Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2019 | Mar. 01, 2022 | Jun. 30, 2021 | |
Document and Entity Information | ||||
Document Type | 10-K | |||
Document Annual Report | true | |||
Document Transition Report | false | |||
Document Period End Date | Dec. 31, 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 | false | |||
ICFR Auditor Attestation Flag | true | |||
Entity Shell Company | false | |||
Entity Central Index Key | 0001769617 | |||
Current Fiscal Year End Date | --12-31 | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Public Float | $ 628,584,000 | |||
Entity Common Stock, Shares Outstanding | 51,374,421 | |||
Document Fiscal Year Focus | 2021 | |||
Document Fiscal Period Focus | FY | |||
Amendment Flag | false | |||
Auditor Name | Crowe LLP | Wolf & Company | ||
Auditor Firm ID | 173 | 392 | ||
Auditor Location | Livingston, New Jersey | Boston, Massachusetts |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and due from banks | $ 35,549 | $ 31,777 |
Short-term investments | 159,170 | 174,093 |
Total cash and cash equivalents | 194,719 | 205,870 |
Securities available for sale, at fair value | 394,036 | 276,498 |
Federal Home Loan Bank stock, at cost | 5,931 | 8,738 |
Assets held for sale | 881 | |
Loans held for sale, at fair value | 45,642 | 208,612 |
Loans | 3,607,733 | 3,494,642 |
Less: Allowance for loan losses | (45,377) | (55,395) |
Net loans | 3,562,356 | 3,439,247 |
Accrued interest receivable | 10,624 | 11,874 |
Other real estate owned and repossessed assets | 53 | 595 |
Mortgage servicing rights, at fair value | 38,268 | 24,833 |
Property and equipment, net | 50,745 | 49,580 |
Retirement plan annuities | 14,174 | 13,747 |
Bank-owned life insurance | 89,972 | 87,950 |
Goodwill | 69,802 | 69,802 |
Intangible assets | 3,164 | 4,370 |
Other assets | 73,038 | 81,899 |
Total assets | 4,553,405 | 4,483,615 |
Deposits: | ||
Demand deposit accounts | 743,051 | 689,672 |
NOW accounts | 313,733 | 218,584 |
Regular savings and club accounts | 1,138,979 | 998,994 |
Money market deposit accounts | 858,970 | 866,661 |
Term certificate accounts | 627,916 | 732,298 |
Total deposits | 3,682,649 | 3,506,209 |
Short-term borrowed funds | 35,000 | |
Long-term borrowed funds | 55,711 | 114,097 |
Subordinated debt | 34,159 | 34,033 |
Mortgagors' escrow accounts | 8,459 | 7,736 |
Accrued interest payable | 1,083 | 1,262 |
Other liabilities and accrued expenses | 92,083 | 88,964 |
Total liabilities | 3,874,144 | 3,787,301 |
Commitments and contingencies (Notes 9 and 10) | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 59,087,487 and 58,834,970 shares issued; 52,390,478 and 57,205,458 shares outstanding at December 31, 2021 and 2020, respectively | 585 | 584 |
Additional paid-in capital | 469,934 | 464,176 |
Retained earnings | 325,699 | 277,312 |
Treasury stock, at cost, 6,693,504 and 1,629,512 shares at December 31, 2021 and 2020, respectively | (85,859) | (16,644) |
Accumulated other comprehensive (loss) income | (1,637) | 2,185 |
Unearned compensation - ESOP | (29,461) | (31,299) |
Total stockholders' equity | 679,261 | 696,314 |
Total liabilities and stockholders' equity | $ 4,553,405 | $ 4,483,615 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 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 | 59,087,487 | 58,834,970 |
Common stock, shares outstanding | 52,390,478 | 57,205,458 |
Treasury, shares | 6,693,504 | 1,629,512 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Interest and dividend income: | |||
Interest and fees on loans | $ 135,823 | $ 137,765 | $ 142,228 |
Interest on loans held for sale | 3,342 | 3,892 | 2,767 |
Interest on taxable securities | 4,212 | 5,510 | 6,325 |
Interest on non-taxable securities | 103 | 494 | |
Other interest and dividend income | 518 | 1,288 | 2,970 |
Total interest and dividend income | 143,895 | 148,558 | 154,784 |
Interest expense: | |||
Interest on deposits | 8,723 | 22,793 | 37,057 |
Interest on FHLB borrowings | 1,707 | 3,604 | 6,588 |
Interest on subordinated debentures | 2,095 | 2,095 | 2,077 |
Total interest expense | 12,525 | 28,492 | 45,722 |
Net interest and dividend income | 131,370 | 120,066 | 109,062 |
Provision (credit) for loan losses | (7,258) | 34,815 | 4,747 |
Net interest and dividend income, after provision (credit) for loan losses | 138,628 | 85,251 | 104,315 |
Mortgage banking income: | |||
Gain on sale of mortgage loans | 61,883 | 105,469 | 33,557 |
Changes in mortgage servicing rights fair value | (380) | (6,732) | (6,241) |
Other | 15,831 | 15,172 | 9,459 |
Total mortgage banking income | 77,334 | 113,909 | 36,775 |
Deposit account fees | 17,839 | 14,018 | 16,294 |
Income on retirement plan annuities | 427 | 414 | 402 |
Loss on disposal of asset held for sale | (482) | ||
Gain on sale and call of securities, net | 241 | 2,533 | 1,344 |
Bank-owned life insurance income | 2,022 | 2,215 | 1,105 |
Other income | 2,823 | 5,591 | 4,657 |
Total noninterest income | 100,686 | 138,680 | 60,095 |
Noninterest expense: | |||
Compensation and benefits | 101,924 | 105,615 | 86,787 |
Occupancy and equipment | 19,646 | 17,841 | 17,396 |
Data processing | 9,154 | 8,811 | 8,692 |
Loan expenses | 5,740 | 9,810 | 5,325 |
Marketing | 3,644 | 3,390 | 3,705 |
Deposit expenses | 1,782 | 1,874 | 1,583 |
Postage and printing | 1,620 | 1,819 | 1,935 |
Professional fees | 5,875 | 5,456 | 5,689 |
Prepayment penalties on Federal Home Loan Bank advances | 1,095 | ||
Foreclosed and repossessed assets | (398) | (4) | 13 |
Deposit insurance | 1,338 | 1,180 | 1,035 |
Other expenses | 7,442 | 10,130 | 9,574 |
Total noninterest expense | 158,862 | 165,922 | 141,734 |
Income before income taxes | 80,452 | 58,009 | 22,676 |
Income tax provision | 21,935 | 13,217 | 4,408 |
Net income | $ 58,517 | $ 44,792 | $ 18,268 |
Earnings per common share: | |||
Basic | $ 1.15 | $ 0.82 | $ 0.33 |
Diluted | $ 1.14 | $ 0.82 | $ 0.33 |
Weighted average shares outstanding: | |||
Weighted average common shares, basic | 50,746,302 | 54,313,368 | 55,731,637 |
Weighted average common shares, diluted | 51,523,135 | 54,319,835 | 55,731,776 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 58,517 | $ 44,792 | $ 18,268 |
Unrealized gain/loss on cash flow hedge: | |||
Unrealized holding gains (losses) | 2,557 | (1,453) | |
Reclassification adjustment for net losses included in net income | 513 | 46 | |
Net change in unrealized gains (losses) on derivatives in cash flow hedging instruments | 3,070 | (1,407) | |
Related tax effect | (860) | 394 | |
Net-of-tax amount | 2,210 | (1,013) | |
Unrealized gain/loss on securities available for sale: | |||
Unrealized holding (losses) gains | (7,496) | 4,214 | 6,266 |
Reclassification of unrealized gain on securities transferred to available for sale | 522 | ||
Reclassification adjustment for net realized gains | (241) | (2,533) | (1,344) |
Net unrealized (losses) gains | (7,737) | 2,203 | 4,922 |
Related tax effect | 1,705 | (485) | (1,084) |
Net-of-tax amount | (6,032) | 1,718 | 3,838 |
Total other comprehensive (loss) income | (3,822) | 705 | 3,838 |
Comprehensive income | $ 54,695 | $ 45,497 | $ 22,106 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock, at Cost | Accumulated Other Comprehensive Income (Loss) [Member] | Unearned Compensation - ESOP | Total |
Balance at beginning of period at Dec. 31, 2018 | $ 327 | $ 152,156 | $ 219,088 | $ (1,548) | $ (2,358) | $ (10,091) | $ 357,574 |
Balance, beginning of period (in shares) at Dec. 31, 2018 | 58,465,505 | ||||||
Comprehensive income (loss) | 18,268 | 3,838 | 22,106 | ||||
Conversion of HarborOne Bancorp, Inc. | $ 257 | 303,804 | 304,061 | ||||
Conversion of HarborOne Bancorp, Inc. (in shares) | 8,760 | ||||||
Purchase of shares by the ESOP | (24,829) | (24,829) | |||||
Treasury stock retired | (1,548) | 1,548 | |||||
Contribution of HarborOne Bancorp Mutual Bancshares | 99 | 99 | |||||
ESOP shares committed to be released | 872 | 1,783 | 2,655 | ||||
Restricted stock awards granted, net of forfeitures (in shares) | 14,957 | ||||||
Share-based compensation expense | 4,849 | 4,849 | |||||
Treasury stock purchased | (721) | (721) | |||||
Treasury stock purchased (in shares) | (71,201) | ||||||
Balance at end of period at Dec. 31, 2019 | $ 584 | 460,232 | 237,356 | (721) | 1,480 | (33,137) | 665,794 |
Balance, end of period (in shares) at Dec. 31, 2019 | 58,418,021 | ||||||
Comprehensive income (loss) | 44,792 | 705 | 45,497 | ||||
Dividends declared per share | (4,836) | (4,836) | |||||
ESOP shares committed to be released | 265 | 1,838 | 2,103 | ||||
Restricted stock awards granted, net of forfeitures (in shares) | 345,748 | ||||||
Share-based compensation expense | 3,679 | 3,679 | |||||
Treasury stock purchased | (15,923) | $ (15,923) | |||||
Treasury stock purchased (in shares) | (1,558,311) | (1,533,500) | |||||
Balance at end of period at Dec. 31, 2020 | $ 584 | 464,176 | 277,312 | (16,644) | 2,185 | (31,299) | $ 696,314 |
Balance, end of period (in shares) at Dec. 31, 2020 | 57,205,458 | 57,205,458 | |||||
Comprehensive income (loss) | 58,517 | (3,822) | $ 54,695 | ||||
Dividends declared per share | (10,130) | (10,130) | |||||
ESOP shares committed to be released | 1,332 | 1,838 | 3,170 | ||||
Restricted stock awards granted, net of forfeitures (in shares) | 186,172 | ||||||
Share-based compensation expense | 3,784 | 3,784 | |||||
Stock option exercised | $ 1 | 642 | 643 | ||||
Stock option exercised (in shares) | 62,840 | ||||||
Treasury stock purchased | (69,215) | (69,215) | |||||
Treasury stock purchased (in shares) | (5,063,992) | ||||||
Balance at end of period at Dec. 31, 2021 | $ 585 | $ 469,934 | $ 325,699 | $ (85,859) | $ (1,637) | $ (29,461) | $ 679,261 |
Balance, end of period (in shares) at Dec. 31, 2021 | 52,390,478 | 52,390,478 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019USD ($)shares | |
Consolidated Statements of Changes in Stockholders' Equity | |||
Dividends declared per share | $ / shares | $ 0.20 | $ 0.09 | |
Shares purchased by the ESOP | 2,482,945 | ||
ESOP shares committed to be released | 230,722 | 230,723 | 230,724 |
Conversion costs | $ | $ 6.3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net income | $ 58,517 | $ 44,792 | $ 18,268 |
Adjustments to reconcile net income to net cash used by operating activities: | |||
(Credit) provision for loan losses | (7,258) | 34,815 | 4,747 |
Net amortization of securities premiums/discounts | 3,689 | 2,263 | 391 |
Proceeds from sale of loans | 2,190,295 | 2,460,786 | 1,105,494 |
Loans originated for sale | (1,973,672) | (2,446,830) | (1,138,718) |
Net (accretion) amortization of net deferred loan costs/fees and premiums | (2,530) | 370 | 2,867 |
Depreciation and amortization of premises and equipment | 4,412 | 4,011 | 4,394 |
Change in mortgage servicing rights fair value | 380 | 6,732 | 6,241 |
Mortgage servicing rights capitalized | (13,815) | (14,415) | (1,173) |
Accretion of fair value adjustment on loans and deposits, net | (3,455) | (4,175) | (2,838) |
Amortization of other intangible assets | 1,206 | 1,665 | 2,344 |
Amortization of subordinated debt issuance costs | 126 | 126 | 108 |
Gain on sale and call of securities, net | (241) | (2,533) | (1,344) |
Net gains on mortgage loan sales, including fair value adjustments | (53,653) | (112,016) | (35,221) |
Bank-owned life insurance income | (2,022) | (2,215) | (1,105) |
Income on retirement plan annuities | (427) | (414) | (402) |
Loss on disposal of asset held for sale | 482 | ||
Net loss on disposal of premises and equipment | 101 | 116 | |
Net (gain) loss on sale and write-down of other real estate owned and repossessed assets | (243) | (41) | (69) |
Deferred income tax expense (benefit) | 6,427 | (3,614) | (556) |
ESOP expense | 3,170 | 2,103 | 2,655 |
Share-based compensation expense | 3,784 | 3,679 | 4,849 |
Net change in: | |||
Increase in operating lease right-of-use assets | (3,592) | ||
Increase in operating lease liabilities | 4,000 | ||
Change in other assets | 32,974 | (33,222) | (11,619) |
Change in other liabilities | (23,777) | 31,080 | 3,962 |
Net cash provided (used) by operating activities | 224,295 | (26,952) | (36,127) |
Activity in securities available for sale: | |||
Maturities, prepayments and calls | 148,702 | 110,615 | 56,691 |
Purchases | (316,746) | (191,560) | (109,289) |
Sales | 39,321 | 67,574 | 28,391 |
Activity in securities held to maturity: | |||
Maturities, prepayment and calls | 432 | 18,218 | |
Sales | 4,759 | ||
Net redemption of FHLB stock | 2,807 | 8,383 | 7,848 |
Investment in bank-owned life insurance | (40,000) | ||
Proceeds on asset held for sale | 8,536 | ||
Proceeds from sale of portfolio loans transferred to held for sale | 10,000 | ||
Loan pool purchases | (26,768) | ||
Participation-in loan purchases | (87,837) | (27,133) | (112,259) |
Net loan payments (originations) | 4,352 | (306,421) | (76,389) |
Proceeds from sale of other real estate owned and repossessed assets | 1,576 | 1,704 | 2,290 |
Additions to property and equipment | (6,458) | (5,741) | (4,434) |
Cash received in MHC merger | 99 | ||
Net cash used by investing activities | (241,051) | (318,852) | (228,834) |
Cash flows from financing activities: | |||
Net increase in deposits | 176,035 | 562,591 | 256,847 |
Net change in short-term borrowed funds | (35,000) | (148,000) | (107,000) |
Proceeds from other borrowed funds and subordinated debt | 3,400 | 40,000 | 31,220 |
Repayment of other borrowed funds | (61,786) | (97,035) | (90,024) |
Net change in mortgagors' escrow accounts | 723 | 1,683 | 1,502 |
Purchase of shares by the ESOP | (24,829) | ||
Proceeds from exercise of stock options | 643 | ||
Treasury stock purchased | (69,215) | (15,923) | (721) |
Net proceeds from sale of common stock | 304,061 | ||
Dividends paid | (9,195) | (3,258) | |
Net cash provided by financing activities | 5,605 | 340,058 | 371,056 |
Net change in cash and cash equivalents | (11,151) | (5,746) | 106,095 |
Cash and cash equivalents at beginning of year | 205,870 | 211,616 | 105,521 |
Cash and cash equivalents at end of year | 194,719 | 205,870 | 211,616 |
Supplemental cash flow information: | |||
Interest paid on deposits | 8,714 | 23,253 | 36,824 |
Interest paid on borrowed funds | 3,951 | 5,910 | 8,933 |
Income taxes paid, net | 20,885 | 18,089 | 3,627 |
Transfer of loans to other real estate owned and repossessed assets | 792 | 1,540 | 2,191 |
Transfer of securities held to maturity to available for sale, fair value | 22,051 | ||
Transfer of asset to assets held for sale | 881 | 10,937 | $ 8,536 |
Dividends declared | 10,130 | $ 4,836 | |
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 | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation HarborOne Bancorp, Inc. (the “Company”) is the stock holding company of HarborOne Bank (the “Bank”), a Massachusetts-chartered savings bank, which in turn owns a residential mortgage banking company, HarborOne Mortgage, LLC (“HarborOne Mortgage”). HarborOne Mortgage was acquired as Merrimack Mortgage, LLC on July 1, 2015 and effective April 3, 2018 became HarborOne Mortgage. The Consolidated Financial Statements include the accounts of the Company, the Company’s subsidiaries, Legion Parkway Company LLC, a security corporation formed on July 13, 2016 and HarborOne Bank; and the Bank’s wholly-owned subsidiaries. HarborOne Mortgage, two security corporation subsidiaries and one passive investment subsidiary, which 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. Conversion and Reorganization On August 14, 2019, the Company completed a second step conversion offering (the “Offering”). Prior to the completion of the Offering, approximately 53% of the shares of common stock of the Company were owned by HarborOne Mutual Bancshares, a mutual holding company (the “MHC”). The Company raised gross proceeds of $310.4 million and incurred expenses of $6.3 million, resulting in net cash proceeds of $304.1 million by selling 31,036,812 shares of common stock at $10.00 per share in the Offering, shares of common stock formerly held by the MHC. In addition, each share of the Company common stock owned by shareholders, other than the MHC, prior to the Offering was exchanged for 1.795431 shares of Company common stock, for a total of 12,162,763 shares of Company common stock that were issued in the exchange. The Company utilized $24.8 million to fund an additional ESOP loan, invested $151.3 million into the Bank’s operations, and retained the remaining amount for general corporate purposes. All historical share and per share information has been restated to reflect the 1.795431 exchange ratio. The Company established a liquidation account in connection with Offering. The liquidation accounts are maintained for the benefit of the eligible account holders and supplemental eligible account holders who maintain their accounts at the Bank after the offering. The liquidation accounts are reduced annually to the extent that such account holders have reduced their qualifying deposits as of each anniversary date. Subsequent increases will not restore an account holder’s interest in the liquidation account. The Company is not permitted to pay dividends on its capital stock if the Company’s shareholders’ equity would be reduced below the amount of the liquidation account. Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 30 full-service bank branches in Massachusetts and Rhode Island, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains 28 offices in Massachusetts, Rhode Island, and New Hampshire and originates loans in seven 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 and consumer loans, including indirect automobile lease loans. The Company also originates, sells and services residential mortgage loans primarily through HarborOne Mortgage. Risks and Uncertainties On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted to address the economic effects of the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new loan program called the Paycheck Protection Program (“PPP”). As of December 31, 2021, PPP loans outstanding amounted to $27.0 million, and there was $949,000 in deferred processing fee income that will be recognized in the first quarter of 2022 when the remaining loans are expected to be forgiven. The CARES Act also allowed banks to elect to suspend requirements under accounting principles generally accepted in the United States of America (“GAAP”) for loan modifications related to the COVID-19 pandemic that would otherwise be categorized as a restructured loan, including impairment for accounting purposes. From March 1, 2020 through January 1, 2022, a financial institution may elect to suspend the requirements under accounting principles generally accepted in the U.S. for loan modifications related to the COVID–19 pandemic that would otherwise be categorized as a troubled debt restructured (“TDR”), including impairment accounting. This TDR relief is applicable for the term of the loan modification that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019. Financial institutions are required to maintain records of the volume of loans involved in modifications to which TDR relief is applicable. With the passage of the CARES Act, the option to delay implementation of FASB Accounting Standards Update (ASU) 2016-13, Financial Instruments-Credit Losses (Topic 326), commonly referred to as “CECL,” was provided until the earlier of the national health emergency being declared over or December 31, 2020. The Consolidated Appropriations Act passed on December 27, 2020 provided the option of postponing adoption of the CECL standard until the earlier of the end of the national emergency declaration related to the COVID-19 pandemic or December 31, 2022. The fiscal stimulus and relief programs have been an effective mitigant to credit losses in the near term; however, once these programs are discontinued the severity of potential losses is uncertain and depends on numerous factors and future developments. The Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows. Effects may include: ● 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. ● The provision for loan losses could increase. Continued uncertainty regarding the severity and duration of the COVID-19 pandemic and related economic effects will continue to affect the accounting for loan losses. It also is possible that asset quality could worsen, and loan charge-offs increase. ● Noninterest income could be reduced. Uncertainty regarding the severity and duration of the COVID-19 pandemic could cause further volatility in the financial markets. 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. The COVID-19 pandemic could cause further and sustained decline in the Company’s stock price or the occurrence of additional valuation triggering events that could result in an impairment charge to earnings. Use of Estimates To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, Management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, however, actual results could differ. Significant Group Concentration of Credit Risk The Company has cash and federal fund balances on deposit at correspondent banks that exceed insurable limits. The Company has not experienced any losses on such amounts. Most of the Company’s lending activities are with borrowers located within south eastern New England. The ability and willingness of residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the borrowers’ geographic area and real estate values. Note 5 provides the detail of the Company’s loan portfolio and Note 3 provides the detail of the Company’s investment portfolio. The Company does not have any significant concentrations to any one industry or customer. Reclassifications Certain previously reported amounts have been reclassified to conform to the current year’s presentation. Cash Flows Cash and cash equivalents include cash, interest-bearing deposits with other financial institutions with maturities fewer than 90 days, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions and interest-bearing deposits in other financial institutions. Debt Securities Debt securities are classified as held-to-maturity and carried at amortized cost when Management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates debt securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For debt securities in an unrealized loss position, Management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a debt security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. Federal Home Loan Bank Stock The Company, as a member of the Federal Home Loan Bank (“FHLB”) system, is required to maintain an investment in capital stock of the FHLB of Boston. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. At its discretion, the FHLB may declare dividends on the stock. The Company reviews FHLB stock for impairment based on the ultimate recoverability of the cost basis. As of December 31, 2021 and 2020, no impairment has been recognized. Mortgage Loans Held for Sale Residential mortgage loans originated with the intent to sell are classified as held-for-sale and are carried at fair value. Loan origination costs for loans held for sale that the Company accounts for under the fair value option are recognized in noninterest expense when incurred. Changes in fair value are recognized in mortgage banking income. Gains and losses on residential loan sales are recognized at the time of sale and are included in mortgage banking income. Upfront fees and costs related to mortgage loans held for sale for which the fair value option was elected are recognized in mortgage banking income as received / incurred and are not deferred. Interest income on mortgage loans held for sale is recorded in interest income. Loans Loans held for investment are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any unamortized deferred origination fees and costs. Loan origination fees are offset with related direct incremental loan origination costs and the resulting net amount is deferred and amortized to interest income using the level-yield method over the remaining life of the loan without anticipating prepayment. Accrual of interest on loans is discontinued when collectability of principal or interest is uncertain or when payments of principal or interest have become contractually past due 90 days or more. Past due status is based on contractual terms of the loan. However, a loan may remain on accrual status if both the value of any collateral securing the loan is sufficient to cover principal and accrued interest thereon, and the loan is in the process of collection. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on non-accrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company’s loan portfolio includes residential real estate, commercial real estate, construction, commercial and industrial and consumer segments. Residential real estate loans include classes for one- to four-family and second mortgages and equity lines of credit. Consumer loans include classes for auto and personal loans. The Company’s acquired loans are recorded at fair value with no carryover of the allowance for loan losses. Net discount on performing loans acquired are recognized as interest income over the remaining life of the loan. Acquired loans determined to have evidence of deterioration in credit quality and when it is probable, at acquisition, that all contractually required payments will not be collected, are deemed to be purchased credit impaired (“PCI”) loans. For PCI loans, the excess of cash flows expected to be collected over the carrying amount of the loans, referred to as the “accretable yield,” is accreted into interest income over the life of the loans using the effective yield method. The Company monitors actual cash flows to determine any deterioration from those forecasted at the acquisition date, which is evaluated and recorded through the allowance for loan losses. Allowance for Loan Losses The allowance for loan losses is established based upon the level of estimated probable losses in the current loan portfolio. Loan losses are charged against the allowance when Management believes the collectability of a loan balance is doubtful. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by Management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general, specific and unallocated components, as further described below. General component The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by the Company’s loan segments. Management uses a rolling average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment except commercial real estate, commercial construction and commercial and industrial loans. Due to the lack of historical loss experience for our commercial real estate, commercial construction and commercial and industrial loan portfolio, we utilize peer loss data. Adjustments to loss factors are considered for the following qualitative factors: levels/trends in delinquencies, modifications, and charge-offs; trends in volume, concentrations, and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; changes in the loan review system; experience/ability/depth of lending management and staff; unemployment rates; national and local economic trends and conditions; and other external factors, including COVID-19. The determination of qualitative factors involves significant judgement. The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows: Residential real estate – The Company generally does not originate portfolio loans with a loan-to-value ratio greater than 80 percent without obtaining private mortgage insurance and does not generally grant loans that would be classified as subprime upon origination. The Company generally has first or second liens on the property securing equity lines of credit. Loans in this segment are generally collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, can have an effect on the credit quality in this segment. Residential construction –Residential construction loans include loans to build one- to four-family owner-occupied properties, which are subject to the same credit quality factors as residential real estate loans. Commercial real estate – Commercial real estate loans are primarily secured by income-producing properties in southeastern New England. The underlying cash flows generated by the properties can be adversely impacted by a downturn in the economy, as evidenced by increased vacancy rates, which in turn, could have an effect on the credit quality in this segment. Management obtains rent rolls annually and continually monitors the cash flows of these loans. Commercial construction –Commercial construction loans may include speculative real estate development loans for which payment is derived from lease or sale of the property. Credit risk is affected by cost overruns, time to lease or sell at an adequate price, and market conditions. Commercial and industrial – Commercial and industrial loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer or business spending, could have an effect on the credit quality in this segment. Consumer – Consumer loans in this segment are generally secured by automobiles or unsecured and repayment is dependent on the credit quality of the individual borrower. Specific Reserve The specific reserves relate to loans that are classified as impaired. Residential real estate and commercial loans are evaluated for impairment on a loan-by-loan basis. Impairment is determined by nonaccrual status, whether a loan is subject to a TDR agreement or in the case of certain loans, based on the internal credit rating. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, except for TDRs, the Company does not separately identify individual consumer loans for impairment evaluation. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by Management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. TDRs are individually evaluated for impairment and included in the separately identified impairment disclosures. TDRs are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently default, the Company determines the amount of the allowance on that loan in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired. The company incorporates recent historical experience related to TDRs including the performance of TDRs that subsequently default into the calculation of the allowance by loan portfolio segment. Unallocated component The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general reserves in the portfolio. The unallocated component is maintained to cover uncertainties that could affect Management’s estimate of probable losses. Additionally, the Company’s unseasoned commercial portfolio and use of peer group data to establish general reserves for the commercial portfolio adds another element of risk to Management’s estimates. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Property and Equipment Land is carried at cost. Buildings, leasehold improvements, and furniture and equipment are carried at cost, less accumulated depreciation and amortization, computed on the straight-line method over the estimated useful lives of the assets or the terms of the leases, if shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured. Maintenance and repairs are charged to expense as incurred and improvements are capitalized. Leases The Company adopted Accounting Standards Update (“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 December, 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 15, Operating Lease Right-of-Use Assets and Liabilities, for further information. Retirement Plan Annuities Retirement plan annuities are reflected on the Consolidated Balance Sheets at the face amount of the policies. Changes in recorded value are reflected in income on retirement plan annuities on the Consolidated Statements of Income. Bank-owned Life Insurance Bank-owned life insurance policies are reflected on the Consolidated Balance Sheets at net cash surrender value. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in bank-owned life insurance income on the Consolidated Statements of Income and are not subject to income taxes. The Company is the beneficiary on these life insurance policies which are purchased for select employees of the Company. Employee Stock Ownership Plan Compensation expense for the Company’s ESOP is recorded at an amount equal to the shares committed to be allocated by the ESOP multiplied by the quarterly average fair market value of the shares during the year. The Company recognizes compensation expense ratably over the year based upon the Company’s estimate of the number of shares committed to be allocated by the ESOP. The difference between the average fair market value and the cost of the shares committed to be allocated by the ESOP is recorded as an adjustment to additional paid-in capital. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. Mortgage Servicing Rights When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. Under the fair value measurement method, the Company measures servicing rights at fair value at each reporting date and reports changes in fair value of servicing assets in earnings in the period in which the changes occur, and are included with changes in mortgage servicing rights fair value Servicing fee income, which is reported on the income statement as Mortgage banking income, Other income, Derivative Financial Instruments At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to the likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), of (3) an instrument with no hedging designation (“stand-alone derivative”). For a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings as fair values change. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and reclassified into earnings in the same periods during which the hedged transaction affects earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as non-interest income. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. The Company formally documents all relationships between derivatives and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting prospectively when it is determined that (1) the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item; (2) the derivative expires, is sold, or terminated; (3) the derivative instrument is de-designated as a hedge because the forecasted transaction is no longer probable of occurring; (4) a hedged firm commitment no longer meets the definition of a firm commitment; or (5) Management otherwise determines that designation of the derivative as a hedging instrument is no longer appropriate. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as noninterest income. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transaction is still expected to occur, changes in value that were accumulated in other comprehensive income are amortized or accreted into earnings over the same periods which the hedged transactions will affect earnings. The Company accounts for commitments to fund mortgage loa |
