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

Exhibit 99.1

HarborOne Bancorp, Inc. Announces 2022 Fourth Quarter Earnings

Contact: Linda Simmons, EVP, CFO

Brockton, Massachusetts (January 26, 2023): HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $45.6 million, or $0.97 per diluted share, for the year ended December 31, 2022, a decrease of $12.9 million, or 22.1%, compared to net income of $58.5 million, or $1.14 per diluted share, for the year ended December 31, 2021. For the fourth quarter of 2022, net income was $9.6 million, or $0.21 per diluted share, compared to $13.8 million, or $0.30 per diluted share, for the preceding quarter and $12.6 million, or $0.25 per diluted share, for the quarter ended December 31, 2021.

Selected Financial Highlights:

● Net interest income up $17.6 million, or 13.4% year over year, driven by higher rates and loan growth.

● Strong asset quality; nonperforming loans to total loans was 0.32% compared to 1.00% last year.

● Robust loan growth of $941.9 million, or 26.1%, year over year.

● Total deposit growth of $506.8 million, or 13.8% and core deposit growth of $335.4 million, or 11.0%.

● Despite a reduction in mortgage banking income, HarborOne Mortgage posted positive earnings in 2022.

● Continued share repurchase program.

“I am very proud of our team’s 2022 accomplishments. Despite a challenging rate environment, our focused customer engagement produced loan growth of 26%, deposit growth of 14%, and net interest income growth of 13% ; all while reducing expenses by 13%,” said Joseph F. Casey, President and Chief Executive Officer. He added: “Our mortgage team, in particular, faced the rapidly rising mortgage rates and dramatic reduction in refinance volume head on, implementing significant cost reductions in order to maintain profitability for the year.”

Net Interest Income

The Company’s net interest and dividend income was $39.2 million for the quarter ended December 31, 2022, compared to $39.3 million for the quarter ended September 30, 2022, and up $5.2 million, or 15.3%, from $34.0 million for the quarter ended December 31, 2021. The tax equivalent interest rate spread and net interest margin were 2.88% and 3.23%, respectively, for the quarter ended December 31, 2022, compared to 3.30% and 3.47%, respectively, for the quarter ended September 30, 2022, and 3.10% and 3.19%, respectively, for the quarter ended December 31, 2021. On a linked-quarter basis, the decreases in net interest and dividend income, tax equivalent interest rate spread, and net interest margin primarily reflect higher rates on deposits partially offset by increased loan balances and yields. The cost of funds was 114 basis points for the quarter ended December 31, 2022, compared to 51 basis points for the preceding quarter.

The $7.4 million increase in total interest and dividend income on a linked-quarter basis reflected a 34-basis-point increase in the yield on interest-earning assets and a $333.7 million increase in average earning assets. The yield on loans increased 36 basis points, from 4.11% to 4.47%. The yield on investments increased 9 basis points, from 2.00% to 2.09%.

The increase in net interest and dividend income from the prior year quarter reflects an increase of $15.6 million, or 42.8%, in total interest and dividend income and an increase of $10.4 million, or 437.4%, in total interest expense. The changes reflect rate and volume changes in both interest-bearing assets and liabilities. The yield on interest-earning assets increased 86 basis points, while the average balance increased $610.8 million, and the cost of interest-bearing liabilities increased 108 basis points, while the average balance increased $620.0 million.

Noninterest Income

Total noninterest income decreased $4.3, or 30.5%, to $9.9 million for the quarter ended December 31, 2022, from $14.2 million for the quarter ended September 30, 2022. Mortgage loan closings for the quarter ended December 31, 2022 were $222.4 million with a gain on loan sales of $2.3 million, compared to $250.5 million in mortgage closings and $3.8 million in gain on sales for the preceding quarter. Deposit account fees were $5.0 million for the quarter ended December 31, 2022, compared to $4.9 million for the quarter ended September 30, 2022. Other income for the quarter ended December 31, 2022 increased $1.6 million, primarily reflecting a $1.2 million increase in swap fee income.

The decrease in the fair value of mortgage servicing rights for the three months ended December 31, 2022 was $2.1 million, as compared to an increase of $2.6 million in the fair value of mortgage servicing rights for the three months ended September 30, 2022. The valuation

was negatively impacted by key benchmark mortgage rates used in the valuation that declined, as well as an increase in the discount rate to reflect secondary market servicing conditions. The impact of principal payments on the underlying mortgages on the mortgage servicing rights was $570,000 and $747,000 for the quarters ended December 31, 2022 and September 30, 2022, respectively.

Total noninterest income decreased $9.3 million, or 48.3%, compared to the quarter ended December 31, 2021, primarily due to a $11.2 million, or 84.9%, decrease in mortgage banking income, driven by the decrease in loan closings and narrowing gain-on-sale margins.

