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

Exhibit 99.1

HarborOne Bancorp, Inc. Announces 2023 Second Quarter Earnings

Contact: Linda Simmons, EVP, CFO

Brockton, Massachusetts (July 25, 2023): HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $7.5 million, or $0.17 per diluted share, for the second quarter of 2023, compared to net income of $7.3 million, or $0.16 per diluted share, for the preceding quarter and net income of $10.0 million, or $0.21 per diluted share, for the same period last year.

Selected Financial Highlights:

● Loan growth of $75.6 million, or 1.6%, and deposit growth of $45.8 million, or 1.1%, on a linked-quarter basis.

● The closure of one branch and the relocation of another branch were completed, providing long-term expense savings.

● Completed share repurchase program and received regulatory non-objection for sixth share repurchase program.

“During the second quarter, we completed our fifth share repurchase program and received regulatory approval to commence our sixth program,” said Joseph F. Casey, President and CEO. “Despite continued economic headwinds, our book value per share and tangible book value per share increased for the last three consecutive quarters. Additionally, the pace of deposit cost increases has slowed and we had solid customer deposit growth in Q2, with the average balance increasing at an annualized growth rate of 9.5%.”

Net Interest Income

The Company’s net interest and dividend income was $32.1 million for the quarter ended June 30, 2023, compared to $34.4 million for the quarter ended March 31, 2023, and $37.2 million for the quarter ended June 30, 2022. The tax equivalent interest rate spread and net interest margin were 1.89% and 2.45%, respectively, for the quarter ended June 30, 2023, compared to 2.28% and 2.78%, respectively, for the quarter ended March 31, 2023, and 3.39% and 3.48%, respectively, for the quarter ended June 30, 2022. The Company continues to evaluate and execute strategies to mitigate interest rate risk and manage net interest margin, including designated fair value and cash flow hedges, competitive deposit and loan pricing and brokered certificates of deposit.

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 235 basis points for the quarter ended June 30, 2023, compared to 188 basis points for the preceding quarter. Income on other interest-earning assets increased $2.1 million on a linked-quarter basis, primarily reflecting an increase in the average balance invested in federal funds.  

The $5.1 million decrease in net interest and dividend income from the prior year quarter reflects an increase of $26.0 million, or 978.1%, in total interest expense, partially offset by an increase of $20.9 million, or 52.5%, in total interest and dividend income. The changes reflect rate and volume changes in both interest-bearing assets and liabilities. The cost of interest-bearing liabilities increased 240 basis points, while the average balance increased $1.08 billion, and the yield on interest-earning assets increased 90 basis points, while the average balance increased $1.00 billion.

Noninterest Income

Total noninterest income increased $4.0 million, or 45.7%, to $12.7 million for the quarter ended June 30, 2023, from $8.7 million for the quarter ended March 31, 2023. Higher gain-on-sale margins and volume provided gain on loan sales of $3.3 million for the quarter ended June 30, 2023 compared to $2.2 million in gain on sales for the preceding quarter, from mortgage loan closings of $172.2 million and $125.6 million, respectively. Deposit account fees were $5.0 million for the quarter ended June 30, 2023, compared to $4.7 million for the quarter ended March 31, 2023.

The increase in the fair value of mortgage servicing rights for the three months ended June 30, 2023 was $915,000 as compared to a decrease of $1.3 million in the fair value of mortgage servicing rights for the three months ended March 31, 2023. The valuation was positively 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 $479,000 and $371,000 for the quarters ended June 30, 2023 and March 31, 2023, respectively.

Total noninterest income decreased $1.4 million, or 10.2%, compared to the quarter ended June 30, 2022, primarily due to a $2.0 million, or 24.5%, 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 $1.6 million increase in the fair value of mortgage servicing rights.

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

Noninterest Expense

Total noninterest expenses were $31.7 million for the quarter ended June 30, 2023, an increase of $216,000, or 0.7%, from the quarter ended March 31, 2023. Deposit insurance expense increased $666,000 and compensation and benefits increased $421,000, primarily reflecting increased mortgage origination commission partially offset by decreased payroll tax expense. There were additional decreases in occupancy and equipment expense of $407,000, reflecting recent cost saving measures.

Total noninterest expenses decreased $3.2 million, or 9.2%, from the quarter ended June 30, 2022. Compensation and benefits decreased $3.2 million, primarily reflecting decreased mortgage origination commission and incentive accruals, and professional fees decreased $566,000, partially offset by a deposit insurance expense increase of $822,000.

During the second quarter of 2023 the Bank took cost-saving and organizational efficiency measures with an estimated annual savings of $2.9 million and recognized severance expense of $452,000. Additionally, the Bank closed one branch and relocated another branch, which will both provide additional long-term expense savings.  

