Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 02, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
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, $0.01 par value | |
Trading Symbol | HONE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 50,172,062 | |
Entity Central Index Key | 0001769617 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and due from banks | $ 35,843 | $ 35,549 |
Short-term investments | 48,495 | 159,170 |
Total cash and cash equivalents | 84,338 | 194,719 |
Securities available for sale, at fair value | 334,398 | 394,036 |
Securities held to maturity, at amortized cost | 10,000 | |
Federal Home Loan Bank stock, at cost | 5,625 | 5,931 |
Asset held for sale | 881 | |
Loans held for sale, at fair value | 31,679 | 45,642 |
Loans | 3,911,949 | 3,607,733 |
Less: Allowance for credit losses on loans | (43,560) | (45,377) |
Net loans | 3,868,389 | 3,562,356 |
Accrued interest receivable | 11,305 | 10,624 |
Other real estate owned and repossessed assets | 26 | 53 |
Mortgage servicing rights, at fair value | 47,130 | 38,268 |
Property and equipment, net | 49,394 | 50,745 |
Retirement plan annuities | 14,393 | 14,174 |
Bank-owned life insurance | 90,949 | 89,972 |
Goodwill | 69,802 | 69,802 |
Intangible assets | 2,695 | 3,164 |
Other assets | 83,921 | 73,038 |
Total assets | 4,704,044 | 4,553,405 |
Deposits: | ||
Demand deposit accounts | 775,154 | 743,051 |
NOW accounts | 316,839 | 313,733 |
Regular savings and club accounts | 1,282,913 | 1,138,979 |
Money market deposit accounts | 885,673 | 858,970 |
Term certificate accounts | 587,354 | 627,916 |
Total deposits | 3,847,933 | 3,682,649 |
Short-term borrowed funds | 90,000 | 0 |
Long-term borrowed funds | 15,693 | 55,711 |
Subordinated debt | 34,222 | 34,159 |
Mortgagors' escrow accounts | 9,639 | 8,459 |
Accrued interest payable | 908 | 1,083 |
Other liabilities and accrued expenses | 81,171 | 92,083 |
Total liabilities | 4,079,566 | 3,874,144 |
Commitments and contingencies (Notes 9 and 10) | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 59,922,099 and 59,087,487 shares issued; 49,989,007 and 52,390,478 shares outstanding at June 30, 2022 and December 31, 2021, respectively | 593 | 585 |
Additional paid-in capital | 479,519 | 469,934 |
Retained earnings | 339,471 | 325,699 |
Treasury stock, at cost, 9,933,092 and 6,693,504 shares at June 30, 2022 and December 31, 2021, respectively | (132,296) | (85,859) |
Accumulated other comprehensive loss | (34,267) | (1,637) |
Unearned compensation - ESOP | (28,542) | (29,461) |
Total stockholders' equity | 624,478 | 679,261 |
Total liabilities and stockholders' equity | $ 4,704,044 | $ 4,553,405 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
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 | 59,922,099 | 59,087,487 |
Common stock, shares outstanding | 49,989,007 | 52,390,478 |
Treasury, shares | 9,933,092 | 6,693,504 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Interest and dividend income: | ||||
Interest and fees on loans | $ 37,522 | $ 34,106 | $ 71,098 | $ 67,966 |
Interest on loans held for sale | 331 | 852 | 595 | 2,176 |
Interest on taxable securities | 1,873 | 793 | 3,574 | 1,378 |
Other interest and dividend income | 131 | 136 | 192 | 214 |
Total interest and dividend income | 39,857 | 35,887 | 75,459 | 71,734 |
Interest expense: | ||||
Interest on deposits | 2,019 | 2,302 | 3,640 | 5,022 |
Interest on FHLB borrowings | 119 | 531 | 307 | 1,083 |
Interest on subordinated debentures | 524 | 524 | 1,047 | 1,047 |
Total interest expense | 2,662 | 3,357 | 4,994 | 7,152 |
Net interest and dividend income | 37,195 | 32,530 | 70,465 | 64,582 |
Provision (benefit) for credit losses | 2,546 | (4,286) | 2,884 | (4,195) |
Net interest and dividend income, after provision (benefit) for credit losses | 34,649 | 36,816 | 67,581 | 68,777 |
Mortgage banking income: | ||||
Gain on sale of mortgage loans | 4,538 | 14,262 | 9,860 | 39,064 |
Changes in mortgage servicing rights fair value | 862 | (2,552) | 6,147 | 857 |
Other | 2,612 | 4,075 | 5,170 | 8,590 |
Total mortgage banking income | 8,012 | 15,785 | 21,177 | 48,511 |
Deposit account fees | 4,892 | 4,546 | 9,364 | 8,398 |
Income on retirement plan annuities | 112 | 106 | 219 | 210 |
Bank-owned life insurance income | 494 | 508 | 977 | 1,001 |
Other income | 593 | 758 | 1,427 | 1,392 |
Total noninterest income | 14,103 | 21,703 | 33,164 | 59,512 |
Noninterest expense: | ||||
Compensation and benefits | 21,455 | 25,146 | 42,178 | 52,600 |
Occupancy and equipment | 4,575 | 4,702 | 10,003 | 9,958 |
Data processing | 2,259 | 2,362 | 4,500 | 4,705 |
Loan expenses | 385 | 1,250 | 863 | 3,685 |
Marketing | 986 | 831 | 2,204 | 1,644 |
Deposit expenses | 513 | 338 | 1,059 | 778 |
Postage and printing | 412 | 418 | 831 | 819 |
Professional fees | 1,680 | 1,487 | 3,219 | 3,070 |
Foreclosed and repossessed assets | 52 | (47) | 18 | (24) |
Deposit insurance | 354 | 332 | 703 | 652 |
Other expenses | 2,283 | 1,779 | 4,211 | 3,513 |
Total noninterest expense | 34,954 | 38,598 | 69,789 | 81,400 |
Income before income taxes | 13,798 | 19,921 | 30,956 | 46,889 |
Income tax provision | 3,811 | 5,645 | 8,702 | 13,221 |
Net income | $ 9,987 | $ 14,276 | $ 22,254 | $ 33,668 |
Earnings per common share: | ||||
Basic | $ 0.21 | $ 0.28 | $ 0.47 | $ 0.65 |
Diluted | $ 0.21 | $ 0.27 | $ 0.46 | $ 0.64 |
Weighted average shares outstanding: | ||||
Weighted average common shares, basic | 46,980,830 | 51,778,293 | 47,406,257 | 52,155,754 |
Weighted average common shares, diluted | 47,536,033 | 52,650,071 | 48,110,863 | 52,823,354 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Consolidated Statements of Comprehensive (Loss) Income | ||||
Net income | $ 9,987 | $ 14,276 | $ 22,254 | $ 33,668 |
Unrealized gain/loss on cash flow hedge: | ||||
Unrealized holding gains (losses) | 939 | (363) | 4,728 | 1,370 |
Reclassification adjustment for net losses (gains) included in net income | (71) | 121 | 40 | 233 |
Net change in unrealized gains (losses) on derivatives in cash flow hedging instruments | 868 | (242) | 4,768 | 1,603 |
Related tax effect | (244) | 68 | (1,340) | (448) |
Net-of-tax amount | 624 | (174) | 3,428 | 1,155 |
Unrealized gain/loss on securities available for sale: | ||||
Unrealized holding (losses) gains | (20,323) | 1,493 | (46,252) | (3,220) |
Related tax effect | 4,479 | (330) | 10,194 | 709 |
Net-of-tax amount | (15,844) | 1,163 | (36,058) | (2,511) |
Total other comprehensive (loss) income | (15,220) | 989 | (32,630) | (1,356) |
Comprehensive (loss) income | $ (5,233) | $ 15,265 | $ (10,376) | $ 32,312 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Treasury Stock, at Cost | Accumulated Other Comprehensive Income (Loss) | Unearned Compensation - ESOP | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance at beginning of period at Dec. 31, 2020 | $ 584 | $ 464,176 | $ 277,312 | $ (16,644) | $ 2,185 | $ (31,299) | $ 696,314 | ||
Balance, beginning of period (in shares) at Dec. 31, 2020 | 57,205,458 | ||||||||
Comprehensive income (loss) | 33,668 | (1,356) | 32,312 | ||||||
Dividends declared per share | (5,149) | (5,149) | |||||||
ESOP shares committed to be released | 615 | 919 | 1,534 | ||||||
Restricted stock awards granted, net of forfeitures (in shares) | 188,377 | ||||||||
Share-based compensation expense | 1,761 | 1,761 | |||||||
Stock option exercised | $ 1 | 642 | 643 | ||||||
Stock option exercised (in shares) | 62,840 | ||||||||
Treasury stock purchased | (21,944) | (21,944) | |||||||
Treasury stock purchased (in shares) | (1,721,052) | ||||||||
Balance at end of period at Jun. 30, 2021 | $ 585 | 467,194 | 305,831 | (38,588) | 829 | (30,380) | 705,471 | ||
Balance, end of period (in shares) at Jun. 30, 2021 | 55,735,623 | ||||||||
Balance at beginning of period at Mar. 31, 2021 | $ 585 | 465,832 | 294,116 | (31,460) | (160) | (30,840) | 698,073 | ||
Balance, beginning of period (in shares) at Mar. 31, 2021 | 56,228,762 | ||||||||
Comprehensive income (loss) | 14,276 | 989 | 15,265 | ||||||
Dividends declared per share | (2,561) | (2,561) | |||||||
ESOP shares committed to be released | 373 | 460 | 833 | ||||||
Share-based compensation expense | 989 | 989 | |||||||
Treasury stock purchased | (7,128) | (7,128) | |||||||
Treasury stock purchased (in shares) | (493,139) | ||||||||
Balance at end of period at Jun. 30, 2021 | $ 585 | 467,194 | 305,831 | (38,588) | 829 | (30,380) | 705,471 | ||
Balance, end of period (in shares) at Jun. 30, 2021 | 55,735,623 | ||||||||
Balance at beginning of period at Dec. 31, 2021 | $ 585 | 469,934 | 325,699 | (85,859) | (1,637) | (29,461) | $ 679,261 | ||
Balance, beginning of period (in shares) at Dec. 31, 2021 | 52,390,478 | 52,390,478 | |||||||
Comprehensive income (loss) | 22,254 | (32,630) | $ (10,376) | ||||||
Dividends declared per share | (6,598) | (6,598) | |||||||
ESOP shares committed to be released | 724 | 919 | 1,643 | ||||||
Restricted stock awards granted, net of forfeitures (in shares) | 100,816 | ||||||||
Performance stock units vested (in shares) | 14,596 | ||||||||
Share-based compensation expense | 2,000 | 2,000 | |||||||
Stock option exercised | $ 8 | 6,861 | 6,869 | ||||||
Stock option exercised (in shares) | 722,705 | ||||||||
Treasury stock purchased | (46,437) | (46,437) | |||||||
Treasury stock purchased (in shares) | (3,239,588) | ||||||||
Balance at end of period at Jun. 30, 2022 | $ 593 | 479,519 | $ (1,884) | 339,471 | (132,296) | (34,267) | (28,542) | $ (1,884) | $ 624,478 |
Balance, end of period (in shares) at Jun. 30, 2022 | 49,989,007 | 49,989,007 | |||||||
Balance at beginning of period at Mar. 31, 2022 | $ 591 | 477,302 | 332,734 | (113,513) | (19,047) | (29,002) | $ 649,065 | ||
Balance, beginning of period (in shares) at Mar. 31, 2022 | 51,257,696 | ||||||||
Comprehensive income (loss) | 9,987 | (15,220) | (5,233) | ||||||
Dividends declared per share | (3,250) | (3,250) | |||||||
ESOP shares committed to be released | 337 | 460 | 797 | ||||||
Restricted stock awards forfeited (in shares) | (8,181) | ||||||||
Performance stock units vested (in shares) | 14,596 | ||||||||
Share-based compensation expense | 1,029 | 1,029 | |||||||
Stock option exercised | $ 2 | 851 | 853 | ||||||
Stock option exercised (in shares) | 83,263 | ||||||||
Treasury stock purchased | (18,783) | (18,783) | |||||||
Treasury stock purchased (in shares) | (1,358,367) | ||||||||
Balance at end of period at Jun. 30, 2022 | $ 593 | $ 479,519 | $ (1,884) | $ 339,471 | $ (132,296) | $ (34,267) | $ (28,542) | $ (1,884) | $ 624,478 |
Balance, end of period (in shares) at Jun. 30, 2022 | 49,989,007 | 49,989,007 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Consolidated Statements of Changes in Stockholders' Equity | ||||
Dividends declared per share | $ 0.07 | $ 0.05 | $ 0.14 | $ 0.10 |
ESOP shares committed to be released (in shares) | 57,681 | 57,681 | 115,362 | 115,362 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 22,254 | $ 33,668 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Provision (benefit) for credit losses | 2,884 | (4,195) |
Net amortization of securities premiums/discounts | 643 | 2,363 |
Proceeds from sale of loans | 357,324 | 1,329,424 |
Loans originated for sale | (334,293) | (1,191,730) |
Net accretion of net deferred loan costs/fees and premiums | (381) | (903) |
Depreciation and amortization of premises and equipment | 1,948 | 2,353 |
Change in mortgage servicing rights fair value | (6,147) | (857) |
Mortgage servicing rights capitalized | (2,715) | (10,265) |
Accretion of fair value adjustment on loans and deposits, net | (713) | (2,189) |
Amortization of other intangible assets | 469 | 647 |
Amortization of subordinated debt issuance costs | 63 | 63 |
Net gains on mortgage loan sales, including fair value adjustments | (9,068) | (32,968) |
Bank-owned life insurance income | (977) | (1,001) |
Income on retirement plan annuities | (219) | (210) |
Write-down of asset held for sale | 196 | |
Net gain on sale and write-down of other real estate owned and repossessed assets | (30) | (9) |
ESOP expense | 1,643 | 1,534 |
Share-based compensation expense | 2,000 | 1,761 |
Net change in: | ||
Decrease (increase) in operating lease right-of-use assets | 304 | (2,648) |
(Decrease) increase in operating lease liabilities | (1,266) | 2,959 |
Change in other assets | 2,491 | 16,923 |
Change in other liabilities | (15,350) | (22,476) |
Net cash provided by operating activities | 21,060 | 122,244 |
Activity in securities available for sale: | ||
Maturities, prepayments and calls | 28,845 | 88,604 |
Purchases | (16,102) | (171,537) |
Activity in securities held to maturity: | ||
Purchases | (10,000) | |
Net redemption of FHLB stock | 306 | 1,497 |
Proceeds on asset held for sale | 685 | |
Loan pool purchase | (58,311) | |
Participation-in loan purchases | (68,383) | (16,742) |
Net loan (originations) payments | (178,772) | 94,520 |
Proceeds from sale of other real estate owned and repossessed assets | 220 | 864 |
Additions to property and equipment | (596) | (4,277) |
Net cash used by investing activities | (302,108) | (7,071) |
Cash flows from financing activities: | ||
Net increase in deposits | 165,237 | 181,464 |
Net change in short-term borrowed funds | 90,000 | (35,000) |
Proceeds from other borrowed funds and subordinated debt | 3,400 | |
Repayment of other borrowed funds | (40,018) | (30,018) |
Net change in mortgagors' escrow accounts | 1,180 | 548 |
Proceeds from exercise of stock options | 6,869 | 643 |
Treasury stock purchased | (46,437) | (21,944) |
Dividends paid | (6,164) | (4,489) |
Net cash provided by financing activities | 170,667 | 94,604 |
Net change in cash and cash equivalents | (110,381) | 209,777 |
Cash and cash equivalents at beginning of period | 194,719 | 205,870 |
Cash and cash equivalents at end of period | 84,338 | 415,647 |
Supplemental cash flow information: | ||
Interest paid on deposits | 3,355 | 5,026 |
Interest paid on borrowed funds | 1,397 | 2,194 |
Income taxes paid, net | 4,621 | 10,649 |
Transfer of loans to other real estate owned and repossessed assets | 163 | 558 |
Dividends declared | $ 6,598 | 5,149 |
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 | 6 Months Ended |
Jun. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The unaudited interim Consolidated Financial Statements of HarborOne Bancorp, Inc. (the “Company”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by the U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying Consolidated Financial Statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the years ended December 31, 2021 and 2020 and notes thereto included in the Company’s Annual Report on Form 10-K. The unaudited interim Consolidated Financial Statements include the accounts of the Company; the Company’s subsidiaries, Legion Parkway Company LLC (a security corporation) and HarborOne Bank (the “Bank”); and the Bank’s wholly-owned subsidiaries, which consist of HarborOne Mortgage, LLC (“HarborOne Mortgage”), a passive investment corporation, and one security corporation. The passive investment corporation maintains and manages certain assets of the Bank. The security corporation was established for the purpose of buying, holding and selling securities on its own behalf. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. These changes and reclassifications did not impact previously reported net income or comprehensive income. Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 31 full-service branches in Massachusetts and Rhode Island, and commercial lending offices in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains 27 offices in Massachusetts, Rhode Island, and New Hampshire and is licensed to lend 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, home equity, and consumer loans. The Company also originates, sells and services residential mortgage loans through HarborOne Mortgage. Risks and Uncertainties COVID-19 impacted a broad range of industries in which the Company's customers operate and could still impair their ability to fulfill their financial obligations to the Company. COVID-19 case and hospitalization trends have generally improved despite the continued emergence of new variants. Macroeconomic trends are mixed as uncertainty remains about the timing and strength of the economy’s recovery from the impact of the COVID-19 pandemic. The Company could experience adverse effects on its business, financial condition, results of operations and cash flows if there is further escalation of the current geopolitical situation, sustained supply chain disruptions, severe inflation, or if there is a resurgence in the virus. While asset quality continues to point to economic recovery, the continued uncertainty regarding the COVID-19 pandemic and the related economic effects on credit quality could continue to affect the accounting for credit losses. Although credit quality has not been a severely impacted so far, it is possible that asset quality could worsen, and loan charge-offs could increase as government aid expires or if new variants result in renewed business restrictions. Summary of Significant Accounting Policies and Recently Adopted Accounting Standards Updates (“ASU”) Significant accounting policies in effect and disclosed within the Company’s most recent audited consolidated financial statements as of December 31, 2021 remain substantially unchanged with the exception of the accounting policy for credit losses, commonly referred to as “CECL,” as a result of adopting ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) ASU 2016-13 was issued in June 2016. ASU 2016-13 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 at the reporting date. The measurement is based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. For available-for-sale debt securities with unrealized losses, Topic 326 requires credit losses to be recognized as an allowance rather than a reduction in the amortized cost of the securities. As a result, improvements to estimated credit losses are recognized immediately in earnings rather than as interest income over time. ASU 2016-13 provides for a modified retrospective transition, resulting in a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is effective. The Company adopted ASU 2016-13, including the subsequent ASUs issued to clarify Topic 326 (“Topic 326”), on January 1, 2022. The Company assembled a cross-functional project team that met regularly to address the additional data requirements, to determine the approach for implementation and to identify new internal controls over accounting processes for estimating the allowance for credit losses (“ACL”). This included assessing the adequacy of existing loan and loss data, assessing models for default and loss estimates, conducting limited “trial” runs and analytical reviews through December 31, 2021, and completing independent model validation and documentation of ACL processes and controls in the first quarter of 2022. In accordance with Topic 326, the Company has updated its ACL accounting policies. Required policy disclosures are provided in Notes 2, 4, and 9. Upon adoption of Topic 326 on January 1, 2022, the ACL for loans decreased by $1.3 million and the ACL for unfunded commitments increased by $3.9 million, as compared to December 31, 2021. The increases in the ACL on loans and unfunded commitments upon adoption resulted in a one-time cumulative-effect adjustment that decreased retained earnings by $1.9 million, net of deferred tax balances of $737,000 . The Company has not elected to use the CECL transition provision provided by regulatory guidance issued by the Federal Deposit Insurance Corporation (“FDIC”) in March 2020, and as such the full impact of the adoption is reflected in Tier 2 capital ratios. See Note 12 for additional disclosure on regulatory capital. ASUs not yet Adopted In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, “Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”). ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings (“TDRs”) in Accounting Standards Codification (“ASC”) 310-40, “Receivables – Troubled Debt Restructurings by Creditors” for entities that have adopted the current expected credit loss (“CECL”) model introduced by ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2022-02 also requires that public business entities disclose current-period gross charge-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, “Financial Instruments — Credit Losses — Measured at Amortized Cost”. ASU 2022-02 is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the effect that ASU 2022-02 will have on its consolidated financial statements and related disclosures. |
DEBT SECURITIES
DEBT SECURITIES | 6 Months Ended |
Jun. 30, 2022 | |
DEBT SECURITIES | |