Noninterest Expense

Total noninterest expenses were $34.6 million for the quarter ended December 31, 2022, an increase of $171,000, or 0.5%, from the quarter ended September 30, 2022. Other expenses increased $1.1 million, or 31.9% for the quarter ended December 31 2022, primarily as a result of a legal settlement. In the fourth quarter of 2022, the Company reached an agreement-in-principle to settle a purported class action lawsuit concerning overdraft fees on re-presented transactions. The matter was filed in the Massachusetts Superior Court in June 2022, and it is expected to be refiled in federal court for final settlement purposes, where the settlement remains subject to court approval. As of December 31, 2022, the Company estimated the settlement expense, including related costs, to be $950,000. The increase was offset by an $887,000, or 4.2%, decrease in compensation expense, primarily reflecting a $715,000 decrease in salaries and mortgage origination commissions.

Total noninterest expenses decreased $3.5 million, or 9.3%, from the quarter ended December 30, 2021. Compensation and benefits decreased $4.5 million and loan expenses decreased $563,000, consistent with the decrease in residential mortgage loan closings and corresponding decrease in mortgage origination commissions. The decrease in compensation and benefits also reflects the impact of proactive cost reduction measures taken at HarborOne Mortgage, LLC beginning in the second quarter of 2021.

Income Tax Provision

The effective tax rate for the quarter and year ended December 31, 2022 was 22.4% and 26.1%, respectively, compared to 23.2% and 27.3% for the quarter and year ended December 31, 2021. The 2022 effective tax rate was impacted by a tax benefit recorded for Industrial Revenue Bonds and a reserve release upon the expiration of the statute of limitations.

Asset Quality and Allowance for Credit Losses

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

Credit quality performance continued to be strong with total nonperforming assets of $14.8 million at December 31, 2022, compared to $23.4 million at September 30, 2022 and $36.2 million at December 31, 2021. Nonperforming assets as a percentage of total assets were 0.28% at December 31, 2022, 0.47% at September 30, 2022, and 0.79% at December 31, 2021. During 2022, two large commercial credits were resolved, reducing nonperforming assets significantly.

The provision for funded loan credit losses for the quarter and year ended December 31, 2022 was $2.7 million and $4.7 million, respectively, and reflects provisioning for loan growth partially offset by a reduction in pandemic-related uncertainty. Net charge-offs totaled $2.1 million, or 0.19%, and $3.5 million, or 0.09%, of average loans outstanding on an annualized basis, for the quarter and year ended December 31, 2022, respectively. Net recoveries totaled $799,000, or 0.08% of average loans outstanding on an annualized basis, for the quarter ended September 30, 2022, and net charge-offs totaled $1.2 million, or 0.13% of average loans outstanding on an annualized basis, for the quarter ended December 31, 2021.

The ACL was $45.2 million, or 0.99% of total loans, at December 31, 2022, compared to $44.6 million, or 1.06% of total loans, at September 30, 2022 and an allowance for loss under the incurred loss model of $45.4 million, or 1.26% of total loans, at December 31, 2021. The ACL on unfunded commitments, included in other liabilities on the unaudited Consolidated Balance Sheets, amounted to $4.9 million at December 31, 2022 as compared to $5.5 million at September 30, 2022, reflecting a negative provision of $575,000 for the quarter ended December 31, 2022. For the year ended December 31, 2022, the provision for unfunded commitments was $966,000, and there was no ACL on unfunded commitments at December 31, 2021. The decrease from the prior quarter primarily reflects the movement of commercial loans from construction loans to permanent loans.

We have not experienced any significant negative trends in the at-risk sectors previously identified in response to conditions that developed during the COVID-19 pandemic; however management continues to monitor certain credit types within those sectors that may be susceptible to increased credit risk as a result of trends that were precipitated by the COVID-19 pandemic and may be exacerbated by current economic conditions. Management is focused on loans secured by business-oriented hotels, non-anchored retail space and metro office space. As of December 31, 2022, business-oriented hotels loans included 12 loans with a total outstanding balance of $86.0

million, non-anchored retail space loans included 28 loans with a total outstanding balance of $40.5 million, and metro office space loans included two loans with a total outstanding balance of $14.9 million. As of December 31, 2022 there was one business-oriented hotel credit with a carrying value of $2.1 million that was rated substandard and on nonaccrual. This credit was provided a principal deferral that resulted in a troubled debt restructuring designation in the third quarter. The other loans in these groups were performing in accordance with their terms.

Balance Sheet

Total assets increased $371.9 million, or 7.5%, to $5.36 billion at December 31, 2022, from $4.99 billion at September 30, 2022. The increase primarily reflects an increase of $352.3 million in loans. Securities available for sale were negatively impacted by unrealized losses of $68.3 million as of December 31, 2022, as compared to $70.4 million of unrealized losses as of September 30, 2022 and $3.6 million of unrealized losses as of December 31, 2021.

Loans increased $352.3 million, or 8.4%, to $4.55 billion at December 31, 2022, from $4.20 billion at September 30, 2022. The increase in loans for the three months ended December 31, 2022 was primarily due to increases in commercial real estate loans of $208.4 million, commercial and industrial loans of $27.2 million, commercial construction loans of $14.2 million, and residential real estate loans of $113.5 million, partially offset by decreases in consumer loans of $11.0 million.

