HarborOne Bancorp (HONE) 8-K HarborOne Bancorp, Inc. Announces 2022 First Quarter Earnings

Exhibit 99.1

HarborOne Bancorp, Inc. Announces 2022 First Quarter Earnings

Contact: Linda Simmons, EVP, CFO

Brockton, Massachusetts (April 28, 2022): HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $12.3 million, or $0.25 per diluted share, for the first quarter of 2022, compared to net income of $12.6 million, or $0.25 per diluted share, for the preceding quarter and $19.4 million, or $0.37 per basic and diluted share, for the same period last year.  

Selected First Quarter Financial Highlights:

● Return on average assets was 1.08% and return on average equity was 7.35%.

● Commercial loan growth of $123.3 million, or 5.5%.

● Core deposit growth of $109.5 million, or 3.6%.

● Net interest margin increased 2 basis points to 3.21%.

● Strong credit quality with nonperforming assets to total assets down 22 basis points to 0.57%.

● Announced fourth share repurchase program after completing third share repurchase program at $14.64 per share.

● Raised quarterly dividend rate 40%, from $0.05 to $0.07 per quarter.

“We remain focused on the core fundamentals of deposit and loan growth, as we continue to invest in building out our small business banking team and tools. The launch of our new BusinessOne lending platform for small businesses will provide our business banking customers with quick access to the capital they need to help them achieve their growth objectives” said James Blake, CEO. “We continue to be responsive to the challenges in the residential mortgage market in this rising rate environment, continuously assessing our operational costs, and making the necessary staff and expense adjustments” added Joseph Casey, President and COO.

Net Interest Income

The Company’s net interest and dividend income was $33.3 million for the quarter ended March 31, 2022, down $715,000, or 2.1%, from $34.0 million for the quarter ended December 31, 2021 and up $1.2 million, or 3.8%, from $32.1 million for the quarter ended March 31, 2021. The tax equivalent interest rate spread and net interest margin were 3.12% and 3.21%, respectively, for the quarter ended March 31, 2022, compared to 3.10% and 3.19%, respectively, for the quarter ended December 31, 2021, and 2.99% and 3.14%, respectively, for the quarter ended March 31, 2021. On a linked-quarter basis, the decrease in net interest and dividend income primarily reflects decreases in fees recognized in connection with U.S. Small Business Administration Paycheck Protection Program (“PPP”) loans, accretion income and prepayment penalties as compared to the prior quarter, partially offset by increased rates on investments. The cost of funds was flat at 25 basis points.

The $751,000 decrease in total interest and dividend income primarily reflected a decrease in interest income on loans. The three months ended March 31, 2022 and December 31, 2021 include the recognition of deferred fees on PPP loans in the amount of $487,000 and $1.2 million, respectively. Interest on loans in the first quarter included $284,000 in accretion income from the fair value discount on loans acquired in connection with the merger with Coastway Bancorp, Inc. and $305,000 in prepayment penalties on commercial loans. Accretion income and prepayment penalties in the preceding quarter were $634,000 and $861,000, respectively.

The increase in net interest and dividend income from the prior year quarter reflected a decrease of $1.5 million, or 38.6%, in total interest expense, partially offset by a $245,000, or 0.7%, decrease in total interest and dividend income. The decreases reflect rate and volume changes in both interest-bearing assets and liabilities. The cost of interest-bearing liabilities decreased 21 basis points, while the average balance increased $60.7 million. The yield on interest-earning assets decreased 8 basis points, while the average balance increased $60.4 million.

Noninterest Income

Total noninterest income decreased $103,000, or 0.5%, to $19.1 million for the quarter ended March 31, 2022, from $19.2 million for the quarter ended December 31, 2021. Softening demand for mortgage loans resulted in mortgage loan closings of $253.8 million and a gain on loan sales of $5.3 million for the quarter ended March 31, 2022, compared to $451.4 million in mortgage closings and $10.1 million in gain on sales for the preceding quarter. The change in the fair value of derivatives included in mortgage banking income was a positive $1.0 million for the three months ended March 31, 2022, as compared to a negative $2.6 million for the three months ended December 31, 2021.

The change in the fair value of mortgage servicing rights positively impacted mortgage banking income; resulting in an increase of $5.3 million in the fair value of mortgage servicing rights for the three months ended March 31, 2022; as compared to a decrease of $245,000 in the fair value of mortgage servicing rights for the three months ended December 31, 2021. The 10-year Treasury Constant Maturity rate increased 80 basis points versus the fourth quarter of 2021, and prepayments slowed. The change in the fair value of the mortgage servicing rights is generally consistent with the change in the 10-year Treasury Constant Maturity rate. As interest rates rise and prepayment speeds slow, mortgage servicing rights values tend to increase; conversely, as interest rates fall and prepayment speeds quicken, mortgage servicing rights values tend to decrease.  

