HarborOne Bancorp (HONE) 8-K HarborOne Bancorp, Inc. Announces 2023 First Quarter Earnings

Exhibit 99.1

HarborOne Bancorp, Inc. Announces 2023 First Quarter Earnings

Contact: Linda Simmons, EVP, CFO

Brockton, Massachusetts (April 27, 2023): HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $7.3 million, or $0.16 per diluted share, for the first quarter of 2023, compared to net income of $9.6 million, or $0.21 per diluted share, for the preceding quarter and net income of $12.3 million, or $0.25 per diluted share, for the same period last year.

Selected Financial Highlights:

● Recent Company-wide cost saving measures and organizational efficiencies will provide approximately $4.1 million in annual cost savings; a branch closure and a branch relocation will provide additional long-term expense savings.

● Returned $3.3 million of capital to shareholders via dividends and increased quarterly dividend by 7%.

● Continued share repurchase program returning $26.8 million to shareholders, representing 2.0 million shares.

● Disciplined underwriting continues to provide strong credit quality, with nonperforming loans to total loans of 0.27%, compared to 0.32% on a linked-quarter basis.

● Loan growth of $73.0 million, or 1.6%, and deposit growth of $52.2 million, or 1.2%, on a linked-quarter basis.

“While significant challenges presented themselves in Q1, I have tremendous confidence in our ability to manage through the current environment. Our excellent credit quality, strong capital position, and deposit growth provide the foundation for that confidence,” said Joseph F. Casey, President and CEO. “Our team remains highly focused on ensuring stability in our deposit base. The Company has been proactive in reducing expenses at both HarborOne Mortgage and the Bank and will continue to look for additional opportunities. Our resilience and strategic discipline position us well to drive long-term value for our shareholders.”

Net Interest Income

The Company’s net interest and dividend income was $34.4 million for the quarter ended March 31, 2023, compared to $39.2 million for the quarter ended December 31, 2022, and $33.3 million for the quarter ended March 31, 2022. The tax equivalent interest rate spread and net interest margin were 2.28% and 2.78%, respectively, for the quarter ended March 31, 2023, compared to 2.88% and 3.23%, respectively, for the quarter ended December 31, 2022, and 3.12% and 3.21%, respectively, for the quarter ended March 31, 2022.

On a linked-quarter basis, the decreases in net interest and dividend income, tax equivalent interest rate spread, and net interest margin primarily reflect an increase in interest-bearing liabilities, with higher cost of funding, partially offset by increased loan balances and yields with liability repricing outpacing assets. The cost of funds was 188 basis points for the quarter ended March 31, 2023, compared to 114 basis points for the preceding quarter.

The $1.1 million increase in net interest and dividend income from the prior year quarter reflects an increase of $20.3 million, or 57.1%, in total interest and dividend income and an increase of $19.2 million, or 823.7%, 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 108 basis points, while the average balance increased $849.7 million, and the cost of interest-bearing liabilities increased 192 basis points, while the average balance increased $887.5 million.

Noninterest Income

Total noninterest income decreased $1.2 million, or 12.2%, to $8.7 million for the quarter ended March 31, 2023, from $9.9 million for the quarter ended December 31, 2022. Mortgage loan closings for the quarter ended March 31, 2023 were $125.6 million with a gain on loan sales of $2.2 million, compared to $222.4 million in mortgage closings and $2.3 million in gain on sales for the preceding quarter as higher gain-on-sale margins help offset the seasonal loss in production volume. Deposit account fees were $4.7 million for the quarter ended March 31, 2023, compared to $5.0 million for the quarter ended December 31, 2022. Other income for the quarter ended March 31, 2023 decreased $1.7 million, primarily reflecting a $1.1 million decrease in swap fee income.

The decrease in the fair value of mortgage servicing rights for the three months ended March 31, 2023 was $1.3 million, as compared to a decrease of $2.1 million in the fair value of mortgage servicing rights for the three months ended December 31, 2022. The valuation was negatively impacted by key benchmark mortgage rates used in the valuation. The impact of principal payments on the underlying

mortgages on the mortgage servicing rights was $371,000 and $570,000 for the quarters ended March 31, 2023 and December 31, 2022, respectively.