Asset Quality and Allowance for Credit Losses

Total nonperforming assets were $20.2 million at June 30, 2023, compared to $12.3 million at March 31, 2023 and $24.4 million at June 30, 2022. Nonperforming assets as a percentage of total assets were 0.36% at June 30, 2023, 0.22% at March 31, 2023, and 0.52% at June 30, 2022. During the quarter ended June 30, 2023, a $2.9 million charge off was recorded on a metro office space commercial real estate credit, and it was placed on nonaccrual. As of June 30, 2023, the carrying value of the credit is $7.0 million.

The provision for credit losses for the quarter ended June 30, 2023 was $3.3 million and primarily reflects replenishment as a result of the charge-off and provisioning for loan growth. Net charge-offs totaled $2.7 million, or 0.23% of average loans outstanding on an annualized basis, for the quarter ended June 30, 2023. Net recoveries totaled $11,000 for the quarter ended March 31, 2023, and $504,000 for the quarter ended June 30, 2022.

The allowance for credit losses (“ACL”) on loans  was $47.8 million, or 1.02% of total loans, at June 30, 2023, compared to $47.0 million, or 1.02% of total loans, at March 31, 2023 and $43.6 million, or 1.11% of total loans, at June 30, 2022. The ACL on unfunded commitments, included in other liabilities on the unaudited Consolidated Balance Sheets, amounted to $4.8 million at June 30, 2023 as compared to $5.0 million at March 31, 2023 and $5.1 million at June 30, 2022.

We believe that we are well positioned to withstand a downturn in the credit cycle should one materialize. We continue to closely monitor our loan portfolio for signs of deterioration. Management continues to be 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 June 30, 2023, business-oriented hotels loans included 13 loans with a total outstanding balance of $114.8 million, non-anchored retail space loans included 28 loans with a total outstanding balance of $41.5 million, and metro office space loans included two loans with a total outstanding balance of $11.9 million. As of June 30, 2023, there was one metro office space loan with a carrying value of $7.0 million, that was rated doubtful and on nonaccrual and one business-oriented hotel credit with a carrying value of $1.8 million that was rated substandard and on nonaccrual. The other loans in these groups were performing in accordance with their terms.

Balance Sheet

Total assets increased $86.4 million, or 1.6%, to $5.66 billion at June 30, 2023, from $5.57 billion at March 31, 2023. The increase primarily reflects an increase of $75.6 million in loans.

Available-for-sale securities were $292.0 million and $303.1 million at June 30, 2023 and March 31, 2023, respectively. The unrealized loss on securities available for sale increased to $66.5 million as of June 30, 2023, as compared to $61.2 million of unrealized losses as of March 31, 2023. Securities held to maturity were $19.8 million, or 0.35% of total assets, with a fair value of $19.0 million.

Loans increased $75.6 million, or 1.6%, to $4.70 billion at June 30, 2023, from $4.62 billion at March 31, 2023. The increase in loans for the three months ended June 30, 2023 was primarily due to increases in commercial and industrial loans of $30.4 million, commercial construction loans of $16.2 million, and residential real estate loans of $33.8 million, partially offset by a decrease in consumer loans of $4.8 million. Management continues to seek prudent commercial lending opportunities to deepen relationships with existing customers and develop new relationships with strong borrowers.

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

Total deposits were $4.29 billion at June 30, 2023 and $4.24 billion at March 31, 2023. Compared to the prior quarter, non-certificate accounts decreased $35.7 million, brokered deposits decreased $7.9 million, and term certificate accounts increased $89.4 million, primarily due to an 11-month term rate special offered during the quarter. As of June 30, 2023, FDIC-insured deposits were approximately 69% of total deposits, including Bank subsidiary deposits. Including Depositors Insurance Fund (“DIF”), excess insurance coverage that remains available until February 24, 2024, insured deposits are approximately 88% of total deposits, including Bank subsidiary 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.  

FHLB borrowings increased $13.9 million to $604.6 million at June 30, 2023 from $590.7 million at March 31, 2023. At June 30, 2023, FHLB short-term borrowings were $414.0 million as the Bank utilized available credit to enhance liquidity. In the second quarter of 2023, the Bank established access to the Bank Term Funding Program (“BTFP”) with the Federal Reserve to enhance its liquidity position. As of June 30, 2023, there were no outstanding advances under the BTFP and the Bank had $1.0 billion in available borrowing capacity across multiple relationships.