Total deposits were $4.19 billion at December 31, 2022 and $3.88 billion at September 30, 2022. Compared to the prior quarter, non-certificate accounts increased $106.7 million, and term certificate accounts increased $199.7 million. FHLB borrowings increased $55.0 million to $400.7 million at December 31, 2022 from $345.7 million at September 30, 2022. At December 31, 2022, FHLB borrowings were primarily short-term borrowings.

Total stockholders’ equity was $617.0 million at December 31, 2022, compared to $611.4 million at September 30, 2022 and $679.3 million at December 31, 2021. Stockholders’ equity increased 0.9% when compared to the prior quarter, as earnings were offset by share repurchases. The Company repurchased 349,738 shares at an average price of $13.63 during the three months ended December 31, 2022 and announced a fifth share repurchase program on September 21, 2022 to commence following the completion of the share repurchase program announced on April 12, 2022. The tangible-common-equity-to-tangible-assets ratio was 10.31% at December 31, 2022, 10.97% at September 30, 2022, and 13.53% at December 31, 2021. At December 31, 2022, the Company and the Bank had strong capital positions and exceeded all regulatory capital requirements.

About HarborOne Bancorp, Inc.

HarborOne Bancorp, Inc. is the holding company for HarborOne Bank, a Massachusetts-chartered savings bank. HarborOne Bank serves the financial needs of consumers, businesses, and municipalities throughout Eastern Massachusetts and Rhode Island through a network of 31 full-service branches located in Massachusetts and Rhode Island, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Bank also provides a range of educational services through “HarborOne U,” with classes on small business, financial literacy and personal enrichment at two campuses located adjacent to our Brockton and Mansfield locations. HarborOne Mortgage, LLC, a subsidiary of HarborOne Bank, is a full-service mortgage lender with 26 offices in Maine, Massachusetts, Rhode Island, and New Hampshire, and is licensed to lend in six additional states.

Forward Looking Statements

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

restructurings; the risk that the Company may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the SEC, which are available at the SEC’s website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, HarborOne’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.

Use of Non-GAAP Measures

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

HarborOne Bancorp, Inc.

Consolidated Balance Sheet Trend

(Unaudited)

	December 31,		September 30,		June 30,		March 31,		December 31,
(in thousands)	2022		2022		2022		2022		2021
Assets
Cash and due from banks	$	39,712	$	39,910	$	35,843	$	41,862	$	35,549
Short-term investments		58,305		46,044		48,495		97,870		159,170
Total cash and cash equivalents		98,017		85,954		84,338		139,732		194,719
Securities available for sale, at fair value		301,149		304,852		334,398		361,529		394,036
Securities held to maturity, at amortized cost		19,949		15,000		10,000		—		—
Federal Home Loan Bank stock, at cost		20,071		15,973		5,625		5,931		5,931
Asset held for sale		—		—		—		678		881
Loans held for sale, at fair value		18,544		18,805		31,679		25,690		45,642
Loans:
Commercial real estate		2,250,344		2,041,905		1,847,619		1,816,484		1,699,877
Commercial construction		199,311		185,062		158,762		154,059		136,563
Commercial and industrial		424,275		397,112		407,182		410,787		421,608
Total commercial loans		2,873,930		2,624,079		2,413,563		2,381,330		2,258,048
Residential real estate		1,634,319		1,520,809		1,423,074		1,252,920		1,217,980
Consumer		41,421		52,466		75,312		103,100		131,705
Loans		4,549,670		4,197,354		3,911,949		3,737,350		3,607,733
Less: Allowance for credit losses on loans		(45,236)		(44,621)		(43,560)		(41,765)		(45,377)
Net loans		4,504,434		4,152,733		3,868,389		3,695,585		3,562,356
Mortgage servicing rights, at fair value		48,138		49,861		47,130		45,043		38,268
Goodwill		69,802		69,802		69,802		69,802		69,802
Other intangible assets		2,272		2,461		2,695		2,930		3,164
Other assets		277,169		272,202		249,988		244,405		238,606
Total assets	$	5,359,545	$	4,987,643	$	4,704,044	$	4,591,325	$	4,553,405
Liabilities and Stockholders' Equity
Deposits:
Demand deposit accounts	$	762,576	$	795,945	$	775,154	$	771,172	$	743,051
NOW accounts		297,692		308,191		316,839		310,090		313,733
Regular savings and club accounts		1,468,172		1,289,825		1,282,913		1,218,656		1,138,979
Money market deposit accounts		861,704		889,517		885,673		864,316		858,970
Term certificate accounts		799,355		599,632		587,354		597,746		627,916
Total deposits		4,189,499		3,883,110		3,847,933		3,761,980		3,682,649
Short-term borrowed funds		385,000		330,000		90,000		—		—
Long-term borrowed funds		15,675		15,684		15,693		55,702		55,711
Subordinated debt		34,285		34,254		34,222		34,191		34,159
Other liabilities and accrued expenses		118,110		113,225		91,718		90,387		101,625
Total liabilities		4,742,569		4,376,273		4,079,566		3,942,260		3,874,144
Common stock		596		593		593		591		585
Additional paid-in capital		483,031		480,617		479,519		477,302		469,934
Unearned compensation - ESOP		(27,623)		(28,083)		(28,542)		(29,002)		(29,461)
Retained earnings		356,438		350,049		339,471		332,734		325,699
Treasury stock		(148,384)		(143,125)		(132,296)		(113,513)		(85,859)
Accumulated other comprehensive loss		(47,082)		(48,681)		(34,267)		(19,047)		(1,637)
Total stockholders' equity		616,976		611,370		624,478		649,065		679,261
Total liabilities and stockholders' equity	$	5,359,545	$	4,987,643	$	4,704,044	$	4,591,325	$	4,553,405