Total noninterest income decreased $10.4 million, or 54.4%, compared to the quarter ended March 31, 2022, primarily due to a $10.4 million, or 79.1%, decrease in mortgage banking income, driven by the decrease in loan demand as a result of interest rate increases. The prior year quarter also reflected a $6.1 million increase in the fair value of mortgage servicing rights.

Noninterest Expense

Total noninterest expenses were $31.5 million for the quarter ended March 31, 2023, a decrease of $3.1 million, or 9.0%, from the quarter ended December 31, 2022. Compensation and benefits decreased $2.3 million primarily reflecting decreased mortgage origination commission and incentive accruals. Other expenses decreased $1.6 million, or 35.7% for the quarter ended March 31 2023, primarily as a result of a legal settlement accrued for in the fourth quarter of 2022.

Total noninterest expenses decreased $3.3 million, or 9.5%, from the quarter ended March 31, 2022. Compensation and benefits decreased $2.9 million primarily reflecting decreased mortgage origination commission and incentive accruals.

During the quarter, management evaluated potential cost saving measures across the Company. This resulted in a reduction in force at HarborOne Mortgage, LLC (“HarborOne Mortgage”) during the first quarter with an expected annual cost savings of $1.2 million and recognized severance expense of $249,000. During the second quarter of 2023 the Bank took further cost saving and organizational efficiency measures with an estimated annual savings of $2.9 million and will recognize severance expense of $452,000. Additionally, the Bank sought and obtained regulatory approval in 2023 to close one branch and relocate another branch that will both provide additional long-term expense savings.  

Income Tax Provision

The effective tax rate for the quarter ended March 31, 2023 was 24.9% compared to 22.4% for the quarter ended December 31, 2022. 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

Disciplined underwriting and active loan management continues to result in strong credit quality performance. Total nonperforming assets improved to $12.3 million at March 31, 2023, compared to $14.8 million at December 31, 2022 and $26.1 million at March 31, 2022. Nonperforming assets as a percentage of total assets were 0.22% at March 31, 2023, 0.28% at December 31, 2022, and 0.57% at March 31, 2022. During 2022, two large commercial credits were resolved, reducing nonperforming assets significantly.

The provision for funded loan credit losses for the quarter ended March 31, 2023 was $1.7 million and reflects provisioning for loan growth and increased economic uncertainty. Net recoveries totaled $11,000 for the quarter ended March 31, 2023. Net charge-offs totaled $2.1 million, or 0.19% of average loans outstanding on an annualized basis, for the quarter ended December 31, 2022, and net charge-offs totaled $2.7 million, or 0.30% of average loans outstanding on an annualized basis, for the quarter ended March 31, 2022.

The allowance for credit losses (“ACL”) was $47.0 million, or 1.02% of total loans, at March 31, 2023, compared to $45.2 million, or 0.99% of total loans, at December 31, 2022 and $41.8 million, or 1.12% of total loans, at March 31, 2022. The ACL on unfunded commitments, included in other liabilities on the unaudited Consolidated Balance Sheets, amounted to $5.0 million at March 31, 2023 as compared to $4.9 million at December 31, 2022 and $3.8 million at March 31, 2022.

We believe that we are well positioned to withstand any downturn in the credit cycle should one materialize. We continue to closely monitor our loan portfolio for signs of deterioration. Management is focused on commercial real estate in light of speculation that commercial real estate values may deteriorate as the market adjusts to higher vacancies and rates. Our commercial real estate portfolio is centered in New England with approximately 75% in Massachusetts and Rhode Island. Approximately 60% of commercial real estate loans are fixed-rate loans with limited near-term maturity risk.