Total stockholders’ equity was $595.5 million at June 30, 2023, compared to $599.8 million at March 31, 2023 and $624.5 million at June 30, 2022. Stockholders’ equity decreased 0.7% when compared to the prior quarter, as earnings were offset by share repurchases. The Company repurchased 472,308 shares at an average price of $12.30, including $0.13 per share of excise tax, during the three months ended June 30, 2023. A share repurchase program that commenced in the first quarter of 2023 was completed in the second quarter of 2023, and the Company plans to commence a sixth share repurchase program during the third quarter of 2023. The tangible-common-equity-to-tangible-assets ratio ⁽¹⁾ was 9.38% at June 30, 2023, 9.60% at March 31, 2023, and 11.92% at June 30, 2022. At June 30, 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 30 full-service banking centers located in Massachusetts and Rhode Island, and commercial lending offices in Boston, Massachusetts and Providence, Rhode Island. HarborOne Bank also provides a range of educational resources through “HarborOne U,” with free digital content, webinars, and recordings for small business and personal financial education. HarborOne Mortgage, LLC, a subsidiary of HarborOne Bank, provides mortgage lending services throughout New England and other states.

⁽¹⁾ This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets to total assets less goodwill and intangible assets.

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

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)

	June 30,		March 31,		December 31,		September 30,		June 30,
(in thousands)	2023		2023		2022		2022		2022
Assets
Cash and due from banks	$	43,525	$	38,989	$	39,712	$	39,910	$	35,843
Short-term investments		209,326		210,765		58,305		46,044		48,495
Total cash and cash equivalents		252,851		249,754		98,017		85,954		84,338
Securities available for sale, at fair value		292,012		303,059		301,149		304,852		334,398
Securities held to maturity, at amortized cost		19,839		19,838		19,949		15,000		10,000
Federal Home Loan Bank stock, at cost		27,123		23,589		20,071		15,973		5,625
Asset held for sale		966		—		—		—		—
Loans held for sale, at fair value		20,949		13,956		18,544		18,805		31,679
Loans:
Commercial real estate		2,286,688		2,286,727		2,250,344		2,041,905		1,847,619
Commercial construction		228,902		212,689		199,311		185,062		158,762
Commercial and industrial		453,422		423,036		424,275		397,112		407,182
Total commercial loans		2,969,012		2,922,452		2,873,930		2,624,079		2,413,563
Residential real estate		1,701,766		1,667,934		1,634,319		1,520,809		1,423,074
Consumer		27,425		32,246		41,421		52,466		75,312
Loans		4,698,203		4,622,632		4,549,670		4,197,354		3,911,949
Less: Allowance for credit losses on loans		(47,821)		(46,994)		(45,236)		(44,621)		(43,560)
Net loans		4,650,382		4,575,638		4,504,434		4,152,733		3,868,389
Mortgage servicing rights, at fair value		48,176		47,080		48,138		49,861		47,130
Goodwill		69,802		69,802		69,802		69,802		69,802
Other intangible assets		1,893		2,082		2,272		2,461		2,695
Other assets		275,261		268,060		277,169		272,202		249,988
Total assets	$	5,659,254	$	5,572,858	$	5,359,545	$	4,987,643	$	4,704,044
Liabilities and Stockholders' Equity
Deposits:
Demand deposit accounts	$	717,572	$	726,548	$	762,576	$	795,945	$	775,154
NOW accounts		286,956		287,376		297,692		308,191		316,839
Regular savings and club accounts		1,390,906		1,455,318		1,468,172		1,289,825		1,282,913
Money market deposit accounts		834,120		796,008		861,704		889,517		885,673
Term certificate accounts		742,931		653,553		497,975		484,936		487,354
Brokered deposits		315,003		322,927		301,380		114,696		100,000
Total deposits		4,287,488		4,241,730		4,189,499		3,883,110		3,847,933
FHLB borrowings		604,568		590,665		400,675		345,684		105,693
Subordinated debt		34,348		34,317		34,285		34,254		34,222
Other liabilities and accrued expenses		137,318		106,352		118,110		113,225		91,718
Total liabilities		5,063,722		4,973,064		4,742,569		4,376,273		4,079,566
Common stock		597		597		596		593		593
Additional paid-in capital		484,544		483,831		483,031		480,617		479,519
Unearned compensation - ESOP		(26,704)		(27,164)		(27,623)		(28,083)		(28,542)
Retained earnings		364,709		360,454		356,438		350,049		339,471
Treasury stock		(181,324)		(175,514)		(148,384)		(143,125)		(132,296)
Accumulated other comprehensive loss		(46,290)		(42,410)		(47,082)		(48,681)		(34,267)
Total stockholders' equity		595,532		599,794		616,976		611,370		624,478
Total liabilities and stockholders' equity	$	5,659,254	$	5,572,858	$	5,359,545	$	4,987,643	$	4,704,044