DEBT SECURITIES | 2. DEBT SECURITIES Adoption of Topic 326 Effective January 1, 2022, the Company adopted the provisions of Topic 326 using the modified retrospective method. Therefore, prior period comparative information has not been adjusted and continues to be reported under GAAP in effect prior to the adoption of Topic 326. There was no ACL on available-for-sale debt securities recognized upon the adoption of Topic 326. Accounting Policy Updates Effective January 1, 2022, the Company has modified its accounting policy for the assessment of debt securities for impairment. The updated policy is detailed below. The Company has made an accounting policy election to exclude accrued interest from the amortized cost basis of debt securities and reports accrued interest separately in other assets in the Unaudited Consolidated Balance Sheets. The Company also excludes accrued interest from the estimate of credit losses. A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a debt security placed on nonaccrual is reversed against interest income. There were no debt securities on nonaccrual status, and therefore there was no accrued interest related to debt securities reversed against interest income, for the three months ended June 30, 2022 and 2021. The Company measures expected credit losses on held to maturity securities on a collective basis by major security type in accordance with the CECL methodology. As of June 30, 2022, the held to maturity securities were U.S. government-sponsored agency obligations. These securities are guaranteed by the government sponsored agency with a long history of no credit losses. As a result, management has determined these securities to have a zero loss expectation and therefore does not estimate an allowance for credit losses on these securities. For available-for-sale debt securities in an unrealized loss position, management first assesses whether the Company intends to sell, or if it is likely that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through a provision for credit losses charge to earnings. For debt securities available for sale that do not meet either these criteria, management evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers both quantitative and qualitative factors. A substantial portion of available-for-sale debt securities held by the Company are obligations issued by U.S. government agency and U.S. government-sponsored enterprises, including mortgage-backed securities. These securities are either explicitly or implicitly guaranteed by the U.S. government, which are highly rated by major credit rating agencies and have a long history of no credit losses. For these securities, management takes into consideration the long history of no credit losses and other factors to assess the risk of nonpayment even if the U.S. government were to default. As such, the Company has utilized a zero loss estimate due to credit for these securities. For available-for-sale debt securities that are not guaranteed by U.S. government agencies and U.S. government-sponsored enterprises, such as corporate bonds, management utilizes a third-party credit modeling tool based on observable market data, which assists management in identifying any potential credit risk associated with its available-for-sale debt securities. In addition, qualitative factors are also considered, including the extent to which fair value is less than amortized cost, changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If a credit loss exists based on the results of this assessment, an ACL (contra asset) is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is considered market-related and is recognized in other comprehensive income, net of taxes. Changes in the ACL on available-for-sale debt securities are recorded as provision for (or reversal of) credit losses. Losses are charged against the ACL when management believes the uncollectibility of an available for sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Debt Securities The amortized cost and fair value with gross unrealized gains and losses, and ACL on securities is as follows: Gross Gross Allowance Amortized Unrealized Unrealized for Credit Fair Cost Gains Losses Losses Value (in thousands) June 30, 2022: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 47,142 $ — $ 6,092 $ — $ 41,050 U.S. government agency and government-sponsored residential mortgage-backed securities 329,742 4 43,586 — 286,160 U.S. government-sponsored collateralized mortgage obligations 3,166 — 42 — 3,124 SBA asset-backed securities 3,235 — 111 — 3,124 Corporate bonds 1,000 — 60 — 940 Total securities available for sale $ 384,285 $ 4 $ 49,891 $ — $ 334,398 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 10,000 $ — $ 168 $ — $ 9,832 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 Seventeen mortgage-backed securities with a combined fair value of $13.9 million were pledged as collateral for interest rate swap agreements as of December 31, 2021. There were no securities pledged as collateral for interest rate swap agreements as of June 30, 2022 (see Note 10). The amortized cost and fair value of debt securities by contractual maturity at June 30, 2022 is as follows: Available for Sale Held to Maturity Amortized Fair Amortized Fair Cost Value Cost Value (in thousands) After 1 year through 5 years $ — $ — $ — $ — After 5 years through 10 years 48,142 41,990 10,000 9,832 Over 10 years — — — — 48,142 41,990 10,000 9,832 U.S. government agency and government-sponsored residential mortgage-backed securities 329,742 286,160 — — U.S. government-sponsored collateralized mortgage obligations 3,166 3,124 — — SBA asset-backed securities 3,235 3,124 — — Total $ 384,285 $ 334,398 $ 10,000 $ 9,832 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 three to 29 years ; however, it is expected that such securities will have shorter actual lives due to prepayments. U.S. government and government-sponsored enterprise obligations and corporate bonds are callable at the discretion of the issuer. U.S. government and government-sponsored enterprise obligations and corporate bonds with a total fair value of $51.8 million have a final maturity of five to ten years and a call feature of one month to five years . At June 30, 2022 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. There were no sales or calls of securities in the three or six months ended June 30, 2022 or 2021, respectively. Information pertaining to securities with gross unrealized losses at June 30, 2022 and December 31, 2021 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) June 30, 2022: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 6,092 $ 41,050 $ — $ — U.S. government agency and government-sponsored residential mortgage-backed securities 33,520 226,948 10,066 58,708 U.S. government-sponsored collateralized mortgage obligations 42 3,124 — — SBA asset-backed securities 111 3,124 — — Corporate bonds 60 940 — — $ 39,825 $ 275,186 $ 10,066 $ 58,708 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 168 $ 9,832 — — 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 Management assesses the decline in fair value of investment securities on a regular basis. Unrealized losses on debt securities may occur from current market conditions, increases in interest rates since the time of purchase, a structural change in an investment, volatility of earnings of a specific issuer, or deterioration in credit quality of the issuer. Management evaluates both qualitative and quantitative factors to assess whether an impairment exists. For the accounting policy on the assessment of available-for-sale debt securities for impairment that was in effect prior to the adoption of Topic 326, see Note 1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. As of June 30, 2022, the Company’s security portfolio consisted of 130 debt securities, 126 of which were in an unrealized loss position. The unrealized losses are primarily related to the Company’s debt securities that were issued by U.S. government-sponsored entities and agencies. The Company does not believe that the debt securities that were in an unrealized loss position as of June 30, 2022 represent a credit loss impairment. As of June 30, 2022, and December 31, 2021, the gross unrealized loss positions were primarily related to mortgage-backed securities and other obligations issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government and have a long history of zero credit loss. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. Management reviewed the collectability of the corporate bond taking into consideration such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, credit ratings, including ratings in effect as of the reporting period date as well as credit rating changes between the reporting period date and the filing date of this report, and other information. Management believes the unrealized losses on the corporate bond are primarily attributable to changes in the investment spreads and interest rates and not changes in the credit quality of the issuers of the corporate bond. Management expects to recover the entire amortized cost basis of the debt securities with an unrealized loss. Furthermore, the Company does not intend to sell these securities, and it is likely that the Company will not be required to sell these securities, before recovery of their cost basis, which may be maturity. Therefore, no allowance for credit losses was recorded at June 30, 2022. |
LOANS HELD FOR SALE
LOANS HELD FOR SALE | 6 Months Ended |
Jun. 30, 2022 | |
LOANS HELD FOR SALE | |
LOANS HELD FOR SALE | 3. LOANS HELD FOR SALE The following table provides the fair value and contractual principal balance outstanding of loans held for sale accounted for under the fair value option: June 30, December 31, 2022 2021 (in thousands) Loans held for sale, fair value $ 31,679 $ 45,642 Loans held for sale, contractual principal outstanding 31,073 44,245 Fair value less unpaid principal balance $ 606 $ 1,397 The Company has elected the fair value option for mortgage loans held for sale to better match changes in fair value of the loans with changes in the fair value of the forward sale commitment contracts used to economically hedge them. Changes in fair value of mortgage loans held for sale accounted for under the fair value option election amounted to a decrease of $791,000 in the six months ended June 30, 2022 to $606,000, compared to a decrease of $6.1 million in the six months ended June 30, 2021. These amounts are offset in earnings by the changes in fair value of forward sale commitments. The changes in fair value are reported as a component of gain on sale of mortgage loans in the Unaudited Consolidated Statements of Income. At June 30, 2022 and December 31, 2021, there were no loans held for sale that were greater than 90 days past due. |
LOANS AND ALLOWANCE FOR CREDIT
LOANS AND ALLOWANCE FOR CREDIT LOSSES | 6 Months Ended |
Jun. 30, 2022 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES A summary of the balances of loans follows: June 30, December 31, 2022 2021 (in thousands) Residential real estate: One- to four-family $ 1,229,950 $ 1,047,819 Second mortgages and equity lines of credit 151,683 136,853 Residential real estate construction 41,441 33,308 Total residential real estate loans 1,423,074 1,217,980 Commercial: Commercial real estate 1,847,619 1,699,877 Commercial construction 158,762 136,563 Commercial and industrial 407,182 421,608 Total commercial loans 2,413,563 2,258,048 Consumer loans: Auto 68,533 124,354 Personal 6,779 7,351 Total consumer loans 75,312 131,705 Total loans 3,911,949 3,607,733 Allowance for loan losses (43,560) (45,377) Loans, net $ 3,868,389 $ 3,562,356 The net unamortized deferred loan origination costs included in total loans and leases were $7.2 million and $5.4 million as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022 and December 31, 2021, the commercial and industrial loans include $2.5 million and $27.0 million, respectively, of U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans and $93,000 and $949,000, respectively, of deferred fees on the PPP loans. PPP loans are fully guaranteed by the U.S. government. The Company has transferred a portion of its originated commercial loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying unaudited interim Consolidated Balance Sheets. The Company and participating lenders share ratably in cash flows and any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders and disburses required escrow funds to relevant parties. At June 30, 2022 and December 31, 2021, the Company was servicing commercial loans for participants in the aggregate amount of $316.4 million and $288.9 million, respectively. Adoption of Topic 326 Effective January 1, 2022, the Company adopted the provisions of Topic 326 using the modified retrospective method. Therefore, prior period comparative information has not been adjusted and continues to be reported under GAAP in effect prior to the adoption of Topic 326. As a result of adopting Topic 326, the Company decreased the ACL on loans by $1.3 million on January 1, 2022. Accounting Policy Updates Effective January 1, 2022, the Company has modified its accounting policy for the ACL on loans as described below. The Company has made an accounting policy election to exclude accrued interest from the amortized cost basis of loans and reports accrued interest separately in other assets in the Unaudited Consolidated Balance Sheets. The Company also excludes accrued interest from the estimate of credit losses. Accrued interest receivable on loans totaled $10.3 million and $9.6 million, respectively, as of June 30, 2022 and December 31, 2021. The ACL on loans is management’s estimate of expected credit losses over the expected life of the loans at the reporting date. The ACL on loans is increased through a provision for credit losses recognized in the Unaudited Consolidated Statements of Income and by recoveries of amounts previously charged off. The ACL on loans is reduced by charge-offs on loans. Loan charge-offs are recognized when management believes the collectability of the principal balance outstanding is unlikely. Full or partial charge-offs on collateral-dependent individually analyzed loans are generally recognized when the collateral is deemed to be insufficient to support the carrying value of the loan. The level of the ACL on loans is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the calculation of loss given default and the estimation of expected credit losses. As discussed further below, adjustments to historical information are made for differences in specific risk characteristics, such as differences in underwriting standards, portfolio mix, delinquency level, or term, as well as for changes in environmental conditions, that may not be reflected in historical loss rates. Management employs a process and methodology to estimate the ACL on loans that evaluates both quantitative and qualitative factors. The methodology for evaluating quantitative factors consists of two basic components. The first component involves pooling loans into portfolio segments for loans that share similar risk characteristics. Pooled loan portfolio segments include commercial real estate, commercial and industrial, commercial construction, residential real estate (including homeowner construction), home equity and consumer loans. The second component involves individually analyzed loans that do not share similar risk characteristics with loans that are pooled into portfolio segments. Individually analyzed loans include nonaccrual loans, commercial loans risk-rated 8 or greater, loans classified as troubled debt restructured loans (“TDR”) and certain other loans based on the underlying risk characteristics and the discretion of management to individually analyze such loans. For loans that are individually analyzed, the ACL is measured using a discounted cash flow (“DCF”) methodology based upon the loan’s contractual effective interest rate, or at the loan’s observable market price, or, if the loan is collateral-dependent, at the fair value of the collateral. Factors management considers when measuring the extent of expected credit loss include payment status, collateral value, borrower financial condition, guarantor support and the probability of collecting scheduled principal and interest payments when due. For collateral-dependent loans for which repayment is to be provided substantially through the sale of the collateral, management adjusts the fair value for estimated costs to sell. For collateral-dependent loans for which repayment is to be provided substantially through the operation of the collateral, such as accruing TDRs, estimated costs to sell are not incorporated into the measurement. Management may also adjust appraised values to reflect estimated market value declines or apply other discounts to appraised values for unobservable factors resulting from its knowledge of circumstances associated with the collateral. For pooled loans, the Company utilizes a DCF methodology to estimate credit losses over the expected life of the loan. The life of the loan excludes expected extensions, renewal and modifications, unless: (1) the extension or renewal options are included in the original or modified contract terms and not unconditionally cancellable by the Company; or (2) management reasonably expects at the reporting date that a troubled debt restructuring will be executed with an individual borrower. The methodology incorporates the probability of default and loss given default, which are identified by default triggers such as past due by 90 or more days, whether a charge-off has occurred, the loan is nonaccrual, the loan has been modified in a troubled debt restructuring or the loan is risk-rated as special mention, substandard, or doubtful. The probability of default for the life of the loan is determined by the use of an econometric factor. Management utilizes the national unemployment rate as an econometric factor with a one-year forecast period and one-year straight-line reversion period to the historical mean of its macroeconomic assumption in order to estimate the probability of default for each loan portfolio segment. Utilizing a third-party regression model, the forecasted national unemployment rate is correlated with the probability of default for each loan portfolio segment. The DCF methodology combines the probability of default, the loss given default, maturity date and prepayment speeds to estimate a reserve for each loan. The sum of all the loan level reserves are aggregated for each portfolio segment and a loss rate factor is derived. Quantitative loss factors are also supplemented by certain qualitative risk factors reflecting management’s view of how losses may vary from those represented by quantitative loss rates. These qualitative risk factors include: (1) changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses; (2) changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments; (3) changes in the nature of the portfolio and in the volume of past due loans; (4) changes in the experience, ability, and depth of lending management and other relevant staff; (5) changes in the quality of the loan review system; (6) changes in the value of underlying collateral for collateral-dependent loans; (7) the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and (8) the effect of other external factors such as legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio. Qualitative loss factors are applied to each portfolio segment and determined based on the risk characteristics of each segment. Because the methodology is based upon historical experience and trends, current economic data, reasonable and supportable forecasts, as well as management’s judgment, factors may arise that result in different estimations. Deteriorating conditions or assumptions could lead to further increases in the ACL on loans. In addition, various regulatory agencies periodically review the ACL on loans. Such agencies may require additions to the allowance based on their judgments about information available to them at the time of their examination. The ACL on loans is an estimate, and ultimate losses may vary from management’s estimate. The following table presents the activity in the ACL on loans for the three and six months ended June 30, 2022: 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 March 31, 2022 $ 8,884 $ 833 $ 314 $ 20,131 $ 4,210 $ 6,949 $ 444 $ — $ 41,765 Charge-offs — — — — — — (11) — (11) Recoveries — 81 — 6 — 406 23 — 516 Provision 1,198 (65) 13 294 160 (181) (129) — 1,290 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ — $ 43,560 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, 2021 $ 3,631 $ 420 $ 69 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 Adoption of Topic 326 5,198 391 185 (10,194) 1,698 2,288 123 (1,000) (1,311) Charge-offs — — — (2,786) — (40) (31) — (2,857) Recoveries — 93 — 6 — 473 60 — 632 Provision 1,253 (55) 73 163 662 (185) (192) — 1,719 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ — $ 43,560 For the accounting policy on the allowance for loan losses that was in effect prior to the adoption of Topic 326, see Note 1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The following is the activity in the allowance for loan losses for the three and six months ended June 30, 2021: Second Mortgages Residential Residential and Equity Real Estate Commercial Commercial Commercial Real Estate Lines of Credit Construction Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at March 31, 2021 $ 6,136 $ 936 $ 197 $ 34,987 $ 2,237 $ 6,627 $ 2,064 $ 2,200 $ 55,384 Provision for loan losses (1,546) (364) (74) (1,984) (300) 1,422 (1,239) (201) (4,286) Charge-offs — — — (12) — — (31) — (43) Recoveries 118 31 — — — 10 59 — 218 Balance at June 30, 2021 $ 4,708 $ 603 $ 123 $ 32,991 $ 1,937 $ 8,059 $ 853 $ 1,999 $ 51,273 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, 2020 $ 6,168 $ 1,054 $ 197 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Provision for loan losses (1,604) (527) (74) (1,766) (18) 2,916 (1,651) (1,471) (4,195) Charge-offs — — — (12) — (186) (86) — (284) Recoveries 144 76 — 4 — 18 115 — 357 Balance at June 30, 2021 $ 4,708 $ 603 $ 123 $ 32,991 $ 1,937 $ 8,059 $ 853 $ 1,999 $ 51,273 Effective January 1, 2022, individually analyzed loans include nonaccrual loans, loans classified as TDRs, and certain other loans based on the underlying risk characteristics and the discretion of management to individually analyze such loans. As of June 30, 2022, the carrying value of individually analyzed loans amounted to $33.2 million, with a related allowance of $3.6 million, and $24.0 million were considered collateral dependent. For collateral-dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. The following table presents the carrying value of collateral-dependent individually analyzed loans as of June 30, 2022: Related Carrying Value Allowance (in thousands) Commercial: Commercial real estate $ 10,620 $ 3,099 Commercial and industrial 3,626 24 Commercial construction — — Total Commercial 14,246 3,123 Residential real estate 9,732 319 Total $ 23,978 $ 3,442 Prior to January 1, 2022, a loan was considered impaired when, based on current information and events, it was probable that Company would not be able to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Impaired loans included nonaccrual loans and loans restructured in a troubled debt restructuring. The Company identified loss allocations for impaired loans on an individual loan basis. The following is a summary of impaired loans. 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 The following information pertains to impaired loans: December 31, 2021 Unpaid Recorded Principal Related Investment Balance Allowance (in thousands) Impaired loans without a specific reserve: Residential real estate $ 14,115 $ 15,335 $ — Commercial real estate 2,641 2,692 — Commercial construction — — — Commercial and industrial 1,389 3,396 — Total 18,145 21,423 — Impaired loans with a specific reserve: Residential real estate 8,995 9,791 650 Commercial real estate 17,562 24,847 7,275 Commercial construction — — — Commercial and industrial 2,793 3,596 21 Total 29,350 38,234 7,946 Total impaired loans $ 47,495 $ 59,657 $ 7,946 Three Months Ended June 30, 2021 Interest Average Interest Income Recorded Income Recognized Investment Recognized on Cash Basis (in thousands) Residential real estate $ 22,268 $ 247 $ 54 Commercial real estate 12,455 63 63 Commercial construction — — — Commercial and industrial 7,834 16 16 Total $ 42,557 $ 326 $ 133 Six Months Ended June 30, 2021 Interest Average Interest Income Recorded Income Recognized Investment Recognized on Cash Basis (in thousands) Residential real estate $ 22,973 $ 543 $ 159 Commercial real estate 12,474 65 65 Commercial construction — — — Commercial and industrial 8,342 136 136 Total $ 43,789 $ 744 $ 360 Interest income recognized and interest income recognized on a cash basis in the tables above represent interest income for the three and six months ended June 30, 2021, not for the time period designated as impaired. No additional funds are committed to be advanced in connection with impaired loans. The following is a summary of past due and non-accrual loans at June 30, 2022 and December 31, 2021: 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) June 30, 2022 Residential real estate: One- to four-family $ 269 $ 1,393 $ 5,247 $ 6,909 $ 9,772 Second mortgages and equity lines of credit 130 151 84 365 329 Commercial real estate 348 — 2,153 2,501 10,620 Commercial construction — — — — — Commercial and industrial 1,533 152 3,166 4,851 3,626 Consumer: Auto 525 34 62 621 65 Personal 1 2 3 6 3 Total $ 2,806 $ 1,732 $ 10,715 $ 15,253 $ 24,415 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 At June 30, 2022 and December 31, 2021, there were no loans past due 90 days or more and still accruing. There were no material TDR loan modifications for the three and six months ended June 30, 2022 and 2021. The recorded investment in TDRs was $9.9 million and $11.0 million at June 30, 2022 and December 31, 2021, respectively. Commercial TDRs totaled $361,000 and $408,000 at June 30, 2022 and December 31, 2021, respectively. The remainder of the TDRs outstanding at the end of these periods were residential loans. Non-accrual TDRs totaled $988,000 at June 30, 2022 and $1.0 million at December 31, 2021. Of these loans, $171,000 and $190,000 were non-accrual commercial TDRs at June 30, 2022 and December 31, 2021, respectively. All TDR loans are considered impaired, and management performs a DCF calculation to determine the amount of impairment reserve required on each loan. TDR loans which subsequently default are reviewed to determine if the loan should be deemed collateral dependent. In either case, any reserve required is recorded as part of the allowance for loan losses. During the three and six months ended June 30, 2022 and 2021, there were no payment defaults on TDRs. Credit Quality Indicators Commercial The Company uses a ten-grade internal loan rating system for commercial real estate, commercial construction and commercial loans, as follows: Loans rated 1 – 6 are considered “pass”-rated loans with low to average risk. Loans rated 7 are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management. Loans rated 8 are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected. Loans rated 9 are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. Loans rated 10 are considered “uncollectible” (loss), and of such little value that their continuance as loans is not warranted. Loans not rated consist primarily of certain smaller balance commercial real estate and commercial loans that are managed by exception. On an annual basis, or more often if needed, the Company formally reviews on a risk adjusted basis, the ratings on all commercial real estate, construction and commercial loans. Semi-annually, the Company engages an independent third party to review a significant portion of loans within these segments. Management uses the results of these reviews as part of its annual review process. Residential and Consumer 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 summarizes the Company’s loan portfolio by credit quality indicator and loan portfolio segment as of June 30, 2022: Revolving Revolving Loans Term Loans at Amortized Cost by Origination Year Loans Converted to 2022 2021 2020 2019 2018 Prior Amortized Cost Term Loans Total (in thousands) As of June 30, 2022 Commercial real estate Pass $ 330,697 $ 427,181 $ 250,180 $ 273,804 $ 144,725 $ 387,436 $ — $ — $ 1,814,023 Special mention — — — — 22,557 419 — — 22,976 Substandard — — — — — 10,620 — — 10,620 Doubtful — — — — — — — — — Total commercial real estate 330,697 427,181 250,180 273,804 167,282 398,475 — — 1,847,619 Commercial and industrial Pass 23,948 95,254 77,600 28,549 40,089 59,658 78,386 — 403,484 Special mention — 5 — — 58 49 — — 112 Substandard — — — — — 338 — — 338 Doubtful — — — — — 3,198 50 — 3,248 Total commercial and industrial 23,948 95,259 77,600 28,549 40,147 63,243 78,436 — 407,182 Commercial construction Pass 31,471 92,080 13,279 20,230 195 1,507 — — 158,762 Special mention — — — — — — — — — Substandard — — — — — — — — — Doubtful — — — — — — — — — Total commercial construction 31,471 92,080 13,279 20,230 195 1,507 — — 158,762 Residential real estate Accrual 210,612 514,568 219,995 43,871 26,563 257,873 137,745 1,746 1,412,973 Nonaccrual — 333 1,154 8,561 53 — 10,101 Total residential real estate 210,612 514,568 219,995 44,204 27,717 266,434 137,798 1,746 1,423,074 Consumer Accrual 4,520 4,402 2,727 46,346 11,479 4,733 1,037 — 75,244 Nonaccrual — — — 34 1 33 — — 68 Total Consumer 4,520 4,402 2,727 46,380 11,480 4,766 1,037 — 75,312 Total Loans $ 601,248 $ 1,133,490 $ 563,781 $ 413,167 $ 246,821 $ 734,425 $ 217,271 $ 1,746 $ 3,911,949 The following table presents the Company’s loans by risk rating at December 31, 2021: December 31, 2021 Commercial Commercial Commercial Real Estate Construction and Industrial (in thousands) Loans rated 1 - 6 $ 1,645,871 $ 136,563 $ 417,408 Loans rated 7 33,953 — 85 Loans rated 8 20,053 — 694 Loans rated 9 — — 3,421 Loans rated 10 — — — $ 1,699,877 $ 136,563 $ 421,608 The Company adopted CECL using the prospective transition approach for financial assets purchased with credit deterioration (“PCD”) that were previously classified as purchased credit impaired and accounted for under ASC 310-30 Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”). Prior to January 1, 2022, ASC 310-30 required the following table that summarizes activity in the accretable yield for PCI loans: Three Months Ended Six Months Ended June 30, 2021 June 30, 2021 (in thousands) Balance at beginning of period $ 138 $ 141 Additions — — Accretion (2) (5) Reclassification from nonaccretable difference — — Balance at end of period $ 136 $ 136 |
