Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 01, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2023 | |
Entity File Number | 001-38955 | |
Entity Registrant Name | HarborOne Bancorp, Inc. | |
Entity Incorporation, State or Country Code | MA | |
Entity Tax Identification Number | 81-1607465 | |
Entity Address, Address Line One | 770 Oak Street | |
Entity Address, City or Town | Brockton | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02301 | |
City Area Code | 508 | |
Local Phone Number | 895-1000 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | HONE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 46,545,478 | |
Entity Central Index Key | 0001769617 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and due from banks | $ 43,525 | $ 39,712 |
Short-term investments | 209,326 | 58,305 |
Total cash and cash equivalents | 252,851 | 98,017 |
Securities available for sale, at fair value | 292,012 | 301,149 |
Securities held to maturity, at amortized cost (fair value of $19,005 at June 30, 2023 and $19,274 at December 31, 2022) | 19,839 | 19,949 |
Federal Home Loan Bank stock, at cost | 27,123 | 20,071 |
Asset held for sale | 966 | |
Loans held for sale, at fair value | 20,949 | 18,544 |
Loans | 4,698,203 | 4,549,670 |
Less: Allowance for credit losses on loans | (47,821) | (45,236) |
Net loans | 4,650,382 | 4,504,434 |
Accrued interest receivable | 16,948 | 15,139 |
Mortgage servicing rights, at fair value | 48,176 | 48,138 |
Property and equipment, net | 48,773 | 49,045 |
Retirement plan annuities | 14,877 | 14,630 |
Bank-owned life insurance | 92,964 | 91,953 |
Goodwill | 69,802 | 69,802 |
Intangible assets | 1,893 | 2,272 |
Other assets | 101,699 | 106,402 |
Total assets | 5,659,254 | 5,359,545 |
Deposits: | ||
Demand deposit accounts | 717,572 | 762,576 |
NOW accounts | 286,956 | 297,692 |
Regular savings and club accounts | 1,390,906 | 1,468,172 |
Money market deposit accounts | 834,120 | 861,704 |
Term certificate accounts | 742,931 | 497,975 |
Brokered deposits | 315,003 | 301,380 |
Total deposits | 4,287,488 | 4,189,499 |
FHLB borrowings | 604,568 | 400,675 |
Subordinated debt | 34,348 | 34,285 |
Mortgagors' escrow accounts | 11,073 | 9,537 |
Accrued interest payable | 4,845 | 2,325 |
Other liabilities and accrued expenses | 121,400 | 106,248 |
Total liabilities | 5,063,722 | 4,742,569 |
Commitments and contingencies (Notes 7, 12 and 13) | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 60,203,459 and 60,061,527 shares issued; 46,575,478 and 48,961,452 shares outstanding at June 30, 2023 and December 31, 2022, respectively | 597 | 596 |
Additional paid-in capital | 484,544 | 483,031 |
Retained earnings | 364,709 | 356,438 |
Treasury stock, at cost, 13,627,981 and 11,100,075 shares at June 30, 2023 and December 31, 2022, respectively | (181,324) | (148,384) |
Accumulated other comprehensive loss | (46,290) | (47,082) |
Unearned compensation - ESOP | (26,704) | (27,623) |
Total stockholders' equity | 595,532 | 616,976 |
Total liabilities and stockholders' equity | $ 5,659,254 | $ 5,359,545 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Consolidated Balance Sheets | ||
Held-to-maturity Securities, Fair Value | $ 19,005 | $ 19,274 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common Stock, shares issued | 60,203,459 | 60,061,527 |
Common stock, shares outstanding | 46,575,478 | 48,961,452 |
Treasury, shares | 13,627,981 | 11,100,075 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Interest and dividend income: | ||||
Interest and fees on loans | $ 55,504 | $ 37,522 | $ 108,275 | $ 71,098 |
Interest on loans held for sale | 326 | 331 | 612 | 595 |
Interest on taxable securities | 2,035 | 1,873 | 4,114 | 3,574 |
Other interest and dividend income | 2,935 | 131 | 3,738 | 192 |
Total interest and dividend income | 60,800 | 39,857 | 116,739 | 75,459 |
Interest expense: | ||||
Interest on deposits | 20,062 | 2,019 | 35,975 | 3,640 |
Interest on FHLB and FRB borrowings | 8,114 | 119 | 13,219 | 307 |
Interest on subordinated debentures | 524 | 524 | 1,047 | 1,047 |
Total interest expense | 28,700 | 2,662 | 50,241 | 4,994 |
Net interest and dividend income | 32,100 | 37,195 | 66,498 | 70,465 |
Provision for credit losses | 3,283 | 2,546 | 5,149 | 2,884 |
Net interest and dividend income, after provision for credit losses | 28,817 | 34,649 | 61,349 | 67,581 |
Mortgage banking income: | ||||
Gain on sale of mortgage loans | 3,300 | 4,538 | 5,524 | 9,860 |
Changes in mortgage servicing rights fair value | 436 | 862 | (1,256) | 6,147 |
Other | 2,312 | 2,612 | 4,528 | 5,170 |
Total mortgage banking income | 6,048 | 8,012 | 8,796 | 21,177 |
Deposit account fees | 5,012 | 4,892 | 9,745 | 9,364 |
Income on retirement plan annuities | 128 | 112 | 247 | 219 |
Bank-owned life insurance income | 511 | 494 | 1,011 | 977 |
Other income | 963 | 593 | 1,553 | 1,427 |
Total noninterest income | 12,662 | 14,103 | 21,352 | 33,164 |
Noninterest expense: | ||||
Compensation and benefits | 18,220 | 21,455 | 36,019 | 42,178 |
Occupancy and equipment | 4,633 | 4,575 | 9,673 | 10,003 |
Data processing | 2,403 | 2,259 | 4,749 | 4,500 |
Loan expenses | 417 | 385 | 730 | 863 |
Marketing | 925 | 986 | 2,106 | 2,204 |
Deposit expenses | 326 | 513 | 860 | 1,059 |
Postage and printing | 425 | 412 | 882 | 831 |
Professional fees | 1,114 | 1,680 | 2,615 | 3,219 |
Foreclosed and repossessed assets | 5 | 52 | (12) | 18 |
Deposit insurance | 1,176 | 354 | 1,686 | 703 |
Other expenses | 2,081 | 2,283 | 3,926 | 4,211 |
Total noninterest expense | 31,725 | 34,954 | 63,234 | 69,789 |
Income before income taxes | 9,754 | 13,798 | 19,467 | 30,956 |
Income tax provision | 2,275 | 3,811 | 4,691 | 8,702 |
Net income | $ 7,479 | $ 9,987 | $ 14,776 | $ 22,254 |
Earnings per common share: | ||||
Basic | $ 0.17 | $ 0.21 | $ 0.34 | $ 0.47 |
Diluted | $ 0.17 | $ 0.21 | $ 0.33 | $ 0.46 |
Weighted average shares outstanding: | ||||
Weighted average common shares, basic | 43,063,507 | 46,980,830 | 43,955,411 | 47,406,257 |
Weighted average common shares, diluted | 43,133,455 | 47,536,033 | 44,203,893 | 48,110,863 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Consolidated Statements of Comprehensive (Loss) Income | ||||
Net income | $ 7,479 | $ 9,987 | $ 14,776 | $ 22,254 |
Unrealized gain/loss on cashflow hedge: | ||||
Unrealized holding gains | 1,577 | 939 | 1,407 | 4,728 |
Reclassification adjustment for net (gains) losses included in net income | (1,134) | (71) | (2,152) | 40 |
Net change in unrealized (losses) gains on derivatives in cashflow hedging instruments | 443 | 868 | (745) | 4,768 |
Related tax effect | (124) | (244) | 210 | (1,340) |
Net-of-tax amount | 319 | 624 | (535) | 3,428 |
Unrealized gain/loss on securities available for sale: | ||||
Unrealized holding gains (losses) | (5,366) | (20,323) | 1,723 | (46,252) |
Related tax effect | 1,205 | 4,479 | (358) | 10,194 |
Net-of-tax amount | (4,161) | (15,844) | 1,365 | (36,058) |
Postretirement benefit: | ||||
Adjustment of accumulated obligation for postretirement benefits | 1 | 1 | ||
Reclassification adjustment for gains recognized in net periodic benefit cost | (39) | (39) | ||
Net gains | (38) | (38) | ||
Total other comprehensive income (loss) | (3,880) | (15,220) | 792 | (32,630) |
Comprehensive income (loss) | $ 3,599 | $ (5,233) | $ 15,568 | $ (10,376) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Additional Paid-in Capital | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Treasury Stock, at Cost | Accumulated Other Comprehensive Income (Loss) | Unearned Compensation - ESOP | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance at beginning of period at Dec. 31, 2021 | $ 585,000 | $ 469,934,000 | $ (1,884,000) | $ 325,699,000 | $ (85,859,000) | $ (1,637,000) | $ (29,461,000) | $ (1,884,000) | $ 679,261,000 |
Balance, beginning of period (in shares) at Dec. 31, 2021 | 52,390,478 | ||||||||
Comprehensive income (loss) | 22,254,000 | (32,630,000) | (10,376,000) | ||||||
Dividends declared per share | (6,598,000) | (6,598,000) | |||||||
ESOP shares committed to be released | 724,000 | 919,000 | 1,643,000 | ||||||
Restricted stock awards granted, net of forfeitures (in shares) | 100,816 | ||||||||
Performance stock units vested (in shares) | 14,596 | ||||||||
Share-based compensation expense | 2,000,000 | 2,000,000 | |||||||
Stock option exercised | $ 8,000 | 6,861,000 | 6,869,000 | ||||||
Stock option exercised (in shares) | 722,705 | ||||||||
Treasury stock purchased | (46,437,000) | (46,437,000) | |||||||
Treasury stock purchased (in shares) | (3,239,588) | ||||||||
Balance at end of period at Jun. 30, 2022 | $ 593,000 | 479,519,000 | 339,471,000 | (132,296,000) | (34,267,000) | (28,542,000) | 624,478,000 | ||
Balance, end of period (in shares) at Jun. 30, 2022 | 49,989,007 | ||||||||
Balance at beginning of period at Mar. 31, 2022 | $ 591,000 | 477,302,000 | 332,734,000 | (113,513,000) | (19,047,000) | (29,002,000) | 649,065,000 | ||
Balance, beginning of period (in shares) at Mar. 31, 2022 | 51,257,696 | ||||||||
Comprehensive income (loss) | 9,987,000 | (15,220,000) | (5,233,000) | ||||||
Dividends declared per share | (3,250,000) | (3,250,000) | |||||||
ESOP shares committed to be released | 337,000 | 460,000 | 797,000 | ||||||
Restricted stock awards granted, net of forfeitures (in shares) | (8,181) | ||||||||
Performance stock units vested (in shares) | 14,596 | ||||||||
Share-based compensation expense | 1,029,000 | 1,029,000 | |||||||
Stock option exercised | $ 2,000 | 851,000 | 853,000 | ||||||
Stock option exercised (in shares) | 83,263 | ||||||||
Treasury stock purchased | (18,783,000) | (18,783,000) | |||||||
Treasury stock purchased (in shares) | (1,358,367) | ||||||||
Balance at end of period at Jun. 30, 2022 | $ 593,000 | 479,519,000 | 339,471,000 | (132,296,000) | (34,267,000) | (28,542,000) | 624,478,000 | ||
Balance, end of period (in shares) at Jun. 30, 2022 | 49,989,007 | ||||||||
Balance at beginning of period at Dec. 31, 2022 | $ 596,000 | 483,031,000 | 356,438,000 | (148,384,000) | (47,082,000) | (27,623,000) | $ 616,976,000 | ||
Balance, beginning of period (in shares) at Dec. 31, 2022 | 48,961,452 | 48,961,452 | |||||||
Comprehensive income (loss) | 14,776,000 | 792,000 | $ 15,568,000 | ||||||
Dividends declared per share | (6,505,000) | (6,505,000) | |||||||
ESOP shares committed to be released | 403,000 | 919,000 | 1,322,000 | ||||||
Restricted stock awards granted, net of forfeitures | $ 141,932 | ||||||||
Share-based compensation expense | 1,000 | 1,110,000 | 1,111,000 | ||||||
Treasury stock purchased | (2,527,906) | (32,940,000) | (32,940,000) | ||||||
Balance at end of period at Jun. 30, 2023 | $ 597,000 | 484,544,000 | 364,709,000 | (181,324,000) | (46,290,000) | (26,704,000) | $ 595,532,000 | ||
Balance, end of period (in shares) at Jun. 30, 2023 | 46,575,478 | 46,575,478 | |||||||
Balance at beginning of period at Mar. 31, 2023 | $ 597,000 | 483,831,000 | 360,454,000 | (175,514,000) | (42,410,000) | (27,164,000) | $ 599,794,000 | ||
Balance, beginning of period (in shares) at Mar. 31, 2023 | 47,063,087 | ||||||||
Comprehensive income (loss) | 7,479,000 | (3,880,000) | 3,599,000 | ||||||
Dividends declared per share | (3,224,000) | (3,224,000) | |||||||
ESOP shares committed to be released | 91,000 | 460,000 | 551,000 | ||||||
Restricted stock awards granted, net of forfeitures (in shares) | (15,127) | ||||||||
Share-based compensation expense | 622,000 | 622,000 | |||||||
Treasury stock purchased | (5,810,000) | (5,810,000) | |||||||
Treasury stock purchased (in shares) | (472,482) | ||||||||
Balance at end of period at Jun. 30, 2023 | $ 597,000 | $ 484,544,000 | $ 364,709,000 | $ (181,324,000) | $ (46,290,000) | $ (26,704,000) | $ 595,532,000 | ||