Deposit account fees decreased $311,000, or 6.5%, to $4.5 million for the quarter ended March 31, 2022, from $4.8 million for the quarter ended December 31, 2021. Other income for the quarter ended March 31, 2022 increased $245,000. The fourth quarter of 2021 included a write-off of $431,000 on a direct interest-rate swap related to a non-accrual loan, and no such write-off was recorded in the first quarter of 2022.

Total noninterest income decreased $18.7 million, or 49.6%, as compared to the quarter ended March 31, 2021, primarily due to a $19.6 million, or 59.8%, decrease in mortgage banking income, driven by the decrease in loan closings and narrowing gain-on-sale margins. The decrease in mortgage banking income was offset by a $620,000 increase in deposit account fees.

Noninterest Expense

Total noninterest expenses were $34.8 million for the quarter ended March 31, 2022, a decrease of $3.4 million, or 8.8%, from the quarter ended December 31, 2021. The decrease primarily reflects the decrease in compensation and benefits, consistent with the decrease in residential mortgage loan closings at HarborOne Mortgage, LLC (“HarborOne Mortgage”).

Total noninterest expenses decreased $8.0 million, or 18.6%, from the quarter ended March 31, 2021. Compensation and benefits decreased $6.7 million and loan expenses decreased $2.0 million, consistent with the decrease in residential mortgage loan closings.

Income Tax Provision

The effective tax rate was 28.5% for the quarter ended March 31, 2022, compared to 23.2% for the quarter ended December 31, 2021 and 28.1% for the quarter ended March 31, 2021. The effective tax rate for the quarter ended December 31, 2021 was impacted by the recognition of a net tax benefit in the amount of $754,000 for a reserve release upon the expiration of the applicable statute of limitations.

Asset Quality and Allowance for Credit Losses

Effective January 1, 2022, the Company adopted Accounting Standards Update No. 2016-13, commonly referred to as CECL, which requires the measurement of expected lifetime credit losses for financial assets measured at amortized cost, as well as unfunded commitments that are considered off-balance sheet credit exposures. CECL requires that the allowance for credit losses (“ACL”) be calculated based on current expected credit losses over the full remaining expected life of the financial assets and also consider expected future changes in macroeconomic conditions. Upon adoption of CECL on January 1, 2022, the Company’s ACL on loans decreased by $1.3 million, and the ACL on unfunded commitments increased by $3.9 million for a net increase of $2.6 million. The after-tax impact of $1.9 million was recognized as a one-time, cumulative-effect adjustment that decreased retained earnings.

Credit quality performance has remained strong with total nonperforming assets of $26.1 million at March 31, 2022, compared to $36.2 million at December 31, 2021 and $32.9 million at March 31, 2021. Nonperforming assets as a percentage of total assets were 0.57% at March 31, 2022, 0.79% at December 31, 2021, and 0.71% at March 31, 2021. The decrease in nonperforming assets was primarily due to the resolution of one credit in the amount of $8.8 million, previously included in the office at-risk sector, for which the Company also recorded a $2.8 million charge off in the first quarter of 2022.

Net charges-offs totaled $2.7 million, or 0.30% of average loans outstanding on an annualized basis, for the quarter ended March 31, 2022. Net charge-offs totaled $1.2 million, or 0.13% of average loans outstanding on an annualized basis, for the quarter ended December 31, 2021, and net charge-offs totaled $102,000, or 0.01% of average loans outstanding on an annualized basis, for the quarter ended March 31, 2021.

The ACL was $41.8 million, or 1.12% of total loans, at March 31, 2022, compared to $45.4 million, or 1.26% of total loans, at December 31, 2021 and $55.4 million, or 1.60% of total loans, at March 31, 2021. The ACL on unfunded commitments, included in other liabilities on the unaudited Consolidated Balance Sheets, amounted to $3.8 million at March 31, 2022, and there was no ACL on unfunded commitments at December 31, 2021.

Although we have not experienced any significant negative trends in the at-risk sectors previously identified, Management continues to monitor commercial loan sectors that may be susceptible to increased credit risk as a result of the COVID-19 pandemic: retail, office space, hotels, restaurants, and recreation. The five commercial sectors identified as at-risk totaled $835.2 million at March 31, 2022, which represents 35.1% of the commercial loan portfolio. The at-risk sectors include $712.7 million in commercial real estate loans, $73.8 million in commercial and industrial loans, and $48.7 million in commercial construction loans. Non-performing loans included in the at-risk sectors amounted to $10.8 million at March 31, 2022, the majority of which was included in the hotels sector.