MORTGAGE LOAN SERVICING
MORTGAGE LOAN SERVICING | 6 Months Ended |
Jun. 30, 2022 | |
MORTGAGE LOAN SERVICING | |
MORTGAGE LOAN SERVICING | 5. MORTGAGE LOAN SERVICING The Company sells residential mortgages to government-sponsored entities and other parties. The Company retains no beneficial interests in these loans, but may retain the servicing rights of the loans sold. Mortgage loans serviced for others are not included in the accompanying unaudited interim Consolidated Balance Sheets. The risks inherent in mortgage servicing rights (“MSRs”) relate primarily to changes in prepayments that primarily result from shifts in mortgage interest rates. The unpaid principal balance of mortgage loans serviced for others was $3.65 billion as of June 30, 2022 and December 31, 2021. 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 June 30, December 31, 2022 2021 Prepayment speed 7.20 % 9.40 % Discount rate 9.24 9.20 Default rate 1.49 1.64 The following summarizes changes to MSRs for the three and six months ended June 30, 2022 and 2021: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Balance, beginning of period $ 45,043 $ 33,939 $ 38,268 $ 24,833 Additions 1,225 4,568 2,715 10,265 Changes in fair value due to: Reductions from loans paid off during the period (771) (1,501) (1,604) (3,100) Changes in valuation inputs or assumptions 1,633 (1,051) 7,751 3,957 Balance, end of period $ 47,130 $ 35,955 $ 47,130 $ 35,955 Contractually specified servicing fees, net of subservicing expense, included in other mortgage banking income amounted to $2.1 million and $4.0 million for the three and six months ended June 30, 2022 and $1.9 million and $3.5 million for the three and six months ended June 30, 2021. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS As of June 30, 2022 the Company had $69.8 million in goodwill, of which $59.0 million was allocated to the HarborOne Bank reporting unit and $10.8 million was allocated to the HarborOne Mortgage reporting unit. The Company typically performs its goodwill impairment test during the fourth quarter of the year, unless certain indicators suggest earlier testing to be warranted. Other intangible assets were $2.7 million and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company determined that there was no triggering event that warranted an interim impairment test at June 30, 2022. |
DEPOSITS
DEPOSITS | 6 Months Ended |
Jun. 30, 2022 | |
DEPOSITS | |
DEPOSITS | 7. DEPOSITS A summary of deposit balances, by type, is as follows: June 30, December 31, 2022 2021 (in thousands) NOW and demand deposit accounts $ 1,091,993 $ 1,056,784 Regular savings and club accounts 1,282,913 1,138,979 Money market deposit accounts 885,673 858,970 Total non-certificate accounts 3,260,579 3,054,733 Term certificate accounts greater than $250,000 101,931 108,426 Term certificate accounts less than or equal to $250,000 385,423 419,490 Brokered deposits 100,000 100,000 Total certificate accounts 587,354 627,916 Total deposits $ 3,847,933 $ 3,682,649 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 June 30, 2022 and December 31, 2021, total reciprocal deposits were $36.5 million and $43.8 million, respectively, consisting primarily of demand deposit accounts. A summary of certificate accounts by maturity at June 30, 2022 is as follows: Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 421,621 0.37 % Over 1 year to 2 years 127,833 1.03 Over 2 years to 3 years 24,707 0.99 Over 3 years to 4 years 10,509 0.67 Over 4 years to 5 years 2,866 0.72 Total certificate deposits 587,536 0.55 % Less unaccreted acquisition discount (182) Total certificate deposits, net $ 587,354 |
BORROWINGS
BORROWINGS | 6 Months Ended |
Jun. 30, 2022 | |
BORROWINGS | |
BORROWINGS | 8. Borrowed funds at June 30, 2022 and December 31, 2021 consist of Federal Home Loan Bank (“FHLB”) advances. Short-term advances were $90.0 million at June 30, 2022, with a weighted average rate of 1.70%. There were no short-term advances at December 31, 2021. Long-term advances are summarized by maturity date below. June 30, 2022 December 31, 2021 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: 2022 $ — $ — — % $ — 40,000 — % 2023 183 183 1.43 185 185 1.46 2024 13,400 13,400 1.39 13,400 13,400 1.39 2025 987 987 — 40,987 987 1.32 2026 — — — — — — 2027 and thereafter 1,123 1,123 2.00 1,139 1,139 2.00 $ 15,693 $ 15,693 1.35 % $ 55,711 $ 55,711 1.35 % * Includes an amortizing advance requiring monthly principal and interest payments. (1) (2) 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 $1.24 billion at June 30, 2022 and $1.22 billion at December 31, 2021. As of June 30, 2022, the Company had $829.5 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 (“FRBB”), secured by 68% of the carrying value of indirect auto and commercial loans with principal balances amounting to $97.8 million and $101.4 million at June 30, 2022 and December 31, 2021, respectively. No amounts were outstanding under either line at June 30, 2022 or December 31, 2021. On August 30, 2018, the Company issued $35.0 million in fixed-to-floating rate subordinated notes due 2028 (the “Notes”) in a private placement transaction to institutional accredited investors. The Notes bear interest at annual fixed rate of 5.625% until September 1, 2023 at which time the interest rate resets quarterly to an interest rate per annum equal to the three–month LIBOR plus 278 basis points. Interest is payable semi-annually on March 1 and September 1 each year through September 1, 2023 and quarterly thereafter. The Notes can be redeemed partially or in whole, prior to the maturity date beginning September 1, 2023 and on any scheduled interest payment date thereafter, at par. The Notes are carried on the Consolidated Balance Sheets net of unamortized issuance costs of $778,000 and $841,000 at June 30, 2022 and December 31, 2021, respectively. |
OTHER COMMITMENTS AND CONTINGEN
OTHER COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
OTHER COMMITMENTS AND CONTINGENCIES | |
OTHER COMMITMENTS AND CONTINGENCIES | 9. OTHER COMMITMENTS AND CONTINGENCIES Adoption of Topic 326 As disclosed in Note 2, Topic 326 requires the measurement of expected lifetime credit losses for unfunded commitments that are considered off-balance sheet credit exposures. The Company adopted the provisions of Topic 326 effective January 1, 2022 using the modified retrospective method. Therefore, the prior period comparative information has not been adjusted and continues to be reported under GAAP in effect prior to the adoption of Topic 326. As a result of adopting Topic 326, the Company recognized an increase in the ACL on unfunded commitments of $3.9 million on January 1, 2022. Effective January 1, 2022, the Company has modified its accounting policy for the ACL on unfunded commitments. The updated policy is detailed below. The ACL on unfunded commitments is management’s estimate of expected credit losses over the expected contractual term (or life) in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. For each portfolio, estimated loss rates and funding factors are applied to the corresponding balance of unfunded commitments. For each portfolio, the estimated loss rates applied to unfunded commitments are the same quantitative and qualitative loss rates applied to the corresponding on-balance sheet amounts in determining the ACL on loans. The estimated funding factor applied to unfunded commitments represents the likelihood that the funding will occur and is based upon the Company’s average historical utilization rate for each portfolio. The ACL on unfunded commitments is included in other liabilities in the Unaudited Consolidated Balance Sheets. The ACL on unfunded commitments is adjusted through a provision for credit losses recognized in the Unaudited Consolidated Statements of Income. The ACL on unfunded commitments amounted to $5.1 million at June 30, 2022. The activity in the ACL on unfunded commitments for the three months ended June 30, 2022 is presented below: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Total (in thousands) Balance at March 31, 2022 $ 339 $ 538 $ 2,345 $ 604 $ 14 $ 3,840 Provision (2) (56) 1,293 20 1 1,256 $ 337 $ 482 $ 3,638 $ 624 $ 15 $ 5,096 The activity in the ACL on the unfunded commitments for the six months ended June 30, 2022 is presented below: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Total (in thousands) Balance at December 31, 2021 $ — $ — $ — $ — $ — $ — Adoption of Topic 326 318 380 2,561 658 14 3,931 Provision 19 102 1,077 (34) 1 1,165 $ 337 $ 482 $ 3,638 $ 624 $ 15 $ 5,096 Loan Commitments The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and advance funds on various lines of credit. Those commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the accompanying unaudited interim Consolidated Financial Statements. The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments. The following off-balance sheet financial instruments were outstanding at June 30, 2022 and December 31, 2021. The contract amounts represent credit risk. June 30, December 31, 2022 2021 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 153,938 $ 142,781 Commitments to grant other loans 103,802 27,029 Unadvanced funds on home equity lines of credit 229,509 211,120 Unadvanced funds on revolving lines of credit 251,995 223,110 Unadvanced funds on construction loans 294,452 194,101 Commitments to extend credit and unadvanced portion of construction loans are agreements to lend to a customer, as long as there is no violation of any condition established in the contract. Commitments to grant loans generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for unadvanced funds on construction loans and home equity and revolving lines of credit may expire without being drawn upon; therefore, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. Commitments to grant loans, and unadvanced construction loans and home equity lines of credit are collateralized by real estate, while revolving lines of credit are unsecured. |
DERIVATIVES
DERIVATIVES | 6 Months Ended |
Jun. 30, 2022 | |
DERIVATIVES | |
DERIVATIVES | 10. DERIVATIVES The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally to manage the Company’s interest rate risk. Additionally, the Company enters into interest rate derivatives to accommodate the business requirements of its customers. All derivatives are recognized as either assets or liabilities on the balance sheet and are measured at fair value. The accounting for changes in the fair value of a derivative instrument depends upon whether or not it qualifies as a hedge for accounting purposes, and further, by the type of hedging relationship. Interest Rate Swaps Designated as a Cashflow Hedge As part of its interest rate risk management strategy, the Company utilizes interest rate swap agreements to help manage its interest rate risk positions. The notional amount of the interest rate swaps do not represent the amount exchanged by the parties. The exchange of cash flows is determined by reference to the notional amounts and the other terms of the interest rate swap agreements. The changes in fair value of derivatives designated as cashflow hedges are recorded in other comprehensive income and subsequently reclassified to earnings when gains or losses are realized. As of June 30, 2022, the Company had one interest rate swap agreement with a notional amount of $100.0 million that was designated as a cashflow hedge of certificates of deposits. The interest rate swap agreement has an average maturity of 2.78 years, the current weighted average fixed rate paid is 0.67% , the weighted average 3-month LIBOR swap receive rate is 0.95% , and the fair value is $6.4 million. The Company expects approximately $2.5 million related to the cashflow hedge to be reclassified to interest expense, from other comprehensive income, in the next twelve months. Derivative Loan Commitments Mortgage loan commitments qualify as derivative loan commitments if the loan that will result from exercise of the commitment will be held for sale upon funding. The Company enters into commitments to fund residential mortgage loans at specified times in the future, with the intention that these loans will subsequently be sold in the secondary market. A mortgage loan commitment binds the Company to lend funds to a potential borrower at a specified interest rate and within a specified period of time, generally up to 60 days after inception of the rate lock. Outstanding derivative loan commitments expose the Company to the risk that the price of the loans arising from exercise of the loan commitment might decline from inception of a rate lock to funding of the loan due to increases in mortgage interest rates. If interest rates increase, the value of these loan commitments decreases. Conversely, if interest rates decrease, the value of these loan commitments increases. Forward Loan Sale Commitments The Company utilizes both “mandatory delivery” and “best efforts” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. With a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the number of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay a “pair-off” fee, based on then-current market prices, to the investor to compensate the investor for the shortfall. With a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. Generally, the price the investor will pay the seller for an individual loan is specified prior to the loan being funded (e.g., on the same day the lender commits to lend funds to a potential borrower). The Company expects that these forward loan sale commitments will experience changes in fair value opposite to the change in fair value of derivative loan commitments. Interest Rate Swaps The Company enters into interest rate swap agreements that are transacted to meet the financing needs of its commercial customers. Offsetting interest rate swap agreements are simultaneously transacted with a third-party financial institution to effectively eliminate the Company’s interest rate risk associated with the customer swaps. The primary risks associated with these transactions arise from exposure to the ability of the counterparties to meet the terms of the contract. At June 30, 2022, there were no securities pledged to secure the Company’s liability for the offsetting interest rate swaps (see Note 2). The interest rate swap notional amount is the aggregate notional amount of the customer swap and the offsetting third-party swap. The Company also assess 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 was included in other income. During the first quarter of 2022, the interest rate swap was terminated which resulted in a reversal of $329,000 to the negative fair value adjustment recorded in 2021 to a negative fair value adjustment of $101,000 at March 31, 2022. 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 presents the outstanding notional balances and fair values of outstanding derivative instruments: Assets Liabilities Balance Balance Notional Sheet Fair Sheet Fair Amount Location Value Location Value (in thousands) June 30, 2022: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 Other assets $ 6,431 Other liabilities $ — Derivatives not designated as Hedging Instruments Derivative loan commitments $ 66,802 Other assets $ 1,187 Other liabilities $ 23 Forward loan sale commitments 64,500 Other assets 158 Other liabilities 216 Interest rate swaps 656,743 Other assets 15,894 Other liabilities 15,894 Risk participation agreements 124,742 Other assets — Other liabilities — Total $ 23,670 $ 16,133 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 The following table presents the recorded net gains and losses pertaining to the Company’s derivative instruments: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Derivatives designated as hedging instruments (Loss) gain in OCI on derivatives (effective portion), net of tax $ (8,628) $ (174) $ (5,824) $ 1,155 (Loss) gain reclassified from OCI into interest income or interest expense (effective portion) $ 71 $ (121) $ (40) $ (233) Derivatives not designated as hedging instruments Changes in fair value of derivative loan commitments Mortgage banking income $ 369 $ (1,868) $ (268) $ (7,281) Changes in fair value of forward loan sale commitments Mortgage banking income (1,676) (3,422) (21) 1,995 Changes in fair value of interest rate swaps Other income — — 330 — Total $ (1,307) $ (5,290) $ 41 $ (5,286) |
OPERATING LEASE RIGHT-OF-USE AS
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | 6 Months Ended |
Jun. 30, 2022 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | 11. OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES Operating lease right-of-use (“ROU”) assets, included in other assets, were $26.5 million and $26.8 million at June 30, 2022 and December 31, 2021, respectively. Operating lease liabilities, included in other liabilities and accrued expenses , were $28.1 million and $28.4 million at June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022 and December 31, 2021, there were no leases that had not yet commenced. At June 30, 2022, lease expiration dates ranged from five month s to 36.2 years and have a weighted average remaining lease term of 16. 4 years. At December 31, 2021, lease expiration dates ranged from 3 months to 36.1 years and had a weighted average remaining lease term of 16.7 years. Future minimum lease payments under non-cancellable leases as of June 30, 2022 June 30, 2022 (in thousands) 2022 $ 1,655 2023 3,179 2024 2,658 2025 2,496 2026 2,461 Thereafter 21,515 Total lease payments 33,964 Imputed interest (5,860) Total present value of operating lease liabilities $ 28,104 The weighted-average discount rate and remaining lease term for operating leases were as follows: June 30, 2022 December 31, 2021 Weighted-average discount rate 1.96 % 1.94 % Weighted-average remaining lease term (years) 16.41 16.77 Rental expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease components, such as fair market value adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities. The following table presents the components of total lease expense: Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 (in thousands) Lease Expense: Operating lease expense $ 822 $ 658 $ 1,636 $ 1,290 Short-term lease expense 37 29 68 70 Variable lease expense — 10 — 19 Sublease income (5) — (5) — Total lease expense $ 854 $ 697 $ 1,699 $ 1,379 Other Information Cash paid for amounts included in the measurement of lease liabilities- operating cash flows for operating leases 802 746 1,601 1,422 Operating Lease - Operating cash flows (Liability reduction) 672 621 1,340 1,180 Right-of-use assets obtained in exchange for new operating lease liabilities 778 2,380 1,083 27,087 |
MINIMUM REGULATORY CAPITAL REQU
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 6 Months Ended |
Jun. 30, 2022 | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 12. The Company and Bank are subject to various regulatory capital requirements administered by the Board of Governors of the Federal Reserve System 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 June 30, 2022, 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 June 30, 2022 also exceeded the minimum capital requirements, including the currently applicable capital conservation buffer of 2.5%. The Company’s and the Bank’s actual regulatory capital ratios as of June 30, 2022 and December 31, 2021 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. June 30, 2022 Common equity Tier 1 capital to risk-weighted assets $ 586,990 14.5 % $ 182,699 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 586,990 14.5 243,599 6.0 N/A N/A Total capital to risk-weighted assets 670,646 16.5 324,799 8.0 N/A N/A Tier 1 capital to average assets 586,990 12.8 182,828 4.0 N/A N/A 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 HarborOne Bank June 30, 2022 Common equity Tier 1 capital to risk-weighted assets $ 504,759 12.4 % $ 182,682 4.5 % $ 263,874 6.5 % Tier 1 capital to risk-weighted assets 504,759 12.4 243,576 6.0 324,768 8.0 Total capital to risk-weighted assets 553,415 13.6 324,768 8.0 405,960 10.0 Tier 1 capital to average assets 504,759 11.0 182,792 4.0 228,491 5.0 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 |
COMPREHENSIVE (LOSS) INCOME
COMPREHENSIVE (LOSS) INCOME | 6 Months Ended |
Jun. 30, 2022 | |
COMPREHENSIVE (LOSS) INCOME | |