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

	Quarters Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
(in thousands, except share data)	2023		2023		2022		2022		2022
Interest and dividend income:
Interest and fees on loans	$	55,504	$	52,771	$	49,177	$	42,065	$	37,522
Interest on loans held for sale		326		286		334		377		331
Interest on securities		2,035		2,079		2,045		1,971		1,873
Other interest and dividend income		2,935		803		359		143		131
Total interest and dividend income		60,800		55,939		51,915		44,556		39,857
Interest expense:
Interest on deposits		20,062		15,913		8,499		3,491		2,019
Interest on FHLB and FRB borrowings		8,114		5,105		3,703		1,209		119
Interest on subordinated debentures		524		523		524		524		524
Total interest expense		28,700		21,541		12,726		5,224		2,662
Net interest and dividend income		32,100		34,398		39,189		39,332		37,195
Provision for credit losses		3,283		1,866		2,108		668		2,546
Net interest and dividend income, after provision for credit losses		28,817		32,532		37,081		38,664		34,649
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans		3,300		2,224		2,301		3,809		4,538
Changes in mortgage servicing rights fair value		436		(1,692)		(2,631)		1,816		862
Other		2,312		2,216		2,325		2,453		2,612
Total mortgage banking income		6,048		2,748		1,995		8,078		8,012
Deposit account fees		5,012		4,733		5,031		4,870		4,892
Income on retirement plan annuities		128		119		118		119		112
Bank-owned life insurance income		511		500		501		503		494
Other income		963		590		2,255		675		593
Total noninterest income		12,662		8,690		9,900		14,245		14,103
Noninterest expenses:
Compensation and benefits		18,220		17,799		20,104		20,991		21,455
Occupancy and equipment		4,633		5,040		4,935		4,829		4,575
Data processing		2,403		2,346		2,359		2,311		2,259
Loan expense		417		313		169		355		385
Marketing		925		1,181		862		850		986
Professional fees		1,114		1,501		1,446		1,457		1,680
Deposit insurance		1,176		510		385		357		354
Other expenses		2,837		2,819		4,384		3,323		3,260
Total noninterest expenses		31,725		31,509		34,644		34,473		34,954
Income before income taxes		9,754		9,713		12,337		18,436		13,798
Income tax provision		2,275		2,416		2,760		4,678		3,811
Net income	$	7,479	$	7,297	$	9,577	$	13,758	$	9,987
Earnings per common share:
Basic	$	0.17	$	0.16	$	0.21	$	0.30	$	0.21
Diluted	$	0.17	$	0.16	$	0.21	$	0.30	$	0.21
Weighted average shares outstanding:
Basic		43,063,507		44,857,224		45,321,491		45,830,737		46,980,830
Diluted		43,133,455		45,284,240		45,861,658		46,420,527		47,536,033

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

	For the Six Months Ended June 30,
(dollars in thousands, except share data)	2023		2022		$ Change		% Change
Interest and dividend income:
Interest and fees on loans	$	108,275	$	71,098	$	37,177	52.3	%
Interest on loans held for sale		612		595		17	2.9
Interest on securities		4,114		3,574		540	15.1
Other interest and dividend income		3,738		192		3,546	1846.9
Total interest and dividend income		116,739		75,459		41,280	54.7
Interest expense:
Interest on deposits		35,975		3,640		32,335	888.3
Interest on FHLB and FRB borrowings		13,219		307		12,912	4205.9
Interest on subordinated debentures		1,047		1,047		—	0.0
Total interest expense		50,241		4,994		45,247	906.0
Net interest and dividend income		66,498		70,465		(3,967)	(5.6)
Provision for credit losses		5,149		2,884		2,265	78.5
Net interest and dividend income, after provision for credit losses		61,349		67,581		(6,232)	(9.2)
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans		5,524		9,860		(4,336)	(44.0)
Changes in mortgage servicing rights fair value		(1,256)		6,147		(7,403)	(120.4)
Other		4,528		5,170		(642)	(12.4)
Total mortgage banking income		8,796		21,177		(12,381)	(58.5)
Deposit account fees		9,745		9,364		381	4.1
Income on retirement plan annuities		247		219		28	12.8
Bank-owned life insurance income		1,011		977		34	3.5
Other income		1,553		1,427		126	8.8
Total noninterest income		21,352		33,164		(11,812)	(35.6)
Noninterest expenses:
Compensation and benefits		36,019		42,178		(6,159)	(14.6)
Occupancy and equipment		9,673		10,003	���	(330)	(3.3)
Data processing		4,749		4,500		249	5.5
Loan expense		730		863		(133)	(15.4)
Marketing		2,106		2,204		(98)	(4.4)
Professional fees		2,615		3,219		(604)	(18.8)
Deposit insurance		1,686		703		983	139.8
Other expenses		5,656		6,119		(463)	(7.6)
Total noninterest expenses		63,234		69,789		(6,555)	(9.4)
Income before income taxes		19,467		30,956		(11,489)	(37.1)
Income tax provision		4,691		8,702		(4,011)	(46.1)
Net income	$	14,776	$	22,254	$	(7,478)	(33.6)	%
Earnings per common share:
Basic	$	0.34	$	0.47
Diluted	$	0.33	$	0.46
Weighted average shares outstanding:
Basic		43,955,411		47,406,257
Diluted		44,203,893		48,110,863