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

	Quarters Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
(in thousands, except share data)	2022		2022		2022		2022		2021
Interest and dividend income:
Interest and fees on loans	$	49,177	$	42,065	$	37,522	$	33,576	$	34,177
Interest on loans held for sale		334		377		331		264		501
Interest on securities		2,045		1,971		1,873		1,701		1,541
Other interest and dividend income		359		143		131		61		134
Total interest and dividend income		51,915		44,556		39,857		35,602		36,353
Interest expense:
Interest on deposits		8,499		3,491		2,019		1,621		1,651
Interest on FHLB borrowings		3,703		1,209		119		188		193
Interest on subordinated debentures		524		524		524		523		524
Total interest expense		12,726		5,224		2,662		2,332		2,368
Net interest and dividend income		39,189		39,332		37,195		33,270		33,985
Provision (benefit) for credit losses		2,108		668		2,546		338		(1,436)
Net interest and dividend income, after provision (benefit) for credit losses		37,081		38,664		34,649		32,932		35,421
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans		2,301		3,809		4,538		5,322		10,063
Changes in mortgage servicing rights fair value		(2,631)		1,816		862		5,285		(245)
Other		2,325		2,453		2,612		2,558		3,359
Total mortgage banking income		1,995		8,078		8,012		13,165		13,177
Deposit account fees		5,031		4,870		4,892		4,472		4,783
Income on retirement plan annuities		118		119		112		107		109
Gain on sale and call of securities, net		—		—		—		—		—
Bank-owned life insurance income		501		503		494		483		506
Other income		2,255		675		593		834		589
Total noninterest income		9,900		14,245		14,103		19,061		19,164
Noninterest expenses:
Compensation and benefits		20,104		20,991		21,455		20,723		24,564
Occupancy and equipment		4,935		4,829		4,575		5,428		4,923
Data processing		2,359		2,311		2,259		2,241		2,244
Loan expense		169		355		385		478		732
Marketing		862		850		986		1,218		1,120
Professional fees		1,446		1,457		1,680		1,539		1,443
Deposit insurance		385		357		354		349		345
Prepayment penalties on Federal Home Loan Bank advances		—		—		—		—		—
Other expenses		4,384		3,323		3,260		2,859		2,817
Total noninterest expenses		34,644		34,473		34,954		34,835		38,188
Income before income taxes		12,337		18,436		13,798		17,158		16,397
Income tax provision		2,760		4,678		3,811		4,891		3,807
Net income	$	9,577	$	13,758	$	9,987	$	12,267	$	12,590
Earnings per common share:
Basic	$	0.21	$	0.30	$	0.21	$	0.26	$	0.26
Diluted	$	0.21	$	0.30	$	0.21	$	0.25	$	0.25
Weighted average shares outstanding:
Basic		45,321,491		45,830,737		46,980,830		47,836,410		48,918,539
Diluted		45,861,658		46,420,527		47,536,033		48,690,420		49,828,379

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income

(Unaudited)

	For the Years Ended December 31,
(dollars in thousands, except share data)	2022		2021		$ Change		% Change
Interest and dividend income:
Interest and fees on loans	$	162,340	$	135,823	$	26,517	19.5	%
Interest on loans held for sale		1,306		3,342		(2,036)	(60.9)
Interest on securities		7,590		4,212		3,378	80.2
Other interest and dividend income		694		518		176	34.0
Total interest and dividend income		171,930		143,895		28,035	19.5
Interest expense:
Interest on deposits		15,630		8,723		6,907	79.2
Interest on FHLB borrowings		5,219		1,707		3,512	205.7
Interest on subordinated debentures		2,095		2,095		—	0.0
Total interest expense		22,944		12,525		10,419	83.2
Net interest and dividend income		148,986		131,370		17,616	13.4
Provision (benefit) for credit losses		5,660		(7,258)		12,918	178.0
Net interest and dividend income, after provision (benefit) for credit losses		143,326		138,628		4,698	3.4
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans		15,970		61,883		(45,913)	(74.2)
Changes in mortgage servicing rights fair value		5,332		(380)		5,712	NM
Other		9,948		15,831		(5,883)	(37.2)
Total mortgage banking income		31,250		77,334		(46,084)	(59.6)
Deposit account fees		19,265		17,839		1,426	8.0
Income on retirement plan annuities		456		427		29	6.8
Gain on sale and call of securities, net		—		241		(241)	(100.0)
Bank-owned life insurance income		1,981		2,022		(41)	(2.0)
Other income		4,357		2,823		1,534	54.3
Total noninterest income		57,309		100,686		(43,377)	(43.1)
Noninterest expenses:
Compensation and benefits		83,273		101,924		(18,651)	(18.3)
Occupancy and equipment		19,767		19,646		121	0.6
Data processing		9,170		9,154		16	0.2
Loan expense		1,387		5,740		(4,353)	(75.8)
Marketing		3,916		3,644		272	7.5
Professional fees		6,122		5,875		247	4.2
Deposit insurance		1,445		1,338		107	8.0
Prepayment penalties on Federal Home Loan Bank advances		—		1,095		(1,095)	(100.0)
Other expenses		13,826		10,446		3,380	32.4
Total noninterest expenses		138,906		158,862		(19,956)	(12.6)
Income before income taxes		61,729		80,452		(18,723)	(23.3)
Income tax provision		16,140		21,935		(5,795)	(26.4)
Net income	$	45,589	$	58,517	$	(12,928)	(22.1)	%
Earnings per common share:
Basic	$	0.98	$	1.15
Diluted	$	0.97	$	1.14
Weighted average shares outstanding:
Basic		46,483,664		50,746,302
Diluted		47,118,457		51,523,135