COMPREHENSIVE (LOSS) INCOME | 13. 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 (loss) income, included in stockholders’ equity, are as follows: June 30, December 31, 2022 2021 (in thousands) Cash flow hedge: Net unrealized gain $ 6,431 $ 1,663 Related tax effect (1,806) (466) Total accumulated other comprehensive income $ 4,625 $ 1,197 Securities available for sale: Net unrealized loss $ (49,887) $ (3,635) Related tax effect 10,995 801 Total accumulated other comprehensive loss $ (38,892) $ (2,834) The following tables present changes in accumulated other comprehensive (loss) income by component for the three and six months ended June 30, 2022 and 2021: Three Months Ended June 30, 2022 2021 Available Cash Available Cash for Sale Flow for Sale Flow Securities Hedge Total Securities Hedge Total (in thousands) Balance at beginning of period $ (23,048) $ 4,001 $ (19,047) $ (476) $ 316 $ (160) Other comprehensive (loss) income before reclassifications (20,323) 939 (19,384) 1,493 (363) 1,130 Amounts reclassified from accumulated other comprehensive income (loss) — (71) (71) — 121 121 Net current period other comprehensive (loss) income (20,323) 868 (19,455) 1,493 (242) 1,251 Related tax effect 4,479 (244) 4,235 (330) 68 (262) Balance at end of period $ (38,892) $ 4,625 $ (34,267) $ 687 $ 142 $ 829 Six Months Ended June 30, 2022 2021 Available Cash Available Cash for Sale Flow for Sale Flow Securities Hedge Total Securities Hedge Total (in thousands) Balance at beginning of period $ (2,834) $ 1,197 $ (1,637) $ 3,198 $ (1,013) $ 2,185 Other comprehensive (loss) income before reclassifications (46,252) 4,728 (41,524) (3,220) 1,370 (1,850) Amounts reclassified from accumulated other comprehensive income (loss) — 40 40 — 233 233 Net current period other comprehensive (loss) income (46,252) 4,768 (41,484) (3,220) 1,603 (1,617) Related tax effect 10,194 (1,340) 8,854 709 (448) 261 Balance at end of period $ (38,892) $ 4,625 $ (34,267) $ 687 $ 142 $ 829 |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 6 Months Ended |
Jun. 30, 2022 | |
FAIR VALUE OF ASSETS AND LIABILITIES | |
FAIR VALUE OF ASSETS AND LIABILITIES | 14. FAIR VALUE OF ASSETS AND LIABILITIES Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: •Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. •Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. •Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The following methods and assumptions were used by the Company in estimating fair value disclosures: Debt Securities Level 2 debt securities are traded less frequently than exchange-traded instruments. The fair value of these securities is determined using matrix pricing with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category includes obligations of U.S. government-sponsored enterprises, including mortgage-backed securities, individual name issuer trust preferred debt securities and corporate bonds. Debt securities not actively traded whose fair value is determined through the use of cash flows utilizing inputs that are unobservable are classified as Level 3. There were no Level 3 securities held at June 30, 2022 and December 31, 2021. Loans held for sale Collateral-Dependent Impaired Loans a lesser extent, other business assets. For collateral-dependent loans for which repayment is dependent on the sale of the collateral, management adjusts the fair value for estimated costs to sell. For collateral-dependent loans for which repayment is dependent on the operation of the collateral, such as accruing troubled debt restructured loans, estimated costs to sell are not incorporated into the measurement. Management may also adjust appraised values to reflect estimated market value declines or apply other discounts to appraised values resulting from its knowledge of the property. Internal valuations are utilized to determine the fair value of other business assets. Collateral-dependent impaired loans are categorized as Level 3. 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 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 June 30, 2022 and December 31, 2021, 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 during the periods presented. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below: Total Level 1 Level 2 Level 3 Fair Value (in thousands) June 30, 2022 Assets Securities available for sale $ — $ 334,398 $ — $ 334,398 Loans held for sale — 31,679 — 31,679 Mortgage servicing rights — 47,130 — 47,130 Derivative loan commitments — — 1,187 1,187 Forward loan sale commitments — — 158 158 Interest rate management agreements — 6,431 — 6,431 Interest rate swaps — 15,894 — 15,894 $ — $ 435,532 $ 1,345 $ 436,877 Liabilities Derivative loan commitments $ — $ — $ 23 $ 23 Forward loan sale commitments — — 216 216 Interest rate swaps — 15,894 — 15,894 $ — $ 15,894 $ 239 $ 16,133 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 The table below presents, for the three and six months ended June 30, 2022 and 2021, the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis. Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 2,864 $ 10,225 $ 1,583 $ 12,623 Total gains losses included in net income (1) (1,520) (5,091) (239) (7,489) Balance at end of period $ 1,344 $ 5,134 $ 1,344 $ 5,134 Changes in unrealized gains relating to instruments at period end $ 1,344 $ 5,134 $ 1,344 $ 5,134 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (452) $ (143) $ (189) $ (2,545) Total gains (losses) included in net income (1) 213 (199) (50) 2,203 Balance at end of period $ (239) $ (342) $ (239) $ (342) Changes in unrealized losses relating to instruments at period end $ (239) $ (342) $ (239) $ (342) (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 is required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with GAAP. The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis. June 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Collateral-dependent impaired loans $ — $ — $ 8,850 $ — $ — $ 21,615 Other real estate owned and repossessed assets — — — — — 53 $ — $ — $ 8,850 $ — $ — $ 21,668 Losses in the following table represent the amount of the fair value adjustments recorded during the period on the carrying value of the assets held at June 30, 2022 and December 31, 2021, respectively. Losses on fully charged off loans are not included in the table. Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Collateral-dependent impaired loans $ 9 $ 1,517 $ 819 $ 2,877 Other real estate owned and repossessed assets — 2 — 24 $ 9 $ 1,519 $ 819 $ 2,901 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 June 30, December 31, Valuation Technique 2022 2021 (in thousands) Collateral-dependent impaired loans $ 5,717 $ 21,615 Sales Comparison Approach (1) Real estate owned and repossessed assets $ — $ — (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. June 30, 2022 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 84,338 $ 84,338 $ — $ — $ 84,338 Securities available for sale 334,398 — 334,398 — 334,398 Securities held to maturity 10,000 — 9,832 — 9,832 Federal Home Loan Bank stock 5,625 N/A N/A N/A N/A Loans held for sale 31,679 — 31,679 — 31,679 Loans, net 3,868,389 — — 3,792,952 3,792,952 Retirement plan annuities 14,393 — — 14,393 14,393 Accrued interest receivable 11,305 — 11,305 — 11,305 Financial liabilities: Deposits 3,847,933 — — 3,833,716 3,833,716 Borrowed funds 105,693 — 104,994 — 104,994 Subordinated debt 34,222 — — 30,526 30,526 Mortgagors' escrow accounts 9,639 — — 9,639 9,639 Accrued interest payable 908 — 908 — 908 Derivative loan commitments: Assets 1,187 — — 1,187 1,187 Liabilities 23 — — 23 23 Interest rate management agreements: Assets 6,431 — 6,431 — 6,431 Liabilities — — — — — Interest rate swap agreements: Assets 15,894 — 15,894 — 15,894 Liabilities 15,894 — 15,894 — 15,894 Forward loan sale commitments: Assets 158 — — 158 158 Liabilities 216 — — 216 216 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 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 15. EARNINGS PER SHARE (“EPS”) Basic EPS represents net income attributable to common shareholders divided by the weighted-average number of common shares outstanding during the period. Non-vested restricted shares that are participating securities are included in the computation of basic EPS. Diluted EPS is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding, plus the effect of potential dilutive common stock equivalents outstanding during the period. The following table presents earnings per common share. Three Months Ended June 30, 2022 2021 Net income available to common stockholders (in thousands) $ 9,987 $ 14,276 Average number of common shares outstanding 50,487,259 55,515,445 Less: Average unallocated ESOP shares and non-vested restricted shares (3,506,429) (3,737,152) Weighted average number of common shares outstanding used to calculate basic earnings per common share 46,980,830 51,778,293 Dilutive effect of share-based compensation 555,203 871,778 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 47,536,033 52,650,071 Earnings per common share: Basic $ 0.21 $ 0.28 Diluted $ 0.21 $ 0.27 Six Months Ended June 30, 2022 2021 Net income available to common stockholders (in thousands) $ 22,254 $ 33,668 Average number of common shares outstanding 50,941,367 55,921,587 Less: Average unallocated ESOP shares and non-vested restricted shares (3,535,110) (3,765,833) Weighted average number of common shares outstanding used to calculate basic earnings per common share 47,406,257 52,155,754 Dilutive effect of share-based compensation 704,606 667,600 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 48,110,863 52,823,354 Earnings per common share: Basic $ 0.47 $ 0.65 Diluted $ 0.46 $ 0.64 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2022 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 16. REVENUE RECOGNITION Revenue from contracts with customers in the scope of ASC Topic 606 is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. The Company recognizes revenue from contracts with customers when it satisfies its performance obligations. The Company’s performance obligations are generally satisfied as services are rendered and can either be satisfied at a point in time or over time. Unsatisfied performance obligations at the report date are not material to our consolidated financial statements. In certain cases, other parties are involved with providing services to our customers. If the Company is a principal in the transaction (providing services itself or through a third party on its behalf), revenues are reported based on the gross consideration received from the customer and any related expenses are reported gross in noninterest expense. If the Company is an agent in the transaction (referring to another party to provide services), the Company reports its net fee or commission retained as revenue. The Company recognizes revenue that is transactional in nature and such revenue is earned at a point in time. Revenue that is recognized at a point in time includes card interchange fees (fee income related to debit card transactions), ATM fees, wire transfer fees, overdraft charge fees, and stop-payment and returned check fees. Additionally, revenue is collected from loan fees, such as letters of credit, line renewal fees and application fees. Such revenue is derived from transactional information and is recognized as revenue immediately as the transactions occur or upon providing the service to complete the customer’s transaction. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2022 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 17. SEGMENT REPORTING The Company has two reportable segments: HarborOne Bank and HarborOne Mortgage. Revenue from HarborOne Bank consists primarily of interest earned on loans and investment securities and service charges on deposit accounts. Revenue from HarborOne Mortgage comprises interest earned on loans and fees received as a result of the residential mortgage origination, sale and servicing process. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Segment profit and loss is measured by net income on a legal entity basis. Intercompany transactions are eliminated in consolidation. Information about the reportable segments and reconciliation to the unaudited interim Consolidated Financial Statements at June 30, 2022 and 2021 and for the three and six months then ended is presented in the tables below. Three Months Ended June 30, 2022 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 37,246 $ 411 $ 37,195 Provision for credit losses 2,546 — 2,546 Net interest and dividend income, after provision for credit losses 34,700 411 34,649 Mortgage banking income: Gain on sale of mortgage loans — 4,538 4,538 Intersegment gain (loss) (1,095) 1,097 — Changes in mortgage servicing rights fair value 127 735 862 Other 219 2,393 2,612 Total mortgage banking income (loss) (749) 8,763 8,012 Other noninterest income 6,084 7 6,091 Total noninterest income 5,335 8,770 14,103 Noninterest expense 27,131 7,242 34,954 Income before income taxes 12,904 1,939 13,798 Provision for income taxes 3,550 549 3,811 Net income $ 9,354 $ 1,390 $ 9,987 Six Months Ended June 30, 2022 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 70,670 $ 761 $ 70,465 Provision for credit losses 2,884 — 2,884 Net interest and dividend income, after provision for credit losses 67,786 761 67,581 Mortgage banking income: Gain on sale of mortgage loans — 9,860 9,860 Intersegment gain (loss) (1,703) 1,934 — Changes in mortgage servicing rights fair value 717 5,430 6,147 Other 452 4,718 5,170 Total mortgage banking income (loss) (534) 21,942 21,177 Other noninterest income 11,971 16 11,987 Total noninterest income 11,437 21,958 33,164 Noninterest expense 53,956 15,003 69,789 Income before income taxes 25,267 7,716 30,956 Provision for income taxes 7,107 2,090 8,702 Net income $ 18,160 $ 5,626 $ 22,254 Total assets at period end $ 4,718,584 $ 149,186 $ 4,704,044 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 Three Months Ended June 30, 2021 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 32,134 $ 855 $ 32,530 Provision (benefit) for credit losses (4,286) — (4,286) Net interest and dividend income, after provision (benefit) for credit losses 36,420 855 36,816 Mortgage banking income: Gain on sale of mortgage loans — 14,262 14,262 Intersegment gain (loss) (910) 910 — Changes in mortgage servicing rights fair value (419) (2,133) (2,552) Other 276 3,799 4,075 Total mortgage banking income (loss) (1,053) 16,838 15,785 Other noninterest income 5,898 20 5,918 Total noninterest income 4,845 16,858 21,703 Noninterest expense 24,128 14,101 38,598 Income before income taxes 17,137 3,612 19,921 Provision for income taxes 4,863 1,013 5,645 Net income $ 12,274 $ 2,599 $ 14,276 Six Months Ended June 30, 2021 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 63,382 $ 2,105 $ 64,582 Provision (benefit) for credit losses (4,195) — (4,195) Net interest and dividend income, after provision (benefit) for credit losses 67,577 2,105 68,777 Mortgage banking income: Gain on sale of mortgage loans — 39,064 39,064 Intersegment gain (loss) (1,572) 1,572 — Changes in mortgage servicing rights fair value (133) 990 857 Other 576 8,014 8,590 Total mortgage banking income (loss) (1,129) 49,640 48,511 Other noninterest income 10,989 12 11,001 Total noninterest income 9,860 49,652 59,512 Noninterest expense 48,591 32,158 81,400 Income before income taxes 28,846 19,599 46,889 Provision for income taxes 8,298 5,346 13,221 Net income $ 20,548 $ 14,253 $ 33,668 Total assets at period end $ 4,631,734 $ 233,818 $ 4,616,422 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The unaudited interim Consolidated Financial Statements of HarborOne Bancorp, Inc. (the “Company”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by the U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying Consolidated Financial Statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the years ended December 31, 2021 and 2020 and notes thereto included in the Company’s Annual Report on Form 10-K. The unaudited interim Consolidated Financial Statements include the accounts of the Company; the Company’s subsidiaries, Legion Parkway Company LLC (a security corporation) and HarborOne Bank (the “Bank”); and the Bank’s wholly-owned subsidiaries, which consist of HarborOne Mortgage, LLC (“HarborOne Mortgage”), a passive investment corporation, and one security corporation. The passive investment corporation maintains and manages certain assets of the Bank. The security corporation was established for the purpose of buying, holding and selling securities on its own behalf. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. These changes and reclassifications did not impact previously reported net income or comprehensive income. |
Nature of Operations | Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 31 full-service branches in Massachusetts and Rhode Island, and commercial lending offices in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains 27 offices in Massachusetts, Rhode Island, and New Hampshire and is licensed to lend 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, home equity, and consumer loans. The Company also originates, sells and services residential mortgage loans through HarborOne Mortgage. |
Risks and Uncertainties | Risks and Uncertainties COVID-19 impacted a broad range of industries in which the Company's customers operate and could still impair their ability to fulfill their financial obligations to the Company. COVID-19 case and hospitalization trends have generally improved despite the continued emergence of new variants. Macroeconomic trends are mixed as uncertainty remains about the timing and strength of the economy’s recovery from the impact of the COVID-19 pandemic. The Company could experience adverse effects on its business, financial condition, results of operations and cash flows if there is further escalation of the current geopolitical situation, sustained supply chain disruptions, severe inflation, or if there is a resurgence in the virus. While asset quality continues to point to economic recovery, the continued uncertainty regarding the COVID-19 pandemic and the related economic effects on credit quality could continue to affect the accounting for credit losses. Although credit quality has not been a severely impacted so far, it is possible that asset quality could worsen, and loan charge-offs could increase as government aid expires or if new variants result in renewed business restrictions. |
Recently Adopted Accounting Standards Updates ("ASU") and ASUs not yet Adopted | Summary of Significant Accounting Policies and Recently Adopted Accounting Standards Updates (“ASU”) Significant accounting policies in effect and disclosed within the Company’s most recent audited consolidated financial statements as of December 31, 2021 remain substantially unchanged with the exception of the accounting policy for credit losses, commonly referred to as “CECL,” as a result of adopting ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) ASU 2016-13 was issued in June 2016. ASU 2016-13 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 at the reporting date. The measurement is based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. For available-for-sale debt securities with unrealized losses, Topic 326 requires credit losses to be recognized as an allowance rather than a reduction in the amortized cost of the securities. As a result, improvements to estimated credit losses are recognized immediately in earnings rather than as interest income over time. ASU 2016-13 provides for a modified retrospective transition, resulting in a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is effective. The Company adopted ASU 2016-13, including the subsequent ASUs issued to clarify Topic 326 (“Topic 326”), on January 1, 2022. The Company assembled a cross-functional project team that met regularly to address the additional data requirements, to determine the approach for implementation and to identify new internal controls over accounting processes for estimating the allowance for credit losses (“ACL”). This included assessing the adequacy of existing loan and loss data, assessing models for default and loss estimates, conducting limited “trial” runs and analytical reviews through December 31, 2021, and completing independent model validation and documentation of ACL processes and controls in the first quarter of 2022. In accordance with Topic 326, the Company has updated its ACL accounting policies. Required policy disclosures are provided in Notes 2, 4, and 9. Upon adoption of Topic 326 on January 1, 2022, the ACL for loans decreased by $1.3 million and the ACL for unfunded commitments increased by $3.9 million, as compared to December 31, 2021. The increases in the ACL on loans and unfunded commitments upon adoption resulted in a one-time cumulative-effect adjustment that decreased retained earnings by $1.9 million, net of deferred tax balances of $737,000 . The Company has not elected to use the CECL transition provision provided by regulatory guidance issued by the Federal Deposit Insurance Corporation (“FDIC”) in March 2020, and as such the full impact of the adoption is reflected in Tier 2 capital ratios. See Note 12 for additional disclosure on regulatory capital. ASUs not yet Adopted In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, “Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”). ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings (“TDRs”) in Accounting Standards Codification (“ASC”) 310-40, “Receivables – Troubled Debt Restructurings by Creditors” for entities that have adopted the current expected credit loss (“CECL”) model introduced by ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2022-02 also requires that public business entities disclose current-period gross charge-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, “Financial Instruments — Credit Losses — Measured at Amortized Cost”. ASU 2022-02 is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the effect that ASU 2022-02 will have on its consolidated financial statements and related disclosures. |
DEBT SECURITIES (Tables)
DEBT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
DEBT SECURITIES | |
Schedule of securities with gross unrealized gains and losses | Gross Gross Allowance Amortized Unrealized Unrealized for Credit Fair Cost Gains Losses Losses Value (in thousands) June 30, 2022: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 47,142 $ — $ 6,092 $ — $ 41,050 U.S. government agency and government-sponsored residential mortgage-backed securities 329,742 4 43,586 — 286,160 U.S. government-sponsored collateralized mortgage obligations 3,166 — 42 — 3,124 SBA asset-backed securities 3,235 — 111 — 3,124 Corporate bonds 1,000 — 60 — 940 Total securities available for sale $ 384,285 $ 4 $ 49,891 $ — $ 334,398 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 10,000 $ — $ 168 $ — $ 9,832 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 |
Schedule of debt securities by contractual maturity | Available for Sale Held to Maturity Amortized Fair Amortized Fair Cost Value Cost Value (in thousands) After 1 year through 5 years $ — $ — $ — $ — After 5 years through 10 years 48,142 41,990 10,000 9,832 Over 10 years — — — — 48,142 41,990 10,000 9,832 U.S. government agency and government-sponsored residential mortgage-backed securities 329,742 286,160 — — U.S. government-sponsored collateralized mortgage obligations 3,166 3,124 — — SBA asset-backed securities 3,235 3,124 — — Total $ 384,285 $ 334,398 $ 10,000 $ 9,832 |
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) June 30, 2022: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 6,092 $ 41,050 $ — $ — U.S. government agency and government-sponsored residential mortgage-backed securities 33,520 226,948 10,066 58,708 U.S. government-sponsored collateralized mortgage obligations 42 3,124 — — SBA asset-backed securities 111 3,124 — — Corporate bonds 60 940 — — $ 39,825 $ 275,186 $ 10,066 $ 58,708 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 168 $ 9,832 — — 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 |
LOANS HELD FOR SALE (Tables)
LOANS HELD FOR SALE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
LOANS HELD FOR SALE | |
Schedule of fair value and contractual principal balance outstanding of loans held for sale | June 30, December 31, 2022 2021 (in thousands) Loans held for sale, fair value $ 31,679 $ 45,642 Loans held for sale, contractual principal outstanding 31,073 44,245 Fair value less unpaid principal balance $ 606 $ 1,397 |