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

	Quarters Ended
	June 30, 2023							March 31, 2023							June 30, 2022
	Average							Average							Average
	Outstanding					Yield/		Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost (8)		Balance			Interest		Cost (7)		Balance			Interest		Cost (7)
	(dollars in thousands)
Interest-earning assets:
Investment securities (1)	$	381,762		$	2,035	2.14	%	$	387,303		$	2,079	2.18	%	$	391,448		$	1,873	1.92	%
Other interest-earning assets		238,891			2,935	4.93			63,426			803	5.13			64,678			131	0.81
Loans held for sale		19,614			326	6.67			18,108			286	6.41			29,474			331	4.51
Loans
Commercial loans (2)(3)		2,938,292			38,842	5.30			2,901,464			36,837	5.15			2,384,630			25,295	4.25
Residential real estate loans (3)(4)		1,682,860			16,456	3.92			1,647,109			15,616	3.85			1,330,772			11,182	3.37
Consumer loans (3)		29,025			419	5.79			36,310			519	5.80			88,943			1,045	4.71
Total loans		4,650,177			55,717	4.81			4,584,883			52,972	4.69			3,804,345			37,522	3.96
Total interest-earning assets		5,290,444			61,013	4.63			5,053,720			56,140	4.51			4,289,945			39,857	3.73
Noninterest-earning assets		305,132							313,309							311,998
Total assets	$	5,595,576						$	5,367,029						$	4,601,943
Interest-bearing liabilities:
Savings accounts	$	1,421,622			6,165	1.74		$	1,459,392			5,445	1.51		$	1,266,912			626	0.20
NOW accounts		280,501			59	0.08			275,801			36	0.05			311,241			38	0.05
Money market accounts		802,373			6,256	3.13			824,694			5,238	2.58			885,305			635	0.30
Certificates of deposit		708,087			5,273	2.99			552,636			2,685	1.97			484,484			670	0.55
Brokered deposits		281,614			2,309	3.29			330,426			2,509	3.08			100,000			50	0.20
Total interest-bearing deposits		3,494,197			20,062	2.30			3,442,949			15,913	1.87			3,047,942			2,019	0.27
FHLB and FRB borrowings		666,345			8,114	4.88			448,096			5,105	4.62			34,763			119	1.36
Subordinated debentures		34,331			524	6.12			34,298			523	6.18			34,207			524	6.14
Total borrowings		700,676			8,638	4.94			482,394			5,628	4.73			68,970			643	3.74
Total interest-bearing liabilities		4,194,873			28,700	2.74			3,925,343			21,541	2.23			3,116,912			2,662	0.34
Noninterest-bearing liabilities:
Noninterest-bearing deposits		712,081							721,536							768,088
Other noninterest-bearing liabilities		88,363							101,820							75,186
Total liabilities		4,995,317							4,748,699							3,960,186
Total stockholders' equity		600,259							618,330							641,757
Total liabilities and stockholders' equity	$	5,595,576						$	5,367,029						$	4,601,943
Tax equivalent net interest income					32,313							34,599							37,195
Tax equivalent interest rate spread (5)						1.89	%						2.28	%						3.39	%
Less: tax equivalent adjustment					213							201							—
Net interest income as reported				$	32,100						$	34,398						$	37,195
Net interest-earning assets (6)	$	1,095,571						$	1,128,377						$	1,173,033
Net interest margin (7)						2.43	%						2.76	%						3.48	%
Tax equivalent effect						0.02							0.02							—
Net interest margin on a fully tax equivalent basis						2.45	%						2.78	%						3.48	%
Ratio of interest-earning assets to interest-bearing liabilities		126.12	%						128.75	%						137.63	%
Supplemental information:
Total deposits, including demand deposits	$	4,206,278		$	20,062			$	4,164,485		$	15,913			$	3,816,030		$	2,019
Cost of total deposits						1.91	%						1.55	%						0.21	%
Total funding liabilities, including demand deposits	$	4,906,954		$	28,700			$	4,646,879		$	21,541			$	3,885,000		$	2,662
Cost of total funding liabilities						2.35	%						1.88	%						0.27	%
(1) Includes securities available for sale and securities held to maturity.
(2) Includes industrial revenue bonds for the quarters ended June 30, 2023 and March 31, 2023. 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 June 30, 2023 and March 31, 2023 was 5.27% and 5.12%, respectively.
(3) Includes nonaccruing loan balances and interest received on such loans.
(4) Includes the basis adjustments of certain loans included in fair value hedging relationships.
(5) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(6) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(7) Net interest margin represents net interest income divided by average total interest-earning assets.
(8) Annualized.