Balance Sheet

Total assets increased $37.9 million, or 0.8%, to $4.59 billion at March 31, 2022 from $4.55 billion at December 31, 2021. The increase primarily reflects an increase of $129.6 million in loans, partially offset by decreases of $55.0 million in cash and cash equivalents and $32.5 million in securities available for sale. Securities available for sale were negatively impacted by unrealized losses of $30.0 million as March 31, 2022, as compared to $3.6 million of unrealized losses as of December 31, 2021.

Loans increased $129.6 million, or 3.6%, to $3.74 billion at March 31, 2022, from $3.61 billion at December 31, 2021. The increase in loans for the three months ended March 31, 2022 was primarily due to an increase in total commercial loans of $123.3 million and residential real estate loans of $34.9 million, partially offset by a decrease in consumer loans of $28.6 million. As of March 31, 2022, outstanding PPP loans amounted to $13.6 million, and there was $462,000 in deferred processing fee income. We expect to complete the forgiveness process for the remaining PPP loans by the end of the second quarter of 2022.

Total deposits were $3.76 billion at March 31, 2022 and $3.68 billion at December 31, 2021. Compared to the prior quarter, non-certificate accounts increased $109.5 million, and term certificate accounts decreased $30.2 million. FHLB borrowings were flat at $55.7 million at March 31, 2022 and December 31, 2021.

Total stockholders’ equity was $649.1 million at March 31, 2022, compared to $679.3 million at December 31, 2021 and $698.1 million at March 31, 2021. Stockholders’ equity decreased 4.4% when compared to the prior quarter, as earnings were offset by share repurchases and elevated levels of unrealized losses on available-for-sale investment securities included in other comprehensive income. The Company completed its third share repurchase program on March 25, 2022 of 2,668,159 shares at an average price of $14.64. The Company announced a fourth share repurchase program on April 12, 2022, under which it may repurchase up to 2,526,134 shares of the Company’s common stock, or approximately 5% of the Company’s outstanding shares. The tangible-common-equity-to-tangible-assets ratio was 12.75% at March 31, 2022, 13.53% at December 31, 2021, and 13.77% at March 31, 2021. At March 31, 2022, the Company and the Bank had strong capital positions and exceeded all regulatory capital requirements.

About HarborOne Bancorp, Inc.

HarborOne Bancorp, Inc. is the holding company for HarborOne Bank, a Massachusetts-chartered savings bank. HarborOne Bank serves the financial needs of consumers, businesses, and municipalities throughout Eastern Massachusetts and Rhode Island through a network of 30 full-service branches located in Massachusetts and Rhode Island, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. The Bank also provides a range of educational services through “HarborOne U,” with classes on small business, financial literacy and personal enrichment at two campuses located adjacent to our Brockton and Mansfield locations. HarborOne Mortgage, LLC, a subsidiary of HarborOne Bank, is a full-service mortgage lender with more than 30 offices in Massachusetts, Rhode Island, and New Hampshire, and is licensed to lend in seven additional states.

Forward Looking Statements

Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Securities and Exchange Commission (“SEC”), in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, ongoing disruptions due to the COVID-19 pandemic and the measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; changes in general business and economic conditions on a national basis and in the local markets in which the Company operates, including changes that adversely affect borrowers’ ability to service and repay the Company’s loans; changes in customer behavior; turbulence in the capital and debt markets and the impact of such conditions on the Company’s business activities; changes in interest rates; increases in loan default and charge-off rates; changes related to the discontinuation and replacement of LIBOR; decreases in the value of securities in the Company’s investment portfolio; fluctuations in real estate values; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior or adverse economic developments; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; competitive pressures from other financial institutions; acquisitions may not produce results at levels or within time frames originally anticipated; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, war, terrorism, civil unrest and future pandemics; changes in regulation; changes in accounting standards and practices; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; demand for loans in the Company’s market area; the Company’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that the Company may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the SEC, which are available at the SEC’s website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, HarborOne’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these

forward-looking statements, which speak only as of the date of this release. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.

Use of Non-GAAP Measures

In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. The Company’s management believes that the supplemental non-GAAP information, which consists of the tax equivalent basis for yields, the efficiency ratio, tangible common equity to tangible assets ratio and tangible book value per share, is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

HarborOne Bancorp, Inc.