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

	Quarters Ended
	December 31, 2022							September 30, 2022							December 31, 2021
	Average							Average							Average
	Outstanding					Yield/		Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost (6)		Balance			Interest		Cost (6)		Balance			Interest		Cost (6)
	(dollars in thousands)
Interest-earning assets:
Investment securities (1)	$	388,247		$	2,045	2.09	%	$	390,577		$	1,971	2.00	%	$	394,301		$	1,541	1.55	%
Other interest-earning assets		42,640			359	3.34			27,723			143	2.05			286,026			134	0.19
Loans held for sale		22,350			334	5.93			28,046			377	5.33			63,833			501	3.11
Loans
Commercial loans (2)(3)		2,770,667			34,351	4.92			2,522,359			28,298	4.45			2,165,739			22,658	4.15
Residential real estate loans (3)		1,566,389			14,352	3.64			1,470,305			12,972	3.50			1,171,608			9,870	3.34
Consumer loans (3)		45,629			632	5.50			63,220			795	4.99			143,577			1,649	4.56
Total loans		4,382,685			49,335	4.47			4,055,884			42,065	4.11			3,480,924			34,177	3.90
Total interest-earning assets		4,835,922			52,073	4.27			4,502,230			44,556	3.93			4,225,084			36,353	3.41
Noninterest-earning assets		311,372							308,734							337,310
Total assets	$	5,147,294						$	4,810,964						$	4,562,394
Interest-bearing liabilities:
Savings accounts	$	1,408,493			3,591	1.01		$	1,293,598			1,211	0.37		$	1,147,855			247	0.09
NOW accounts		291,890			40	0.05			305,777			42	0.05			300,459			40	0.05
Money market accounts		878,609			3,312	1.50			893,452			1,382	0.61			839,977			307	0.15
Certificates of deposit		487,121			1,062	0.86			486,923			787	0.64			543,208			878	0.64
Brokered deposits		148,460			494	1.32			102,875			69	0.27			100,000			179	0.71
Total interest-bearing deposits		3,214,573			8,499	1.05			3,082,625			3,491	0.45			2,931,499			1,651	0.22
FHLB advances		392,508			3,703	3.74			196,036			1,209	2.45			55,714			193	1.37
Subordinated debentures		34,268			524	6.07			34,237			524	6.07			34,144			524	6.09
Total borrowings		426,776			4,227	3.93			230,273			1,733	2.99			89,858			717	3.17
Total interest-bearing liabilities		3,641,349			12,726	1.39			3,312,898			5,224	0.63			3,021,357			2,368	0.31
Noninterest-bearing liabilities:
Noninterest-bearing deposits		788,572							789,214							768,361
Other noninterest-bearing liabilities		101,621							80,304							92,034
Total liabilities		4,531,542							4,182,416							3,881,752
Total stockholders' equity		615,752							628,548							680,642
Total liabilities and stockholders' equity	$	5,147,294						$	4,810,964						$	4,562,394
Tax equivalent net interest income					39,347							39,332							33,985
Tax equivalent interest rate spread (4)						2.88	%						3.30	%						3.10	%
Less: tax equivalent adjustment					158							—							—
Net interest income as reported				$	39,189						$	39,332						$	33,985
Net interest-earning assets (5)	$	1,194,573						$	1,189,332						$	1,203,727
Net interest margin (6)						3.22	%						3.47	%						3.19	%
Tax equivalent effect						0.01							—							—
Net interest margin on a fully tax equivalent basis						3.23	%						3.47	%						3.19	%
Ratio of interest-earning assets to interest-bearing liabilities		132.81	%						135.90	%						139.84	%
Supplemental information:
Total deposits, including demand deposits	$	4,003,145		$	8,499			$	3,871,839		$	3,491			$	3,699,860		$	1,651
Cost of total deposits						0.84	%						0.36	%						0.18	%
Total funding liabilities, including demand deposits	$	4,429,921		$	12,726			$	4,102,112		$	5,224			$	3,789,718		$	2,368
Cost of total funding liabilities						1.14	%						0.51	%						0.25	%
(1) Includes securities available for sale and securities held to maturity.
(2) Includes industrial revenue bonds for the quarter ended December 31, 2022. Interest income from tax exempt loans is computed on a taxable equivalent basis using a rate of 21% for the quarters presented. The yield on commercial loans before tax equivalent adjustment at December 31, 2022 was 4.90%.
(3) Includes nonaccruing loan balances and interest received on such loans.
(4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(5) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average total interest-earning assets.
(7) Annualized.