Balance, end of period (in shares) at Jun. 30, 2023 | 46,575,478 | 46,575,478 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Consolidated Statements of Changes in Stockholders' Equity | ||||
Dividends declared per share | $ 0.075 | $ 0.07 | $ 0.15 | $ 0.14 |
ESOP shares committed to be released (in shares) | 57,681 | 57,681 | 115,362 | 115,362 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 14,776 | $ 22,254 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Provision for credit losses | 5,149 | 2,884 |
Net amortization of securities premiums/discounts | 223 | 643 |
Proceeds from sale of loans | 198,615 | 357,324 |
Loans originated for sale | (195,460) | (334,293) |
Accretion of net deferred loan costs/fees and premiums | (130) | (381) |
Depreciation and amortization of premises and equipment | 1,925 | 1,948 |
Change in mortgage servicing rights fair value | 1,256 | (6,147) |
Mortgage servicing rights capitalized | (1,294) | (2,715) |
Accretion of fair value adjustment on loans and deposits, net | (106) | (713) |
Amortization of other intangible assets | 379 | 469 |
Amortization of subordinated debt issuance costs | 63 | 63 |
Net gains on mortgage loan sales, including fair value adjustments | (5,560) | (9,068) |
Bank-owned life insurance income | (1,011) | (977) |
Income on retirement plan annuities | (247) | (219) |
Write-down of asset held for sale | 196 | |
Net gain on sale and write-down of other real estate owned and repossessed assets | (13) | (30) |
ESOP expense | 1,322 | 1,643 |
Share-based compensation expense | 1,111 | 2,000 |
Net change in: | ||
Increase in operating lease ROU assets | 840 | 304 |
Increase in operating lease liabilities | (833) | (1,266) |
Change in other assets | (378) | 2,491 |
Change in other liabilities | 20,941 | (15,350) |
Net cash provided by operating activities | 41,568 | 21,060 |
Activity in securities available for sale: | ||
Maturities, prepayments and calls | 10,634 | 28,845 |
Purchases | (16,102) | |
Activity in securities held to maturity: | ||
Maturities, prepayment and calls | 113 | |
Purchases | (10,000) | |
Net redemption (purchase) of FHLB stock | (7,052) | 306 |
Proceeds on asset held for sale | 685 | |
Loan pool purchase | (58,311) | |
Participation-in loan purchases | (16,276) | (68,383) |
Net loan originations | (135,216) | (178,772) |
Proceeds from sale of other real estate owned and repossessed assets | 215 | 220 |
Additions to property and equipment | (2,619) | (596) |
Net cash used by investing activities | (150,201) | (302,108) |
Cash flows from financing activities: | ||
Net increase in deposits | 97,906 | 165,237 |
Net change in short-term borrowed funds | 29,000 | 90,000 |
Proceeds from FHLB borrowings | 175,000 | |
Repayment of FHLB borrowings | (107) | (40,018) |
Net change in mortgagors' escrow accounts | 1,536 | 1,180 |
Proceeds from exercise of stock options | 6,869 | |
Treasury stock purchased | (32,940) | (46,437) |
Dividends paid | (6,928) | (6,164) |
Net cash provided by financing activities | 263,467 | 170,667 |
Net change in cash and cash equivalents | 154,834 | (110,381) |
Cash and cash equivalents at beginning of period | 98,017 | 194,719 |
Cash and cash equivalents at end of period | 252,851 | 84,338 |
Supplemental cash flow information: | ||
Interest paid on deposits | 35,142 | 3,355 |
Interest paid on borrowed funds | 13,438 | 1,397 |
Income taxes paid, net | 5,005 | 4,621 |
Transfer of loans to other real estate owned and repossessed assets | 173 | 163 |
Dividends declared | $ 6,505 | $ 6,598 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The unaudited interim Consolidated Financial Statements of HarborOne Bancorp, Inc. presented herein have been prepared pursuant to the rules of the SEC for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by GAAP. In the opinion of management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying Consolidated Financial Statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the years ended December 31, 2022 and 2021 and notes thereto included in the Company’s Annual Report on Form 10-K. The unaudited interim Consolidated Financial Statements include the accounts of the Company; the Company’s subsidiaries, Legion Parkway Company LLC (a security corporation) and HarborOne Bank; and the Bank’s wholly-owned subsidiaries, which consist of HarborOne Mortgage, LLC, HarborOne Security Company, Inc. and a passive investment corporation The passive investment corporation maintains and manages certain assets of the Bank. The security company was established for the purpose of buying, holding and selling securities on its own behalf. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. These changes and reclassifications did not impact previously reported net income or comprehensive income. Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 30 full-service branches in Massachusetts and Rhode Island, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains offices in Florida, Maine, Massachusetts, New Hampshire, New Jersey and Rhode Island and originates loans in five additional states. The Company’s primary deposit products are checking, money market, savings, and term certificate of deposit accounts, while its primary lending products are commercial real estate, commercial, residential mortgages, home equity, and consumer loans. The Company also originates, sells and services residential mortgage loans through HarborOne Mortgage. Risks and Uncertainties During the first quarter of 2023, the banking industry experienced significant volatility with multiple high-profile bank failures and industry-wide concerns related to liquidity, deposit outflows, unrealized securities losses and eroding consumer confidence in the banking system. In response to these events, the Treasury, the Federal Reserve, and the FDIC jointly announced the BTFP on March 12, 2023. This program aims to enhance liquidity by allowing institutions to pledge certain securities at the par value of the securities, and at a borrowing rate of ten basis points over the one-year overnight index swap rate. The BTFP is available to eligible U.S. federally insured depository institutions, with advances having a term of up to one year and no prepayment penalties. Macroeconomic trends are mixed as uncertainty remains about the economy and banking industry. Reliance on secondary funding sources could increase the Company’s overall cost of funds and thereby reduce net income. While the Company believes its current sources of liquidity are adequate to fund operations, there is no guarantee they will suffice to meet future liquidity demands. This may necessitate slowing or discontinuing loan growth, capital expenditures, or other investments, or liquidating assets. Additionally, the Company could experience adverse effects on its business, financial condition, results of operations and cash flows if there is severe or prolonged inflation, a recession, further escalation of the current geopolitical situation, or sustained supply chain disruptions. While asset quality continues to point to economic recovery, the Company’s customers could experience similar adverse effects from these uncertainties that would impair their ability to fulfill their financial obligations to the Company resulting in deteriorating credit quality and loan charge-offs. Summary of Significant Accounting Policies and Recently Adopted Accounting Standards Updates Significant accounting policies in effect and disclosed within the Company’s most recent audited Consolidated Financial Statements as of December 31, 2022 remain substantially unchanged. In March 2022, the FASB issued ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures” ASU 2022-02 also requires that public business entities disclose current-period gross charge-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, “Financial Instruments—Credit Losses—Measured at Amortized Cost.” The Company adopted ASU 2022-02 effective January 1, 2023 on a modified retrospective basis. The adoption of ASU 2022-02 did not have a material impact on the Company’s Consolidated Financial Statements. |
DEBT SECURITIES
DEBT SECURITIES | 6 Months Ended |
Jun. 30, 2023 | |
DEBT SECURITIES | |
DEBT SECURITIES | 2. DEBT SECURITIES The following is a summary of securities available for sale and held to maturity: Gross Gross Allowance Amortized Unrealized Unrealized for Credit Fair Cost Gains Losses Losses Value (in thousands) June 30, 2023: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 47,143 $ — $ 7,958 $ — $ 39,185 U.S. government agency and government-sponsored residential mortgage-backed securities 305,959 — 58,092 — 247,867 U.S. government-sponsored collateralized mortgage obligations 2,238 — 112 — 2,126 SBA asset-backed securities 2,204 — 172 — 2,032 Corporate bonds 1,000 — 198 — 802 Total securities available for sale $ 358,544 $ — $ 66,532 $ — $ 292,012 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 15,000 $ — $ 680 $ — $ 14,320 SBA asset-backed securities 4,839 — 154 — 4,685 Total securities held to maturity $ 19,839 $ — $ 834 $ — $ 19,005 Gross Gross Allowance Amortized Unrealized Unrealized for Credit Fair Cost Gains Losses Losses Value (in thousands) December 31, 2022: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 47,143 $ — $ 8,649 $ — $ 38,494 U.S. government agency and government-sponsored residential mortgage-backed securities 315,964 — 59,149 — 256,815 U.S. government-sponsored collateralized mortgage obligations 2,612 — 113 — 2,499 SBA asset-backed securities 2,685 — 190 — 2,495 Corporate bonds 1,000 — 154 — 846 Total securities available for sale $ 369,404 $ — $ 68,255 $ — $ 301,149 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 15,000 $ — $ 597 $ — $ 14,403 SBA asset-backed securities 4,949 — 78 — 4,871 Total securities held to maturity $ 19,949 $ — $ 675 $ — $ 19,274 Accrued interest receivable is excluded from the amortized cost basis of debt securities. Accrued interest receivable totaled $944,000 and $957,000 as of June 30, 2023 and December 31, 2022, respectively. At June 30, 2023, available-for-sale debt securities with a fair value of $289.2 million and held-to-maturity securities with an amortized cost of $15.0 million were pledged as collateral to provide BTFP borrowing capacity. The amortized cost and fair value of debt securities by contractual maturity at June 30, 2023 is as follows: Available for Sale Held to Maturity Amortized Fair Amortized Fair Cost Value Cost Value (in thousands) After 1 year through 5 years $ 5,000 $ 4,736 $ 15,000 $ 14,320 After 5 years through 10 years 43,143 35,251 — — Over 10 years — — — — 48,143 39,987 15,000 14,320 U.S. government agency and government-sponsored residential mortgage-backed securities 305,959 247,867 — — U.S. government-sponsored collateralized mortgage obligations 2,238 2,126 — — SBA asset-backed securities 2,204 2,032 4,839 4,685 Total $ 358,544 $ 292,012 $ 19,839 $ 19,005 U.S. government-sponsored residential mortgage-backed securities, collateralized mortgage obligations, and securities whose underlying assets are loans from the SBA have stated maturities of two to 28 years ; however, it is expected that such securities will have shorter actual lives due to prepayments. U.S. government and government-sponsored enterprise obligations and corporate bonds are callable at the discretion of the issuer. U.S. government and government-sponsored enterprise obligations and corporate bonds with a total fair value of $54.3 million have a final maturity of four to nine years and a call feature of one month to four years . At June 30, 2023, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholder equity. There were no sales or calls of securities in the three and six months ended June 30, 2023 and 