Consolidated Balance Sheet Trend

(Unaudited)

	March 31,		December 31,		September 30,		June 30,		March 31,
(in thousands)	2022		2021		2021		2021		2021
Assets
Cash and due from banks	$	41,862	$	35,549	$	42,589	$	41,328	$	37,074
Short-term investments		97,870		159,170		277,050		374,319		281,451
Total cash and cash equivalents		139,732		194,719		319,639		415,647		318,525
Securities available for sale, at fair value		361,529		394,036		390,552		353,848		304,168
Federal Home Loan Bank stock, at cost		5,931		5,931		6,828		7,241		7,572
Asset held for sale		678		881		881		—		—
Loans held for sale, at fair value		25,690		45,642		77,052		103,886		210,494
Loans:
Commercial real estate		1,816,484		1,699,877		1,573,284		1,561,873		1,559,056
Commercial construction		154,059		136,563		152,685		107,585		112,187
Commercial and industrial		410,787		421,608		414,814		467,479		499,728
Total commercial loans		2,381,330		2,258,048		2,140,783		2,136,937		2,170,971
Residential real estate		1,252,920		1,217,980		1,160,689		1,096,370		1,062,229
Consumer		103,100		131,705		156,272		186,430		228,279
Loans		3,737,350		3,607,733		3,457,744		3,419,737		3,461,479
Less: Allowance for credit losses on loans		(41,765)		(45,377)		(47,988)		(51,273)		(55,384)
Net loans		3,695,585		3,562,356		3,409,756		3,368,464		3,406,095
Mortgage servicing rights, at fair value		45,043		38,268		36,540		35,955		33,939
Goodwill		69,802		69,802		69,802		69,802		69,802
Other intangible assets		2,930		3,164		3,399		3,723		4,047
Other assets		244,405		238,606		252,645		257,856		251,316
Total assets	$	4,591,325	$	4,553,405	$	4,567,094	$	4,616,422	$	4,605,958
Liabilities and Stockholders' Equity
Deposits:
Demand deposit accounts	$	771,172	$	743,051	$	756,917	$	800,118	$	777,959
NOW accounts		310,090		313,733		300,577		250,099		224,869
Regular savings and club accounts		1,218,656		1,138,979		1,144,595		1,123,123		1,113,450
Money market deposit accounts		864,316		858,970		832,441		832,006		861,867
Term certificate accounts		597,746		627,916		659,850		682,594		696,438
Total deposits		3,761,980		3,682,649		3,694,380		3,687,940		3,674,583
Long-term borrowed funds		55,702		55,711		55,720		87,479		97,488
Subordinated debt		34,191		34,159		34,128		34,096		34,064
Other liabilities and accrued expenses		90,387		101,625		102,834		101,436		101,750
Total liabilities		3,942,260		3,874,144		3,887,062		3,910,951		3,907,885
Common stock		591		585		585		585		585
Additional paid-in capital		477,302		469,934		468,526		467,194		465,832
Unearned compensation - ESOP		(29,002)		(29,461)		(29,921)		(30,380)		(30,840)
Retained earnings		332,734		325,699		315,683		305,831		294,116
Treasury stock		(113,513)		(85,859)		(73,723)		(38,588)		(31,460)
Accumulated other comprehensive income (loss)		(19,047)		(1,637)		(1,118)		829		(160)
Total stockholders' equity		649,065		679,261		680,032		705,471		698,073
Total liabilities and stockholders' equity	$	4,591,325	$	4,553,405	$	4,567,094	$	4,616,422	$	4,605,958

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

	Quarters Ended
	March 31,		December 31,		September 30,		June 30,		March 31,
(in thousands, except share data)	2022		2021		2021		2021		2021
Interest and dividend income:
Interest and fees on loans	$	33,576	$	34,177	$	33,680	$	34,106	$	33,860
Interest on loans held for sale		264		501		665		852		1,324
Interest on securities		1,701		1,541		1,293		793		585
Other interest and dividend income		61		134		170		136		78
Total interest and dividend income		35,602		36,353		35,808		35,887		35,847
Interest expense:
Interest on deposits		1,621		1,651		2,050		2,302		2,720
Interest on FHLB borrowings		188		193		431		531		552
Interest on subordinated debentures		523		524		524		524		523
Total interest expense		2,332		2,368		3,005		3,357		3,795
Net interest and dividend income		33,270		33,985		32,803		32,530		32,052
Provision for credit losses		338		(1,436)		(1,627)		(4,286)		91
Net interest and dividend income, after provision for credit losses		32,932		35,421		34,430		36,816		31,961
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans		5,322		10,063		12,756		14,262		24,802
Changes in mortgage servicing rights fair value		5,285		(245)		(992)		(2,552)		3,409
Other		2,558		3,359		3,882		4,075		4,515
Total mortgage banking income		13,165		13,177		15,646		15,785		32,726
Deposit account fees		4,472		4,783		4,658		4,546		3,852
Income on retirement plan annuities		107		109		108		106		104
Gain on sale and call of securities, net		—		—		241		—		—
Bank-owned life insurance income		483		506		515		508		493
Other income		834		589		842		758		634
Total noninterest income		19,061		19,164		22,010		21,703		37,809
Noninterest expenses:
Compensation and benefits		20,723		24,564		24,760		25,146		27,454
Occupancy and equipment		5,428		4,923		4,765		4,702		5,256
Data processing		2,241		2,244		2,205		2,362		2,343
Loan expense		478		732		1,323		1,250		2,435
Marketing		1,218		1,120		880		831		813
Professional fees		1,539		1,443		1,362		1,487		1,583
Deposit insurance		349		345		341		332		320
Prepayment penalties on Federal Home Loan Bank advances		—		—		1,095		—		—
Other expenses		2,859		2,817		2,543		2,488		2,598
Total noninterest expenses		34,835		38,188		39,274		38,598		42,802
Income before income taxes		17,158		16,397		17,166		19,921		26,968
Income tax provision		4,891		3,807		4,907		5,645		7,576
Net income	$	12,267	$	12,590	$	12,259	$	14,276	$	19,392
Earnings per common share:
Basic	$	0.26	$	0.26	$	0.25	$	0.28	$	0.37
Diluted	$	0.25	$	0.25	$	0.24	$	0.27	$	0.37
Weighted average shares outstanding:
Basic		47,836,410		48,918,539		49,801,123		51,778,293		52,537,409
Diluted		48,690,420		49,828,379		50,663,415		52,650,071		53,000,830