Management has also identified certain sectors within the commercial real estate segment that may be particularly 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. This includes business-oriented hotels, non-anchored retail space and metro office space. As of March 31, 2023, business-oriented hotels loans included 12 loans with a total outstanding balance of $85.3 million, non-anchored retail space loans included 28 loans with a total outstanding balance of $40.2 million, and metro office space loans included two loans with a total outstanding balance of $14.8 million. As of March 31, 2023, there was one business-oriented hotel credit with a carrying value of $1.9 million that was rated substandard and on nonaccrual. This credit was provided a principal deferral in the third quarter of 2022. The other loans in these groups were performing in accordance with their terms.

Balance Sheet

Total assets increased $213.3 million, or 4.0%, to $5.57 billion at March 31, 2023, from $5.36 billion at December 31, 2022. The increase primarily reflects an increase of $152.5 million in short-term investments and a $73.0 million increase in loans. The increase in short-term investments reflects management’s pro-active liquidity-enhancing measures in response to financial industry concerns.

Available for sale securities were $303.1 million and $301.1 million at March 31, 2023 and December 31, 2022, respectively. The unrealized loss on securities available for sale decreased to $61.2 million as of March 31, 2023, as compared to $68.3 million of unrealized losses as of December 31, 2022. Securities held to maturity were $19.8 million, or 0.4% of total assets, with a fair value of $19.3 million.

Loans increased $73.0 million, or 1.6%, to $4.62 billion at March 31, 2023, from $4.55 billion at December 31, 2022. The increase in loans for the three months ended March 31, 2023 was primarily due to increases in commercial real estate loans of $36.4 million, commercial construction loans of $13.4 million, and residential real estate loans of $33.6 million, partially offset by decreases in commercial and industrial loans of $1.2 million and consumer loans of $9.2 million. Management continues to seek prudent commercial lending opportunities to deepen relationships with existing customers and develop new relationships with strong borrowers.

Total deposits were $4.24 billion at March 31, 2023 and $4.19 billion at December 31, 2022. Compared to the prior quarter, non-certificate accounts decreased $124.9 million, term certificate accounts increased $155.6 million, and brokered deposits increased $21.5 million. As of March 31, 2023, FDIC-insured deposits exceeded 70% of total deposits. Including Depositors Insurance Fund (“DIF”) excess insurance coverage that remains available until February 24, 2024, insured deposits are approximately 100% of total deposits. The Bank exited the DIF as of February 24, 2023; however, insurance remains in place for funds on deposit as of that date for one year or until maturity for term certificates, if that is a later date.  

FHLB borrowings increased $190.0 million to $590.7 million at March 31, 2023 from $400.7 million at December 31, 2022. At March 31, 2023, FHLB borrowings were primarily short-term borrowings as the Bank utilized available credit to enhance liquidity. As of March 31, 2023, the Bank had $677.6 million in available borrowing capacity across multiple relationships.

Total stockholders’ equity was $599.8 million at March 31, 2023, compared to $617.0 million at December 31, 2022 and $649.1 million at March 31, 2022. Stockholders’ equity decreased 2.8% when compared to the prior quarter, as earnings were offset by share repurchases. The Company repurchased 2,033,192 shares at an average price of $13.19, including $0.13 per share of excise tax, during the three months ended March 31, 2023. A share repurchase program that commenced in the first quarter of 2023 is expected to be completed in the second quarter of 2023. Due to recent market volatility and increased economic uncertainty, share repurchase activity is expected to be reduced in the second quarter of 2023 compared to recent prior quarters. The tangible-common-equity-to-tangible-assets ratio was 9.60% at March 31, 2023, 10.31% at December 31, 2022, and 12.75% at March 31, 2022. At March 31, 2023, the Company and the Bank had strong capital positions, exceeded all regulatory capital requirements, and are considered well-capitalized.

About HarborOne Bancorp, Inc.