CASH AND DUE FROM BANKS
CASH AND DUE FROM BANKS | 12 Months Ended |
Dec. 31, 2021 | |
CASH AND DUE FROM BANKS | |
CASH AND DUE FROM BANKS | 2. Effective March 26, 2020, the Federal Reserve reduced the reserve requirement to 0% which eliminated reserve requirements for all depository institutions. Prior to March 26, 2020, the Company was required to maintain average balances on hand or with the Federal Reserve Bank of Boston. |
DEBT SECURITIES
DEBT SECURITIES | 12 Months Ended |
Dec. 31, 2021 | |
DEBT SECURITIES | |
DEBT SECURITIES | 3. 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) December 31, 2021: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 42,148 $ — $ 883 $ 41,265 U.S. government agency and government-sponsored residential mortgage-backed securities 347,716 914 3,870 344,760 U.S. government-sponsored collateralized mortgage obligations 3,927 100 — 4,027 SBA asset-backed securities 3,880 104 — 3,984 Total securities available for sale $ 397,671 $ 1,118 $ 4,753 $ 394,036 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 Seventeen mortgage-backed securities with a combined fair value of $13.9 million are pledged as collateral for interest rate swap agreements as of December 31, 2021 (see Note 14). 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 December 31, 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 42,148 41,265 Over 10 years — — 42,148 41,265 U.S. government agency and government-sponsored residential mortgage-backed securities 347,716 344,760 U.S. government-sponsored collateralized mortgage obligations 3,927 4,027 SBA asset-backed securities 3,880 3,984 Total $ 397,671 $ 394,036 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 1 month to 30 years; however, it is expected that such securities will have shorter actual lives due to prepayments. U.S. government and GSE obligations are callable at the discretion of the issuer. The U.S. government and GSE obligations with a total fair value of $41.3 million have a final maturity of 10 years and a call feature of 2 months to 2 years. At the year ended December 31, 2021 and 2020, 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: Year Ended December 31, 2021 2020 2019 (in thousands) Sales Proceeds $ 39,321 $ 72,333 $ 28,391 Gross gains 241 2,521 1,267 Gross losses — — — Calls Proceeds $ 5,000 $ 13,635 $ 20,145 Gross gains — 12 77 Gross losses — — — Information pertaining to securities with gross unrealized losses at December 31, 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) December 31, 2021: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 883 $ 41,265 $ — $ — U.S. government agency and government-sponsored residential mortgage-backed securities 2,835 262,889 1,035 35,552 $ 3,718 $ 304,154 $ 1,035 $ 35,552 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 OTTI at each reporting period, and more frequently when economic or market concerns warrant such evaluation. As of December 31, 2021, the Company’s security portfolio consisted of 126 debt securities, 76 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 mortgage-backed 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 OTTI impaired at December 31, 2021. |
LOANS HELD FOR SALE
LOANS HELD FOR SALE | 12 Months Ended |
Dec. 31, 2021 | |
LOANS HELD FOR SALE | |
LOANS HELD FOR SALE | 4. 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: December 31, 2021 2020 (in thousands) Loans held for sale, fair value $ 45,642 $ 208,612 Loans held for sale, contractual principal outstanding 44,245 198,984 Fair value less unpaid principal balance $ 1,397 $ 9,628 The Company has elected the fair value option for mortgage loans held for sale to better match changes in the 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 $8.2 million in the year ended December 31, 2021 to $1.4 million, compared to an increase of $6.5 million in the year ended December 31, 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 Consolidated Statements of Income. At December 31, 2021 and 2020, there were no loans held for sale that were greater than 90 days past due. |
LOANS
LOANS | 12 Months Ended |
Dec. 31, 2021 | |
LOANS | |
LOANS | 5. LOANS A summary of the balances of loans follows: December 31, 2021 2020 (in thousands) Residential real estate: One- to four-family $ 1,047,819 $ 928,934 Second mortgages and equity lines of credit 136,853 145,672 Residential real estate construction 33,308 31,217 Total residential real estate loans 1,217,980 1,105,823 Commercial: Commercial real estate 1,699,877 1,551,265 Commercial construction 136,563 99,331 Commercial and industrial 421,608 464,393 Total commercial loans 2,258,048 2,114,989 Consumer loans: Auto 124,354 265,266 Personal 7,351 8,564 Total consumer loans 131,705 273,830 Total loans 3,607,733 3,494,642 Allowance for loan losses (45,377) (55,395) Loans, net $ 3,562,356 $ 3,439,247 The net unamortized deferred loan origination fees and costs included in total loans and leases were $4.4 million and $2.3 million as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and December 31, 2020, the commercial and industrial loans include $27.0 million and $126.5 million, respectively, of PPP loans and $949,000 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 real estate loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying 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 December 31, 2021 and 2020, the Company was servicing loans for participants aggregating $288.9 million and $284.2 million, respectively. Acquired Loans The loans purchased from Coastway included $5.4 million in purchased credit impaired loans (“PCI”). The PCI loans were primarily residential real estate loans. The following table provides certain information pertaining to PCI loans: December 31, 2021 2020 (in thousands) Outstanding balance $ 3,076 $ 4,307 Carrying amount $ 2,828 $ 4,079 The following table summarizes activity in the accretable yield for PCI loans: Years Ended December 31, 2021 2020 (in thousands) Balance at beginning of period $ 141 $ 149 Additions — — Accretion (27) (8) Reclassification from nonaccretable difference — — Balance at end of period $ 114 $ 141 The following is the activity in the allowance for loan losses for the years ended December 31, 2021, 2020 and 2019 follows: Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2018 $ 2,681 $ 508 $ 50 $ 10,059 $ 2,707 $ 2,286 $ 1,154 $ 1,210 $ 20,655 Provision (credit) for loan losses (373) (7) (27) 2,810 (181) 1,744 497 284 4,747 Charge-offs (20) (116) — — — (1,075) (891) — (2,102) Recoveries 314 168 — 6 — 22 250 — 760 Balance at December 31, 2019 $ 2,602 $ 553 $ 23 $ 12,875 $ 2,526 $ 2,977 $ 1,010 $ 1,494 $ 24,060 Provision for loan losses 3,399 388 174 23,129 366 3,552 1,831 1,976 34,815 Charge-offs (51) (9) — (1,240) (937) (1,471) (599) — (4,307) Recoveries 218 122 — 1 — 253 233 — 827 Balance at December 31, 2020 $ 6,168 $ 1,054 $ 197 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Provision (credit) for loan losses (2,755) (794) (128) (1,123) 55 2,055 (2,098) (2,470) (7,258) Charge-offs — — — (405) — (2,850) (177) — (3,432) Recoveries 218 160 — 5 — 122 167 — 672 Balance at December 31, 2021 $ 3,631 $ 420 $ 69 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 Allocation of the allowance to loan segments at December 31, 2021 and 2020 follows: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) December 31, 2021: Loans: Impaired loans $ 23,110 $ 20,203 $ — $ 4,182 $ — $ 47,495 Non-impaired loans 1,194,870 1,679,674 136,563 417,426 131,705 3,560,238 Total loans $ 1,217,980 $ 1,699,877 $ 136,563 $ 421,608 $ 131,705 $ 3,607,733 Allowance for loan losses: Impaired loans $ 650 $ 7,275 $ — $ 21 $ — $ — $ 7,946 Non-impaired loans 3,470 25,967 2,010 4,617 367 1,000 37,431 Total allowance for loan losses $ 4,120 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 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 December 31, 2021 and 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) December 31, 2021 Residential real estate: One- to four-family $ 5,578 $ 2,901 $ 3,777 $ 12,256 $ 11,210 Second mortgages and equity lines of credit 202 — 336 538 600 Commercial real estate 149 — 11,334 11,483 20,053 Commercial construction — — — — — Commercial and industrial 616 1 3,277 3,894 4,114 Consumer: Auto 747 162 140 1,049 144 Personal 67 — 12 79 12 Total $ 7,359 $ 3,064 $ 18,876 $ 29,299 $ 36,133 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 December 31, 2021 and 2020, there were no loans past due 90 days or more and still accruing. During the year ended December 31, 2020 two non-performing loans with a recorded investment of $10.9 million, were sold and a charge off of $937,000 was recorded. The following information pertains to impaired loans: December 31, 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 $ 14,115 $ 15,335 $ — $ 12,284 $ 13,039 $ — Commercial real estate 2,641 2,692 — 3,552 4,741 — Commercial construction — — — — — — Commercial and industrial 1,389 3,396 — 9,243 11,604 — Total 18,145 21,423 — 25,079 29,384 — Impaired loans with a specific reserve: Residential real estate 8,995 9,791 650 12,100 12,355 802 Commercial real estate 17,562 24,847 7,275 8,961 8,961 1,845 Commercial construction — — — — — — Commercial and industrial 2,793 3,596 21 116 181 31 Total 29,350 38,234 7,946 21,177 21,497 2,678 Total impaired loans $ 47,495 $ 59,657 $ 7,946 $ 46,256 $ 50,881 $ 2,678 Year Ended December 31, 2021 2020 2019 Interest Interest Interest Average Interest Income Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 23,800 $ 795 $ 732 $ 26,040 $ 1,115 $ 1,054 $ 29,708 $ 1,694 $ 1,335 Commercial real estate 15,156 6 6 5,064 2 2 643 10 10 Commercial construction — — — 8,831 — — 5,622 237 237 Commercial and industrial 7,078 5 5 8,162 80 80 5,564 54 54 Total $ 46,034 $ 806 $ 743 $ 48,097 $ 1,197 $ 1,136 $ 41,537 $ 1,995 $ 1,636 Interest income recognized and interest income recognized on a cash basis in the table above represent interest income for the years ended December 31, 2021, 2020 and 2019, not for the time period designated as impaired. No additional funds are committed to be advanced in connection with impaired loans. Loan modifications and payment deferrals as a result of the COVID-19 pandemic that meet the criteria established under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators are excluded from evaluation of TDR classification and will continue to be reported as current during the payment deferral period. The Company’s policy is to continue to accrue interest during the deferral period. Loans that do not meet the CARES Act or regulatory guidance criteria are evaluated for TDR and non-accrual treatment under the Company’s existing policies and procedures. There were no material TDR loan modifications for the year ended December 31, 2021 and December 31, 2020. During the year ended December 31, 2019, there was one material TDR loan modification for a $2.0 million commercial loan. The TDR included an extension of maturity dates, interest only periods, and compliance with specific covenants. The recorded investment of TDRs was $11.0 million and $15.1 million at December 31, 2021 and 2020, respectively. Commercial TDRs totaled $408,000 and $2.5 million at December 31, 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 $1.0 million and $3.6 million at December 31, 2021 and December 31, 2020, respectively. Of these loans, $190,000 and $2.5 million were non-accrual commercial TDRs at December 31, 2021 and 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. For the years ended December 31, 2021, 2020 and 2019, there were no significant TDRs that defaulted in the first twelve months of restructure. A default is defined as two or more payments in arrears. As noted above, loan modifications and payment deferrals as a result of the COVID-19 pandemic that meet the criteria established under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators are excluded from evaluation of TDR classification and will continue to be reported as current during the payment deferral period. The Company’s policy is to continue to accrue interest during the deferral period. Loans not meeting the CARES Act or regulatory guidance are evaluated for TDR and non-accrual treatment under the Company’s existing policies and procedures. There were no loan modifications made pursuant to the CARES Act that were in payment deferral at December 31, 2021. 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, 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 December 31, 2021 and 2020: December 31, 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 $ 1,645,871 $ 136,563 $ 417,408 $ 1,524,105 $ 99,331 $ 452,665 Loans rated 7 33,953 — 85 14,674 — 3,122 Loans rated 8 20,053 — 694 9,455 — 7,080 Loans rated 9 — — 3,421 3,031 — 1,526 Loans rated 10 — — — — — — $ 1,699,877 $ 136,563 $ 421,608 $ 1,551,265 $ 99,331 $ 464,393 |
MORTGAGE LOAN SERVICING
MORTGAGE LOAN SERVICING | 12 Months Ended |
Dec. 31, 2021 | |
MORTGAGE LOAN SERVICING | |
MORTGAGE LOAN SERVICING | 6. 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 Consolidated Balance Sheets. The risks inherent in MSRs relate primarily to changes in prepayments that result from shifts in mortgage interest rates. The unpaid principal balances of mortgage loans serviced for others were $3.65 billion and $3.05 billion as of December 31, 2021 and 2020, respectively. The Company accounts for MSRs at fair value. The Company obtains and reviews 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. At December 31, 2021 and 2020, the following weighted average assumptions were used in the calculation of fair value of MSRs: December 31, 2021 2020 Prepayment speed 9.40 % 14.30 % Discount rate 9.20 9.23 Default rate 1.64 2.27 The following summarizes changes to MSRs for the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, 2021 2020 2019 (in thousands) Balance, beginning of period $ 24,833 $ 17,150 22,217 Additions 13,815 14,415 1,174 Changes in fair value due to: Reductions from loans paid off during the period (6,019) (4,181) (1,972) Changes in valuation inputs or assumptions 5,639 (2,551) (4,269) Balance, end of period $ 38,268 $ 24,833 17,150 For the years ended December 31, 2021, 2020 and 2019, contractually specified servicing fees included in other mortgage banking income amounted to $7.4 million, $4.7 million, and $4.2 million respectively. |
OTHER REAL ESTATE LOANS AND REP
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | 7. OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS Income and expenses applicable to foreclosed and repossessed assets include the following: Year Ended December 31, 2021 2020 2019 (in thousands) Gain on sales of real estate, net $ (198) $ (86) $ (181) Net loss on sales of repossessed assets (45) 45 112 Operating expenses (155) 37 82 $ (398) $ (4) $ 13 At December 31, 2021, there were no foreclosed assets and repossessed assets were automobiles with a total recorded value of $53,000 . At December 31, 2020, foreclosed and repossessed assets included one residential real estate property with a recorded value of $297,000 and automobiles with total recorded values of $298,000 , respectively. All foreclosed and repossessed assets are held for sale. Mortgage loans in the process of foreclosure totaled $2.9 million and $4.3 million as of December 31, 2021 and 2020, respectively, and are reported in loans. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 8. PROPERTY AND EQUIPMENT A summary of the cost and accumulated depreciation of property and equipment follows: December 31, 2021 2020 (in thousands) Land $ 12,251 $ 12,420 Buildings and leasehold improvements 49,790 46,216 Furniture, equipment and vehicles 16,665 14,719 Fixed assets in process 534 1,365 79,240 74,720 Less accumulated depreciation and amortization (28,495) (25,140) Property and equipment, net $ 50,745 $ 49,580 Depreciation and amortization expense amounted to $4.4 million, $4.0 million and $4.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. During the year ended December 31, 2021, land and a building with a total net book value of $881,000 were transferred to asset held for sale. During the year ended December 31, 2019, land and a building with a total net book value of $9.0 million were transferred to asset held for sale, a loss of $482,000 was recognized on the transfer and the property was sold during 2020 with no additional gain or loss recorded. In addition, $17.7 million of fully depreciated property and equipment was purged from our fixed assets system when we converted to a new accounting platform in 2019. At December 31, 2021 and 2020, fixed assets in process represents building improvements and equipment not placed in service. December 31, 2020 fixed assets in process also includes buildings in process. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 9. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Year Ended December 31, 2021 2020 (in thousands) Balance, end of period $ 69,802 $ 69,802 The Bank and HarborOne Mortgage are identified as a reporting unit for purposes of goodwill impairment testing. At December 31, 2021 and 2020, the carrying value of the Bank’s goodwill was $59.0 million as of both dates and the carrying value of HarborOne Mortgage’s goodwill was $10.8 million as of both dates. Impairment exists when a reporting unit’s carrying value exceeds its fair value. At October 31, 2021 the Company’s reporting units had positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the reporting units exceeded their carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the fair value of the Bank and HarborOne Mortgage, exceeded the carrying value, including goodwill, resulting in no impairment. Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company also considered the impact of the COVID-19 pandemic as it pertains to these intangible assets, and determined that there was no indication of impairment related to other intangible assets as of June 30, 2020. Core Deposit Intangible The Company recognized core deposit intangibles (“CDI”) of $9.0 million in connection with the Coastway acquisition. The Company’s change in the gross amount of core deposit intangibles and the related accumulated amortization consisted of the following: December 31, 2021 2020 (in thousands) Gross amount of CDI: Balance, beginning of period $ 8,952 8,952 Additions due to acquisitions — — Balance, end of period 8,952 8,952 Accumulated amortization: Balance, beginning of period (4,582) (2,917) Amortization (1,206) (1,665) Balance, end of period (5,788) (4,582) Net CDI, end of period $ 3,164 4,370 The estimated aggregate amortization expense related to the Company’s core deposit intangible assets is $893,000 in 2022 and $757,000 thereafter until 2025. The weighted average original amortization period was 7.3 years. Other Intangible Assets A non-compete intangible asset was recognized in connection with HarborOne Mortgage and was amortized over the four year period of the agreement ending in 2019. Amortization expense for this asset of $45,000 in 2019. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2021 | |
DEPOSITS | |
DEPOSITS | 10. DEPOSITS A summary of deposit balances, by type, is as follows: December 31, 2021 2020 (in thousands) NOW and demand deposit accounts $ 1,056,784 $ 908,256 Regular savings and club accounts 1,138,979 998,994 Money market deposit accounts 858,970 866,661 Total non-certificate accounts 3,054,733 2,773,911 Term certificate accounts greater than $250,000 108,426 135,190 Term certificate accounts less than or equal to $250,000 419,490 497,108 Brokered deposits 100,000 100,000 Total certificate accounts 627,916 732,298 Total deposits $ 3,682,649 $ 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 December 31, 2021 and 2020, total reciprocal deposits were $43.8 million and $104.9 million, respectively, consisting primarily of money market accounts. A summary of certificate accounts by maturity at December 31, 2021 is as follows: Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 553,190 0.46 % Over 1 year to 2 years 36,763 0.75 Over 2 years to 3 years 14,171 1.01 Over 3 years to 4 years 20,778 0.88 Over 4 years to 5 years 3,243 0.72 Total certificate deposits 628,145 0.51 % Less unaccreted acquisition discount (229) Total certificate deposits, net $ 627,916 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2021 | |
BORROWINGS | |
BORROWINGS | 11. Borrowed funds at December 31, 2021 and 2020 consist of FHLB advances and subordinated notes. Short-term FHLB advances were $35.0 million at December 31, 2020, with a weighted average rate of 0.42%. There were no short-term advances at December 31, 2021. Long-term advances are summarized below: December 31, 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 $ — $ — — % $ 41,750 101,750 2.47 % 2022 — 40,000 — — — — 2023 185 185 1.46 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 1,139 1,139 2.00 1,170 1,170 2.00 $ 55,711 $ 55,711 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 and $1.25 billion at December 31, 2021 and 2020, respectively. As of December 31, 2021, the Company had $865.2 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 57% of the carrying value of indirect auto and commercial loans with principal balances amounting to $101.4 million and $107.1 million, respectively, of which no amount was outstanding at December 31, 2021 and 2020. 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. An appropriate replacement rate index will be determined as part of our LIBOR reference rate transition. 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 $841,000 and $967,000 at December 31, 2021 and 2020, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | 12. INCOME TAXES Allocation of the federal and state income taxes between current and deferred portions for the years ended December 31, 2021, 2020 and 2019 are as follows: 2021 2020 2019 (in thousands) Current tax provision: Federal $ 10,693 $ 11,591 $ 3,757 State 4,815 5,240 1,207 15,508 16,831 4,964 Deferred tax provision (benefit): Federal 4,451 (2,124) (445) State 1,976 (1,490) (111) 6,427 (3,614) (556) Income tax provision $ 21,935 $ 13,217 $ 4,408 The reasons for the differences between the statutory federal income tax and the actual income tax provision for the years ended December 31, 2021, 2020 and 2019 are summarized as follows: 2021 2020 2019 (dollars in thousands) Statutory tax rate 21% 21% 21% Statutory tax provision $ 16,895 $ 12,182 $ 4,762 Increase (decrease) resulting from: State taxes, net of federal tax benefit 5,365 2,962 866 Bank-owned life insurance (425) (465) (232) Employee Stock Ownership Plan expenses 280 56 172 Tax exempt income — (22) (104) Net reduction in uncertain federal tax positions (712) (1,864) (1,586) Other, net 532 368 530 Income tax provision $ 21,935 $ 13,217 $ 4,408 The tax effects of each item that give rise to deferred taxes at December 31, 2021 and 2020 are as follows: 2021 2020 (in thousands) Deferred tax assets: Allowance for loan losses $ 12,745 $ 15,493 Employee benefit plans 5,478 4,999 Mark-to-market loans 1,469 2,387 Accrued expenses not deducted for tax purposes 1,656 1,799 HarborOne Mortgage loan repurchase reserve 999 743 Net unrealized loss on securities available for sale 801 — Other 602 — 23,750 25,421 Deferred tax liabilities: Net unrealized gain on securities available for sale — (904) Derivatives (2,552) (2,349) Deferred income annuities (1,706) (1,580) Depreciation and amortization (1,223) (1,145) Deferred loan fees (2,820) (1,578) Mortgage servicing rights (10,585) (6,793) Core deposit intangible (889) (1,222) Other — (293) (19,775) (15,864) Net deferred tax asset $ 3,975 $ 9,557 A summary of the change in the net deferred tax asset (liability) for the years ended December 31, 2021, 2020 and 2019 is as follows: 2021 2020 2019 (in thousands) Balance at beginning of year $ 9,557 $ 6,034 $ 6,727 Deferred tax (provision) benefit (6,427) 3,614 556 Coastway net deferred tax asset acquired — — (165) Change in cash flow hedge (860) 394 — Change in securities available for sale 1,705 (485) (1,084) Balance at end of year $ 3,975 $ 9,557 $ 6,034 The Company’s income tax returns are subject to review and examination by federal and state taxing authorities. The Company is currently open to audit under the applicable statutes of limitations by the Internal Revenue Service (“IRS”) and the Massachusetts Department of Revenue for the years ended December 31, 2018 through 2021. At December 31, 2021, the Bank had a net operating loss carryforward in the state of New Hampshire of $1.1 million related to the acquisition of HarborOne Mortgage with a recorded deferred tax asset of $9,000 at December 31, 2021. The net operating loss expires on December 31, 2024. The state of New Hampshire limits the use of acquired net operating losses that can be used by the Bank each year based on Internal Revenue Code Section 382. This limitation is $552,000 per year. Management believes it is more likely than not that it will be able to utilize the New Hampshire net operating loss carryforward prior to expiration. As a result of the Company’s creation of The HarborOne Foundation, to which it contributed 385,450 shares of its common stock and $965,000 in cash in connection with the offering in June 2016, the Company utilized a $1.1 million charitable contribution benefit in the 2019 tax return. During 2017, federal and state amended tax returns were filed that requested tax refunds of approximately $3.2 million. These refunds reflected the change in the tax basis of certain assets not reflected on the original tax return filings. In addition, net operating loss carryforwards for 2016 and related uncertain tax benefits were recognized on the 2016 and 2017 tax return filings. The amended tax return filings net of the tax impact of a temporary difference adjustment of $320,000 reflect “unrecognized tax benefits”, which are defined as the aggregate differences between tax return positions and the benefits recognized in the Consolidated Financial Statements. Interest on the uncertain tax positions was reflected in the determination of tax expense for 2018 and 2017. In 2019, a Federal tax refund in the amount of $603,000 was received for 2013 and state tax refunds were received for years 2013, 2014 and 2015 in the amount of $211,000, $320,000 and $40,000, respectively. Federal tax refunds for years 2014 and 2015 in the amount of $826,000 and $1.3 million, respectively, were received during 2018. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2021 2020 2019 (in thousands) Balance at beginning of year $ 1,162 $ 3,052 $ 3,769 Additions based on tax positions related to current year — — — Additions for tax positions for prior years 247 168 1,471 Reductions for tax positions for prior years (754) (2,058) (153) Settlements — — (2,035) Balance at end of year $ 655 $ 1,162 $ 3,052 The balance of unrecognized tax benefits, the amount of related interest accrued and what management believes to be the range of reasonably possible changes in the next 12 months, are: Unrecognized tax benefits $ 619 Accrued interest on unrecognized tax benefits 36 Portion that, if recognized, would reduce tax expense and effective tax rate 655 Reasonably possible reduction to the balance of unrecognized tax in subsequent year 300 Portion that, if recognized, would reduce tax expense and effective tax rate 300 In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods the deferred tax assets are expected to be deductible, management believes it is more likely than not that its deferred tax assets are realizable. It should be noted, however, that factors beyond management’s control, such as the general economy and real estate values, can affect future levels of taxable income, and no assurance can be given that sufficient taxable income will be generated to fully absorb gross deductible temporary differences. |