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income

(Unaudited)

	For the Three Months Ended March 31,
(dollars in thousands, except share data)	2022		2021		$ Change		% Change
Interest and dividend income:
Interest and fees on loans	$	33,576	$	33,860	$	(284)	(0.8)	%
Interest on loans held for sale		264		1,324		(1,060)	(80.1)
Interest on securities		1,701		585		1,116	190.8
Other interest and dividend income		61		78		(17)	(21.8)
Total interest and dividend income		35,602		35,847		(245)	(0.7)
Interest expense:
Interest on deposits		1,621		2,720		(1,099)	(40.4)
Interest on FHLB borrowings		188		552		(364)	(65.9)
Interest on subordinated debentures		523		523		—	0.0
Total interest expense		2,332		3,795		(1,463)	(38.6)
Net interest and dividend income		33,270		32,052		1,218	3.8
Provision for credit losses		338		91		247	271.4
Net interest and dividend income, after provision for credit losses		32,932		31,961		971	3.0
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans		5,322		24,802		(19,480)	(78.5)
Changes in mortgage servicing rights fair value		5,285		3,409		1,876	55.0
Other		2,558		4,515		(1,957)	(43.3)
Total mortgage banking income		13,165		32,726		(19,561)	(59.8)
Deposit account fees		4,472		3,852		620	16.1
Income on retirement plan annuities		107		104		3	2.9
Bank-owned life insurance income		483		493		(10)	(2.0)
Other income		834		634		200	31.5
Total noninterest income		19,061		37,809		(18,748)	(49.6)
Noninterest expenses:
Compensation and benefits		20,723		27,454		(6,731)	(24.5)
Occupancy and equipment		5,428		5,256		172	3.3
Data processing		2,241		2,343		(102)	(4.4)
Loan expense		478		2,435		(1,957)	(80.4)
Marketing		1,218		813		405	49.8
Professional fees		1,539		1,583		(44)	(2.8)
Deposit insurance		349		320		29	9.1
Other expenses		2,859		2,598		261	10.0
Total noninterest expenses		34,835		42,802		(7,967)	(18.6)
Income before income taxes		17,158		26,968		(9,810)	(36.4)
Income tax provision		4,891		7,576		(2,685)	(35.4)
Net income	$	12,267	$	19,392	$	(7,125)	(36.7)	%
Earnings per common share:
Basic	$	0.26	$	0.37
Diluted	$	0.25	$	0.37
Weighted average shares outstanding:
Basic		47,836,410		52,537,409
Diluted		48,690,420		53,000,830