2022, respectively. Information pertaining to securities with gross unrealized losses at June 30, 2023 and December 31, 2022 aggregated by investment category and length of time that individual securities have been in a continuous loss position follows: Less Than Twelve Months Twelve Months and Over Gross Gross Unrealized Fair Unrealized Fair Losses Value Losses Value (in thousands) June 30, 2023: Securities available for sale U.S. government and government-sponsored enterprise obligations $ — $ — $ 7,958 $ 39,185 U.S. government agency and government-sponsored residential mortgage-backed securities 67 1,547 58,025 246,286 U.S. government-sponsored collateralized mortgage obligations — — 112 2,126 SBA asset-backed securities — — 172 2,032 Corporate bonds — — 198 802 $ 67 $ 1,547 $ 66,465 $ 290,431 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 175 $ 4,825 505 9,495 SBA asset-backed securities 154 4,685 — — $ 329 $ 9,510 $ 505 $ 9,495 December 31, 2022: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 249 $ 4,751 $ 8,400 $ 33,743 U.S. government agency and government-sponsored residential mortgage-backed securities 3,620 35,214 55,529 221,566 U.S. government-sponsored collateralized mortgage obligations 113 2,499 — — SBA asset-backed securities 190 2,495 — — Corporate bonds 154 846 — — $ 4,326 $ 45,805 $ 63,929 $ 255,309 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 597 $ 14,403 $ — $ — SBA asset-backed securities 78 4,871 — — $ 675 $ 19,274 $ — $ — Management assesses the decline in fair value of investment securities on a regular basis. Unrealized losses on debt securities may occur from current market conditions, increases in interest rates since the time of purchase, a structural change in an investment, volatility of earnings of a specific issuer, or deterioration in credit quality of the issuer. Management evaluates both qualitative and quantitative factors to assess whether an impairment exists. As of June 30, 2023, the Company’s security portfolio consisted of 132 debt securities, 131 of which were in an unrealized loss position. The unrealized losses are primarily related to the Company’s debt securities that were issued by U.S. government-sponsored entities and agencies. The Company does not believe that the debt securities that were in an unrealized loss position as of June 30, 2023 represent a credit loss impairment. As of June 30, 2023, and December 31, 2022, the gross unrealized loss positions were primarily related to mortgage-backed securities and other obligations issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government and have a long history of zero credit loss. Total gross unrealized losses were primarily attributable to changes in interest rates relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. Management reviewed the collectability of the corporate bonds taking into consideration such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, credit ratings, including ratings in effect as of the reporting period date as well as credit rating changes between the reporting period date and the filing date of this report, and other information. Management believes the unrealized losses on the corporate bonds are primarily attributable to changes in the investment spreads and interest rates and not changes in the credit quality of the issuers of the corporate bonds. Management expects to recover the entire amortized cost basis of the available-for-sale debt securities with an unrealized loss. Furthermore, the Company does not intend to sell these securities, and it is likely that the Company will not be required to sell these securities, before recovery of their cost basis, which may be at maturity. Therefore, no ACL was recorded at June 30, 2023. As of June 30, 2023, the held-to-maturity securities were U.S. government sponsored agency obligations. These securities are guaranteed by the government sponsored agency with a long history of no credit losses and Management has determined these securities to have a zero loss expectation and therefore does not estimate an allowance for credit losses on these securities. |
LOANS HELD FOR SALE
LOANS HELD FOR SALE | 6 Months Ended |
Jun. 30, 2023 | |
LOANS HELD FOR SALE | |
LOANS HELD FOR SALE | 3. LOANS HELD FOR SALE The following table provides the fair value and contractual principal balance outstanding of loans held for sale accounted for under the fair value option: June 30, December 31, 2023 2022 (in thousands) Loans held for sale, fair value $ 20,949 $ 18,544 Loans held for sale, contractual principal outstanding 20,578 18,208 Fair value less unpaid principal balance $ 371 $ 336 The Company has elected the fair value option for mortgage loans held for sale to better match changes in fair value of the loans with changes in the fair value of the forward sale commitment contracts used to economically hedge them. Changes in fair value of mortgage loans held for sale accounted for under the fair value option election amounted to an increase of $28,000 and $35,000 in the three and six months ended June 30, 2023, respectively, to $371,000, compared to an increase of $522,000 in the three months ended June 30, 2022 and a decrease of $791,000 in the six months ended June 30, 2022. These amounts are offset in earnings by the changes in fair value of forward sale commitments. The changes in fair value are reported as a component of gain on sale of mortgage loans in the Unaudited Consolidated Statements of Income. At June 30, 2023 and December 31, 2022, there were no loans held for sale that were greater than 90 days past due. |
LOANS AND ALLOWANCE FOR CREDIT
LOANS AND ALLOWANCE FOR CREDIT LOSSES | 6 Months Ended |
Jun. 30, 2023 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES A summary of the balances of loans follows: June 30, December 31, 2023 2022 (in thousands) Residential real estate: One- to four-family $ 1,504,142 $ 1,432,263 Second mortgages and equity lines of credit 171,073 166,219 Residential real estate construction 26,995 35,837 Total residential real estate loans 1,702,210 1,634,319 Commercial: Commercial real estate 2,286,688 2,250,344 Commercial construction 228,902 199,311 Commercial and industrial 453,422 424,275 Total commercial loans 2,969,012 2,873,930 Consumer loans: Auto 19,107 33,625 Personal 8,318 7,796 Total consumer loans 27,425 41,421 Total loans before basis adjustment 4,698,647 4,549,670 Basis adjustment associated with fair value hedge (1) (444) — Total loans 4,698,203 4,549,670 Allowance for credit losses on loans (47,821) (45,236) Loans, net $ 4,650,382 $ 4,504,434 (1) Note 10 - Derivatives The net unamortized deferred loan origination costs included in total loans and leases were $8.0 million and $7.4 million as of June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023 and December 31, 2022, the commercial and industrial loans includes $389,000 and $2.1 million, respectively, of SBA PPP loans and $52,000 and $65,000, respectively, of deferred fees on the PPP loans. PPP loans are fully guaranteed by the U.S. government. The Company has transferred a portion of its originated commercial loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying unaudited interim Consolidated Balance Sheets. The Company and participating lenders share ratably in cash flows and any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders, and disburses required escrow funds to relevant parties. At June 30, 2023 and December 31, 2022, the Company was servicing commercial loans for participants in the aggregate amount of $386.5 million and $366.4 million, respectively. The following table presents the activity in the ACL on loans for the three and six months ended June 30, 2023 and 2022: Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Total (in thousands) Balance at March 31, 2023 $ 11,508 $ 967 $ 755 $ 20,942 $ 5,057 $ 7,484 $ 281 $ 46,994 Charge-offs — — — (2,918) — (28) (42) (2,988) Recoveries 1 36 — 1 — 275 4 317 Provision 676 9 (125) 2,574 316 19 29 3,498 Balance at June 30, 2023 $ 12,185 $ 1,012 $ 630 $ 20,599 $ 5,373 $ 7,750 $ 272 $ 47,821 Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Total (in thousands) Balance at December 31, 2022 $ 11,532 $ 924 $ 280 $ 20,357 $ 4,645 $ 7,236 $ 262 $ 45,236 Charge-offs — — — (2,918) — (35) (49) (3,002) Recoveries 2 43 — 2 — 275 20 342 Provision 651 45 350 3,158 728 274 39 5,245 Balance at June 30, 2023 $ 12,185 $ 1,012 $ 630 $ 20,599 $ 5,373 $ 7,750 $ 272 $ 47,821 Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Total (in thousands) Balance at March 31, 2022 $ 8,884 $ 833 $ 314 $ 20,131 $ 4,210 $ 6,949 $ 444 $ 41,765 Charge-offs — — — — — — (11) (11) Recoveries — 81 — 6 — 406 23 516 Provision 1,198 (65) 13 294 160 (181) (129) 1,290 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ 43,560 Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2021 $ 3,631 $ 420 $ 69 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 Adoption of Topic 326 5,198 391 185 (10,194) 1,698 2,288 123 (1,000) (1,311) Charge-offs — — — (2,786) — (40) (31) — (2,857) Recoveries — 93 — 6 — 473 60 — 632 Provision 1,253 (55) 73 163 662 (185) (192) — 1,719 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ — $ 43,560 As of June 30, 2023, the carrying value of individually analyzed loans amounted to $20.2 million, with a related allowance of $80,000, and $20.0 million of individually analyzed loans were considered collateral-dependent. As of December 31, 2022, the carrying value of individually analyzed loans amounted to $23.8 million, with a related allowance of $203,000, and $15.9 million were considered collateral-dependent. For collateral-dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. The following table presents the carrying value of collateral-dependent individually analyzed loans as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 Related Related Carrying Value Allowance Carrying Value Allowance (in thousands) Commercial: Commercial real estate $ 8,959 $ 54 $ 2,039 $ — Commercial and industrial 2,196 21 3,329 7 Commercial construction — — — — Total Commercial 11,155 75 5,368 7 Residential real estate 8,842 2 10,494 1 Total $ 19,997 $ 77 $ 15,862 $ 8 The following is a summary of past due and non-accrual loans at June 30, 2023 and December 31, 2022: 90 Days 30-59 Days 60-89 Days or More Total Loans on Past Due Past Due Past Due Past Due Non-accrual (in thousands) June 30, 2023 Residential real estate: One- to four-family $ 526 $ 709 $ 2,866 $ 4,101 $ 8,723 Second mortgages and equity lines of credit 181 132 47 360 332 Commercial real estate 6,999 — 79 7,078 8,960 Commercial construction — — — — — Commercial and industrial 10 104 1,298 1,412 2,183 Consumer: Auto 235 61 6 302 8 Personal 61 24 4 89 4 Total $ 8,012 $ 1,030 $ 4,300 $ 13,342 $ 20,210 December 31, 2022 Residential real estate: One- to four-family $ 3,711 $ 524 $ 6,526 $ 10,761 $ 8,927 Second mortgages and equity lines of credit 407 5 189 601 421 Commercial real estate — — 120 120 2,039 Commercial construction — — — — — Commercial and industrial 26 492 2,901 3,419 3,329 Consumer: Auto 348 101 51 500 64 Personal 18 — 6 24 6 Total $ 4,510 $ 1,122 $ 9,793 $ 15,425 $ 14,786 At June 30, 2023 and December 31, 2022, there were no loans past due 90 days or more and still accruing. Loan Modifications to Borrowers Experiencing Financial Difficulty Effective January 1, 2023, ASU 2022-02 Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures was adopted. The Bank will modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss and comply with regulations regarding bankruptcy and discharge situations. Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, forbearances, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. There were no material loan modifications based on borrower financial difficulty during the three and six months ended June 30, 2023 and 2022. There were no loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2023 and 2022 and were modified in the twelve months prior to that default. Default is determined at 90 or more days past due, upon charge-off, or upon foreclosure. Modified loans in default are individually evaluated for the allowance for credit losses or if the modified loan is deemed uncollectible, the loan, or a portion of the loan, is written off, and the allowance for credit losses is adjusted accordingly. Credit Quality Indicators Commercial The Company uses a ten-grade internal loan rating system for commercial real estate, commercial construction and commercial loans, as follows: Loans rated 1 – 6 are considered “pass”-rated loans with low to average risk. Loans rated 7 are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management. Loans rated 8 are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected. Loans rated 9 are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. Loans rated 10 are considered “uncollectible” (loss), and of such little value that their continuance as loans is not warranted. Loans not rated consist primarily of certain smaller balance commercial real estate and commercial loans that are managed by exception. On an annual basis, or more often if needed, the Company formally reviews on a risk-adjusted basis, the ratings on all commercial real estate, construction and commercial loans. Semi-annually, the Company engages an independent third party to review a significant portion of loans within these segments. Management uses the results of these reviews as part of its annual review process. Residential and Consumer On a monthly basis, the Company reviews the residential construction, residential real estate and consumer installment portfolios for credit quality primarily through the use of delinquency reports. The following table summarizes the Company’s loan portfolio by credit quality indicator and loan portfolio segment as of June 30, 2023: Revolving Revolving Loans Loans Converted Term Loans at Amortized Cost by Origination Year Amortized to Term 2023 2022 2021 2020 2019 Prior Cost Loans Total (in thousands) As of June 30, 2023 Commercial real estate Pass $ 88,521 $ 825,188 $ 433,039 $ 240,382 $ 240,486 $ 423,597 $ — $ — $ 2,251,213 Special mention — 4,961 — — 9,159 12,395 — — 26,515 Substandard — — — — — 1,961 — — 1,961 Doubtful — — — — — 6,999 — — 6,999 Total commercial real estate 88,521 830,149 433,039 240,382 249,645 444,952 — — 2,286,688 YTD gross charge-offs — — — — — 2,918 — — 2,918 Commercial and industrial Pass 41,897 50,645 96,814 76,539 24,227 80,482 79,902 — 450,506 Special mention — 17 — — 2 714 — — 733 Substandard — 249 83 3 4 427 50 — 816 Doubtful — — — — — 1,317 50 — 1,367 Total commercial and industrial 41,897 50,911 96,897 76,542 24,233 82,940 80,002 — 453,422 YTD gross charge-offs — 18 10 2 4 1 — — 35 Commercial construction Pass 9,760 108,579 96,653 — 6,826 1,785 978 — 224,581 Special mention — — — 4,321 — — — — 4,321 Substandard — — — — — — — — — Doubtful — — — — — — — — — Total commercial construction 9,760 108,579 96,653 4,321 6,826 1,785 978 — 228,902 YTD gross charge-offs — — — — — — — — — Residential real estate Accrual 97,353 439,448 494,062 208,132 40,800 251,396 160,421 1,543 1,693,155 Non-accrual — — — 132 427 8,421 75 — 9,055 Total residential real estate 97,353 439,448 494,062 208,264 41,227 259,817 160,496 1,543 1,702,210 YTD gross charge-offs — — — — — — — — — Consumer Accrual 5,931 6,678 2,847 1,436 6,679 2,846 996 — 27,413 Non-accrual — — 4 — — 8 — — 12 Total Consumer 5,931 6,678 2,851 1,436 6,679 2,854 996 — 27,425 YTD gross charge-offs — 4 — 12 13 20 — — 49 Total loans before basis adjustment $ 243,462 $ 1,435,765 $ 1,123,502 $ 530,945 $ 328,610 $ 792,348 $ 242,472 $ 1,543 $ 4,698,647 Total YTD gross charge-offs $ — $ 22 $ 10 $ 14 $ 17 $ 2,939 $ — $ — $ 3,002 The following table summarizes the Company’s loan portfolio by credit quality indicator and loan portfolio segment as of December 31, 2022: Revolving Revolving Loans Loans Converted Term Loans at Amortized Cost by Origination Year Amortized to Term 2022 2021 2020 2019 2018 Prior Cost Loans Total (in thousands) As of December 31, 2022 Commercial real estate Pass $ 817,320 $ 441,277 $ 241,700 $ 254,221 $ 121,351 $ 340,634 $ — $ — $ 2,216,503 Special mention — — — 9,328 22,474 — — — 31,802 Substandard — — — — — 2,039 — — 2,039 Doubtful — — — — — — — — — Total commercial real estate 817,320 441,277 241,700 263,549 143,825 342,673 — — 2,250,344 Commercial and industrial Pass 53,078 95,600 82,170 26,568 37,358 50,500 76,647 — 421,921 Special mention — — — — 49 92 492 — 633 Substandard — 4 3 — 1 323 — — 331 Doubtful — — — — — 1,340 50 — 1,390 Total commercial and industrial 53,078 95,604 82,173 26,568 37,408 52,255 77,189 — 424,275 Commercial construction Pass 88,173 87,569 11,769 9,174 318 1,487 821 — 199,311 Special mention — — — — — — — — — Substandard — — — — — — — — — Doubtful — — — — — — — — — Total commercial construction 88,173 87,569 11,769 9,174 318 1,487 821 — 199,311 Residential real estate Accrual 443,034 507,679 211,429 42,314 25,232 239,677 154,038 1,568 1,624,971 Non-accrual — 203 140 201 1,258 7,411 96 39 9,348 Total residential real estate 443,034 507,882 211,569 42,515 26,490 247,088 154,134 1,607 1,634,319 Consumer Accrual 9,948 3,588 1,971 16,955 6,122 1,733 1,034 — 41,351 Non-accrual 1 — — 28 20 17 4 — 70 Total Consumer 9,949 3,588 1,971 16,983 6,142 1,750 1,038 — 41,421 Total loans $ 1,411,554 $ 1,135,920 $ 549,182 $ 358,789 $ 214,183 $ 645,253 $ 233,182 $ 1,607 $ 4,549,670 |
MORTGAGE LOAN SERVICING
MORTGAGE LOAN SERVICING | 6 Months Ended |
Jun. 30, 2023 | |
MORTGAGE LOAN SERVICING | |
MORTGAGE LOAN SERVICING | 5. MORTGAGE LOAN SERVICING The Company sells residential mortgages to government-sponsored entities and other parties. The Company retains no beneficial interests in these loans, but it may retain the servicing rights of the loans sold. Mortgage loans serviced for others are not included in the accompanying unaudited interim Consolidated Balance Sheets. The risks inherent in MSRs relate primarily to changes in prepayments that generally result from shifts in mortgage interest rates. The unpaid principal balance of mortgage loans serviced for others was $3.60 billion and $3.62 billion as of June 30, 2023 and December 31, 2022. The Company accounts for MSRs at fair value. The Company obtains and reviews valuations from an independent third party to determine the fair value of MSRs. Key assumptions used in the estimation of fair value include prepayment speeds, discount rates, and default rates June 30, December 31, 2023 2022 Prepayment speed 7.20 % 7.10 % Discount rate 9.90 9.81 Default rate 1.41 1.63 The following summarizes changes to MSRs for the three and six months ended June 30, 2023 and 2022: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Balance, beginning of period $ 47,080 $ 45,043 $ 48,138 $ 38,268 Additions 660 1,225 1,294 2,715 Changes in fair value due to: Reductions from loans paid off during the period (479) (771) (850) (1,604) Changes in valuation inputs or assumptions 915 1,633 (406) 7,751 Balance, end of period $ 48,176 $ 47,130 $ 48,176 $ 47,130 Contractually specified servicing fees, net of subservicing expense, included in other mortgage banking income amounted to $1.9 million and $3.9 million for the three and six months ended June 30, 2023 and $2.1 million and $4.0 million for the three and six months ended June 30, 2022. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS There were no changes in the carrying value of goodwill for the periods ended June 30, 2023 and December 31, 2022. The Bank and HarborOne Mortgage are identified as reporting units for purposes of goodwill impairment testing. At June 30, 2023 and December 31, 2022, the carrying value of the Bank’s goodwill was $59.0 million as of both dates, and the carrying value of HarborOne Mortgage’s goodwill was $10.8 million as of both dates. Goodwill is tested for impairment annually on October 31 or on an interim basis if an event triggering impairment may have occurred. As of June 30, 2023, the Company assessed whether there were additional events or changes in circumstances since its annual goodwill impairment test that would indicate that it was more likely than not that the fair value of the reporting unit was less than the reporting unit’s carrying amounts that would require an interim impairment assessment after October 31, 2022. The Company determined there had been no such indicators, therefore, no interim goodwill impairment assessment as of June 30, 2023 was performed. The process of evaluating fair value is highly subjective and requires significant judgment and estimates. The goodwill at the Bank and HarborOne Mortgage is at risk of future impairment if projected operating results are not met or other inputs into the fair value measurement model change. If concerns persist in the banking sector as a result of the recent bank failures, management may determine a triggering event has occurred, which would cause us to perform an interim impairment test. Interim impairment tests at the Bank or HarborOne Mortgage may result in an impairment charge being recorded in the period. Other intangible assets were $1.9 million and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company determined that there was no triggering event that warranted an interim impairment test at June 30, 2023. |
DEPOSITS
DEPOSITS | 6 Months Ended |
Jun. 30, 2023 | |
DEPOSITS | |
DEPOSITS | 7. DEPOSITS A summary of deposit balances, by type, is as follows: June 30, December 31, 2023 2022 (in thousands) NOW and demand deposit accounts $ 1,004,528 $ 1,060,268 Regular savings and club accounts 1,390,906 1,468,172 Money market deposit accounts 834,120 861,704 Total non-certificate accounts 3,229,554 3,390,144 Term certificate accounts greater than $250,000 224,737 110,360 Term certificate accounts less than or equal to $250,000 518,194 387,615 Brokered deposits 315,003 301,380 Total certificate accounts 1,057,934 799,355 Total deposits $ 4,287,488 $ 4,189,499 Total municipal deposits included in the table amounted to $497.9 million at June 30, 2023 and $413.5 million at December 31, 2022. Municipal deposits are generally required to be fully insured. The Company provided supplemental insurance for municipal deposits through DIF, a reciprocal deposit program or letters of credit offered by the FHLB. DIF was exited February 24, 2023 and will generally provide coverage until February 24, 2024 on deposits that existed at the exit date. The Company has established a relationship to participate in a reciprocal deposit program with other financial institutions. The reciprocal deposit program provides access to FDIC-insured deposit products in aggregate amounts exceeding the current limits for depositors. At June 30, 2023 and December 31, 2022, total reciprocal deposits were $149.2 million and $28.6 million, respectively, consisting of non-certificate accounts. A summary of certificate accounts by maturity at June 30, 2023 is as follows: Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 896,526 3.87 % Over 1 year to 2 years 129,403 3.29 Over 2 years to 3 years 28,334 2.87 Over 3 years to 4 years 2,996 0.70 Over 4 years to 5 years 696 1.74 Total certificate deposits 1,057,955 3.76 % Less unaccreted acquisition discount (21) Total certificate deposits, net $ 1,057,934 |
BORROWINGS
BORROWINGS | 6 Months Ended |
Jun. 30, 2023 | |
BORROWINGS | |
