118) $ 2,963 $ (1,187) $ 1,776 |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
FAIR VALUE OF ASSETS AND LIABILITIES | |
FAIR VALUE OF ASSETS AND LIABILITIES | 15. FAIR VALUE OF ASSETS AND LIABILITIES Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: •Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. •Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. •Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The following methods and assumptions were used by the Company in estimating fair value disclosures: Debt Securities Level 2 debt securities are traded less frequently than exchange-traded instruments. The fair value of these securities is determined using matrix pricing with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category includes obligations of U.S. government-sponsored enterprises, including mortgage-backed securities, individual name issuer trust preferred debt securities and corporate bonds. Debt securities not actively traded whose fair value is determined through the use of cash flows utilizing inputs that are unobservable are classified as Level 3. There were no Level 3 securities held at September 30, 2021 and December 31, 2020. Loans held for sale Collateral Dependent Impaired Loans Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, the Company reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. MSRs Interest rate swap designated as a cashflow hedge Forward loan sale commitments and derivative loan commitments Interest rate swaps and risk participation agreements Off-balance sheet credit-related instruments Transfers between levels are recognized at the end of the reporting period, if applicable. There were no transfers during the periods presented. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below: Total Level 1 Level 2 Level 3 Fair Value (in thousands) September 30, 2021 Assets Securities available for sale $ — $ 390,552 $ — $ 390,552 Loans held for sale — 77,052 — 77,052 Mortgage servicing rights — 36,540 — 36,540 Derivative loan commitments — — 3,147 3,147 Forward loan sale commitments — — 884 884 Interest rate management agreements — 358 — 358 Interest rate swaps — 22,506 — 22,506 $ — $ 527,008 $ 4,031 $ 531,039 Liabilities Derivative loan commitments $ — $ — $ 43 $ 43 Forward loan sale commitments — — 29 29 Interest rate swaps — 22,506 — 22,506 $ — $ 22,506 $ 72 $ 22,578 December 31, 2020 Assets Securities available for sale $ — $ 276,498 $ — $ 276,498 Loans held for sale — 208,612 — 208,612 Mortgage servicing rights — 24,833 — 24,833 Derivative loan commitments — — 12,623 12,623 Forward loan sale commitments — — — — Interest rate swaps — 39,320 — 39,320 $ — $ 549,263 $ 12,623 $ 561,886 Liabilities Derivative loan commitments $ — $ — $ 341 $ 341 Forward loan sale commitments — — 2,204 2,204 Interest rate management agreements — 1,407 — 1,407 Interest rate swaps — 39,320 — 39,320 $ — $ 40,727 $ 2,545 $ 43,272 The table below presents, for the three and nine months ended September 30, 2021 and 2020, the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 5,134 $ 10,844 $ 12,623 $ 1,411 Total gains (losses) included in net income (1) (1,103) 4,903 (8,592) 14,336 Balance at end of period $ 4,031 $ 15,747 $ 4,031 $ 15,747 Changes in unrealized gains relating to instruments at period end $ 4,031 $ 15,747 $ 4,031 $ 15,747 Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (342) $ (2,067) $ (2,545) $ (332) Total gains (losses) included in net income (1) 270 590 2,473 (1,145) Balance at end of period $ (72) $ (1,477) $ (72) $ (1,477) Changes in unrealized losses relating to instruments at period end $ (72) $ (1,477) $ (72) $ (1,477) (1) Included in mortgage banking income on the Consolidated Statements of Net Income. Assets Measured at Fair Value on a Non-recurring Basis The Company may also be required, from time to time, to measure certain other financial assets on a nonrecurring basis in accordance with generally accepted accounting principles. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no liabilities measured at fair value on a non-recurring basis at September 30, 2021 and December 31, 2020. The following table summarizes the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets. September 30, 2021 December 31, 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Impaired loans: Residential $ — $ — $ 846 $ — $ — $ 919 Commercial real estate — — 17,662 — — 3,034 Commercial and industrial — — 4,956 — — 4,208 Other real estate owned and repossessed assets — — 28 — — 595 $ — $ — $ 23,492 $ — $ — $ 8,756 Losses in the following table represent the amount of the fair value adjustments recorded during the period on the carrying value of the assets held at September 30, 2021 and December 31, 2020, respectively. Losses on fully charged off loans are not included in the table. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Impaired loans Residential $ — $ 103 $ — $ 369 Commercial real estate 5,124 — 5,124 — Commercial and industrial 8 644 2,824 2,654 Other real estate owned and repossessed assets — 2 24 58 $ 5,132 $ 749 $ 7,972 $ 3,081 Losses applicable to write-downs of impaired loans and other real estate owned and repossessed assets are based on the appraised value of the underlying collateral less estimated costs to sell. The losses on impaired loans are not recorded directly as an adjustment to current earnings, but rather as a component in determining the allowance for loan losses. The losses on other real estate owned and repossessed assets represent adjustments in valuation recorded during the time period indicated and not for losses incurred on sales. Appraised values are typically based on a blend of (a) an income approach using observable cash flows to measure fair value, and (b) a market approach using observable market comparables. These appraised values may be discounted based on management’s historical knowledge, expertise or changes in market conditions from time of valuation. Summary of Fair Values of Financial Instruments The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments are as follows. Certain financial instruments and all nonfinancial instruments are exempt from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company. September 30, 2021 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 319,639 $ 319,639 $ — $ — $ 319,639 Securities available for sale 390,552 — 390,552 — 390,552 Federal Home Loan Bank stock 6,828 N/A N/A N/A N/A Loans held for sale 77,052 — 77,052 — 77,052 Loans, net 3,409,756 — — 3,441,946 3,441,946 Retirement plan annuities 14,065 — — 14,065 14,065 Accrued interest receivable 10,880 — 10,880 — 10,880 Financial liabilities: Deposits 3,694,380 — — 3,697,001 3,697,001 Borrowed funds 55,720 — 56,350 — 56,350 Subordinated debt 34,128 — — 37,206 37,206 Mortgagors' escrow accounts 8,412 — — 8,412 8,412 Accrued interest payable 567 — 567 — 567 Derivative loan commitments: Assets 3,147 — — 3,147 3,147 Liabilities 43 — — 43 43 Interest rate management agreements: Assets 358 — 358 — 358 Liabilities — — — — — Interest rate swap agreements: Assets 22,506 — 22,506 — 22,506 Liabilities 22,506 — 22,506 — 22,506 Forward loan sale commitments: Assets 884 — — 884 884 Liabilities 29 — — 29 29 December 31, 2020 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 205,870 $ 205,870 $ — $ — $ 205,870 Securities available for sale 276,498 — 276,498 — 276,498 Federal Home Loan Bank stock 8,738 N/A N/A N/A N/A Loans held for sale 208,612 — 208,612 — 208,612 Loans, net 3,439,247 — — 3,473,751 3,473,751 Retirement plan annuities 13,747 — — 13,747 13,747 Accrued interest receivable 11,874 — 11,874 — 11,874 Financial liabilities: Deposits 3,506,209 — — 3,509,996 3,509,996 Borrowed funds 149,097 — 152,373 — 152,373 Subordinated debt 34,033 — — 34,799 34,799 Mortgagors' escrow accounts 7,736 — — 7,736 7,736 Accrued interest payable 1,262 — 1,262 — 1,262 Derivative loan commitments: Assets 12,623 — — 12,623 12,623 Liabilities 341 — — 341 341 Interest rate management agreements: Liabilities 1,407 — 1,407 — 1,407 Interest rate swap agreements: Assets 39,320 — 39,320 — 39,320 Liabilities 39,320 — 39,320 — 39,320 Forward loan sale commitments: Assets — — — — — Liabilities 2,204 — — 2,204 2,204 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 16. EARNINGS PER SHARE (“EPS”) Basic EPS represents net income attributable to common shareholders divided by the weighted-average number of common shares outstanding during the period. Non-vested restricted shares that are participating securities are included in the computation of basic earnings per share. Diluted EPS is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding, plus the effect of potential dilutive common stock equivalents outstanding during the period. The following table presents earnings per common share. Three Months Ended September 30, 2021 2020 Net income available to common stockholders (in thousands) $ 12,259 $ 11,893 Average number of common shares outstanding 54,021,542 58,375,742 Less: Average unallocated ESOP shares and non-vested restricted shares (4,220,419) (3,910,403) Weighted average number of common shares outstanding used to calculate basic earnings per common share 49,801,123 54,465,339 Dilutive effect of share-based compensation 862,292 — Weighted average number of common shares outstanding used to calculate diluted earnings per common share 50,663,415 54,465,339 Earnings per common share: Basic $ 0.25 $ 0.22 Diluted $ 0.24 $ 0.22 Nine Months Ended September 30, 2021 2020 Net income available to common stockholders (in thousands) $ 45,927 $ 27,192 Average number of common shares outstanding 55,599,758 58,403,825 Less: Average unallocated ESOP shares and non-vested restricted shares (4,237,506) (3,967,735) Weighted average number of common shares outstanding used to calculate basic earnings per common share 51,362,252 54,436,090 Dilutive effect of share-based compensation 732,497 — Weighted average number of common shares outstanding used to calculate diluted earnings per common share 52,094,749 54,436,090 Earnings per common share: Basic $ 0.89 $ 0.50 Diluted $ 0.88 $ 0.50 Stock options for 2,148,295 shares of common stock for the three and nine months ended September 30, 2020 were not considered in computing diluted earnings per share because they were antidilutive. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2021 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 17. REVENUE RECOGNITION Revenue from contracts with customers in the scope of Accounting Standards Codification (“ASC”) (“Topic 606”) is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. The Company recognizes revenue from contracts with customers when it satisfies its performance obligations. The Company’s performance obligations are generally satisfied as services are rendered and can either be satisfied at a point in time or over time. Unsatisfied performance obligations at the report date are not material to our consolidated financial statements. In certain cases, other parties are involved with providing services to our customers. If the Company is a principal in the transaction (providing services itself or through a third party on its behalf), revenues are reported based on the gross consideration received from the customer and any related expenses are reported gross in noninterest expense. If the Company is an agent in the transaction (referring to another party to provide services), the Company reports its net fee or commission retained as revenue. The Company recognizes revenue that is transactional in nature and such revenue is earned at a point in time. Revenue that is recognized at a point in time includes card interchange fees (fee income related to debit card transactions), ATM fees, wire transfer fees, overdraft charge fees, and stop-payment and returned check fees. Additionally, revenue is collected from loan fees, such as letters of credit, line renewal fees and application fees. Such revenue is derived from transactional information and is recognized as revenue immediately as the transactions occur or upon providing the service to complete the customer’s transaction. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2021 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 18. SEGMENT REPORTING The Company has two reportable segments: HarborOne Bank and HarborOne Mortgage. Revenue from HarborOne Bank consists primarily of interest earned on loans and investment securities and service charges on deposit accounts. Revenue from HarborOne Mortgage comprises interest earned on loans and fees received as a result of the residential mortgage origination, sale and servicing process. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Segment profit and loss is measured by net income on a legal entity basis. Intercompany transactions are eliminated in consolidation. Information about the reportable segments and reconciliation to the unaudited interim Consolidated Financial Statements at September 30, 2021 and 2020 and for the three and nine months then ended is presented in the tables below. Three Months Ended September 30, 2021 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 32,494 $ 792 $ (483) $ — $ 32,803 Provision (credit) for loan losses (1,627) — — — (1,627) Net interest and dividend income (loss), after provision (credit) for loan losses 34,121 792 (483) — 34,430 Mortgage banking income: Gain on sale of mortgage loans — 12,756 — — 12,756 Intersegment gain (loss) (1,373) 2,366 — (993) — Changes in mortgage servicing rights fair value (74) (918) — — (992) Other 263 3,619 — — 3,882 Total mortgage banking income (loss) (1,184) 17,823 — (993) 15,646 Other noninterest income 6,339 25 — — 6,364 Total noninterest income 5,155 17,848 — (993) 22,010 Noninterest expense 26,570 12,387 317 — 39,274 Income (loss) before income taxes 12,706 6,253 (800) (993) 17,166 Provision (benefit) for income taxes 3,575 1,559 (227) — 4,907 Net income (loss) $ 9,131 $ 4,694 $ (573) $ (993) $ 12,259 Nine Months Ended September 30, 2021 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 95,876 $ 2,897 $ (1,388) $ — $ 97,385 Provision (credit) for loan losses (5,822) — — — (5,822) Net interest and dividend income (loss), after provision (credit) for loan losses 101,698 2,897 (1,388) — 103,207 Mortgage banking income: Gain on sale of mortgage loans — 51,820 — — 51,820 Intersegment gain (loss) (2,945) 3,938 — (993) — Changes in mortgage servicing rights fair value (207) 72 — — (135) Other 839 11,633 — — 12,472 Total mortgage banking income (loss) (2,313) 67,463 — (993) 64,157 Other noninterest income 17,328 37 — — 17,365 Total noninterest income 15,015 67,500 — (993) 81,522 Noninterest expense 75,161 44,545 968 — 120,674 Income (loss) before income taxes 41,552 25,852 (2,356) (993) 64,055 Provision (benefit) for income taxes 11,873 6,905 (650) — 18,128 Net income (loss) $ 29,679 $ 18,947 $ (1,706) $ (993) $ 45,927 Total assets at period end $ 4,575,798 $ 208,888 $ 717,325 $ (934,917) $ 4,567,094 Goodwill at period end $ 59,042 $ 10,760 $ — $ — $ 69,802 Three Months Ended September 30, 2020 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 30,599 $ 1,000 $ (430) $ — $ 31,169 Provision for loan losses 13,454 — — — 13,454 Net interest and dividend income (loss), after provision for loan losses 17,145 1,000 (430) — 17,715 Mortgage banking income: Gain on sale of mortgage loans — 34,055 — — 34,055 Intersegment gain (loss) (645) 645 — — — Changes in mortgage servicing rights fair value (354) 161 — — (193) Other 334 3,924 — — 4,258 Total mortgage banking income (loss) (665) 38,785 — — 38,120 Other noninterest income (loss) 6,326 (8) — — 6,318 Total noninterest income 5,661 38,777 — — 44,438 Noninterest expense 26,300 19,133 266 — 45,699 Income (loss) before income taxes (3,494) 20,644 (696) — 16,454 Provision (benefit) for income taxes 571 4,550 (560) — 4,561 Net income (loss) $ (4,065) $ 16,094 $ (136) $ — $ 11,893 Nine Months Ended September 30, 2020 HarborOne HarborOne HarborOne Bank Mortgage Bancorp Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 86,248 $ 2,020 $ (952) $ — $ 87,316 Provision for loan losses 27,207 — — — 27,207 Net interest and dividend income (loss), after provision for loan losses 59,041 2,020 (952) — 60,109 Mortgage banking income: Gain on sale of mortgage loans — 77,195 — — 77,195 Intersegment gain (loss) (2,444) 2,444 — — — Changes in mortgage servicing rights fair value (2,014) (3,677) — — (5,691) Other 1,031 9,619 — — 10,650 Total mortgage banking income (loss) (3,427) 85,581 — — 82,154 Other noninterest income (loss) 19,640 (141) — — 19,499 Total noninterest income 16,213 85,440 — — 101,653 Noninterest expense 75,806 47,923 907 — 124,636 Income (loss) before income taxes (552) 39,537 (1,859) — 37,126 Provision (benefit) for income taxes 2,199 8,667 (932) — 9,934 Net income (loss) $ (2,751) $ 30,870 $ (927) $ — $ 27,192 Total assets at period end $ 4,404,842 $ 280,983 $ 729,838 $ (987,344) $ 4,428,319 Goodwill at period end $ 59,042 $ 10,760 $ — $ — $ 69,802 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The unaudited interim Consolidated Financial Statements of HarborOne Bancorp, Inc. (the “Company”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by the U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying Consolidated Financial Statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2020 and 2019 and notes thereto included in the Company’s Annual Report on Form 10-K. The unaudited interim Consolidated Financial Statements include the accounts of the Company; the Company’s subsidiaries, Legion Parkway Company LLC (a security corporation) and HarborOne Bank (the “Bank”); and the Bank’s wholly-owned subsidiaries, which consist of HarborOne Mortgage, LLC (“HarborOne Mortgage”), a passive investment corporation, and two security corporations. The passive investment corporation maintains and manages certain assets of the Bank. The security corporations were established for the purpose of buying, holding and selling securities on their own behalf. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. These changes and reclassifications did not impact previously reported net income or comprehensive income. |
Nature of Operations | Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 27 full-service branches in Massachusetts and Rhode Island, and commercial lending offices in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains more than 30 offices in Massachusetts, Rhode Island, New Hampshire, and Maine and is licensed to lend in six additional states. The Company’s primary deposit products are checking, money market, savings, and term certificate of deposit accounts, while its primary lending products are commercial real estate, commercial, residential mortgages, home equity, and consumer loans. The Company also originates, sells and services residential mortgage loans through HarborOne Mortgage. |
Risks and Uncertainties | Risks and Uncertainties ● Net interest income could be reduced. In accordance with regulatory guidance, the Company worked with borrowers impacted by the COVID-19 pandemic to defer payments. While interest will continue to be recognized in accordance with GAAP, should eventual credit losses on these deferments emerge, interest income would be negatively impacted. At September 30, 2021, $7.9 million in loans were in an active deferral period and $1.5 million in loans with an expired deferral period were delinquent more than 30 days. ● Continued uncertainty regarding the severity and duration of the COVID-19 pandemic and the related economic effects on credit quality could continue to affect the accounting for loan losses. Although credit quality has not been a severely impacted so far, it is possible that asset quality could worsen, and loan charge-offs could increase as government aid expires or if new variants result in renewed business restrictions. The Bank participated in the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) providing loans to small businesses negatively impacted by the COVID-19 pandemic. PPP loans are fully guaranteed by the U.S. government and continue to be forgiven. As of September 30, 2021, PPP loans amounted to $54.3 million and there was $2.1 million of deferred processing fee income. We expect to complete the forgiveness process on most of the remaining PPP loans by year end. ● Noninterest income could be reduced. Uncertainty regarding the severity and duration of the COVID-19 pandemic could cause further volatility in the financial markets. The COVID-19 pandemic and the measures taken to control its spread may disrupt the mortgage loan origination process. Mortgage banking revenues are dependent on mortgage origination volume and are sensitive to interest rates and the condition of housing markets. ● Valuation and fair value measurement challenges may occur. Changes in the COVID-19 pandemic could cause a decline in the Company’s stock price or other triggering events could occur that would cause management to perform a goodwill impairment test that may result in an impairment charge being recorded to earnings for that period. |
Recently Adopted Accounting Standards Updates ("ASU") and ASUs not yet Adopted | Summary of Significant Accounting Policies and Recently Adopted Accounting Standards Updates (“ASU”) As an “emerging growth company”, as defined in Title 1 of the Jumpstart Our Business Startups (“JOBS”) Act, the Company has elected to use the extended transition period to delay the adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company’s emerging growth company status is scheduled to end December 31, 2021 unless a triggering event occurs sooner. Significant accounting policies in effect and disclosed within the Company’s most recent audited consolidated financial statements as of December 31, 2020 remain substantially unchanged with the exception of the accounting policy for leases as a result of adopting ASU 2016-02, Leases (Topic 842) and subsequent related updates (collectively ASU 2016-02) as described below. The Company adopted ASU 2016-02 on January 1, 2021, which requires lessees to recognize most leases on their balance sheet. Lessor accounting is largely unchanged. ASU 2016-02 requires both quantitative and qualitative disclosures regarding key information about lease arrangements from both lessees and lessors. The Company elected the effective date transition method utilizing the adoption date as the first date of application of the revised guidance. As a result, prior period amounts have not been restated. Upon adoption, the Company elected certain transitional practical expedients offered through the guidance, including the “package of practical expedients” whereby it did not reassess (i) whether any expired or existing contracts contain leases, (ii) the lease classification of any expired or existing leases, and (iii) initial direct costs for any existing leases, which resulted in the Company not recognizing a cumulative effect adjustment to retained earnings. Management evaluated the leasing contracts and activities and developed methodologies and processes to estimate and account for the right-of-use (“ROU”) assets and lease liabilities for building leases based on the present value of future lease payments. On January 1, 2021, the Company recorded right-of-use (“ROU”) assets, included in other assets, and lease liabilities, included in other liabilities, totaling $23.2 million and $24.4 million, respectively. The impact to capital ratios as a result of increased risk-weighted assets was immaterial. The adoption of this guidance did not result in a material change to lessee expense recognition. The Company is committed to rent premises and equipment used in business operations under non-cancelable operating leases and determines if an arrangement meets the definition of a lease upon inception. Leases that transfer substantially all of the benefits and risks of ownership to the Company are classified as finance leases, while all others are classified as operating leases. At lease commencement, a lease liability and ROU asset are calculated and recognized on both types of leases. The lease liability is equal to the present value of the future minimum lease payments. The ROU asset is equal to the lease liability, plus any initial direct costs and prepaid lease payments, less any lessor incentives received. Operating lease ROU assets are included in other assets and finance lease ROU assets are included in premises and equipment, net. The Company’s leases do not provide an implicit interest rate; therefore, the Company used the appropriate Federal Home Loan Bank (“FHLB”) term rate commensurate with the underlying lease terms to determine the present value of operating lease liabilities. The lease term used in the calculation includes any options to extend that the Company is reasonably certain to exercise, determined on a lease-by-lease basis. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. At September 30, 2021, the Company had no finance lease ROU assets or lease liabilities . For operating leases, total lease cost is comprised of lease expense, short-term lease cost, and variable lease cost. Lease expense includes future minimum lease payments, which are recognized on a straight-line basis over the lease term, as well as common area maintenance charges, real estate taxes, insurance and other expenses, where applicable, which are expensed as incurred. Total lease cost for operating leases is recorded in occupancy and equipment noninterest expense. See Note 11, Operating Lease Right-of-Use Assets and Liabilities, for further information. The Company also adopted the following ASU on January 1, 2021, which did not have a material impact on the Company’s Consolidated Financial Statements: ASU 2017-12 Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities ASUs not yet Adopted ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting These provisions apply to contract modifications that reference the London InterBank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. Qualifying modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification would be considered “minor” so that any existing unamortized deferred loan origination fees and costs would carry forward and continue to be amortized. Qualifying modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for hedge accounting. In January 2020, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which clarifies the scope of Topic 848 to include derivative instruments impacted by the discounting transition. ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022, with adoption permitted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected, the amendments must be applied prospectively for all eligible contract modifications. is evaluating the effect that this ASU will have on the Company’s consolidated financial statements. ASU 2019-12 , Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes. The amendments in this ASU are intended to simplify the accounting for income taxes. ASU 2019-12 is effective for public companies for fiscal years beginning after December 15, 2020, with early adoption permitted. For all other entities the guidance is effective for fiscal years beginning after December 15, 2021. Certain provisions under ASU 2019-12 require prospective application, some require modified retrospective application through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption, while other provisions require retrospective application to all periods presented in the consolidated financial statements upon adoption. The Company expects to adopt ASU 2019-12 on December 31, 2021 and it is not expected to have a material impact on the Company’s consolidated financial statements. ASU 2016-13 Financial Instruments—Credit Losses (Topic 326) |
DEBT SECURITIES (Tables)
DEBT SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
DEBT SECURITIES | |
Schedule of securities with gross unrealized gains and losses | Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (in thousands) September 30, 2021: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 38,155 $ — $ 426 $ 37,729 U.S. government agency and government-sponsored residential mortgage-backed securities 345,737 1,355 2,983 344,109 U.S. government-sponsored collateralized mortgage obligations 4,543 152 — 4,695 SBA asset-backed securities 3,882 137 — 4,019 Total securities available for sale $ 392,317 $ 1,644 $ 3,409 $ 390,552 December 31, 2020: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 5,002 $ 93 $ — $ 5,095 U.S. government agency and government-sponsored residential mortgage-backed securities 234,819 3,113 305 237,627 U.S. government-sponsored collateralized mortgage obligations 16,326 330 — 16,656 SBA asset-backed securities 16,249 871 — 17,120 Total securities available for sale $ 272,396 $ 4,407 $ 305 $ 276,498 |
Schedule of debt securities by contractual maturity | Available for Sale Amortized Fair Cost Value (in thousands) After 1 year through 5 years $ — $ — After 5 years through 10 years 38,155 37,729 Over 10 years — — 38,155 37,729 U.S. government agency and government-sponsored residential mortgage-backed securities 345,737 344,109 U.S. government-sponsored collateralized mortgage obligations 4,543 4,695 SBA asset-backed securities 3,882 4,019 Total $ 392,317 $ 390,552 |
Schedule of proceeds and gross realized gains and losses related to sales and calls of securities | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Sales Proceeds $ 39,321 $ — $ 39,321 $ 72,333 Gross gains 241 — 241 2,521 Gross losses — — — — Calls Proceeds $ 5,000 $ 2,000 $ 5,000 $ 8,635 Gross gains — — — 12 Gross losses — — — — |
Schedule of securities with continuous losses | Less Than Twelve Months Twelve Months and Over Gross Gross Unrealized Fair Unrealized Fair Losses Value Losses Value (in thousands) September 30, 2021: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 426 $ 37,729 $ — $ — U.S. government agency and government-sponsored residential mortgage-backed securities 2,771 261,886 212 19,759 $ 3,197 $ 299,615 $ 212 $ 19,759 December 31, 2020: Securities available for sale U.S. government agency and government-sponsored residential mortgage-backed securities $ 283 $ 67,460 $ 22 $ 3,668 |
LOANS HELD FOR SALE (Tables)