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

	Quarters Ended
	March 31, 2022							December 31, 2021							March 31, 2021
	Average							Average							Average
	Outstanding					Yield/		Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost (6)		Balance			Interest		Cost (6)		Balance			Interest		Cost (6)
	(dollars in thousands)
Interest-earning assets:
Investment securities (1)	$	393,364		$	1,701	1.75	%	$	394,301		$	1,541	1.55	%	$	271,357		$	585	0.87	%
Other interest-earning assets		150,569			61	0.16			286,026			134	0.19			180,526			78	0.18
Loans held for sale		29,842			264	3.59			63,833			501	3.11			193,426			1,324	2.78
Loans
Commercial loans (2)		2,291,343			22,095	3.91			2,165,739			22,658	4.15			2,161,076			20,780	3.90
Residential real estate loans (2)		1,220,703			10,142	3.37			1,171,608			9,870	3.34			1,084,292			10,340	3.87
Consumer loans (2)		118,242			1,339	4.59			143,577			1,649	4.56			253,014			2,740	4.39
Total loans		3,630,288			33,576	3.75			3,480,924			34,177	3.90			3,498,382			33,860	3.93
Total interest-earning assets		4,204,063			35,602	3.43			4,225,084			36,353	3.41			4,143,691			35,847	3.51
Noninterest-earning assets		326,811							337,310							330,257
Total assets	$	4,530,874						$	4,562,394						$	4,473,948
Interest-bearing liabilities:
Savings accounts	$	1,165,683			366	0.13		$	1,147,855			247	0.09		$	1,058,820			537	0.21
NOW accounts		301,279			36	0.05			300,459			40	0.05			212,282			37	0.07
Money market accounts		858,792			303	0.14			839,977			307	0.15			861,518			560	0.26
Certificates of deposit		522,211			729	0.57			543,208			878	0.64			608,089			1,444	0.96
Brokered deposits		100,000			187	0.76			100,000			179	0.71			100,000			142	0.58
Total interest-bearing deposits		2,947,965			1,621	0.22			2,931,499			1,651	0.22			2,840,709			2,720	0.39
FHLB advances		55,706			188	1.37			55,714			193	1.37			102,383			552	2.19
Subordinated debentures		34,173			523	6.21			34,144			524	6.09			34,048			523	6.23
Total borrowings		89,879			711	3.21			89,858			717	3.17			136,431			1,075	3.20
Total interest-bearing liabilities		3,037,844			2,332	0.31			3,021,357			2,368	0.31			2,977,140			3,795	0.52
Noninterest-bearing liabilities:
Noninterest-bearing deposits		738,578							768,361							706,274
Other noninterest-bearing liabilities		86,763							92,034							93,380
Total liabilities		3,863,185							3,881,752							3,776,794
Total stockholders' equity		667,689							680,642							697,154
Total liabilities and stockholders' equity	$	4,530,874						$	4,562,394						$	4,473,948
Tax equivalent net interest income					33,270							33,985							32,052
Tax equivalent interest rate spread (3)						3.12	%						3.10	%						2.99	%
Less: tax equivalent adjustment					—							—							—
Net interest income as reported				$	33,270						$	33,985						$	32,052
Net interest-earning assets (4)	$	1,166,219						$	1,203,727						$	1,166,551
Net interest margin (5)						3.21	%						3.19	%						3.14	%
Tax equivalent effect						—							—							—
Net interest margin on a fully tax equivalent basis						3.21	%						3.19	%						3.14	%
Average interest-earning assets to average interest-bearing liabilities		138.39	%						139.84	%						139.18	%
Supplemental information:
Total deposits, including demand deposits	$	3,686,543		$	1,621			$	3,699,860		$	1,651			$	3,546,983		$	2,720
Cost of total deposits						0.18	%						0.18	%						0.31	%
Total funding liabilities, including demand deposits	$	3,776,422		$	2,332			$	3,789,718		$	2,368			$	3,683,414		$	3,795
Cost of total funding liabilities						0.25	%						0.25	%						0.42	%
(1) Includes securities available for sale. Interest income from tax exempt securities is computed on a tax equivalent basis using a tax rate of 21%. There were no tax exempt securities in the quarters presented.
(2) Includes nonaccruing loan balances and interest received on such loans.
(3) Tax equivalent interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.
(6) Annualized.

HarborOne Bancorp, Inc.

Average Balances and Yield Trend

(Unaudited)