HarborOne Bancorp, Inc. is the holding company for HarborOne Bank, a Massachusetts-chartered trust company. 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 24 offices in Maine, Massachusetts, New Hampshire, New Jersey, and Rhode Island 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 and concerns about 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; 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, 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)

	March 31,		December 31,		September 30,		June 30,		March 31,
(in thousands)	2023		2022		2022		2022		2022
Assets
Cash and due from banks	$	38,989	$	39,712	$	39,910	$	35,843	$	41,862
Short-term investments		210,765		58,305		46,044		48,495		97,870
Total cash and cash equivalents		249,754		98,017		85,954		84,338		139,732
Securities available for sale, at fair value		303,059		301,149		304,852		334,398		361,529
Securities held to maturity, at amortized cost		19,838		19,949		15,000		10,000		—
Federal Home Loan Bank stock, at cost		23,589		20,071		15,973		5,625		5,931
Asset held for sale		—		—		—		—		678
Loans held for sale, at fair value		13,956		18,544		18,805		31,679		25,690
Loans:
Commercial real estate		2,286,727		2,250,344		2,041,905		1,847,619		1,816,484
Commercial construction		212,689		199,311		185,062		158,762		154,059
Commercial and industrial		423,036		424,275		397,112		407,182		410,787
Total commercial loans		2,922,452		2,873,930		2,624,079		2,413,563		2,381,330
Residential real estate		1,667,934		1,634,319		1,520,809		1,423,074		1,252,920
Consumer		32,246		41,421		52,466		75,312		103,100
Loans		4,622,632		4,549,670		4,197,354		3,911,949		3,737,350
Less: Allowance for credit losses on loans		(46,994)		(45,236)		(44,621)		(43,560)		(41,765)
Net loans		4,575,638		4,504,434		4,152,733		3,868,389		3,695,585
Mortgage servicing rights, at fair value		47,080		48,138		49,861		47,130		45,043
Goodwill		69,802		69,802		69,802		69,802		69,802
Other intangible assets		2,082		2,272		2,461		2,695		2,930
Other assets		268,060		277,169		272,202		249,988		244,405
Total assets	$	5,572,858	$	5,359,545	$	4,987,643	$	4,704,044	$	4,591,325
Liabilities and Stockholders' Equity
Deposits:
Demand deposit accounts	$	726,548	$	762,576	$	795,945	$	775,154	$	771,172
NOW accounts		287,376		297,692		308,191		316,839		310,090
Regular savings and club accounts		1,455,318		1,468,172		1,289,825		1,282,913		1,218,656
Money market deposit accounts		796,008		861,704		889,517		885,673		864,316
Term certificate accounts		653,553		497,975		484,936		487,354		497,746
Brokered deposits		322,927		301,380		114,696		100,000		100,000
Total deposits		4,241,730		4,189,499		3,883,110		3,847,933		3,761,980
Short-term borrowed funds		425,000		385,000		330,000		90,000		—
Long-term borrowed funds		165,665		15,675		15,684		15,693		55,702
Subordinated debt		34,317		34,285		34,254		34,222		34,191
Other liabilities and accrued expenses		106,352		118,110		113,225		91,718		90,387
Total liabilities		4,973,064		4,742,569		4,376,273		4,079,566		3,942,260
Common stock		597		596		593		593		591
Additional paid-in capital		483,831		483,031		480,617		479,519		477,302
Unearned compensation - ESOP		(27,164)		(27,623)		(28,083)		(28,542)		(29,002)
Retained earnings		360,454		356,438		350,049		339,471		332,734
Treasury stock		(175,514)		(148,384)		(143,125)		(132,296)		(113,513)
Accumulated other comprehensive loss		(42,410)		(47,082)		(48,681)		(34,267)		(19,047)
Total stockholders' equity		599,794		616,976		611,370		624,478		649,065
Total liabilities and stockholders' equity	$	5,572,858	$	5,359,545	$	4,987,643	$	4,704,044	$	4,591,325