LOANS HELD FOR SALE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
LOANS HELD FOR SALE | |
Schedule of fair value and contractual principal balance outstanding of loans held for sale | September 30, December 31, 2021 2020 (in thousands) Loans held for sale, fair value $ 77,052 $ 208,612 Loans held for sale, contractual principal outstanding 75,009 198,984 Fair value less unpaid principal balance $ 2,043 $ 9,628 |
LOANS (Tables)
LOANS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of balances of loans | September 30, December 31, 2021 2020 (in thousands) Residential real estate: One- to four-family $ 993,725 $ 928,934 Second mortgages and equity lines of credit 135,147 145,672 Residential real estate construction 31,817 31,217 Total residential real estate loans 1,160,689 1,105,823 Commercial: Commercial real estate 1,573,284 1,551,265 Commercial construction 152,685 99,331 Commercial and industrial 414,814 464,393 Total commercial loans 2,140,783 2,114,989 Consumer loans: Auto 149,019 265,266 Personal 7,253 8,564 Total consumer loans 156,272 273,830 Total loans 3,457,744 3,494,642 Allowance for loan losses (47,988) (55,395) Loans, net $ 3,409,756 $ 3,439,247 |
Schedule of activity in allowance for loan losses and allocation of allowance to loan segments | The following is the activity in the allowance for loan losses for the three and nine months ended September 30, 2021 and 2020: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at June 30, 2020 $ 5,857 $ 18,389 $ 3,215 $ 3,562 $ 2,204 $ 2,880 $ 36,107 Provision for loan losses 1,721 7,771 962 1,617 643 740 13,454 Charge-offs — (62) — (213) (140) — (415) Recoveries 22 — — — 55 — 77 Balance at September 30, 2020 $ 7,600 $ 26,098 $ 4,177 $ 4,966 $ 2,762 $ 3,620 $ 49,223 Balance at June 30, 2021 $ 5,434 $ 32,991 $ 1,937 $ 8,059 $ 853 $ 1,999 $ 51,273 Provision (credit) for loan losses (2,009) 2,059 615 (815) (478) (999) (1,627) Charge-offs — (381) — (1,277) (61) — (1,719) Recoveries 8 1 — 18 34 — 61 Balance at September 30, 2021 $ 3,433 $ 34,670 $ 2,552 $ 5,985 $ 348 $ 1,000 $ 47,988 Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2019 $ 3,178 $ 12,875 $ 2,526 $ 2,977 $ 1,010 $ 1,494 $ 24,060 Provision for loan losses 4,270 14,458 1,651 2,560 2,142 2,126 27,207 Charge-offs (52) (1,236) — (790) (519) — (2,597) Recoveries 204 1 — 219 129 — 553 Balance at September 30, 2020 $ 7,600 $ 26,098 $ 4,177 $ 4,966 $ 2,762 $ 3,620 $ 49,223 Balance at December 31, 2020 $ 7,419 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Provision (credit) for loan losses (4,214) 293 597 2,101 (2,129) (2,470) (5,822) Charge-offs — (393) — (1,463) (147) — (2,003) Recoveries 228 5 — 36 149 — 418 Balance at September 30, 2021 $ 3,433 $ 34,670 $ 2,552 $ 5,985 $ 348 $ 1,000 $ 47,988 Allocation of the allowance to loan segments at September 30, 2021 and December 31, 2020 follows: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) September 30, 2021: Loans: Impaired loans $ 26,971 $ 18,155 $ — $ 6,183 $ — $ 51,309 Non-impaired loans 1,133,718 1,555,129 152,685 408,631 156,272 3,406,435 Total loans $ 1,160,689 $ 1,573,284 $ 152,685 $ 414,814 $ 156,272 $ 3,457,744 Allowance for loan losses: Impaired loans $ 662 $ 6,969 $ — $ 1,340 $ — $ — $ 8,971 Non-impaired loans 2,771 27,701 2,552 4,645 348 1,000 39,017 Total allowance for loan losses $ 3,433 $ 34,670 $ 2,552 $ 5,985 $ 348 $ 1,000 $ 47,988 December 31, 2020: Loans: Impaired loans $ 24,384 $ 12,513 $ — $ 9,359 $ — $ 46,256 Non-impaired loans 1,081,439 1,538,752 99,331 455,034 273,830 3,448,386 Total loans $ 1,105,823 $ 1,551,265 $ 99,331 $ 464,393 $ 273,830 $ 3,494,642 Allowance for loan losses: Impaired loans $ 802 $ 1,845 $ — $ 31 $ — $ — $ 2,678 Non-impaired loans 6,617 32,920 1,955 5,280 2,475 3,470 52,717 Total allowance for loan losses $ 7,419 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 |
Summary of past due and non-accrual loans | 90 Days 30-59 Days 60-89 Days or More Total Loans on Past Due Past Due Past Due Past Due Non-accrual (in thousands) September 30, 2021 Residential real estate: One- to four-family $ 778 $ 1,646 $ 3,458 $ 5,882 $ 11,754 Second mortgages and equity lines of credit 203 203 263 669 437 Commercial real estate 8,843 — 338 9,181 18,000 Commercial construction — — — — — Commercial and industrial 37 3 3,683 3,723 6,183 Consumer: Auto 533 109 84 726 111 Personal 55 18 1 74 1 Total $ 10,449 $ 1,979 $ 7,827 $ 20,255 $ 36,486 December 31, 2020 Residential real estate: One- to four-family $ 12,148 $ 2,223 $ 6,418 $ 20,789 $ 11,611 Second mortgages and equity lines of credit 460 46 433 939 834 Residential real estate construction 471 — — 471 — Commercial real estate 416 — 3,369 3,785 12,486 Commercial construction — — — — — Commercial and industrial 444 191 1,243 1,878 8,606 Consumer: Auto 1,657 397 488 2,542 557 Personal 88 11 2 101 7 Total $ 15,684 $ 2,868 $ 11,953 $ 30,505 $ 34,101 |
Schedule of information pertaining to impaired loans | The following information pertains to impaired loans: September 30, 2021 December 31, 2020 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance (in thousands) Impaired loans without a specific reserve: Residential real estate $ 17,445 $ 18,922 $ — $ 12,284 $ 13,039 $ — Commercial real estate 493 495 — 3,552 4,741 — Commercial construction — — — — — — Commercial and industrial 1,463 3,591 — 9,243 11,604 — Total 19,401 23,008 — 25,079 29,384 — Impaired loans with a specific reserve: Residential real estate 9,526 10,324 662 12,100 12,355 802 Commercial real estate 17,662 24,888 6,969 8,961 8,961 1,845 Commercial construction — — — — — — Commercial and industrial 4,720 5,625 1,340 116 181 31 Total 31,908 40,837 8,971 21,177 21,497 2,678 Total impaired loans $ 51,309 $ 63,845 $ 8,971 $ 46,256 $ 50,881 $ 2,678 Three Months Ended September 30, 2021 2020 Interest Interest Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 22,268 $ 279 $ 121 $ 26,542 $ 272 $ 270 Commercial real estate 12,455 60 60 4,287 — — Commercial construction — — — 10,971 — — Commercial and industrial 7,834 13 13 10,334 9 9 Total $ 42,557 $ 352 $ 194 $ 52,134 $ 281 $ 279 Nine Months Ended September 30, 2021 2020 Interest Interest Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 23,973 $ 822 $ 280 $ 26,454 $ 847 $ 788 Commercial real estate 13,894 125 125 3,202 1 1 Commercial construction — — — 11,039 — — Commercial and industrial 7,802 149 149 7,863 16 16 Total $ 45,669 $ 1,096 $ 554 $ 48,558 $ 864 $ 805 |
Schedule of loans by risk rating | September 30, 2021 December 31, 2020 Commercial Commercial Commercial Commercial Commercial Commercial Real Estate Construction and Industrial Real Estate Construction and Industrial (in thousands) Loans rated 1 - 6 $ 1,530,051 $ 152,685 $ 408,277 $ 1,524,105 $ 99,331 $ 452,665 Loans rated 7 25,078 — 354 14,674 — 3,122 Loans rated 8 18,155 — 438 9,455 — 7,080 Loans rated 9 — — 5,745 3,031 — 1,526 Loans rated 10 — — — — — — $ 1,573,284 $ 152,685 $ 414,814 $ 1,551,265 $ 99,331 $ 464,393 |
PCI | |
Schedule of information pertaining to impaired loans | September 30, December 31, 2021 2020 (in thousands) Outstanding balance $ 3,701 $ 4,307 Carrying amount $ 3,485 $ 4,079 |
Summary of activity in accretable yield for purchased credit impaired loans | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Balance at beginning of period $ 136 $ 145 $ 141 $ 149 Additions — — — — Accretion (1) (3) (6) (7) Reclassification from nonaccretable difference — — — — Balance at end of period $ 135 $ 142 $ 135 $ 142 |
MORTGAGE LOAN SERVICING (Tables
MORTGAGE LOAN SERVICING (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
MORTGAGE LOAN SERVICING | |
Tabular disclosure of assumptions used in the calculation of fair value of MSR | September 30, December 31, 2021 2020 Prepayment speed 10.20 % 14.30 % Discount rate 9.21 9.23 Default rate 1.78 2.27 |
Schedule of summarized changes to mortgage servicing rights | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Balance, beginning of period $ 35,955 $ 16,127 $ 24,833 $ 17,150 Additions 1,577 4,225 11,842 8,700 Changes in fair value due to: Reductions from loans paid off during the period (1,613) (1,083) (4,713) (2,773) Changes in valuation inputs or assumptions 621 890 4,578 (2,918) Balance, end of period $ 36,540 $ 20,159 $ 36,540 $ 20,159 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
DEPOSITS | |
Summary of deposit balances, by type | September 30, December 31, 2021 2020 (in thousands) NOW and demand deposit accounts $ 1,057,494 $ 908,256 Regular savings and club accounts 1,144,595 998,994 Money market deposit accounts 832,441 866,661 Total non-certificate accounts 3,034,530 2,773,911 Term certificate accounts greater than $250,000 116,427 135,190 Term certificate accounts less than or equal to $250,000 443,423 497,108 Brokered deposits 100,000 100,000 Total certificate accounts 659,850 732,298 Total deposits $ 3,694,380 $ 3,506,209 |
Summary of certificate accounts by maturity | Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 571,378 0.51 % Over 1 year to 2 years 54,430 0.78 Over 2 years to 3 years 8,381 1.05 Over 3 years to 4 years 23,100 0.96 Over 4 years to 5 years 2,823 0.74 Total certificate deposits 660,112 0.56 % Less unaccreted acquisition discount (262) Total certificate deposits, net $ 659,850 |
BORROWED FUNDS (Tables)
BORROWED FUNDS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
BORROWED FUNDS | |
Schedule of borrowed funds by maturity and call date | September 30, 2021 December 31, 2020 Amount by Weighted Amount by Weighted Scheduled Amount by Average Scheduled Amount by Average Maturity* Call Date (1) Rate (2) Maturity* Call Date (1) Rate (2) (dollars in thousands) Year ending December 31: 2021 $ — $ 40,000 — % $ 41,750 101,750 2.47 % 2022 — — — — — — 2023 186 186 1.48 20,190 190 3.48 2024 13,400 13,400 1.39 10,000 10,000 1.68 2025 40,987 987 1.32 40,987 987 1.32 2026 and thereafter 1,147 1,147 2.00 1,170 1,170 2.00 $ 55,720 $ 55,720 1.35 % $ 114,097 $ 114,097 2.16 % * Includes an amortizing advance requiring monthly principal and interest payments. (1) (2) On September 30, 2021, the Company prepaid $20.0 million in FHLB borrowings that had maturity dates in 2023 and an aggregate prepayment penalty of $1.1 million was incurred and expensed, as the advances were not replaced with other FHLB borrowings. |
OTHER COMMITMENTS AND CONTING_2
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
OTHER COMMITMENTS AND CONTINGENCIES | |
Schedule of financial instruments with off-balance sheet credit risk | September 30, December 31, 2021 2020 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 261,201 $ 485,428 Commitments to grant other loans 93,132 53,714 Unadvanced funds on home equity lines of credit 204,439 178,432 Unadvanced funds on revolving lines of credit 205,074 169,907 Unadvanced funds on construction loans 148,000 127,776 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
DERIVATIVES | |
Schedule of outstanding notional balances and fair values of outstanding derivative instruments | Assets Liabilities Balance Balance Notional Sheet Fair Sheet Fair Amount Location Value Location Value (in thousands) September 30, 2021: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 Other assets $ 358 Other liabilities $ — Derivatives not designated as Hedging Instruments Derivative loan commitments $ 261,202 Other assets $ 3,147 Other liabilities $ 43 Forward loan sale commitments 173,725 Other assets 884 Other liabilities 29 Interest rate swaps 764,430 Other assets 22,506 Other liabilities 22,506 Risk participation agreements 139,506 Other assets — Other liabilities — Total $ 26,895 $ 22,578 December 31, 2020: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 — $ — Other liabilities $ 1,407 Derivatives not designated as Hedging Instruments Derivative loan commitments $ 485,428 Other assets $ 12,623 Other liabilities $ 341 Forward loan sale commitments 356,500 Other assets — Other liabilities 2,204 Interest rate swaps 867,728 Other assets 39,320 Other liabilities 39,320 Risk participation agreements 132,379 Other assets — Other liabilities — Total $ 51,943 $ 43,272 |
Schedule of net gains and losses on derivative instruments | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Derivatives designated as hedging instruments Gain (loss) in OCI on derivatives (effective portion), net of tax $ 116 $ 82 $ 1,271 $ (1,187) Loss reclassified from OCI into interest income or interest expense (effective portion) $ (140) $ (82) $ (373) $ 67 Derivatives not designated as hedging instruments Changes in fair value of derivative loan commitments Mortgage banking income $ (1,897) $ 4,738 $ (9,178) $ 14,266 Changes in fair value of forward loan sale commitments Mortgage banking income 1,064 755 3,059 (1,075) Total $ (833) $ 5,493 $ (6,119) $ 13,191 |
OPERATING LEASE RIGHT-OF-USE _2
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | |
Schedule of undiscounted future minimum operating lease payments | September 30, 2021 December 31, 2020 (in thousands) 2021 $ 737 $ 2,452 2022 2,898 2,239 2023 2,733 1,847 2024 2,247 1,644 2025 2,113 1,684 Thereafter 21,951 13,134 Total lease payments 32,679 $ 23,000 Imputed interest (5,873) Total present value of operating lease liabilities $ 26,806 |
Schedule of weighted-average discount rate and remaining lease term | September 30, 2021 Weighted-average discount rate 1.94 % Weighted-average remaining lease term (years) 17.20 |
Schedule of components of total lease expense | Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 (in thousands) Lease Expense: Operating lease expense $ 742 $ 2,032 Short-term lease expense 52 122 Variable lease expense 2 21 Total lease expense $ 796 $ 2,175 Other Information Cash paid for amounts included in the measurement of lease liabilities- operating cash flows for operating leases 751 2,108 Operating Lease - Operating cash flows (Liability reduction) 624 1,745 Right-of-use assets obtained in exchange for new operating lease liabilities 276 27,267 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Schedule of stock option grants | Outstanding Nonvested Weighted Average Weighted Weighted Remaining Aggregate Average Stock Option Average Contractual Intrinsic Stock Option Grant Date Awards Exercise Price Term (years) Value Awards Fair Value Balance at January 1, 2021 2,106,403 $ 9.86 473,445 $ 2.55 Granted — — — — Exercised (62,840) 10.23 — — Vested — — (192,849) 2.51 Forfeited — — — — Expired — — — — Balance at September 30, 2021 2,043,563 $ 9.85 6.49 $ — 280,596 $ 2.59 Exercisable at September 30, 2021 1,762,967 $ 9.94 6.35 $ — Unrecognized cost inclusive of directors' awards $ 251,116 Weighted average remaining recognition period (years) 0.46 |
Restricted Stock Awards | |
Schedule of unvested stock award activity | Restricted Weighted Average Stock Awards Grant Price Non-vested stock awards at January 1, 2021 384,692 $ 9.33 Vested (15,464) 10.00 Granted 188,377 11.95 Forfeited (3,000) 9.24 Non-vested stock awards at September 30, 2021 554,605 $ 10.20 Unrecognized cost inclusive of directors' awards $ 3,415,803 Weighted average remaining recognition period (years) 1.67 |
Performance Restricted Stock Units | |