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

	Years Ended
	December 31, 2022							December 31, 2021
	Average							Average
	Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost		Balance			Interest		Cost
	(dollars in thousands)
Interest-earning assets:
Investment securities (1)	$	390,894		$	7,590	1.94	%	$	337,843		$	4,212	1.25	%
Other interest-earning assets		70,987			694	0.98			309,819			518	0.17
Loans held for sale		27,409			1,306	4.76			113,788			3,342	2.94
Loans
Commercial loans (2)(3)		2,493,646			110,305	4.42			2,150,022			87,911	4.09
Residential real estate loans (3)		1,398,190			48,645	3.48			1,110,840			39,309	3.54
Consumer loans (3)		78,766			3,811	4.84			192,841			8,603	4.46
Total loans		3,970,602			162,761	4.10			3,453,703			135,823	3.93
Total interest-earning assets		4,459,892			172,351	3.86			4,215,153			143,895	3.41
Noninterest-earning assets		314,670							338,559
Total assets	$	4,774,562						$	4,553,712
Interest-bearing liabilities:
Savings accounts	$	1,284,364			5,794	0.45		$	1,115,626			1,610	0.14
NOW accounts		302,530			156	0.05			257,201			163	0.06
Money market accounts		879,133			5,632	0.64			846,756			1,676	0.20
Certificates of deposit		495,066			3,248	0.66			577,760			4,638	0.80
Brokered deposits		112,939			800	0.71			100,000			636	0.64
Total interest-bearing deposits		3,074,032			15,630	0.51			2,897,343			8,723	0.30
FHLB advances		170,748			5,219	3.06			84,711			1,707	2.02
Subordinated debentures		34,221			2,095	6.12			34,096			2,095	6.14
Total borrowings		204,969			7,314	3.57			118,807			3,802	3.20
Total interest-bearing liabilities		3,279,001			22,944	0.70			3,016,150			12,525	0.42
Noninterest-bearing liabilities:
Noninterest-bearing deposits		771,299							754,198
Other noninterest-bearing liabilities		85,995							91,084
Total liabilities		4,136,295							3,861,432
Total stockholders' equity		638,267							692,280
Total liabilities and stockholders' equity	$	4,774,562						$	4,553,712
Tax equivalent net interest income					149,407							131,370
Tax equivalent interest rate spread (4)						3.16	%						2.99	%
Less: tax equivalent adjustment					421							—
Net interest income as reported				$	148,986						$	131,370
Net interest-earning assets (5)	$	1,180,891						$	1,199,003
Net interest margin (6)						3.34	%						3.12	%
Tax equivalent effect						0.01							—
Net interest margin on a fully tax equivalent basis						3.35	%						3.12	%
Ratio of interest-earning assets to interest-bearing liabilities		136.01	%						139.75	%
Supplemental information:
Total deposits, including demand deposits	$	3,845,331		$	15,630			$	3,651,541		$	8,723
Cost of total deposits						0.41	%						0.24	%
Total funding liabilities, including demand deposits	$	4,050,300		$	22,944			$	3,770,348		$	12,525
Cost of total funding liabilities						0.57	%						0.33	%
(1) Includes securities available for sale and securities held to maturity.
(2) Includes industrial revenue bonds for the year ended December 31, 2022. Interest income from tax exempt loans is computed on a taxable equivalent basis using a rate of 21%. The yield on commercial loans before tax equivalent adjustment at December 31, 2022 was 4.41%.
(3) Includes nonaccruing loan balances and interest received on such loans.
(4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(5) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average total interest-earning assets.

HarborOne Bancorp, Inc.