OTHER COMMITMENTS AND CONTINGEN
OTHER COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
OTHER COMMITMENTS AND CONTINGENCIES | |
OTHER COMMITMENTS AND CONTINGENCIES | 13. 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 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 December 31, 2021 and 2020. The contract amounts represent credit risk. December 31, 2021 2020 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 142,781 $ 485,428 Commitments to grant other loans 27,029 53,714 Unadvanced funds on home equity lines of credit 211,120 178,432 Unadvanced funds on revolving lines of credit 223,110 169,907 Unadvanced funds on construction loans 194,101 127,776 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, unadvanced construction loans and home equity lines of credit are collateralized by real estate, while revolving lines of credit are unsecured. Employment Agreements The Company has entered into employment agreements with certain executive officers. The term of the agreements commenced on the effective date of the signed agreements and continues thereafter until terminated, as defined by the agreements. The agreements generally provide for a specified minimum annual compensation and the continuation of benefits currently received. However, such employment can be terminated for cause, as defined, without incurring any continuing obligations. In addition, all of the agreements provide for severance payments to the officers following a change in control, as defined. The Company entered into an employment agreement with the former President and Chief Executive Officer of Coastway in connection with the Coastway acquisition. The agreement had a five-year term that provided total compensation of $2.2 million. Generally, in the event of termination after the first twelve months, the remaining total compensation was payable and as such the total amount was fully expensed over twelve months, ending in 2019. For the year ended December 31, 2019, the Company recognized compensation expense of $1.7 million. Reserve for Residential Mortgage Loan Repurchase Losses The Company sells residential mortgage loans on a “whole-loan” basis to Fannie Mae and Freddie Mac, and to non-agency investors. These loan sales occur under industry standard contractual provisions that include various representations and warranties, which typically cover ownership of the loan, compliance with loan criteria set forth in the applicable agreement, validity of the lien securing the loan and other similar matters. The Company may be required to repurchase certain loans sold with identified defects, indemnify the investor, or reimburse the investor for any credit losses incurred. The Company establishes mortgage repurchase reserves related to various representations and warranties that reflect management’s estimate for which we have a repurchase obligation. The reserves are established by a charge to loan expenses in our Consolidated Statements of Income. At December 31, 2021 and 2020, this reserve totaled $3.6 million and $2.7 million, respectively, and is included in other liabilities and accrued expenses on the Consolidated Balance Sheets. The repurchase reserve is applicable to loans the Company originated and sold with representations and warranties, which is representative of the entire sold portfolio. The repurchase loss liability is estimated by origination year and to the extent that repurchase demands are made by investors, we may be able to successfully appeal such repurchase demands. The reserve considers anticipated future losses and the Company’s lack of historical experience with the make-whole demands. The reserve for residential mortgage loan repurchase losses represents our best estimate of the probable loss that we may incur due to the representations and warranties in our loan sales contracts with investors. Repurchase losses depend upon economic factors and other external conditions that may change over the life of the underlying loans. Additionally, lack of access to the servicing records of loans sold on a service released basis adds difficulty to the estimation process. To the extent that future investor repurchase demand and appeals success differ from past experience, the Company could have increased demands and increased loss severities on repurchases, causing future additions to the repurchase reserve. Certain loans were sold with recourse provisions, and at December 31, 2021 and 2020, the related maximum contingent liability related to loans sold amounted to $1.3 million each year. Based on discounted cash flow of projected losses on sold loans in this portfolio at December 31, 2021 and 2020, the Company had no recourse liability. Other In the ordinary course of business, various legal claims arise from time to time and, in the opinion of management based on discussion with legal counsel, management does not believe these claims will have a material effect on the Company’s financial position or results of operations. |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Dec. 31, 2021 | |
DERIVATIVES | |
DERIVATIVES | 14. 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 Cash Flow 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 December 31, 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 3.27 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 $1.7 million. The Company expects approximately $146,000 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 as 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 amount 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 $13.9 million are pledged to secure the Company’s liability for the offsetting interest rate swaps (see Note 3). The interest rate swap notional amount below is the aggregate notional amount of the customer swap and the offsetting third-party swap. The Company also assesses the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determines whether the credit valuation adjustments are significant to the overall valuation of its derivatives. During 2021, a credit valuation adjustment related to an interest rate swap was determined to be significant and required a negative fair value adjustment of $430,000 which is included in other income. 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. The following tables present 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) December 31, 2021: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 Other assets $ 1,663 Other liabilities $ — Derivatives not designated as Hedging Instruments Derivative loan commitments $ 86,134 Other assets $ 1,527 Other liabilities $ 95 Forward loan sale commitments 96,000 Other assets 56 Other liabilities 94 Interest rate swaps 740,235 Other assets 18,874 Other liabilities 19,214 Risk participation agreements 139,109 Other assets — Other liabilities — Total $ 22,120 $ 19,403 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: Year Ended December 31, 2021 2020 2019 Derivatives designated as hedging instruments Gain (loss) in OCI on derivatives (effective portion), net of tax $ 2,210 $ (1,013) $ — Loss reclassified from OCI into interest income or interest expense (effective portion) $ (513) $ (46) $ — Derivatives not designated as hedging instruments Changes in fair value of derivative loan commitments Mortgage banking income $ (10,850) $ 11,072 $ 62 Changes in fair value of forward loan sale commitments Mortgage banking income 2,166 (2,073) 386 Changes in fair value of interest rate swaps Other income (431) — — Total $ (9,115) $ 8,999 $ 448 |
OPERATING LEASE RIGHT-OF-USE AS
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | 15. OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES Operating lease ROU assets, included in other assets Operating lease liabilities, included in other liabilities and accrued expenses 16.7 Future minimum lease payments under non-cancellable leases and a reconciliation to the amount recorded as operating lease liabilities as of December 31, 2021 and December 31, 2020 were as follows: December 31, 2021 December 31, 2020 (in thousands) 2021 $ 3,139 $ 2,452 2022 2,976 2,239 2023 2,493 1,847 2024 2,369 1,644 2025 2,338 1,684 Thereafter 21,086 13,134 Total lease payments 34,401 $ 23,000 Imputed interest (6,031) Total present value of operating lease liabilities $ 28,370 The weighted-average discount rate and remaining lease term for operating leases were as follows: December 31, 2021 Weighted-average discount rate 1.94 % Weighted-average remaining lease term (years) 16.77 Rental expense for operating leases is recognized on a straight-line basis over the lease term and amounted to $2.9 million and $2.8 million, respectively, for the year ended December 31, 2021 and 2020. 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: Year Ended December 31, 2021 (in thousands) Lease Expense: Operating lease expense $ 2,737 Short-term lease expense 162 Variable lease expense — Total lease expense $ 2,899 Other Information Cash paid for amounts included in the measurement of lease liabilities- operating cash flows for operating leases 2,861 Operating Lease - Operating cash flows (Liability reduction) 2,370 Right-of-use assets obtained in exchange for new operating lease liabilities 29,718 |
COMPENSATION AND BENEFIT PLANS
COMPENSATION AND BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2021 | |
COMPENSATION AND BENEFIT PLANS | |
COMPENSATION AND BENEFIT PLANS | 16. Defined Contribution Plan The Company provides saving plans which qualifies under Section 401(k) of the Internal Revenue Code and provides for voluntary contributions by participating employees up to the maximum amount permitted by law. For the years ended December 31, 2021 and 2020 the Bank contributed 5% of each employee’s compensation up to the social security wage base and HarborOne Mortgage matched 50% of the first 4% of employee contributions up to a maximum of $2,000. For the year ended December 31, 2019, the Bank contributed 9.3% of each employee’s compensation up to the social security wage base, plus an additional 5.7% of the employee’s compensation in excess of the social security wage base on a discretionary basis up to regulatory maximums. HarborOne Mortgage made no contributions in 2019. Contributions expensed were $1.9 million, $1.8 million and $2.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. Management Incentive Program The Company from time to time creates incentive compensation plans for senior management and other officers to participate in at varying levels. In addition, the Company may also pay a discretionary bonus to senior management, officers, and/or nonofficers of the Company. These programs are administered by the Compensation Committee of the Board of Directors. The expense for the incentive plans amounted to $4.8 million, $4.8 million and $1.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. Supplemental Retirement Plans The Company provides supplemental retirement benefits to two senior executive officers of the Company under the terms of two Supplemental Executive Retirement Plan Agreements (the “SERPs”). Benefits to be paid under the SERPs are based primarily on the officer’s compensation and estimated mortality. At December 31, 2021, 2020 and 2019, included in other liabilities and accrued expenses is the Company’s obligation under the SERPs of $9.2 million, $8.0 million and $7.1 million, respectively. The retirement benefits, as defined in the SERPs, are accrued by charges to compensation expense over the required service periods of the officers. Expense related to these benefits was $1.2 million, $955,000 and $1.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. Split-Dollar Life Insurance Arrangement The Company has an endorsement split-dollar life insurance agreement with an executive officer whereby the Company will pay to the executives’ estates or beneficiaries a portion of the death benefit that the Company will receive as beneficiary of such policy. At December 31, 2021 and 2020, included in other liabilities and accrued expenses is the Company’s obligation under the arrangement of $352,000. There was no expense for this benefit for the year ended December 31, 2021 and expense associated with this post-retirement benefit for the years ended December 31, 2020 and 2019 amounted to $21,000 and $38,000, respectively. The cash surrender value of the policy is included in Bank-owned life insurance on the Consolidated Balance Sheets. Deferred Compensation Plans The Company is the sole owner of an annuity policy pertaining to one of the Company’s executives that is included in retirement plan annuities on the balance sheet. The Company has an agreement with this executive whereby upon retirement the Company will pay to the executive an amount equal to the cash surrender value of the annuity less premiums paid accumulated at an interest rate of 1.5% per year. At December 31, 2021, 2020 and 2019, included in other liabilities and accrued expenses is the Company’s obligation under the plan of $419,000, $385,000 and $353,000, respectively. For the years ended December 31, 2021, 2020 and 2019, the expense amounted to $34,000, $32,000 and $31,000, respectively. The Company has agreements with two executive officers whereby the Company will pay the cost of the premium for individual supplemental medical and prescription drug coverage for their lifetime upon retirement at age 65 or later. Spousal coverage is provided each year the executive is eligible for coverage and the spouse is age 65 or over. At December 31, 2021, 2020 and 2019, included in other liabilities and accrued expenses is the Company’s obligation under the plan of $380,000, $344,000 and $297,000, respectively. For the years ended December 31, 2021, 2020 and 2019, the expense amounted to $36,000, $47,000 and $66,000, respectively. Long-Term Incentive Plan During 2015, the Company entered into a long-term incentive plan with several executive officers. Benefits are earned annually based on the Company’s achievement of performance goals. The plan is administered by the Company’s Board of Directors. The plan was amended effective January 1, 2018 and no further incentive awards are awarded under the plan. Included in other liabilities and accrued expenses at December 31, 2020 and 2019 are $437,000 and $838,000, respectively, for this plan. For the years ended December 31, 2020 and 2019, the expense amounted to $20,000 and $56,000, respectively. For the year ended December 31, 2019, the Company reversed $82,000 of expense related to a former executive officer. Post-Retirement Life Insurance Employees who are covered under the Company’s bank-owned life insurance program can elect to participate in the benefits of the program while employed by the Company. The Company granted post-employment coverage to certain executives. This post retirement benefit is included in other liabilities and accrued expenses at December 31, 2021, 2020 and 2019 in the amount of $261,000, $234,000 and $186,000, respectively. For the years ended December 31, 2021, 2020 and 2019, the expense amounted to $27,000, $47,000 and $17,000, respectively. Employee Stock Ownership Plan On June 29, 2016, the Company established an ESOP to provide eligible employees the opportunity to own Company stock. The Company added shares to the ESOP as part of the Offering completed August 14, 2019. The plan is a tax-qualified retirement plan for the benefit of the eligible Company employees. The ESOP shares were purchased through a loan from the Company and as the debt is repaid, shares are released. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The unreleased shares are deducted from stockholders’ equity as unearned ESOP shares in the accompanying Consolidated Balance Sheets. The number of shares committed to be released per year is 230,723 through 2035 and 124,148 from 2036 through 2038. The following table presents share information held by the ESOP: December 31, 2021 2020 Allocated shares 939,825 639,525 Shares committed to be allocated 230,722 230,723 Unallocated shares 3,371,840 3,602,562 Total shares 4,542,387 4,472,810 Fair value of unallocated shares $ 50,038,115 $ 39,123,823 Total compensation expense recognized in connection with the ESOP was $3.2 million, $2.1 million and $2.7 million for the years ended December 31, 2021, 2020 and 2019, respectively. ESOP Restoration Plan During 2016, the Company also adopted an ESOP Restoration Plan for the benefit of ESOP eligible employees whose annual compensation exceeds the amount of annual compensation permitted to be recognized under the ESOP by the Internal Revenue Code. Under the ESOP Restoration Plan, eligible participants would receive a credit each year equal to the amount they would have received under the ESOP but for the Internal Revenue Service imposed compensation limit. Any benefits earned under the ESOP Restoration Plan would become payable at the earliest of six months and a day after the participant’s separation of service from the Bank, the participant’s death, a change in control of the Company or upon termination of the ESOP Restoration Plan. These benefits are accrued over the period during which employees provide services to earn these benefits. For the year ended December 31, 2021, 2020 and 2019, $656,000, $487,000 and $210,000, respectively, was accrued for the ESOP Restoration Plan. Directors’ Retirement Plan The Company has an unfunded director fee continuation plan which provides postretirement benefits to eligible directors of the Company. Participants in the plan must have at least six years of service as a director to be vested in the benefit, which is determined based on number of years of service. The Company elected to freeze the plan in 2017. At December 31, 2021, the benefit obligation was $ 2.0 million. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 17. STOCK-BASED COMPENSATION Under the HarborOne Bancorp, Inc. 2020 Equity Plan (the “2020 Equity Plan”) adopted on September 29, 2020, the Company may grant stock options, restricted stock awards, restricted stock units, including performance 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”), was adopted on August 9, 2017. The Company will only award shares under 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 $3.8 million, $3.7 million and $4.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. Stock Options 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 year ended December 31, 2021 and 2020, the Company made no awards of nonqualified options to purchase shares of common stock. During the years ended December 31, 2019, the Company made the following awards of nonqualified options to purchase shares of common stock: Options granted 583,565 Vesting period (years) 3 Term (years) 10 Weighted average expected volatility 22.09 % Expected life (years) 6 Expected dividend yield — % Weighted average risk free interest rate 2.46 % Weighted average fair value per option $2.49 A summary of the status of the Company’s stock option grants for the year ended December 31, 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 — — (285,038) 2.60 Forfeited — — — — Expired — — — — Balance at December 31, 2021 2,043,563 $ 9.85 6.03 $ — 188,407 $ 2.48 Exercisable at December 31, 2021 1,855,156 $ 9.93 5.91 $ — Unrecognized cost inclusive of directors' awards $ 94,667 Weighted average remaining recognition period (years) 0.33 Restricted Stock 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. The following table presents the activity in unvested stock awards under the Equity Plans for the year ended December 31, 2021: Restricted Weighted Average Stock Awards Grant Price Non-vested stock awards at January 1, 2021 384,692 $ 9.33 Vested (204,082) 9.34 Granted 196,377 12.05 Forfeited (10,205) 9.71 Non-vested stock awards at December 31, 2021 366,782 $ 10.78 Unrecognized cost inclusive of directors' awards $ 2,812,633 Weighted average remaining recognition period (years) 1.54 Performance Stock Units 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. For the year ended December 31, 2021 the performance assumption is 150% of the target. Performance Weighted Average Restricted Stock Units Grant Price Non-vested performance restricted stock units at January 1, 2021 — $ — Vested — — Granted 127,599 11.95 Forfeited — — Non-vested performance restricted stock units at December 31, 2021 127,599 $ 11.95 Unrecognized cost $ 1,099,474 Weighted average remaining recognition period (years) 2.17 |
MINIMUM REGULATORY CAPITAL REQU
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 12 Months Ended |
Dec. 31, 2021 | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 18. MINIMUM REGULATORY CAPITAL REQUIREMENTS Minimum Regulatory Capital Requirements 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 December 31, 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 December 31, 2021 also exceeded the minimum capital requirements, including the currently applicable capital conservation buffer of 2.5%. The Company’s and Bank’s regulatory capital ratios as of December 31, 2021 and 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. December 31, 2021 Common equity Tier 1 capital to risk-weighted assets $ 608,804 16.4 % $ 167,475 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 608,804 16.4 223,300 6.0 N/A N/A Total capital to risk-weighted assets 689,181 18.5 297,733 8.0 N/A N/A Tier 1 capital to average assets 608,804 13.6 179,710 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 December 31, 2021 Common equity Tier 1 capital to risk-weighted assets $ 485,239 13.1 % $ 166,660 4.5 % $ 240,731 6.5 % Tier 1 capital to risk-weighted assets 485,239 13.1 222,214 6.0 296,285 8.0 Total capital to risk-weighted assets 530,616 14.3 296,285 8.0 370,356 10.0 Tier 1 capital to average assets 485,239 10.9 178,279 4.0 222,849 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 Dividend Restrictions The Bank is subject to dividend restrictions imposed by various regulators, including a limitation on the total of all dividends that the Bank may pay to the Company in any calendar year. The total of all dividends shall not exceed the Bank’s net income for the current year (as defined by statute), plus the Bank’s net income retained for the two Preferred Stock The Company has 1,000,000 shares of preferred stock, no par value, authorized, and none issued or outstanding. Treasury Stock Any shares repurchased under the Company’s share repurchase programs were purchased in open-market transactions and are held as treasury stock. All treasury stock is held at cost. The Company adopted its third share repurchase program on September 17, 2021 to repurchase up to 2,668,159 shares of the Company’s common stock, or approximately 5% of the Company’s outstanding shares. The Company had repurchased 800,364 shares at an average price of $14.55 under this share repurchase program as of December 31, 2021. During the year ended December 31, 2021 the Company repurchased a total of 5,021,067 shares at an average price of $13.68 for a total of $68.6 million under its share repurchase programs. During the year ended December 31, 2021, an additional 42,925 shares were acquired in connection with the satisfaction of tax obligations on vested restricted shares at an average price of $14.27 for a total of $613,000. During the year ended December 31, 2020, the Company purchased a total of 1,533,500 shares at an average price of $10.29 for a total of $15.9 million. Treasury stock at December 31, 2019 consisted of shares acquired in connection with the satisfaction of tax obligations on vested restricted stock issued pursuant to the 2017 Equity Plan. |
COMPREHENSIVE INCOME (LOSS)
COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2021 | |
COMPREHENSIVE INCOME (LOSS) | |
COMPREHENSIVE INCOME (LOSS) | 19. COMPREHENSIVE INCOME (LOSS) 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: December 31, 2021 2020 (in thousands) Cash flow hedge: Net unrealized gain (loss) $ 1,663 $ (1,407) Related tax effect (466) 394 Total accumulated other comprehensive income (loss) $ 1,197 $ (1,013) Securities available for sale: Net unrealized (loss) gain $ (3,635) $ 4,102 Related tax effect 801 (904) Total accumulated other comprehensive (loss) income $ (2,834) $ 3,198 The following tables present changes in accumulated other comprehensive income (loss) by component for the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, 2021 2020 2019 Available Cash Available Cash Available for Sale Flow for Sale Flow for Sale Securities Hedge Total Securities Hedge Total Securities (in thousands) Balance at beginning of period $ 3,198 $ (1,013) $ 2,185 $ 1,480 $ — $ 1,480 $ (2,358) Other comprehensive (loss) income before reclassifications (7,496) 2,557 (4,939) 4,214 (1,453) 2,761 6,266 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) 513 272 (2,533) 46 (2,487) (1,344) Net current period other comprehensive (loss) income (7,737) 3,070 (4,667) 2,203 (1,407) 796 4,922 Related tax effect 1,705 (860) 845 (485) 394 (91) (1,084) Balance at end of period $ (2,834) $ 1,197 $ (1,637) $ 3,198 $ (1,013) $ 2,185 $ 1,480 |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE OF ASSETS AND LIABILITIES | |
FAIR VALUE OF ASSETS AND LIABILITIES | 20. 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 GSEs, 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 December 31, 2021 and 2020. FHLB stock 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. Retirement plan annuities MSRs Deposits and mortgagors’ escrow accounts Borrowed funds Accrued interest Interest Rate Swap designated as a cashflow hedge Forward loan sale commitments and derivative loan commitments Interest rate swaps and risk participation agreements to arrive at the fair value of each swap. The pricing models do not contain a high level of subjectivity as the methodologies used do not require significant judgment. 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. As of December 31, 2020, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Company classified its derivative valuations in their entirety as Level 2. Off-balance sheet credit-related instruments Transfers between levels are recognized at the end of the reporting period, if applicable. There were no transfers in 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) December 31, 2021 Assets Securities available for sale $ — $ 394,036 $ — $ 394,036 Loans held for sale — 45,642 — 45,642 Mortgage servicing rights — 38,268 — 38,268 Derivative loan commitments — — 1,527 1,527 Forward loan sale commitments — — 56 56 Interest rate management agreements — 1,663 — 1,663 Interest rate swaps — 18,874 — 18,874 $ — $ 498,483 $ 1,583 $ 500,066 Liabilities Derivative loan commitments $ — $ — $ 95 $ 95 Forward loan sale commitments — — 94 94 Interest rate swaps — 19,214 — 19,214 $ — $ 19,214 $ 189 $ 19,403 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 years ended December 31, 2021, 2020 and 2019, the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis. Year Ended December 31, 2021 2020 2019 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 12,623 $ 1,411 $ 1,261 Total gains (losses) included in net income (1) (11,040) 11,212 150 Balance at end of period $ 1,583 $ 12,623 $ 1,411 Changes in unrealized gains relating to instruments at period end $ 1,583 $ 12,623 $ 1,411 Year Ended December 31, 2021 2020 2019 (in thousands) Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (2,545) $ (332) (630) Total gains (losses) included in net income (1) 2,356 (2,213) 298 Balance at end of period $ (189) $ (2,545) (332) Changes in unrealized losses relating to instruments at period end $ (189) $ (2,545) (332) (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 December 31, 2021 and 2020. The following table summarizes the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets. December 31, 2021 December 31, 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Impaired loans: Residential — — $ 1,125 $ — $ — $ 919 Commercial real estate — — 17,562 — — 3,034 Commercial and industrial — — 2,928 — — 4,208 Other real estate owned and repossessed assets — — 53 — — 595 $ — $ — $ 21,668 $ — $ — $ 8,756 Losses in the following table represent the amount of the fair value adjustments recorded during the year on the carrying value of the assets held at December 31, 2021 and 2020, respectively. Losses on fully charged off loans are not included in the table. Year Ended December 31, 2021 2020 (in thousands) Impaired loans Residential 7 118 Commercial real estate 5,239 1,177 Commercial and industrial 916 1,020 Other real estate owned and repossessed assets — — $ 6,162 $ 2,315 The table below presents quantitative information about significant unobservable inputs (Level 3) for assets measured at fair value on a nonrecurring basis at the dates indicated. Fair Value December 31, Valuation Technique 2021 2020 (in thousands) Impaired loans: Residential $ 1,125 $ 919 Sales Comparison Approach (1) Commercial real estate $ 17,562 $ 7,242 Sales Comparison Approach (1) Commercial and industrial $ 2,928 $ — Sales Comparison Approach (1) Real estate owned: Residential $ — $ 298 Sales Comparison Approach (1) (1) 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. December 31, 2021 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 194,719 $ 194,719 $ — $ — $ 194,719 Securities available for sale 394,036 — 394,036 — 394,036 Federal Home Loan Bank stock 5,931 N/A N/A N/A N/A Loans held for sale 45,642 — 45,642 — 45,642 Loans, net 3,562,356 — — 3,558,934 3,558,934 Retirement plan annuities 14,174 — — 14,174 14,174 Accrued interest receivable 10,624 — 10,624 — 10,624 Financial liabilities: Deposits 3,682,649 — — 3,683,465 3,683,465 Borrowed funds 55,711 — 55,765 — 55,765 Subordinated debt 34,159 — — 35,790 35,790 Mortgagors' escrow accounts 8,459 — — 8,459 8,459 Accrued interest payable 1,083 — 1,083 — 1,083 Derivative loan commitments: Assets 1,527 — — 1,527 1,527 Liabilities 95 — — 95 95 Interest rate management agreements: Assets 1,663 — 1,663 — 1,663 Liabilities — — — — — Interest rate swap agreements: Assets 18,874 — 18,874 — 18,874 Liabilities 19,214 — 19,214 — 19,214 Forward loan sale commitments: Assets 56 — — 56 56 Liabilities 94 — — 94 94 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 | 12 Months Ended |