Schedule of unvested stock award activity | Performance Weighted Average Restricted Stock Units Grant Price Non-vested performance restricted stock units at January 1, 2021 — $ — Vested — — Granted 85,066 11.95 Forfeited — — Non-vested performance restricted stock units at September 30, 2021 85,066 $ 11.95 Unrecognized cost $ 818,235 Weighted average remaining recognition period (years) 2.42 |
MINIMUM REGULATORY CAPITAL RE_2
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | |
Summary of the company's and the bank's actual regulatory capital ratios | Minimum Required to be Considered "Well Capitalized" Minimum Required for Under Prompt Corrective Actual Capital Adequacy Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) HarborOne Bancorp, Inc. September 30, 2021 Common equity Tier 1 capital to risk-weighted assets $ 608,882 17.1 % $ 160,129 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 608,882 17.1 213,505 6.0 N/A N/A Total capital to risk-weighted assets 688,405 19.3 284,673 8.0 N/A N/A Tier 1 capital to average assets 608,882 13.5 180,139 4.0 N/A N/A December 31, 2020 Common equity Tier 1 capital to risk-weighted assets $ 621,153 17.7 % $ 158,050 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 621,153 17.7 210,733 6.0 N/A N/A Total capital to risk-weighted assets 700,197 19.9 280,978 8.0 N/A N/A Tier 1 capital to average assets 621,153 14.5 171,578 4.0 N/A N/A HarborOne Bank September 30, 2021 Common equity Tier 1 capital to risk-weighted assets $ 559,819 15.7 % $ 160,182 4.5 % $ 231,374 6.5 % Tier 1 capital to risk-weighted assets 559,819 15.7 213,576 6.0 284,768 8.0 Total capital to risk-weighted assets 604,357 17.0 284,768 8.0 355,960 10.0 Tier 1 capital to average assets 559,819 12.4 180,113 4.0 225,141 5.0 December 31, 2020 Common equity Tier 1 capital to risk-weighted assets $ 506,822 14.4 % $ 158,081 4.5 % $ 228,339 6.5 % Tier 1 capital to risk-weighted assets 506,822 14.4 210,775 6.0 281,033 8.0 Total capital to risk-weighted assets 550,875 15.7 281,033 8.0 351,291 10.0 Tier 1 capital to average assets 506,822 11.8 171,501 4.0 214,377 5.0 |
COMPREHENSIVE INCOME (LOSS) (Ta
COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
COMPREHENSIVE INCOME (LOSS) | |
Schedule of components of accumulated other comprehensive income (loss) | September 30, December 31, 2021 2020 (in thousands) Cash flow hedge: Net unrealized gain (loss) $ 358 $ (1,407) Related tax effect (100) 394 Total accumulated other comprehensive income (loss) $ 258 $ (1,013) Securities available for sale: Net unrealized (loss) gain $ (1,765) $ 4,102 Related tax effect 389 (904) Total accumulated other comprehensive (loss) income $ (1,376) $ 3,198 |
Summary of changes in accumulated other comprehensive income (loss) | Three Months Ended September 30, 2021 2020 Available Cash Available Cash for Sale Flow for Sale Flow Securities Hedge Total Securities Hedge Total (in thousands) Balance at beginning of period $ 687 $ 142 $ 829 $ 4,166 $ (1,269) $ 2,897 Other comprehensive (loss) income before reclassifications (2,406) 22 (2,384) (1,335) 32 (1,303) Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale — — — — — — Amounts reclassified from accumulated other comprehensive income (loss) (241) 140 (101) — 82 82 Net current period other comprehensive (loss) income (2,647) 162 (2,485) (1,335) 114 (1,221) Related tax effect 584 (46) 538 132 (32) 100 Balance at end of period $ (1,376) $ 258 $ (1,118) $ 2,963 $ (1,187) $ 1,776 Nine Months Ended September 30, 2021 2020 Available Cash Available Cash for Sale Flow for Sale Flow Securities Hedge Total Securities Hedge Total (in thousands) Balance at beginning of period $ 3,198 $ (1,013) $ 2,185 $ 1,480 $ — $ 1,480 Other comprehensive (loss) income before reclassifications (5,626) 1,392 (4,234) 4,212 (1,581) 2,631 Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale — — — 522 — 522 Amounts reclassified from accumulated other comprehensive income (loss) (241) 373 132 (2,533) (67) (2,600) Net current period other comprehensive (loss) income (5,867) 1,765 (4,102) 2,201 (1,648) 553 Related tax effect 1,293 (494) 799 (718) 461 (257) Balance at end of period $ (1,376) $ 258 $ (1,118) $ 2,963 $ (1,187) $ 1,776 |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
FAIR VALUE OF ASSETS AND LIABILITIES | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Total Level 1 Level 2 Level 3 Fair Value (in thousands) September 30, 2021 Assets Securities available for sale $ — $ 390,552 $ — $ 390,552 Loans held for sale — 77,052 — 77,052 Mortgage servicing rights — 36,540 — 36,540 Derivative loan commitments — — 3,147 3,147 Forward loan sale commitments — — 884 884 Interest rate management agreements — 358 — 358 Interest rate swaps — 22,506 — 22,506 $ — $ 527,008 $ 4,031 $ 531,039 Liabilities Derivative loan commitments $ — $ — $ 43 $ 43 Forward loan sale commitments — — 29 29 Interest rate swaps — 22,506 — 22,506 $ — $ 22,506 $ 72 $ 22,578 December 31, 2020 Assets Securities available for sale $ — $ 276,498 $ — $ 276,498 Loans held for sale — 208,612 — 208,612 Mortgage servicing rights — 24,833 — 24,833 Derivative loan commitments — — 12,623 12,623 Forward loan sale commitments — — — — Interest rate swaps — 39,320 — 39,320 $ — $ 549,263 $ 12,623 $ 561,886 Liabilities Derivative loan commitments $ — $ — $ 341 $ 341 Forward loan sale commitments — — 2,204 2,204 Interest rate management agreements — 1,407 — 1,407 Interest rate swaps — 39,320 — 39,320 $ — $ 40,727 $ 2,545 $ 43,272 |
Schedule of changes in Level 3 assets measured at fair value on a recurring basis | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 5,134 $ 10,844 $ 12,623 $ 1,411 Total gains (losses) included in net income (1) (1,103) 4,903 (8,592) 14,336 Balance at end of period $ 4,031 $ 15,747 $ 4,031 $ 15,747 Changes in unrealized gains relating to instruments at period end $ 4,031 $ 15,747 $ 4,031 $ 15,747 |
Schedule of changes in Level 3 liabilities measured at fair value on a recurring basis | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (342) $ (2,067) $ (2,545) $ (332) Total gains (losses) included in net income (1) 270 590 2,473 (1,145) Balance at end of period $ (72) $ (1,477) $ (72) $ (1,477) Changes in unrealized losses relating to instruments at period end $ (72) $ (1,477) $ (72) $ (1,477) (1) Included in mortgage banking income on the Consolidated Statements of Net Income. |
Schedule of assets measured at fair value on a non-recurring basis | The following table summarizes the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets. September 30, 2021 December 31, 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Impaired loans: Residential $ — $ — $ 846 $ — $ — $ 919 Commercial real estate — — 17,662 — — 3,034 Commercial and industrial — — 4,956 — — 4,208 Other real estate owned and repossessed assets — — 28 — — 595 $ — $ — $ 23,492 $ — $ — $ 8,756 Losses in the following table represent the amount of the fair value adjustments recorded during the period on the carrying value of the assets held at September 30, 2021 and December 31, 2020, respectively. Losses on fully charged off loans are not included in the table. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Impaired loans Residential $ — $ 103 $ — $ 369 Commercial real estate 5,124 — 5,124 — Commercial and industrial 8 644 2,824 2,654 Other real estate owned and repossessed assets — 2 24 58 $ 5,132 $ 749 $ 7,972 $ 3,081 |
Schedule of estimated fair values and related carrying amounts of financial instruments | September 30, 2021 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 319,639 $ 319,639 $ — $ — $ 319,639 Securities available for sale 390,552 — 390,552 — 390,552 Federal Home Loan Bank stock 6,828 N/A N/A N/A N/A Loans held for sale 77,052 — 77,052 — 77,052 Loans, net 3,409,756 — — 3,441,946 3,441,946 Retirement plan annuities 14,065 — — 14,065 14,065 Accrued interest receivable 10,880 — 10,880 — 10,880 Financial liabilities: Deposits 3,694,380 — — 3,697,001 3,697,001 Borrowed funds 55,720 — 56,350 — 56,350 Subordinated debt 34,128 — — 37,206 37,206 Mortgagors' escrow accounts 8,412 — — 8,412 8,412 Accrued interest payable 567 — 567 — 567 Derivative loan commitments: Assets 3,147 — — 3,147 3,147 Liabilities 43 — — 43 43 Interest rate management agreements: Assets 358 — 358 — 358 Liabilities — — — — — Interest rate swap agreements: Assets 22,506 — 22,506 — 22,506 Liabilities 22,506 — 22,506 — 22,506 Forward loan sale commitments: Assets 884 — — 884 884 Liabilities 29 — — 29 29 December 31, 2020 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 205,870 $ 205,870 $ — $ — $ 205,870 Securities available for sale 276,498 — 276,498 — 276,498 Federal Home Loan Bank stock 8,738 N/A N/A N/A N/A Loans held for sale 208,612 — 208,612 — 208,612 Loans, net 3,439,247 — — 3,473,751 3,473,751 Retirement plan annuities 13,747 — — 13,747 13,747 Accrued interest receivable 11,874 — 11,874 — 11,874 Financial liabilities: Deposits 3,506,209 — — 3,509,996 3,509,996 Borrowed funds 149,097 — 152,373 — 152,373 Subordinated debt 34,033 — — 34,799 34,799 Mortgagors' escrow accounts 7,736 — — 7,736 7,736 Accrued interest payable 1,262 — 1,262 — 1,262 Derivative loan commitments: Assets 12,623 — — 12,623 12,623 Liabilities 341 — — 341 341 Interest rate management agreements: Liabilities 1,407 — 1,407 — 1,407 Interest rate swap agreements: Assets 39,320 — 39,320 — 39,320 Liabilities 39,320 — 39,320 — 39,320 Forward loan sale commitments: Assets — — — — — Liabilities 2,204 — — 2,204 2,204 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share | The following table presents earnings per common share. Three Months Ended September 30, 2021 2020 Net income available to common stockholders (in thousands) $ 12,259 $ 11,893 Average number of common shares outstanding 54,021,542 58,375,742 Less: Average unallocated ESOP shares and non-vested restricted shares (4,220,419) (3,910,403) Weighted average number of common shares outstanding used to calculate basic earnings per common share 49,801,123 54,465,339 Dilutive effect of share-based compensation 862,292 — Weighted average number of common shares outstanding used to calculate diluted earnings per common share 50,663,415 54,465,339 Earnings per common share: Basic $ 0.25 $ 0.22 Diluted $ 0.24 $ 0.22 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
SEGMENT REPORTING | |
Summary of reportable segments | Three Months Ended September 30, 2021 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 32,494 $ 792 $ (483) $ — $ 32,803 Provision (credit) for loan losses (1,627) — — — (1,627) Net interest and dividend income (loss), after provision (credit) for loan losses 34,121 792 (483) — 34,430 Mortgage banking income: Gain on sale of mortgage loans — 12,756 — — 12,756 Intersegment gain (loss) (1,373) 2,366 — (993) — Changes in mortgage servicing rights fair value (74) (918) — — (992) Other 263 3,619 — — 3,882 Total mortgage banking income (loss) (1,184) 17,823 — (993) 15,646 Other noninterest income 6,339 25 — — 6,364 Total noninterest income 5,155 17,848 — (993) 22,010 Noninterest expense 26,570 12,387 317 — 39,274 Income (loss) before income taxes 12,706 6,253 (800) (993) 17,166 Provision (benefit) for income taxes 3,575 1,559 (227) — 4,907 Net income (loss) $ 9,131 $ 4,694 $ (573) $ (993) $ 12,259 Nine Months Ended September 30, 2021 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 95,876 $ 2,897 $ (1,388) $ — $ 97,385 Provision (credit) for loan losses (5,822) — — — (5,822) Net interest and dividend income (loss), after provision (credit) for loan losses 101,698 2,897 (1,388) — 103,207 Mortgage banking income: Gain on sale of mortgage loans — 51,820 — — 51,820 Intersegment gain (loss) (2,945) 3,938 — (993) — Changes in mortgage servicing rights fair value (207) 72 — — (135) Other 839 11,633 — — 12,472 Total mortgage banking income (loss) (2,313) 67,463 — (993) 64,157 Other noninterest income 17,328 37 — — 17,365 Total noninterest income 15,015 67,500 — (993) 81,522 Noninterest expense 75,161 44,545 968 — 120,674 Income (loss) before income taxes 41,552 25,852 (2,356) (993) 64,055 Provision (benefit) for income taxes 11,873 6,905 (650) — 18,128 Net income (loss) $ 29,679 $ 18,947 $ (1,706) $ (993) $ 45,927 Total assets at period end $ 4,575,798 $ 208,888 $ 717,325 $ (934,917) $ 4,567,094 Goodwill at period end $ 59,042 $ 10,760 $ — $ — $ 69,802 Three Months Ended September 30, 2020 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 30,599 $ 1,000 $ (430) $ — $ 31,169 Provision for loan losses 13,454 — — — 13,454 Net interest and dividend income (loss), after provision for loan losses 17,145 1,000 (430) — 17,715 Mortgage banking income: Gain on sale of mortgage loans — 34,055 — — 34,055 Intersegment gain (loss) (645) 645 — — — Changes in mortgage servicing rights fair value (354) 161 — — (193) Other 334 3,924 — — 4,258 Total mortgage banking income (loss) (665) 38,785 — — 38,120 Other noninterest income (loss) 6,326 (8) — — 6,318 Total noninterest income 5,661 38,777 — — 44,438 Noninterest expense 26,300 19,133 266 — 45,699 Income (loss) before income taxes (3,494) 20,644 (696) — 16,454 Provision (benefit) for income taxes 571 4,550 (560) — 4,561 Net income (loss) $ (4,065) $ 16,094 $ (136) $ — $ 11,893 Nine Months Ended September 30, 2020 HarborOne HarborOne HarborOne Bank Mortgage Bancorp Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 86,248 $ 2,020 $ (952) $ — $ 87,316 Provision for loan losses 27,207 — — — 27,207 Net interest and dividend income (loss), after provision for loan losses 59,041 2,020 (952) — 60,109 Mortgage banking income: Gain on sale of mortgage loans — 77,195 — — 77,195 Intersegment gain (loss) (2,444) 2,444 — — — Changes in mortgage servicing rights fair value (2,014) (3,677) — — (5,691) Other 1,031 9,619 — — 10,650 Total mortgage banking income (loss) (3,427) 85,581 — — 82,154 Other noninterest income (loss) 19,640 (141) — — 19,499 Total noninterest income 16,213 85,440 — — 101,653 Noninterest expense 75,806 47,923 907 — 124,636 Income (loss) before income taxes (552) 39,537 (1,859) — 37,126 Provision (benefit) for income taxes 2,199 8,667 (932) — 9,934 Net income (loss) $ (2,751) $ 30,870 $ (927) $ — $ 27,192 Total assets at period end $ 4,404,842 $ 280,983 $ 729,838 $ (987,344) $ 4,428,319 Goodwill at period end $ 59,042 $ 10,760 $ — $ — $ 69,802 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($)itemOfficestate | Dec. 31, 2020USD ($) | |
Number of full-service bank offices | item | 27 | |
Operating lease ROU assets | $ 25,200 | |
Operating lease liabilities | 26,806 | |
Finance lease ROU assets | 0 | |
Finance lease liabilities | 0 | |
Loans in active deferral period | 7,900 | |
Loans in expired deferral period | 1,500 | |
PPP loans | 54,300 | |
Deferred processing fee income | $ 2,100 | |
HarborOne Mortgage | ||
Number of offices | Office | 30 | |
Additional states licensed to lend | state | 6 | |
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-02 | ||
Operating lease ROU assets | $ 23,200 | |
Operating lease liabilities | $ 24,400 | |
HarborOne Bank | ||
Number of security corporation subsidiaries | item | 2 |
DEBT SECURITIES - Gross unreali