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

	Quarters Ended
	March 31,		December 31,		September 30,		June 30,		March 31,
(in thousands, except share data)	2023		2022		2022		2022		2022
Interest and dividend income:
Interest and fees on loans	$	52,771	$	49,177	$	42,065	$	37,522	$	33,576
Interest on loans held for sale		286		334		377		331		264
Interest on securities		2,079		2,045		1,971		1,873		1,701
Other interest and dividend income		803		359		143		131		61
Total interest and dividend income		55,939		51,915		44,556		39,857		35,602
Interest expense:
Interest on deposits		15,913		8,499		3,491		2,019		1,621
Interest on FHLB borrowings		5,105		3,703		1,209		119		188
Interest on subordinated debentures		523		524		524		524		523
Total interest expense		21,541		12,726		5,224		2,662		2,332
Net interest and dividend income		34,398		39,189		39,332		37,195		33,270
Provision for credit losses		1,866		2,108		668		2,546		338
Net interest and dividend income, after provision for credit losses		32,532		37,081		38,664		34,649		32,932
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans		2,224		2,301		3,809		4,538		5,322
Changes in mortgage servicing rights fair value		(1,692)		(2,631)		1,816		862		5,285
Other		2,216		2,325		2,453		2,612		2,558
Total mortgage banking income		2,748		1,995		8,078		8,012		13,165
Deposit account fees		4,733		5,031		4,870		4,892		4,472
Income on retirement plan annuities		119		118		119		112		107
Bank-owned life insurance income		500		501		503		494		483
Other income		590		2,255		675		593		834
Total noninterest income		8,690		9,900		14,245		14,103		19,061
Noninterest expenses:
Compensation and benefits		17,799		20,104		20,991		21,455		20,723
Occupancy and equipment		5,040		4,935		4,829		4,575		5,428
Data processing		2,346		2,359		2,311		2,259		2,241
Loan expense		313		169		355		385		478
Marketing		1,181		862		850		986		1,218
Professional fees		1,501		1,446		1,457		1,680		1,539
Deposit insurance		510		385		357		354		349
Other expenses		2,819		4,384		3,323		3,260		2,859
Total noninterest expenses		31,509		34,644		34,473		34,954		34,835
Income before income taxes		9,713		12,337		18,436		13,798		17,158
Income tax provision		2,416		2,760		4,678		3,811		4,891
Net income	$	7,297	$	9,577	$	13,758	$	9,987	$	12,267
Earnings per common share:
Basic	$	0.16	$	0.21	$	0.30	$	0.21	$	0.26
Diluted	$	0.16	$	0.21	$	0.30	$	0.21	$	0.25
Weighted average shares outstanding:
Basic		44,857,224		45,321,491		45,830,737		46,980,830		47,836,410
Diluted		45,284,240		45,861,658		46,420,527		47,536,033		48,690,420