LOANS AND ALLOWANCE FOR CREDI_2
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
Summary of balances of loans | June 30, December 31, 2022 2021 (in thousands) Residential real estate: One- to four-family $ 1,229,950 $ 1,047,819 Second mortgages and equity lines of credit 151,683 136,853 Residential real estate construction 41,441 33,308 Total residential real estate loans 1,423,074 1,217,980 Commercial: Commercial real estate 1,847,619 1,699,877 Commercial construction 158,762 136,563 Commercial and industrial 407,182 421,608 Total commercial loans 2,413,563 2,258,048 Consumer loans: Auto 68,533 124,354 Personal 6,779 7,351 Total consumer loans 75,312 131,705 Total loans 3,911,949 3,607,733 Allowance for loan losses (43,560) (45,377) Loans, net $ 3,868,389 $ 3,562,356 |
Schedule of activity in allowance for loan losses and allocation of allowance to loan segments | 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 March 31, 2022 $ 8,884 $ 833 $ 314 $ 20,131 $ 4,210 $ 6,949 $ 444 $ — $ 41,765 Charge-offs — — — — — — (11) — (11) Recoveries — 81 — 6 — 406 23 — 516 Provision 1,198 (65) 13 294 160 (181) (129) — 1,290 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ — $ 43,560 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, 2021 $ 3,631 $ 420 $ 69 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 Adoption of Topic 326 5,198 391 185 (10,194) 1,698 2,288 123 (1,000) (1,311) Charge-offs — — — (2,786) — (40) (31) — (2,857) Recoveries — 93 — 6 — 473 60 — 632 Provision 1,253 (55) 73 163 662 (185) (192) — 1,719 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ — $ 43,560 Second Mortgages Residential Residential and Equity Real Estate Commercial Commercial Commercial Real Estate Lines of Credit Construction Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at March 31, 2021 $ 6,136 $ 936 $ 197 $ 34,987 $ 2,237 $ 6,627 $ 2,064 $ 2,200 $ 55,384 Provision for loan losses (1,546) (364) (74) (1,984) (300) 1,422 (1,239) (201) (4,286) Charge-offs — — — (12) — — (31) — (43) Recoveries 118 31 — — — 10 59 — 218 Balance at June 30, 2021 $ 4,708 $ 603 $ 123 $ 32,991 $ 1,937 $ 8,059 $ 853 $ 1,999 $ 51,273 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, 2020 $ 6,168 $ 1,054 $ 197 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Provision for loan losses (1,604) (527) (74) (1,766) (18) 2,916 (1,651) (1,471) (4,195) Charge-offs — — — (12) — (186) (86) — (284) Recoveries 144 76 — 4 — 18 115 — 357 Balance at June 30, 2021 $ 4,708 $ 603 $ 123 $ 32,991 $ 1,937 $ 8,059 $ 853 $ 1,999 $ 51,273 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 |
Schedule of carrying value of collateral dependent individually | Related Carrying Value Allowance (in thousands) Commercial: Commercial real estate $ 10,620 $ 3,099 Commercial and industrial 3,626 24 Commercial construction — — Total Commercial 14,246 3,123 Residential real estate 9,732 319 Total $ 23,978 $ 3,442 |
Schedule of information pertaining to impaired loans | The following information pertains to impaired loans: December 31, 2021 Unpaid Recorded Principal Related Investment Balance Allowance (in thousands) Impaired loans without a specific reserve: Residential real estate $ 14,115 $ 15,335 $ — Commercial real estate 2,641 2,692 — Commercial construction — — — Commercial and industrial 1,389 3,396 — Total 18,145 21,423 — Impaired loans with a specific reserve: Residential real estate 8,995 9,791 650 Commercial real estate 17,562 24,847 7,275 Commercial construction — — — Commercial and industrial 2,793 3,596 21 Total 29,350 38,234 7,946 Total impaired loans $ 47,495 $ 59,657 $ 7,946 Three Months Ended June 30, 2021 Interest Average Interest Income Recorded Income Recognized Investment Recognized on Cash Basis (in thousands) Residential real estate $ 22,268 $ 247 $ 54 Commercial real estate 12,455 63 63 Commercial construction — — — Commercial and industrial 7,834 16 16 Total $ 42,557 $ 326 $ 133 Six Months Ended June 30, 2021 Interest Average Interest Income Recorded Income Recognized Investment Recognized on Cash Basis (in thousands) Residential real estate $ 22,973 $ 543 $ 159 Commercial real estate 12,474 65 65 Commercial construction — — — Commercial and industrial 8,342 136 136 Total $ 43,789 $ 744 $ 360 |
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) June 30, 2022 Residential real estate: One- to four-family $ 269 $ 1,393 $ 5,247 $ 6,909 $ 9,772 Second mortgages and equity lines of credit 130 151 84 365 329 Commercial real estate 348 — 2,153 2,501 10,620 Commercial construction — — — — — Commercial and industrial 1,533 152 3,166 4,851 3,626 Consumer: Auto 525 34 62 621 65 Personal 1 2 3 6 3 Total $ 2,806 $ 1,732 $ 10,715 $ 15,253 $ 24,415 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 |
Schedule of loans by risk rating | Revolving Revolving Loans Term Loans at Amortized Cost by Origination Year Loans Converted to 2022 2021 2020 2019 2018 Prior Amortized Cost Term Loans Total (in thousands) As of June 30, 2022 Commercial real estate Pass $ 330,697 $ 427,181 $ 250,180 $ 273,804 $ 144,725 $ 387,436 $ — $ — $ 1,814,023 Special mention — — — — 22,557 419 — — 22,976 Substandard — — — — — 10,620 — — 10,620 Doubtful — — — — — — — — — Total commercial real estate 330,697 427,181 250,180 273,804 167,282 398,475 — — 1,847,619 Commercial and industrial Pass 23,948 95,254 77,600 28,549 40,089 59,658 78,386 — 403,484 Special mention — 5 — — 58 49 — — 112 Substandard — — — — — 338 — — 338 Doubtful — — — — — 3,198 50 — 3,248 Total commercial and industrial 23,948 95,259 77,600 28,549 40,147 63,243 78,436 — 407,182 Commercial construction Pass 31,471 92,080 13,279 20,230 195 1,507 — — 158,762 Special mention — — — — — — — — — Substandard — — — — — — — — — Doubtful — — — — — — — — — Total commercial construction 31,471 92,080 13,279 20,230 195 1,507 — — 158,762 Residential real estate Accrual 210,612 514,568 219,995 43,871 26,563 257,873 137,745 1,746 1,412,973 Nonaccrual — 333 1,154 8,561 53 — 10,101 Total residential real estate 210,612 514,568 219,995 44,204 27,717 266,434 137,798 1,746 1,423,074 Consumer Accrual 4,520 4,402 2,727 46,346 11,479 4,733 1,037 — 75,244 Nonaccrual — — — 34 1 33 — — 68 Total Consumer 4,520 4,402 2,727 46,380 11,480 4,766 1,037 — 75,312 Total Loans $ 601,248 $ 1,133,490 $ 563,781 $ 413,167 $ 246,821 $ 734,425 $ 217,271 $ 1,746 $ 3,911,949 December 31, 2021 Commercial Commercial Commercial Real Estate Construction and Industrial (in thousands) Loans rated 1 - 6 $ 1,645,871 $ 136,563 $ 417,408 Loans rated 7 33,953 — 85 Loans rated 8 20,053 — 694 Loans rated 9 — — 3,421 Loans rated 10 — — — $ 1,699,877 $ 136,563 $ 421,608 |
Summary of activity in accretable yield for purchased credit impaired loans | Three Months Ended Six Months Ended June 30, 2021 June 30, 2021 (in thousands) Balance at beginning of period $ 138 $ 141 Additions — — Accretion (2) (5) Reclassification from nonaccretable difference — — Balance at end of period $ 136 $ 136 |
MORTGAGE LOAN SERVICING (Tables
MORTGAGE LOAN SERVICING (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
MORTGAGE LOAN SERVICING | |
Tabular disclosure of assumptions used in the calculation of fair value of MSR | June 30, December 31, 2022 2021 Prepayment speed 7.20 % 9.40 % Discount rate 9.24 9.20 Default rate 1.49 1.64 |
Schedule of summarized changes to mortgage servicing rights | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Balance, beginning of period $ 45,043 $ 33,939 $ 38,268 $ 24,833 Additions 1,225 4,568 2,715 10,265 Changes in fair value due to: Reductions from loans paid off during the period (771) (1,501) (1,604) (3,100) Changes in valuation inputs or assumptions 1,633 (1,051) 7,751 3,957 Balance, end of period $ 47,130 $ 35,955 $ 47,130 $ 35,955 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
DEPOSITS | |
Summary of deposit balances, by type | June 30, December 31, 2022 2021 (in thousands) NOW and demand deposit accounts $ 1,091,993 $ 1,056,784 Regular savings and club accounts 1,282,913 1,138,979 Money market deposit accounts 885,673 858,970 Total non-certificate accounts 3,260,579 3,054,733 Term certificate accounts greater than $250,000 101,931 108,426 Term certificate accounts less than or equal to $250,000 385,423 419,490 Brokered deposits 100,000 100,000 Total certificate accounts 587,354 627,916 Total deposits $ 3,847,933 $ 3,682,649 |
Summary of certificate accounts by maturity | Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 421,621 0.37 % Over 1 year to 2 years 127,833 1.03 Over 2 years to 3 years 24,707 0.99 Over 3 years to 4 years 10,509 0.67 Over 4 years to 5 years 2,866 0.72 Total certificate deposits 587,536 0.55 % Less unaccreted acquisition discount (182) Total certificate deposits, net $ 587,354 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
BORROWINGS | |
Schedule of borrowed funds by maturity and call date | June 30, 2022 December 31, 2021 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: 2022 $ — $ — — % $ — 40,000 — % 2023 183 183 1.43 185 185 1.46 2024 13,400 13,400 1.39 13,400 13,400 1.39 2025 987 987 — 40,987 987 1.32 2026 — — — — — — 2027 and thereafter 1,123 1,123 2.00 1,139 1,139 2.00 $ 15,693 $ 15,693 1.35 % $ 55,711 $ 55,711 1.35 % * Includes an amortizing advance requiring monthly principal and interest payments. (1) (2) |
OTHER COMMITMENTS AND CONTING_2
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Schedule of financial instruments with off-balance sheet credit risk | June 30, December 31, 2022 2021 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 153,938 $ 142,781 Commitments to grant other loans 103,802 27,029 Unadvanced funds on home equity lines of credit 229,509 211,120 Unadvanced funds on revolving lines of credit 251,995 223,110 Unadvanced funds on construction loans 294,452 194,101 |
Schedule of activity in the ACL on unfunded commitments | 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 March 31, 2022 $ 8,884 $ 833 $ 314 $ 20,131 $ 4,210 $ 6,949 $ 444 $ — $ 41,765 Charge-offs — — — — — — (11) — (11) Recoveries — 81 — 6 — 406 23 — 516 Provision 1,198 (65) 13 294 160 (181) (129) — 1,290 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ — $ 43,560 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, 2021 $ 3,631 $ 420 $ 69 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 Adoption of Topic 326 5,198 391 185 (10,194) 1,698 2,288 123 (1,000) (1,311) Charge-offs — — — (2,786) — (40) (31) — (2,857) Recoveries — 93 — 6 — 473 60 — 632 Provision 1,253 (55) 73 163 662 (185) (192) — 1,719 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ — $ 43,560 Second Mortgages Residential Residential and Equity Real Estate Commercial Commercial Commercial Real Estate Lines of Credit Construction Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at March 31, 2021 $ 6,136 $ 936 $ 197 $ 34,987 $ 2,237 $ 6,627 $ 2,064 $ 2,200 $ 55,384 Provision for loan losses (1,546) (364) (74) (1,984) (300) 1,422 (1,239) (201) (4,286) Charge-offs — — — (12) — — (31) — (43) Recoveries 118 31 — — — 10 59 — 218 Balance at June 30, 2021 $ 4,708 $ 603 $ 123 $ 32,991 $ 1,937 $ 8,059 $ 853 $ 1,999 $ 51,273 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, 2020 $ 6,168 $ 1,054 $ 197 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Provision for loan losses (1,604) (527) (74) (1,766) (18) 2,916 (1,651) (1,471) (4,195) Charge-offs — — — (12) — (186) (86) — (284) Recoveries 144 76 — 4 — 18 115 — 357 Balance at June 30, 2021 $ 4,708 $ 603 $ 123 $ 32,991 $ 1,937 $ 8,059 $ 853 $ 1,999 $ 51,273 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 |
Unfunded Commitment | |
Schedule of activity in the ACL on unfunded commitments | Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Total (in thousands) Balance at March 31, 2022 $ 339 $ 538 $ 2,345 $ 604 $ 14 $ 3,840 Provision (2) (56) 1,293 20 1 1,256 $ 337 $ 482 $ 3,638 $ 624 $ 15 $ 5,096 The activity in the ACL on the unfunded commitments for the six months ended June 30, 2022 is presented below: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Total (in thousands) Balance at December 31, 2021 $ — $ — $ — $ — $ — $ — Adoption of Topic 326 318 380 2,561 658 14 3,931 Provision 19 102 1,077 (34) 1 1,165 $ 337 $ 482 $ 3,638 $ 624 $ 15 $ 5,096 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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) June 30, 2022: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 Other assets $ 6,431 Other liabilities $ — Derivatives not designated as Hedging Instruments Derivative loan commitments $ 66,802 Other assets $ 1,187 Other liabilities $ 23 Forward loan sale commitments 64,500 Other assets 158 Other liabilities 216 Interest rate swaps 656,743 Other assets 15,894 Other liabilities 15,894 Risk participation agreements 124,742 Other assets — Other liabilities — Total $ 23,670 $ 16,133 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 |
Schedule of net gains and losses on derivative instruments | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Derivatives designated as hedging instruments (Loss) gain in OCI on derivatives (effective portion), net of tax $ (8,628) $ (174) $ (5,824) $ 1,155 (Loss) gain reclassified from OCI into interest income or interest expense (effective portion) $ 71 $ (121) $ (40) $ (233) Derivatives not designated as hedging instruments Changes in fair value of derivative loan commitments Mortgage banking income $ 369 $ (1,868) $ (268) $ (7,281) Changes in fair value of forward loan sale commitments Mortgage banking income (1,676) (3,422) (21) 1,995 Changes in fair value of interest rate swaps Other income — — 330 — Total $ (1,307) $ (5,290) $ 41 $ (5,286) |
OPERATING LEASE RIGHT-OF-USE _2
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | |
Schedule of undiscounted future minimum operating lease payments | June 30, 2022 (in thousands) 2022 $ 1,655 2023 3,179 2024 2,658 2025 2,496 2026 2,461 Thereafter 21,515 Total lease payments 33,964 Imputed interest (5,860) Total present value of operating lease liabilities $ 28,104 |
Schedule of weighted-average discount rate and remaining lease term | June 30, 2022 December 31, 2021 Weighted-average discount rate 1.96 % 1.94 % Weighted-average remaining lease term (years) 16.41 16.77 |
Schedule of components of total lease expense | Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 (in thousands) Lease Expense: Operating lease expense $ 822 $ 658 $ 1,636 $ 1,290 Short-term lease expense 37 29 68 70 Variable lease expense — 10 — 19 Sublease income (5) — (5) — Total lease expense $ 854 $ 697 $ 1,699 $ 1,379 Other Information Cash paid for amounts included in the measurement of lease liabilities- operating cash flows for operating leases 802 746 1,601 1,422 Operating Lease - Operating cash flows (Liability reduction) 672 621 1,340 1,180 Right-of-use assets obtained in exchange for new operating lease liabilities 778 2,380 1,083 27,087 |
MINIMUM REGULATORY CAPITAL RE_2
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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. June 30, 2022 Common equity Tier 1 capital to risk-weighted assets $ 586,990 14.5 % $ 182,699 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 586,990 14.5 243,599 6.0 N/A N/A Total capital to risk-weighted assets 670,646 16.5 324,799 8.0 N/A N/A Tier 1 capital to average assets 586,990 12.8 182,828 4.0 N/A N/A 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 HarborOne Bank June 30, 2022 Common equity Tier 1 capital to risk-weighted assets $ 504,759 12.4 % $ 182,682 4.5 % $ 263,874 6.5 % Tier 1 capital to risk-weighted assets 504,759 12.4 243,576 6.0 324,768 8.0 Total capital to risk-weighted assets 553,415 13.6 324,768 8.0 405,960 10.0 Tier 1 capital to average assets 504,759 11.0 182,792 4.0 228,491 5.0 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 |
COMPREHENSIVE (LOSS) INCOME (Ta
COMPREHENSIVE (LOSS) INCOME (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
COMPREHENSIVE (LOSS) INCOME | |
Schedule of components of accumulated other comprehensive income (loss) | June 30, December 31, 2022 2021 (in thousands) Cash flow hedge: Net unrealized gain $ 6,431 $ 1,663 Related tax effect (1,806) (466) Total accumulated other comprehensive income $ 4,625 $ 1,197 Securities available for sale: Net unrealized loss $ (49,887) $ (3,635) Related tax effect 10,995 801 Total accumulated other comprehensive loss $ (38,892) $ (2,834) |
Summary of changes in accumulated other comprehensive income (loss) | Three Months Ended June 30, 2022 2021 Available Cash Available Cash for Sale Flow for Sale Flow Securities Hedge Total Securities Hedge Total (in thousands) Balance at beginning of period $ (23,048) $ 4,001 $ (19,047) $ (476) $ 316 $ (160) Other comprehensive (loss) income before reclassifications (20,323) 939 (19,384) 1,493 (363) 1,130 Amounts reclassified from accumulated other comprehensive income (loss) — (71) (71) — 121 121 Net current period other comprehensive (loss) income (20,323) 868 (19,455) 1,493 (242) 1,251 Related tax effect 4,479 (244) 4,235 (330) 68 (262) Balance at end of period $ (38,892) $ 4,625 $ (34,267) $ 687 $ 142 $ 829 Six Months Ended June 30, 2022 2021 Available Cash Available Cash for Sale Flow for Sale Flow Securities Hedge Total Securities Hedge Total (in thousands) Balance at beginning of period $ (2,834) $ 1,197 $ (1,637) $ 3,198 $ (1,013) $ 2,185 Other comprehensive (loss) income before reclassifications (46,252) 4,728 (41,524) (3,220) 1,370 (1,850) Amounts reclassified from accumulated other comprehensive income (loss) — 40 40 — 233 233 Net current period other comprehensive (loss) income (46,252) 4,768 (41,484) (3,220) 1,603 (1,617) Related tax effect 10,194 (1,340) 8,854 709 (448) 261 Balance at end of period $ (38,892) $ 4,625 $ (34,267) $ 687 $ 142 $ 829 |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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) June 30, 2022 Assets Securities available for sale $ — $ 334,398 $ — $ 334,398 Loans held for sale — 31,679 — 31,679 Mortgage servicing rights — 47,130 — 47,130 Derivative loan commitments — — 1,187 1,187 Forward loan sale commitments — — 158 158 Interest rate management agreements — 6,431 — 6,431 Interest rate swaps — 15,894 — 15,894 $ — $ 435,532 $ 1,345 $ 436,877 Liabilities Derivative loan commitments $ — $ — $ 23 $ 23 Forward loan sale commitments — — 216 216 Interest rate swaps — 15,894 — 15,894 $ — $ 15,894 $ 239 $ 16,133 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 |
Schedule of changes in Level 3 assets measured at fair value on a recurring basis | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 2,864 $ 10,225 $ 1,583 $ 12,623 Total gains losses included in net income (1) (1,520) (5,091) (239) (7,489) Balance at end of period $ 1,344 $ 5,134 $ 1,344 $ 5,134 Changes in unrealized gains relating to instruments at period end $ 1,344 $ 5,134 $ 1,344 $ 5,134 |
Schedule of changes in Level 3 liabilities measured at fair value on a recurring basis | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (452) $ (143) $ (189) $ (2,545) Total gains (losses) included in net income (1) 213 (199) (50) 2,203 Balance at end of period $ (239) $ (342) $ (239) $ (342) Changes in unrealized losses relating to instruments at period end $ (239) $ (342) $ (239) $ (342) (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 | June 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Collateral-dependent impaired loans $ — $ — $ 8,850 $ — $ — $ 21,615 Other real estate owned and repossessed assets — — — — — 53 $ — $ — $ 8,850 $ — $ — $ 21,668 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Collateral-dependent impaired loans $ 9 $ 1,517 $ 819 $ 2,877 Other real estate owned and repossessed assets — 2 — 24 $ 9 $ 1,519 $ 819 $ 2,901 |
Schedule of changes in Level 3 assets measured at fair value on a nonrecurring basis | 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 June 30, December 31, Valuation Technique 2022 2021 (in thousands) Collateral-dependent impaired loans $ 5,717 $ 21,615 Sales Comparison Approach (1) Real estate owned and repossessed assets $ — $ — (1) |
Schedule of estimated fair values and related carrying amounts of financial instruments | June 30, 2022 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 84,338 $ 84,338 $ — $ — $ 84,338 Securities available for sale 334,398 — 334,398 — 334,398 Securities held to maturity 10,000 — 9,832 — 9,832 Federal Home Loan Bank stock 5,625 N/A N/A N/A N/A Loans held for sale 31,679 — 31,679 — 31,679 Loans, net 3,868,389 — — 3,792,952 3,792,952 Retirement plan annuities 14,393 — — 14,393 14,393 Accrued interest receivable 11,305 — 11,305 — 11,305 Financial liabilities: Deposits 3,847,933 — — 3,833,716 3,833,716 Borrowed funds 105,693 — 104,994 — 104,994 Subordinated debt 34,222 — — 30,526 30,526 Mortgagors' escrow accounts 9,639 — — 9,639 9,639 Accrued interest payable 908 — 908 — 908 Derivative loan commitments: Assets 1,187 — — 1,187 1,187 Liabilities 23 — — 23 23 Interest rate management agreements: Assets 6,431 — 6,431 — 6,431 Liabilities — — — — — Interest rate swap agreements: Assets 15,894 — 15,894 — 15,894 Liabilities 15,894 — 15,894 — 15,894 Forward loan sale commitments: Assets 158 — — 158 158 Liabilities 216 — — 216 216 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 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share | The following table presents earnings per common share. Three Months Ended June 30, 2022 2021 Net income available to common stockholders (in thousands) $ 9,987 $ 14,276 Average number of common shares outstanding 50,487,259 55,515,445 Less: Average unallocated ESOP shares and non-vested restricted shares (3,506,429) (3,737,152) Weighted average number of common shares outstanding used to calculate basic earnings per common share 46,980,830 51,778,293 Dilutive effect of share-based compensation 555,203 871,778 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 47,536,033 52,650,071 Earnings per common share: Basic $ 0.21 $ 0.28 Diluted $ 0.21 $ 0.27 Six Months Ended June 30, 2022 2021 Net income available to common stockholders (in thousands) $ 22,254 $ 33,668 Average number of common shares outstanding 50,941,367 55,921,587 Less: Average unallocated ESOP shares and non-vested restricted shares (3,535,110) (3,765,833) Weighted average number of common shares outstanding used to calculate basic earnings per common share 47,406,257 52,155,754 Dilutive effect of share-based compensation 704,606 667,600 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 48,110,863 52,823,354 Earnings per common share: Basic $ 0.47 $ 0.65 Diluted $ 0.46 $ 0.64 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
SEGMENT REPORTING | |