DEBT SECURITIES - Gross unrealized gains and losses (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Securities available for sale | ||
Amortized Cost | $ 392,317 | $ 272,396 |
Gross Unrealized Gains | 1,644 | 4,407 |
Gross Unrealized Losses | 3,409 | 305 |
Fair Value | 390,552 | 276,498 |
U.S. government and government-sponsored enterprise obligations | ||
Securities available for sale | ||
Amortized Cost | 38,155 | 5,002 |
Gross Unrealized Gains | 93 | |
Gross Unrealized Losses | 426 | |
Fair Value | 37,729 | 5,095 |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Securities available for sale | ||
Amortized Cost | 345,737 | 234,819 |
Gross Unrealized Gains | 1,355 | 3,113 |
Gross Unrealized Losses | 2,983 | 305 |
Fair Value | 344,109 | 237,627 |
U.S. government-sponsored collateralized mortgage obligations | ||
Securities available for sale | ||
Amortized Cost | 4,543 | 16,326 |
Gross Unrealized Gains | 152 | 330 |
Fair Value | 4,695 | 16,656 |
SBA asset-backed securities | ||
Securities available for sale | ||
Amortized Cost | 3,882 | 16,249 |
Gross Unrealized Gains | 137 | 871 |
Fair Value | $ 4,019 | $ 17,120 |
DEBT SECURITIES - Contractual m
DEBT SECURITIES - Contractual maturity (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2020USD ($)security | Sep. 30, 2021USD ($)security | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)security | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)security | |
Amortized Cost-Available-for-Sale | ||||||
After 5 years through 10 years | $ 38,155,000 | $ 38,155,000 | ||||
Total for contractual maturity | 38,155,000 | 38,155,000 | ||||
Amortized Cost | 392,317,000 | 392,317,000 | $ 272,396,000 | |||
Fair Value-Available-for-Sale | ||||||
After 5 years through 10 years | 37,729,000 | 37,729,000 | ||||
Total for contractual maturity | 37,729,000 | 37,729,000 | ||||
Total | 390,552,000 | 390,552,000 | $ 276,498,000 | |||
Sales | ||||||
Proceeds | 39,321,000 | 39,321,000 | $ 72,333,000 | |||
Gross gains | 241,000 | 241,000 | 2,521,000 | |||
Calls | ||||||
Proceeds | $ 5,000,000 | $ 2,000,000 | $ 5,000,000 | 8,635,000 | ||
Gross gains | $ 12,000 | |||||
Number of holdings greater than 10% of shareholder equity | security | 0 | |||||
HTM securities | ||||||
Securities | ||||||
Number of securities sold | security | 6 | |||||
Sold HTM securities | ||||||
Securities | ||||||
Realized gain | $ 357,000 | |||||
Amortized Cost-Held-to-Maturity | ||||||
Amortized Cost | 4,500,000 | |||||
Transferred securities | ||||||
Securities | ||||||
Transfer amount | 21,500,000 | |||||
Fair Value-Available-for-Sale | ||||||
Total | 22,100,000 | |||||
Amortized Cost-Held-to-Maturity | ||||||
Gross Unrealized Gains | $ 522,000 | |||||
Interest rate swaps | Mortgage-backed securities | ||||||
Securities | ||||||
Number of securities pledged | security | 16 | 16 | 26 | |||
Pledged as collateral | $ 20,500,000 | $ 20,500,000 | $ 40,300,000 | |||
Minimum | ||||||
Securities | ||||||
Maturity period | 6 months | |||||
Maximum | ||||||
Securities | ||||||
Maturity period | 30 years | |||||
U.S. government agency and government-sponsored residential mortgage-backed securities | ||||||
Amortized Cost-Available-for-Sale | ||||||
No single maturity date | 345,737,000 | $ 345,737,000 | ||||
Amortized Cost | 345,737,000 | 345,737,000 | 234,819,000 | |||
Fair Value-Available-for-Sale | ||||||
No single maturity date | 344,109,000 | 344,109,000 | ||||
Total | 344,109,000 | 344,109,000 | 237,627,000 | |||
U.S. government-sponsored collateralized mortgage obligations | ||||||
Amortized Cost-Available-for-Sale | ||||||
No single maturity date | 4,543,000 | 4,543,000 | ||||
Amortized Cost | 4,543,000 | 4,543,000 | 16,326,000 | |||
Fair Value-Available-for-Sale | ||||||
No single maturity date | 4,695,000 | 4,695,000 | ||||
Total | 4,695,000 | 4,695,000 | 16,656,000 | |||
SBA asset-backed securities | ||||||
Amortized Cost-Available-for-Sale | ||||||
No single maturity date | 3,882,000 | 3,882,000 | ||||
Amortized Cost | 3,882,000 | 3,882,000 | 16,249,000 | |||
Fair Value-Available-for-Sale | ||||||
No single maturity date | 4,019,000 | 4,019,000 | ||||
Total | 4,019,000 | $ 4,019,000 | 17,120,000 | |||
U.S. government and government-sponsored enterprise obligations | ||||||
Securities | ||||||
Maturity period | 10 years | |||||
Amortized Cost-Available-for-Sale | ||||||
Amortized Cost | 38,155,000 | $ 38,155,000 | 5,002,000 | |||
Fair Value-Available-for-Sale | ||||||
Total | $ 37,729,000 | $ 37,729,000 | $ 5,095,000 | |||
U.S. government and government-sponsored enterprise obligations | Minimum | ||||||
Securities | ||||||
Callable period | 5 months | |||||
U.S. government and government-sponsored enterprise obligations | Maximum | ||||||
Securities | ||||||
Callable period | 2 years |
DEBT SECURITIES - Gross unrea_2
DEBT SECURITIES - Gross unrealized losses aggregated by category (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($)security | Dec. 31, 2020USD ($) | |
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | $ 3,197 | |
Twelve Months and Over | 212 | |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 299,615 | |
Twelve Months and Over | $ 19,759 | |
Number of debt securities | security | 118 | |
Number of debt securities in unrealized loss position | security | 63 | |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | $ 2,771 | $ 283 |
Twelve Months and Over | 212 | 22 |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 261,886 | 67,460 |
Twelve Months and Over | 19,759 | $ 3,668 |
U.S. government and government-sponsored enterprise obligations | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | 426 | |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | $ 37,729 |
LOANS HELD FOR SALE (Details)
LOANS HELD FOR SALE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Fair value and contractual principal outstanding: | |||||
Loans held for sale, fair value | $ 77,052 | $ 77,052 | $ 208,612 | ||
Loans held for sale, contractual principal outstanding | 75,009 | 75,009 | 198,984 | ||
Fair value less unpaid principal balance | 2,043 | 2,043 | 9,628 | ||
Change in fair value of mortgage loans held for sale | (7,600) | $ 5,500 | |||
Underwriting fees | 2,000 | $ 3,000 | 7,000 | $ 7,500 | |
90 Days or More | |||||
Fair value and contractual principal outstanding: | |||||
Loans held for sale, fair value | $ 0 | $ 0 | $ 0 |
LOANS - Summary of Balances of
LOANS - Summary of Balances of Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Loans | ||||||
Total loans | $ 3,457,744 | $ 3,494,642 | ||||
Less: Allowance for loan losses | (47,988) | $ (51,273) | (55,395) | $ (49,223) | $ (36,107) | $ (24,060) |
Net loans | 3,409,756 | 3,439,247 | ||||
PPP loans | Commercial and industrial | ||||||
Loans | ||||||
Net deferred loan costs | 2,100 | 2,700 | ||||
Loans before fees | 54,300 | 126,500 | ||||
Residential | ||||||
Loans | ||||||
Total loans | 1,160,689 | 1,105,823 | ||||
Less: Allowance for loan losses | (3,433) | (5,434) | (7,419) | (7,600) | (5,857) | (3,178) |
Residential | 1-4 family | ||||||
Loans | ||||||
Total loans | 993,725 | 928,934 | ||||
Residential | Second mortgages and equity lines of credit | ||||||
Loans | ||||||
Total loans | 135,147 | 145,672 | ||||
Residential | Residential real estate construction | ||||||
Loans | ||||||
Total loans | 31,817 | 31,217 | ||||
Commercial | ||||||
Loans | ||||||
Total loans | 2,140,783 | 2,114,989 | ||||
Commercial | Commercial real estate | ||||||
Loans | ||||||
Total loans | 1,573,284 | 1,551,265 | ||||
Less: Allowance for loan losses | (34,670) | (32,991) | (34,765) | (26,098) | (18,389) | (12,875) |
Commercial | Commercial construction | ||||||
Loans | ||||||
Total loans | 152,685 | 99,331 | ||||
Less: Allowance for loan losses | (2,552) | (1,937) | (1,955) | (4,177) | (3,215) | (2,526) |
Commercial | Commercial and industrial | ||||||
Loans | ||||||
Total loans | 414,814 | 464,393 | ||||
Less: Allowance for loan losses | (5,985) | (8,059) | (5,311) | (4,966) | (3,562) | (2,977) |
Consumer loans | ||||||
Loans | ||||||
Total loans | 156,272 | 273,830 | ||||
Less: Allowance for loan losses | (348) | $ (853) | (2,475) | $ (2,762) | $ (2,204) | $ (1,010) |
Consumer loans | Auto | ||||||
Loans | ||||||
Total loans | 149,019 | 265,266 | ||||
Consumer loans | Personal | ||||||
Loans | ||||||
Total loans | $ 7,253 | $ 8,564 |
LOANS - Loans Sold or Transferr
LOANS - Loans Sold or Transferred (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Commercial real estate | ||
Loans | ||
Unpaid principal balance of loans serviced for others | $ 297 | $ 284.2 |
LOANS - Acquired Loans (Details
LOANS - Acquired Loans (Details) - PCI - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Oct. 31, 2018 |
Loans | |||
Outstanding balance | $ 3,701 | $ 4,307 | |
Carrying amount | $ 3,485 | $ 4,079 | |
Coastway | |||
Loans | |||
Loans purchased | $ 5,400 |
LOANS - PCI Loans (Details)
LOANS - PCI Loans (Details) - PCI - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accretable yield: | ||||
Balance at beginning of period | $ 136 | $ 145 | $ 141 | $ 149 |
Accretion | (1) | (3) | (6) | (7) |
Balance at end of period | $ 135 | $ 142 | $ 135 | $ 142 |
LOANS - Allowance for Loan Loss
LOANS - Allowance for Loan Losses Activity and Allocation to Loan Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Activity in the allowance for loan losses | |||||
Balance | $ 51,273 | $ 36,107 | $ 55,395 | $ 24,060 | |
Provision (credit) for loan losses | (1,627) | 13,454 | (5,822) | 27,207 | |
Charge-offs | (1,719) | (415) | (2,003) | (2,597) | |
Recoveries | 61 | 77 | 418 | 553 | |
Balance | 47,988 | 49,223 | 47,988 | 49,223 | |
Allocation of the allowance to loan segments | |||||
Total loans | 3,457,744 | 3,457,744 | $ 3,494,642 | ||
Total allowance for loan losses | 47,988 | 49,223 | 47,988 | 49,223 | 55,395 |
Impaired loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 2,678 | ||||
Balance | 8,971 | 8,971 | |||
Allocation of the allowance to loan segments | |||||
Total loans | 51,309 | 51,309 | 46,256 | ||
Total allowance for loan losses | 8,971 | 8,971 | 2,678 | ||
Non-impaired loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 52,717 | ||||
Balance | 39,017 | 39,017 | |||
Allocation of the allowance to loan segments | |||||
Total loans | 3,406,435 | 3,406,435 | 3,448,386 | ||
Total allowance for loan losses | 39,017 | 39,017 | 52,717 | ||
Residential | |||||
Activity in the allowance for loan losses | |||||
Balance | 5,434 | 5,857 | 7,419 | 3,178 | |
Provision (credit) for loan losses | (2,009) | 1,721 | (4,214) | 4,270 | |
Charge-offs | (52) | ||||
Recoveries | 8 | 22 | 228 | 204 | |
Balance | 3,433 | 7,600 | 3,433 | 7,600 | |
Allocation of the allowance to loan segments | |||||
Total loans | 1,160,689 | 1,160,689 | 1,105,823 | ||
Total allowance for loan losses | 3,433 | 7,600 | 3,433 | 7,600 | 7,419 |
Residential | Impaired loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 802 | ||||
Balance | 662 | 662 | |||
Allocation of the allowance to loan segments | |||||
Total loans | 26,971 | 26,971 | 24,384 | ||
Total allowance for loan losses | 662 | 662 | 802 | ||
Residential | Non-impaired loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 6,617 | ||||
Balance | 2,771 | 2,771 | |||
Allocation of the allowance to loan segments | |||||
Total loans | 1,133,718 | 1,133,718 | 1,081,439 | ||
Total allowance for loan losses | 2,771 | 2,771 | 6,617 | ||
Commercial | |||||
Allocation of the allowance to loan segments | |||||
Total loans | 2,140,783 | 2,140,783 | 2,114,989 | ||
Commercial | Commercial real estate | |||||
Activity in the allowance for loan losses | |||||
Balance | 32,991 | 18,389 | 34,765 | 12,875 | |
Provision (credit) for loan losses | 2,059 | 7,771 | 293 | 14,458 | |
Charge-offs | (381) | (62) | (393) | (1,236) | |
Recoveries | 1 | 5 | 1 | ||
Balance | 34,670 | 26,098 | 34,670 | 26,098 | |
Allocation of the allowance to loan segments | |||||
Total loans | 1,573,284 | 1,573,284 | 1,551,265 | ||
Total allowance for loan losses | 34,670 | 26,098 | 34,670 | 26,098 | 34,765 |
Commercial | Commercial real estate | Impaired loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 1,845 | ||||
Balance | 6,969 | 6,969 | |||
Allocation of the allowance to loan segments | |||||
Total loans | 18,155 | 18,155 | 12,513 | ||
Total allowance for loan losses | 6,969 | 6,969 | 1,845 | ||
Commercial | Commercial real estate | Non-impaired loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 32,920 | ||||
Balance | 27,701 | 27,701 | |||
Allocation of the allowance to loan segments | |||||
Total loans | 1,555,129 | 1,555,129 | 1,538,752 | ||
Total allowance for loan losses | 27,701 | 27,701 | 32,920 | ||
Commercial | Commercial construction | |||||
Activity in the allowance for loan losses | |||||
Balance | 1,937 | 3,215 | 1,955 | 2,526 | |
Provision (credit) for loan losses | 615 | 962 | 597 | 1,651 | |
Balance | 2,552 | 4,177 | 2,552 | 4,177 | |
Allocation of the allowance to loan segments | |||||
Total loans | 152,685 | 152,685 | 99,331 | ||
Total allowance for loan losses | 2,552 | 4,177 | 2,552 | 4,177 | 1,955 |
Commercial | Commercial construction | Non-impaired loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 1,955 | ||||
Balance | 2,552 | 2,552 | |||
Allocation of the allowance to loan segments | |||||
Total loans | 152,685 | 152,685 | 99,331 | ||
Total allowance for loan losses | 2,552 | 2,552 | 1,955 | ||
Commercial | Commercial and industrial | |||||
Activity in the allowance for loan losses | |||||
Balance | 8,059 | 3,562 | 5,311 | 2,977 | |
Provision (credit) for loan losses | (815) | 1,617 | 2,101 | 2,560 | |
Charge-offs | (1,277) | (213) | (1,463) | (790) | |
Recoveries | 18 | 36 | 219 | ||
Balance | 5,985 | 4,966 | 5,985 | 4,966 | |
Allocation of the allowance to loan segments | |||||
Total loans | 414,814 | 414,814 | 464,393 | ||
Total allowance for loan losses | 5,985 | 4,966 | 5,985 | 4,966 | 5,311 |
Commercial | Commercial and industrial | Impaired loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 31 | ||||
Balance | 1,340 | 1,340 | |||
Allocation of the allowance to loan segments | |||||
Total loans | 6,183 | 6,183 | 9,359 | ||
Total allowance for loan losses | 1,340 | 1,340 | 31 | ||
Commercial | Commercial and industrial | Non-impaired loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 5,280 | ||||
Balance | 4,645 | 4,645 | |||
Allocation of the allowance to loan segments | |||||
Total loans | 408,631 | 408,631 | 455,034 | ||
Total allowance for loan losses | 4,645 | 4,645 | 5,280 | ||
Consumer loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 853 | 2,204 | 2,475 | 1,010 | |
Provision (credit) for loan losses | (478) | 643 | (2,129) | 2,142 | |
Charge-offs | (61) | (140) | (147) | (519) | |
Recoveries | 34 | 55 | 149 | 129 | |
Balance | 348 | 2,762 | 348 | 2,762 | |
Allocation of the allowance to loan segments | |||||
Total loans | 156,272 | 156,272 | 273,830 | ||
Total allowance for loan losses | 348 | 2,762 | 348 | 2,762 | 2,475 |
Consumer loans | Non-impaired loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 2,475 | ||||
Balance | 348 | 348 | |||
Allocation of the allowance to loan segments | |||||
Total loans | 156,272 | 156,272 | 273,830 | ||