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

	For the Six Months Ended
	June 30, 2023							June 30, 2022
	Average							Average
	Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost (8)		Balance			Interest		Cost (8)
	(dollars in thousands)
Interest-earning assets:
Investment securities (1)	$	384,517		$	4,114	2.16	%	$	392,401		$	3,574	1.84	%
Other interest-earning assets		151,644			3,738	4.97			107,386			192	0.36
Loans held for sale		18,865			612	6.54			29,657			595	4.05
Loans
Commercial loans (2)(3)		2,919,980			75,679	5.23			2,338,245			47,390	4.09
Residential real estate loans (3)(4)		1,665,083			32,072	3.88			1,276,041			21,324	3.37
Consumer loans (3)		32,647			938	5.79			103,512			2,384	4.64
Total loans		4,617,710			108,689	4.75			3,717,798			71,098	3.86
Total interest-earning assets		5,172,736			117,153	4.57			4,247,242			75,459	3.58
Noninterest-earning assets		309,198							319,362
Total assets	$	5,481,934						$	4,566,604
Interest-bearing liabilities:
Savings accounts	$	1,440,403			11,610	1.63		$	1,216,578			992	0.16
NOW accounts		278,164			95	0.07			306,287			74	0.05
Money market accounts		813,472			11,494	2.85			872,122			938	0.22
Certificates of deposit		630,791			7,958	2.54			503,243			1,399	0.56
Brokered deposits		305,885			4,818	3.18			100,000			237	0.48
Total interest-bearing deposits		3,468,715			35,975	2.09			2,998,230			3,640	0.24
FHLB and FRB borrowings		557,823			13,219	4.78			45,176			307	1.37
Subordinated debentures		34,315			1,047	6.15			34,190			1,047	6.18
Total borrowings		592,138			14,266	4.86			79,366			1,354	3.44
Total interest-bearing liabilities		4,060,853			50,241	2.49			3,077,596			4,994	0.33
Noninterest-bearing liabilities:
Noninterest-bearing deposits		716,782							753,414
Other noninterest-bearing liabilities		95,054							80,943
Total liabilities		4,872,689							3,911,953
Total stockholders' equity		609,245							654,651
Total liabilities and stockholders' equity	$	5,481,934						$	4,566,604
Tax equivalent net interest income					66,912							70,465
Tax equivalent interest rate spread (5)						2.08	%						3.25	%
Less: tax equivalent adjustment					414							—
Net interest income as reported				$	66,498						$	70,465
Net interest-earning assets (6)	$	1,111,883						$	1,169,646
Net interest margin (7)						2.59	%						3.35	%
Tax equivalent effect						0.02							—
Net interest margin on a fully tax equivalent basis						2.61	%						3.35	%
Ratio of interest-earning assets to interest-bearing liabilities		127.38	%						138.01	%
Supplemental information:
Total deposits, including demand deposits	$	4,185,497		$	35,975			$	3,751,644		$	3,640
Cost of total deposits						1.73	%						0.20	%
Total funding liabilities, including demand deposits	$	4,777,635		$	50,241			$	3,831,010		$	4,994
Cost of total funding liabilities						2.12	%						0.26	%
(1) Includes securities available for sale and securities held to maturity.
(2) Includes industrial revenue bonds for the six months ended June 30, 2023. 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 June 30, 2023 was 5.20%.
(3) Includes nonaccruing loan balances and interest received on such loans.
(4) Includes the basis adjustments of certain loans included in fair value hedging relationships.
(5) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(6) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(7) Net interest margin represents net interest income divided by average total interest-earning assets.
(8) Annualized.

HarborOne Bancorp, Inc.