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

	Quarters Ended
	March 31, 2023								December 31, 2022							March 31, 2022
	Average								Average							Average
	Outstanding						Yield/		Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest			Cost (7)		Balance			Interest		Cost (7)		Balance			Interest		Cost (7)
	(dollars in thousands)
Interest-earning assets:
Investment securities (1)	$	387,303		$	2,079		2.18	%	$	388,247		$	2,045	2.09	%	$	393,364		$	1,701	1.75	%
Other interest-earning assets		63,426			803		5.13			42,640			359	3.34			150,569			61	0.16
Loans held for sale		18,108			286		6.41			22,350			334	5.93			29,842			264	3.59
Loans
Commercial loans (2)(3)		2,901,464			36,837		5.15			2,770,667			34,351	4.92			2,291,343			22,095	3.91
Residential real estate loans (3)		1,647,109			15,616		3.85			1,566,389			14,352	3.64			1,220,703			10,142	3.37
Consumer loans (3)		36,310			519		5.80			45,629			632	5.50			118,242			1,339	4.59
Total loans		4,584,883			52,972		4.69			4,382,685			49,335	4.47			3,630,288			33,576	3.75
Total interest-earning assets		5,053,720			56,140		4.51			4,835,922			52,073	4.27			4,204,063			35,602	3.43
Noninterest-earning assets		313,309								311,372							326,811
Total assets	$	5,367,029							$	5,147,294						$	4,530,874
Interest-bearing liabilities:
Savings accounts	$	1,459,392			5,445		1.51		$	1,408,493			3,591	1.01		$	1,165,683			366	0.13
NOW accounts		275,801			36		0.05			291,890			40	0.05			301,279			36	0.05
Money market accounts		824,694			5,238		2.58			878,609			3,312	1.50			858,792			303	0.14
Certificates of deposit		552,636			2,685		1.97			487,121			1,062	0.86			522,211			729	0.57
Brokered deposits		330,426			2,509		3.08			148,460			494	1.32			100,000			187	0.76
Total interest-bearing deposits		3,442,949			15,913		1.87			3,214,573			8,499	1.05			2,947,965			1,621	0.22
FHLB advances		448,096			5,105		4.62			392,508			3,703	3.74			55,706			188	1.37
Subordinated debentures		34,298			523		6.18			34,268			524	6.07			34,173			523	6.21
Total borrowings		482,394			5,628		4.73			426,776			4,227	3.93			89,879			711	3.21
Total interest-bearing liabilities		3,925,343			21,541		2.23			3,641,349			12,726	1.39			3,037,844			2,332	0.31
Noninterest-bearing liabilities:
Noninterest-bearing deposits		721,536								788,572							738,578
Other noninterest-bearing liabilities		101,820								101,621							86,763
Total liabilities		4,748,699								4,531,542							3,863,185
Total stockholders' equity		618,330								615,752							667,689
Total liabilities and stockholders' equity	$	5,367,029							$	5,147,294						$	4,530,874
Tax equivalent net interest income					34,599								39,347							33,270
Tax equivalent interest rate spread (4)							2.28	%						2.88	%						3.12	%
Less: tax equivalent adjustment					201								158							—
Net interest income as reported				$	34,398							$	39,189						$	33,270
Net interest-earning assets (5)	$	1,128,377							$	1,194,573						$	1,166,219
Net interest margin (6)						��	2.76	%						3.22	%						3.21	%
Tax equivalent effect							0.02							0.01							—
Net interest margin on a fully tax equivalent basis							2.78	%						3.23	%						3.21	%
Ratio of interest-earning assets to interest-bearing liabilities		128.75	%							132.81	%						138.39	%
Supplemental information:
Total deposits, including demand deposits	$	4,164,485		$	15,913				$	4,003,145		$	8,499			$	3,686,543		$	1,621
Cost of total deposits							1.55	%						0.84	%						0.18	%
Total funding liabilities, including demand deposits	$	4,646,879		$	21,541				$	4,429,921		$	12,726			$	3,776,422		$	2,332
Cost of total funding liabilities							1.88	%						1.14	%						0.25	%
(1) Includes securities available for sale and securities held to maturity.
(2) Includes industrial revenue bonds for the quarters ended March 31, 2023 and 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 March 31, 2023 and December 31, 2022 was 5.12% and 4.90%, respectively.
(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 and Yield Trend

(Unaudited)