BORROWINGS | 8. Borrowed funds at June 30, 2023 and December 31, 2022 consisted of FHLB advances. Short-term advances were $414.0 million and $385.0 million with a weighted average rate of 5.31% and 4.32%, at June 30, 2023 and December 31, 2022, respectively. Long-term advances are summarized by maturity date below. June 30, 2023 December 31, 2022 Amount by Weighted Amount by Weighted Scheduled Amount by Average Scheduled Average Maturity* Call Date (1) Rate (2) Maturity* Rate (2) (dollars in thousands) Year ending December 31: 2023 $ 90 $ 75,090 2.71 % $ 180 1.40 % 2024 13,400 13,400 1.39 13,400 1.39 2025 85,987 60,987 4.19 987 — 2026 80,000 40,000 4.28 — — 2027 — — — — — 2028 and thereafter 11,091 1,091 3.67 1,108 2.00 $ 190,568 $ 190,568 4.00 % $ 15,675 1.35 % * Includes an amortizing advance requiring monthly principal and interest payments. (1) (2) The FHLB advances are secured by a blanket security agreement which requires the Bank to maintain certain qualifying assets as collateral, principally residential mortgage loans and commercial real estate loans held in the Bank’s portfolio. The carrying value of the loans pledged as collateral for these borrowings totaled $1.83 billion at June 30, 2023 and $1.71 billion at December 31, 2022. As of June 30, 2023, the Company had $583.7 million of available borrowing capacity with the FHLB. The Company also has additional borrowing capacity under a $25.0 million unsecured federal funds line with a correspondent bank and a secured line of credit with the FRBB, secured by 69% of the carrying value of commercial loans with principal balances amounting to $99.7 million and $100.2 million at June 30, 2023 and December 31, 2022, respectively. No amounts were outstanding under either line at June 30, 2023 or December 31, 2022. On March 12, 2023, the Federal Reserve announced the creation of the BTFP. The BTFP offers loans of up to one year to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasury securities, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets are valued at par for purposes of the collateral pledge under the BTFP. The Company has $366.8 million in borrowing capacity under this program, and no amounts were outstanding at June 30, 2023. On August 30, 2018, the Company issued $35.0 million in fixed-to-floating rate subordinated notes due 2028 in a private placement to institutional accredited investors. The Notes bear interest at annual fixed rate of 5.625% until September 1, 2023, at which time the interest rate resets quarterly to an interest rate per annum equal to the three–month CME Term SOFR plus applicable spread adjustment plus 278 basis points. Interest is payable semi-annually on March 1 and September 1 each year through September 1, 2023 and quarterly thereafter. The Notes can be redeemed partially or in whole, prior to the maturity date beginning September 1, 2023 and on any scheduled interest payment date thereafter, at par. The Notes are carried on the Consolidated Balance Sheets net of unamortized issuance costs of $652,000 and $715,000 at June 30, 2023 and December 31, 2022, respectively. |
OTHER COMMITMENTS AND CONTINGEN
OTHER COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
OTHER COMMITMENTS AND CONTINGENCIES | |
OTHER COMMITMENTS AND CONTINGENCIES | 9. OTHER COMMITMENTS AND CONTINGENCIES ACL on Unfunded Commitments The ACL on unfunded commitments amounted to $4.8 million and $5.1 million at June 30, 2023 and 2022, respectively. The activity in the ACL on unfunded commitments for the three and six months ended June 30, 2023 and 2022 is presented below: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Total (in thousands) Balance at March 31, 2023 $ 262 $ 548 $ 3,277 $ 940 $ 19 $ 5,046 Provision 10 (58) (97) (70) — (215) Balance at June 30, 2023 $ 272 $ 490 $ 3,180 $ 870 $ 19 $ 4,831 Balance at March 31, 2022 $ 339 $ 538 $ 2,345 $ 604 $ 14 $ 3,840 Provision (2) (56) 1,293 20 1 1,256 Balance at June 30, 2022 $ 337 $ 482 $ 3,638 $ 624 $ 15 $ 5,096 Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Total (in thousands) Balance at December 31, 2022 $ 336 $ 628 $ 3,079 $ 870 $ 14 $ 4,927 Provision (64) (138) 101 — 5 (96) Balance at June 30, 2023 $ 272 $ 490 $ 3,180 $ 870 $ 19 $ 4,831 Balance at December 31, 2021 $ — $ — $ — $ — $ — $ — Adoption of Topic 326 318 380 2,561 658 14 3,931 Provision 19 102 1,077 (34) 1 1,165 Balance at June 30, 2022 $ 337 $ 482 $ 3,638 $ 624 $ 15 $ 5,096 Loan Commitments The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and advance funds on various lines of credit. Those commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the accompanying unaudited interim Consolidated Financial Statements. The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments. The following off-balance sheet financial instruments were outstanding at June 30, 2023 and December 31, 2022. The contract amounts represent credit risk. June 30, December 31, 2023 2022 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 67,347 $ 57,916 Commitments to grant other loans 84,676 43,700 Unadvanced funds on home equity lines of credit 256,957 251,759 Unadvanced funds on revolving lines of credit 314,496 351,382 Unadvanced funds on construction loans 287,523 262,945 Commitments to extend credit and unadvanced portion of construction loans are agreements to lend to a customer, as long as there is no violation of any condition established in the contract. Commitments to grant loans generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for unadvanced funds on construction loans and home equity and revolving lines of credit may expire without being drawn upon; therefore, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit-worthiness on a case-by-case basis. Commitments to grant loans, and unadvanced construction loans and home equity lines of credit are collateralized by real estate, while revolving lines of credit are unsecured. |
DERIVATIVES
DERIVATIVES | 6 Months Ended |
Jun. 30, 2023 | |
DERIVATIVES | |
DERIVATIVES | 10. DERIVATIVES The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally to manage the Company’s interest rate risk. Additionally, the Company enters into interest rate derivatives to accommodate the business requirements of its customers. All derivatives are recognized as either assets or liabilities on the balance sheet and are measured at fair value. The accounting for changes in the fair value of a derivative instrument depends upon whether or not it qualifies as a hedge for accounting purposes, and further, by the type of hedging relationship. Derivatives Designated as Hedging Instruments Fair Value Hedge As of June 30, 2023, the Company had two interest rate swap agreements with a notional amount of $100.0 million that were designated as a fair value hedge of fixed rate residential mortgages. The hedges were determined to be effective during the three months ended June 30, 2023, and the Company expects the hedges to remain effective during the remaining terms of the swaps. The following amounts were recorded on the Consolidated Balance Sheets related to cumulative basis adjustment for fair value hedges as of the dates indicated: Cumulative Amount of Fair Value Hedging Adjustment Included in the Line Item in the Consolidated Balance Sheets Carrying Amount of the Hedged Carrying Amount of the Hedged in Which the Hedged Item is Included Assets Assets June 30, June 30, June 30, June 30, 2023 2022 2023 2022 (in thousands) Loans held for investment (1) $ 99,556 $ — $ (444) $ — Total $ 99,556 $ — $ (444) $ — (1) Cashflow Hedge As of June 30, 2023, the Company had one interest rate swap agreement with a notional amount of $100.0 million that was designated as a cashflow hedge of brokered deposits. The interest rate swap agreement has an average maturity of 1.78 years, the current weighted average fixed rate paid is 0.671% , the weighted average 3-month LIBOR swap receive rate is 5.157% , and the fair value is $7.6 million. The Company expects approximately $4.7 million related to the cashflow hedge to be reclassified to interest expense, from other comprehensive income, in the next twelve months. Derivatives Not Designated as Hedging Instruments Derivative Loan Commitments- Mortgage loan commitments qualify as derivative loan commitments if the loan that will result from exercise of the commitment will be held for sale upon funding. The Company enters into commitments to fund residential mortgage loans at specified times in the future, with the intention that these loans will subsequently be sold in the secondary market. A mortgage loan commitment binds the Company to lend funds to a potential borrower at a specified interest rate and within a specified period of time, generally up to 60 days after inception of the rate lock. Outstanding derivative loan commitments expose the Company to the risk that the price of the loans arising from exercise of the loan commitment might decline from inception of a rate lock to funding of the loan due to increases in mortgage interest rates. If interest rates increase, the value of these loan commitments decreases. Conversely, if interest rates decrease, the value of these loan commitments increases. Forward Loan Sale Commitments With a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the number of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay a “pair-off” fee, based on then-current market prices, to the investor to compensate the investor for the shortfall. With a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. Generally, the price the investor will pay the seller for an individual loan is specified prior to the loan being funded (e.g., on the same day the lender commits to lend funds to a potential borrower). The Company expects that these forward loan sale commitments will experience changes in fair value opposite to the change in fair value of derivative loan commitments. Interest Rate Swaps Risk Participation Agreements The following table presents the outstanding notional balances and fair values of outstanding derivative instruments: Assets Liabilities Notional Fair Fair Amount Value Value (in thousands) June 30, 2023: Derivatives designated as hedging instruments Fair value hedge - interest rate swaps $ 100,000 $ 437 $ — Cashflow hedge - interest rate swaps 100,000 7,569 — Total derivatives designated as hedging instruments $ 8,006 $ — Derivatives not designated as hedging instruments Derivative loan commitments $ 55,986 $ 521 $ 82 Forward loan sale commitments 51,000 262 3 Interest rate swaps 827,176 28,127 28,127 Risk participation agreements 182,304 — — Total derivatives not designated as hedging instruments $ 28,910 $ 28,212 Total derivatives $ 36,916 $ 28,212 December 31, 2022: Derivatives designated as hedging instruments Cashflow hedge - interest rate swaps $ 100,000 $ 8,314 $ — Total derivatives designated as hedging instruments $ 8,314 $ — Derivatives not designated as hedging instruments Derivative loan commitments $ 27,935 $ 238 $ 65 Forward loan sale commitments 29,000 249 39 Interest rate swaps 772,588 28,525 28,525 Risk participation agreements 164,528 — — Total derivatives not designated as hedging instruments $ 29,012 $ 28,629 Total derivatives $ 37,326 $ 28,629 The following table presents the recorded net gains and losses pertaining to the Company’s derivative instruments: Location of gain (loss) recognized in Three Months Ended June 30, Six Months Ended June 30, Income 2023 2022 2023 2022 (in thousands) Derivatives designated as fair value hedge Hedged items - loans Interest income $ (444) $ — $ (444) $ — Interest rate swap contracts Interest income 437 — 437 — Total $ (7) $ — $ (7) $ — Derivatives not designated as hedging instruments Derivative loan commitments Mortgage banking income $ (293) $ 369 $ 266 $ (268) Forward loan sale commitments Mortgage banking income 527 (1,676) 49 (21) Interest rate swaps Other income — — — 330 Total $ 234 $ (1,307) $ 315 $ 41 The effect of cashflow hedge accounting on accumulated other comprehensive income is as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Derivatives designated as hedging instruments (Loss) gain in OCI on derivatives (effective portion), net of tax $ 319 $ 624 $ (535) $ 3,428 Gain (loss) reclassified from OCI into interest expense (effective portion) $ 1,134 $ 71 $ 2,152 $ (40) Master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral or cash funds, in the event of default on, or termination of, any one contract. Collateral is provided by cash or securities received or posted by the counterparty with net liability positions, respectively, in accordance with contract thresholds. The following table presents the offsetting of derivatives and amounts subject to an enforceable master netting arrangement, not offset in the Consolidated Balance Sheets at June 30, 2023: Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amounts Gross Amounts Gross Amounts Assets (Liabilities) Cash of Recognized Offset in the presented in the Collateral Assets Consolidated Consolidated Financial (Received) Net (Liabilities) Balance Sheets Balance Sheets Instruments Posted Amount (in thousands) Derivatives designated as hedging instruments Interest rate swap on deposits $ 7,569 $ — $ 7,569 $ — $ (7,569) $ — Interest rate swap on residential real estate loans $ 437 $ — $ 437 $ — $ — $ 437 Derivatives not designated as hedging instruments Customer interest rate swaps $ 26,543 $ — $ 26,543 $ — $ (22,431) $ 4,112 |