Average Balances and Yield Trend

(Unaudited)

	Average Balances - Trend - Quarters Ended
	June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
	(in thousands)
Interest-earning assets:
Investment securities (1)	$	381,762		$	387,303		$	388,247		$	390,577		$	391,448
Other interest-earning assets		238,891			63,426			42,640			27,723			64,678
Loans held for sale		19,614			18,108			22,350			28,046			29,474
Loans
Commercial loans (2)(3)		2,938,292			2,901,464			2,770,667			2,522,359			2,384,630
Residential real estate loans (3)(4)		1,682,860			1,647,109			1,566,389			1,470,305			1,330,772
Consumer loans (3)		29,025			36,310			45,629			63,220			88,943
Total loans		4,650,177			4,584,883			4,382,685			4,055,884			3,804,345
Total interest-earning assets		5,290,444			5,053,720			4,835,922			4,502,230			4,289,945
Noninterest-earning assets		305,132			313,309			311,372			308,734			311,998
Total assets	$	5,595,576		$	5,367,029		$	5,147,294		$	4,810,964		$	4,601,943
Interest-bearing liabilities:
Savings accounts	$	1,421,622		$	1,459,392		$	1,408,493		$	1,293,598		$	1,266,912
NOW accounts		280,501			275,801			291,890			305,777			311,241
Money market accounts		802,373			824,694			878,609			893,452			885,305
Certificates of deposit		708,087			552,636			487,121			486,923			484,484
Brokered deposits		281,614			330,426			148,460			102,875			100,000
Total interest-bearing deposits		3,494,197			3,442,949			3,214,573			3,082,625			3,047,942
FHLB and FRB borrowings		666,345			448,096			392,508			196,036			34,763
Subordinated debentures		34,331			34,298			34,268			34,237			34,207
Total borrowings		700,676			482,394			426,776			230,273			68,970
Total interest-bearing liabilities		4,194,873			3,925,343			3,641,349			3,312,898			3,116,912
Noninterest-bearing liabilities:
Noninterest-bearing deposits		712,081			721,536			788,572			789,214			768,088
Other noninterest-bearing liabilities		88,363			101,820			101,621			80,304			75,186
Total liabilities		4,995,317			4,748,699			4,531,542			4,182,416			3,960,186
Total stockholders' equity		600,259			618,330			615,752			628,548			641,757
Total liabilities and stockholders' equity	$	5,595,576		$	5,367,029		$	5,147,294		$	4,810,964		$	4,601,943
	Annualized Yield Trend - Quarters Ended
	June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
Interest-earning assets:
Investment securities (1)		2.14	%		2.18	%		2.09	%		2.00	%		1.92	%
Other interest-earning assets		4.93	%		5.13	%		3.34	%		2.05	%		0.81	%
Loans held for sale		6.67	%		6.41	%		5.93	%		5.33	%		4.51	%
Commercial loans (2)(3)		5.30	%		5.15	%		4.92	%		4.45	%		4.25	%
Residential real estate loans (3)(4)		3.92	%		3.85	%		3.64	%		3.50	%		3.37	%
Consumer loans (3)		5.79	%		5.80	%		5.50	%		4.99	%		4.71	%
Total loans		4.81	%		4.69	%		4.47	%		4.11	%		3.96	%
Total interest-earning assets		4.63	%		4.51	%		4.27	%		3.93	%		3.73	%
Interest-bearing liabilities:
Savings accounts		1.74	%		1.51	%		1.01	%		0.37	%		0.20	%
NOW accounts		0.08	%		0.05	%		0.05	%		0.05	%		0.05	%
Money market accounts		3.13	%		2.58	%		1.50	%		0.61	%		0.30	%
Certificates of deposit		2.99	%		1.97	%		0.86	%		0.64	%		0.55	%
Brokered deposits		3.29	%		3.08	%		1.32	%		0.27	%		0.20	%
Total interest-bearing deposits		2.30	%		1.87	%		1.05	%		0.45	%		0.27	%
FHLB and FRB borrowings		4.88	%		4.62	%		3.74	%		2.45	%		1.36	%
Subordinated debentures		6.12	%		6.18	%		6.07	%		6.07	%		6.14	%
Total borrowings		4.94	%		4.73	%		3.93	%		2.99	%		3.74	%
Total interest-bearing liabilities		2.74	%		2.23	%		1.39	%		0.63	%		0.34	%
(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) Includes the basis adjustments of certain loans included in fair value hedging relationships.

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
Performance Ratios (annualized):	2023			2023			2022			2022			2022
(dollars in thousands)											��
Return on average assets (ROAA)		0.54	%		0.54	%		0.74	%		1.14	%		0.87	%
Return on average equity (ROAE)		4.98	%		4.72	%		6.22	%		8.76	%		6.22	%
Total noninterest expense	$	31,725		$	31,509		$	34,644		$	34,473		$	34,954
Less: Amortization of other intangible assets		189			189			189			235			235
Total adjusted noninterest expense	$	31,536		$	31,320		$	34,455		$	34,238		$	34,719
Net interest and dividend income	$	32,100		$	34,398		$	39,189		$	39,332		$	37,195
Total noninterest income		12,662			8,690			9,900			14,245			14,103
Total revenue	$	44,762		$	43,088		$	49,089		$	53,577		$	51,298
Efficiency ratio (1)		70.45	%		72.69	%		70.19	%		63.90	%		67.68	%
(1) This non-GAAP measure represents adjusted noninterest expense divided by total revenue