	Average Balances - Trend - Quarters Ended
	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
	(in thousands)
Interest-earning assets:
Investment securities (1)	$	387,303		$	388,247		$	390,577		$	391,448		$	393,364
Other interest-earning assets		63,426			42,640			27,723			64,678			150,569
Loans held for sale		18,108			22,350			28,046			29,474			29,842
Loans
Commercial loans (2)(3)		2,901,464			2,770,667			2,522,359			2,384,630			2,291,343
Residential real estate loans (3)		1,647,109			1,566,389			1,470,305			1,330,772			1,220,703
Consumer loans (3)		36,310			45,629			63,220			88,943			118,242
Total loans		4,584,883			4,382,685			4,055,884			3,804,345			3,630,288
Total interest-earning assets		5,053,720			4,835,922			4,502,230			4,289,945			4,204,063
Noninterest-earning assets		313,309			311,372			308,734			311,998			326,811
Total assets	$	5,367,029		$	5,147,294		$	4,810,964		$	4,601,943		$	4,530,874
Interest-bearing liabilities:
Savings accounts	$	1,459,392		$	1,408,493		$	1,293,598		$	1,266,912		$	1,165,683
NOW accounts		275,801			291,890			305,777			311,241			301,279
Money market accounts		824,694			878,609			893,452			885,305			858,792
Certificates of deposit		552,636			487,121			486,923			484,484			522,211
Brokered deposits		330,426			148,460			102,875			100,000			100,000
Total interest-bearing deposits		3,442,949			3,214,573			3,082,625			3,047,942			2,947,965
FHLB advances		448,096			392,508			196,036			34,763			55,706
Subordinated debentures		34,298			34,268			34,237			34,207			34,173
Total borrowings		482,394			426,776			230,273			68,970			89,879
Total interest-bearing liabilities		3,925,343			3,641,349			3,312,898			3,116,912			3,037,844
Noninterest-bearing liabilities:
Noninterest-bearing deposits		721,536			788,572			789,214			768,088			738,578
Other noninterest-bearing liabilities		101,820			101,621			80,304			75,186			86,763
Total liabilities		4,748,699			4,531,542			4,182,416			3,960,186			3,863,185
Total stockholders' equity		618,330			615,752			628,548			641,757			667,689
Total liabilities and stockholders' equity	$	5,367,029		$	5,147,294		$	4,810,964		$	4,601,943		$	4,530,874
	Annualized Yield Trend - Quarters Ended
	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Interest-earning assets:
Investment securities (1)		2.18	%		2.09	%		2.00	%		1.92	%		1.75	%
Other interest-earning assets		5.13	%		3.34	%		2.05	%		0.81	%		0.16	%
Loans held for sale		6.41	%		5.93	%		5.33	%		4.51	%		3.59	%
Commercial loans (2)(3)		5.15	%		4.92	%		4.45	%		4.25	%		3.91	%
Residential real estate loans (3)		3.85	%		3.64	%		3.50	%		3.37	%		3.37	%
Consumer loans (3)		5.80	%		5.50	%		4.99	%		4.71	%		4.59	%
Total loans		4.69	%		4.47	%		4.11	%		3.96	%		3.75	%
Total interest-earning assets		4.51	%		4.27	%		3.93	%		3.73	%		3.43	%
Interest-bearing liabilities:
Savings accounts		1.51	%		1.01	%		0.37	%		0.20	%		0.13	%
NOW accounts		0.05	%		0.05	%		0.05	%		0.05	%		0.05	%
Money market accounts		2.58	%		1.50	%		0.61	%		0.30	%		0.14	%
Certificates of deposit		1.97	%		0.86	%		0.64	%		0.55	%		0.57	%
Brokered deposits		3.08	%		1.32	%		0.27	%		0.20	%		0.76	%
Total interest-bearing deposits		1.87	%		1.05	%		0.45	%		0.27	%		0.22	%
FHLB advances		4.62	%		3.74	%		2.45	%		1.36	%		1.37	%
Subordinated debentures		6.18	%		6.07	%		6.07	%		6.14	%		6.21	%
Total borrowings		4.73	%		3.93	%		2.99	%		3.74	%		3.21	%
Total interest-bearing liabilities		2.23	%		1.39	%		0.63	%		0.34	%		0.31	%
(1) Includes securities available for sale and securities held to maturity.
(2) Includes industrial revenue bonds for the quarters ended March 31, 2023 and 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 March 31, 2023 and December 31, 2022 was 5.12% and 4.90%, respectively.
(3) Includes nonaccruing loan balances and interest received on such loans.

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

	Quarters Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Performance Ratios (annualized):	2023			2022			2022			2022			2022
(dollars in thousands)
Return on average assets (ROAA)		0.54	%		0.74	%		1.14	%		0.87	%		1.08	%
Return on average equity (ROAE)		4.72	%		6.22	%		8.76	%		6.22	%		7.35	%
Total noninterest expense	$	31,509		$	34,644		$	34,473		$	34,954		$	34,835
Less: Amortization of other intangible assets		189			189			235			235			235
Total adjusted noninterest expense	$	31,320		$	34,455		$	34,238		$	34,719		$	34,600
Net interest and dividend income	$	34,398		$	39,189		$	39,332		$	37,195		$	33,270
Total noninterest income		8,690			9,900			14,245			14,103			19,061
Total revenue	$	43,088		$	49,089		$	53,577		$	51,298		$	52,331
Efficiency ratio (1)		72.69	%		70.19	%		63.90	%		67.68	%		66.12	%
(1) This non-GAAP measure represents adjusted noninterest expense divided by total revenue