OPERATING LEASE ROU ASSETS AND
OPERATING LEASE ROU ASSETS AND LIABILITIES | 6 Months Ended |
Jun. 30, 2023 | |
OPERATING LEASE ROU ASSETS AND LIABILITIES | |
OPERATING LEASE ROU ASSETS AND LIABILITIES | 11. OPERATING LEASE ROU ASSETS AND LIABILITIES Operating lease ROU assets, included in other assets, were $24.1 million and $26.9 million at June 30, 2023 and December 31, 2022, respectively. Operating lease liabilities, included in other liabilities and accrued expenses , were $25.8 million and $28.6 million at June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023 and December 31, 2022, there were no leases that had not yet commenced. At June 30, 2023, lease expiration dates ranged from two months to 35.2 years and have a weighted average remaining lease term of 16.3 years. At December 31, 2022 , lease expiration dates ranged from three months to 35.7 years and had a weighted average remaining lease term of 17.3 years. Future minimum lease payments under non-cancellable leases as of June 30, 2023 June 30, 2023 (in thousands) 2023 $ 1,529 2024 2,827 2025 2,552 2026 2,505 2027 2,445 Thereafter 19,421 Total lease payments 31,279 Imputed interest (5,476) Total present value of operating lease liabilities $ 25,803 The weighted-average discount rate and remaining lease term for operating leases were as follows: June 30, 2023 December 31, 2022 Weighted-average discount rate 2.07 % 2.02 % Weighted-average remaining lease term (years) 16.27 17.33 Rental expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease components, such as fair-market value adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities. The following table presents the components of total lease expense: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (in thousands) Lease Expense: Operating lease expense $ 792 $ 822 $ 1,599 $ 1,636 Short-term lease expense 35 37 65 68 Variable lease expense 3 — 5 — Sublease income (4) (5) (9) (5) Total lease expense $ 826 $ 854 $ 1,660 $ 1,699 Other Information Cash paid for amounts included in the measurement of lease liabilities- operating cash flows for operating leases 779 802 1,614 1,601 Operating Lease - Operating cash flows (Liability reduction) 655 672 1,335 1,340 ROU assets obtained in exchange for new operating lease liabilities 596 778 596 1,083 |
MINIMUM REGULATORY CAPITAL REQU
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 6 Months Ended |
Jun. 30, 2023 | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 12. The Company and the Bank are subject to various regulatory capital requirements administered by the Federal Reserve and the FDIC. Failure to meet minimum capital requirements can result in mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s Consolidated Financial Statements. Under the capital rules, risk-based capital ratios are calculated by dividing Tier 1, common equity Tier 1, and total risk-based capital, respectively, by risk-weighted assets. Assets and off-balance sheet credit equivalents are assigned to one of several risk-weight categories, based primarily on relative risk. The rules require banks and bank holding companies to maintain a minimum common equity Tier 1 capital ratio of 4.5%, a minimum Tier 1 capital ratio of 6.0% and a total capital ratio of 8.0%. In addition, a Tier 1 leverage ratio of 4.0% is required. Additionally, the capital rules require a bank holding company to maintain a capital conservation buffer of common equity Tier 1 capital in an amount above the minimum risk-based capital requirements equal to 2.5% of total risk weighted assets, or face restrictions on the ability to pay dividends, pay discretionary bonuses, and to engage in share repurchases. Under the FDIC’s prompt corrective action rules, an insured state nonmember bank is considered “well capitalized” if its capital ratios meet or exceed the ratios as set forth in the following table and is not subject to any written agreement, order, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. The Bank must meet well capitalized requirements under prompt corrective action provisions. Prompt corrective action provisions are not applicable to bank holding companies. A bank holding company is considered “well capitalized” if the bank holding company (i) has a total risk-based capital ratio of at least 10.0%, (ii) has a Tier 1 risk-based capital ratio of at least 6.0%, and (iii) is not subject to any written agreement order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. At June 30, 2023, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The capital levels of both the Company and the Bank at June 30, 2023 also exceeded the minimum capital requirements, including the currently applicable capital conservation buffer of 2.5%. The Company’s and the Bank’s actual regulatory capital ratios as of June 30, 2023 and December 31, 2022 are presented in the table below. Minimum Required to be Considered "Well Capitalized" Minimum Required for Under Prompt Corrective Actual Capital Adequacy Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) HarborOne Bancorp, Inc. June 30, 2023 Common equity Tier 1 capital to risk-weighted assets $ 570,648 12.0 % $ 213,486 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 570,648 12.0 284,648 6.0 N/A N/A Total capital to risk-weighted assets 658,301 13.9 379,531 8.0 N/A N/A Tier 1 capital to average assets 570,648 10.2 223,471 4.0 N/A N/A December 31, 2022 Common equity Tier 1 capital to risk-weighted assets $ 592,610 12.8 % $ 208,541 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 592,610 12.8 278,054 6.0 N/A N/A Total capital to risk-weighted assets 677,774 14.6 370,739 8.0 N/A N/A Tier 1 capital to average assets 592,610 11.5 205,897 4.0 N/A N/A HarborOne Bank June 30, 2023 Common equity Tier 1 capital to risk-weighted assets $ 536,539 11.3 % $ 213,396 4.5 % $ 308,239 6.5 % Tier 1 capital to risk-weighted assets 536,539 11.3 284,529 6.0 379,371 8.0 Total capital to risk-weighted assets 589,191 12.4 379,371 8.0 474,214 10.0 Tier 1 capital to average assets 536,539 9.6 223,432 4.0 279,291 5.0 December 31, 2022 Common equity Tier 1 capital to risk-weighted assets $ 525,522 11.3 % $ 208,447 4.5 % $ 301,090 6.5 % Tier 1 capital to risk-weighted assets 525,522 11.3 277,929 6.0 370,572 8.0 Total capital to risk-weighted assets 575,686 12.4 370,572 8.0 463,215 10.0 Tier 1 capital to average assets 525,522 10.2 205,874 4.0 257,342 5.0 |
COMPREHENSIVE (LOSS) INCOME
COMPREHENSIVE (LOSS) INCOME | 6 Months Ended |
Jun. 30, 2023 | |
COMPREHENSIVE (LOSS) INCOME | |
COMPREHENSIVE (LOSS) INCOME | 13. Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities are reported as a separate component of the stockholders’ equity section of the Consolidated Balance Sheets, such items, along with net income, are components of comprehensive income (loss). The following table presents changes in accumulated other comprehensive (loss) income by component for the three and six months ended June 30, 2023 and 2022: Three Months Ended June 30, 2023 2022 Available Cash Available Cash Postretirement for Sale Flow for Sale Flow Benefit Securities Hedge Total Securities Hedge Total (in thousands) Balance at beginning of period $ 150 $ (47,686) $ 5,126 $ (42,410) $ (23,048) $ 4,001 $ (19,047) Other comprehensive income (loss) before reclassifications 1 (5,366) 1,577 (3,788) (20,323) 939 (19,384) Amounts reclassified from accumulated other comprehensive (loss) income (39) — (1,134) (1,173) — (71) (71) Net current period other comprehensive (loss) income (38) (5,366) 443 (4,961) (20,323) 868 (19,455) Related tax effect — 1,205 (124) 1,081 4,479 (244) 4,235 Balance at end of period $ 112 $ (51,847) $ 5,445 $ (46,290) $ (38,892) $ 4,625 $ (34,267) Six Months Ended June 30, 2023 2022 Available Cash Available Cash Postretirement for Sale Flow for Sale Flow Benefit Securities Hedge Total Securities Hedge Total (in thousands) Balance at beginning of period $ 150 $ (53,212) $ 5,980 $ (47,082) $ (2,834) $ 1,197 $ (1,637) Other comprehensive (loss) income before reclassifications 1 1,723 1,407 3,131 (46,252) 4,728 (41,524) Amounts reclassified from accumulated other comprehensive income (loss) (39) — (2,152) (2,191) — 40 40 Net current period other comprehensive (loss) income (38) 1,723 (745) 940 (46,252) 4,768 (41,484) Related tax effect — (358) 210 (148) 10,194 (1,340) 8,854 Balance at end of period $ 112 $ (51,847) $ 5,445 $ (46,290) $ (38,892) $ 4,625 $ (34,267) |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 6 Months Ended |
Jun. 30, 2023 | |
FAIR VALUE OF ASSETS AND LIABILITIES | |