	Average Balances - Trend - Quarters Ended
	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021
	(in thousands)
Interest-earning assets:
Investment securities (1)	$	393,364		$	394,301		$	358,927		$	325,205		$	271,357
Other interest-earning assets		150,569			286,026			372,892			397,979			180,526
Loans held for sale		29,842			63,833			84,399			115,240			193,426
Loans
Commercial loans (2)		2,291,343			2,165,739			2,121,432			2,152,105			2,161,076
Residential real estate loans (2)		1,220,703			1,171,608			1,121,898			1,064,481			1,084,292
Consumer loans (2)		118,242			143,577			170,366			205,856			253,014
Total loans		3,630,288			3,480,924			3,413,696			3,422,442			3,498,382
Total interest-earning assets		4,204,063			4,225,084			4,229,914			4,260,866			4,143,691
Noninterest-earning assets		326,811			337,310			347,060			339,438			330,257
Total assets	$	4,530,874		$	4,562,394		$	4,576,974		$	4,600,304		$	4,473,948
Interest-bearing liabilities:
Savings accounts	$	1,165,683		$	1,147,855		$	1,136,131		$	1,118,494		$	1,058,820
NOW accounts		301,279			300,459			283,725			231,075			212,282
Money market accounts		858,792			839,977			832,340			853,586			861,518
Certificates of deposit		522,211			543,208			570,570			589,964			608,089
Brokered deposits		100,000			100,000			100,000			100,000			100,000
Total interest-bearing deposits		2,947,965			2,931,499			2,922,766			2,893,119			2,840,709
FHLB advances		55,706			55,714			84,438			96,823			102,383
Subordinated debentures		34,173			34,144			34,111			34,080			34,048
Total borrowings		89,879			89,858			118,549			130,903			136,431
Total interest-bearing liabilities		3,037,844			3,021,357			3,041,315			3,024,022			2,977,140
Noninterest-bearing liabilities:
Noninterest-bearing deposits		738,578			768,361			756,927			784,521			706,274
Other noninterest-bearing liabilities		86,763			92,034			90,366			88,577			93,380
Total liabilities		3,863,185			3,881,752			3,888,608			3,897,120			3,776,794
Total stockholders' equity		667,689			680,642			688,366			703,184			697,154
Total liabilities and stockholders' equity	$	4,530,874		$	4,562,394		$	4,576,974		$	4,600,304		$	4,473,948
	Annualized Yield Trend - Quarters Ended
	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021
Interest-earning assets:
Investment securities (1)		1.75	%		1.55	%		1.43	%		0.98	%		0.87	%
Other interest-earning assets		0.16	%		0.19	%		0.18	%		0.14	%		0.18	%
Loans held for sale		3.59	%		3.11	%		3.13	%		2.97	%		2.78	%
Commercial loans (2)		3.91	%		4.15	%		4.19	%		4.11	%		3.90	%
Residential real estate loans (2)		3.37	%		3.34	%		3.31	%		3.67	%		3.87	%
Consumer loans (2)		4.59	%		4.56	%		4.50	%		4.44	%		4.39	%
Total loans		3.75	%		3.90	%		3.91	%		4.00	%		3.93	%
Total interest-earning assets		3.43	%		3.41	%		3.36	%		3.38	%		3.51	%
Interest-bearing liabilities:
Savings accounts		0.13	%		0.09	%		0.13	%		0.17	%		0.21	%
NOW accounts		0.05	%		0.05	%		0.06	%		0.07	%		0.07	%
Money market accounts		0.14	%		0.15	%		0.19	%		0.20	%		0.26	%
Certificates of deposit		0.57	%		0.64	%		0.76	%		0.84	%		0.96	%
Brokered deposits		0.76	%		0.71	%		0.64	%		0.62	%		0.58	%
Total interest-bearing deposits		0.22	%		0.22	%		0.28	%		0.32	%		0.39	%
FHLB advances		1.37	%		1.37	%		2.03	%		2.20	%		2.19	%
Subordinated debentures		6.21	%		6.09	%		6.09	%		6.17	%		6.23	%
Total borrowings		3.21	%		3.17	%		3.20	%		3.23	%		3.20	%
Total interest-bearing liabilities		0.31	%		0.31	%		0.39	%		0.45	%		0.52	%
(1) Includes securities available for sale.
(2) Includes nonaccruing loan balances and interest received on such loans.

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

	Quarters Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Performance Ratios (annualized):	2022			2021			2021			2021			2021
(dollars in thousands)
Return on average assets (ROAA)		1.08	%		1.10	%		1.07	%		1.24	%		1.73	%
Return on average equity (ROAE)		7.35	%		7.40	%		7.12	%		8.12	%		11.13	%
Total noninterest expense	$	34,835		$	38,188		$	39,274		$	38,598		$	42,802
Less: Amortization of other intangible assets		235			235			324			324			324
Total adjusted noninterest expense	$	34,600		$	37,953		$	38,950		$	38,274		$	42,478
Net interest and dividend income	$	33,270		$	33,985		$	32,803		$	32,530		$	32,052
Total noninterest income		19,061			19,164			22,010			21,703			37,809
Total revenue	$	52,331		$	53,149		$	54,813		$	54,233		$	69,861
Efficiency ratio (1)		66.12	%		71.41	%		71.06	%		70.57	%		60.80	%
(1) This non-GAAP measure represents adjusted noninterest expense divided by total revenue