Dec. 31, 2021 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 21. 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. Year Ended December 31, 2021 2020 2019 Net income available to common stockholders (in thousands) $ 58,517 $ 44,792 $ 18,268 Average number of common shares outstanding 54,454,113 58,252,140 58,451,387 Less: Average unallocated ESOP shares and non-vested restricted shares (3,707,811) (3,938,772) (2,719,750) Weighted average number of common shares outstanding used to calculate basic earnings per common share 50,746,302 54,313,368 55,731,637 Dilutive effect of share-based compensation 776,833 6,467 139 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 51,523,135 54,319,835 55,731,776 Earnings per common share: Basic $ 1.15 $ 0.82 $ 0.33 Diluted $ 1.14 $ 0.82 $ 0.33 Stock options for 2,106,403 and 2,169,243 shares were not considered in computing diluted earnings per share for the years ended December 31, 2020 and 2019, respectively, because they were antidilutive. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2021 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 22. The reportable segments are determined by the products and services offered, primarily distinguished between banking and mortgage banking operations. They are also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business. 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 Consolidated Financial Statements at December 31, 2021, 2020 and 2019, and for the years then-ended are presented in the tables below. Year Ended December 31, 2021 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 129,785 $ 3,468 $ 131,370 Credit for loan losses (7,258) — (7,258) Net interest and dividend income, after credit for loan losses 137,043 3,468 138,628 Mortgage banking income: Gain on sale of mortgage loans — 61,883 61,883 Intersegment gain (loss) (3,665) 4,434 — Changes in mortgage servicing rights fair value (137) (243) (380) Other 1,090 14,741 15,831 Total mortgage banking income (loss) (2,712) 80,815 77,334 Other noninterest income 23,308 44 23,352 Total noninterest income 20,596 80,859 100,686 Noninterest expense 102,557 55,012 158,862 Income loss before income taxes 55,082 29,315 80,452 Provision for income taxes 14,933 7,569 21,935 Net income $ 40,149 $ 21,746 $ 58,517 Total assets at period end $ 4,481,509 $ 173,545 $ 4,553,405 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 Year Ended December 31, 2020 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 118,217 $ 3,235 $ 120,066 Provision for loan losses 34,815 — 34,815 Net interest and dividend income, after provision for loan losses 83,402 3,235 85,251 Mortgage banking income: Gain on sale of mortgage loans — 105,469 105,469 Intersegment gain (loss) (3,148) 3,148 — Changes in mortgage servicing rights fair value (2,376) (4,356) (6,732) Other 1,360 13,812 15,172 Total mortgage banking income (loss) (4,164) 118,073 113,909 Other noninterest income (loss) 24,909 (138) 24,771 Total noninterest income 20,745 117,935 138,680 Noninterest expense 98,354 66,393 165,922 Income before income taxes 5,793 54,777 58,009 Provision for income taxes 527 12,964 13,217 Net income $ 5,266 $ 41,813 $ 44,792 Total assets at period end $ 4,460,164 $ 312,194 $ 4,483,615 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 Year Ended December 31, 2019 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 109,106 $ 1,064 $ 109,062 Provision for loan losses 4,747 — 4,747 Net interest and dividend income, after provision for loan losses 104,359 1,064 104,315 Mortgage banking income: Gain on sale of mortgage loans 1 33,556 33,557 Intersegment gain (loss) (1,183) 1,183 — Changes in mortgage servicing rights fair value (1,431) (4,810) (6,241) Other 1,494 7,965 9,459 Total mortgage banking income (loss) (1,119) 37,894 36,775 Other noninterest income (loss) 23,365 (45) 23,320 Total noninterest income 22,246 37,849 60,095 Noninterest expense 100,688 38,876 141,734 Income before income taxes 25,917 37 22,676 Provision (benefit) for income taxes 5,019 (77) 4,408 Net income $ 20,898 $ 114 $ 18,268 Total assets at period end $ 3,925,328 $ 165,863 $ 4,058,921 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 |
CONDENSED FINANCIAL STATEMENTS
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | 12 Months Ended |
Dec. 31, 2021 | |
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | |
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | 23. CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY Condensed financial information relative to HarborOne Bancorp, Inc.’s balance sheet at December 31, 2021 and 2020 and the related statements of net income and cash flows for the years ended December 31, 2021, 2020 and 2019 are presented below. The statement of stockholders’ equity is not presented below as the parent company’s stockholders’ equity is that of the consolidated company. Balance Sheet December 31, 2021 2020 (in thousands) Assets Cash and due from banks $ 131,033 $ 118,265 Investment in common stock of HarborOne Bank 555,695 581,982 Loan receivable - ESOP 30,740 32,190 Due from subsidiary — 612 Other assets 637 657 Total assets $ 718,105 $ 733,706 Liabilities and Stockholders' Equity Subordinated debt $ 34,159 $ 34,033 Other liabilities and accrued expenses 4,685 3,359 Stockholders' equity 679,261 696,314 Total liabilities and stockholders' equity $ 718,105 $ 733,706 Statement of Net Income Year Ended December 31, 2021 2020 2019 (in thousands) Dividends from subsidiary $ 90,000 $ — $ — Interest from bank deposits 210 260 15 Interest on short-term investments 2 449 953 Interest on ESOP loan 1,046 1,596 1,062 Total income 91,258 2,305 2,030 Interest expense 2,095 2,095 2,076 Operating expenses 2,338 2,771 3,232 Total expenses 4,433 4,866 5,308 Income (loss) before income taxes and equity in undistributed net income (loss) of HarborOne Bank 86,825 (2,561) (3,278) Income tax benefit (566) (274) (534) Income (loss) before equity in income of subsidiaries 87,391 (2,287) (2,744) Equity in undistributed net income (loss) of HarborOne Bank (28,874) 47,079 21,012 Net income $ 58,517 $ 44,792 $ 18,268 Statement of Cash Flows Year Ended December 31, 2021 2020 2019 (in thousands) Cash flows from operating activities: Net income $ 58,517 $ 44,792 $ 18,268 Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed net (income) loss of HarborOne Bank 28,874 (47,079) (21,012) Deferred income tax provision (benefit) (8) (18) 139 Share-based compensation 545 963 1,432 Net change in other assets 27 231 (284) Net change in other liabilities 391 302 1,299 Net cash provided (used) by operating activities 88,346 (809) (158) Cash flows from investing activities: Investment in HarborOne Bank — — (152,713) Repayment of ESOP loan 1,450 1,218 1,862 Advances to subsidiary (1,046) (1,884) (2,456) Repayment of advances to subsidiary 1,659 3,728 — Net cash provided (used) by investing activities 2,063 3,062 (153,307) Cash flows from financing activities: Issuance of common stock 643 — 304,161 Repurchase of common stock (69,215) (15,923) (721) Purchase of shares by ESOP — — (24,829) Repayment of advance from subsidiary — — (139) Amortization of subordinated debt issuance costs 126 126 108 Dividends paid (9,195) (3,258) — Net cash (used) provided by financing activities (77,641) (19,055) 278,580 Net change in cash and cash equivalents 12,768 (16,802) 125,115 Cash and cash equivalents at beginning of year 118,265 135,067 9,952 Cash and cash equivalents at end of year $ 131,033 $ 118,265 $ 135,067 |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2021 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 24. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) First Quarter Second Quarter Third Quarter Fourth Quarter 2021 2020 2021 2020 2021 2020 2021 2020 (in thousands, except share data) Interest and dividend income $ 35,847 $ 37,169 $ 35,887 $ 36,621 $ 35,808 $ 37,048 $ 36,353 $ 37,720 Interest expense 3,795 10,469 3,357 7,174 3,005 5,879 2,368 4,970 Net interest and dividend income 32,052 26,700 32,530 29,447 32,803 31,169 33,985 32,750 Provision (benefit) for loan losses 91 3,749 (4,286) 10,004 (1,627) 13,454 (1,436) 7,608 Other noninterest income 37,809 16,113 21,703 38,569 21,769 44,439 19,164 37,027 Gain on sale and call of securities, net — 2,525 — 8 241 — — — Total noninterest income 37,809 18,638 21,703 38,577 22,010 44,439 19,164 37,027 Total noninterest expenses 42,802 35,160 38,598 43,777 39,274 45,700 38,188 41,286 Provision for income taxes 7,576 1,705 5,645 3,668 4,907 4,561 3,807 3,283 Net income $ 19,392 $ 4,724 $ 14,276 $ 10,575 $ 12,259 $ 11,893 $ 12,590 $ 17,600 Basic earnings per share $ 0.37 $ 0.09 $ 0.28 $ 0.19 $ 0.25 $ 0.22 $ 0.26 $ 0.33 Diluted earnings per share $ 0.37 $ 0.09 $ 0.27 $ 0.19 $ 0.24 $ 0.22 $ 0.25 $ 0.33 Weighted average common shares, basic 52,537,409 54,392,465 51,778,293 54,450,146 49,801,123 54,465,339 48,918,539 53,947,868 Weighted average common shares, diluted 53,000,830 54,392,465 52,650,071 54,450,146 50,663,415 54,465,339 49,828,379 53,973,737 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2021 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 25. 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. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation HarborOne Bancorp, Inc. (the “Company”) is the stock holding company of HarborOne Bank (the “Bank”), a Massachusetts-chartered savings bank, which in turn owns a residential mortgage banking company, HarborOne Mortgage, LLC (“HarborOne Mortgage”). HarborOne Mortgage was acquired as Merrimack Mortgage, LLC on July 1, 2015 and effective April 3, 2018 became HarborOne Mortgage. The Consolidated Financial Statements include the accounts of the Company, the Company’s subsidiaries, Legion Parkway Company LLC, a security corporation formed on July 13, 2016 and HarborOne Bank; and the Bank’s wholly-owned subsidiaries. HarborOne Mortgage, two security corporation subsidiaries and one passive investment subsidiary, which 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. |
Conversion and Reorganization | Conversion and Reorganization On August 14, 2019, the Company completed a second step conversion offering (the “Offering”). Prior to the completion of the Offering, approximately 53% of the shares of common stock of the Company were owned by HarborOne Mutual Bancshares, a mutual holding company (the “MHC”). The Company raised gross proceeds of $310.4 million and incurred expenses of $6.3 million, resulting in net cash proceeds of $304.1 million by selling 31,036,812 shares of common stock at $10.00 per share in the Offering, shares of common stock formerly held by the MHC. In addition, each share of the Company common stock owned by shareholders, other than the MHC, prior to the Offering was exchanged for 1.795431 shares of Company common stock, for a total of 12,162,763 shares of Company common stock that were issued in the exchange. The Company utilized $24.8 million to fund an additional ESOP loan, invested $151.3 million into the Bank’s operations, and retained the remaining amount for general corporate purposes. All historical share and per share information has been restated to reflect the 1.795431 exchange ratio. The Company established a liquidation account in connection with Offering. The liquidation accounts are maintained for the benefit of the eligible account holders and supplemental eligible account holders who maintain their accounts at the Bank after the offering. The liquidation accounts are reduced annually to the extent that such account holders have reduced their qualifying deposits as of each anniversary date. Subsequent increases will not restore an account holder’s interest in the liquidation account. The Company is not permitted to pay dividends on its capital stock if the Company’s shareholders’ equity would be reduced below the amount of the liquidation account. |
Nature of Operations | Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 30 full-service bank branches in Massachusetts and Rhode Island, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains 28 offices in Massachusetts, Rhode Island, and New Hampshire and originates loans in seven 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 and consumer loans, including indirect automobile lease loans. The Company also originates, sells and services residential mortgage loans primarily through HarborOne Mortgage. |
Risks and Uncertainties | Risks and Uncertainties On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted to address the economic effects of the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new loan program called the Paycheck Protection Program (“PPP”). As of December 31, 2021, PPP loans outstanding amounted to $27.0 million, and there was $949,000 in deferred processing fee income that will be recognized in the first quarter of 2022 when the remaining loans are expected to be forgiven. The CARES Act also allowed banks to elect to suspend requirements under accounting principles generally accepted in the United States of America (“GAAP”) for loan modifications related to the COVID-19 pandemic that would otherwise be categorized as a restructured loan, including impairment for accounting purposes. From March 1, 2020 through January 1, 2022, a financial institution may elect to suspend the requirements under accounting principles generally accepted in the U.S. for loan modifications related to the COVID–19 pandemic that would otherwise be categorized as a troubled debt restructured (“TDR”), including impairment accounting. This TDR relief is applicable for the term of the loan modification that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019. Financial institutions are required to maintain records of the volume of loans involved in modifications to which TDR relief is applicable. With the passage of the CARES Act, the option to delay implementation of FASB Accounting Standards Update (ASU) 2016-13, Financial Instruments-Credit Losses (Topic 326), commonly referred to as “CECL,” was provided until the earlier of the national health emergency being declared over or December 31, 2020. The Consolidated Appropriations Act passed on December 27, 2020 provided the option of postponing adoption of the CECL standard until the earlier of the end of the national emergency declaration related to the COVID-19 pandemic or December 31, 2022. The fiscal stimulus and relief programs have been an effective mitigant to credit losses in the near term; however, once these programs are discontinued the severity of potential losses is uncertain and depends on numerous factors and future developments. The Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows. Effects may include: ● 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. ● The provision for loan losses could increase. Continued uncertainty regarding the severity and duration of the COVID-19 pandemic and related economic effects will continue to affect the accounting for loan losses. It also is possible that asset quality could worsen, and loan charge-offs increase. ● Noninterest income could be reduced. Uncertainty regarding the severity and duration of the COVID-19 pandemic could cause further volatility in the financial markets. 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. The COVID-19 pandemic could cause further and sustained decline in the Company’s stock price or the occurrence of additional valuation triggering events that could result in an impairment charge to earnings. |
Use of Estimates | Use of Estimates To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, Management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, however, actual results could differ. |
Significant Group Concentration of Credit Risk | Significant Group Concentration of Credit Risk The Company has cash and federal fund balances on deposit at correspondent banks that exceed insurable limits. The Company has not experienced any losses on such amounts. Most of the Company’s lending activities are with borrowers located within south eastern New England. The ability and willingness of residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the borrowers’ geographic area and real estate values. Note 5 provides the detail of the Company’s loan portfolio and Note 3 provides the detail of the Company’s investment portfolio. The Company does not have any significant concentrations to any one industry or customer. |
Reclassifications | Reclassifications Certain previously reported amounts have been reclassified to conform to the current year’s presentation. |
Cash Flows | Cash Flows Cash and cash equivalents include cash, interest-bearing deposits with other financial institutions with maturities fewer than 90 days, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions and interest-bearing deposits in other financial institutions. |
Debt Securities | Debt Securities Debt securities are classified as held-to-maturity and carried at amortized cost when Management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates debt securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For debt securities in an unrealized loss position, Management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a debt security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock The Company, as a member of the Federal Home Loan Bank (“FHLB”) system, is required to maintain an investment in capital stock of the FHLB of Boston. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. At its discretion, the FHLB may declare dividends on the stock. The Company reviews FHLB stock for impairment based on the ultimate recoverability of the cost basis. As of December 31, 2021 and 2020, no impairment has been recognized. |
Mortgage Loans Held for Sale | Mortgage Loans Held for Sale Residential mortgage loans originated with the intent to sell are classified as held-for-sale and are carried at fair value. Loan origination costs for loans held for sale that the Company accounts for under the fair value option are recognized in noninterest expense when incurred. Changes in fair value are recognized in mortgage banking income. Gains and losses on residential loan sales are recognized at the time of sale and are included in mortgage banking income. Upfront fees and costs related to mortgage loans held for sale for which the fair value option was elected are recognized in mortgage banking income as received / incurred and are not deferred. Interest income on mortgage loans held for sale is recorded in interest income. |
Loans | Loans Loans held for investment are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any unamortized deferred origination fees and costs. Loan origination fees are offset with related direct incremental loan origination costs and the resulting net amount is deferred and amortized to interest income using the level-yield method over the remaining life of the loan without anticipating prepayment. Accrual of interest on loans is discontinued when collectability of principal or interest is uncertain or when payments of principal or interest have become contractually past due 90 days or more. Past due status is based on contractual terms of the loan. However, a loan may remain on accrual status if both the value of any collateral securing the loan is sufficient to cover principal and accrued interest thereon, and the loan is in the process of collection. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on non-accrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company’s loan portfolio includes residential real estate, commercial real estate, construction, commercial and industrial and consumer segments. Residential real estate loans include classes for one- to four-family and second mortgages and equity lines of credit. Consumer loans include classes for auto and personal loans. The Company’s acquired loans are recorded at fair value with no carryover of the allowance for loan losses. Net discount on performing loans acquired are recognized as interest income over the remaining life of the loan. Acquired loans determined to have evidence of deterioration in credit quality and when it is probable, at acquisition, that all contractually required payments will not be collected, are deemed to be purchased credit impaired (“PCI”) loans. For PCI loans, the excess of cash flows expected to be collected over the carrying amount of the loans, referred to as the “accretable yield,” is accreted into interest income over the life of the loans using the effective yield method. The Company monitors actual cash flows to determine any deterioration from those forecasted at the acquisition date, which is evaluated and recorded through the allowance for loan losses. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is established based upon the level of estimated probable losses in the current loan portfolio. Loan losses are charged against the allowance when Management believes the collectability of a loan balance is doubtful. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by Management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general, specific and unallocated components, as further described below. General component The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by the Company’s loan segments. Management uses a rolling average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment except commercial real estate, commercial construction and commercial and industrial loans. Due to the lack of historical loss experience for our commercial real estate, commercial construction and commercial and industrial loan portfolio, we utilize peer loss data. Adjustments to loss factors are considered for the following qualitative factors: levels/trends in delinquencies, modifications, and charge-offs; trends in volume, concentrations, and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; changes in the loan review system; experience/ability/depth of lending management and staff; unemployment rates; national and local economic trends and conditions; and other external factors, including COVID-19. The determination of qualitative factors involves significant judgement. The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows: Residential real estate – The Company generally does not originate portfolio loans with a loan-to-value ratio greater than 80 percent without obtaining private mortgage insurance and does not generally grant loans that would be classified as subprime upon origination. The Company generally has first or second liens on the property securing equity lines of credit. Loans in this segment are generally collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, can have an effect on the credit quality in this segment. Residential construction –Residential construction loans include loans to build one- to four-family owner-occupied properties, which are subject to the same credit quality factors as residential real estate loans. Commercial real estate – Commercial real estate loans are primarily secured by income-producing properties in southeastern New England. The underlying cash flows generated by the properties can be adversely impacted by a downturn in the economy, as evidenced by increased vacancy rates, which in turn, could have an effect on the credit quality in this segment. Management obtains rent rolls annually and continually monitors the cash flows of these loans. Commercial construction –Commercial construction loans may include speculative real estate development loans for which payment is derived from lease or sale of the property. Credit risk is affected by cost overruns, time to lease or sell at an adequate price, and market conditions. Commercial and industrial – Commercial and industrial loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer or business spending, could have an effect on the credit quality in this segment. Consumer – Consumer loans in this segment are generally secured by automobiles or unsecured and repayment is dependent on the credit quality of the individual borrower. Specific Reserve The specific reserves relate to loans that are classified as impaired. Residential real estate and commercial loans are evaluated for impairment on a loan-by-loan basis. Impairment is determined by nonaccrual status, whether a loan is subject to a TDR agreement or in the case of certain loans, based on the internal credit rating. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, except for TDRs, the Company does not separately identify individual consumer loans for impairment evaluation. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by Management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. TDRs are individually evaluated for impairment and included in the separately identified impairment disclosures. TDRs are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently default, the Company determines the amount of the allowance on that loan in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired. The company incorporates recent historical experience related to TDRs including the performance of TDRs that subsequently default into the calculation of the allowance by loan portfolio segment. Unallocated component The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general reserves in the portfolio. The unallocated component is maintained to cover uncertainties that could affect Management’s estimate of probable losses. Additionally, the Company’s unseasoned commercial portfolio and use of peer group data to establish general reserves for the commercial portfolio adds another element of risk to Management’s estimates. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. |
Property and Equipment | Property and Equipment Land is carried at cost. Buildings, leasehold improvements, and furniture and equipment are carried at cost, less accumulated depreciation and amortization, computed on the straight-line method over the estimated useful lives of the assets or the terms of the leases, if shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured. Maintenance and repairs are charged to expense as incurred and improvements are capitalized. |
Leases | Leases The Company adopted Accounting Standards Update (“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 December, 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 15, Operating Lease Right-of-Use Assets and Liabilities, for further information. |
Retirement Plan Annuities | Retirement Plan Annuities Retirement plan annuities are reflected on the Consolidated Balance Sheets at the face amount of the policies. Changes in recorded value are reflected in income on retirement plan annuities on the Consolidated Statements of Income. |
Bank-owned life insurance | Bank-owned Life Insurance Bank-owned life insurance policies are reflected on the Consolidated Balance Sheets at net cash surrender value. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in bank-owned life insurance income on the Consolidated Statements of Income and are not subject to income taxes. The Company is the beneficiary on these life insurance policies which are purchased for select employees of the Company. |
Employee Stock Ownership Plan | Employee Stock Ownership Plan Compensation expense for the Company’s ESOP is recorded at an amount equal to the shares committed to be allocated by the ESOP multiplied by the quarterly average fair market value of the shares during the year. The Company recognizes compensation expense ratably over the year based upon the Company’s estimate of the number of shares committed to be allocated by the ESOP. The difference between the average fair market value and the cost of the shares committed to be allocated by the ESOP is recorded as an adjustment to additional paid-in capital. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. |
Mortgage Servicing Rights | Mortgage Servicing Rights When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. Under the fair value measurement method, the Company measures servicing rights at fair value at each reporting date and reports changes in fair value of servicing assets in earnings in the period in which the changes occur, and are included with changes in mortgage servicing rights fair value Servicing fee income, which is reported on the income statement as Mortgage banking income, Other income, |
Derivative Financial Instruments | Derivative Financial Instruments At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to the likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), of (3) an instrument with no hedging designation (“stand-alone derivative”). For a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings as fair values change. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and reclassified into earnings in the same periods during which the hedged transaction affects earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as non-interest income. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. The Company formally documents all relationships between derivatives and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting prospectively when it is determined that (1) the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item; (2) the derivative expires, is sold, or terminated; (3) the derivative instrument is de-designated as a hedge because the forecasted transaction is no longer probable of occurring; (4) a hedged firm commitment no longer meets the definition of a firm commitment; or (5) Management otherwise determines that designation of the derivative as a hedging instrument is no longer appropriate. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as noninterest income. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transaction is still expected to occur, changes in value that were accumulated in other comprehensive income are amortized or accreted into earnings over the same periods which the hedged transactions will affect earnings. The Company accounts for commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans as free standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. In order to hedge the change in interest rates resulting from its commitments to fund the loans, the Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in fair value are recorded as gain on sale of mortgage loans. The Company also enters into interest rate swap contracts to meet the financing needs of the Company’s commercial customers. Offsetting swap agreements are simultaneously transacted to effectively eliminate the Company’s market and interest rate risk associated with the swaps. Interest rate swaps are recognized on the Consolidated Balance Sheets in other assets and other liabilities with changes in their fair values recorded in other income. |
Transfers of Financial Assets | Transfers of Financial Assets Transfers of an entire financial asset, a group of entire financial assets, or a participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets. During the normal course of business, the Company may transfer a portion of a financial asset, for example, a participation loan or the government guaranteed portion of a loan. In order to be eligible for sale treatment, the transfer of the portion of the loan must meet the criteria of a participating interest. If it does not meet the criteria of a participating interest, the transfer must be accounted for as a secured borrowing. In order to meet the criteria for a participating interest, all cash flows from the loan must be divided proportionately, the rights of each loan holder must have the same priority, the loan holders must have no recourse to the transferor other than standard representations and warranties and no loan holder has the right to pledge or exchange the entire loan. |