	At or for the Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
Asset Quality	2023			2023			2022			2022			2022
(dollars in thousands)
Total nonperforming assets	$	20,210		$	12,300		$	14,840		$	23,367		$	24,441
Nonperforming assets to total assets		0.36	%		0.22	%		0.28	%		0.47	%		0.52	%
Allowance for credit losses on loans to total loans		1.02	%		1.02	%		0.99	%		1.06	%		1.11	%
Net charge-offs (recoveries)	$	2,671		$	(11)		$	2,067		$	(799)		$	(504)
Annualized net charge-offs (recoveries)/average loans		0.23	%		—	%		0.19	%		(0.08)	%		(0.05)	%
Allowance for credit losses on loans to nonperforming loans		236.62	%		383.50	%		305.93	%		191.60	%		178.41	%

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
Capital and Share Related	2023			2023			2022			2022			2022
(dollars in thousands, except share data)
Common stock outstanding		46,575,478			47,063,087			48,961,452			49,202,660			49,989,007
Book value per share	$	12.79		$	12.74		$	12.60		$	12.43		$	12.49
Tangible common equity:
Total stockholders' equity	$	595,532		$	599,794		$	616,976		$	611,370		$	624,478
Less: Goodwill		69,802			69,802			69,802			69,802			69,802
Less: Other intangible assets (1)		1,893			2,082			2,272			2,461			2,695
Tangible common equity	$	523,837		$	527,910		$	544,902		$	539,107		$	551,981
Tangible book value per share (2)	$	11.25		$	11.22		$	11.13		$	10.96		$	11.04
Tangible assets:
Total assets	$	5,659,254		$	5,572,858		$	5,359,545		$	4,987,643		$	4,704,044
Less: Goodwill		69,802			69,802			69,802			69,802			69,802
Less: Other intangible assets		1,893			2,082			2,272			2,461			2,695
Tangible assets	$	5,587,559		$	5,500,974		$	5,287,471		$	4,915,380		$	4,631,547
Tangible common equity / tangible assets (3)		9.38	%		9.60	%		10.31	%		10.97	%		11.92	%
(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
	June 30,		March 31,		June 30,		June 30,		March 31,		June 30,
	2023		2023		2022		2023		2023		2022
	(in thousands)
Net interest and dividend income	$	120	$	327	$	411	$	32,490	$	34,562	$	37,246
Provision for credit losses		—		—		—		3,283		1,866		2,546
Net interest and dividend income, after provision for credit losses		120		327		411		29,207		32,696		34,700
Mortgage banking income:
Gain on sale of mortgage loans		3,300		2,224		4,538		—		—		—
Intersegment gain (loss)		90		454		1,097		(358)		(348)		(1,095)
Changes in mortgage servicing rights fair value		407		(1,556)		735		29		(136)		127
Other		2,117		2,015		2,393		195		201		219
Total mortgage banking income (loss)		5,914		3,137		8,763		(134)		(283)		(749)
Other noninterest income		—		—		7		6,614		5,942		6,084
Total noninterest income		5,914		3,137		8,770		6,480		5,659		5,335
Noninterest expense		5,493		5,322		7,242		26,193		26,190		27,131
Income (loss) before income taxes		541		(1,858)		1,939		9,494		12,165		12,904
Provision (benefit) for income taxes		232		(565)		549		2,193		3,115		3,550
Net income (loss)	$	309	$	(1,293)	$	1,390	$	7,301	$	9,050	$	9,354

	HarborOne Mortgage				HarborOne Bank
	For the Six Months Ended				For the Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2023		2022		2023		2022
	(in thousands)
Net interest and dividend income	$	447	$	761	$	67,052	$	70,670
Provision for credit losses		—		—		5,149		2,884
Net interest and dividend income, after provision for credit losses		447		761		61,903		67,786
Mortgage banking income:
Gain on sale of mortgage loans		5,524		9,860		—		—
Intersegment gain (loss)		544		1,934		(706)		(1,703)
Changes in mortgage servicing rights fair value		(1,149)		5,430		(107)		717
Other		4,132		4,718		396		452
Total mortgage banking income (loss)		9,051		21,942		(417)		(534)
Other noninterest income		—		16		12,556		11,971
Total noninterest income		9,051		21,958		12,139		11,437
Noninterest expense		10,815		15,003		52,383		53,956
(Loss) income before income taxes		(1,317)		7,716		21,659		25,267
(Benefit) provision for income taxes		(333)		2,090		5,308		7,107
Net (loss) income	$	(984)	$	5,626	$	16,351	$	18,160