Summary of reportable segments | Three Months Ended June 30, 2022 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 37,246 $ 411 $ 37,195 Provision for credit losses 2,546 — 2,546 Net interest and dividend income, after provision for credit losses 34,700 411 34,649 Mortgage banking income: Gain on sale of mortgage loans — 4,538 4,538 Intersegment gain (loss) (1,095) 1,097 — Changes in mortgage servicing rights fair value 127 735 862 Other 219 2,393 2,612 Total mortgage banking income (loss) (749) 8,763 8,012 Other noninterest income 6,084 7 6,091 Total noninterest income 5,335 8,770 14,103 Noninterest expense 27,131 7,242 34,954 Income before income taxes 12,904 1,939 13,798 Provision for income taxes 3,550 549 3,811 Net income $ 9,354 $ 1,390 $ 9,987 Six Months Ended June 30, 2022 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 70,670 $ 761 $ 70,465 Provision for credit losses 2,884 — 2,884 Net interest and dividend income, after provision for credit losses 67,786 761 67,581 Mortgage banking income: Gain on sale of mortgage loans — 9,860 9,860 Intersegment gain (loss) (1,703) 1,934 — Changes in mortgage servicing rights fair value 717 5,430 6,147 Other 452 4,718 5,170 Total mortgage banking income (loss) (534) 21,942 21,177 Other noninterest income 11,971 16 11,987 Total noninterest income 11,437 21,958 33,164 Noninterest expense 53,956 15,003 69,789 Income before income taxes 25,267 7,716 30,956 Provision for income taxes 7,107 2,090 8,702 Net income $ 18,160 $ 5,626 $ 22,254 Total assets at period end $ 4,718,584 $ 149,186 $ 4,704,044 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 Three Months Ended June 30, 2021 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 32,134 $ 855 $ 32,530 Provision (benefit) for credit losses (4,286) — (4,286) Net interest and dividend income, after provision (benefit) for credit losses 36,420 855 36,816 Mortgage banking income: Gain on sale of mortgage loans — 14,262 14,262 Intersegment gain (loss) (910) 910 — Changes in mortgage servicing rights fair value (419) (2,133) (2,552) Other 276 3,799 4,075 Total mortgage banking income (loss) (1,053) 16,838 15,785 Other noninterest income 5,898 20 5,918 Total noninterest income 4,845 16,858 21,703 Noninterest expense 24,128 14,101 38,598 Income before income taxes 17,137 3,612 19,921 Provision for income taxes 4,863 1,013 5,645 Net income $ 12,274 $ 2,599 $ 14,276 Six Months Ended June 30, 2021 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 63,382 $ 2,105 $ 64,582 Provision (benefit) for credit losses (4,195) — (4,195) Net interest and dividend income, after provision (benefit) for credit losses 67,577 2,105 68,777 Mortgage banking income: Gain on sale of mortgage loans — 39,064 39,064 Intersegment gain (loss) (1,572) 1,572 — Changes in mortgage servicing rights fair value (133) 990 857 Other 576 8,014 8,590 Total mortgage banking income (loss) (1,129) 49,640 48,511 Other noninterest income 10,989 12 11,001 Total noninterest income 9,860 49,652 59,512 Noninterest expense 48,591 32,158 81,400 Income before income taxes 28,846 19,599 46,889 Provision for income taxes 8,298 5,346 13,221 Net income $ 20,548 $ 14,253 $ 33,668 Total assets at period end $ 4,631,734 $ 233,818 $ 4,616,422 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended | ||||||
Jun. 30, 2022 USD ($) item Office state | Mar. 31, 2022 USD ($) | Jan. 01, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Number of full-service bank offices | item | 31 | ||||||
Allowance for loan losses | $ 43,560,000 | $ 41,765,000 | $ 45,377,000 | $ 51,273,000 | $ 55,384,000 | $ 55,395,000 | |
Retained earnings | 339,471,000 | 325,699,000 | |||||
Consumer loans | |||||||
Allowance for loan losses | $ 327,000 | $ 444,000 | 367,000 | $ 853,000 | $ 2,064,000 | $ 2,475,000 | |
HarborOne Mortgage | |||||||
Number of offices | Office | 27 | ||||||
Additional states licensed to lend | state | 7 | ||||||
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-13 | |||||||
Allowance for loan losses | $ (1,311,000) | $ 1,300,000 | $ (1,300,000) | ||||
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-13 | Unfunded Commitment | |||||||
Allowance for loan losses | 3,900,000 | ||||||
Retained earnings | (1,900,000) | ||||||
Net deferred tax asset balance | $ 737,000 | ||||||
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-13 | Consumer loans | |||||||
Allowance for loan losses | $ 123,000 | ||||||
HarborOne Bank. | |||||||
Number of security corporation subsidiaries | item | 1 |
DEBT SECURITIES - Gross unreali
DEBT SECURITIES - Gross unrealized gains and losses (Details) - USD ($) | 3 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jan. 01, 2022 | Dec. 31, 2021 | |
Securities available for sale | ||||
Amortized Cost | $ 384,285,000 | $ 397,671,000 | ||
Gross Unrealized Gains | 4,000 | 1,118,000 | ||
Gross Unrealized Losses | 49,891,000 | 4,753,000 | ||
Allowance for Credit Loss | 0 | |||
Fair Value | 334,398,000 | 394,036,000 | ||
Securities held to maturity | ||||
Amortized Cost | 10,000,000 | |||
Fair Value | 9,832,000 | |||
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Securities | ||||
Debt securities | 0 | |||
Accrued interest related to debt securities | 0 | $ 0 | ||
Securities available for sale | ||||
Allowance for Credit Loss | $ 0 | |||
U.S. government and government-sponsored enterprise obligations | ||||
Securities available for sale | ||||
Amortized Cost | 47,142,000 | 42,148,000 | ||
Gross Unrealized Losses | 6,092,000 | 883,000 | ||
Fair Value | 41,050,000 | 41,265,000 | ||
Securities held to maturity | ||||
Amortized Cost | 10,000,000 | |||
Gross Unrealized Losses | 168,000 | |||
Fair Value | 9,832,000 | |||
U.S. government agency and government-sponsored residential mortgage-backed securities | ||||
Securities available for sale | ||||
Amortized Cost | 329,742,000 | 347,716,000 | ||
Gross Unrealized Gains | 4,000 | 914,000 | ||
Gross Unrealized Losses | 43,586,000 | 3,870,000 | ||
Fair Value | 286,160,000 | 344,760,000 | ||
U.S. government-sponsored collateralized mortgage obligations | ||||
Securities available for sale | ||||
Amortized Cost | 3,166,000 | 3,927,000 | ||
Gross Unrealized Gains | 100,000 | |||
Gross Unrealized Losses | 42,000 | |||
Fair Value | 3,124,000 | 4,027,000 | ||
SBA asset-backed securities | ||||
Securities available for sale | ||||
Amortized Cost | 3,235,000 | 3,880,000 | ||
Gross Unrealized Gains | 104,000 | |||
Gross Unrealized Losses | 111,000 | |||
Fair Value | 3,124,000 | $ 3,984,000 | ||
Corporate bonds | ||||
Securities available for sale | ||||
Amortized Cost | 1,000,000 | |||
Gross Unrealized Losses | 60,000 | |||
Fair Value | $ 940,000 |
DEBT SECURITIES - Contractual m
DEBT SECURITIES - Contractual maturity (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) item | Jun. 30, 2021 item | Jun. 30, 2022 USD ($) security item | Jun. 30, 2021 item | Dec. 31, 2021 USD ($) security | |
Securities | |||||
Fair Value | $ 9,832,000 | $ 9,832,000 | |||
Allowance for Credit Loss | 0 | 0 | |||
Amortized Cost-Available-for-Sale | |||||
After 5 years through 10 years | 48,142,000 | 48,142,000 | |||
Total for contractual maturity | 48,142,000 | 48,142,000 | |||
Amortized Cost | 384,285,000 | 384,285,000 | $ 397,671,000 | ||
Fair Value-Available-for-Sale | |||||
After 5 years through 10 years | 41,990,000 | 41,990,000 | |||
Total for contractual maturity | 41,990,000 | 41,990,000 | |||
Total | 334,398,000 | 334,398,000 | $ 394,036,000 | ||
Amortized Cost-Held-to-Maturity | |||||
Amortized Cost | 10,000,000 | 10,000,000 | |||
After 5 years through 10 years | 10,000,000 | 10,000,000 | |||
Total for contractual maturity | 10,000,000 | 10,000,000 | |||
Total | 10,000,000 | 10,000,000 | |||
Fair Value-Held-to-Maturity | |||||
After 5 years through 10 years | 9,832,000 | 9,832,000 | |||
Total for contractual maturity | 9,832,000 | 9,832,000 | |||
Total | $ 9,832,000 | $ 9,832,000 | |||
Number of sales or calls of securities | item | 0 | 0 | 0 | 0 | |
Sales and proceeds | |||||
Number of holdings greater than 10% of shareholder equity | security | 0 | ||||
Interest rate swaps | Mortgage-backed securities | |||||
Securities | |||||
Number of securities pledged | security | 17 | ||||
Pledged as collateral | $ 0 | $ 0 | $ 13,900,000 | ||
Minimum | |||||
Securities | |||||
Maturity period | 3 years | ||||
Maximum | |||||
Securities | |||||
Maturity period | 29 years | ||||
U.S. government agency and government-sponsored residential mortgage-backed securities | |||||
Amortized Cost-Available-for-Sale | |||||
No single maturity date | 329,742,000 | $ 329,742,000 | |||
Amortized Cost | 329,742,000 | 329,742,000 | 347,716,000 | ||
Fair Value-Available-for-Sale | |||||
No single maturity date | 286,160,000 | 286,160,000 | |||
Total | 286,160,000 | 286,160,000 | 344,760,000 | ||
U.S. government-sponsored collateralized mortgage obligations | |||||
Amortized Cost-Available-for-Sale | |||||
No single maturity date | 3,166,000 | 3,166,000 | |||
Amortized Cost | 3,166,000 | 3,166,000 | 3,927,000 | ||
Fair Value-Available-for-Sale | |||||
No single maturity date | 3,124,000 | 3,124,000 | |||
Total | 3,124,000 | 3,124,000 | 4,027,000 | ||
SBA asset-backed securities | |||||
Amortized Cost-Available-for-Sale | |||||
No single maturity date | 3,235,000 | 3,235,000 | |||
Amortized Cost | 3,235,000 | 3,235,000 | 3,880,000 | ||
Fair Value-Available-for-Sale | |||||
No single maturity date | 3,124,000 | 3,124,000 | |||
Total | 3,124,000 | 3,124,000 | 3,984,000 | ||
U.S. government and government-sponsored enterprise obligations | |||||
Securities | |||||
Fair Value | 9,832,000 | 9,832,000 | |||
Amortized Cost-Available-for-Sale | |||||
Amortized Cost | 47,142,000 | 47,142,000 | 42,148,000 | ||
Fair Value-Available-for-Sale | |||||
Total | 41,050,000 | 41,050,000 | $ 41,265,000 | ||
Amortized Cost-Held-to-Maturity | |||||
Amortized Cost | 10,000,000 | 10,000,000 | |||
Fair Value-Held-to-Maturity | |||||
Total | 9,832,000 | $ 9,832,000 | |||
U.S. government and government-sponsored enterprise obligations | Minimum | |||||
Securities | |||||
Maturity period | 5 years | ||||
Callable period | 1 month | ||||
U.S. government and government-sponsored enterprise obligations | Maximum | |||||
Securities | |||||
Maturity period | 10 years | ||||
Callable period | 5 years | ||||
U.S. government and government-sponsored enterprise obligations and corporate bonds | |||||
Fair Value-Available-for-Sale | |||||
Total | $ 51,800,000 | $ 51,800,000 |
DEBT SECURITIES - Gross unrea_2
DEBT SECURITIES - Gross unrealized losses aggregated by category (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 USD ($) security | Dec. 31, 2021 USD ($) | |
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | $ 39,825 | $ 3,718 |
Twelve Months and Over | 10,066 | 1,035 |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 275,186 | 304,154 |
Twelve Months and Over | $ 58,708 | 35,552 |
Continuous unrealized losses, Fair Value, Held-for-Maturity | ||
Number of debt securities | security | 130 | |
Number of debt securities in unrealized loss position | security | 126 | |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | $ 33,520 | 2,835 |
Twelve Months and Over | 10,066 | 1,035 |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 226,948 | 262,889 |
Twelve Months and Over | 58,708 | 35,552 |
U.S. government-sponsored collateralized mortgage obligations | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | 42 | |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 3,124 | |
SBA asset-backed securities | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | 111 | |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 3,124 | |
U.S. government and government-sponsored enterprise obligations | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | 6,092 | 883 |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 41,050 | $ 41,265 |
Continuous unrealized losses, Gross Unrealized Losses, Held-to-Maturity | ||
Less than Twelve Months | 168 | |
Continuous unrealized losses, Fair Value, Held-for-Maturity | ||
Less Than Twelve Months | 9,832 | |
Corporate bonds | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | 60 | |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | $ 940 |
LOANS HELD FOR SALE (Details)
LOANS HELD FOR SALE (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Fair value and contractual principal outstanding: | |||
Loans held for sale, fair value | $ 31,679,000 | $ 45,642,000 | |
Loans held for sale, contractual principal outstanding | 31,073,000 | 44,245,000 | |
Fair value less unpaid principal balance | 606,000 | 1,397,000 | |
Change in fair value of mortgage loans held for sale | (791,000) | $ (6,100,000) | |
90 Days or More | |||
Fair value and contractual principal outstanding: | |||
Loans held for sale, fair value | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR CREDI_3
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Summary of Balances of Loans (Details) - USD ($) | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Loans | ||||||
Total loans | $ 3,911,949,000 | $ 3,607,733,000 | ||||
Net deferred loan costs | 7,200,000 | 5,400,000 | ||||
Less: Allowance for credit losses on loans | (43,560,000) | $ (41,765,000) | (45,377,000) | $ (51,273,000) | $ (55,384,000) | $ (55,395,000) |
Net loans | 3,868,389,000 | 3,562,356,000 | ||||
Accrued interest receivable | 10,300,000 | 9,600,000 | ||||
PPP loans | Commercial and industrial | ||||||
Loans | ||||||
Loans before fees | 2,500,000 | 27,000,000 | ||||
Deferred processing fee income | 93,000 | 949,000 | ||||
Residential | ||||||
Loans | ||||||
Total loans | 1,423,074,000 | 1,217,980,000 | ||||
Less: Allowance for credit losses on loans | (4,120,000) | (4,708,000) | (6,136,000) | |||
Residential | 1-4 family | ||||||
Loans | ||||||
Total loans | 1,229,950,000 | 1,047,819,000 | ||||
Less: Allowance for credit losses on loans | (10,082,000) | (8,884,000) | (3,631,000) | (4,708,000) | (6,168,000) | |
Residential | Second mortgages and equity lines of credit | ||||||
Loans | ||||||
Total loans | 151,683,000 | 136,853,000 | ||||
Less: Allowance for credit losses on loans | (849,000) | (833,000) | (420,000) | (603,000) | (936,000) | (1,054,000) |
Residential | Residential real estate construction | ||||||
Loans | ||||||
Total loans | 41,441,000 | 33,308,000 | ||||
Less: Allowance for credit losses on loans | (327,000) | (314,000) | (69,000) | (123,000) | (197,000) | (197,000) |
Commercial | ||||||
Loans | ||||||
Total loans | 2,413,563,000 | 2,258,048,000 | ||||
Commercial | Commercial real estate | ||||||
Loans | ||||||
Total loans | 1,847,619,000 | 1,699,877,000 | ||||
Less: Allowance for credit losses on loans | (20,431,000) | (20,131,000) | (33,242,000) | (32,991,000) | (34,987,000) | (34,765,000) |
Commercial | Commercial construction | ||||||
Loans | ||||||
Total loans | 158,762,000 | 136,563,000 | ||||
Less: Allowance for credit losses on loans | (4,370,000) | (4,210,000) | (2,010,000) | (1,937,000) | (2,237,000) | (1,955,000) |
Commercial | Commercial and industrial | ||||||
Loans | ||||||
Total loans | 407,182,000 | 421,608,000 | ||||
Less: Allowance for credit losses on loans | (7,174,000) | (6,949,000) | (4,638,000) | (8,059,000) | (6,627,000) | (5,311,000) |
Consumer loans | ||||||
Loans | ||||||
Total loans | 75,312,000 | 131,705,000 | ||||
Less: Allowance for credit losses on loans | (327,000) | $ (444,000) | (367,000) | $ (853,000) | $ (2,064,000) | $ (2,475,000) |
Consumer loans | Auto | ||||||
Loans | ||||||
Total loans | 68,533,000 | 124,354,000 | ||||
Consumer loans | Personal | ||||||
Loans | ||||||
Total loans | $ 6,779,000 | $ 7,351,000 |
LOANS AND ALLOWANCE FOR CREDI_4
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Loans Sold or Transferred (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Commercial real estate | ||
Loans | ||
Unpaid principal balance of loans serviced for others | $ 316.4 | $ 288.9 |
LOANS AND ALLOWANCE FOR CREDI_5
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Allowance for Loan Losses Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Activity in the allowance for loan losses | ||||
Balance | $ 41,765 | $ 55,384 | $ 45,377 | $ 55,395 |
Charge-offs | (11) | (43) | (2,857) | (284) |
Recoveries | 516 | 218 | 632 | 357 |
Provision | 1,290 | (4,286) | 1,719 | (4,195) |
Balance | 43,560 | 51,273 | 43,560 | 51,273 |
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses | ||||
Balance | (1,300) | |||
Balance | (1,311) | (1,311) | ||
Residential | ||||
Activity in the allowance for loan losses | ||||
Balance | 6,136 | 4,120 | ||
Recoveries | 118 | |||
Provision | (1,546) | |||
Balance | 4,708 | 4,708 | ||
Residential | 1-4 family | ||||
Activity in the allowance for loan losses | ||||
Balance | 8,884 | 3,631 | 6,168 | |
Recoveries | 144 | |||
Provision | 1,198 | 1,253 | (1,604) | |
Balance | 10,082 | 4,708 | 10,082 | 4,708 |
Residential | 1-4 family | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses | ||||
Balance | 5,198 | 5,198 | ||
Residential | Second mortgages and equity lines of credit | ||||
Activity in the allowance for loan losses | ||||
Balance | 833 | 936 | 420 | 1,054 |
Recoveries | 81 | 31 | 93 | 76 |
Provision | (65) | (364) | (55) | (527) |
Balance | 849 | 603 | 849 | 603 |
Residential | Second mortgages and equity lines of credit | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses | ||||
Balance | 391 | 391 | ||
Residential | Residential real estate construction | ||||
Activity in the allowance for loan losses | ||||
Balance | 314 | 197 | 69 | 197 |
Provision | 13 | (74) | 73 | (74) |
Balance | 327 | 123 | 327 | 123 |
Residential | Residential real estate construction | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses | ||||
Balance | 185 | 185 | ||
Commercial | Commercial real estate | ||||
Activity in the allowance for loan losses | ||||
Balance | 20,131 | 34,987 | 33,242 | 34,765 |
Charge-offs | (12) | (2,786) | (12) | |
Recoveries | 6 | 6 | 4 | |
Provision | 294 | (1,984) | 163 | (1,766) |
Balance | 20,431 | 32,991 | 20,431 | 32,991 |
Commercial | Commercial real estate | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses | ||||
Balance | (10,194) | (10,194) | ||
Commercial | Commercial construction | ||||
Activity in the allowance for loan losses | ||||
Balance | 4,210 | 2,237 | 2,010 | 1,955 |
Provision | 160 | (300) | 662 | (18) |
Balance | 4,370 | 1,937 | 4,370 | 1,937 |
Commercial | Commercial construction | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses | ||||
Balance | 1,698 | 1,698 | ||
Commercial | Commercial and industrial | ||||
Activity in the allowance for loan losses | ||||
Balance | 6,949 | 6,627 | 4,638 | 5,311 |
Charge-offs | (40) | (186) | ||
Recoveries | 406 | 10 | 473 | 18 |
Provision | (181) | 1,422 | (185) | 2,916 |
Balance | 7,174 | 8,059 | 7,174 | 8,059 |
Commercial | Commercial and industrial | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses | ||||
Balance | 2,288 | 2,288 | ||
Consumer loans | ||||
Activity in the allowance for loan losses | ||||
Balance | 444 | 2,064 | 367 | 2,475 |
Charge-offs | (11) | (31) | (31) | (86) |
Recoveries | 23 | 59 | 60 | 115 |
Provision | (129) | (1,239) | (192) | (1,651) |
Balance | 327 | 853 | 327 | 853 |
Consumer loans | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses | ||||
Balance | 123 | 123 | ||
Unallocated | ||||
Activity in the allowance for loan losses | ||||
Balance | 2,200 | 1,000 | 3,470 | |
Provision | (201) | (1,471) | ||
Balance | $ 1,999 | $ 1,999 | ||
Unallocated | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses | ||||
Balance | $ (1,000) | $ (1,000) |
LOANS AND ALLOWANCE FOR CREDI_6
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Allocation to Loan Segments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Allocation of the allowance to loan segments | |||||||
Total loans | $ 3,911,949 | $ 3,607,733 | |||||
Total allowance for loan losses | 43,560 | $ 41,765 | 45,377 | $ 51,273 | $ 55,384 | $ 55,395 | |
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Allocation of the allowance to loan segments | |||||||
Total allowance for loan losses | (1,311) | $ 1,300 | (1,300) | ||||
Impaired loans. | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 47,495 | ||||||
Total allowance for loan losses | 7,946 | ||||||
Non-impaired loans | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 3,560,238 | ||||||
Total allowance for loan losses | 37,431 | ||||||
Residential | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 1,423,074 | 1,217,980 | |||||
Total allowance for loan losses | 4,120 | 4,708 | 6,136 | ||||
Residential | Impaired loans. | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 23,110 | ||||||
Total allowance for loan losses | 650 | ||||||
Residential | Non-impaired loans | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 1,194,870 | ||||||
Total allowance for loan losses | 3,470 | ||||||
Residential | 1-4 family | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 1,229,950 | 1,047,819 | |||||
Total allowance for loan losses | 10,082 | 8,884 | 3,631 | 4,708 | 6,168 | ||
Residential | 1-4 family | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Allocation of the allowance to loan segments | |||||||
Total allowance for loan losses | 5,198 | ||||||
Residential | Second mortgages and equity lines of credit | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 151,683 | 136,853 | |||||
Total allowance for loan losses | 849 | 833 | 420 | 603 | 936 | 1,054 | |
Residential | Second mortgages and equity lines of credit | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Allocation of the allowance to loan segments | |||||||
Total allowance for loan losses | 391 | ||||||
Residential | Residential real estate construction | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 41,441 | 33,308 | |||||
Total allowance for loan losses | 327 | 314 | 69 | 123 | 197 | 197 | |
Residential | Residential real estate construction | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Allocation of the allowance to loan segments | |||||||
Total allowance for loan losses | 185 | ||||||
Commercial | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 2,413,563 | 2,258,048 | |||||
Commercial | Commercial real estate | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 1,847,619 | 1,699,877 | |||||
Total allowance for loan losses | 20,431 | 20,131 | 33,242 | 32,991 | 34,987 | 34,765 | |
Commercial | Commercial real estate | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Allocation of the allowance to loan segments | |||||||
Total allowance for loan losses | (10,194) | ||||||
Commercial | Commercial real estate | Impaired loans. | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 20,203 | ||||||
Total allowance for loan losses | 7,275 | ||||||
Commercial | Commercial real estate | Non-impaired loans | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 1,679,674 | ||||||
Total allowance for loan losses | 25,967 | ||||||
Commercial | Commercial construction | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 158,762 | 136,563 | |||||
Total allowance for loan losses | 4,370 | 4,210 | 2,010 | 1,937 | 2,237 | 1,955 | |
Commercial | Commercial construction | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Allocation of the allowance to loan segments | |||||||
Total allowance for loan losses | 1,698 | ||||||
Commercial | Commercial construction | Non-impaired loans | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 136,563 | ||||||
Total allowance for loan losses | 2,010 | ||||||
Commercial | Commercial and industrial | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 407,182 | 421,608 | |||||
Total allowance for loan losses | 7,174 | 6,949 | 4,638 | 8,059 | 6,627 | 5,311 | |
Commercial | Commercial and industrial | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Allocation of the allowance to loan segments | |||||||
Total allowance for loan losses | 2,288 | ||||||
Commercial | Commercial and industrial | Impaired loans. | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 4,182 | ||||||
Total allowance for loan losses | 21 | ||||||
Commercial | Commercial and industrial | Non-impaired loans | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 417,426 | ||||||
Total allowance for loan losses | 4,617 | ||||||
Consumer loans | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 75,312 | 131,705 | |||||
Total allowance for loan losses | 327 | $ 444 | 367 | 853 | 2,064 | 2,475 | |
Consumer loans | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Allocation of the allowance to loan segments | |||||||
Total allowance for loan losses | 123 | ||||||
Consumer loans | Non-impaired loans | |||||||
Allocation of the allowance to loan segments | |||||||
Total loans | 131,705 | ||||||
Total allowance for loan losses | 367 | ||||||
Unallocated | |||||||
Allocation of the allowance to loan segments | |||||||
Total allowance for loan losses | 1,000 | $ 1,999 | $ 2,200 | $ 3,470 | |||
Unallocated | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Allocation of the allowance to loan segments | |||||||
Total allowance for loan losses | $ (1,000) | ||||||
Unallocated | Non-impaired loans | |||||||
Allocation of the allowance to loan segments | |||||||
Total allowance for loan losses | $ 1,000 |
LOANS AND ALLOWANCE FOR CREDI_7
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Carrying value (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Carrying value | $ 33,200 |
Related Allowance | 3,600 |
Collateral Dependent | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Carrying value | 23,978 |
Related Allowance | 3,442 |
Residential | Collateral Dependent | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Carrying value | 9,732 |
Related Allowance | 319 |