Other Real Estate Owned and Repossessed Assets | Other Real Estate Owned and Repossessed Assets Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated costs to sell when legal title is obtained, establishing a new cost basis. Subsequently, valuations are periodically updated by Management and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell. The excess (deficiency) of any consideration received as compared to the carrying value of other real estate owned is recorded as a gain (loss) on sale of other real estate owned. Revenues and expenses from operations and changes in the valuation allowance and any direct write-downs are included in foreclosed and repossessed assets expense. Repossessed assets includes automobiles to be sold which are recorded at estimated fair value, less costs to sell, with the initial charge to the allowance for loan losses and the subsequent gain or loss on sale recorded to foreclosed and repossessed assets expense. |
Goodwill and Identifiable Intangible Assets | Goodwill and Identifiable Intangible Assets The assets (including identifiable intangible assets) and liabilities acquired in a business combination are recorded at fair value at the date of acquisition. Goodwill is recognized for the excess of the acquisition cost over the fair values of the net assets acquired and is not subsequently amortized. Identifiable intangible assets include core deposit premium and non-compete contracts and are being amortized over their estimated lives. Management assesses the recoverability of goodwill at least on an annual basis and all intangible assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The impairment test uses a combined qualitative and quantitative approach. The initial qualitative approach assesses whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after this assessment, the Company determines that it is more likely than not that the fair value is less than the carrying value, a quantitative impairment test is performed. The quantitative impairment test compares book value to the fair value of the reporting unit. If the carrying amount exceeds fair value, an impairment charge is recorded through earnings. Management has identified two reporting units for purposes of testing goodwill for impairment. The Company’s reporting units are the same as the segments used for segment reporting - the Bank, including the two security corporations, and one passive investment company, and HarborOne Mortgage. No impairment has been recognized as of December 31, 2021. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are determined using the asset and liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws in the period on enactment. A valuation allowance is established against deferred tax assets when, based upon the available evidence including historical and projected taxable income, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company records uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The determination of whether or not a tax position has met the more likely than not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to Management’s judgment. The Company records interest and penalties as part of income tax expense. |
Fair Values of Financial Instruments | Fair Value of Financial Instruments The fair value of financial instruments is estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgement regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates. |
Share-based Compensation Plans | Share-based Compensation Plans The Company’s share-based compensation plans provide for awards of stock options, restricted stock and other stock-based compensation to directors, officers and employees. The cost of employee services received in exchange for awards of equity instruments is based on the grant-date fair value of those awards. Compensation cost is recognized over the requisite service period as a component of compensation expense. The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options granted, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards and performance stock units. Nonvested performance share unit compensation expense is based on the most recent performance assumption available and is adjusted as assumptions change. The Company has elected to recognize forfeitures of awards as they occur (e.g., when an award does not vest because the employee leaves the Company or does not meet specific performance measures). |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income and other comprehensive income (loss). Other comprehensive income includes unrealized gains and losses on debt securities available for sale and cash flow hedges, net of taxes, which are also recognized as a separate component of equity. |
Revenue Recognition | Revenue Recognition ASC 606, Revenue from Contracts with Customers, provides a revenue recognition framework for contracts with customers unless those contracts are within the scope of other accounting standards. Revenue from deposit account-related fees, including general service fees charged for deposit account maintenance and activity and transaction-based fees charged for certain services, such as debit card, wire transfer or overdraft activities, is recognized when the performance obligation is completed, which is generally after a transaction is completed or monthly for account maintenance services. |
Earnings Per Share | Earnings Per Share Basic earnings per common share is net income divided by the weighted-average number of common shares outstanding during the period. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations. Restricted stock awards are included in weighted average common shares outstanding as they are earned. Outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities for this calculation. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable. Potential common shares that may be issued by the Company relate to outstanding stock options awards and restricted stock awards and are determined using the treasury stock method. |
Loss Contingencies | Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe such matters exist that will have a material effect on the financial statements. |
Recently Adopted Accounting Standards Updates ("ASU") and ASUs not yet Adopted | Recent Accounting Pronouncements Accounting Guidance Issued and Adopted ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. . Accounting Guidance Issued But Not Yet Adopted ASU 2016-13 Financial Instruments—Credit Losses (Topic 326) As previously disclosed, the Company formed a cross-functional team to work through its implementation of CECL. The Company has completed its selection of the discounted cash flow modeling method and has run parallel processes and is in final review stages of completing its documentation including third party model validations. The Company had previously elected to delay its adoption of CECL, as provided by its emerging growth company status. The CARES Act allowed the Company to extend the transition until the date on which the National Emergency concerning COVID-19 was terminated or December 31, 2020, whichever occurred first. The December 31, 2020 adoption date under the CARES Act was extended to January 1, 2022, and therefore the Company has adopted CECL on January 1, 2022. |
DEBT SECURITIES (Tables)
DEBT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
DEBT SECURITIES | |
Schedule of securities with gross unrealized gains and losses | Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (in thousands) December 31, 2021: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 42,148 $ — $ 883 $ 41,265 U.S. government agency and government-sponsored residential mortgage-backed securities 347,716 914 3,870 344,760 U.S. government-sponsored collateralized mortgage obligations 3,927 100 — 4,027 SBA asset-backed securities 3,880 104 — 3,984 Total securities available for sale $ 397,671 $ 1,118 $ 4,753 $ 394,036 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 42,148 41,265 Over 10 years — — 42,148 41,265 U.S. government agency and government-sponsored residential mortgage-backed securities 347,716 344,760 U.S. government-sponsored collateralized mortgage obligations 3,927 4,027 SBA asset-backed securities 3,880 3,984 Total $ 397,671 $ 394,036 |
Schedule of proceeds and gross realized gains and losses related to sales and calls of securities | Year Ended December 31, 2021 2020 2019 (in thousands) Sales Proceeds $ 39,321 $ 72,333 $ 28,391 Gross gains 241 2,521 1,267 Gross losses — — — Calls Proceeds $ 5,000 $ 13,635 $ 20,145 Gross gains — 12 77 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) December 31, 2021: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 883 $ 41,265 $ — $ — U.S. government agency and government-sponsored residential mortgage-backed securities 2,835 262,889 1,035 35,552 $ 3,718 $ 304,154 $ 1,035 $ 35,552 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) | 12 Months Ended |
Dec. 31, 2021 | |
LOANS HELD FOR SALE | |
Schedule of fair value and contractual principal balance outstanding of loans held for sale | December 31, 2021 2020 (in thousands) Loans held for sale, fair value $ 45,642 $ 208,612 Loans held for sale, contractual principal outstanding 44,245 198,984 Fair value less unpaid principal balance $ 1,397 $ 9,628 |
LOANS (Tables)
LOANS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of balances of loans | December 31, 2021 2020 (in thousands) Residential real estate: One- to four-family $ 1,047,819 $ 928,934 Second mortgages and equity lines of credit 136,853 145,672 Residential real estate construction 33,308 31,217 Total residential real estate loans 1,217,980 1,105,823 Commercial: Commercial real estate 1,699,877 1,551,265 Commercial construction 136,563 99,331 Commercial and industrial 421,608 464,393 Total commercial loans 2,258,048 2,114,989 Consumer loans: Auto 124,354 265,266 Personal 7,351 8,564 Total consumer loans 131,705 273,830 Total loans 3,607,733 3,494,642 Allowance for loan losses (45,377) (55,395) Loans, net $ 3,562,356 $ 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 years ended December 31, 2021, 2020 and 2019 follows: Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2018 $ 2,681 $ 508 $ 50 $ 10,059 $ 2,707 $ 2,286 $ 1,154 $ 1,210 $ 20,655 Provision (credit) for loan losses (373) (7) (27) 2,810 (181) 1,744 497 284 4,747 Charge-offs (20) (116) — — — (1,075) (891) — (2,102) Recoveries 314 168 — 6 — 22 250 — 760 Balance at December 31, 2019 $ 2,602 $ 553 $ 23 $ 12,875 $ 2,526 $ 2,977 $ 1,010 $ 1,494 $ 24,060 Provision for loan losses 3,399 388 174 23,129 366 3,552 1,831 1,976 34,815 Charge-offs (51) (9) — (1,240) (937) (1,471) (599) — (4,307) Recoveries 218 122 — 1 — 253 233 — 827 Balance at December 31, 2020 $ 6,168 $ 1,054 $ 197 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Provision (credit) for loan losses (2,755) (794) (128) (1,123) 55 2,055 (2,098) (2,470) (7,258) Charge-offs — — — (405) — (2,850) (177) — (3,432) Recoveries 218 160 — 5 — 122 167 — 672 Balance at December 31, 2021 $ 3,631 $ 420 $ 69 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 Allocation of the allowance to loan segments at December 31, 2021 and 2020 follows: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) December 31, 2021: Loans: Impaired loans $ 23,110 $ 20,203 $ — $ 4,182 $ — $ 47,495 Non-impaired loans 1,194,870 1,679,674 136,563 417,426 131,705 3,560,238 Total loans $ 1,217,980 $ 1,699,877 $ 136,563 $ 421,608 $ 131,705 $ 3,607,733 Allowance for loan losses: Impaired loans $ 650 $ 7,275 $ — $ 21 $ — $ — $ 7,946 Non-impaired loans 3,470 25,967 2,010 4,617 367 1,000 37,431 Total allowance for loan losses $ 4,120 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 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) December 31, 2021 Residential real estate: One- to four-family $ 5,578 $ 2,901 $ 3,777 $ 12,256 $ 11,210 Second mortgages and equity lines of credit 202 — 336 538 600 Commercial real estate 149 — 11,334 11,483 20,053 Commercial construction — — — — — Commercial and industrial 616 1 3,277 3,894 4,114 Consumer: Auto 747 162 140 1,049 144 Personal 67 — 12 79 12 Total $ 7,359 $ 3,064 $ 18,876 $ 29,299 $ 36,133 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 | December 31, 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 $ 14,115 $ 15,335 $ — $ 12,284 $ 13,039 $ — Commercial real estate 2,641 2,692 — 3,552 4,741 — Commercial construction — — — — — — Commercial and industrial 1,389 3,396 — 9,243 11,604 — Total 18,145 21,423 — 25,079 29,384 — Impaired loans with a specific reserve: Residential real estate 8,995 9,791 650 12,100 12,355 802 Commercial real estate 17,562 24,847 7,275 8,961 8,961 1,845 Commercial construction — — — — — — Commercial and industrial 2,793 3,596 21 116 181 31 Total 29,350 38,234 7,946 21,177 21,497 2,678 Total impaired loans $ 47,495 $ 59,657 $ 7,946 $ 46,256 $ 50,881 $ 2,678 Year Ended December 31, 2021 2020 2019 Interest Interest Interest Average Interest Income Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 23,800 $ 795 $ 732 $ 26,040 $ 1,115 $ 1,054 $ 29,708 $ 1,694 $ 1,335 Commercial real estate 15,156 6 6 5,064 2 2 643 10 10 Commercial construction — — — 8,831 — — 5,622 237 237 Commercial and industrial 7,078 5 5 8,162 80 80 5,564 54 54 Total $ 46,034 $ 806 $ 743 $ 48,097 $ 1,197 $ 1,136 $ 41,537 $ 1,995 $ 1,636 |
Schedule of loans by risk rating | December 31, 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 $ 1,645,871 $ 136,563 $ 417,408 $ 1,524,105 $ 99,331 $ 452,665 Loans rated 7 33,953 — 85 14,674 — 3,122 Loans rated 8 20,053 — 694 9,455 — 7,080 Loans rated 9 — — 3,421 3,031 — 1,526 Loans rated 10 — — — — — — $ 1,699,877 $ 136,563 $ 421,608 $ 1,551,265 $ 99,331 $ 464,393 |
PCI | |
Schedule of information pertaining to impaired loans | December 31, 2021 2020 (in thousands) Outstanding balance $ 3,076 $ 4,307 Carrying amount $ 2,828 $ 4,079 |
Summary of activity in accretable yield for purchased credit impaired loans | Years Ended December 31, 2021 2020 (in thousands) Balance at beginning of period $ 141 $ 149 Additions — — Accretion (27) (8) Reclassification from nonaccretable difference — — Balance at end of period $ 114 $ 141 |
MORTGAGE LOAN SERVICING (Tables
MORTGAGE LOAN SERVICING (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
MORTGAGE LOAN SERVICING | |
Tabular disclosure of assumptions used in the calculation of fair value of MSR | December 31, 2021 2020 Prepayment speed 9.40 % 14.30 % Discount rate 9.20 9.23 Default rate 1.64 2.27 |
Schedule of summarized changes to mortgage servicing rights | Year Ended December 31, 2021 2020 2019 (in thousands) Balance, beginning of period $ 24,833 $ 17,150 22,217 Additions 13,815 14,415 1,174 Changes in fair value due to: Reductions from loans paid off during the period (6,019) (4,181) (1,972) Changes in valuation inputs or assumptions 5,639 (2,551) (4,269) Balance, end of period $ 38,268 $ 24,833 17,150 |
OTHER REAL ESTATE LOANS AND R_2
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS (Table) | 12 Months Ended |
Dec. 31, 2021 | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | |
Schedule of expenses applicable to foreclosed and repossessed assets | Year Ended December 31, 2021 2020 2019 (in thousands) Gain on sales of real estate, net $ (198) $ (86) $ (181) Net loss on sales of repossessed assets (45) 45 112 Operating expenses (155) 37 82 $ (398) $ (4) $ 13 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
Summary of the cost and accumulated depreciation of property and equipment | December 31, 2021 2020 (in thousands) Land $ 12,251 $ 12,420 Buildings and leasehold improvements 49,790 46,216 Furniture, equipment and vehicles 16,665 14,719 Fixed assets in process 534 1,365 79,240 74,720 Less accumulated depreciation and amortization (28,495) (25,140) Property and equipment, net $ 50,745 $ 49,580 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedules of changes in carrying value of goodwill | Year Ended December 31, 2021 2020 (in thousands) Balance, end of period $ 69,802 $ 69,802 |
Schedule of intangible assets | December 31, 2021 2020 (in thousands) Gross amount of CDI: Balance, beginning of period $ 8,952 8,952 Additions due to acquisitions — — Balance, end of period 8,952 8,952 Accumulated amortization: Balance, beginning of period (4,582) (2,917) Amortization (1,206) (1,665) Balance, end of period (5,788) (4,582) Net CDI, end of period $ 3,164 4,370 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
DEPOSITS | |
Summary of deposit balances, by type | December 31, 2021 2020 (in thousands) NOW and demand deposit accounts $ 1,056,784 $ 908,256 Regular savings and club accounts 1,138,979 998,994 Money market deposit accounts 858,970 866,661 Total non-certificate accounts 3,054,733 2,773,911 Term certificate accounts greater than $250,000 108,426 135,190 Term certificate accounts less than or equal to $250,000 419,490 497,108 Brokered deposits 100,000 100,000 Total certificate accounts 627,916 732,298 Total deposits $ 3,682,649 $ 3,506,209 |
Summary of certificate accounts by maturity | Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 553,190 0.46 % Over 1 year to 2 years 36,763 0.75 Over 2 years to 3 years 14,171 1.01 Over 3 years to 4 years 20,778 0.88 Over 4 years to 5 years 3,243 0.72 Total certificate deposits 628,145 0.51 % Less unaccreted acquisition discount (229) Total certificate deposits, net $ 627,916 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
BORROWINGS | |
Schedule of borrowed funds by maturity and call date | December 31, 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 $ — $ — — % $ 41,750 101,750 2.47 % 2022 — 40,000 — — — — 2023 185 185 1.46 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 1,139 1,139 2.00 1,170 1,170 2.00 $ 55,711 $ 55,711 1.35 % $ 114,097 $ 114,097 2.16 % * Includes an amortizing advance requiring monthly principal and interest payments. (1) (2) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Schedule of allocation of federal and state income taxes between current and deferred portions | 2021 2020 2019 (in thousands) Current tax provision: Federal $ 10,693 $ 11,591 $ 3,757 State 4,815 5,240 1,207 15,508 16,831 4,964 Deferred tax provision (benefit): Federal 4,451 (2,124) (445) State 1,976 (1,490) (111) 6,427 (3,614) (556) Income tax provision $ 21,935 $ 13,217 $ 4,408 |
Schedule of difference between the statutory federal income tax and the actual income tax provision (benefit) | 2021 2020 2019 (dollars in thousands) Statutory tax rate 21% 21% 21% Statutory tax provision $ 16,895 $ 12,182 $ 4,762 Increase (decrease) resulting from: State taxes, net of federal tax benefit 5,365 2,962 866 Bank-owned life insurance (425) (465) (232) Employee Stock Ownership Plan expenses 280 56 172 Tax exempt income — (22) (104) Net reduction in uncertain federal tax positions (712) (1,864) (1,586) Other, net 532 368 530 Income tax provision $ 21,935 $ 13,217 $ 4,408 |
Schedule of tax effects give rise to deferred taxes | 2021 2020 (in thousands) Deferred tax assets: Allowance for loan losses $ 12,745 $ 15,493 Employee benefit plans 5,478 4,999 Mark-to-market loans 1,469 2,387 Accrued expenses not deducted for tax purposes 1,656 1,799 HarborOne Mortgage loan repurchase reserve 999 743 Net unrealized loss on securities available for sale 801 — Other 602 — 23,750 25,421 Deferred tax liabilities: Net unrealized gain on securities available for sale — (904) Derivatives (2,552) (2,349) Deferred income annuities (1,706) (1,580) Depreciation and amortization (1,223) (1,145) Deferred loan fees (2,820) (1,578) Mortgage servicing rights (10,585) (6,793) Core deposit intangible (889) (1,222) Other — (293) (19,775) (15,864) Net deferred tax asset $ 3,975 $ 9,557 |
Schedule of change in net deferred tax asset (liability) | 2021 2020 2019 (in thousands) Balance at beginning of year $ 9,557 $ 6,034 $ 6,727 Deferred tax (provision) benefit (6,427) 3,614 556 Coastway net deferred tax asset acquired — — (165) Change in cash flow hedge (860) 394 — Change in securities available for sale 1,705 (485) (1,084) Balance at end of year $ 3,975 $ 9,557 $ 6,034 |
Schedule of changes in unrecognized tax benefits | December 31, 2021 2020 2019 (in thousands) Balance at beginning of year $ 1,162 $ 3,052 $ 3,769 Additions based on tax positions related to current year — — — Additions for tax positions for prior years 247 168 1,471 Reductions for tax positions for prior years (754) (2,058) (153) Settlements — — (2,035) Balance at end of year $ 655 $ 1,162 $ 3,052 |
Schedule of unrecognized tax benefits, the amount of interest accrued and range of reasonably possible changes | Unrecognized tax benefits $ 619 Accrued interest on unrecognized tax benefits 36 Portion that, if recognized, would reduce tax expense and effective tax rate 655 Reasonably possible reduction to the balance of unrecognized tax in subsequent year 300 Portion that, if recognized, would reduce tax expense and effective tax rate 300 |
OTHER COMMITMENTS AND CONTING_2
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
OTHER COMMITMENTS AND CONTINGENCIES | |
Schedule of financial instruments with off-balance sheet credit risk | December 31, 2021 2020 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 142,781 $ 485,428 Commitments to grant other loans 27,029 53,714 Unadvanced funds on home equity lines of credit 211,120 178,432 Unadvanced funds on revolving lines of credit 223,110 169,907 Unadvanced funds on construction loans 194,101 127,776 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Dec. 31, 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) December 31, 2021: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 Other assets $ 1,663 Other liabilities $ — Derivatives not designated as Hedging Instruments Derivative loan commitments $ 86,134 Other assets $ 1,527 Other liabilities $ 95 Forward loan sale commitments 96,000 Other assets 56 Other liabilities 94 Interest rate swaps 740,235 Other assets 18,874 Other liabilities 19,214 Risk participation agreements 139,109 Other assets — Other liabilities — Total $ 22,120 $ 19,403 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 | Year Ended December 31, 2021 2020 2019 Derivatives designated as hedging instruments Gain (loss) in OCI on derivatives (effective portion), net of tax $ 2,210 $ (1,013) $ — Loss reclassified from OCI into interest income or interest expense (effective portion) $ (513) $ (46) $ — Derivatives not designated as hedging instruments Changes in fair value of derivative loan commitments Mortgage banking income $ (10,850) $ 11,072 $ 62 Changes in fair value of forward loan sale commitments Mortgage banking income 2,166 (2,073) 386 Changes in fair value of interest rate swaps Other income (431) — — Total $ (9,115) $ 8,999 $ 448 |
OPERATING LEASE RIGHT-OF-USE _2
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | |
Schedule of undiscounted future minimum operating lease payments | December 31, 2021 December 31, 2020 (in thousands) 2021 $ 3,139 $ 2,452 2022 2,976 2,239 2023 2,493 1,847 2024 2,369 1,644 2025 2,338 1,684 Thereafter 21,086 13,134 Total lease payments 34,401 $ 23,000 Imputed interest (6,031) Total present value of operating lease liabilities $ 28,370 |
Schedule of weighted-average discount rate and remaining lease term | December 31, 2021 Weighted-average discount rate 1.94 % Weighted-average remaining lease term (years) 16.77 |
Schedule of components of total lease expense | Year Ended December 31, 2021 (in thousands) Lease Expense: Operating lease expense $ 2,737 Short-term lease expense 162 Variable lease expense — Total lease expense $ 2,899 Other Information Cash paid for amounts included in the measurement of lease liabilities- operating cash flows for operating leases 2,861 Operating Lease - Operating cash flows (Liability reduction) 2,370 Right-of-use assets obtained in exchange for new operating lease liabilities 29,718 |
COMPENSATION AND BENEFIT PLANS
COMPENSATION AND BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
COMPENSATION AND BENEFIT PLANS | |
Schedule of share information held by the ESOP | December 31, 2021 2020 Allocated shares 939,825 639,525 Shares committed to be allocated 230,722 230,723 Unallocated shares 3,371,840 3,602,562 Total shares 4,542,387 4,472,810 Fair value of unallocated shares $ 50,038,115 $ 39,123,823 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Schedule of stock options, valuation assumptions | Options granted 583,565 Vesting period (years) 3 Term (years) 10 Weighted average expected volatility 22.09 % Expected life (years) 6 Expected dividend yield — % Weighted average risk free interest rate 2.46 % Weighted average fair value per option $2.49 |
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 — — (285,038) 2.60 Forfeited — — — — Expired — — — — Balance at December 31, 2021 2,043,563 $ 9.85 6.03 $ — 188,407 $ 2.48 Exercisable at December 31, 2021 1,855,156 $ 9.93 5.91 $ — Unrecognized cost inclusive of directors' awards $ 94,667 Weighted average remaining recognition period (years) 0.33 |
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 (204,082) 9.34 Granted 196,377 12.05 Forfeited (10,205) 9.71 Non-vested stock awards at December 31, 2021 366,782 $ 10.78 Unrecognized cost inclusive of directors' awards $ 2,812,633 Weighted average remaining recognition period (years) 1.54 |
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 127,599 11.95 Forfeited — — Non-vested performance restricted stock units at December 31, 2021 127,599 $ 11.95 Unrecognized cost $ 1,099,474 Weighted average remaining recognition period (years) 2.17 |
MINIMUM REGULATORY CAPITAL RE_2
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Tables) | 12 Months Ended |
Dec. 31, 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. December 31, 2021 Common equity Tier 1 capital to risk-weighted assets $ 608,804 16.4 % $ 167,475 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 608,804 16.4 223,300 6.0 N/A N/A Total capital to risk-weighted assets 689,181 18.5 297,733 8.0 N/A N/A Tier 1 capital to average assets 608,804 13.6 179,710 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 December 31, 2021 Common equity Tier 1 capital to risk-weighted assets $ 485,239 13.1 % $ 166,660 4.5 % $ 240,731 6.5 % Tier 1 capital to risk-weighted assets 485,239 13.1 222,214 6.0 296,285 8.0 Total capital to risk-weighted assets 530,616 14.3 296,285 8.0 370,356 10.0 Tier 1 capital to average assets 485,239 10.9 178,279 4.0 222,849 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) | 12 Months Ended |
Dec. 31, 2021 | |
COMPREHENSIVE INCOME (LOSS) | |
Schedule of components of accumulated other comprehensive income (loss) | December 31, 2021 2020 (in thousands) Cash flow hedge: Net unrealized gain (loss) $ 1,663 $ (1,407) Related tax effect (466) 394 Total accumulated other comprehensive income (loss) $ 1,197 $ (1,013) Securities available for sale: Net unrealized (loss) gain $ (3,635) $ 4,102 Related tax effect 801 (904) Total accumulated other comprehensive (loss) income $ (2,834) $ 3,198 |
Summary of changes in accumulated other comprehensive income (loss) | Year Ended December 31, 2021 2020 2019 Available Cash Available Cash Available for Sale Flow for Sale Flow for Sale Securities Hedge Total Securities Hedge Total Securities (in thousands) Balance at beginning of period $ 3,198 $ (1,013) $ 2,185 $ 1,480 $ — $ 1,480 $ (2,358) Other comprehensive (loss) income before reclassifications (7,496) 2,557 (4,939) 4,214 (1,453) 2,761 6,266 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) 513 272 (2,533) 46 (2,487) (1,344) Net current period other comprehensive (loss) income (7,737) 3,070 (4,667) 2,203 (1,407) 796 4,922 Related tax effect 1,705 (860) 845 (485) 394 (91) (1,084) Balance at end of period $ (2,834) $ 1,197 $ (1,637) $ 3,198 $ (1,013) $ 2,185 $ 1,480 |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 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) December 31, 2021 Assets Securities available for sale $ — $ 394,036 $ — $ 394,036 Loans held for sale — 45,642 — 45,642 Mortgage servicing rights — 38,268 — 38,268 Derivative loan commitments — — 1,527 1,527 Forward loan sale commitments — — 56 56 Interest rate management agreements — 1,663 — 1,663 Interest rate swaps — 18,874 — 18,874 $ — $ 498,483 $ 1,583 $ 500,066 Liabilities Derivative loan commitments $ — $ — $ 95 $ 95 Forward loan sale commitments — — 94 94 Interest rate swaps — 19,214 — 19,214 $ — $ 19,214 $ 189 $ 19,403 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 | Year Ended December 31, 2021 2020 2019 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 12,623 $ 1,411 $ 1,261 Total gains (losses) included in net income (1) (11,040) 11,212 150 Balance at end of period $ 1,583 $ 12,623 $ 1,411 Changes in unrealized gains relating to instruments at period end $ 1,583 $ 12,623 $ 1,411 |
Schedule of changes in Level 3 liabilities measured at fair value on a recurring basis | Year Ended December 31, 2021 2020 2019 (in thousands) Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (2,545) $ (332) (630) Total gains (losses) included in net income (1) 2,356 (2,213) 298 Balance at end of period $ (189) $ (2,545) (332) Changes in unrealized losses relating to instruments at period end $ (189) $ (2,545) (332) (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. December 31, 2021 December 31, 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Impaired loans: Residential — — $ 1,125 $ — $ — $ 919 Commercial real estate — — 17,562 — — 3,034 Commercial and industrial — — 2,928 — — 4,208 Other real estate owned and repossessed assets — — 53 — — 595 $ — $ — $ 21,668 $ — $ — $ 8,756 Losses in the following table represent the amount of the fair value adjustments recorded during the year on the carrying value of the assets held at December 31, 2021 and 2020, respectively. Losses on fully charged off loans are not included in the table. Year Ended December 31, 2021 2020 (in thousands) Impaired loans Residential 7 118 Commercial real estate 5,239 1,177 Commercial and industrial 916 1,020 Other real estate owned and repossessed assets — — $ 6,162 $ 2,315 |
Schedule of changes in Level 3 assets measured at fair value on a nonrecurring basis | Fair Value December 31, Valuation Technique 2021 2020 (in thousands) Impaired loans: Residential $ 1,125 $ 919 Sales Comparison Approach (1) Commercial real estate $ 17,562 $ 7,242 Sales Comparison Approach (1) Commercial and industrial $ 2,928 $ — Sales Comparison Approach (1) Real estate owned: Residential $ — $ 298 Sales Comparison Approach (1) (1) |
Schedule of estimated fair values and related carrying amounts of financial instruments | December 31, 2021 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 194,719 $ 194,719 $ — $ — $ 194,719 Securities available for sale 394,036 — 394,036 — 394,036 Federal Home Loan Bank stock 5,931 N/A N/A N/A N/A Loans held for sale 45,642 — 45,642 — 45,642 Loans, net 3,562,356 — — 3,558,934 3,558,934 Retirement plan annuities 14,174 — — 14,174 14,174 Accrued interest receivable 10,624 — 10,624 — 10,624 Financial liabilities: Deposits 3,682,649 — — 3,683,465 3,683,465 Borrowed funds 55,711 — 55,765 — 55,765 Subordinated debt 34,159 — — 35,790 35,790 Mortgagors' escrow accounts 8,459 — — 8,459 8,459 Accrued interest payable 1,083 — 1,083 — 1,083 Derivative loan commitments: Assets 1,527 — — 1,527 1,527 Liabilities 95 — — 95 95 Interest rate management agreements: Assets 1,663 — 1,663 — 1,663 Liabilities — — — — — Interest rate swap agreements: Assets 18,874 — 18,874 — 18,874 Liabilities 19,214 — 19,214 — 19,214 Forward loan sale commitments: Assets 56 — — 56 56 Liabilities 94 — — 94 94 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) | 12 Months Ended |