FAIR VALUE OF ASSETS AND LIABILITIES | 14. FAIR VALUE OF ASSETS AND LIABILITIES Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: •Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. •Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. •Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The following methods and assumptions were used by the Company in estimating fair value disclosures: Debt Securities Level 2 debt securities are traded less frequently than exchange-traded instruments. The fair value of these securities is determined using matrix pricing with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category includes obligations of U.S. government-sponsored enterprises, including mortgage-backed securities, individual name issuer trust preferred debt securities and corporate bonds. Debt securities not actively traded whose fair value is determined through the use of cash flows utilizing inputs that are unobservable are classified as Level 3. There were no Level 3 securities held at June 30, 2023 and December 31, 2022. Loans held for sale Collateral-Dependent Impaired Loans Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, the Company reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Retirement plan annuities MSRs Deposits and mortgagors’ escrow accounts Borrowed funds Accrued interest Derivatives Derivatives designated as hedging instrument Forward loan sale commitments and derivative loan commitments Interest rate swaps and risk participation agreements Although the Company has determined that the majority of the inputs used to value its interest rate swaps and risk participation agreements fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with interest rate contracts and risk participation agreements utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of June 30, 2023 and December 31, 2022, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Company classified its derivative valuations in their entirety as Level 2. Off-balance sheet credit-related instruments Transfers between levels are recognized at the end of the reporting period, if applicable. There were no transfers during the periods presented. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below: Total Level 1 Level 2 Level 3 Fair Value (in thousands) June 30, 2023 Assets Securities available for sale $ — $ 292,012 $ — $ 292,012 Loans held for sale — 20,949 — 20,949 Mortgage servicing rights — 48,176 — 48,176 Derivatives — 36,133 783 36,916 $ — $ 397,270 $ 783 $ 398,053 Liabilities Derivatives $ — $ 28,127 $ 85 $ 28,212 December 31, 2022 Assets Securities available for sale $ — $ 301,149 $ — $ 301,149 Loans held for sale — 18,544 — 18,544 Mortgage servicing rights — 48,138 — 48,138 Derivatives — 36,839 487 37,326 $ — $ 404,670 $ 487 $ 405,157 Liabilities Derivatives $ — $ 28,525 $ 104 $ 28,629 The table below presents, for the three and six months ended June 30, 2023 and 2022, the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 766 $ 2,864 $ 487 $ 1,583 Total gains (losses) included in net income (1) 17 (1,520) 296 (239) Balance at end of period $ 783 $ 1,344 $ 783 $ 1,344 Changes in unrealized gains relating to instruments at period end $ 783 $ 1,344 $ 783 $ 1,344 Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (302) $ (452) $ (104) $ (189) Total gains (losses) included in net income (1) 217 213 19 (50) Balance at end of period $ (85) $ (239) $ (85) $ (239) Changes in unrealized losses relating to instruments at period end $ (85) $ (239) $ (85) $ (239) (1) Included in mortgage banking income on the Consolidated Statements of Income. Assets Measured at Fair Value on a Non-recurring Basis The Company is required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with GAAP. The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis. June 30, December 31, 2023 2022 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Collateral-dependent impaired loans $ — $ — $ 7,108 $ — $ — $ 349 Losses in the following table represent the amount of the fair value adjustments recorded during the period on the carrying value of the assets held at June 30, 2023 and December 31, 2022, respectively. Losses on fully charged off loans are not included in the table. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Collateral-dependent impaired loans $ 2,977 $ 9 $ 2,982 $ 819 The table below presents quantitative information about significant unobservable inputs (Level 3) for assets measured at fair value on a nonrecurring basis at the dates indicated. Fair Value June 30, December 31, Valuation Technique 2023 2022 (in thousands) Collateral-dependent impaired loans $ 7,108 $ 349 Sales Comparison Approach (1) (1) Fair value is generally determined through independent appraisals of the underlying collateral which includes unobservable inputs such as adjustments for differences between the comparable sales. The Company may also use another source of collateral assessment to determine a reasonable estimate of the fair value of the collateral. Appraisals may be adjusted by Management for qualitative factors and estimated liquidation expenses. Generally, appraisals for residential real estate and commercial real estate loan are discounted 20% . Commercial and industrial appraisals are generally discounted 25% - 50% . Management may take larger discounts to reflect market liquidity for certain types of assets not addressed in the appraisals. Summary of Fair Values of Financial Instruments The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments are as follows. Certain financial instruments and all nonfinancial instruments are exempt from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company. June 30, 2023 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 252,851 $ 252,851 $ — $ — $ 252,851 Securities available for sale 292,012 — 292,012 — 292,012 Securities held to maturity 19,839 — 19,005 — 19,005 Federal Home Loan Bank stock 27,123 N/A N/A N/A N/A Loans held for sale 20,949 — 20,949 — 20,949 Loans, net 4,650,382 — — 4,464,164 4,464,164 Retirement plan annuities 14,877 — — 14,877 14,877 Accrued interest receivable 16,948 — 16,948 — 16,948 Derivatives 36,916 — 36,133 783 36,916 Financial liabilities: Deposits 4,287,488 — — 4,262,936 4,262,936 Borrowed funds 604,568 — 602,341 — 602,341 Subordinated debt 34,348 — — 33,892 33,892 Mortgagors' escrow accounts 11,073 — — 11,073 11,073 Accrued interest payable 4,845 — 4,845 — 4,845 Derivatives 28,212 — 28,127 85 28,212 December 31, 2022 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 98,017 $ 98,017 $ — $ — $ 98,017 Securities available for sale 301,149 — 301,149 — 301,149 Securities held to maturity 19,949 — 19,274 — 19,274 Federal Home Loan Bank stock 20,071 N/A N/A N/A N/A Loans held for sale 18,544 — 18,544 — 18,544 Loans, net 4,504,434 — — 4,383,613 4,383,613 Retirement plan annuities 14,630 — — 14,630 14,630 Accrued interest receivable 15,139 — 15,139 — 15,139 Derivatives 37,326 — 36,839 487 37,326 Financial liabilities: Deposits 4,189,499 — — 4,166,796 4,166,796 Borrowed funds 400,675 — 399,655 — 399,655 Subordinated debt 34,285 — — 28,221 28,221 Mortgagors' escrow accounts 9,537 — — 9,537 9,537 Accrued interest payable 2,325 — 2,325 — 2,325 Derivatives 28,629 — 28,525 104 28,629 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 15. EARNINGS PER SHARE Basic EPS represents net income attributable to common shareholders divided by the weighted-average number of common shares outstanding during the period. Non-vested restricted shares that are participating securities are included in the computation of basic EPS. Diluted EPS is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding, plus the effect of potential dilutive common stock equivalents outstanding during the period. At June 30, 2023, potential common shares of 1,308,266 were considered to be anti-dilutive and excluded from EPS. There were no potential shares considered to be anti-dilutive at June 30, 2022. The following table presents earnings per common share. Three Months Ended June 30, 2023 2022 Net income available to common stockholders (in thousands) $ 7,479 $ 9,987 Average number of common shares outstanding 46,620,893 50,487,259 Less: Average unallocated ESOP shares and non-vested restricted shares (3,557,386) (3,506,429) Weighted average number of common shares outstanding used to calculate basic earnings per common share 43,063,507 46,980,830 Dilutive effect of share-based compensation 69,948 555,203 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 43,133,455 47,536,033 Earnings per common share: Basic $ 0.17 $ 0.21 Diluted $ 0.17 $ 0.21 Six Months Ended June 30, 2023 2022 Net income available to common stockholders (in thousands) $ 14,776 $ 22,254 Average number of common shares outstanding 47,522,623 50,941,367 Less: Average unallocated ESOP shares and non-vested restricted shares (3,567,212) (3,535,110) Weighted average number of common shares outstanding used to calculate basic earnings per common share 43,955,411 47,406,257 Dilutive effect of share-based compensation 248,482 704,606 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 44,203,893 48,110,863 Earnings per common share: Basic $ 0.34 $ 0.47 Diluted $ 0.33 $ 0.46 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2023 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 16. REVENUE RECOGNITION Revenue from contracts with customers in the scope of ASC Topic 606 is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. The Company recognizes revenue from contracts with customers when it satisfies its performance obligations. The Company’s performance obligations are generally satisfied as services are rendered and can either be satisfied at a point in time or over time. Unsatisfied performance obligations at the report date are not material to our Consolidated Financial Statements. In certain cases, other parties are involved with providing services to our customers. If the Company is a principal in the transaction (providing services itself or through a third party on its behalf), revenues are reported based on the gross consideration received from the customer and any related expenses are reported gross in noninterest expense. If the Company is an agent in the transaction (referring to another party to provide services), the Company reports its net fee or commission retained as revenue. The Company recognizes revenue that is transactional in nature and such revenue is earned at a point in time. Revenue that is recognized at a point in time includes card interchange fees (fee income related to debit card transactions), ATM fees, wire transfer fees, overdraft charge fees, and stop-payment and returned check fees. Additionally, revenue is collected from loan fees, such as letters of credit, line renewal fees and application fees. Such revenue is derived from transactional information and is recognized as revenue immediately as the transactions occur or upon providing the service to complete the customer’s transaction. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2023 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 17. SEGMENT REPORTING The Company has two reportable segments: HarborOne Bank and HarborOne Mortgage. Revenue from HarborOne Bank consists primarily of interest earned on loans and investment securities and service charges on deposit accounts. Revenue from HarborOne Mortgage comprises interest earned on loans and fees received as a result of the residential mortgage origination, sale and servicing process. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Segment profit and loss is measured by net income on a legal entity basis. Intercompany transactions are eliminated in consolidation. Information about the reportable segments and reconciliation to the unaudited interim Consolidated Financial Statements at June 30, 2023 and 2022 and for the three and six months ended June 30, 2023 and 2022 is presented in the tables below. Three Months Ended June 30, 2023 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 32,490 $ 120 $ 32,100 Provision for credit losses 3,283 — 3,283 Net interest and dividend income, after provision for credit losses 29,207 120 28,817 Mortgage banking income: Gain on sale of mortgage loans — 3,300 3,300 Intersegment gain (loss) (358) 90 — Changes in mortgage servicing rights fair value 29 407 436 Other 195 2,117 2,312 Total mortgage banking income (loss) (134) 5,914 6,048 Other noninterest income 6,614 — 6,614 Total noninterest income 6,480 5,914 12,662 Noninterest expense 26,193 5,493 31,725 Income before income taxes 9,494 541 9,754 Provision for income taxes 2,193 232 2,275 Net income $ 7,301 $ 309 $ 7,479 Six Months Ended June 30, 2023 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 67,052 $ 447 $ 66,498 Provision for credit losses 5,149 — 5,149 Net interest and dividend income, after provision for credit losses 61,903 447 61,349 Mortgage banking income: Gain on sale of mortgage loans — 5,524 5,524 Intersegment gain (loss) (706) 544 — Changes in mortgage servicing rights fair value (107) (1,149) (1,256) Other 396 4,132 4,528 Total mortgage banking income (loss) (417) 9,051 8,796 Other noninterest income 12,556 — 12,556 Total noninterest income 12,139 9,051 21,352 Noninterest expense 52,383 10,815 63,234 Income (loss) before income taxes 21,659 (1,317) 19,467 Provision (benefit) for income taxes 5,308 (333) 4,691 Net income (loss) $ 16,351 $ (984) $ 14,776 Total assets at period end $ 