Total allowance for loan losses | 348 | 348 | 2,475 | ||
Unallocated | |||||
Activity in the allowance for loan losses | |||||
Balance | 1,999 | 2,880 | 3,470 | 1,494 | |
Provision (credit) for loan losses | (999) | 740 | (2,470) | 2,126 | |
Balance | 1,000 | 3,620 | 1,000 | 3,620 | |
Allocation of the allowance to loan segments | |||||
Total allowance for loan losses | 1,000 | $ 3,620 | 1,000 | $ 3,620 | 3,470 |
Unallocated | Non-impaired loans | |||||
Activity in the allowance for loan losses | |||||
Balance | 3,470 | ||||
Balance | 1,000 | 1,000 | |||
Allocation of the allowance to loan segments | |||||
Total allowance for loan losses | $ 1,000 | $ 1,000 | $ 3,470 |
LOANS - Summary of Past Due and
LOANS - Summary of Past Due and Non-Accrual Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Summary of past due and non-accrual loans | ||
Past Due | $ 20,255 | $ 30,505 |
Loans on Non-accrual | 36,486 | 34,101 |
Loans past due 90 days or more and still accruing | 0 | 0 |
30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 10,449 | 15,684 |
60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,979 | 2,868 |
90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 7,827 | 11,953 |
Residential | 1-4 family | ||
Summary of past due and non-accrual loans | ||
Past Due | 5,882 | 20,789 |
Loans on Non-accrual | 11,754 | 11,611 |
Residential | 1-4 family | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 778 | 12,148 |
Residential | 1-4 family | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,646 | 2,223 |
Residential | 1-4 family | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 3,458 | 6,418 |
Residential | Second mortgages and equity lines of credit | ||
Summary of past due and non-accrual loans | ||
Past Due | 669 | 939 |
Loans on Non-accrual | 437 | 834 |
Residential | Second mortgages and equity lines of credit | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 203 | 460 |
Residential | Second mortgages and equity lines of credit | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 203 | 46 |
Residential | Second mortgages and equity lines of credit | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 263 | 433 |
Residential | Residential real estate | ||
Summary of past due and non-accrual loans | ||
Past Due | 471 | |
Residential | Residential real estate | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 471 | |
Commercial | Commercial real estate | ||
Summary of past due and non-accrual loans | ||
Past Due | 9,181 | 3,785 |
Loans on Non-accrual | 18,000 | 12,486 |
Commercial | Commercial real estate | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 8,843 | 416 |
Commercial | Commercial real estate | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 338 | 3,369 |
Commercial | Commercial and industrial | ||
Summary of past due and non-accrual loans | ||
Past Due | 3,723 | 1,878 |
Loans on Non-accrual | 6,183 | 8,606 |
Commercial | Commercial and industrial | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 37 | 444 |
Commercial | Commercial and industrial | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 3 | 191 |
Commercial | Commercial and industrial | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 3,683 | 1,243 |
Consumer loans | Auto | ||
Summary of past due and non-accrual loans | ||
Past Due | 726 | 2,542 |
Loans on Non-accrual | 111 | 557 |
Consumer loans | Auto | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 533 | 1,657 |
Consumer loans | Auto | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 109 | 397 |
Consumer loans | Auto | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 84 | 488 |
Consumer loans | Personal | ||
Summary of past due and non-accrual loans | ||
Past Due | 74 | 101 |
Loans on Non-accrual | 1 | 7 |
Consumer loans | Personal | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 55 | 88 |
Consumer loans | Personal | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 18 | 11 |
Consumer loans | Personal | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | $ 1 | $ 2 |
LOANS - Impaired Loans (Details
LOANS - Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Recorded Investment | |||||
Impaired loans without a valuation allowance | $ 19,401 | $ 19,401 | $ 25,079 | ||
Impaired loans with a valuation allowance | 31,908 | 31,908 | 21,177 | ||
Total impaired loans | 51,309 | 51,309 | 46,256 | ||
Unpaid Principal Balance | |||||
Impaired loans without a valuation allowance | 23,008 | 23,008 | 29,384 | ||
Impaired loans with a valuation allowance | 40,837 | 40,837 | 21,497 | ||
Total impaired loans | 63,845 | 63,845 | 50,881 | ||
Activity in the allowance for loan losses | |||||
Allowance for loan losses for impaired loans | 8,971 | 8,971 | 2,678 | ||
Impaired loans | |||||
Average Recorded Investment | 42,557 | $ 52,134 | 45,669 | $ 48,558 | |
Interest Income Recognized | 352 | 281 | 1,096 | 864 | |
Interest Income Recognized on Cash Basis | 194 | 279 | 554 | 805 | |
Additional funds committed to be advanced in connection with impaired loans | 0 | 0 | 0 | 0 | |
Residential | |||||
Recorded Investment | |||||
Impaired loans without a valuation allowance | 17,445 | 17,445 | 12,284 | ||
Impaired loans with a valuation allowance | 9,526 | 9,526 | 12,100 | ||
Unpaid Principal Balance | |||||
Impaired loans without a valuation allowance | 18,922 | 18,922 | 13,039 | ||
Impaired loans with a valuation allowance | 10,324 | 10,324 | 12,355 | ||
Activity in the allowance for loan losses | |||||
Allowance for loan losses for impaired loans | 662 | 662 | 802 | ||
Impaired loans | |||||
Average Recorded Investment | 22,268 | 26,542 | 23,973 | 26,454 | |
Interest Income Recognized | 279 | 272 | 822 | 847 | |
Interest Income Recognized on Cash Basis | 121 | 270 | 280 | 788 | |
Commercial | Commercial real estate | |||||
Recorded Investment | |||||
Impaired loans without a valuation allowance | 493 | 493 | 3,552 | ||
Impaired loans with a valuation allowance | 17,662 | 17,662 | 8,961 | ||
Unpaid Principal Balance | |||||
Impaired loans without a valuation allowance | 495 | 495 | 4,741 | ||
Impaired loans with a valuation allowance | 24,888 | 24,888 | 8,961 | ||
Activity in the allowance for loan losses | |||||
Allowance for loan losses for impaired loans | 6,969 | 6,969 | 1,845 | ||
Impaired loans | |||||
Average Recorded Investment | 12,455 | 4,287 | 13,894 | 3,202 | |
Interest Income Recognized | 60 | 125 | 1 | ||
Interest Income Recognized on Cash Basis | 60 | 125 | 1 | ||
Commercial | Commercial construction | |||||
Impaired loans | |||||
Average Recorded Investment | 10,971 | 11,039 | |||
Commercial | Commercial and industrial | |||||
Recorded Investment | |||||
Impaired loans without a valuation allowance | 1,463 | 1,463 | 9,243 | ||
Impaired loans with a valuation allowance | 4,720 | 4,720 | 116 | ||
Unpaid Principal Balance | |||||
Impaired loans without a valuation allowance | 3,591 | 3,591 | 11,604 | ||
Impaired loans with a valuation allowance | 5,625 | 5,625 | 181 | ||
Activity in the allowance for loan losses | |||||
Allowance for loan losses for impaired loans | 1,340 | 1,340 | $ 31 | ||
Impaired loans | |||||
Average Recorded Investment | 7,834 | 10,334 | 7,802 | 7,863 | |
Interest Income Recognized | 13 | 9 | 149 | 16 | |
Interest Income Recognized on Cash Basis | $ 13 | $ 9 | $ 149 | $ 16 |
LOANS - Troubled Debt Restructu
LOANS - Troubled Debt Restructurings (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)contract | Sep. 30, 2020USD ($)contract | Sep. 30, 2021USD ($)contract | Sep. 30, 2020contract | Dec. 31, 2020USD ($) | |
Troubled debt restructurings | |||||
TDR modifications | $ 0 | $ 0 | |||
Recorded investment of troubled debt restructurings | 13,200 | $ 13,200 | $ 15,100 | ||
Recorded investment of troubled debt restructurings that were nonaccruing | $ 3,000 | $ 3,000 | 3,600 | ||
Number of troubled debt restructurings that defaulted | contract | 0 | 0 | 0 | 0 | |
Loans, net | $ 3,409,756 | $ 3,409,756 | 3,439,247 | ||
Commercial | |||||
Troubled debt restructurings | |||||
Recorded investment of troubled debt restructurings | 2,300 | 2,300 | 2,500 | ||
Recorded investment of troubled debt restructurings that were nonaccruing | $ 2,100 | $ 2,100 | $ 2,500 |
LOANS - Risk Rating (Details)
LOANS - Risk Rating (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($)grade | Dec. 31, 2020USD ($) | |
Loans by risk rating | ||
Number of grades utilized in internal loan rating system | grade | 10 | |
Total loans | $ 3,457,744 | $ 3,494,642 |
Commercial | ||
Loans by risk rating | ||
Total loans | 2,140,783 | 2,114,989 |
Commercial | Commercial real estate | ||
Loans by risk rating | ||
Total loans | 1,573,284 | 1,551,265 |
Commercial | Commercial real estate | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 1,530,051 | 1,524,105 |
Commercial | Commercial real estate | Loans rated 7, special mention | ||
Loans by risk rating | ||
Total loans | 25,078 | 14,674 |
Commercial | Commercial real estate | Loans rated 8, substandard | ||
Loans by risk rating | ||
Total loans | 18,155 | 9,455 |
Commercial | Commercial real estate | Loans rated 9, doubtful | ||
Loans by risk rating | ||
Total loans | 3,031 | |
Commercial | Commercial construction | ||
Loans by risk rating | ||
Total loans | 152,685 | 99,331 |
Commercial | Commercial construction | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 152,685 | 99,331 |
Commercial | Commercial and industrial | ||
Loans by risk rating | ||
Total loans | 414,814 | 464,393 |
Commercial | Commercial and industrial | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 408,277 | 452,665 |
Commercial | Commercial and industrial | Loans rated 7, special mention | ||
Loans by risk rating | ||
Total loans | 354 | 3,122 |
Commercial | Commercial and industrial | Loans rated 8, substandard | ||
Loans by risk rating | ||
Total loans | 438 | 7,080 |
Commercial | Commercial and industrial | Loans rated 9, doubtful | ||
Loans by risk rating | ||
Total loans | $ 5,745 | $ 1,526 |
MORTGAGE LOAN SERVICING - Key A
MORTGAGE LOAN SERVICING - Key Assumptions (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Unpaid Principal Balance | ||
Unpaid principal balances of mortgage loans serviced | $ 3,630 | $ 3,050 |
Prepayment speed | 10.20% | 14.30% |
Discount rate | 9.21% | 9.23% |
Default rate | 1.78% | 2.27% |
MORTGAGE LOAN SERVICING - Fair
MORTGAGE LOAN SERVICING - Fair value of MSR (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Changes to the fair value of Mortgage Servicing Rights | ||||
Mortgage servicing rights, at fair value, beginning of period | $ 35,955 | $ 16,127 | $ 24,833 | $ 17,150 |
Additions | 1,577 | 4,225 | 11,842 | 8,700 |
Changes in fair value due to : | ||||
Reductions from loans paid off during the period | (1,613) | (1,083) | (4,713) | (2,773) |
Changes in valuation inputs or assumptions | 621 | 890 | 4,578 | (2,918) |
Mortgage servicing rights, at fair value, end of period | 36,540 | 20,159 | 36,540 | 20,159 |
Fees and commissions, mortgage banking and servicing | $ 2,000 | $ 1,300 | $ 5,500 | $ 3,300 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill | $ 69,802 | $ 69,802 | $ 69,802 |
Intangible assets | 3,399 | $ 4,370 | |
HarborOne Bank | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill | 59,000 | ||
HarborOne Mortgage | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill | $ 10,800 |
DEPOSITS - Summary of deposits
DEPOSITS - Summary of deposits (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
DEPOSITS | ||
NOW and demand deposit accounts | $ 1,057,494 | $ 908,256 |
Regular savings and club accounts | 1,144,595 | 998,994 |
Money market deposit accounts | 832,441 | 866,661 |
Total non-certificate accounts | 3,034,530 | 2,773,911 |
Term certificate accounts greater than $250,000 | 116,427 | 135,190 |
Term certificate accounts less than or equal to $250,000 | 443,423 | 497,108 |
Brokered deposits | 100,000 | 100,000 |
Total certificate deposits, net | 659,850 | 732,298 |
Total deposits | 3,694,380 | 3,506,209 |
Total reciprocal deposits | $ 42,300 | $ 104,900 |
DEPOSITS - Maturity of deposits
DEPOSITS - Maturity of deposits (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Summary of certificate accounts by maturity | ||
Within 1 year | $ 571,378 | |
Over 1 year to 2 years | 54,430 | |
Over 2 years to 3 years | 8,381 | |
Over 3 years to 4 years | 23,100 | |
Over 4 years to 5 years | 2,823 | |
Total certificate deposits | 660,112 | |
Less unaccreted acquisition discount | (262) | |
Total certificate deposits, net | $ 659,850 | $ 732,298 |
Summary of certificate accounts by maturity | ||
Within 1 year | 0.51% | |
Over 1 year to 2 years | 0.78% | |
Over 2 years to 3 years | 1.05% | |
Over 3 years to 4 years | 0.96% | |
Over 4 years to 5 years | 0.74% | |
Weighted average interest rate | 0.56% |
BORROWED FUNDS - FHLB Advances
BORROWED FUNDS - FHLB Advances (Details) $ in Thousands | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Short-term borrowed funds | $ 0 | $ 35,000 |
Scheduled Maturity | ||
2021 | 41,750 | |
2022 | 0 | 0 |
2023 | 186 | 20,190 |
2024 | 13,400 | 10,000 |
2025 | 40,987 | 40,987 |
2026 and thereafter | 1,147 | 1,170 |
Total | 55,720 | 114,097 |
Redeemable at Call Date | ||
2021 | 40,000 | 101,750 |
2023 | 186 | 190 |
2024 | 13,400 | 10,000 |
2025 | 987 | 987 |
2026 and thereafter | 1,147 | 1,170 |
Total | $ 55,720 | $ 114,097 |
Weighted Average Rate | ||
2021 | 2.47% | |
2023 | 1.48% | 3.48% |
2024 | 1.39% | 1.68% |
2025 | 1.32% | 1.32% |
2026 and thereafter | 2.00% | 2.00% |
Total | 1.35% | 2.16% |
Weighted Average Rate | ||
Short-term advances, weighted average rate | 0.42 |
BORROWED FUNDS - Others (Detail
BORROWED FUNDS - Others (Details) - USD ($) | Sep. 01, 2023 | Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Aug. 30, 2018 |
Borrowed funds | |||||
Prepayment on FHLB borrowings | $ 20,000,000 | ||||
Prepayment penalties on Federal Home Loan Bank advances | 1,095,000 | $ 1,095,000 | |||
Amount outstanding | 0 | $ 0 | $ 0 | ||
Federal Reserve Bank of Boston | |||||
Borrowed funds | |||||
Percentage of carrying value pledged as collateral | 66.00% | ||||
Loans pledged for FHLB | 103,600,000 | $ 103,600,000 | 107,100,000 | ||
Federal Home Loan Bank Advances | |||||
Borrowed funds | |||||
Carrying value of the loans pledged as collateral | 1,220,000,000 | 1,220,000,000 | 1,250,000,000 | ||
Available borrowing capacity | 863,600,000 | 863,600,000 | |||
Other Loans | |||||
Borrowed funds | |||||
Additional borrowing capacity | 25,000,000 | 25,000,000 | |||
Subordinated Notes due 2028 | |||||
Borrowed funds | |||||
Notes issued | $ 35,000,000 | ||||
Annual fixed interest rate until September 1, 2023 | 5.625% | ||||
Issuance costs | $ 872,000 | $ 872,000 | $ 967,000 | ||
Forecast | Subordinated Notes due 2028 | LIBOR | |||||
Borrowed funds | |||||
Basis points | 2.78% |
OTHER COMMITMENTS AND CONTING_3
OTHER COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Commitments to grant residential real estate loans - HarborOne Mortgage | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | $ 261,201 | $ 485,428 |
Commitments to grant other loans | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 93,132 | 53,714 |