Dec. 31, 2021 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share | Year Ended December 31, 2021 2020 2019 Net income available to common stockholders (in thousands) $ 58,517 $ 44,792 $ 18,268 Average number of common shares outstanding 54,454,113 58,252,140 58,451,387 Less: Average unallocated ESOP shares and non-vested restricted shares (3,707,811) (3,938,772) (2,719,750) Weighted average number of common shares outstanding used to calculate basic earnings per common share 50,746,302 54,313,368 55,731,637 Dilutive effect of share-based compensation 776,833 6,467 139 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 51,523,135 54,319,835 55,731,776 Earnings per common share: Basic $ 1.15 $ 0.82 $ 0.33 Diluted $ 1.14 $ 0.82 $ 0.33 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SEGMENT REPORTING | |
Summary of reportable segments | Information about the reportable segments and reconciliation to the Consolidated Financial Statements at December 31, 2021, 2020 and 2019, and for the years then-ended are presented in the tables below. Year Ended December 31, 2021 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 129,785 $ 3,468 $ 131,370 Credit for loan losses (7,258) — (7,258) Net interest and dividend income, after credit for loan losses 137,043 3,468 138,628 Mortgage banking income: Gain on sale of mortgage loans — 61,883 61,883 Intersegment gain (loss) (3,665) 4,434 — Changes in mortgage servicing rights fair value (137) (243) (380) Other 1,090 14,741 15,831 Total mortgage banking income (loss) (2,712) 80,815 77,334 Other noninterest income 23,308 44 23,352 Total noninterest income 20,596 80,859 100,686 Noninterest expense 102,557 55,012 158,862 Income loss before income taxes 55,082 29,315 80,452 Provision for income taxes 14,933 7,569 21,935 Net income $ 40,149 $ 21,746 $ 58,517 Total assets at period end $ 4,481,509 $ 173,545 $ 4,553,405 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 Year Ended December 31, 2020 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 118,217 $ 3,235 $ 120,066 Provision for loan losses 34,815 — 34,815 Net interest and dividend income, after provision for loan losses 83,402 3,235 85,251 Mortgage banking income: Gain on sale of mortgage loans — 105,469 105,469 Intersegment gain (loss) (3,148) 3,148 — Changes in mortgage servicing rights fair value (2,376) (4,356) (6,732) Other 1,360 13,812 15,172 Total mortgage banking income (loss) (4,164) 118,073 113,909 Other noninterest income (loss) 24,909 (138) 24,771 Total noninterest income 20,745 117,935 138,680 Noninterest expense 98,354 66,393 165,922 Income before income taxes 5,793 54,777 58,009 Provision for income taxes 527 12,964 13,217 Net income $ 5,266 $ 41,813 $ 44,792 Total assets at period end $ 4,460,164 $ 312,194 $ 4,483,615 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 Year Ended December 31, 2019 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 109,106 $ 1,064 $ 109,062 Provision for loan losses 4,747 — 4,747 Net interest and dividend income, after provision for loan losses 104,359 1,064 104,315 Mortgage banking income: Gain on sale of mortgage loans 1 33,556 33,557 Intersegment gain (loss) (1,183) 1,183 — Changes in mortgage servicing rights fair value (1,431) (4,810) (6,241) Other 1,494 7,965 9,459 Total mortgage banking income (loss) (1,119) 37,894 36,775 Other noninterest income (loss) 23,365 (45) 23,320 Total noninterest income 22,246 37,849 60,095 Noninterest expense 100,688 38,876 141,734 Income before income taxes 25,917 37 22,676 Provision (benefit) for income taxes 5,019 (77) 4,408 Net income $ 20,898 $ 114 $ 18,268 Total assets at period end $ 3,925,328 $ 165,863 $ 4,058,921 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 |
CONDENSED FINANCIAL STATEMENT_2
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | |
Schedule of Condensed Balance Sheet | Balance Sheet December 31, 2021 2020 (in thousands) Assets Cash and due from banks $ 131,033 $ 118,265 Investment in common stock of HarborOne Bank 555,695 581,982 Loan receivable - ESOP 30,740 32,190 Due from subsidiary — 612 Other assets 637 657 Total assets $ 718,105 $ 733,706 Liabilities and Stockholders' Equity Subordinated debt $ 34,159 $ 34,033 Other liabilities and accrued expenses 4,685 3,359 Stockholders' equity 679,261 696,314 Total liabilities and stockholders' equity $ 718,105 $ 733,706 |
Schedule of Condensed Statement of Net Income | Statement of Net Income Year Ended December 31, 2021 2020 2019 (in thousands) Dividends from subsidiary $ 90,000 $ — $ — Interest from bank deposits 210 260 15 Interest on short-term investments 2 449 953 Interest on ESOP loan 1,046 1,596 1,062 Total income 91,258 2,305 2,030 Interest expense 2,095 2,095 2,076 Operating expenses 2,338 2,771 3,232 Total expenses 4,433 4,866 5,308 Income (loss) before income taxes and equity in undistributed net income (loss) of HarborOne Bank 86,825 (2,561) (3,278) Income tax benefit (566) (274) (534) Income (loss) before equity in income of subsidiaries 87,391 (2,287) (2,744) Equity in undistributed net income (loss) of HarborOne Bank (28,874) 47,079 21,012 Net income $ 58,517 $ 44,792 $ 18,268 |
Schedule of Condensed Statement of Cash Flows | Statement of Cash Flows Year Ended December 31, 2021 2020 2019 (in thousands) Cash flows from operating activities: Net income $ 58,517 $ 44,792 $ 18,268 Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed net (income) loss of HarborOne Bank 28,874 (47,079) (21,012) Deferred income tax provision (benefit) (8) (18) 139 Share-based compensation 545 963 1,432 Net change in other assets 27 231 (284) Net change in other liabilities 391 302 1,299 Net cash provided (used) by operating activities 88,346 (809) (158) Cash flows from investing activities: Investment in HarborOne Bank — — (152,713) Repayment of ESOP loan 1,450 1,218 1,862 Advances to subsidiary (1,046) (1,884) (2,456) Repayment of advances to subsidiary 1,659 3,728 — Net cash provided (used) by investing activities 2,063 3,062 (153,307) Cash flows from financing activities: Issuance of common stock 643 — 304,161 Repurchase of common stock (69,215) (15,923) (721) Purchase of shares by ESOP — — (24,829) Repayment of advance from subsidiary — — (139) Amortization of subordinated debt issuance costs 126 126 108 Dividends paid (9,195) (3,258) — Net cash (used) provided by financing activities (77,641) (19,055) 278,580 Net change in cash and cash equivalents 12,768 (16,802) 125,115 Cash and cash equivalents at beginning of year 118,265 135,067 9,952 Cash and cash equivalents at end of year $ 131,033 $ 118,265 $ 135,067 |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Schedule of selected quarterly financial data | First Quarter Second Quarter Third Quarter Fourth Quarter 2021 2020 2021 2020 2021 2020 2021 2020 (in thousands, except share data) Interest and dividend income $ 35,847 $ 37,169 $ 35,887 $ 36,621 $ 35,808 $ 37,048 $ 36,353 $ 37,720 Interest expense 3,795 10,469 3,357 7,174 3,005 5,879 2,368 4,970 Net interest and dividend income 32,052 26,700 32,530 29,447 32,803 31,169 33,985 32,750 Provision (benefit) for loan losses 91 3,749 (4,286) 10,004 (1,627) 13,454 (1,436) 7,608 Other noninterest income 37,809 16,113 21,703 38,569 21,769 44,439 19,164 37,027 Gain on sale and call of securities, net — 2,525 — 8 241 — — — Total noninterest income 37,809 18,638 21,703 38,577 22,010 44,439 19,164 37,027 Total noninterest expenses 42,802 35,160 38,598 43,777 39,274 45,700 38,188 41,286 Provision for income taxes 7,576 1,705 5,645 3,668 4,907 4,561 3,807 3,283 Net income $ 19,392 $ 4,724 $ 14,276 $ 10,575 $ 12,259 $ 11,893 $ 12,590 $ 17,600 Basic earnings per share $ 0.37 $ 0.09 $ 0.28 $ 0.19 $ 0.25 $ 0.22 $ 0.26 $ 0.33 Diluted earnings per share $ 0.37 $ 0.09 $ 0.27 $ 0.19 $ 0.24 $ 0.22 $ 0.25 $ 0.33 Weighted average common shares, basic 52,537,409 54,392,465 51,778,293 54,450,146 49,801,123 54,465,339 48,918,539 53,947,868 Weighted average common shares, diluted 53,000,830 54,392,465 52,650,071 54,450,146 50,663,415 54,465,339 49,828,379 53,973,737 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Aug. 14, 2019USD ($)$ / sharesshares | Jun. 30, 2016shares | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($)company | Dec. 31, 2021USD ($)item | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($)state | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Aug. 13, 2019 |
Number of passive investment subsidiaries | 1 | 1 | ||||||||
Shares issued | shares | 31,036,812 | |||||||||
Shares issued (in dollars per share) | $ / shares | $ 10 | |||||||||
Net proceeds from sale of common stock | $ 310,400,000 | $ 304,061,000 | ||||||||
Expenses incurred | $ 6,300,000 | 6,300,000 | ||||||||
Stock conversion ratio | 1.795431 | |||||||||
Shares issued in exchange | shares | 12,162,763 | |||||||||
Net proceeds from sale of common stock | $ 304,100,000 | |||||||||
Amount utilized to fund new ESOP | 24,800,000 | $ 24,829,000 | ||||||||
Number of full-service bank offices | item | 30 | |||||||||
Operating lease ROU assets | $ 26,800,000 | $ 26,800,000 | $ 26,800,000 | $ 26,800,000 | $ 26,800,000 | |||||
Operating lease liabilities | 28,370,000 | 28,370,000 | $ 28,370,000 | 28,370,000 | 28,370,000 | |||||
Impairment of federal home loan bank stock | $ 0 | |||||||||
Number of reporting units | item | 2 | |||||||||
Number of security corporations | item | 2 | |||||||||
Impairment recognized of goodwill and intangible assets | 0 | |||||||||
PPP loans | 27,000,000 | 27,000,000 | $ 27,000,000 | 27,000,000 | 27,000,000 | |||||
Deferred processing fee income | $ 949,000 | $ 949,000 | $ 949,000 | $ 949,000 | $ 949,000 | |||||
LTV 80 to 100 Percent | Residential | ||||||||||
Loan To Value Ratio | 80.00% | |||||||||
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-02 | ||||||||||
Operating lease ROU assets | 23,200,000 | |||||||||
Operating lease liabilities | $ 24,400,000 | |||||||||
HarborOne Mortgages. | ||||||||||
Number of offices | item | 28 | |||||||||
Additional states licensed to lend | state | 7 | |||||||||
MHC | HarborOne Bancorp Inc. | ||||||||||
Ownership percentage | 53.00% | |||||||||
HarborOne Foundation | ||||||||||
Shares issued | shares | 385,450 | |||||||||
HarborOne Bank. | ||||||||||
Number of security corporation subsidiaries | company | 2 | |||||||||
Cash invested into Bank's operations | $ 151,300,000 |
DEBT SECURITIES - Gross unreali
DEBT SECURITIES - Gross unrealized gains and losses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Securities available for sale | ||
Amortized Cost | $ 397,671 | $ 272,396 |
Gross Unrealized Gains | 1,118 | 4,407 |
Gross Unrealized Losses | 4,753 | 305 |
Fair Value | 394,036 | 276,498 |
U.S. government and government-sponsored enterprise obligations | ||
Securities available for sale | ||
Amortized Cost | 42,148 | 5,002 |
Gross Unrealized Gains | 93 | |
Gross Unrealized Losses | 883 | |
Fair Value | 41,265 | 5,095 |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Securities available for sale | ||
Amortized Cost | 347,716 | 234,819 |
Gross Unrealized Gains | 914 | 3,113 |
Gross Unrealized Losses | 3,870 | 305 |
Fair Value | 344,760 | 237,627 |
U.S. government-sponsored collateralized mortgage obligations | ||
Securities available for sale | ||
Amortized Cost | 3,927 | 16,326 |
Gross Unrealized Gains | 100 | 330 |
Fair Value | 4,027 | 16,656 |
SBA asset-backed securities | ||
Securities available for sale | ||
Amortized Cost | 3,880 | 16,249 |
Gross Unrealized Gains | 104 | 871 |
Fair Value | $ 3,984 | $ 17,120 |
DEBT SECURITIES - Contractual m
DEBT SECURITIES - Contractual maturity (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)security | Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($) | |
Amortized Cost-Available-for-Sale | |||
After 5 years through 10 years | $ 42,148 | ||
Total for contractual maturity | 42,148 | ||
Amortized Cost | 397,671 | $ 272,396 | |
Fair Value-Available-for-Sale | |||
After 5 years through 10 years | 41,265 | ||
Total for contractual maturity | 41,265 | ||
Total | 394,036 | 276,498 | |
Sales | |||
Proceeds | 39,321 | 72,333 | $ 28,391 |
Gross gains | 241 | 2,521 | 1,267 |
Calls | |||
Proceeds | $ 5,000 | 13,635 | 20,145 |
Gross gains | $ 12 | $ 77 | |
Number of holdings greater than 10% of shareholder equity | security | 0 | 0 | |
Interest rate swaps | Mortgage-backed securities | |||
Securities | |||
Number of securities pledged | security | 17 | 26 | |
Pledged as collateral | $ 13,900 | $ 40,300 | |
Minimum | |||
Securities | |||
Maturity period | 1 month | ||
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 | $ 347,716 | ||
Amortized Cost | 347,716 | 234,819 | |
Fair Value-Available-for-Sale | |||
No single maturity date | 344,760 | ||
Total | 344,760 | 237,627 | |
U.S. government-sponsored collateralized mortgage obligations | |||
Amortized Cost-Available-for-Sale | |||
No single maturity date | 3,927 | ||
Amortized Cost | 3,927 | 16,326 | |
Fair Value-Available-for-Sale | |||
No single maturity date | 4,027 | ||
Total | 4,027 | 16,656 | |
SBA asset-backed securities | |||
Amortized Cost-Available-for-Sale | |||
No single maturity date | 3,880 | ||
Amortized Cost | 3,880 | 16,249 | |
Fair Value-Available-for-Sale | |||
No single maturity date | 3,984 | ||
Total | $ 3,984 | 17,120 | |
U.S. government and government-sponsored enterprise obligations | |||
Securities | |||
Maturity period | 10 years | ||
Amortized Cost-Available-for-Sale | |||
Amortized Cost | $ 42,148 | 5,002 | |
Fair Value-Available-for-Sale | |||
Total | $ 41,265 | $ 5,095 | |
U.S. government and government-sponsored enterprise obligations | Minimum | |||
Securities | |||
Callable period | 2 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 | 12 Months Ended | |
Dec. 31, 2021USD ($)security | Dec. 31, 2020USD ($) | |
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | $ 3,718 | |
Twelve Months and Over | 1,035 | |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 304,154 | |
Twelve Months and Over | $ 35,552 | |
Number of debt securities | security | 126 | |
Number of debt securities in unrealized loss position | security | 76 | |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | $ 2,835 | $ 283 |
Twelve Months and Over | 1,035 | 22 |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 262,889 | 67,460 |
Twelve Months and Over | 35,552 | $ 3,668 |
U.S. government and government-sponsored enterprise obligations | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | 883 | |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | $ 41,265 |
LOANS HELD FOR SALE (Details)
LOANS HELD FOR SALE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair value and contractual principal outstanding: | ||
Loans held for sale, fair value | $ 45,642 | $ 208,612 |
Loans held for sale, contractual principal outstanding | 44,245 | 198,984 |
Fair value less unpaid principal balance | 1,397 | 9,628 |
Change in fair value of mortgage loans held for sale | (8,200) | 6,500 |
90 Days or More | ||
Fair value and contractual principal outstanding: | ||
Loans held for sale, fair value | $ 0 | $ 0 |
LOANS - Summary of Balances of
LOANS - Summary of Balances of Loans (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Loans | ||||
Total loans | $ 3,607,733,000 | $ 3,494,642,000 | ||
Net deferred loan costs | 4,400,000 | 2,300,000 | ||
Less: Allowance for loan losses | (45,377,000) | (55,395,000) | $ (24,060,000) | $ (20,655,000) |
Net loans | 3,562,356,000 | 3,439,247,000 | ||
Deferred processing fee income | 949,000 | |||
Residential | ||||
Loans | ||||
Total loans | 1,217,980,000 | 1,105,823,000 | ||
Less: Allowance for loan losses | (4,120,000) | (7,419,000) | ||
Residential | 1-4 family | ||||
Loans | ||||
Total loans | 1,047,819,000 | 928,934,000 | ||
Less: Allowance for loan losses | (3,631,000) | (6,168,000) | (2,602,000) | (2,681,000) |
Residential | Second mortgages and equity lines of credit | ||||
Loans | ||||
Total loans | 136,853,000 | 145,672,000 | ||
Less: Allowance for loan losses | (420,000) | (1,054,000) | (553,000) | (508,000) |
Residential | Residential real estate construction | ||||
Loans | ||||
Total loans | 33,308,000 | 31,217,000 | ||
Less: Allowance for loan losses | (69,000) | (197,000) | (23,000) | (50,000) |
Commercial | ||||
Loans | ||||
Total loans | 2,258,048,000 | 2,114,989,000 | ||
Commercial | Commercial real estate | ||||
Loans | ||||
Total loans | 1,699,877,000 | 1,551,265,000 | ||
Less: Allowance for loan losses | (33,242,000) | (34,765,000) | (12,875,000) | (10,059,000) |
Commercial | Commercial construction | ||||
Loans | ||||
Total loans | 136,563,000 | 99,331,000 | ||
Less: Allowance for loan losses | (2,010,000) | (1,955,000) | (2,526,000) | (2,707,000) |
Commercial | Commercial and industrial | ||||
Loans | ||||
Total loans | 421,608,000 | 464,393,000 | ||
Less: Allowance for loan losses | (4,638,000) | (5,311,000) | (2,977,000) | (2,286,000) |
Consumer loans | ||||
Loans | ||||
Total loans | 131,705,000 | 273,830,000 | ||
Less: Allowance for loan losses | (367,000) | (2,475,000) | $ (1,010,000) | $ (1,154,000) |
Consumer loans | Auto | ||||
Loans | ||||
Total loans | 124,354,000 | 265,266,000 | ||
Consumer loans | Personal | ||||
Loans | ||||
Total loans | 7,351,000 | 8,564,000 | ||
Commercial and industrial | PPP loans | ||||
Loans | ||||
Loans before fees | 27,000,000 | 126,500,000 | ||
Deferred processing fee income | $ 949,000 | $ 2,700,000 |
LOANS - Loans Sold or Transferr
LOANS - Loans Sold or Transferred (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Commercial real estate | ||
Loans | ||
Unpaid principal balance of loans serviced for others | $ 288.9 | $ 284.2 |
LOANS - Acquired Loans (Details
LOANS - Acquired Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 31, 2018 |
Loans | |||
Outstanding balance | $ 3,076 | $ 4,307 | |
Carrying amount | $ 2,828 | $ 4,079 | |
Coastway | PCI | |||
Loans | |||
Loans purchased | $ 5,400 |
LOANS - PCI Loans (Details)
LOANS - PCI Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accretable yield: | ||
Balance at beginning of period | $ 141 | $ 149 |
Accretion | (27) | (8) |
Balance at end of period | $ 114 | $ 141 |
LOANS - Allowance for Loan Loss
LOANS - Allowance for Loan Losses Activity and Allocation to Loan Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Activity in the allowance for loan losses | |||||||||||
Balance | $ 55,395 | $ 24,060 | $ 55,395 | $ 24,060 | $ 20,655 | ||||||
(Credit) provision for loan losses | $ (1,436) | $ (1,627) | $ (4,286) | 91 | $ 7,608 | $ 13,454 | $ 10,004 | 3,749 | (7,258) | 34,815 | 4,747 |
Charge-offs | (3,432) | (4,307) | (2,102) | ||||||||
Recoveries | 672 | 827 | 760 | ||||||||
Balance | 45,377 | 55,395 | 45,377 | 55,395 | 24,060 | ||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 3,607,733 | 3,494,642 | 3,607,733 | 3,494,642 | |||||||
Total allowance for loan losses | 45,377 | 55,395 | 45,377 | 55,395 | 24,060 | ||||||
Impaired loans. | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 2,678 | 2,678 | |||||||||
Balance | 7,946 | 2,678 | 7,946 | 2,678 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 47,495 | 46,256 | 47,495 | 46,256 | |||||||
Total allowance for loan losses | 7,946 | 2,678 | 7,946 | 2,678 | |||||||
Non-impaired loans | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 52,717 | 52,717 | |||||||||
Balance | 37,431 | 52,717 | 37,431 | 52,717 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 3,560,238 | 3,448,386 | 3,560,238 | 3,448,386 | |||||||
Total allowance for loan losses | 37,431 | 52,717 | 37,431 | 52,717 | |||||||
Residential | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 7,419 | 7,419 | |||||||||
Balance | 4,120 | 7,419 | 4,120 | 7,419 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 1,217,980 | 1,105,823 | 1,217,980 | 1,105,823 | |||||||
Total allowance for loan losses | 4,120 | 7,419 | 4,120 | 7,419 | |||||||
Residential | Impaired loans. | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 802 | 802 | |||||||||
Balance | 650 | 802 | 650 | 802 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 23,110 | 24,384 | 23,110 | 24,384 | |||||||
Total allowance for loan losses | 650 | 802 | 650 | 802 | |||||||
Residential | Non-impaired loans | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 6,617 | 6,617 | |||||||||
Balance | 3,470 | 6,617 | 3,470 | 6,617 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 1,194,870 | 1,081,439 | 1,194,870 | 1,081,439 | |||||||
Total allowance for loan losses | 3,470 | 6,617 | 3,470 | 6,617 | |||||||
Residential | 1-4 family | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 6,168 | 2,602 | 6,168 | 2,602 | 2,681 | ||||||
(Credit) provision for loan losses | (2,755) | 3,399 | (373) | ||||||||
Charge-offs | (51) | (20) | |||||||||
Recoveries | 218 | 218 | 314 | ||||||||
Balance | 3,631 | 6,168 | 3,631 | 6,168 | 2,602 | ||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 1,047,819 | 928,934 | 1,047,819 | 928,934 | |||||||
Total allowance for loan losses | 3,631 | 6,168 | 3,631 | 6,168 | 2,602 | ||||||
Residential | Second mortgages and equity lines of credit | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 1,054 | 553 | 1,054 | 553 | 508 | ||||||
(Credit) provision for loan losses | (794) | 388 | (7) | ||||||||
Charge-offs | (9) | (116) | |||||||||
Recoveries | 160 | 122 | 168 | ||||||||
Balance | 420 | 1,054 | 420 | 1,054 | 553 | ||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 136,853 | 145,672 | 136,853 | 145,672 | |||||||
Total allowance for loan losses | 420 | 1,054 | 420 | 1,054 | 553 | ||||||
Residential | Residential real estate construction | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 197 | 23 | 197 | 23 | 50 | ||||||
(Credit) provision for loan losses | (128) | 174 | (27) | ||||||||
Balance | 69 | 197 | 69 | 197 | 23 | ||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 33,308 | 31,217 | 33,308 | 31,217 | |||||||
Total allowance for loan losses | 69 | 197 | 69 | 197 | 23 | ||||||
Commercial | |||||||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 2,258,048 | 2,114,989 | 2,258,048 | 2,114,989 | |||||||
Commercial | Commercial real estate | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 34,765 | 12,875 | 34,765 | 12,875 | 10,059 | ||||||
(Credit) provision for loan losses | (1,123) | 23,129 | 2,810 | ||||||||
Charge-offs | (405) | (1,240) | |||||||||
Recoveries | 5 | 1 | 6 | ||||||||
Balance | 33,242 | 34,765 | 33,242 | 34,765 | 12,875 | ||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 1,699,877 | 1,551,265 | 1,699,877 | 1,551,265 | |||||||
Total allowance for loan losses | 33,242 | 34,765 | 33,242 | 34,765 | 12,875 | ||||||
Commercial | Commercial real estate | Impaired loans. | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 1,845 | 1,845 | |||||||||
Balance | 7,275 | 1,845 | 7,275 | 1,845 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 20,203 | 12,513 | 20,203 | 12,513 | |||||||
Total allowance for loan losses | 7,275 | 1,845 | 7,275 | 1,845 | |||||||
Commercial | Commercial real estate | Non-impaired loans | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 32,920 | 32,920 | |||||||||
Balance | 25,967 | 32,920 | 25,967 | 32,920 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 1,679,674 | 1,538,752 | 1,679,674 | 1,538,752 | |||||||
Total allowance for loan losses | 25,967 | 32,920 | 25,967 | 32,920 | |||||||
Commercial | Commercial construction | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 1,955 | 2,526 | 1,955 | 2,526 | 2,707 | ||||||
(Credit) provision for loan losses | 55 | 366 | (181) | ||||||||
Charge-offs | (937) | ||||||||||
Balance | 2,010 | 1,955 | 2,010 | 1,955 | 2,526 | ||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 136,563 | 99,331 | 136,563 | 99,331 | |||||||
Total allowance for loan losses | 2,010 | 1,955 | 2,010 | 1,955 | 2,526 | ||||||
Commercial | Commercial construction | Non-impaired loans | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 1,955 | 1,955 | |||||||||
Balance | 2,010 | 1,955 | 2,010 | 1,955 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 136,563 | 99,331 | 136,563 | 99,331 | |||||||
Total allowance for loan losses | 2,010 | 1,955 | 2,010 | 1,955 | |||||||
Commercial | Commercial and industrial | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 5,311 | 2,977 | 5,311 | 2,977 | 2,286 | ||||||
(Credit) provision for loan losses | 2,055 | 3,552 | 1,744 | ||||||||
Charge-offs | (2,850) | (1,471) | (1,075) | ||||||||
Recoveries | 122 | 253 | 22 | ||||||||
Balance | 4,638 | 5,311 | 4,638 | 5,311 | 2,977 | ||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 421,608 | 464,393 | 421,608 | 464,393 | |||||||
Total allowance for loan losses | 4,638 | 5,311 | 4,638 | 5,311 | 2,977 | ||||||
Commercial | Commercial and industrial | Impaired loans. | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 31 | 31 | |||||||||
Balance | 21 | 31 | 21 | 31 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 4,182 | 9,359 | 4,182 | 9,359 | |||||||
Total allowance for loan losses | 21 | 31 | 21 | 31 | |||||||
Commercial | Commercial and industrial | Non-impaired loans | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 5,280 | 5,280 | |||||||||
Balance | 4,617 | 5,280 | 4,617 | 5,280 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 417,426 | 455,034 | 417,426 | 455,034 | |||||||
Total allowance for loan losses | 4,617 | 5,280 | 4,617 | 5,280 | |||||||
Consumer loans | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 2,475 | 1,010 | 2,475 | 1,010 | 1,154 | ||||||
(Credit) provision for loan losses | (2,098) | 1,831 | 497 | ||||||||
Charge-offs | (177) | (599) | (891) | ||||||||
Recoveries | 167 | 233 | 250 | ||||||||
Balance | 367 | 2,475 | 367 | 2,475 | 1,010 | ||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 131,705 | 273,830 | 131,705 | 273,830 | |||||||
Total allowance for loan losses | 367 | 2,475 | 367 | 2,475 | 1,010 | ||||||
Consumer loans | Non-impaired loans | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 2,475 | 2,475 | |||||||||
Balance | 367 | 2,475 | 367 | 2,475 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total loans | 131,705 | 273,830 | 131,705 | 273,830 | |||||||
Total allowance for loan losses | 367 | 2,475 | 367 | 2,475 | |||||||
Unallocated | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | 3,470 | $ 1,494 | 3,470 | 1,494 | 1,210 | ||||||
(Credit) provision for loan losses | (2,470) | 1,976 | 284 | ||||||||
Balance | 1,000 | 3,470 | 1,000 | 3,470 | 1,494 | ||||||
Allocation of the allowance to loan segments | |||||||||||
Total allowance for loan losses | 1,000 | 3,470 | 1,000 | 3,470 | $ 1,494 | ||||||
Unallocated | Non-impaired loans | |||||||||||
Activity in the allowance for loan losses | |||||||||||
Balance | $ 3,470 | 3,470 | |||||||||
Balance | 1,000 | 3,470 | 1,000 | 3,470 | |||||||
Allocation of the allowance to loan segments | |||||||||||
Total allowance for loan losses | $ 1,000 | $ 3,470 | $ 1,000 | $ 3,470 |
LOANS - Summary of Past Due and
LOANS - Summary of Past Due and Non-Accrual Loans (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)loan | Dec. 31, 2021USD ($) | |
Summary of past due and non-accrual loans | ||
Past Due | $ 30,505,000 | $ 29,299,000 |
Loans on Non-accrual | 34,101,000 | 36,133,000 |
Loans past due 90 days or more and still accruing | $ 0 | 0 |
Number of non-performing loans | loan | 2 | |
Recorded investment | $ 10,900,000 | |
Charge offs | 937,000 | |
30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 15,684,000 | 7,359,000 |
60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 2,868,000 | 3,064,000 |
90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 11,953,000 | 18,876,000 |
Residential | 1-4 family | ||
Summary of past due and non-accrual loans | ||
Past Due | 20,789,000 | 12,256,000 |
Loans on Non-accrual | 11,611,000 | 11,210,000 |
Residential | 1-4 family | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 12,148,000 | 5,578,000 |
Residential | 1-4 family | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 2,223,000 | 2,901,000 |
Residential | 1-4 family | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 6,418,000 | 3,777,000 |
Residential | Second mortgages and equity lines of credit | ||
Summary of past due and non-accrual loans | ||
Past Due | 939,000 | 538,000 |
Loans on Non-accrual | 834,000 | 600,000 |
Residential | Second mortgages and equity lines of credit | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 460,000 | 202,000 |
Residential | Second mortgages and equity lines of credit | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 46,000 | |
Residential | Second mortgages and equity lines of credit | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 433,000 | 336,000 |
Residential | Residential real estate | ||
Summary of past due and non-accrual loans | ||
Past Due | 471,000 | |
Residential | Residential real estate | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 471,000 | |
Commercial | Commercial real estate | ||
Summary of past due and non-accrual loans | ||
Past Due | 3,785,000 | 11,483,000 |
Loans on Non-accrual | 12,486,000 | 20,053,000 |
Commercial | Commercial real estate | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 416,000 | 149,000 |
Commercial | Commercial real estate | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 3,369,000 | 11,334,000 |
Commercial | Commercial and industrial | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,878,000 | 3,894,000 |
Loans on Non-accrual | 8,606,000 | 4,114,000 |
Commercial | Commercial and industrial | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 444,000 | 616,000 |
Commercial | Commercial and industrial | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 191,000 | 1,000 |
Commercial | Commercial and industrial | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,243,000 | 3,277,000 |
Consumer loans | Auto | ||
Summary of past due and non-accrual loans | ||
Past Due | 2,542,000 | 1,049,000 |
Loans on Non-accrual | 557,000 | 144,000 |
Consumer loans | Auto | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,657,000 | 747,000 |
Consumer loans | Auto | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 397,000 | 162,000 |
Consumer loans | Auto | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 488,000 | 140,000 |
Consumer loans | Personal | ||
Summary of past due and non-accrual loans | ||
Past Due | 101,000 | 79,000 |
Loans on Non-accrual | 7,000 | 12,000 |
Consumer loans | Personal | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 88,000 | 67,000 |
Consumer loans | Personal | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 11,000 | |
Consumer loans | Personal | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | $ 2,000 | $ 12,000 |
LOANS - Impaired Loans (Details
LOANS - Impaired Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Recorded Investment | |||
Impaired loans without a valuation allowance | $ 18,145 | $ 25,079 | |
Impaired loans with a valuation allowance | 29,350 | 21,177 | |
Total impaired loans | 47,495 | 46,256 | |
Unpaid Principal Balance | |||
Impaired loans without a valuation allowance | 21,423 | 29,384 | |
Impaired loans with a valuation allowance | 38,234 | 21,497 | |
Total impaired loans | 59,657 | 50,881 | |
Activity in the allowance for loan losses | |||
Allowance for loan losses for impaired loans | 7,946 | 2,678 | |
Impaired loans | |||
Average Recorded Investment | 46,034 | 48,097 | $ 41,537 |
Interest Income Recognized | 806 | 1,197 | 1,995 |