Average Balances and Yield Trend

(Unaudited)

	Average Balances - Trend - Quarters Ended
	December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021
	(in thousands)
Interest-earning assets:
Investment securities (1)	$	388,247		$	390,577		$	391,448		$	393,364		$	394,301
Other interest-earning assets		42,640			27,723			64,678			150,569			286,026
Loans held for sale		22,350			28,046			29,474			29,842			63,833
Loans
Commercial loans (2)		2,770,667			2,522,359			2,384,630			2,291,343			2,165,739
Residential real estate loans (2)		1,566,389			1,470,305			1,330,772			1,220,703			1,171,608
Consumer loans (2)		45,629			63,220			88,943			118,242			143,577
Total loans		4,382,685			4,055,884			3,804,345			3,630,288			3,480,924
Total interest-earning assets		4,835,922			4,502,230			4,289,945			4,204,063			4,225,084
Noninterest-earning assets		311,372			308,734			311,998			326,811			337,310
Total assets	$	5,147,294		$	4,810,964		$	4,601,943		$	4,530,874		$	4,562,394
Interest-bearing liabilities:
Savings accounts	$	1,408,493		$	1,293,598		$	1,266,912		$	1,165,683		$	1,147,855
NOW accounts		291,890			305,777			311,241			301,279			300,459
Money market accounts		878,609			893,452			885,305			858,792			839,977
Certificates of deposit		487,121			486,923			484,484			522,211			543,208
Brokered deposits		148,460			102,875			100,000			100,000			100,000
Total interest-bearing deposits		3,214,573			3,082,625			3,047,942			2,947,965			2,931,499
FHLB advances		392,508			196,036			34,763			55,706			55,714
Subordinated debentures		34,268			34,237			34,207			34,173			34,144
Total borrowings		426,776			230,273			68,970			89,879			89,858
Total interest-bearing liabilities		3,641,349			3,312,898			3,116,912			3,037,844			3,021,357
Noninterest-bearing liabilities:
Noninterest-bearing deposits		788,572			789,214			768,088			738,578			768,361
Other noninterest-bearing liabilities		101,621			80,304			75,186			86,763			92,034
Total liabilities		4,531,542			4,182,416			3,960,186			3,863,185			3,881,752
Total stockholders' equity		615,752			628,548			641,757			667,689			680,642
Total liabilities and stockholders' equity	$	5,147,294		$	4,810,964		$	4,601,943		$	4,530,874		$	4,562,394
	Annualized Yield Trend - Quarters Ended
	December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021
Interest-earning assets:
Investment securities (1)		2.09	%		2.00	%		1.92	%		1.75	%		1.55	%
Other interest-earning assets		3.34	%		2.05	%		0.81	%		0.16	%		0.19	%
Loans held for sale		5.93	%		5.33	%		4.51	%		3.59	%		3.11	%
Commercial loans (2)(3)		4.92	%		4.45	%		4.25	%		3.91	%		4.15	%
Residential real estate loans (3)		3.64	%		3.50	%		3.37	%		3.37	%		3.34	%
Consumer loans (3)		5.50	%		4.99	%		4.71	%		4.59	%		4.56	%
Total loans		4.47	%		4.11	%		3.96	%		3.75	%		3.90	%
Total interest-earning assets		4.27	%		3.93	%		3.73	%		3.43	%		3.41	%
Interest-bearing liabilities:
Savings accounts		1.01	%		0.37	%		0.20	%		0.13	%		0.09	%
NOW accounts		0.05	%		0.05	%		0.05	%		0.05	%		0.05	%
Money market accounts		1.50	%		0.61	%		0.30	%		0.14	%		0.15	%
Certificates of deposit		0.86	%		0.64	%		0.55	%		0.57	%		0.64	%
Brokered deposits		1.32	%		0.27	%		0.20	%		0.76	%		0.71	%
Total interest-bearing deposits		1.05	%		0.45	%		0.27	%		0.22	%		0.22	%
FHLB advances		3.74	%		2.45	%		1.36	%		1.37	%		1.37	%
Subordinated debentures		6.07	%		6.07	%		6.14	%		6.21	%		6.09	%
Total borrowings		3.93	%		2.99	%		3.74	%		3.21	%		3.17	%
Total interest-bearing liabilities		1.39	%		0.63	%		0.34	%		0.31	%		0.31	%
(1) Includes securities available for sale and securities held to maturity.
(2) Includes industrial revenue bonds for the quarter ended December 31, 2022. Interest income from tax exempt loans is computed on a taxable equivalent basis using a rate of 21% for the quarters presented. The yield on commercial loans before tax equivalent adjustment at December 31, 2022 was 4.90%.
(3) Includes nonaccruing loan balances and interest received on such loans.

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
Performance Ratios (annualized):	2022			2022			2022			2022			2021
(dollars in thousands)
Return on average assets (ROAA)		0.74	%		1.14	%		0.87	%		1.08	%		1.10	%
Return on average equity (ROAE)		6.22	%		8.76	%		6.22	%		7.35	%		7.40	%
Total noninterest expense	$	34,644		$	34,473		$	34,954		$	34,835		$	38,188
Less: Amortization of other intangible assets		189			235			235			235			235
Total adjusted noninterest expense	$	34,455		$	34,238		$	34,719		$	34,600		$	37,953
Net interest and dividend income	$	39,189		$	39,332		$	37,195		$	33,270		$	33,985
Total noninterest income		9,900			14,245			14,103			19,061			19,164
Total revenue	$	49,089		$	53,577		$	51,298		$	52,331		$	53,149
Efficiency ratio (1)		70.19	%		63.90	%		67.68	%		66.12	%		71.41	%
(1) This non-GAAP measure represents adjusted noninterest expense divided by total revenue