Unadvanced funds on home equity lines of credit | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 204,439 | 178,432 |
Unadvanced funds on revolving lines of credit | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 205,074 | 169,907 |
Unadvanced funds on construction loans | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | $ 148,000 | $ 127,776 |
DERIVATIVES (Details)
DERIVATIVES (Details) | 9 Months Ended | |
Sep. 30, 2021USD ($)derivative | Dec. 31, 2020USD ($) | |
Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | $ 26,895,000 | $ 51,943,000 |
Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | $ 22,578,000 | 43,272,000 |
Derivative loan commitments | ||
Derivative disclosures | ||
Loan commitment specified period | 60 days | |
Derivative loan commitments | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | $ 261,202,000 | 485,428,000 |
Derivative loan commitments | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 3,147,000 | 12,623,000 |
Derivative loan commitments | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 43,000 | 341,000 |
Forward loan sale commitments | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | 173,725,000 | 356,500,000 |
Forward loan sale commitments | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 884,000 | |
Forward loan sale commitments | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | $ 29,000 | 2,204,000 |
Interest rate swaps | Cash Flow Hedging | ||
Derivative disclosures | ||
Number of Derivative Instruments Held | derivative | 1 | |
Maturity term | 3 years 6 months 7 days | |
Fixed rate | 0.67% | |
Variable rate | 0.12% | |
Amount to be reclassified in next 12 months | $ 506,000 | |
Notional Amount | 100,000,000 | |
Fair Value, Liabilities | 358,000 | |
Interest rate swaps | Mortgage-backed securities | ||
Derivative disclosures | ||
Securities pledged to secure the Company's liability for the offsetting interest rate swaps | 20,500,000 | |
Interest rate swaps | Designated as Hedging Instrument | ||
Derivative disclosures | ||
Notional Amount | 100,000,000 | 100,000,000 |
Interest rate swaps | Designated as Hedging Instrument | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 358,000 | |
Interest rate swaps | Designated as Hedging Instrument | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 1,407,000 | |
Interest rate swaps | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | 764,430,000 | 867,728,000 |
Interest rate swaps | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 22,506,000 | 39,320,000 |
Interest rate swaps | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 22,506,000 | 39,320,000 |
Risk Participation Agreements | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | $ 139,506,000 | $ 132,379,000 |
DERIVATIVES - Net gain and loss
DERIVATIVES - Net gain and losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative [Line Items] | ||||
Gain (loss) in OCI on derivatives (effective portion), net of tax | $ (1,947) | $ (1,121) | $ (3,303) | $ 296 |
Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Gain (loss) in OCI on derivatives (effective portion), net of tax | 116 | 82 | 1,271 | (1,187) |
Loss reclassified from OCI into interest income or interest expense (effective portion) | (140) | (82) | (373) | 67 |
Not designated as hedging instruments | ||||
Derivative [Line Items] | ||||
Total | (833) | 5,493 | (6,119) | 13,191 |
Mortgage banking income | Not designated as hedging instruments | Derivative loan commitments | ||||
Derivative [Line Items] | ||||
Total | (1,897) | 4,738 | (9,178) | 14,266 |
Mortgage banking income | Not designated as hedging instruments | Forward loan sale commitments | ||||
Derivative [Line Items] | ||||
Total | $ 1,064 | $ 755 | $ 3,059 | $ (1,075) |
OPERATING LEASE RIGHT-OF-USE _3
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Operating lease ROU assets | $ 25,200 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets. |
Operating lease liabilities | $ 26,806 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accrued Liabilities and Other Liabilities |
Weighted-average remaining lease term (years) | 17 years 2 months 12 days |
Minimum | |
Lessee, Operating Lease, Remaining Lease Term | 6 months |
Maximum | |
Lessee, Operating Lease, Remaining Lease Term | 36 years 4 months 24 days |
OPERATING LEASE RIGHT-OF-USE _4
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | $ 737 | $ 2,452 |
2022 | 2,898 | 2,239 |
2023 | 2,733 | 1,847 |
2024 | 2,247 | 1,644 |
2025 | 2,113 | 1,684 |
Thereafter | 21,951 | 13,134 |
Total lease payments | 32,679 | $ 23,000 |
Imputed interest | (5,873) | |
Total present value of operating lease liabilities | $ 26,806 |
OPERATING LEASE RIGHT-OF-USE _5
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES - Weighted average discount and remaining lease term (Details) | Sep. 30, 2021 |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | |
Weighted-average discount rate | 1.94% |
Weighted-average remaining lease term (years) | 17 years 2 months 12 days |
OPERATING LEASE RIGHT-OF-USE _6
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES - Lease expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | ||||
Operating lease expense | $ 742,000 | $ 2,032,000 | ||
Short-term lease expense | 52,000 | 122,000 | ||
Variable lease expense | 2,000 | 21,000 | ||
Total lease expense | 796,000 | $ 701,000 | 2,175,000 | $ 1,900,000 |
Other Information | ||||
Cash paid for amounts included in the measurement of lease liabilities-operating cash flows for operating leases | 751,000 | 2,108,000 | ||
Operating Lease - Operating cash flows (Liability reduction) | 624,000 | 1,745,000 | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 276,000 | $ 27,267,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 29, 2020 | |
STOCK-BASED COMPENSATION | |||||
Stock based compensation expense | $ 992,000 | $ 617,000 | $ 2,800,000 | $ 3,100,000 | |
2020 Equity Plan | |||||
STOCK-BASED COMPENSATION | |||||
Shares reserved for issuance | 4,500,000 | ||||
Stock Options | |||||
STOCK-BASED COMPENSATION | |||||
Term (years) | 10 years | ||||
Minimum | Stock Options | |||||
STOCK-BASED COMPENSATION | |||||
Vesting period (years) | 1 year | ||||
Maximum | Stock Options | |||||
STOCK-BASED COMPENSATION | |||||
Vesting period (years) | 3 years |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock options (Details) - Stock Options | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Stock Option Awards | |
Balance at the beginning of the period | shares | 2,106,403 |
Exercised | shares | (62,840) |
Balance at the end of the period | shares | 2,043,563 |
Exercisable at end of the period | shares | 1,762,967 |
Unrecognized cost inclusive of directors' awards | $ | $ 251,116 |
Weighted average remaining recognition period (years) | 5 months 15 days |
Weighted Average Exercise Price | |
Balance at the beginning of the period | $ / shares | $ 9.86 |
Exercised | $ / shares | 10.23 |
Balance at the end of the period | $ / shares | 9.85 |
Exercisable at end of the period | $ / shares | $ 9.94 |
Weighted Average Remaining Contractual Term (years) | |
Weighted average remaining contractual term, balance (years) | 6 years 5 months 26 days |
Exercisable at end of the period | 6 years 4 months 6 days |
Stock Option Awards, Nonvested | |
Balance at the beginning of the period | shares | 473,445 |
Vested | shares | (192,849) |
Balance at the end of the period | shares | 280,596 |
Weighted Average Exercise Price, Nonvested | |
Balance at the beginning of the period | $ / shares | $ 2.55 |
Vested | $ / shares | 2.51 |
Balance at the end of the period | $ / shares | $ 2.59 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock and Performance Restricted Stock Units (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Restricted Stock Awards | |
Outstanding Restricted Stock Awards | |
Non-vested stock awards, beginning balance | shares | 384,692 |
Vested | shares | (15,464) |
Granted | shares | 188,377 |
Forfeited | shares | (3,000) |
Non-vested stock awards, ending balance | shares | 554,605 |
Unrecognized cost inclusive of directors' awards | $ | $ 3,415,803 |
Weighted average remaining recognition period (years) | 1 year 8 months 1 day |
Weighted Average Grant Price | |
Non-vested stock awards, beginning balance | $ / shares | $ 9.33 |
Vested | $ / shares | 10 |
Granted | $ / shares | 11.95 |
Forfeited | $ / shares | 9.24 |
Non-vested stock awards, ending balance | $ / shares | $ 10.20 |
Performance Restricted Stock Units | |
Outstanding Restricted Stock Awards | |
Granted | shares | 85,066 |
Non-vested stock awards, ending balance | shares | 85,066 |
Unrecognized cost inclusive of directors' awards | $ | $ 818,235 |
Weighted average remaining recognition period (years) | 2 years 5 months 1 day |
Weighted Average Grant Price | |
Granted | $ / shares | $ 11.95 |
Non-vested stock awards, ending balance | $ / shares | $ 11.95 |
MINIMUM REGULATORY CAPITAL RE_3
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Common equity Tier 1 capital conversation buffer ratio | 0.025 | |
Applicable capital conversation buffer ratio | 0.025 | |
Common equity Tier 1 to risk-weighted assets | ||
Actual, Capital amount | $ 608,882 | $ 621,153 |
Actual, Ratio | 0.171 | 0.177 |
Minimum Requirement for Capital Adequacy Purposes | $ 160,129 | $ 158,050 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.045 | 0.045 |
Tier 1 capital to risk weighted assets | ||
Actual, Capital amount | $ 608,882 | $ 621,153 |
Actual, Ratio | 0.171 | 0.177 |
Minimum Requirement for Capital Adequacy Purposes | $ 213,505 | $ 210,733 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.060 | 0.060 |
Total capital to risk-weighted assets | ||
Actual, Capital amount | $ 688,405 | $ 700,197 |
Actual, Ratio | 0.193 | 0.199 |
Minimum Requirement for Capital Adequacy Purposes | $ 284,673 | $ 280,978 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.080 | 0.080 |
Tier 1 capital to average assets | ||
Actual, Capital amount | $ 608,882 | $ 621,153 |
Actual, Ratio | 0.135 | 0.145 |
Minimum Requirement for Capital Adequacy Purposes | $ 180,139 | $ 171,578 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.040 | 0.040 |
HarborOne Bank | ||
Common equity Tier 1 to risk-weighted assets | ||
Actual, Capital amount | $ 559,819 | $ 506,822 |
Actual, Ratio | 0.157 | 0.144 |
Minimum Requirement for Capital Adequacy Purposes | $ 160,182 | $ 158,081 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.045 | 0.045 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 231,374 | $ 228,339 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.065 | 0.065 |
Tier 1 capital to risk weighted assets | ||
Actual, Capital amount | $ 559,819 | $ 506,822 |
Actual, Ratio | 0.157 | 0.144 |
Minimum Requirement for Capital Adequacy Purposes | $ 213,576 | $ 210,775 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.060 | 0.060 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 284,768 | $ 281,033 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.080 | 0.080 |
Total capital to risk-weighted assets | ||
Actual, Capital amount | $ 604,357 | $ 550,875 |
Actual, Ratio | 0.170 | 0.157 |
Minimum Requirement for Capital Adequacy Purposes | $ 284,768 | $ 281,033 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.080 | 0.080 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 355,960 | $ 351,291 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.100 | 0.100 |
Tier 1 capital to average assets | ||
Actual, Capital amount | $ 559,819 | $ 506,822 |
Actual, Ratio | 0.124 | 0.118 |
Minimum Requirement for Capital Adequacy Purposes | $ 180,113 | $ 171,501 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.040 | 0.040 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 225,141 | $ 214,377 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.050 | 0.050 |
COMPREHENSIVE INCOME (LOSS) (De
COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Components of AOCI | ||
Total accumulated other comprehensive income (loss) | $ (1,118) | $ 2,185 |
Cash flow hedge | ||
Components of AOCI | ||
Net unrealized gain (loss) | 358 | (1,407) |
Related tax effect | (100) | 394 |
Total accumulated other comprehensive income (loss) | 258 | (1,013) |
Securities available for sale | ||
Components of AOCI | ||
Net unrealized gain (loss) | (1,765) | 4,102 |
Related tax effect | 389 | (904) |
Total accumulated other comprehensive income (loss) | $ (1,376) | $ 3,198 |
COMPREHENSIVE INCOME (LOSS) - C
COMPREHENSIVE INCOME (LOSS) - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 705,471 | $ 684,455 | $ 696,314 | $ 665,794 |
Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale | 522 | |||
Balance at end of period | 680,032 | 694,103 | 680,032 | 694,103 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 829 | 2,897 | 2,185 | 1,480 |
Other comprehensive income (loss) before reclassifications | (2,384) | (1,303) | (4,234) | 2,631 |
Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale | 522 | |||
Amounts reclassified from accumulated other comprehensive income (loss) | (101) | 82 | 132 | (2,600) |
Net current period other comprehensive income (loss) | (2,485) | (1,221) | (4,102) | 553 |
Related tax effect | 538 | 100 | 799 | (257) |
Balance at end of period | (1,118) | 1,776 | (1,118) | 1,776 |
Securities available for sale | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 687 | 4,166 | 3,198 | 1,480 |
Other comprehensive income (loss) before reclassifications | (2,406) | (1,335) | (5,626) | 4,212 |
Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale | 522 | |||
Amounts reclassified from accumulated other comprehensive income (loss) | (241) | (241) | (2,533) | |
Net current period other comprehensive income (loss) | (2,647) | (1,335) | (5,867) | 2,201 |
Related tax effect | 584 | 132 | 1,293 | (718) |
Balance at end of period | (1,376) | 2,963 | (1,376) | 2,963 |
Cash flow hedge | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 142 | (1,269) | (1,013) | |
Other comprehensive income (loss) before reclassifications | 22 | 32 | 1,392 | (1,581) |
Amounts reclassified from accumulated other comprehensive income (loss) | 140 | 82 | 373 | (67) |
Net current period other comprehensive income (loss) | 162 | 114 | 1,765 | (1,648) |
Related tax effect | (46) | (32) | (494) | 461 |
Balance at end of period | $ 258 | $ (1,187) | $ 258 | $ (1,187) |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABILITIES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Assets and liabilities measured on recurring basis | ||
Fair Value | $ 390,552,000 | $ 276,498,000 |
Derivative loan commitments | ||
Assets and liabilities measured on recurring basis | ||
Weighted average pull-through rate | 88.00% | 76.00% |
Recurring | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | $ 390,552,000 | $ 276,498,000 |
Recurring | Level 1 | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | 0 | 0 |
Recurring | Level 2 | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | 390,552,000 | 276,498,000 |
Recurring | Level 3 | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | 0 | 0 |
90 Days or More | Recurring | Level 2 | ||