Interest Income Recognized on Cash Basis | 743 | 1,136 | 1,636 |
Additional funds committed to be advanced in connection with impaired loans | 0 | ||
Residential | |||
Recorded Investment | |||
Impaired loans without a valuation allowance | 14,115 | 12,284 | |
Impaired loans with a valuation allowance | 8,995 | 12,100 | |
Unpaid Principal Balance | |||
Impaired loans without a valuation allowance | 15,335 | 13,039 | |
Impaired loans with a valuation allowance | 9,791 | 12,355 | |
Activity in the allowance for loan losses | |||
Allowance for loan losses for impaired loans | 650 | 802 | |
Impaired loans | |||
Average Recorded Investment | 23,800 | 26,040 | 29,708 |
Interest Income Recognized | 795 | 1,115 | 1,694 |
Interest Income Recognized on Cash Basis | 732 | 1,054 | 1,335 |
Commercial | Commercial real estate | |||
Recorded Investment | |||
Impaired loans without a valuation allowance | 2,641 | 3,552 | |
Impaired loans with a valuation allowance | 17,562 | 8,961 | |
Unpaid Principal Balance | |||
Impaired loans without a valuation allowance | 2,692 | 4,741 | |
Impaired loans with a valuation allowance | 24,847 | 8,961 | |
Activity in the allowance for loan losses | |||
Allowance for loan losses for impaired loans | 7,275 | 1,845 | |
Impaired loans | |||
Average Recorded Investment | 15,156 | 5,064 | 643 |
Interest Income Recognized | 6 | 2 | 10 |
Interest Income Recognized on Cash Basis | 6 | 2 | 10 |
Commercial | Commercial construction | |||
Impaired loans | |||
Average Recorded Investment | 8,831 | 5,622 | |
Interest Income Recognized | 237 | ||
Interest Income Recognized on Cash Basis | 237 | ||
Commercial | Commercial and industrial | |||
Recorded Investment | |||
Impaired loans without a valuation allowance | 1,389 | 9,243 | |
Impaired loans with a valuation allowance | 2,793 | 116 | |
Unpaid Principal Balance | |||
Impaired loans without a valuation allowance | 3,396 | 11,604 | |
Impaired loans with a valuation allowance | 3,596 | 181 | |
Activity in the allowance for loan losses | |||
Allowance for loan losses for impaired loans | 21 | 31 | |
Impaired loans | |||
Average Recorded Investment | 7,078 | 8,162 | 5,564 |
Interest Income Recognized | 5 | 80 | 54 |
Interest Income Recognized on Cash Basis | $ 5 | $ 80 | $ 54 |
LOANS - Troubled Debt Restructu
LOANS - Troubled Debt Restructurings (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)itemloan | Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)item | |
Troubled debt restructurings | |||
Troubled debt restructurings during the period | 0 | 0 | 1 |
TDR modifications | $ 2,000,000 | ||
Number of loan modifications pursuant to CARES Act | loan | 0 | ||
Recorded investment of troubled debt restructurings | $ 11,000,000 | $ 15,100,000 | |
Recorded investment of troubled debt restructurings that were nonaccruing | $ 1,000,000 | $ 3,600,000 | |
Number of troubled debt restructurings that defaulted | 0 | 0 | 0 |
Loans, net | $ 3,562,356,000 | $ 3,439,247,000 | |
Minimum | |||
Troubled debt restructurings | |||
Payment in arrears before considered in default | item | 2 | ||
Commercial | |||
Troubled debt restructurings | |||
Recorded investment of troubled debt restructurings | $ 408,000 | 2,500,000 | |
Recorded investment of troubled debt restructurings that were nonaccruing | $ 190,000 | $ 2,500,000 |
LOANS - Risk Rating (Details)
LOANS - Risk Rating (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)grade | Dec. 31, 2020USD ($) | |
Loans by risk rating | ||
Number of grades utilized in internal loan rating system | grade | 10 | |
Total loans | $ 3,607,733 | $ 3,494,642 |
Commercial | ||
Loans by risk rating | ||
Total loans | 2,258,048 | 2,114,989 |
Commercial | Commercial real estate | ||
Loans by risk rating | ||
Total loans | 1,699,877 | 1,551,265 |
Commercial | Commercial real estate | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 1,645,871 | 1,524,105 |
Commercial | Commercial real estate | Loans rated 7, special mention | ||
Loans by risk rating | ||
Total loans | 33,953 | 14,674 |
Commercial | Commercial real estate | Loans rated 8, substandard | ||
Loans by risk rating | ||
Total loans | 20,053 | 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 | 136,563 | 99,331 |
Commercial | Commercial construction | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 136,563 | 99,331 |
Commercial | Commercial and industrial | ||
Loans by risk rating | ||
Total loans | 421,608 | 464,393 |
Commercial | Commercial and industrial | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 417,408 | 452,665 |
Commercial | Commercial and industrial | Loans rated 7, special mention | ||
Loans by risk rating | ||
Total loans | 85 | 3,122 |
Commercial | Commercial and industrial | Loans rated 8, substandard | ||
Loans by risk rating | ||
Total loans | 694 | 7,080 |
Commercial | Commercial and industrial | Loans rated 9, doubtful | ||
Loans by risk rating | ||
Total loans | $ 3,421 | $ 1,526 |
MORTGAGE LOAN SERVICING - Key A
MORTGAGE LOAN SERVICING - Key Assumptions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Unpaid Principal Balance | ||
Unpaid principal balances of mortgage loans serviced | $ 3,650 | $ 3,050 |
Prepayment speed | 9.40% | 14.30% |
Discount rate | 9.20% | 9.23% |
Default rate | 1.64% | 2.27% |
MORTGAGE LOAN SERVICING - Fair
MORTGAGE LOAN SERVICING - Fair value of MSR (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes to the fair value of Mortgage Servicing Rights | |||
Balance, beginning of period | $ 24,833 | $ 17,150 | $ 22,217 |
Additions | 13,815 | 14,415 | 1,174 |
Changes in fair value due to : | |||
Reductions from loans paid off during the period | (6,019) | (4,181) | (1,972) |
Changes in valuation inputs or assumptions | 5,639 | (2,551) | (4,269) |
Balance, end of period | 38,268 | 24,833 | 17,150 |
Fees and commissions, mortgage banking and servicing | $ 7,400 | $ 4,700 | $ 4,200 |
OTHER REAL ESTATE LOANS AND R_3
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)item | Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | |||
Gain on sale of real estate, net | $ (198,000) | $ (86,000) | $ (181,000) |
Net loss on sales of repossessed assets | (45,000) | 45,000 | 112,000 |
Operating expenses | (155,000) | 37,000 | 82,000 |
Expenses applicable to foreclosed and repossessed assets | $ (398,000) | $ (4,000) | $ 13,000 |
Number of real estate properties foreclosed and repossessed | item | 0 | 1 | |
Foreclosed and repossessed assets, residential real estate properties | $ 297,000 | ||
Foreclosed and repossessed assets, automobiles | $ 53,000 | 298,000 | |
Mortgage loans in the process of foreclosure | $ 2,900,000 | $ 4,300,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 79,240,000 | $ 74,720,000 | |
Less accumulated depreciation and amortization | (28,495,000) | (25,140,000) | |
Property and equipment, net | 50,745,000 | 49,580,000 | |
Depreciation and amortization of premises and equipment | 4,412,000 | 4,011,000 | $ 4,394,000 |
Net book value asset transfer to asset held for sale | 881,000 | 9,000,000 | |
Loss recognized on transfer of asset held for sale | (482,000) | ||
Fully depreciated property equipment | $ 17,700,000 | ||
Land | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 12,251,000 | 12,420,000 | |
Buildings and leasehold improvements | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 49,790,000 | 46,216,000 | |
Furniture, equipment and vehicles | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 16,665,000 | 14,719,000 | |
Fixed assets in process | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 534,000 | $ 1,365,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
GOODWILL AND INTANGIBLE ASSETS | ||||
Goodwill | $ 69,802 | $ 69,802 | $ 69,802 | |
Intangible assets | 3,164 | 4,370 | ||
Impairment recognized of goodwill and intangible assets | 0 | |||
Impairment of intangible assets | $ 0 | |||
HarborOne Mortgages. | ||||
GOODWILL AND INTANGIBLE ASSETS | ||||
Goodwill | 10,800 | 10,800 | ||
HarborOne Bank. | ||||
GOODWILL AND INTANGIBLE ASSETS | ||||
Goodwill | $ 59,000 | $ 59,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accumulated amortization and net amount of intangible assets | |||
Amortization | $ (1,206,000) | $ (1,665,000) | $ (2,344,000) |
Core deposit intangibles | |||
Gross amount of intangible assets | |||
Gross amount, beginning of period | 8,952,000 | 8,952,000 | |
Gross amount, end of period | 8,952,000 | 8,952,000 | 8,952,000 |
Accumulated amortization and net amount of intangible assets | |||
Accumulated amortization, beginning of period | (4,582,000) | (2,917,000) | |
Amortization | (1,206,000) | (1,665,000) | |
Accumulated amortization, end of period | (5,788,000) | (4,582,000) | $ (2,917,000) |
Net CDI, end of year | 3,164,000 | $ 4,370,000 | |
Estimated future amortization expense | |||
2022 | 893,000 | ||
2025 | $ 757,000 | ||
Weighted average original amortization period | 7 years 3 months 18 days |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 1,206,000 | $ 1,665,000 | $ 2,344,000 |
Non-compete intangible asset | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 4 years | ||
Amortization expense | $ 45,000 |
DEPOSITS - Summary of deposits
DEPOSITS - Summary of deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
DEPOSITS | ||
NOW and demand deposit accounts | $ 1,056,784 | $ 908,256 |
Regular savings and club accounts | 1,138,979 | 998,994 |
Money market deposit accounts | 858,970 | 866,661 |
Total non-certificate accounts | 3,054,733 | 2,773,911 |
Term certificate accounts greater than $250,000 | 108,426 | 135,190 |
Term certificate accounts less than or equal to $250,000 | 419,490 | 497,108 |
Brokered deposits | 100,000 | 100,000 |
Total certificate deposits, net | 627,916 | 732,298 |
Total deposits | 3,682,649 | 3,506,209 |
Total reciprocal deposits | $ 43,800 | $ 104,900 |
DEPOSITS - Maturity of deposits
DEPOSITS - Maturity of deposits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of certificate accounts by maturity | ||
Within 1 year | $ 553,190 | |
Over 1 year to 2 years | 36,763 | |
Over 2 years to 3 years | 14,171 | |
Over 3 years to 4 years | 20,778 | |
Over 4 years to 5 years | 3,243 | |
Total certificate deposits | 628,145 | |
Less unaccreted acquisition discount | (229) | |
Total certificate deposits, net | $ 627,916 | $ 732,298 |
Summary of certificate accounts by maturity | ||
Within 1 year | 0.46% | |
Over 1 year to 2 years | 0.75% | |
Over 2 years to 3 years | 1.01% | |
Over 3 years to 4 years | 0.88% | |
Over 4 years to 5 years | 0.72% | |
Total certificate deposits | 0.51% |
BORROWINGS - FHLB Advances (Det
BORROWINGS - FHLB Advances (Details) $ in Thousands | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Short-term borrowed funds | $ 35,000 | |
Scheduled Maturity | ||
2021 | 41,750 | |
2023 | $ 185 | 20,190 |
2024 | 13,400 | 10,000 |
2025 | 40,987 | 40,987 |
2026 and thereafter | 1,139 | 1,170 |
Total | 55,711 | 114,097 |
Redeemable at Call Date | ||
2021 | 101,750 | |
2022 | 40,000 | |
2023 | 185 | 190 |
2024 | 13,400 | 10,000 |
2025 | 987 | 987 |
2026 and thereafter | 1,139 | 1,170 |
Total | $ 55,711 | $ 114,097 |
Weighted Average Rate | ||
Short-term advances, weighted average rate | 0.42 | |
Weighted Average Rate | ||
2021 | 2.47% | |
2023 | 1.46% | 3.48% |
2024 | 1.39% | 1.68% |
2025 | 1.32% | 1.32% |
2026 and thereafter | 2.00% | 2.00% |
Total | 1.35% | 2.16% |
BORROWINGS - Others (Details)
BORROWINGS - Others (Details) - USD ($) | Sep. 01, 2023 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 30, 2018 |
Borrowed funds | |||||
Prepayment on FHLB borrowings | $ 20,000,000 | ||||
Prepayment penalties on Federal Home Loan Bank advances | $ 1,100,000 | $ 1,095,000 | |||
Amount outstanding | $ 0 | $ 0 | |||
Federal Reserve Bank of Boston | |||||
Borrowed funds | |||||
Percentage of carrying value pledged as collateral | 57.00% | ||||
Loans pledged for FHLB | $ 101,400,000 | 107,100,000 | |||
Federal Home Loan Bank Advances | |||||
Borrowed funds | |||||
Carrying value of the loans pledged as collateral | 1,220,000,000 | 1,250,000,000 | |||
Available borrowing capacity | 865,200,000 | ||||
Other Loans | |||||
Borrowed funds | |||||
Additional borrowing capacity | 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 | $ 841,000 | $ 967,000 | |||
Forecast | Subordinated Notes due 2028 | LIBOR | |||||
Borrowed funds | |||||
Basis points | 278.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current tax provision: | |||||||||||
Federal | $ 10,693 | $ 11,591 | $ 3,757 | ||||||||
State | 4,815 | 5,240 | 1,207 | ||||||||
Total current tax provision | 15,508 | 16,831 | 4,964 | ||||||||
Deferred tax benefit: | |||||||||||
Federal | 4,451 | (2,124) | (445) | ||||||||
State | 1,976 | (1,490) | (111) | ||||||||
Deferred tax benefit | 6,427 | (3,614) | (556) | ||||||||
Income tax provision | $ 3,807 | $ 4,907 | $ 5,645 | $ 7,576 | $ 3,283 | $ 4,561 | $ 3,668 | $ 1,705 | 21,935 | 13,217 | $ 4,408 |
Deferred tax liability for derivatives | $ 2,552 | $ 2,349 | $ 2,552 | $ 2,349 |
INCOME TAXES - Differences Betw
INCOME TAXES - Differences Between Federal Income Tax and Actual Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES | |||||||||||
Statutory tax rate (as a percent) | 21.00% | 21.00% | 21.00% | ||||||||
Differences between the statutory federal income tax and the actual income tax provision (benefit) | |||||||||||
Statutory federal tax provision | $ 16,895 | $ 12,182 | $ 4,762 | ||||||||
Increase (decrease) resulting from: | |||||||||||
State taxes, net of federal tax benefit | 5,365 | 2,962 | 866 | ||||||||
Bank-owned life insurance | (425) | (465) | (232) | ||||||||
Employee Stock Ownership Plan expenses | 280 | 56 | 172 | ||||||||
Tax exempt income | (22) | (104) | |||||||||
Reduction in uncertain federal tax positions | (712) | (1,864) | (1,586) | ||||||||
Other, net | 532 | 368 | 530 | ||||||||
Income tax provision | $ 3,807 | $ 4,907 | $ 5,645 | $ 7,576 | $ 3,283 | $ 4,561 | $ 3,668 | $ 1,705 | $ 21,935 | $ 13,217 | $ 4,408 |
INCOME TAXES - Deferred taxes (
INCOME TAXES - Deferred taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||||
Allowance for loan losses | $ 12,745 | $ 15,493 | ||
Employee benefit plans | 5,478 | 4,999 | ||
Mark-to-market loans | 1,469 | 2,387 | ||
Accrued expenses not deducted for tax purposes | 1,656 | 1,799 | ||
HarborOne Mortgage loan repurchase reserve | 999 | 743 | ||
Net unrealized loss on securities available for sale | 801 | |||
Other | 602 | |||
Total deferred tax assets | 23,750 | 25,421 | ||
Deferred tax liabilities: | ||||
Net unrealized gain on securities available for sale | (904) | |||
Derivatives | (2,552) | (2,349) | ||
Deferred income annuities | (1,706) | (1,580) | ||
Depreciation and amortization | (1,223) | (1,145) | ||
Deferred loan fees | (2,820) | (1,578) | ||
Mortgage servicing rights | (10,585) | (6,793) | ||
Core deposit intangible | (889) | (1,222) | ||
Other | (293) | |||
Total deferred tax liabilities | (19,775) | (15,864) | ||
Net deferred tax asset | $ 3,975 | $ 9,557 | $ 6,034 | $ 6,727 |
INCOME TAXES - Changes In Net D
INCOME TAXES - Changes In Net Deferred Tax Asset (Liability) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES | |||
Balance at beginning of year | $ 9,557 | $ 6,034 | $ 6,727 |
Deferred tax benefit | (6,427) | 3,614 | 556 |
Coastway deferred tax accounting / measurement period adjustment | (165) | ||
Change in cash flow hedge | (860) | 394 | |
Change in securities available for sale | 1,705 | (485) | (1,084) |
Balance at end of year | $ 3,975 | $ 9,557 | $ 6,034 |
INCOME TAXES - Carryforwards (D
INCOME TAXES - Carryforwards (Details) - USD ($) | Aug. 14, 2019 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2014 |
Operating Loss Carryforwards [Line Items] | ||||||||
Net deferred tax asset balance | $ 3,975,000 | $ 9,557,000 | $ 6,034,000 | $ 6,727,000 | ||||
Shares issued | 31,036,812 | |||||||
Temporary difference adjustment | 320,000 | |||||||
Charitable contribution carryforward expected to be used | 1,100,000 | |||||||
Request tax refunds | $ 3,200,000 | |||||||
Federal | Tax Year 2013 | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax refund | (603,000) | |||||||
Federal | Tax Year 2014 | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax refund | (826,000) | |||||||
Federal | Tax Year 2015 | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax refund | $ (1,300,000) | |||||||
State | Tax Year 2013 | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax refund | (211,000) | |||||||
State | Tax Year 2014 | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax refund | $ (320,000) | |||||||
State | Tax Year 2015 | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Tax refund | $ (40,000) | |||||||
HarborOne Foundation | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Shares issued | 385,450 | |||||||
Cash | $ 965,000 | |||||||
HarborOne Bank. | Maximum | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Net operating loss that can be used per year | 552,000 | |||||||
HarborOne Bank. | New Hampshire | HarborOne Mortgage | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Net operating loss | 1,100,000 | |||||||
Net deferred tax asset balance | $ 9,000 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized Tax Benefits, Beginning Balance | $ 1,162 | $ 3,052 | $ 3,769 |
Additions for tax positions for prior years | 247 | 168 | 1,471 |
Reductions for tax positions for prior years | (754) | (2,058) | (153) |
Settlements | (2,035) | ||
Unrecognized Tax Benefits, Ending Balance | $ 655 | $ 1,162 | $ 3,052 |
INCOME TAXES - Unrecognized t_2
INCOME TAXES - Unrecognized tax benefits, interest accrued, and range of reasonably possible changes (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Unrecognized tax benefits | |
Unrecognized tax benefits | $ 619 |
Accrued interest on unrecognized tax benefits | 36 |
Portion that, if recognized, would reduce tax expense and effective tax rate | 655 |
Reasonably possible reduction to the balance of unrecognized tax in subsequent year | 300 |
Portion that, if recognized, would reduce tax expense and effective tax rate in subsequent year | $ 300 |
OTHER COMMITMENTS AND CONTING_3
OTHER COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Agreements | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Employee agreement term | 5 years | ||
Total compensation to employees | $ 2,200,000 | ||
Compensation to employees | $ 1,700,000 | ||
Obligation to Repurchase Receivables Sold | Maximum | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Reserve | $ 1,300,000 | $ 1,300,000 | |
Other Liabilities And Accrued Expenses | Obligation to Repurchase Receivables Sold | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Reserve | 3,600,000 | 2,700,000 | |
Recourse liability | 0 | 0 | |
Commitments to grant residential real estate loans - HarborOne Mortgage | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Financial instruments committed contract amount | 142,781,000 | 485,428,000 | |
Commitments to grant other loans | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Financial instruments committed contract amount | 27,029,000 | 53,714,000 | |
Unadvanced funds on home equity lines of credit | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Financial instruments committed contract amount | 211,120,000 | 178,432,000 | |
Unadvanced funds on revolving lines of credit | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Financial instruments committed contract amount | 223,110,000 | 169,907,000 | |
Unadvanced funds on construction loans | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Financial instruments committed contract amount | $ 194,101,000 | $ 127,776,000 |
DERIVATIVES (Details)
DERIVATIVES (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)derivative | Dec. 31, 2020USD ($) | |
Derivative disclosures | ||
Fair value adjustment | $ 6,162,000 | $ 2,315,000 |
Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 22,120,000 | 51,943,000 |
Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | $ 19,403,000 | 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 | $ 86,134,000 | 485,428,000 |
Derivative loan commitments | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 1,527,000 | 12,623,000 |
Derivative loan commitments | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 95,000 | 341,000 |
Forward loan sale commitments | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | 96,000,000 | 356,500,000 |
Forward loan sale commitments | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 56,000 | |
Forward loan sale commitments | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | $ 94,000 | 2,204,000 |
Interest rate swaps | Cash Flow Hedging | ||
Derivative disclosures | ||
Number of Derivative Instruments Held | derivative | 1 | |
Maturity term | 3 years 3 months 7 days | |
Fixed rate | 0.67% | |
Swap receive rate | 0.12% | |
Amount to be reclassified in next 12 months | $ 146,000 | |
Notional Amount | 100,000,000 | |
Fair Value, Liabilities | 1,700,000 | |
Interest rate swaps | Mortgage-backed securities | ||
Derivative disclosures | ||
Securities pledged to secure the Company's liability for the offsetting interest rate swaps | 13,900,000 | |
Fair value adjustment | (430,000) | |
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 | 1,663,000 | |
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 | 740,235,000 | 867,728,000 |
Interest rate swaps | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 18,874,000 | 39,320,000 |
Interest rate swaps | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 19,214,000 | 39,320,000 |
Risk Participation Agreements | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | $ 139,109,000 | $ 132,379,000 |
DERIVATIVES - Net gain and loss
DERIVATIVES - Net gain and losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative [Line Items] | |||
Gain (loss) in OCI on derivatives (effective portion), net of tax | $ (3,822) | $ 705 | $ 3,838 |
Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Gain (loss) in OCI on derivatives (effective portion), net of tax | 2,210 | (1,013) | |
Loss reclassified from OCI into interest income or interest expense (effective portion) | (513) | (46) | |
Not designated as hedging instruments | |||
Derivative [Line Items] | |||
Total | (9,115) | 8,999 | 448 |
Mortgage banking income | Not designated as hedging instruments | Derivative loan commitments | |||
Derivative [Line Items] | |||
Total | (10,850) | 11,072 | 62 |
Mortgage banking income | Not designated as hedging instruments | Forward loan sale commitments | |||
Derivative [Line Items] | |||
Total | 2,166 | $ (2,073) | $ 386 |
Other income | |||
Derivative [Line Items] | |||
Total | $ (431) |
OPERATING LEASE RIGHT-OF-USE _3
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Operating lease ROU assets | $ 26,800 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets. |
Operating lease liabilities | $ 28,370 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent |
Weighted-average remaining lease term (years) | 16 years 9 months 7 days |
Minimum | |
Lessee, Operating Lease, Remaining Lease Term | 3 months |
Maximum | |
Lessee, Operating Lease, Remaining Lease Term | 36 years 1 month 6 days |
OPERATING LEASE RIGHT-OF-USE _4
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | $ 3,139 | $ 2,452 |
2022 | 2,976 | 2,239 |
2023 | 2,493 | 1,847 |
2024 | 2,369 | 1,644 |
2025 | 2,338 | 1,684 |
Thereafter | 21,086 | 13,134 |
Total lease payments | 34,401 | $ 23,000 |
Imputed interest | (6,031) | |
Total present value of operating lease liabilities | $ 28,370 |
OPERATING LEASE RIGHT-OF-USE _5
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES - Weighted average discount and remaining lease term (Details) | Dec. 31, 2021 |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | |
Weighted-average discount rate | 1.94% |
Weighted-average remaining lease term (years) | 16 years 9 months 7 days |
OPERATING LEASE RIGHT-OF-USE _6
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES - Lease expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | ||
Operating lease expense | $ 2,737 | |
Short-term lease expense | 162 | |
Total lease expense | 2,899 | $ 2,800 |
Other Information | ||
Cash paid for amounts included in the measurement of lease liabilities-operating cash flows for operating leases | 2,861 | |
Operating Lease - Operating cash flows (Liability reduction) | 2,370 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 29,718 |
COMPENSATION AND BENEFIT PLAN_2
COMPENSATION AND BENEFIT PLANS (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)itemshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | |
Defined Benefit Plan Disclosure [Line Items] | |||
Contributions expenses | $ 1,900,000 | $ 1,800,000 | $ 2,500,000 |
Allocated shares | shares | 939,825 | 639,525 | |
Shares committed to be allocated | shares | 230,722 | 230,723 | 230,724 |
Unallocated shares | shares | 3,371,840 | 3,602,562 | |
Total shares | shares | 4,542,387 | 4,472,810 | |
Fair value of unallocated shares, end of period | $ 50,038,115 | $ 39,123,823 | |
ESOP compensation expense | $ 3,170,000 | 2,103,000 | $ 2,655,000 |
ESOP restoration benefit payable period | six months and a day | ||
Restoration accrual | $ 656,000 | 487,000 | $ 210,000 |
Through 2035 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Shares committed to be allocated | shares | 230,723 | ||
From 2036 to 2038 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Shares committed to be allocated | shares | 124,148 | ||
HarborOne Bank. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employee compensation the bank contributed (as a percent) | 5.00% | 9.30% | |
Employee's compensation in excess of social security wage match (as a percent) | 5.70% | ||
HarborOne Mortgages. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of matched contribution | 50.00% | ||
Employee contributions matched 50% (as a percent) | 4.00% | ||
Maximum amount employer will match | $ 0 | ||
Maximum | HarborOne Mortgages. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Maximum amount employer will match | $ 2,000 | ||
Split-dollar Life Insurance Arrangements | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expense amount | 0 | 21,000 | 38,000 |
Split-dollar Life Insurance Arrangements | Other Liabilities And Accrued Expenses | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer obligation | $ 352,000 | 352,000 | |
Deferred Compensation Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of executive officers | item | 1 | ||
Interest rate (as a percent) | 1.50% | ||
Expense amount | $ 34,000 | 32,000 | 31,000 |
Eligible age for medical insurance plan | 65 years | ||
Deferred Compensation Plan | Other Liabilities And Accrued Expenses | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer obligation | $ 419,000 | 385,000 | 353,000 |
Supplemental medical and prescription drug | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of executive officers | item | 2 | ||
Expense amount | $ 36,000 | 47,000 | 66,000 |
Supplemental medical and prescription drug | Other Liabilities And Accrued Expenses | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer obligation | 380,000 | 344,000 | 297,000 |
Management Incentive Program | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expense amount | 4,800,000 | 4,800,000 | 1,800,000 |
Supplemental Retirement Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Contributions expenses | $ 1,200,000 | 955,000 | 1,800,000 |
Number of SERP agreements | item | 2 | ||
Supplemental Retirement Plans | Other Liabilities And Accrued Expenses | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer obligation | $ 9,200,000 | 8,000,000 | 7,100,000 |
Supplemental Retirement Plans | Executive | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of executive officers | item | 2 | ||
Long-Term Incentive Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expense amount | 20,000 | 56,000 | |
Long-Term Incentive Plan | Other Liabilities And Accrued Expenses | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer obligation | 437,000 | 838,000 | |
Long-Term Incentive Plan | Executive | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expense amount | (82,000) | ||
Post-Retirement Life Insurance | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expense amount | $ 27,000 | 47,000 | 17,000 |
Post-Retirement Life Insurance | Other Liabilities And Accrued Expenses | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer obligation | 261,000 | $ 234,000 | $ 186,000 |
Directors Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefit plan liability | $ 2,000,000 | ||
Directors Retirement Plan | Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Vesting period | 6 years |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 29, 2020 | |
STOCK-BASED COMPENSATION | ||||
Stock based compensation expense | $ 3.8 | $ 3.7 | $ 4.8 | |
2020 Equity Plan | ||||
STOCK-BASED COMPENSATION | ||||
Shares reserved for issuance | 4,500,000 | |||
Stock Options | ||||
STOCK-BASED COMPENSATION | ||||
Options granted | 583,565 | |||
Vesting period (years) | 3 years | |||
Term (years) | 10 years | 10 years | ||
Weighted average expected volatility | 22.09% | |||
Expected life (years) | 6 years | |||
Weighted average risk free interest rate | 2.46% | |||
Weighted average fair value per option | $ 2.49 | |||
Performance Restricted Stock Units | ||||
STOCK-BASED COMPENSATION | ||||
Percentage of target considered as performance assumption | 150.00% | |||
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 - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2019 | |
Stock Option Awards | ||
Balance at the beginning of the period | 2,106,403 | |
Granted | 583,565 | |
Exercised | (62,840) | |
Balance at the end of the period | 2,043,563 | |
Exercisable at end of the period | 1,855,156 | |
Unrecognized cost inclusive of directors' awards | $ 94,667 | |
Weighted average remaining recognition period (years) | 3 months 29 days | |
Weighted Average Exercise Price | ||
Balance at the beginning of the period | $ 9.86 | |
Exercised | 10.23 | |
Balance at the end of the period | 9.85 | |
Exercisable at end of the period | $ 9.93 | |
Weighted Average Remaining Contractual Term (years) | ||
Weighted average remaining contractual term, balance (years) | 6 years 10 days | |
Exercisable at end of the period | 5 years 10 months 28 days | |
Stock Option Awards, Nonvested | ||
Balance at the beginning of the period | 473,445 | |
Granted | 583,565 | |
Vested | (285,038) | |
Balance at the end of the period | 188,407 | |
Weighted Average Exercise Price, Nonvested | ||
Balance at the beginning of the period | $ 2.55 | |
Vested | 2.60 | |
Balance at the end of the period | $ 2.48 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock and Performance Restricted Stock Units (Details) | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Restricted Stock Awards | |
Outstanding Restricted Stock Awards | |
Non-vested stock awards, beginning balance | shares | 384,692 |
Vested | shares | (204,082) |
Granted | shares | 196,377 |
Forfeited | shares | (10,205) |
Non-vested stock awards, ending balance | shares | 366,782 |
Unrecognized cost | $ | $ 2,812,633 |
Weighted average remaining recognition period (years) | 1 year 6 months 14 days |
Weighted Average Grant Price | |
Non-vested stock awards, beginning balance | $ / shares | $ 9.33 |