	At or for the Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
Asset Quality	2022			2022			2022			2022			2021
(dollars in thousands)
Total nonperforming assets	$	14,840		$	23,367		$	24,441		$	26,109		$	36,186
Nonperforming assets to total assets		0.28	%		0.47	%		0.52	%		0.57	%		0.79	%
Allowance for credit losses on loans to total loans		0.99	%		1.06	%		1.11	%		1.12	%		1.26	%
Net charge-offs (recoveries)	$	2,067		$	(799)		$	(504)		$	2,730		$	1,174
Annualized net charge-offs (recoveries)/average loans		0.19	%		(0.08)	%		(0.05)	%		0.30	%		0.13	%
Allowance for credit losses on loans to nonperforming loans		305.93	%		191.60	%		178.41	%		159.96	%		125.60	%

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
Capital and Share Related	2022			2022			2022			2022			2021
(dollars in thousands, except share data)												���
Common stock outstanding		48,961,452			49,202,660			49,989,007			51,257,696			52,390,478
Book value per share	$	12.60		$	12.43		$	12.49		$	12.66		$	12.97
Tangible common equity:
Total stockholders' equity	$	616,976		$	611,370		$	624,478		$	649,065		$	679,261
Less: Goodwill		69,802			69,802			69,802			69,802			69,802
Less: Other intangible assets (1)		2,272			2,461			2,695			2,930			3,164
Tangible common equity	$	544,902		$	539,107		$	551,981		$	576,333		$	606,295
Tangible book value per share (2)	$	11.13		$	10.96		$	11.04		$	11.24		$	11.57
Tangible assets:
Total assets	$	5,359,545		$	4,987,643		$	4,704,044		$	4,591,325		$	4,553,405
Less: Goodwill		69,802			69,802			69,802			69,802			69,802
Less: Other intangible assets		2,272			2,461			2,695			2,930			3,164
Tangible assets	$	5,287,471		$	4,915,380		$	4,631,547		$	4,518,593		$	4,480,439
Tangible common equity / tangible assets (3)		10.31	%		10.97	%		11.92	%		12.75	%		13.53	%
(1) Other intangible assets are core deposit intangibles.
(2) This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets divided by common stock outstanding.
(3) This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets to total assets less goodwill and intangible assets.

HarborOne Bancorp, Inc.

Segments Statements of Net Income

(Unaudited)

	HarborOne Mortgage						HarborOne Bank
	For the Quarter Ended						For the Quarter Ended
	December 31,		September 30,		December 31,		December 31,		September 30,		December 31,
	2022		2022		2021		2022		2022		2021
	(in thousands)
Net interest and dividend income	$	419	$	437	$	571	$	39,258	$	39,373	$	33,909
Provision (benefit) for credit losses		—		—		—		2,108		668		(1,436)
Net interest and dividend income, after provision for loan losses		419		437		571		37,150		38,705		35,345
Mortgage banking income:
Gain on sale of mortgage loans		2,301		3,809		10,063		—		—		—
Intersegment gain (loss)		553		698		496		(997)		(904)		(720)
Changes in mortgage servicing rights fair value		(2,368)		1,652		(315)		(263)		164		70
Other		2,122		2,235		3,108		203		218		251
Total mortgage banking income (loss)		2,608		8,394		13,352		(1,057)		(522)		(399)
Other noninterest income (loss)		126		(13)		7		7,779		6,180		5,980
Total noninterest income		2,734		8,381		13,359		6,722		5,658		5,581
Noninterest expense		5,452		6,610		10,467		28,744		27,707		27,396
(Loss) income before income taxes		(2,299)		2,208		3,463		15,128		16,656		13,530
Provision for income taxes		—		687		664		2,817		4,166		3,060
Net (loss) income	$	(2,299)	$	1,521	$	2,799	$	12,311	$	12,490	$	10,470

	HarborOne Mortgage				HarborOne Bank
	For the Years Ended				For the Years Ended
	December 31,		December 31,		December 31,		December 31,
	2022		2021		2022		2021
	(in thousands)
Net interest and dividend income	$	1,617	$	3,468	$	149,301	$	129,785
Provision (benefit) for credit losses		—		—		5,660		(7,258)
Net interest and dividend income, after provision (benefit) for credit losses		1,617		3,468		143,641		137,043
Mortgage banking income:
Gain on sale of mortgage loans		15,970		61,883		—		—
Intersegment gain (loss)		3,185		4,434		(3,604)		(3,665)
Changes in mortgage servicing rights fair value		4,714		(243)		618		(137)
Other		9,075		14,741		873		1,090
Total mortgage banking income (loss)		32,944		80,815		(2,113)		(2,712)
Other noninterest income		129		44		25,930		23,308
Total noninterest income		33,073		80,859		23,817		20,596
Noninterest expense		27,065		55,012		110,407		102,557
Income before income taxes		7,625		29,315		57,051		55,082
Provision for income taxes		2,777		7,569		14,090		14,933
Net income	$	4,848	$	21,746	$	42,961	$	40,149