Commercial | Collateral Dependent | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Carrying value | 14,246 |
Related Allowance | 3,123 |
Commercial | Commercial real estate | Collateral Dependent | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Carrying value | 10,620 |
Related Allowance | 3,099 |
Commercial | Commercial and industrial | Collateral Dependent | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Carrying value | 3,626 |
Related Allowance | $ 24 |
LOANS AND ALLOWANCE FOR CREDI_8
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | |
Recorded Investment | ||||
Impaired loans without a valuation allowance | $ 18,145 | |||
Impaired loans with a valuation allowance | 29,350 | |||
Total impaired loans | 47,495 | |||
Unpaid Principal Balance | ||||
Impaired loans without a valuation allowance | 21,423 | |||
Impaired loans with a valuation allowance | 38,234 | |||
Total impaired loans | 59,657 | |||
Activity in the allowance for loan losses | ||||
Allowance for loan losses for impaired loans | 7,946 | |||
Impaired loans | ||||
Average Recorded Investment | $ 42,557 | $ 43,789 | ||
Interest Income Recognized | 326 | 744 | ||
Interest Income Recognized on Cash Basis | 133 | 360 | ||
Additional funds committed to be advanced in connection with impaired loans | 0 | 0 | $ 0 | |
Residential | ||||
Recorded Investment | ||||
Impaired loans without a valuation allowance | 14,115 | |||
Impaired loans with a valuation allowance | 8,995 | |||
Unpaid Principal Balance | ||||
Impaired loans without a valuation allowance | 15,335 | |||
Impaired loans with a valuation allowance | 9,791 | |||
Activity in the allowance for loan losses | ||||
Allowance for loan losses for impaired loans | 650 | |||
Impaired loans | ||||
Average Recorded Investment | 22,268 | 22,973 | ||
Interest Income Recognized | 247 | 543 | ||
Interest Income Recognized on Cash Basis | 54 | 159 | ||
Commercial | Commercial real estate | ||||
Recorded Investment | ||||
Impaired loans without a valuation allowance | 2,641 | |||
Impaired loans with a valuation allowance | 17,562 | |||
Unpaid Principal Balance | ||||
Impaired loans without a valuation allowance | 2,692 | |||
Impaired loans with a valuation allowance | 24,847 | |||
Activity in the allowance for loan losses | ||||
Allowance for loan losses for impaired loans | 7,275 | |||
Impaired loans | ||||
Average Recorded Investment | 12,455 | 12,474 | ||
Interest Income Recognized | 63 | 65 | ||
Interest Income Recognized on Cash Basis | 63 | 65 | ||
Commercial | Commercial and industrial | ||||
Recorded Investment | ||||
Impaired loans without a valuation allowance | 1,389 | |||
Impaired loans with a valuation allowance | 2,793 | |||
Unpaid Principal Balance | ||||
Impaired loans without a valuation allowance | 3,396 | |||
Impaired loans with a valuation allowance | 3,596 | |||
Activity in the allowance for loan losses | ||||
Allowance for loan losses for impaired loans | $ 21 | |||
Impaired loans | ||||
Average Recorded Investment | 7,834 | 8,342 | ||
Interest Income Recognized | 16 | 136 | ||
Interest Income Recognized on Cash Basis | $ 16 | $ 136 |
LOANS AND ALLOWANCE FOR CREDI_9
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Summary of Past Due and Non-Accrual Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Summary of past due and non-accrual loans | ||
Past Due | $ 15,253 | $ 29,299 |
Loans on Non-accrual | 24,415 | 36,133 |
Loans past due 90 days or more and still accruing | 0 | 0 |
30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 2,806 | 7,359 |
60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,732 | 3,064 |
90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 10,715 | 18,876 |
Residential | 1-4 family | ||
Summary of past due and non-accrual loans | ||
Past Due | 6,909 | 12,256 |
Loans on Non-accrual | 9,772 | 11,210 |
Residential | 1-4 family | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 269 | 5,578 |
Residential | 1-4 family | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,393 | 2,901 |
Residential | 1-4 family | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 5,247 | 3,777 |
Residential | Second mortgages and equity lines of credit | ||
Summary of past due and non-accrual loans | ||
Past Due | 365 | 538 |
Loans on Non-accrual | 329 | 600 |
Residential | Second mortgages and equity lines of credit | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 130 | 202 |
Residential | Second mortgages and equity lines of credit | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 151 | |
Residential | Second mortgages and equity lines of credit | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 84 | 336 |
Commercial | Commercial real estate | ||
Summary of past due and non-accrual loans | ||
Past Due | 2,501 | 11,483 |
Loans on Non-accrual | 10,620 | 20,053 |
Commercial | Commercial real estate | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 348 | 149 |
Commercial | Commercial real estate | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 2,153 | 11,334 |
Commercial | Commercial and industrial | ||
Summary of past due and non-accrual loans | ||
Past Due | 4,851 | 3,894 |
Loans on Non-accrual | 3,626 | 4,114 |
Commercial | Commercial and industrial | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,533 | 616 |
Commercial | Commercial and industrial | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 152 | 1 |
Commercial | Commercial and industrial | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 3,166 | 3,277 |
Consumer loans | Auto | ||
Summary of past due and non-accrual loans | ||
Past Due | 621 | 1,049 |
Loans on Non-accrual | 65 | 144 |
Consumer loans | Auto | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 525 | 747 |
Consumer loans | Auto | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 34 | 162 |
Consumer loans | Auto | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 62 | 140 |
Consumer loans | Personal | ||
Summary of past due and non-accrual loans | ||
Past Due | 6 | 79 |
Loans on Non-accrual | 3 | 12 |
Consumer loans | Personal | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 1 | 67 |
Consumer loans | Personal | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 2 | |
Consumer loans | Personal | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | $ 3 | $ 12 |
LOANS AND ALLOWANCE FOR CRED_10
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Troubled Debt Restructurings (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) contract | Jun. 30, 2021 USD ($) contract | Jun. 30, 2022 USD ($) contract | Jun. 30, 2021 USD ($) contract | Dec. 31, 2021 USD ($) | |
Troubled debt restructurings | |||||
TDR modifications | $ 0 | $ 0 | $ 0 | $ 0 | |
Recorded investment of troubled debt restructurings | 9,900,000 | 9,900,000 | $ 11,000,000 | ||
Recorded investment of troubled debt restructurings that were nonaccruing | $ 988,000 | $ 988,000 | 1,000,000 | ||
Number of troubled debt restructurings that defaulted | contract | 0 | 0 | 0 | 0 | |
Commercial | |||||
Troubled debt restructurings | |||||
Recorded investment of troubled debt restructurings | $ 361,000 | $ 361,000 | 408,000 | ||
Recorded investment of troubled debt restructurings that were nonaccruing | $ 171,000 | $ 171,000 | $ 190,000 |
LOANS AND ALLOWANCE FOR CRED_11
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Risk Rating (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Loans by risk rating | ||
2022 | $ 601,248 | |
2021 | 1,133,490 | |
2020 | 563,781 | |
2019 | 413,167 | |
2018 | 246,821 | |
Prior | 734,425 | |
Revolving Loans Amortized Cost | 217,271 | |
Revolving Loans Converted to Term Loans | 1,746 | |
Total loans | 3,911,949 | $ 3,607,733 |
Commercial | ||
Loans by risk rating | ||
Total loans | 2,413,563 | 2,258,048 |
Commercial | Commercial real estate | ||
Loans by risk rating | ||
2022 | 330,697 | |
2021 | 427,181 | |
2020 | 250,180 | |
2019 | 273,804 | |
2018 | 167,282 | |
Prior | 398,475 | |
Total loans | 1,847,619 | 1,699,877 |
Commercial | Commercial real estate | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
2022 | 330,697 | |
2021 | 427,181 | |
2020 | 250,180 | |
2019 | 273,804 | |
2018 | 144,725 | |
Prior | 387,436 | |
Total loans | 1,814,023 | 1,645,871 |
Commercial | Commercial real estate | Loans rated 7, special mention | ||
Loans by risk rating | ||
2018 | 22,557 | |
Prior | 419 | |
Total loans | 22,976 | 33,953 |
Commercial | Commercial real estate | Loans rated 8, substandard | ||
Loans by risk rating | ||
Prior | 10,620 | |
Total loans | 10,620 | 20,053 |
Commercial | Commercial construction | ||
Loans by risk rating | ||
2022 | 31,471 | |
2021 | 92,080 | |
2020 | 13,279 | |
2019 | 20,230 | |
2018 | 195 | |
Prior | 1,507 | |
Total loans | 158,762 | 136,563 |
Commercial | Commercial construction | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
2022 | 31,471 | |
2021 | 92,080 | |
2020 | 13,279 | |
2019 | 20,230 | |
2018 | 195 | |
Prior | 1,507 | |
Total loans | 158,762 | 136,563 |
Commercial | Commercial and industrial | ||
Loans by risk rating | ||
2022 | 23,948 | |
2021 | 95,259 | |
2020 | 77,600 | |
2019 | 28,549 | |
2018 | 40,147 | |
Prior | 63,243 | |
Revolving Loans Amortized Cost | 78,436 | |
Total loans | 407,182 | 421,608 |
Commercial | Commercial and industrial | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
2022 | 23,948 | |
2021 | 95,254 | |
2020 | 77,600 | |
2019 | 28,549 | |
2018 | 40,089 | |
Prior | 59,658 | |
Revolving Loans Amortized Cost | 78,386 | |
Total loans | 403,484 | 417,408 |
Commercial | Commercial and industrial | Loans rated 7, special mention | ||
Loans by risk rating | ||
2021 | 5 | |
2018 | 58 | |
Prior | 49 | |
Total loans | 112 | 85 |
Commercial | Commercial and industrial | Loans rated 8, substandard | ||
Loans by risk rating | ||
Prior | 338 | |
Total loans | 338 | 694 |
Commercial | Commercial and industrial | Loans rated 9, doubtful | ||
Loans by risk rating | ||
Prior | 3,198 | |
Revolving Loans Amortized Cost | 50 | |
Total loans | 3,248 | 3,421 |
Residential | ||
Loans by risk rating | ||
2022 | 210,612 | |
2021 | 514,568 | |
2020 | 219,995 | |
2019 | 44,204 | |
2018 | 27,717 | |
Prior | 266,434 | |
Revolving Loans Amortized Cost | 137,798 | |
Revolving Loans Converted to Term Loans | 1,746 | |
Total loans | 1,423,074 | 1,217,980 |
Residential | Accrual | ||
Loans by risk rating | ||
2022 | 210,612 | |
2021 | 514,568 | |
2020 | 219,995 | |
2019 | 43,871 | |
2018 | 26,563 | |
Prior | 257,873 | |
Revolving Loans Amortized Cost | 137,745 | |
Revolving Loans Converted to Term Loans | 1,746 | |
Total loans | 1,412,973 | |
Residential | Nonaccrual | ||
Loans by risk rating | ||
2019 | 333 | |
2018 | 1,154 | |
Prior | 8,561 | |
Revolving Loans Amortized Cost | 53 | |
Total loans | 10,101 | |
Consumer loans | ||
Loans by risk rating | ||
2022 | 4,520 | |
2021 | 4,402 | |
2020 | 2,727 | |
2019 | 46,380 | |
2018 | 11,480 | |
Prior | 4,766 | |
Revolving Loans Amortized Cost | 1,037 | |
Total loans | 75,312 | $ 131,705 |
Consumer loans | Accrual | ||
Loans by risk rating | ||
2022 | 4,520 | |
2021 | 4,402 | |
2020 | 2,727 | |
2019 | 46,346 | |
2018 | 11,479 | |
Prior | 4,733 | |
Revolving Loans Amortized Cost | 1,037 | |
Total loans | 75,244 | |
Consumer loans | Nonaccrual | ||
Loans by risk rating | ||
2019 | 34 | |
2018 | 1 | |
Prior | 33 | |
Total loans | $ 68 |
LOANS AND ALLOWANCE FOR CRED_12
LOANS AND ALLOWANCE FOR CREDIT LOSSES - PCI Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | |
Accretable yield: | |||
Balance at beginning of period | $ 138 | $ 141 | |
Accretion | (2) | (5) | |
Balance at end of period | $ 136 | $ 136 | |
Amortized cost | $ 2,500 |
MORTGAGE LOAN SERVICING - Key A
MORTGAGE LOAN SERVICING - Key Assumptions (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Unpaid Principal Balance | ||
Unpaid principal balances of mortgage loans serviced | $ 3,650 | $ 3,650 |
Prepayment speed | 7.20% | 9.40% |
Discount rate | 9.24% | 9.20% |
Default rate | 1.49% | 1.64% |
MORTGAGE LOAN SERVICING - Fair
MORTGAGE LOAN SERVICING - Fair value of MSR (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Changes to the fair value of Mortgage Servicing Rights | ||||
Balance, beginning of period | $ 45,043 | $ 33,939 | $ 38,268 | $ 24,833 |
Additions | 1,225 | 4,568 | 2,715 | 10,265 |
Changes in fair value due to : | ||||
Reductions from loans paid off during the period | (771) | (1,501) | (1,604) | (3,100) |
Changes in valuation inputs or assumptions | 1,633 | (1,051) | 7,751 | 3,957 |
Balance, end of period | 47,130 | 35,955 | 47,130 | 35,955 |
Fees and commissions, mortgage banking and servicing | $ 2,100 | $ 1,900 | $ 4,000 | $ 3,500 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill | $ 69,802 | $ 69,802 | $ 69,802 |
Intangible assets | 2,695 | $ 3,164 | |
HarborOne Bank | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill | 59,000 | ||
HarborOne Mortgage. | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill | $ 10,800 |
DEPOSITS - Summary of deposits
DEPOSITS - Summary of deposits (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
DEPOSITS | ||
NOW and demand deposit accounts | $ 1,091,993 | $ 1,056,784 |
Regular savings and club accounts | 1,282,913 | 1,138,979 |
Money market deposit accounts | 885,673 | 858,970 |
Total non-certificate accounts | 3,260,579 | 3,054,733 |
Term certificate accounts greater than $250,000 | 101,931 | 108,426 |
Term certificate accounts less than or equal to $250,000 | 385,423 | 419,490 |
Brokered deposits | 100,000 | 100,000 |
Total certificate accounts | 587,354 | 627,916 |
Total deposits | 3,847,933 | 3,682,649 |
Total reciprocal deposits | $ 36,500 | $ 43,800 |
DEPOSITS - Maturity of deposits
DEPOSITS - Maturity of deposits (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Summary of certificate accounts by maturity | ||
Within 1 year | $ 421,621 | |
Over 1 year to 2 years | 127,833 | |
Over 2 years to 3 years | 24,707 | |
Over 3 years to 4 years | 10,509 | |
Over 4 years to 5 years | 2,866 | |
Total certificate deposits | 587,536 | |
Less unaccreted acquisition discount | (182) | |
Total certificate accounts | $ 587,354 | $ 627,916 |
Summary of certificate accounts by maturity | ||
Within 1 year | 0.37% | |
Over 1 year to 2 years | 1.03% | |
Over 2 years to 3 years | 0.99% | |
Over 3 years to 4 years | 0.67% | |
Over 4 years to 5 years | 0.72% | |
Total certificate deposits | 0.55% |
BORROWINGS - FHLB Advances (Det
BORROWINGS - FHLB Advances (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
BORROWINGS | ||
Short-term borrowed funds | $ 90,000 | $ 0 |
Weighted average rate | 1.70% | |
Scheduled Maturity | ||
2023 | $ 183 | 185 |
2024 | 13,400 | 13,400 |
2025 | 987 | 40,987 |
2027 and thereafter | 1,123 | 1,139 |
Total | 15,693 | 55,711 |
Redeemable at Call Date | ||
2022 | 40,000 | |
2023 | 183 | 185 |
2024 | 13,400 | 13,400 |
2025 | 987 | 987 |
2027 and thereafter | 1,123 | 1,139 |
Total | $ 15,693 | $ 55,711 |
Weighted Average Rate | ||
2023 | 1.43% | 1.46% |
2024 | 1.39% | 1.39% |
2025 | 1.32% | |
2027 and thereafter | 2% | 2% |
Total | 1.35% | 1.35% |
BORROWINGS - Others (Details)
BORROWINGS - Others (Details) - USD ($) | 6 Months Ended | |||
Sep. 01, 2023 | Jun. 30, 2022 | Dec. 31, 2021 | Aug. 30, 2018 | |
Borrowed funds | ||||
Amount outstanding | $ 0 | $ 0 | ||
Federal Reserve Bank of Boston | ||||
Borrowed funds | ||||
Percentage of carrying value pledged as collateral | 68% | |||
Loans pledged for FHLB | $ 97,800,000 | 101,400,000 | ||
Federal Home Loan Bank Advances | ||||
Borrowed funds | ||||
Carrying value of the loans pledged as collateral | 1,240,000,000 | 1,220,000,000 | ||
Available borrowing capacity | 829,500,000 | |||
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 | $ 778,000 | $ 841,000 | ||
Forecast | Subordinated Notes due 2028 | LIBOR | ||||
Borrowed funds | ||||
Basis points | 2.78% |
OTHER COMMITMENTS AND CONTING_3
OTHER COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
OTHER COMMITMENTS AND CONTINGENCIES | |||||||
Loans and Leases Receivable, Allowance | $ 43,560 | $ 41,765 | $ 45,377 | $ 51,273 | $ 55,384 | $ 55,395 | |
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
OTHER COMMITMENTS AND CONTINGENCIES | |||||||
Loans and Leases Receivable, Allowance | (1,311) | $ 1,300 | (1,300) | ||||
Commitments to grant residential real estate loans - HarborOne Mortgage | |||||||
OTHER COMMITMENTS AND CONTINGENCIES | |||||||
Financial instruments committed contract amount | 153,938 | 142,781 | |||||
Commitments to grant other loans | |||||||
OTHER COMMITMENTS AND CONTINGENCIES | |||||||
Financial instruments committed contract amount | 103,802 | 27,029 | |||||
Unadvanced funds on home equity lines of credit | |||||||
OTHER COMMITMENTS AND CONTINGENCIES | |||||||
Financial instruments committed contract amount | 229,509 | 211,120 | |||||
Unadvanced funds on revolving lines of credit | |||||||
OTHER COMMITMENTS AND CONTINGENCIES | |||||||
Financial instruments committed contract amount | 251,995 | 223,110 | |||||
Unadvanced funds on construction loans | |||||||
OTHER COMMITMENTS AND CONTINGENCIES | |||||||
Financial instruments committed contract amount | $ 294,452 | $ 194,101 | |||||
Unfunded Commitment | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
OTHER COMMITMENTS AND CONTINGENCIES | |||||||
Loans and Leases Receivable, Allowance | $ 3,900 |
OTHER COMMITMENTS AND CONTING_4
OTHER COMMITMENTS AND CONTINGENCIES - Unfunded commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jan. 01, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | $ 45,377 | $ 41,765 | $ 55,384 | $ 45,377 | $ 55,395 |
Provision for loan losses | 2,546 | (4,286) | 2,884 | (4,195) | |
Balance | 43,560 | 51,273 | 43,560 | 51,273 | |
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | (1,300) | (1,300) | |||
Balance | 1,300 | (1,311) | (1,311) | ||
Residential | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | 4,120 | 6,136 | 4,120 | ||
Balance | 4,708 | 4,708 | |||
Residential | Residential real estate construction | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | 69 | 314 | 197 | 69 | 197 |
Balance | 327 | 123 | 327 | 123 | |
Residential | Residential real estate construction | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | 185 | 185 | |||
Commercial | Commercial real estate | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | 33,242 | 20,131 | 34,987 | 33,242 | 34,765 |
Balance | 20,431 | 32,991 | 20,431 | 32,991 | |
Commercial | Commercial real estate | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | (10,194) | (10,194) | |||
Commercial | Commercial construction | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | 2,010 | 4,210 | 2,237 | 2,010 | 1,955 |
Balance | 4,370 | 1,937 | 4,370 | 1,937 | |
Commercial | Commercial construction | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | 1,698 | 1,698 | |||
Commercial | Commercial and industrial | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | 4,638 | 6,949 | 6,627 | 4,638 | 5,311 |
Balance | 7,174 | 8,059 | 7,174 | 8,059 | |
Commercial | Commercial and industrial | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | 2,288 | 2,288 | |||
Consumer loans | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | 367 | 444 | 2,064 | 367 | 2,475 |
Balance | 327 | $ 853 | 327 | $ 853 | |
Consumer loans | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Balance | 123 | 123 | |||
Unfunded Commitment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Beginning balance | 3,840 | ||||
Provision | 1,256 | 1,165 | |||
Ending balance | 5,096 | 5,096 | |||
Unfunded Commitment | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Provision | 3,900 | ||||
Balance | $ 3,900 | ||||
Ending balance | 3,931 | 3,931 | |||
Unfunded Commitment | Residential | Residential real estate construction | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Beginning balance | 339 | ||||
Provision | (2) | 19 | |||
Ending balance | 337 | 337 | |||
Unfunded Commitment | Residential | Residential real estate construction | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Ending balance | 318 | 318 | |||
Unfunded Commitment | Commercial | Commercial real estate | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Beginning balance | 538 | ||||
Provision | (56) | 102 | |||
Ending balance | 482 | 482 | |||
Unfunded Commitment | Commercial | Commercial real estate | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Ending balance | 380 | 380 | |||
Unfunded Commitment | Commercial | Commercial construction | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Beginning balance | 2,345 | ||||
Provision | 1,293 | 1,077 | |||
Ending balance | 3,638 | 3,638 | |||
Unfunded Commitment | Commercial | Commercial construction | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Ending balance | 2,561 | 2,561 | |||
Unfunded Commitment | Commercial | Commercial and industrial | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Beginning balance | 604 | ||||
Provision | 20 | (34) | |||
Ending balance | 624 | 624 | |||
Unfunded Commitment | Commercial | Commercial and industrial | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Ending balance | 658 | 658 | |||
Unfunded Commitment | Consumer loans | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Beginning balance | 14 | ||||
Provision | 1 | 1 | |||
Ending balance | 15 | 15 | |||
Unfunded Commitment | Consumer loans | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Ending balance | $ 14 | $ 14 |
DERIVATIVES (Details)
DERIVATIVES (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 USD ($) derivative | Mar. 31, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) derivative | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Derivative disclosures | ||||||
Fair value adjustment | $ 9,000 | $ 1,519,000 | $ 819,000 | $ 2,901,000 | ||
Net impact of fair value adjustments | $ (101,000) | |||||
Other assets | ||||||
Derivative disclosures | ||||||
Fair Value, Assets | 23,670,000 | 23,670,000 | $ 22,120,000 | |||
Other liabilities | ||||||
Derivative disclosures | ||||||
Fair Value, Liabilities | 16,133,000 | $ 16,133,000 | 19,403,000 | |||
Derivative loan commitments | ||||||
Derivative disclosures | ||||||
Loan commitment specified period | 60 days | |||||
Derivative loan commitments | Not designated as hedging instruments | ||||||
Derivative disclosures | ||||||
Notional Amount | 66,802,000 | $ 66,802,000 | 86,134,000 | |||
Derivative loan commitments | Not designated as hedging instruments | Other assets | ||||||
Derivative disclosures | ||||||
Fair Value, Assets | 1,187,000 | 1,187,000 | 1,527,000 | |||
Derivative loan commitments | Not designated as hedging instruments | Other liabilities | ||||||
Derivative disclosures | ||||||
Fair Value, Liabilities | 23,000 | 23,000 | 95,000 | |||
Forward loan sale commitments | Not designated as hedging instruments | ||||||
Derivative disclosures | ||||||
Notional Amount | 64,500,000 | 64,500,000 | 96,000,000 | |||
Forward loan sale commitments | Not designated as hedging instruments | Other assets | ||||||
Derivative disclosures | ||||||
Fair Value, Assets | 158,000 | 158,000 | 56,000 | |||
Forward loan sale commitments | Not designated as hedging instruments | Other liabilities | ||||||
Derivative disclosures | ||||||
Fair Value, Liabilities | 216,000 | 216,000 | 94,000 | |||
Interest rate swaps | ||||||
Derivative disclosures | ||||||
Securities pledged to secure the Company's liability for the offsetting interest rate swaps | $ 0 | $ 0 | ||||
Fair value adjustment | $ 329,000 | (430,000) | ||||
Interest rate swaps | Cash Flow Hedging | ||||||
Derivative disclosures | ||||||
Number of Derivative Instruments Held | derivative | 1 | 1 | ||||
Maturity term | 2 years 9 months 10 days | |||||
Fixed rate | 0.67% | 0.67% | ||||
Variable rate | 0.95% | 0.95% | ||||
Amount to be reclassified in next 12 months | $ 2,500,000 | $ 2,500,000 | ||||
Notional Amount | 100,000,000 | 100,000,000 | ||||
Fair Value, Assets | 6,400,000 | 6,400,000 | ||||
Interest rate swaps | Designated as Hedging Instrument | ||||||
Derivative disclosures | ||||||
Notional Amount | 100,000,000 | 100,000,000 | 100,000,000 | |||
Interest rate swaps | Designated as Hedging Instrument | Other assets | ||||||
Derivative disclosures | ||||||