Vested | $ / shares | 9.34 |
Granted | $ / shares | 12.05 |
Forfeited | $ / shares | 9.71 |
Non-vested stock awards, ending balance | $ / shares | $ 10.78 |
Performance Restricted Stock Units | |
Outstanding Restricted Stock Awards | |
Granted | shares | 127,599 |
Non-vested stock awards, ending balance | shares | 127,599 |
Unrecognized cost | $ | $ 1,099,474 |
Weighted average remaining recognition period (years) | 2 years 2 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) | 12 Months Ended | |||
Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | Sep. 17, 2021shares | |
Compliance with Regulatory Capital Requirements under Banking Regulations | ||||
Common equity Tier 1 capital conversation buffer ratio | 2.5 | |||
Applicable capital conversation buffer ratio | 2.5 | |||
Number of previous years net income is retained | 2 years | |||
Common equity Tier 1 to risk-weighted assets | ||||
Actual, Capital amount | $ 608,804,000 | $ 621,153,000 | ||
Actual, Ratio | 16.4 | 17.7 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 167,475,000 | $ 158,050,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 4.5 | 4.5 | ||
Tier 1 capital to risk weighted assets | ||||
Actual, Capital amount | $ 608,804,000 | $ 621,153,000 | ||
Actual, Ratio | 16.4 | 17.7 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 223,300,000 | $ 210,733,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 6 | 6 | ||
Total capital to risk-weighted assets | ||||
Actual, Capital amount | $ 689,181,000 | $ 700,197,000 | ||
Actual, Ratio | 18.5 | 19.9 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 297,733,000 | $ 280,978,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 8 | 8 | ||
Tier 1 capital to average assets | ||||
Actual, Capital amount | $ 608,804,000 | $ 621,153,000 | ||
Actual, Ratio | 13.6 | 14.5 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 179,710,000 | $ 171,578,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 4 | 4 | ||
Preferred Stock | ||||
Preferred stock, shares authorized | shares | 1,000,000 | 1,000,000 | ||
Preferred Stock, Par Value Per Share | $ / shares | $ 0 | $ 0 | ||
Preferred Stock, shares issued | shares | 0 | 0 | ||
Preferred Stock, shares outstanding | shares | 0 | 0 | ||
Treasury Stock | ||||
Treasury stock, additional shares acquired | shares | 42,925 | |||
Treasury stock additional shares acquired, average cost per share | $ / shares | $ 14.27 | |||
Treasury stock, additional shares acquired, value | $ 613,000 | |||
Treasury stock purchased (in shares) | shares | 1,533,500 | |||
Treasury stock acquired, average cost per share | $ / shares | $ 10.29 | |||
Total treasury stock | $ 69,215,000 | $ 15,923,000 | $ 721,000 | |
Share Repurchase Programs | ||||
Treasury Stock | ||||
Treasury stock purchased (in shares) | shares | 5,021,067 | |||
Treasury stock acquired, average cost per share | $ / shares | $ 13.68 | |||
Total treasury stock | $ 68,600,000 | |||
Third Share Repurchase Program | ||||
Treasury Stock | ||||
Shares available for repurchase | shares | 2,668,159 | |||
Authorized percentage of outstanding shares | 5.00% | |||
Treasury stock purchased (in shares) | shares | 800,364 | |||
Treasury stock acquired, average cost per share | $ / shares | $ 14.55 | |||
HarborOne Bank. | ||||
Common equity Tier 1 to risk-weighted assets | ||||
Actual, Capital amount | $ 485,239,000 | $ 506,822,000 | ||
Actual, Ratio | 13.1 | 14.4 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 166,660,000 | $ 158,081,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 4.5 | 4.5 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 240,731,000 | $ 228,339,000 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 6.5 | 6.5 | ||
Tier 1 capital to risk weighted assets | ||||
Actual, Capital amount | $ 485,239,000 | $ 506,822,000 | ||
Actual, Ratio | 13.1 | 14.4 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 222,214,000 | $ 210,775,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 6 | 6 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 296,285,000 | $ 281,033,000 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 8 | 8 | ||
Total capital to risk-weighted assets | ||||
Actual, Capital amount | $ 530,616,000 | $ 550,875,000 | ||
Actual, Ratio | 14.3 | 15.7 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 296,285,000 | $ 281,033,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 8 | 8 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 370,356,000 | $ 351,291,000 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 10 | 10 | ||
Tier 1 capital to average assets | ||||
Actual, Capital amount | $ 485,239,000 | $ 506,822,000 | ||
Actual, Ratio | 10.9 | 11.8 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 178,279,000 | $ 171,501,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 4 | 4 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 222,849,000 | $ 214,377,000 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 5 | 5 |
COMPREHENSIVE INCOME (LOSS) (De
COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Components of AOCI | ||
Total accumulated other comprehensive income (loss) | $ (1,637) | $ 2,185 |
Cash flow hedge | ||
Components of AOCI | ||
Net unrealized gain (loss) | 1,663 | (1,407) |
Related tax effect | (466) | 394 |
Total accumulated other comprehensive income (loss) | 1,197 | (1,013) |
Securities available for sale | ||
Components of AOCI | ||
Net unrealized gain (loss) | (3,635) | 4,102 |
Related tax effect | 801 | (904) |
Total accumulated other comprehensive income (loss) | $ (2,834) | $ 3,198 |
COMPREHENSIVE INCOME (LOSS) - C
COMPREHENSIVE INCOME (LOSS) - Changes in AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | $ 696,314 | $ 665,794 | $ 357,574 |
Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale | 522 | ||
Reclassification adjustment for net realized gains | (241) | (2,533) | (1,344) |
Balance at end of period | 679,261 | 696,314 | 665,794 |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | 2,185 | 1,480 | (2,358) |
Other comprehensive income (loss) before reclassifications | (4,939) | 2,761 | |
Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale | 522 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 272 | (2,487) | |
Net current period other comprehensive income (loss) | (4,667) | 796 | |
Related tax effect | 845 | (91) | |
Balance at end of period | (1,637) | 2,185 | 1,480 |
Securities available for sale | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | 3,198 | 1,480 | (2,358) |
Other comprehensive income (loss) before reclassifications | (7,496) | 4,214 | 6,266 |
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) | (2,533) | (1,344) |
Net current period other comprehensive income (loss) | (7,737) | 2,203 | 4,922 |
Related tax effect | 1,705 | (485) | (1,084) |
Balance at end of period | (2,834) | 3,198 | $ 1,480 |
Cash flow hedge | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (1,013) | ||
Other comprehensive income (loss) before reclassifications | 2,557 | (1,453) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 513 | 46 | |
Net current period other comprehensive income (loss) | 3,070 | (1,407) | |
Related tax effect | (860) | 394 | |
Balance at end of period | $ 1,197 | $ (1,013) |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Assets and liabilities measured on recurring basis | ||
Fair Value | $ 394,036,000 | $ 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 | $ 394,036,000 | $ 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 | 394,036,000 | 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) | 12 Months Ended | |||
Dec. 31, 2021USD ($)item | Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Assets and liabilities measured on recurring basis | ||||
Number of transfers | item | 0 | 0 | ||
Assets | ||||
Securities available for sale, at fair value | $ 394,036,000 | $ 276,498,000 | ||
Loans held for sale | 45,642,000 | 208,612,000 | ||
Mortgage servicing rights | 38,268,000 | 24,833,000 | $ 17,150,000 | $ 22,217,000 |
Recurring | ||||
Assets | ||||
Securities available for sale, at fair value | 394,036,000 | 276,498,000 | ||
Loans held for sale | 45,642,000 | 208,612,000 | ||
Mortgage servicing rights | 38,268,000 | 24,833,000 | ||
Total assets | 500,066,000 | 561,886,000 | ||
Liabilities | ||||
Total liabilities | 19,403,000 | 43,272,000 | ||
Recurring | Derivative loan commitments | ||||
Assets | ||||
Derivative assets | 1,527,000 | 12,623,000 | ||
Liabilities | ||||
Derivative liabilities | 95,000 | 341,000 | ||
Recurring | Forward loan sale commitments | ||||
Assets | ||||
Derivative assets | 56,000 | |||
Liabilities | ||||
Derivative liabilities | 94,000 | 2,204,000 | ||
Recurring | Interest rate swaps | ||||
Assets | ||||
Derivative assets | 18,874,000 | 39,320,000 | ||
Liabilities | ||||
Derivative liabilities | 19,214,000 | 39,320,000 | ||
Recurring | Interest rate management agreement | ||||
Assets | ||||
Derivative assets | 1,663,000 | |||
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 | 394,036,000 | 276,498,000 | ||
Loans held for sale | 45,642,000 | 208,612,000 | ||
Mortgage servicing rights | 38,268,000 | 24,833,000 | ||
Total assets | 498,483,000 | 549,263,000 | ||
Liabilities | ||||
Total liabilities | 19,214,000 | 40,727,000 | ||
Recurring | Level 2 | Interest rate swaps | ||||
Assets | ||||
Derivative assets | 18,874,000 | 39,320,000 | ||
Liabilities | ||||
Derivative liabilities | 19,214,000 | 39,320,000 | ||
Recurring | Level 2 | Interest rate management agreement | ||||
Assets | ||||
Derivative assets | 1,663,000 | |||
Liabilities | ||||
Derivative liabilities | 1,407,000 | |||
Recurring | Level 3 | ||||
Assets | ||||
Securities available for sale, at fair value | 0 | 0 | ||
Total assets | 1,583,000 | 12,623,000 | ||
Liabilities | ||||
Total liabilities | 189,000 | 2,545,000 | ||
Recurring | Level 3 | Derivative loan commitments | ||||
Assets | ||||
Derivative assets | 1,527,000 | 12,623,000 | ||
Liabilities | ||||
Derivative liabilities | 95,000 | 341,000 | ||
Recurring | Level 3 | Forward loan sale commitments | ||||
Assets | ||||
Derivative assets | 56,000 | |||
Liabilities | ||||
Derivative liabilities | $ 94,000 | $ 2,204,000 |
FAIR VALUE OF ASSETS AND LIAB_5
FAIR VALUE OF ASSETS AND LIABILITIES - Level 3 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in Level 3 liabilities | |||
Balance at beginning of period | $ (332) | $ (630) | |
Total gains (losses) included in net income | 298 | ||
Balance at end of period | (332) | ||
Changes in unrealized losses relating to instruments at period end | (332) | ||
Derivative and Forward Loan Sale Commitments | |||
Changes in Level 3 assets | |||
Balance at beginning of period | $ 12,623 | 1,411 | 1,261 |
Total gains (losses) included in net income | (11,040) | 11,212 | 150 |
Balance at end of period | 1,583 | 12,623 | 1,411 |
Changes in unrealized gains relating to instruments at period end | 1,583 | 12,623 | 1,411 |
Changes in Level 3 liabilities | |||
Balance at beginning of period | (2,545) | (332) | |
Total gains (losses) included in net income | 2,356 | (2,213) | |
Balance at end of period | (189) | (2,545) | $ (332) |
Changes in unrealized losses relating to instruments at period end | $ (189) | $ (2,545) |
FAIR VALUE OF ASSETS AND LIAB_6
FAIR VALUE OF ASSETS AND LIABILITIES - Impaired Loans (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Assets and liabilities measured on non-recurring basis | ||
Total Losses | $ 6,162,000 | $ 2,315,000 |
Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Total Losses | 7,000 | 118,000 |
Commercial real estate | ||
Assets and liabilities measured on non-recurring basis | ||
Total Losses | 5,239,000 | 1,177,000 |
Commercial and industrial | ||
Assets and liabilities measured on non-recurring basis | ||
Total Losses | 916,000 | 1,020,000 |
Level 3 | Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | 1,125,000 | 919,000 |
Level 3 | Commercial real estate | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | 17,562,000 | 7,242,000 |
Level 3 | Commercial and industrial | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | $ 2,928,000 | |
Level 3 | Other real estate owned | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | $ 298,000 | |
Level 3 | Weighted Average Rate | Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 15 | |
Level 3 | Weighted Average Rate | Commercial real estate | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 23 | 27 |
Level 3 | Weighted Average Rate | Commercial and industrial | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 49 | |
Level 3 | Discount | Minimum | Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0 | |
Level 3 | Discount | Minimum | Commercial real estate | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0 | |
Level 3 | Discount | Minimum | Commercial and industrial | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0 | |
Level 3 | Discount | Maximum | Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 20 | |
Level 3 | Discount | Maximum | Commercial real estate | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 50 | |
Level 3 | Discount | Maximum | Commercial and industrial | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 90 | |
Non-recurring | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | $ 0 | $ 0 |
Non-recurring | Level 3 | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | 21,668,000 | 8,756,000 |
Non-recurring | Level 3 | Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | 1,125,000 | 919,000 |
Non-recurring | Level 3 | Commercial real estate | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | 17,562,000 | 3,034,000 |
Non-recurring | Level 3 | Commercial and industrial | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | 2,928,000 | 4,208,000 |
Non-recurring | Level 3 | Other real estate owned and repossessed assets | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | $ 53,000 | $ 595,000 |
FAIR VALUE OF ASSETS AND LIAB_7
FAIR VALUE OF ASSETS AND LIABILITIES - Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financial assets: | ||
Cash and cash equivalents | $ 194,719 | $ 205,870 |
Securities available for sale, at fair value | 394,036 | 276,498 |
Federal Home Loan Bank stock | 5,931 | 8,738 |
Loans held for sale | 45,642 | 208,612 |
Loans, net | 3,562,356 | 3,439,247 |
Retirement plan annuities | 14,174 | 13,747 |
Accrued interest receivable | 10,624 | 11,874 |
Financial liabilities: | ||
Deposits | 3,682,649 | 3,506,209 |
Subordinated debt | 34,159 | 34,033 |
Mortgagors' escrow accounts | 8,459 | 7,736 |
Accrued interest payable | 1,083 | 1,262 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 194,719 | 205,870 |
Securities available for sale, at fair value | 394,036 | 276,498 |
Federal Home Loan Bank stock | 5,931 | 8,738 |
Loans held for sale | 45,642 | 208,612 |
Loans, net | 3,562,356 | 3,439,247 |
Retirement plan annuities | 14,174 | 13,747 |
Accrued interest receivable | 10,624 | 11,874 |
Financial liabilities: | ||
Deposits | 3,682,649 | 3,506,209 |
Borrowed funds | 55,711 | 149,097 |
Subordinated debt | 34,159 | 34,033 |
Mortgagors' escrow accounts | 8,459 | 7,736 |
Accrued interest payable | 1,083 | 1,262 |
Carrying Amount | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 1,527 | 12,623 |
Liabilities | 95 | 341 |
Carrying Amount | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Assets | 1,663 | |
Liabilities | 1,407 | |
Carrying Amount | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 18,874 | 39,320 |
Liabilities | 19,214 | 39,320 |
Carrying Amount | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 56 | |
Liabilities | 94 | 2,204 |
Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 194,719 | 205,870 |
Securities available for sale, at fair value | 394,036 | 276,498 |
Loans held for sale | 45,642 | 208,612 |
Loans, net | 3,558,934 | 3,473,751 |
Retirement plan annuities | 14,174 | 13,747 |
Accrued interest receivable | 10,624 | 11,874 |
Financial liabilities: | ||
Deposits | 3,683,465 | 3,509,996 |
Borrowed funds | 55,765 | 152,373 |
Subordinated debt | 35,790 | 34,799 |
Mortgagors' escrow accounts | 8,459 | 7,736 |
Accrued interest payable | 1,083 | 1,262 |
Fair Value | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 1,527 | 12,623 |
Liabilities | 95 | 341 |
Fair Value | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Assets | 1,663 | |
Liabilities | 1,407 | |
Fair Value | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 18,874 | 39,320 |
Liabilities | 19,214 | 39,320 |
Fair Value | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 56 | |
Liabilities | 94 | 2,204 |
Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 194,719 | 205,870 |
Fair Value | Level 2 | ||
Financial assets: | ||
Securities available for sale, at fair value | 394,036 | 276,498 |
Loans held for sale | 45,642 | 208,612 |
Accrued interest receivable | 10,624 | 11,874 |
Financial liabilities: | ||
Borrowed funds | 55,765 | 152,373 |
Accrued interest payable | 1,083 | 1,262 |
Fair Value | Level 2 | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Assets | 1,663 | |
Liabilities | 1,407 | |
Fair Value | Level 2 | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 18,874 | 39,320 |
Liabilities | 19,214 | 39,320 |
Fair Value | Level 3 | ||
Financial assets: | ||
Loans, net | 3,558,934 | 3,473,751 |
Retirement plan annuities | 14,174 | 13,747 |
Financial liabilities: | ||
Deposits | 3,683,465 | 3,509,996 |
Subordinated debt | 35,790 | 34,799 |
Mortgagors' escrow accounts | 8,459 | 7,736 |
Fair Value | Level 3 | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 1,527 | 12,623 |
Liabilities | 95 | 341 |
Fair Value | Level 3 | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 56 | |
Liabilities | $ 94 | $ 2,204 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) $ / shares in Units, $ in Thousands | Aug. 14, 2019 | Dec. 31, 2021$ / sharesshares | Sep. 30, 2021$ / sharesshares | Jun. 30, 2021$ / sharesshares | Mar. 31, 2021$ / sharesshares | Dec. 31, 2020$ / sharesshares | Sep. 30, 2020$ / sharesshares | Jun. 30, 2020$ / sharesshares | Mar. 31, 2020$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares |
EARNINGS PER SHARE | ||||||||||||
Net income available to common stockholders (in thousands) | $ | $ 58,517 | $ 44,792 | $ 18,268 | |||||||||
Average number of common shares outstanding | 54,454,113 | 58,252,140 | 58,451,387 | |||||||||
Less: Average unallocated ESOP shares and non-vested restricted shares | (3,707,811) | (3,938,772) | (2,719,750) | |||||||||
Weighted average common shares outstanding used to calculate basic earnings per common share | 48,918,539 | 49,801,123 | 51,778,293 | 52,537,409 | 53,947,868 | 54,465,339 | 54,450,146 | 54,392,465 | 50,746,302 | 54,313,368 | 55,731,637 | |
Dilutive effect of share-based compensation | 776,833 | 6,467 | 139 | |||||||||
Weighted average common shares outstanding used to calculate diluted earnings per common share | 49,828,379 | 50,663,415 | 52,650,071 | 53,000,830 | 53,973,737 | 54,465,339 | 54,450,146 | 54,392,465 | 51,523,135 | 54,319,835 | 55,731,776 | |
Basic | $ / shares | $ 0.26 | $ 0.25 | $ 0.28 | $ 0.37 | $ 0.33 | $ 0.22 | $ 0.19 | $ 0.09 | $ 1.15 | $ 0.82 | $ 0.33 | |
Diluted | $ / shares | $ 0.25 | $ 0.24 | $ 0.27 | $ 0.37 | $ 0.33 | $ 0.22 | $ 0.19 | $ 0.09 | $ 1.14 | $ 0.82 | $ 0.33 | |
Stock conversion ratio | 1.795431 | |||||||||||
Stock Options | ||||||||||||
EARNINGS PER SHARE | ||||||||||||
Antidilutive securities excluded from computation of earnings per share | 2,106,403 | 2,169,243 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Net interest and dividend income (expense) | $ 33,985 | $ 32,803 | $ 32,530 | $ 32,052 | $ 32,750 | $ 31,169 | $ 29,447 | $ 26,700 | $ 131,370 | $ 120,066 | $ 109,062 |
Provision (credit) for loan losses | (1,436) | (1,627) | (4,286) | 91 | 7,608 | 13,454 | 10,004 | 3,749 | (7,258) | 34,815 | 4,747 |
Net interest and dividend income, after provision (credit) for loan losses | 138,628 | 85,251 | 104,315 | ||||||||
Mortgage banking income: | |||||||||||
Gain on sale of mortgage loans | 61,883 | 105,469 | 33,557 | ||||||||
Changes in mortgage servicing rights fair value | (380) | (6,732) | (6,241) | ||||||||
Other | 15,831 | 15,172 | 9,459 | ||||||||
Total mortgage banking income | 77,334 | 113,909 | 36,775 | ||||||||
Other noninterest income (loss) | 23,352 | 24,771 | 23,320 | ||||||||
Total noninterest income | 19,164 | 22,010 | 21,703 | 37,809 | 37,027 | 44,439 | 38,577 | 18,638 | 100,686 | 138,680 | 60,095 |
Noninterest expense | 38,188 | 39,274 | 38,598 | 42,802 | 41,286 | 45,700 | 43,777 | 35,160 | 158,862 | 165,922 | 141,734 |
Income (loss) before income taxes | 80,452 | 58,009 | 22,676 | ||||||||
Income tax benefit | 3,807 | 4,907 | 5,645 | 7,576 | 3,283 | 4,561 | 3,668 | 1,705 | 21,935 | 13,217 | 4,408 |
Net income | 12,590 | $ 12,259 | $ 14,276 | $ 19,392 | 17,600 | $ 11,893 | $ 10,575 | $ 4,724 | 58,517 | 44,792 | 18,268 |
Total assets at period end | 4,553,405 | 4,483,615 | 4,553,405 | 4,483,615 | 4,058,921 | ||||||
Goodwill at period end | 69,802 | 69,802 | 69,802 | 69,802 | 69,802 | ||||||
Operating Segments | HarborOne Bank | |||||||||||
Segment Reporting Information | |||||||||||
Net interest and dividend income (expense) | 129,785 | 118,217 | 109,106 | ||||||||
Provision (credit) for loan losses | (7,258) | 34,815 | 4,747 | ||||||||
Net interest and dividend income, after provision (credit) for loan losses | 137,043 | 83,402 | 104,359 | ||||||||
Mortgage banking income: | |||||||||||
Gain on sale of mortgage loans | 1 | ||||||||||
Intersegment gain (loss) | (3,665) | (3,148) | (1,183) | ||||||||
Changes in mortgage servicing rights fair value | (137) | (2,376) | (1,431) | ||||||||
Other | 1,090 | 1,360 | 1,494 | ||||||||
Total mortgage banking income | (2,712) | (4,164) | (1,119) | ||||||||
Other noninterest income (loss) | 23,308 | 24,909 | 23,365 | ||||||||
Total noninterest income | 20,596 | 20,745 | 22,246 | ||||||||
Noninterest expense | 102,557 | 98,354 | 100,688 | ||||||||
Income (loss) before income taxes | 55,082 | 5,793 | 25,917 | ||||||||
Income tax benefit | 14,933 | 527 | 5,019 | ||||||||
Net income | 40,149 | 5,266 | 20,898 | ||||||||
Total assets at period end | 4,481,509 | 4,460,164 | 4,481,509 | 4,460,164 | 3,925,328 | ||||||
Goodwill at period end | 59,042 | 59,042 | 59,042 | 59,042 | 59,042 | ||||||
Operating Segments | HarborOne Mortgage. | |||||||||||
Segment Reporting Information | |||||||||||
Net interest and dividend income (expense) | 3,468 | 3,235 | 1,064 | ||||||||
Net interest and dividend income, after provision (credit) for loan losses | 3,468 | 3,235 | 1,064 | ||||||||
Mortgage banking income: | |||||||||||
Gain on sale of mortgage loans | 61,883 | 105,469 | 33,556 | ||||||||
Intersegment gain (loss) | 4,434 | 3,148 | 1,183 | ||||||||
Changes in mortgage servicing rights fair value | (243) | (4,356) | (4,810) | ||||||||
Other | 14,741 | 13,812 | 7,965 | ||||||||
Total mortgage banking income | 80,815 | 118,073 | 37,894 | ||||||||
Other noninterest income (loss) | 44 | (138) | (45) | ||||||||
Total noninterest income | 80,859 | 117,935 | 37,849 | ||||||||
Noninterest expense | 55,012 | 66,393 | 38,876 | ||||||||
Income (loss) before income taxes | 29,315 | 54,777 | 37 | ||||||||
Income tax benefit | 7,569 | 12,964 | (77) | ||||||||
Net income | 21,746 | 41,813 | 114 | ||||||||
Total assets at period end | 173,545 | 312,194 | 173,545 | 312,194 | 165,863 | ||||||
Goodwill at period end | $ 10,760 | $ 10,760 | $ 10,760 | $ 10,760 | $ 10,760 |
CONDENSED FINANCIAL STATEMENT_3
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||||
Cash and due from banks | $ 35,549 | $ 31,777 | ||
Other assets | 73,038 | 81,899 | ||
Total assets | 4,553,405 | 4,483,615 | $ 4,058,921 | |
Liabilities and Stockholders' Equity | ||||
Subordinated debt | 34,159 | 34,033 | ||
Other liabilities and accrued expenses | 92,083 | 88,964 | ||
Stockholders' equity | 679,261 | 696,314 | $ 665,794 | $ 357,574 |
Total liabilities and stockholders' equity | 4,553,405 | 4,483,615 | ||
Parent Company | Reportable Legal Entities | ||||
Assets | ||||
Cash and due from banks | 131,033 | 118,265 | ||
Investment in common stock of HarborOne Bank | 555,695 | 581,982 | ||
Loan receivable - ESOP | 30,740 | 32,190 | ||
Due from subsidiary | 612 | |||
Other assets | 637 | 657 | ||
Total assets | 718,105 | 733,706 | ||
Liabilities and Stockholders' Equity | ||||
Subordinated debt | 34,159 | 34,033 | ||
Other liabilities and accrued expenses | 4,685 | 3,359 | ||
Stockholders' equity | 679,261 | 696,314 | ||
Total liabilities and stockholders' equity | $ 718,105 | $ 733,706 |
CONDENSED FINANCIAL STATEMENT_4
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY - Statement Of Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Net Income | |||||||||||
Total interest and dividend income | $ 36,353 | $ 35,808 | $ 35,887 | $ 35,847 | $ 37,720 | $ 37,048 | $ 36,621 | $ 37,169 | $ 143,895 | $ 148,558 | $ 154,784 |
Interest expense | 2,368 | 3,005 | 3,357 | 3,795 | 4,970 | 5,879 | 7,174 | 10,469 | 12,525 | 28,492 | 45,722 |
Income tax benefit | 3,807 | 4,907 | 5,645 | 7,576 | 3,283 | 4,561 | 3,668 | 1,705 | 21,935 | 13,217 | 4,408 |
Net income | $ 12,590 | $ 12,259 | $ 14,276 | $ 19,392 | $ 17,600 | $ 11,893 | $ 10,575 | $ 4,724 | 58,517 | 44,792 | 18,268 |
Parent Company | Reportable Legal Entities | |||||||||||
Statement of Net Income | |||||||||||
Dividends from subsidiary | 90,000 | ||||||||||
Interest from bank deposits | 210 | 260 | 15 | ||||||||
Interest on short-term investments | 2 | 449 | 953 | ||||||||
Interest on ESOP loan | 1,046 | 1,596 | 1,062 | ||||||||
Total interest and dividend income | 91,258 | 2,305 | 2,030 | ||||||||
Interest expense | 2,095 | 2,095 | 2,076 | ||||||||
Operating expenses | 2,338 | 2,771 | 3,232 | ||||||||
Total expenses | 4,433 | 4,866 | 5,308 | ||||||||
Income (loss) before income taxes and equity in undistributed net income (loss) of HarborOne Bank | 86,825 | (2,561) | (3,278) | ||||||||
Income tax benefit | (566) | (274) | (534) | ||||||||
Income (loss) before equity in income of subsidiaries | 87,391 | (2,287) | (2,744) | ||||||||
Equity in undistributed net income (loss) of HarborOne Bank | (28,874) | 47,079 | 21,012 | ||||||||
Net income | $ 58,517 | $ 44,792 | $ 18,268 |
CONDENSED FINANCIAL STATEMENT_5
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY - Statement of Cash Flows (Details) - USD ($) $ in Thousands | Aug. 14, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Cash flows from operating activities: | ||||
Net income | $ 58,517 | $ 44,792 | $ 18,268 | |
Adjustments to reconcile net income to net cash used by operating activities: | ||||
Deferred income tax expense (benefit) | 6,427 | (3,614) | (556) | |
Share-based compensation | 3,784 | 3,679 | 4,849 | |
Net change in other assets | 32,974 | (33,222) | (11,619) | |
Net change in other liabilities | (23,777) | 31,080 | 3,962 | |
Net cash provided (used) by operating activities | 224,295 | (26,952) | (36,127) | |
Cash flows from investing activities: | ||||
Net cash used by investing activities | (241,051) | (318,852) | (228,834) | |
Cash flows from financing activities: | ||||
Net proceeds from sale of common stock | $ 310,400 | 304,061 | ||
Proceeds from exercise of stock options | 643 | |||
Repurchase of common stock | (69,215) | (15,923) | (721) | |
Purchase of shares by the ESOP | $ (24,800) | (24,829) | ||
Dividends paid | (9,195) | (3,258) | ||
Net cash provided by financing activities | 5,605 | 340,058 | 371,056 | |
Net change in cash and cash equivalents | (11,151) | (5,746) | 106,095 | |
Cash and cash equivalents at beginning of year | 205,870 | 211,616 | 105,521 | |
Cash and cash equivalents at end of year | 194,719 | 205,870 | 211,616 | |
Parent Company | Reportable Legal Entities | ||||
Cash flows from operating activities: | ||||
Net income | 58,517 | 44,792 | 18,268 | |
Adjustments to reconcile net income to net cash used by operating activities: | ||||
Equity in undistributed net (income) loss of HarborOne Bank | 28,874 | (47,079) | (21,012) | |
Deferred income tax expense (benefit) | (8) | (18) | 139 | |
Share-based compensation | 545 | 963 | 1,432 | |
Net change in other assets | 27 | 231 | (284) | |
Net change in other liabilities | 391 | 302 | 1,299 | |
Net cash provided (used) by operating activities | 88,346 | (809) | (158) | |
Cash flows from investing activities: | ||||
Investment in HarborOne Bank | (152,713) | |||
Repayment of ESOP loan | 1,450 | 1,218 | 1,862 | |
Advances to subsidiary | (1,046) | (1,884) | (2,456) | |
Repayment of advances to subsidiary | 1,659 | 3,728 | ||
Net cash used by investing activities | 2,063 | 3,062 | (153,307) | |
Cash flows from financing activities: | ||||
Net proceeds from sale of common stock | 304,161 | |||
Proceeds from exercise of stock options | 643 | |||
Repurchase of common stock | (69,215) | (15,923) | (721) | |
Purchase of shares by the ESOP | (24,829) | |||
Repayment of advance from subsidiary | (139) | |||
Amortization of subordinated debt issuance costs | 126 | 126 | 108 | |
Dividends paid | (9,195) | (3,258) | ||
Net cash provided by financing activities | (77,641) | (19,055) | 278,580 | |
Net change in cash and cash equivalents | 12,768 | (16,802) | 125,115 | |
Cash and cash equivalents at beginning of year | 118,265 | 135,067 | 9,952 | |
Cash and cash equivalents at end of year | $ 131,033 | $ 118,265 | $ 135,067 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Selected Quarterly Financial Information [Abstract] | |||||||||||
Interest and dividend income | $ 36,353 | $ 35,808 | $ 35,887 | $ 35,847 | $ 37,720 | $ 37,048 | $ 36,621 | $ 37,169 | $ 143,895 | $ 148,558 | $ 154,784 |
Interest expense | 2,368 | 3,005 | 3,357 | 3,795 | 4,970 | 5,879 | 7,174 | 10,469 | 12,525 | 28,492 | 45,722 |
Net interest and dividend income | 33,985 | 32,803 | 32,530 | 32,052 | 32,750 | 31,169 | 29,447 | 26,700 | 131,370 | 120,066 | 109,062 |
Provision (credit) for loan losses | (1,436) | (1,627) | (4,286) | 91 | 7,608 | 13,454 | 10,004 | 3,749 | (7,258) | 34,815 | 4,747 |
Other noninterest income | 19,164 | 21,769 | 21,703 | 37,809 | 37,027 | 44,439 | 38,569 | 16,113 | |||
Gain on sale and call of securities, net | 241 | 8 | 2,525 | 241 | 2,533 | 1,344 | |||||
Total noninterest income | 19,164 | 22,010 | 21,703 | 37,809 | 37,027 | 44,439 | 38,577 | 18,638 | 100,686 | 138,680 | 60,095 |
Total noninterest expenses | 38,188 | 39,274 | 38,598 | 42,802 | 41,286 | 45,700 | 43,777 | 35,160 | 158,862 | 165,922 | 141,734 |
Income tax benefit | 3,807 | 4,907 | 5,645 | 7,576 | 3,283 | 4,561 | 3,668 | 1,705 | 21,935 | 13,217 | 4,408 |
Net income | $ 12,590 | $ 12,259 | $ 14,276 | $ 19,392 | $ 17,600 | $ 11,893 | $ 10,575 | $ 4,724 | $ 58,517 | $ 44,792 | $ 18,268 |
Basic earnings per share | $ 0.26 | $ 0.25 | $ 0.28 | $ 0.37 | $ 0.33 | $ 0.22 | $ 0.19 | $ 0.09 | $ 1.15 | $ 0.82 | $ 0.33 |
Diluted earnings per share | $ 0.25 | $ 0.24 | $ 0.27 | $ 0.37 | $ 0.33 | $ 0.22 | $ 0.19 | $ 0.09 | $ 1.14 | $ 0.82 | $ 0.33 |
Weighted average common shares, basic | 48,918,539 | 49,801,123 | 51,778,293 | 52,537,409 | 53,947,868 | 54,465,339 | 54,450,146 | 54,392,465 | 50,746,302 | 54,313,368 | 55,731,637 |
Weighted average common shares, diluted | 49,828,379 | 50,663,415 | 52,650,071 | 53,000,830 | 53,973,737 | 54,465,339 | 54,450,146 | 54,392,465 | 51,523,135 | 54,319,835 | 55,731,776 |