	At or for the Quarters Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Asset Quality	2023			2022			2022			2022			2022
(dollars in thousands)
Total nonperforming assets	$	12,300		$	14,840		$	23,367		$	24,441		$	26,109
Nonperforming assets to total assets		0.22	%		0.28	%		0.47	%		0.52	%		0.57	%
Allowance for credit losses on loans to total loans		1.02	%		0.99	%		1.06	%		1.11	%		1.12	%
Net charge-offs (recoveries)	$	(11)		$	2,067		$	(799)		$	(504)		$	2,730
Annualized net charge-offs (recoveries)/average loans		—	%		0.19	%		(0.08)	%		(0.05)	%		0.30	%
Allowance for credit losses on loans to nonperforming loans		383.50	%		305.93	%		191.60	%		178.41	%		159.96	%

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

	Quarters Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Capital and Share Related	2023			2022			2022			2022			2022
(dollars in thousands, except share data)
Common stock outstanding		47,063,087			48,961,452			49,202,660			49,989,007			51,257,696
Book value per share	$	12.74		$	12.60		$	12.43		$	12.49		$	12.66
Tangible common equity:
Total stockholders' equity	$	599,794		$	616,976		$	611,370		$	624,478		$	649,065
Less: Goodwill		69,802			69,802			69,802			69,802			69,802
Less: Other intangible assets (1)		2,082			2,272			2,461			2,695			2,930
Tangible common equity	$	527,910		$	544,902		$	539,107		$	551,981		$	576,333
Tangible book value per share (2)	$	11.22		$	11.13		$	10.96		$	11.04		$	11.24
Tangible assets:
Total assets	$	5,572,858		$	5,359,545		$	4,987,643		$	4,704,044		$	4,591,325
Less: Goodwill		69,802			69,802			69,802			69,802			69,802
Less: Other intangible assets		2,082			2,272			2,461			2,695			2,930
Tangible assets	$	5,500,974		$	5,287,471		$	4,915,380		$	4,631,547		$	4,518,593
Tangible common equity / tangible assets (3)		9.60	%		10.31	%		10.97	%		11.92	%		12.75	%
(1) Other intangible assets are core deposit intangibles.
(2) This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets divided by common stock outstanding.
(3) This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets to total assets less goodwill and intangible assets.

HarborOne Bancorp, Inc.

Segments Statements of Net Income

(Unaudited)

	HarborOne Mortgage						HarborOne Bank
	For the Quarter Ended						For the Quarter Ended
	March 31,		December 31,		March 31,		March 31,		December 31,		March 31,
	2023		2022		2022		2023		2022		2022
	(in thousands)
Net interest and dividend income	$	327	$	419	$	350	$	34,562	$	39,258	$	33,424
Provision (benefit) for credit losses		—		—		—		1,866		2,108		338
Net interest and dividend income, after provision for loan losses		327		419		350		32,696		37,150		33,086
Mortgage banking income:
Gain on sale of mortgage loans		2,224		2,301		5,322		—		—		—
Intersegment gain (loss)		454		553		837		(348)		(997)		(608)
Changes in mortgage servicing rights fair value		(1,556)		(2,368)		4,695		(136)		(263)		590
Other		2,015		2,122		2,325		201		203		233
Total mortgage banking income (loss)		3,137		2,608		13,179		(283)		(1,057)		215
Other noninterest income (loss)		—		126		9		5,942		7,779		5,887
Total noninterest income		3,137		2,734		13,188		5,659		6,722		6,102
Noninterest expense		5,322		5,452		7,761		26,190		28,744		26,825
(Loss) income before income taxes		(1,858)		(2,299)		5,777		12,165		15,128		12,363
Provision for income taxes		(565)		—		1,541		3,115		2,817		3,557
Net (loss) income	$	(1,293)	$	(2,299)	$	4,236	$	9,050	$	12,311	$	8,806