Fair Value, Assets | 6,431,000 | 6,431,000 | 1,663,000 | |||
Interest rate swaps | Not designated as hedging instruments | ||||||
Derivative disclosures | ||||||
Notional Amount | 656,743,000 | 656,743,000 | 740,235,000 | |||
Interest rate swaps | Not designated as hedging instruments | Other assets | ||||||
Derivative disclosures | ||||||
Fair Value, Assets | 15,894,000 | 15,894,000 | 18,874,000 | |||
Interest rate swaps | Not designated as hedging instruments | Other liabilities | ||||||
Derivative disclosures | ||||||
Fair Value, Liabilities | 15,894,000 | 15,894,000 | 19,214,000 | |||
Risk Participation Agreements | Not designated as hedging instruments | ||||||
Derivative disclosures | ||||||
Notional Amount | $ 124,742,000 | $ 124,742,000 | $ 139,109,000 |
DERIVATIVES - Net gain and loss
DERIVATIVES - Net gain and losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Derivative [Line Items] | ||||
(Loss) gain in OCI on derivatives (effective portion), net of tax | $ (15,220) | $ 989 | $ (32,630) | $ (1,356) |
Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
(Loss) gain in OCI on derivatives (effective portion), net of tax | (8,628) | (174) | (5,824) | 1,155 |
(Loss) gain reclassified from OCI into interest income or interest expense (effective portion) | (71) | 121 | 40 | 233 |
Not designated as hedging instruments | ||||
Derivative [Line Items] | ||||
Total | (1,307) | (5,290) | 41 | (5,286) |
Mortgage banking income | Not designated as hedging instruments | Derivative loan commitments | ||||
Derivative [Line Items] | ||||
Total | 369 | (1,868) | (268) | (7,281) |
Mortgage banking income | Not designated as hedging instruments | Forward loan sale commitments | ||||
Derivative [Line Items] | ||||
Total | $ (1,676) | $ (3,422) | (21) | $ 1,995 |
Other income | Not designated as hedging instruments | Interest rate swaps | ||||
Derivative [Line Items] | ||||
Total | $ 330 |
OPERATING LEASE RIGHT-OF-USE _3
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Operating lease ROU assets | $ 26,500 | $ 26,800 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets. | Other Assets. |
Operating lease liabilities | $ 28,104 | $ 28,400 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | hone:OtherLiabilitiesAndAccruedExpensesMember | hone:OtherLiabilitiesAndAccruedExpensesMember |
Weighted-average remaining lease term (years) | 16 years 4 months 28 days | 16 years 9 months 7 days |
Minimum | ||
Lessee, Operating Lease, Remaining Lease Term | 5 months | 3 months |
Maximum | ||
Lessee, Operating Lease, Remaining Lease Term | 36 years 2 months 12 days | 36 years 1 month 6 days |
OPERATING LEASE RIGHT-OF-USE _4
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2022 | $ 1,655 | |
2023 | 3,179 | |
2024 | 2,658 | |
2025 | 2,496 | |
2026 | 2,461 | |
Thereafter | 21,515 | |
Total lease payments | 33,964 | |
Imputed interest | (5,860) | |
Total present value of operating lease liabilities | $ 28,104 | $ 28,400 |
OPERATING LEASE RIGHT-OF-USE _5
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES - Weighted average discount and remaining lease term (Details) | Jun. 30, 2022 | Dec. 31, 2021 |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | ||
Weighted-average discount rate | 1.96% | 1.94% |
Weighted-average remaining lease term (years) | 16 years 4 months 28 days | 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 | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | ||||
Operating lease expense | $ 822 | $ 658 | $ 1,636 | $ 1,290 |
Short-term lease expense | 37 | 29 | 68 | 70 |
Variable lease expense | 10 | 19 | ||
Sublease income | (5) | (5) | ||
Total lease expense | 854 | 697 | 1,699 | 1,379 |
Other Information | ||||
Cash paid for amounts included in the measurement of lease liabilities-operating cash flows for operating leases | 802 | 746 | 1,601 | 1,422 |
Operating Lease - Operating cash flows (Liability reduction) | 672 | 621 | 1,340 | 1,180 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 778 | $ 2,380 | $ 1,083 | $ 27,087 |
MINIMUM REGULATORY CAPITAL RE_3
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Common equity Tier 1 capital conversation buffer ratio | 0.025 | |
Applicable capital conversation buffer ratio | 0.025 | |
Common equity Tier 1 to risk-weighted assets | ||
Actual, Capital amount | $ 586,990 | $ 608,804 |
Actual, Ratio | 0.145 | 0.164 |
Minimum Requirement for Capital Adequacy Purposes | $ 182,699 | $ 167,475 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.045 | 0.045 |
Tier 1 capital to risk weighted assets | ||
Actual, Capital amount | $ 586,990 | $ 608,804 |
Actual, Ratio | 0.145 | 0.164 |
Minimum Requirement for Capital Adequacy Purposes | $ 243,599 | $ 223,300 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.060 | 0.060 |
Total capital to risk-weighted assets | ||
Actual, Capital amount | $ 670,646 | $ 689,181 |
Actual, Ratio | 0.165 | 0.185 |
Minimum Requirement for Capital Adequacy Purposes | $ 324,799 | $ 297,733 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.080 | 0.080 |
Tier 1 capital to average assets | ||
Actual, Capital amount | $ 586,990 | $ 608,804 |
Actual, Ratio | 0.128 | 0.136 |
Minimum Requirement for Capital Adequacy Purposes | $ 182,828 | $ 179,710 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.040 | 0.040 |
HarborOne Bank. | ||
Common equity Tier 1 to risk-weighted assets | ||
Actual, Capital amount | $ 504,759 | $ 485,239 |
Actual, Ratio | 0.124 | 0.131 |
Minimum Requirement for Capital Adequacy Purposes | $ 182,682 | $ 166,660 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.045 | 0.045 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 263,874 | $ 240,731 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.065 | 0.065 |
Tier 1 capital to risk weighted assets | ||
Actual, Capital amount | $ 504,759 | $ 485,239 |
Actual, Ratio | 0.124 | 0.131 |
Minimum Requirement for Capital Adequacy Purposes | $ 243,576 | $ 222,214 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.060 | 0.060 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 324,768 | $ 296,285 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.080 | 0.080 |
Total capital to risk-weighted assets | ||
Actual, Capital amount | $ 553,415 | $ 530,616 |
Actual, Ratio | 0.136 | 0.143 |
Minimum Requirement for Capital Adequacy Purposes | $ 324,768 | $ 296,285 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.080 | 0.080 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 405,960 | $ 370,356 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.100 | 0.100 |
Tier 1 capital to average assets | ||
Actual, Capital amount | $ 504,759 | $ 485,239 |
Actual, Ratio | 0.110 | 0.109 |
Minimum Requirement for Capital Adequacy Purposes | $ 182,792 | $ 178,279 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.040 | 0.040 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 228,491 | $ 222,849 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.050 | 0.050 |
COMPREHENSIVE (LOSS) INCOME (De
COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Components of AOCI | ||
Total accumulated other comprehensive income (loss) | $ (34,267) | $ (1,637) |
Cash flow hedge | ||
Components of AOCI | ||
Net unrealized gain (loss) | 6,431 | 1,663 |
Related tax effect | (1,806) | (466) |
Total accumulated other comprehensive income (loss) | 4,625 | 1,197 |
Securities available for sale | ||
Components of AOCI | ||
Net unrealized gain (loss) | (49,887) | (3,635) |
Related tax effect | 10,995 | 801 |
Total accumulated other comprehensive income (loss) | $ (38,892) | $ (2,834) |
COMPREHENSIVE (LOSS) INCOME - C
COMPREHENSIVE (LOSS) INCOME - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 649,065 | $ 698,073 | $ 679,261 | $ 696,314 |
Balance at end of period | 624,478 | 705,471 | 624,478 | 705,471 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (19,047) | (160) | (1,637) | 2,185 |
Other comprehensive (loss) income before reclassifications | (19,384) | 1,130 | (41,524) | (1,850) |
Amounts reclassified from accumulated other comprehensive income (loss) | (71) | 121 | 40 | 233 |
Net current period other comprehensive (loss) income | (19,455) | 1,251 | (41,484) | (1,617) |
Related tax effect | 4,235 | (262) | 8,854 | 261 |
Balance at end of period | (34,267) | 829 | (34,267) | 829 |
Securities available for sale | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (23,048) | (476) | (2,834) | 3,198 |
Other comprehensive (loss) income before reclassifications | (20,323) | 1,493 | (46,252) | (3,220) |
Net current period other comprehensive (loss) income | (20,323) | 1,493 | (46,252) | (3,220) |
Related tax effect | 4,479 | (330) | 10,194 | 709 |
Balance at end of period | (38,892) | 687 | (38,892) | 687 |
Cash flow hedge | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 4,001 | 316 | 1,197 | (1,013) |
Other comprehensive (loss) income before reclassifications | 939 | (363) | 4,728 | 1,370 |
Amounts reclassified from accumulated other comprehensive income (loss) | (71) | 121 | 40 | 233 |
Net current period other comprehensive (loss) income | 868 | (242) | 4,768 | 1,603 |
Related tax effect | (244) | 68 | (1,340) | (448) |
Balance at end of period | $ 4,625 | $ 142 | $ 4,625 | $ 142 |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABILITIES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Assets and liabilities measured on recurring basis | ||
Fair Value | $ 334,398,000 | $ 394,036,000 |
Derivative loan commitments | ||
Assets and liabilities measured on recurring basis | ||
Weighted average pull-through rate | 86% | 88% |
Recurring | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | $ 334,398,000 | $ 394,036,000 |
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 | 334,398,000 | 394,036,000 |
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) | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2022 USD ($) item | Dec. 31, 2021 USD ($) item | Mar. 31, 2022 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Assets and liabilities measured on recurring basis | ||||||
Number of transfers | item | 0 | 0 | ||||
Assets | ||||||
Securities available for sale, at fair value | $ 334,398,000 | $ 394,036,000 | ||||
Loans held for sale | 31,679,000 | 45,642,000 | ||||
Mortgage servicing rights | 47,130,000 | 38,268,000 | $ 45,043,000 | $ 35,955,000 | $ 33,939,000 | $ 24,833,000 |
Recurring | ||||||
Assets | ||||||
Securities available for sale, at fair value | 334,398,000 | 394,036,000 | ||||
Loans held for sale | 31,679,000 | 45,642,000 | ||||
Mortgage servicing rights | 47,130,000 | 38,268,000 | ||||
Total assets | 436,877,000 | 500,066,000 | ||||
Liabilities | ||||||
Total liabilities | 16,133,000 | 19,403,000 | ||||
Recurring | Derivative loan commitments | ||||||
Assets | ||||||
Derivative assets | 1,187,000 | 1,527,000 | ||||
Liabilities | ||||||
Derivative liabilities | 23,000 | 95,000 | ||||
Recurring | Forward loan sale commitments | ||||||
Assets | ||||||
Derivative assets | 158,000 | 56,000 | ||||
Liabilities | ||||||
Derivative liabilities | 216,000 | 94,000 | ||||
Recurring | Interest rate swaps | ||||||
Assets | ||||||
Derivative assets | 15,894,000 | 18,874,000 | ||||
Liabilities | ||||||
Derivative liabilities | 15,894,000 | 19,214,000 | ||||
Recurring | Interest rate management agreement | ||||||
Assets | ||||||
Derivative assets | 6,431,000 | 1,663,000 | ||||
Recurring | Level 1 | ||||||
Assets | ||||||
Securities available for sale, at fair value | 0 | 0 | ||||
Recurring | Level 2 | ||||||
Assets | ||||||
Securities available for sale, at fair value | 334,398,000 | 394,036,000 | ||||
Loans held for sale | 31,679,000 | 45,642,000 | ||||
Mortgage servicing rights | 47,130,000 | 38,268,000 | ||||
Total assets | 435,532,000 | 498,483,000 | ||||
Liabilities | ||||||
Total liabilities | 15,894,000 | 19,214,000 | ||||
Recurring | Level 2 | Interest rate swaps | ||||||
Assets | ||||||
Derivative assets | 15,894,000 | 18,874,000 | ||||
Liabilities | ||||||
Derivative liabilities | 15,894,000 | 19,214,000 | ||||
Recurring | Level 2 | Interest rate management agreement | ||||||
Assets | ||||||
Derivative assets | 6,431,000 | 1,663,000 | ||||
Recurring | Level 3 | ||||||
Assets | ||||||
Securities available for sale, at fair value | 0 | 0 | ||||
Total assets | 1,345,000 | 1,583,000 | ||||
Liabilities | ||||||
Total liabilities | 239,000 | 189,000 | ||||
Recurring | Level 3 | Derivative loan commitments | ||||||
Assets | ||||||
Derivative assets | 1,187,000 | 1,527,000 | ||||
Liabilities | ||||||
Derivative liabilities | 23,000 | 95,000 | ||||
Recurring | Level 3 | Forward loan sale commitments | ||||||
Assets | ||||||
Derivative assets | 158,000 | 56,000 | ||||
Liabilities | ||||||
Derivative liabilities | $ 216,000 | $ 94,000 |
FAIR VALUE OF ASSETS AND LIAB_5
FAIR VALUE OF ASSETS AND LIABILITIES - Level 3 (Details) - Derivative and Forward Loan Sale Commitments - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Changes in Level 3 assets | ||||
Balance at beginning of period | $ 2,864 | $ 10,225 | $ 1,583 | $ 12,623 |
Total gains losses included in net income | (1,520) | (5,091) | (239) | (7,489) |
Balance at end of period | 1,344 | 5,134 | 1,344 | 5,134 |
Changes in unrealized gains relating to instruments at period end | 1,344 | 5,134 | 1,344 | 5,134 |
Changes in Level 3 liabilities | ||||
Balance at beginning of period | (452) | (143) | (189) | (2,545) |
Total gains (losses) included in net income | 213 | (199) | (50) | 2,203 |
Balance at end of period | (239) | (342) | (239) | (342) |
Changes in unrealized losses relating to instruments at period end | $ (239) | $ (342) | $ (239) | $ (342) |
FAIR VALUE OF ASSETS AND LIAB_6
FAIR VALUE OF ASSETS AND LIABILITIES - Impaired Loans (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | $ 9 | $ 1,519 | $ 819 | $ 2,901 | |
Collateral-dependent impaired loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | $ 9 | 1,517 | $ 819 | 2,877 | |
Other real estate owned and repossessed assets | |||||
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | $ 2 | $ 24 | |||
Level 3 | Discount | Minimum | Residential loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Measurement input | 0 | 0 | |||
Level 3 | Discount | Minimum | Commercial real estate | |||||
Assets and liabilities measured on non-recurring basis | |||||
Measurement input | 0 | 0 | |||
Level 3 | Discount | Minimum | Commercial and industrial | |||||
Assets and liabilities measured on non-recurring basis | |||||
Measurement input | 0 | 0 | |||
Level 3 | Discount | Maximum | Residential loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Measurement input | 0.20 | 0.20 | |||
Level 3 | Discount | Maximum | Commercial real estate | |||||
Assets and liabilities measured on non-recurring basis | |||||
Measurement input | 0.50 | 0.50 | |||
Level 3 | Discount | Maximum | Commercial and industrial | |||||
Assets and liabilities measured on non-recurring basis | |||||
Measurement input | 0.90 | 0.90 | |||
Non-recurring | Level 3 | |||||
Assets and liabilities measured on non-recurring basis | |||||
Assets, Fair value | $ 8,850 | $ 8,850 | $ 21,668 | ||
Non-recurring | Level 3 | Residential loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Assets, Fair value | 8,850 | 8,850 | 21,615 | ||
Non-recurring | Level 3 | Collateral-dependent impaired loans | Sales Comparison Approach | |||||
Assets and liabilities measured on non-recurring basis | |||||
Assets, Fair value | $ 5,717 | $ 5,717 | 21,615 | ||
Non-recurring | Level 3 | Other real estate owned and repossessed assets | |||||
Assets and liabilities measured on non-recurring basis | |||||
Assets, Fair value | $ 53 |
FAIR VALUE OF ASSETS AND LIAB_7
FAIR VALUE OF ASSETS AND LIABILITIES - Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Financial assets: | ||
Cash and cash equivalents | $ 84,338 | $ 194,719 |
Securities available for sale, at fair value | 334,398 | 394,036 |
Securities held to maturity, at amortized cost | 10,000 | |
Federal Home Loan Bank stock | 5,625 | 5,931 |
Securities held to maturity | 9,832 | |
Loans held for sale | 31,679 | 45,642 |
Loans, net | 3,868,389 | 3,562,356 |
Retirement plan annuities | 14,393 | 14,174 |
Accrued interest receivable | 11,305 | 10,624 |
Financial liabilities: | ||
Deposits | 3,847,933 | 3,682,649 |
Subordinated debt | 34,222 | 34,159 |
Mortgagors' escrow accounts | 9,639 | 8,459 |
Accrued interest payable | 908 | 1,083 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 84,338 | 194,719 |
Securities available for sale, at fair value | 334,398 | 394,036 |
Federal Home Loan Bank stock | 5,625 | 5,931 |
Securities held to maturity | 10,000 | |
Loans held for sale | 31,679 | 45,642 |
Loans, net | 3,868,389 | 3,562,356 |
Retirement plan annuities | 14,393 | 14,174 |
Accrued interest receivable | 11,305 | 10,624 |
Financial liabilities: | ||
Deposits | 3,847,933 | 3,682,649 |
Borrowed funds | 105,693 | 55,711 |
Subordinated debt | 34,222 | 34,159 |
Mortgagors' escrow accounts | 9,639 | 8,459 |
Accrued interest payable | 908 | 1,083 |
Carrying Amount | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 1,187 | 1,527 |
Liabilities | 23 | 95 |
Carrying Amount | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Assets | 6,431 | 1,663 |
Carrying Amount | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 15,894 | 18,874 |
Liabilities | 15,894 | 19,214 |
Carrying Amount | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 158 | 56 |
Liabilities | 216 | 94 |
Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 84,338 | 194,719 |
Securities available for sale, at fair value | 334,398 | 394,036 |
Securities held to maturity | 9,832 | |
Loans held for sale | 31,679 | 45,642 |
Loans, net | 3,792,952 | 3,558,934 |
Retirement plan annuities | 14,393 | 14,174 |
Accrued interest receivable | 11,305 | 10,624 |
Financial liabilities: | ||
Deposits | 3,833,716 | 3,683,465 |
Borrowed funds | 104,994 | 55,765 |
Subordinated debt | 30,526 | 35,790 |
Mortgagors' escrow accounts | 9,639 | 8,459 |
Accrued interest payable | 908 | 1,083 |
Fair Value | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 1,187 | 1,527 |
Liabilities | 23 | 95 |
Fair Value | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Assets | 6,431 | 1,663 |
Fair Value | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 15,894 | 18,874 |
Liabilities | 15,894 | 19,214 |
Fair Value | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 158 | 56 |
Liabilities | 216 | 94 |
Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 84,338 | 194,719 |
Fair Value | Level 2 | ||
Financial assets: | ||
Securities available for sale, at fair value | 334,398 | 394,036 |
Securities held to maturity | 9,832 | |
Loans held for sale | 31,679 | 45,642 |
Accrued interest receivable | 11,305 | 10,624 |
Financial liabilities: | ||
Borrowed funds | 104,994 | 55,765 |
Accrued interest payable | 908 | 1,083 |
Fair Value | Level 2 | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Assets | 6,431 | 1,663 |
Fair Value | Level 2 | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 15,894 | 18,874 |
Liabilities | 15,894 | 19,214 |
Fair Value | Level 3 | ||
Financial assets: | ||
Loans, net | 3,792,952 | 3,558,934 |
Retirement plan annuities | 14,393 | 14,174 |
Financial liabilities: | ||
Deposits | 3,833,716 | 3,683,465 |
Subordinated debt | 30,526 | 35,790 |
Mortgagors' escrow accounts | 9,639 | 8,459 |
Fair Value | Level 3 | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 1,187 | 1,527 |
Liabilities | 23 | 95 |
Fair Value | Level 3 | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 158 | 56 |
Liabilities | $ 216 | $ 94 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
EARNINGS PER SHARE | ||||
Net income available to common stockholders (in thousands) | $ 9,987 | $ 14,276 | $ 22,254 | $ 33,668 |
Average number of common shares outstanding | 50,487,259 | 55,515,445 | 50,941,367 | 55,921,587 |
Less: Average unallocated ESOP shares and non-vested restricted shares | (3,506,429) | (3,737,152) | (3,535,110) | (3,765,833) |
Weighted average common shares outstanding used to calculate basic earnings per common share | 46,980,830 | 51,778,293 | 47,406,257 | 52,155,754 |
Dilutive effect of share-based compensation | 555,203 | 871,778 | 704,606 | 667,600 |
Weighted average common shares outstanding used to calculate diluted earnings per common share | 47,536,033 | 52,650,071 | 48,110,863 | 52,823,354 |
Basic | $ 0.21 | $ 0.28 | $ 0.47 | $ 0.65 |
Diluted | $ 0.21 | $ 0.27 | $ 0.46 | $ 0.64 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) segment | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Reporting Information | |||||
Number of reportable segments | segment | 2 | ||||
Net interest and dividend income (expense) | $ 37,195 | $ 32,530 | $ 70,465 | $ 64,582 | |
Provision (benefit) for credit losses | 2,546 | (4,286) | 2,884 | (4,195) | |
Net interest and dividend income, after provision (benefit) for credit losses | 34,649 | 36,816 | 67,581 | 68,777 | |
Mortgage banking income: | |||||
Gain on sale of mortgage loans | 4,538 | 14,262 | 9,860 | 39,064 | |
Changes in mortgage servicing rights fair value | 862 | (2,552) | 6,147 | 857 | |
Other | 2,612 | 4,075 | 5,170 | 8,590 | |
Total mortgage banking income | 8,012 | 15,785 | 21,177 | 48,511 | |
Other noninterest income (loss) | 6,091 | 5,918 | 11,987 | 11,001 | |
Total noninterest income | 14,103 | 21,703 | 33,164 | 59,512 | |
Noninterest expense | 34,954 | 38,598 | 69,789 | 81,400 | |
Income (loss) before income taxes | 13,798 | 19,921 | 30,956 | 46,889 | |
Income tax benefit | 3,811 | 5,645 | 8,702 | 13,221 | |
Net income | 9,987 | 14,276 | 22,254 | 33,668 | |
Total assets at period end | 4,704,044 | 4,616,422 | 4,704,044 | 4,616,422 | $ 4,553,405 |
Goodwill at period end | 69,802 | 69,802 | 69,802 | 69,802 | $ 69,802 |
HarborOne Bank | |||||
Mortgage banking income: | |||||
Goodwill at period end | 59,000 | 59,000 | |||
HarborOne Mortgage. | |||||
Mortgage banking income: | |||||
Goodwill at period end | 10,800 | 10,800 | |||
Operating Segments | HarborOne Bank | |||||
Segment Reporting Information | |||||
Net interest and dividend income (expense) | 37,246 | 32,134 | 70,670 | 63,382 | |
Provision (benefit) for credit losses | 2,546 | (4,286) | 2,884 | (4,195) | |
Net interest and dividend income, after provision (benefit) for credit losses | 34,700 | 36,420 | 67,786 | 67,577 | |
Mortgage banking income: | |||||
Intersegment gain (loss) | (1,095) | (910) | (1,703) | (1,572) | |
Changes in mortgage servicing rights fair value | 127 | (419) | 717 | (133) | |
Other | 219 | 276 | 452 | 576 | |
Total mortgage banking income | (749) | (1,053) | (534) | (1,129) | |
Other noninterest income (loss) | 6,084 | 5,898 | 11,971 | 10,989 | |
Total noninterest income | 5,335 | 4,845 | 11,437 | 9,860 | |
Noninterest expense | 27,131 | 24,128 | 53,956 | 48,591 | |
Income (loss) before income taxes | 12,904 | 17,137 | 25,267 | 28,846 | |
Income tax benefit | 3,550 | 4,863 | 7,107 | 8,298 | |
Net income | 9,354 | 12,274 | 18,160 | 20,548 | |
Total assets at period end | 4,718,584 | 4,631,734 | 4,718,584 | 4,631,734 | |
Goodwill at period end | 59,042 | 59,042 | 59,042 | 59,042 | |
Operating Segments | HarborOne Mortgage. | |||||
Segment Reporting Information | |||||
Net interest and dividend income (expense) | 411 | 855 | 761 | 2,105 | |
Net interest and dividend income, after provision (benefit) for credit losses | 411 | 855 | 761 | 2,105 | |
Mortgage banking income: | |||||
Gain on sale of mortgage loans | 4,538 | 14,262 | 9,860 | 39,064 | |
Intersegment gain (loss) | 1,097 | 910 | 1,934 | 1,572 | |
Changes in mortgage servicing rights fair value | 735 | (2,133) | 5,430 | 990 | |
Other | 2,393 | 3,799 | 4,718 | 8,014 | |
Total mortgage banking income | 8,763 | 16,838 | 21,942 | 49,640 | |
Other noninterest income (loss) | 7 | 20 | 16 | 12 | |
Total noninterest income | 8,770 | 16,858 | 21,958 | 49,652 | |
Noninterest expense | 7,242 | 14,101 | 15,003 | 32,158 | |
Income (loss) before income taxes | 1,939 | 3,612 | 7,716 | 19,599 | |
Income tax benefit | 549 | 1,013 | 2,090 | 5,346 | |
Net income | 1,390 | 2,599 | 5,626 | 14,253 | |
Total assets at period end | 149,186 | 233,818 | 149,186 | 233,818 | |
Goodwill at period end | $ 10,760 | $ 10,760 | $ 10,760 | $ 10,760 |