Assets and liabilities measured on recurring basis | ||
Loans held for sale | $ 0 | $ 0 |
FAIR VALUE OF ASSETS AND LIAB_4
FAIR VALUE OF ASSETS AND LIABILITIES - Recurring basis (Details) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021USD ($)item | Dec. 31, 2020USD ($)item | Jun. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | |
Assets and liabilities measured on recurring basis | ||||||
Number of transfers | item | 0 | 0 | ||||
Assets | ||||||
Securities available for sale, at fair value | $ 390,552,000 | $ 276,498,000 | ||||
Loans held for sale | 77,052,000 | 208,612,000 | ||||
Mortgage servicing rights | 36,540,000 | 24,833,000 | $ 35,955,000 | $ 20,159,000 | $ 16,127,000 | $ 17,150,000 |
Recurring | ||||||
Assets | ||||||
Securities available for sale, at fair value | 390,552,000 | 276,498,000 | ||||
Loans held for sale | 77,052,000 | 208,612,000 | ||||
Mortgage servicing rights | 36,540,000 | 24,833,000 | ||||
Total assets | 531,039,000 | 561,886,000 | ||||
Liabilities | ||||||
Total liabilities | 22,578,000 | 43,272,000 | ||||
Recurring | Derivative loan commitments | ||||||
Assets | ||||||
Derivative assets | 3,147,000 | 12,623,000 | ||||
Liabilities | ||||||
Derivative liabilities | 43,000 | 341,000 | ||||
Recurring | Forward loan sale commitments | ||||||
Assets | ||||||
Derivative assets | 884,000 | |||||
Liabilities | ||||||
Derivative liabilities | 29,000 | 2,204,000 | ||||
Recurring | Interest rate swaps | ||||||
Assets | ||||||
Derivative assets | 22,506,000 | 39,320,000 | ||||
Liabilities | ||||||
Derivative liabilities | 22,506,000 | 39,320,000 | ||||
Recurring | Interest rate management agreement | ||||||
Assets | ||||||
Derivative assets | 358,000 | |||||
Liabilities | ||||||
Derivative liabilities | 1,407,000 | |||||
Recurring | Level 1 | ||||||
Assets | ||||||
Securities available for sale, at fair value | 0 | 0 | ||||
Recurring | Level 2 | ||||||
Assets | ||||||
Securities available for sale, at fair value | 390,552,000 | 276,498,000 | ||||
Loans held for sale | 77,052,000 | 208,612,000 | ||||
Mortgage servicing rights | 36,540,000 | 24,833,000 | ||||
Total assets | 527,008,000 | 549,263,000 | ||||
Liabilities | ||||||
Total liabilities | 22,506,000 | 40,727,000 | ||||
Recurring | Level 2 | Interest rate swaps | ||||||
Assets | ||||||
Derivative assets | 22,506,000 | 39,320,000 | ||||
Liabilities | ||||||
Derivative liabilities | 22,506,000 | 39,320,000 | ||||
Recurring | Level 2 | Interest rate management agreement | ||||||
Assets | ||||||
Derivative assets | 358,000 | |||||
Liabilities | ||||||
Derivative liabilities | 1,407,000 | |||||
Recurring | Level 3 | ||||||
Assets | ||||||
Securities available for sale, at fair value | 0 | 0 | ||||
Total assets | 4,031,000 | 12,623,000 | ||||
Liabilities | ||||||
Total liabilities | 72,000 | 2,545,000 | ||||
Recurring | Level 3 | Derivative loan commitments | ||||||
Assets | ||||||
Derivative assets | 3,147,000 | 12,623,000 | ||||
Liabilities | ||||||
Derivative liabilities | 43,000 | 341,000 | ||||
Recurring | Level 3 | Forward loan sale commitments | ||||||
Assets | ||||||
Derivative assets | 884,000 | |||||
Liabilities | ||||||
Derivative liabilities | $ 29,000 | $ 2,204,000 |
FAIR VALUE OF ASSETS AND LIAB_5
FAIR VALUE OF ASSETS AND LIABILITIES - Level 3 (Details) - Derivative and Forward Loan Sale Commitments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Changes in Level 3 assets | ||||
Balance at beginning of period | $ 5,134 | $ 10,844 | $ 12,623 | $ 1,411 |
Total gains included in net income | (1,103) | 4,903 | (8,592) | 14,336 |
Balance at end of period | 4,031 | 15,747 | 4,031 | 15,747 |
Changes in unrealized gains relating to instruments at period end | 4,031 | 15,747 | 4,031 | 15,747 |
Changes in Level 3 liabilities | ||||
Balance at beginning of period | (342) | (2,067) | (2,545) | (332) |
Total gains (losses) included in net income | 270 | 590 | 2,473 | (1,145) |
Balance at end of period | (72) | (1,477) | (72) | (1,477) |
Changes in unrealized losses relating to instruments at period end | $ (72) | $ (1,477) | $ (72) | $ (1,477) |
FAIR VALUE OF ASSETS AND LIAB_6
FAIR VALUE OF ASSETS AND LIABILITIES - Impaired Loans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | $ 5,132,000 | $ 749,000 | $ 7,972,000 | $ 3,081,000 | |
Residential loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | 103,000 | 369,000 | |||
Commercial real estate | |||||
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | 5,124,000 | 5,124,000 | |||
Commercial and industrial | |||||
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | 8,000 | 644,000 | 2,824,000 | 2,654,000 | |
Other real estate owned and repossessed assets | |||||
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | $ 2,000 | 24,000 | $ 58,000 | ||
Non-recurring | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | 0 | 0 | $ 0 | ||
Non-recurring | Level 3 | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | 23,492,000 | 23,492,000 | 8,756,000 | ||
Non-recurring | Level 3 | Residential loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | 846,000 | 846,000 | 919,000 | ||
Non-recurring | Level 3 | Commercial real estate | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | 17,662,000 | 17,662,000 | 3,034,000 | ||
Non-recurring | Level 3 | Commercial and industrial | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | 4,956,000 | 4,956,000 | 4,208,000 | ||
Non-recurring | Level 3 | Other real estate owned and repossessed assets | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | $ 28,000 | $ 28,000 | $ 595,000 |
FAIR VALUE OF ASSETS AND LIAB_7
FAIR VALUE OF ASSETS AND LIABILITIES - Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Financial assets: | ||
Cash and cash equivalents | $ 319,639 | $ 205,870 |
Securities available for sale, at fair value | 390,552 | 276,498 |
Federal Home Loan Bank stock | 6,828 | 8,738 |
Loans held for sale | 77,052 | 208,612 |
Loans, net | 3,409,756 | 3,439,247 |
Retirement plan annuities | 14,065 | 13,747 |
Accrued interest receivable | 10,880 | 11,874 |
Financial liabilities: | ||
Deposits | 3,694,380 | 3,506,209 |
Subordinated debt | 34,128 | 34,033 |
Mortgagors' escrow accounts | 8,412 | 7,736 |
Accrued interest payable | 567 | 1,262 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 319,639 | 205,870 |
Securities available for sale, at fair value | 390,552 | 276,498 |
Federal Home Loan Bank stock | 6,828 | 8,738 |
Loans held for sale | 77,052 | 208,612 |
Loans, net | 3,409,756 | 3,439,247 |
Retirement plan annuities | 14,065 | 13,747 |
Accrued interest receivable | 10,880 | 11,874 |
Financial liabilities: | ||
Deposits | 3,694,380 | 3,506,209 |
Borrowed funds | 55,720 | 149,097 |
Subordinated debt | 34,128 | 34,033 |
Mortgagors' escrow accounts | 8,412 | 7,736 |
Accrued interest payable | 567 | 1,262 |
Carrying Amount | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 3,147 | 12,623 |
Liabilities | 43 | 341 |
Carrying Amount | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Assets | 358 | |
Liabilities | 1,407 | |
Carrying Amount | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 22,506 | 39,320 |
Liabilities | 22,506 | 39,320 |
Carrying Amount | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 884 | |
Liabilities | 29 | 2,204 |
Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 319,639 | 205,870 |
Securities available for sale, at fair value | 390,552 | 276,498 |
Loans held for sale | 77,052 | 208,612 |
Loans, net | 3,441,946 | 3,473,751 |
Retirement plan annuities | 14,065 | 13,747 |
Accrued interest receivable | 10,880 | 11,874 |
Financial liabilities: | ||
Deposits | 3,697,001 | 3,509,996 |
Borrowed funds | 56,350 | 152,373 |
Subordinated debt | 37,206 | 34,799 |
Mortgagors' escrow accounts | 8,412 | 7,736 |
Accrued interest payable | 567 | 1,262 |
Fair Value | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 3,147 | 12,623 |
Liabilities | 43 | 341 |
Fair Value | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Assets | 358 | |
Liabilities | 1,407 | |
Fair Value | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 22,506 | 39,320 |
Liabilities | 22,506 | 39,320 |
Fair Value | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 884 | |
Liabilities | 29 | 2,204 |
Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 319,639 | 205,870 |
Fair Value | Level 2 | ||
Financial assets: | ||
Securities available for sale, at fair value | 390,552 | 276,498 |
Loans held for sale | 77,052 | 208,612 |
Accrued interest receivable | 10,880 | 11,874 |
Financial liabilities: | ||
Borrowed funds | 56,350 | 152,373 |
Accrued interest payable | 567 | 1,262 |
Fair Value | Level 2 | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Assets | 358 | |
Liabilities | 1,407 | |
Fair Value | Level 2 | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 22,506 | 39,320 |
Liabilities | 22,506 | 39,320 |
Fair Value | Level 3 | ||
Financial assets: | ||
Loans, net | 3,441,946 | 3,473,751 |
Retirement plan annuities | 14,065 | 13,747 |
Financial liabilities: | ||
Deposits | 3,697,001 | 3,509,996 |
Subordinated debt | 37,206 | 34,799 |
Mortgagors' escrow accounts | 8,412 | 7,736 |
Fair Value | Level 3 | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 3,147 | 12,623 |
Liabilities | 43 | 341 |
Fair Value | Level 3 | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 884 | |
Liabilities | $ 29 | $ 2,204 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
EARNINGS PER SHARE | ||||
Net income available to common stockholders (in thousands) | $ 12,259 | $ 11,893 | $ 45,927 | $ 27,192 |
Average number of common shares outstanding | 54,021,542 | 58,375,742 | 55,599,758 | 58,403,825 |
Less: Average unallocated ESOP shares and non-vested restricted shares | (4,220,419) | (3,910,403) | (4,237,506) | (3,967,735) |
Weighted average common shares outstanding used to calculate basic earnings per common share | 49,801,123 | 54,465,339 | 51,362,252 | 54,436,090 |
Dilutive effect of share-based compensation | 862,292 | 732,497 | ||
Weighted average common shares outstanding used to calculate diluted earnings per common share | 50,663,415 | 54,465,339 | 52,094,749 | 54,436,090 |
Basic | $ 0.25 | $ 0.22 | $ 0.89 | $ 0.50 |
Diluted | $ 0.24 | $ 0.22 | $ 0.88 | $ 0.50 |
Stock Options | ||||
EARNINGS PER SHARE | ||||
Antidilutive securities excluded from computation of earnings per share | 2,148,295 | 2,148,295 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Segment Reporting Information | |||||
Number of reportable segments | segment | 2 | ||||
Net interest and dividend income (expense) | $ 32,803 | $ 31,169 | $ 97,385 | $ 87,316 | |
(Credit) provision for loan losses | (1,627) | 13,454 | (5,822) | 27,207 | |
Net interest and dividend income, after provision (credit) for loan losses | 34,430 | 17,715 | 103,207 | 60,109 | |
Mortgage banking income: | |||||
Gain on sale of mortgage loans | 12,756 | 34,055 | 51,820 | 77,195 | |
Changes in mortgage servicing rights fair value | (992) | (193) | (135) | (5,691) | |
Other | 3,882 | 4,258 | 12,472 | 10,650 | |
Total mortgage banking income | 15,646 | 38,120 | 64,157 | 82,154 | |
Other noninterest income (loss) | 6,364 | 6,318 | 17,365 | 19,499 | |
Total noninterest income | 22,010 | 44,438 | 81,522 | 101,653 | |
Noninterest expense | 39,274 | 45,699 | 120,674 | 124,636 | |
Income (loss) before income taxes | 17,166 | 16,454 | 64,055 | 37,126 | |
Provision (benefit) for income taxes | 4,907 | 4,561 | 18,128 | 9,934 | |
Net income | 12,259 | 11,893 | 45,927 | 27,192 | |
Total assets at period end | 4,567,094 | 4,428,319 | 4,567,094 | 4,428,319 | $ 4,483,615 |
Goodwill at period end | 69,802 | 69,802 | 69,802 | 69,802 | $ 69,802 |
HarborOne Bank | |||||
Mortgage banking income: | |||||
Goodwill at period end | 59,000 | 59,000 | |||
HarborOne Mortgage | |||||
Mortgage banking income: | |||||
Goodwill at period end | 10,800 | 10,800 | |||
Operating Segments | HarborOne Bank | |||||
Segment Reporting Information | |||||
Net interest and dividend income (expense) | 32,494 | 30,599 | 95,876 | 86,248 | |
(Credit) provision for loan losses | (1,627) | 13,454 | (5,822) | 27,207 | |
Net interest and dividend income, after provision (credit) for loan losses | 34,121 | 17,145 | 101,698 | 59,041 | |
Mortgage banking income: | |||||
Intersegment (loss) gain | (1,373) | (645) | (2,945) | (2,444) | |
Changes in mortgage servicing rights fair value | (74) | (354) | (207) | (2,014) | |
Other | 263 | 334 | 839 | 1,031 | |
Total mortgage banking income | (1,184) | (665) | (2,313) | (3,427) | |
Other noninterest income (loss) | 6,339 | 6,326 | 17,328 | 19,640 | |
Total noninterest income | 5,155 | 5,661 | 15,015 | 16,213 | |
Noninterest expense | 26,570 | 26,300 | 75,161 | 75,806 | |
Income (loss) before income taxes | 12,706 | (3,494) | 41,552 | (552) | |
Provision (benefit) for income taxes | 3,575 | 571 | 11,873 | 2,199 | |
Net income | 9,131 | (4,065) | 29,679 | (2,751) | |
Total assets at period end | 4,575,798 | 4,404,842 | 4,575,798 | 4,404,842 | |
Goodwill at period end | 59,042 | 59,042 | 59,042 | 59,042 | |
Operating Segments | HarborOne Mortgage | |||||
Segment Reporting Information | |||||
Net interest and dividend income (expense) | 792 | 1,000 | 2,897 | 2,020 | |
Net interest and dividend income, after provision (credit) for loan losses | 792 | 1,000 | 2,897 | 2,020 | |
Mortgage banking income: | |||||
Gain on sale of mortgage loans | 12,756 | 34,055 | 51,820 | 77,195 | |
Intersegment (loss) gain | 2,366 | 645 | 3,938 | 2,444 | |
Changes in mortgage servicing rights fair value | (918) | 161 | 72 | (3,677) | |
Other | 3,619 | 3,924 | 11,633 | 9,619 | |
Total mortgage banking income | 17,823 | 38,785 | 67,463 | 85,581 | |
Other noninterest income (loss) | 25 | (8) | 37 | (141) | |
Total noninterest income | 17,848 | 38,777 | 67,500 | 85,440 | |
Noninterest expense | 12,387 | 19,133 | 44,545 | 47,923 | |
Income (loss) before income taxes | 6,253 | 20,644 | 25,852 | 39,537 | |
Provision (benefit) for income taxes | 1,559 | 4,550 | 6,905 | 8,667 | |
Net income | 4,694 | 16,094 | 18,947 | 30,870 | |
Total assets at period end | 208,888 | 280,983 | 208,888 | 280,983 | |
Goodwill at period end | 10,760 | 10,760 | 10,760 | 10,760 | |
Operating Segments | HarborOne Bancorp, Inc. | |||||
Segment Reporting Information | |||||
Net interest and dividend income (expense) | (483) | (430) | (1,388) | (952) | |
Net interest and dividend income, after provision (credit) for loan losses | (483) | (430) | (1,388) | (952) | |
Mortgage banking income: | |||||
Noninterest expense | 317 | 266 | 968 | 907 | |
Income (loss) before income taxes | (800) | (696) | (2,356) | (1,859) | |
Provision (benefit) for income taxes | (227) | (560) | (650) | (932) | |
Net income | (573) | (136) | (1,706) | (927) | |
Total assets at period end | 717,325 | 729,838 | 717,325 | 729,838 | |
Eliminations | |||||
Mortgage banking income: | |||||
Intersegment (loss) gain | (993) | (993) | |||
Total mortgage banking income | (993) | (993) | |||
Total noninterest income | (993) | (993) | |||
Income (loss) before income taxes | (993) | (993) | |||
Net income | (993) | (993) | |||
Total assets at period end | $ (934,917) | $ (987,344) | $ (934,917) | $ (987,344) |