	At or for the Quarters Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Asset Quality	2022			2021			2021			2021			2021
(dollars in thousands)
Total nonperforming assets	$	26,109		$	36,186		$	36,514		$	32,731		$	32,886
Nonperforming assets to total assets		0.57	%		0.79	%		0.80	%		0.71	%		0.71	%
Allowance for credit losses on loans to total loans		1.12	%		1.26	%		1.39	%		1.50	%		1.60	%
Net charge-offs	$	2,730		$	1,174		$	1,658		$	(175)		$	102
Annualized net charge-offs/average loans		0.30	%		0.13	%		0.19	%		(0.02)	%		0.01	%
Allowance for credit losses on loans to nonperforming loans		159.96	%		125.60	%		131.52	%		158.08	%		171.18	%

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

	March 31,			December 31,			September 30,			June 30,			March 31,
Capital and Share Related	2022			2021			2021			2021			2021
(dollars in thousands, except share data)
Common stock outstanding		51,257,696			52,390,478			53,232,110			55,735,623			56,228,762
Book value per share	$	12.66		$	12.97		$	12.77		$	12.66		$	12.41
Tangible common equity:
Total stockholders' equity	$	649,065		$	679,261		$	680,032		$	705,471		$	698,073
Less: Goodwill		69,802			69,802			69,802			69,802			69,802
Less: Other intangible assets (1)		2,930			3,164			3,399			3,723			4,047
Tangible common equity	$	576,333		$	606,295		$	606,831		$	631,946		$	624,224
Tangible book value per share (2)	$	11.24		$	11.57		$	11.40		$	11.34		$	11.10
Tangible assets:
Total assets	$	4,591,325		$	4,553,405		$	4,567,094		$	4,616,422		$	4,605,958
Less: Goodwill		69,802			69,802			69,802			69,802			69,802
Less: Other intangible assets		2,930			3,164			3,399			3,723			4,047
Tangible assets	$	4,518,593		$	4,480,439		$	4,493,893		$	4,542,897		$	4,532,109
Tangible common equity / tangible assets (3)		12.75	%		13.53	%		13.50	%		13.91	%		13.77	%
(1) Other intangible assets are core deposit intangibles.
(2) This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets divided by common stock outstanding.
(3) This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets to total assets less goodwill and intangible assets.

HarborOne Bancorp, Inc.

Segments Statements of Net Income

(Unaudited)

	HarborOne Mortgage						HarborOne Bank
	For the Quarter Ended						For the Quarter Ended
	March 31,		December 31,		March 31,		March 31,		December 31,		March 31,
	2022		2021		2021		2022		2021		2021
	(in thousands)
Net interest and dividend income	$	350	$	571	$	1,250	$	33,424	$	33,909	$	31,248
Provision for credit losses		—		—		—		338		(1,436)		91
Net interest and dividend income, after provision for loan losses		350		571		1,250		33,086		35,345		31,157
Mortgage banking income:
Gain on sale of mortgage loans		5,322		10,063		24,802		—		—		—
Intersegment gain (loss)		837		496		662		(608)		(720)		(662)
Changes in mortgage servicing rights fair value		4,695		(315)		3,123		590		70		286
Other		2,325		3,108		4,215		233		251		300
Total mortgage banking income (loss)		13,179		13,352		32,802		215		(399)		(76)
Other noninterest income (loss)		9		7		(8)		5,887		5,980		5,091
Total noninterest income		13,188		13,359		32,794		6,102		5,581		5,015
Noninterest expense		7,761		10,467		18,057		26,825		27,396		24,463
Income before income taxes		5,777		3,463		15,987		12,363		13,530		11,709
Provision for income taxes		1,541		664		4,333		3,557		3,060		3,435
Net income	$	4,236	$	2,799	$	11,654	$	8,806	$	10,470	$	8,274

HarborOne Bancorp, Inc.

COVID Loans at Risk as of March 31, 2022

(Unaudited)

	At Risk Sectors
															Percent
											Total				at risk
											at risk		Total		sector
	Retail		Office Space		Hotels		Restaurants		Recreation		sectors		loans		to total
	(dollars in thousands)
Commercial real estate	$	249,010	$	182,041	$	251,081	$	16,183	$	14,351	$	712,666	$	1,816,484	39.2	%
Commercial and industrial		31,811		12,858		3,134		21,786		4,193		73,782		410,787	18.0
Commercial construction		19,076		1,028		9,342		18,575		696		48,717		154,059	31.6
Total	$	299,897	$	195,927	$	263,557	$	56,544	$	19,240	$	835,165	$	2,381,330	35.1	%
PPP loans, net of fees	$	522	$	—	$	1,252	$	1,706	$	1,251	$	4,731	$	13,155	36.0	%
Nonaccrual loans	$	49	$	—	$	10,752	$	—	$	—	$	10,801	$	26,109	41.4	%