5,668,582 $ 115,782 $ 5,659,254 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 Three Months Ended June 30, 2022 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 37,246 $ 411 $ 37,195 Provision for credit losses 2,546 — 2,546 Net interest and dividend income, after provision for credit losses 34,700 411 34,649 Mortgage banking income: Gain on sale of mortgage loans — 4,538 4,538 Intersegment gain (loss) (1,095) 1,097 — Changes in mortgage servicing rights fair value 127 735 862 Other 219 2,393 2,612 Total mortgage banking income (loss) (749) 8,763 8,012 Other noninterest income 6,084 7 6,091 Total noninterest income 5,335 8,770 14,103 Noninterest expense 27,131 7,242 34,954 Income before income taxes 12,904 1,939 13,798 Provision for income taxes 3,550 549 3,811 Net income $ 9,354 $ 1,390 $ 9,987 Six Months Ended June 30, 2022 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 70,670 $ 761 $ 70,465 Provision for credit losses 2,884 — 2,884 Net interest and dividend income, after provision for credit losses 67,786 761 67,581 Mortgage banking income: Gain on sale of mortgage loans — 9,860 9,860 Intersegment gain (loss) (1,703) 1,934 — Changes in mortgage servicing rights fair value 717 5,430 6,147 Other 452 4,718 5,170 Total mortgage banking income (loss) (534) 21,942 21,177 Other noninterest income 11,971 16 11,987 Total noninterest income 11,437 21,958 33,164 Noninterest expense 53,956 15,003 69,789 Income before income taxes 25,267 7,716 30,956 Provision for income taxes 7,107 2,090 8,702 Net income $ 18,160 $ 5,626 $ 22,254 Total assets at period end $ 4,718,584 $ 149,186 $ 4,704,044 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The unaudited interim Consolidated Financial Statements of HarborOne Bancorp, Inc. presented herein have been prepared pursuant to the rules of the SEC for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by GAAP. In the opinion of management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying Consolidated Financial Statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the years ended December 31, 2022 and 2021 and notes thereto included in the Company’s Annual Report on Form 10-K. The unaudited interim Consolidated Financial Statements include the accounts of the Company; the Company’s subsidiaries, Legion Parkway Company LLC (a security corporation) and HarborOne Bank; and the Bank’s wholly-owned subsidiaries, which consist of HarborOne Mortgage, LLC, HarborOne Security Company, Inc. and a passive investment corporation The passive investment corporation maintains and manages certain assets of the Bank. The security company was established for the purpose of buying, holding and selling securities on its own behalf. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. These changes and reclassifications did not impact previously reported net income or comprehensive income. |
Nature of Operations | Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 30 full-service branches in Massachusetts and Rhode Island, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains offices in Florida, Maine, Massachusetts, New Hampshire, New Jersey and Rhode Island and originates loans in five additional states. The Company’s primary deposit products are checking, money market, savings, and term certificate of deposit accounts, while its primary lending products are commercial real estate, commercial, residential mortgages, home equity, and consumer loans. The Company also originates, sells and services residential mortgage loans through HarborOne Mortgage. |
Risks and Uncertainties | Risks and Uncertainties During the first quarter of 2023, the banking industry experienced significant volatility with multiple high-profile bank failures and industry-wide concerns related to liquidity, deposit outflows, unrealized securities losses and eroding consumer confidence in the banking system. In response to these events, the Treasury, the Federal Reserve, and the FDIC jointly announced the BTFP on March 12, 2023. This program aims to enhance liquidity by allowing institutions to pledge certain securities at the par value of the securities, and at a borrowing rate of ten basis points over the one-year overnight index swap rate. The BTFP is available to eligible U.S. federally insured depository institutions, with advances having a term of up to one year and no prepayment penalties. Macroeconomic trends are mixed as uncertainty remains about the economy and banking industry. Reliance on secondary funding sources could increase the Company’s overall cost of funds and thereby reduce net income. While the Company believes its current sources of liquidity are adequate to fund operations, there is no guarantee they will suffice to meet future liquidity demands. This may necessitate slowing or discontinuing loan growth, capital expenditures, or other investments, or liquidating assets. Additionally, the Company could experience adverse effects on its business, financial condition, results of operations and cash flows if there is severe or prolonged inflation, a recession, further escalation of the current geopolitical situation, or sustained supply chain disruptions. While asset quality continues to point to economic recovery, the Company’s customers could experience similar adverse effects from these uncertainties that would impair their ability to fulfill their financial obligations to the Company resulting in deteriorating credit quality and loan charge-offs. |
Summary of Significant Accounting Policies and Recently Adopted Accounting Standards Updates | Summary of Significant Accounting Policies and Recently Adopted Accounting Standards Updates Significant accounting policies in effect and disclosed within the Company’s most recent audited Consolidated Financial Statements as of December 31, 2022 remain substantially unchanged. In March 2022, the FASB issued ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures” ASU 2022-02 also requires that public business entities disclose current-period gross charge-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, “Financial Instruments—Credit Losses—Measured at Amortized Cost.” The Company adopted ASU 2022-02 effective January 1, 2023 on a modified retrospective basis. The adoption of ASU 2022-02 did not have a material impact on the Company’s Consolidated Financial Statements. |
DEBT SECURITIES (Tables)
DEBT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
DEBT SECURITIES | |
Schedule of securities available for sale and held to maturity | Gross Gross Allowance Amortized Unrealized Unrealized for Credit Fair Cost Gains Losses Losses Value (in thousands) June 30, 2023: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 47,143 $ — $ 7,958 $ — $ 39,185 U.S. government agency and government-sponsored residential mortgage-backed securities 305,959 — 58,092 — 247,867 U.S. government-sponsored collateralized mortgage obligations 2,238 — 112 — 2,126 SBA asset-backed securities 2,204 — 172 — 2,032 Corporate bonds 1,000 — 198 — 802 Total securities available for sale $ 358,544 $ — $ 66,532 $ — $ 292,012 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 15,000 $ — $ 680 $ — $ 14,320 SBA asset-backed securities 4,839 — 154 — 4,685 Total securities held to maturity $ 19,839 $ — $ 834 $ — $ 19,005 Gross Gross Allowance Amortized Unrealized Unrealized for Credit Fair Cost Gains Losses Losses Value (in thousands) December 31, 2022: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 47,143 $ — $ 8,649 $ — $ 38,494 U.S. government agency and government-sponsored residential mortgage-backed securities 315,964 — 59,149 — 256,815 U.S. government-sponsored collateralized mortgage obligations 2,612 — 113 — 2,499 SBA asset-backed securities 2,685 — 190 — 2,495 Corporate bonds 1,000 — 154 — 846 Total securities available for sale $ 369,404 $ — $ 68,255 $ — $ 301,149 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 15,000 $ — $ 597 $ — $ 14,403 SBA asset-backed securities 4,949 — 78 — 4,871 Total securities held to maturity $ 19,949 $ — $ 675 $ — $ 19,274 |
Schedule of debt securities by contractual maturity | Available for Sale Held to Maturity Amortized Fair Amortized Fair Cost Value Cost Value (in thousands) After 1 year through 5 years $ 5,000 $ 4,736 $ 15,000 $ 14,320 After 5 years through 10 years 43,143 35,251 — — Over 10 years — — — — 48,143 39,987 15,000 14,320 U.S. government agency and government-sponsored residential mortgage-backed securities 305,959 247,867 — — U.S. government-sponsored collateralized mortgage obligations 2,238 2,126 — — SBA asset-backed securities 2,204 2,032 4,839 4,685 Total $ 358,544 $ 292,012 $ 19,839 $ 19,005 |
Schedule of securities with continuous losses | Less Than Twelve Months Twelve Months and Over Gross Gross Unrealized Fair Unrealized Fair Losses Value Losses Value (in thousands) June 30, 2023: Securities available for sale U.S. government and government-sponsored enterprise obligations $ — $ — $ 7,958 $ 39,185 U.S. government agency and government-sponsored residential mortgage-backed securities 67 1,547 58,025 246,286 U.S. government-sponsored collateralized mortgage obligations — — 112 2,126 SBA asset-backed securities — — 172 2,032 Corporate bonds — — 198 802 $ 67 $ 1,547 $ 66,465 $ 290,431 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 175 $ 4,825 505 9,495 SBA asset-backed securities 154 4,685 — — $ 329 $ 9,510 $ 505 $ 9,495 December 31, 2022: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 249 $ 4,751 $ 8,400 $ 33,743 U.S. government agency and government-sponsored residential mortgage-backed securities 3,620 35,214 55,529 221,566 U.S. government-sponsored collateralized mortgage obligations 113 2,499 — — SBA asset-backed securities 190 2,495 — — Corporate bonds 154 846 — — $ 4,326 $ 45,805 $ 63,929 $ 255,309 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 597 $ 14,403 $ — $ — SBA asset-backed securities 78 4,871 — — $ 675 $ 19,274 $ — $ — |
LOANS HELD FOR SALE (Tables)
LOANS HELD FOR SALE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
LOANS HELD FOR SALE | |
Schedule of fair value and contractual principal balance outstanding of loans held for sale | June 30, December 31, 2023 2022 (in thousands) Loans held for sale, fair value $ 20,949 $ 18,544 Loans held for sale, contractual principal outstanding 20,578 18,208 Fair value less unpaid principal balance $ 371 $ 336 |
LOANS AND ALLOWANCE FOR CREDI_2
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
Summary of balances of loans | June 30, December 31, 2023 2022 (in thousands) Residential real estate: One- to four-family $ 1,504,142 $ 1,432,263 Second mortgages and equity lines of credit 171,073 166,219 Residential real estate construction 26,995 35,837 Total residential real estate loans 1,702,210 1,634,319 Commercial: Commercial real estate 2,286,688 2,250,344 Commercial construction 228,902 199,311 Commercial and industrial 453,422 424,275 Total commercial loans 2,969,012 2,873,930 Consumer loans: Auto 19,107 33,625 Personal 8,318 7,796 Total consumer loans 27,425 41,421 Total loans before basis adjustment 4,698,647 4,549,670 Basis adjustment associated with fair value hedge (1) (444) — Total loans 4,698,203 4,549,670 Allowance for credit losses on loans (47,821) (45,236) Loans, net $ 4,650,382 $ 4,504,434 (1) Note 10 - Derivatives |
Schedule of activity in allowance for loan losses and allocation of allowance to loan segments | Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Total (in thousands) Balance at March 31, 2023 $ 11,508 $ 967 $ 755 $ 20,942 $ 5,057 $ 7,484 $ 281 $ 46,994 Charge-offs — — — (2,918) — (28) (42) (2,988) Recoveries 1 36 — 1 — 275 4 317 Provision 676 9 (125) 2,574 316 19 29 3,498 Balance at June 30, 2023 $ 12,185 $ 1,012 $ 630 $ 20,599 $ 5,373 $ 7,750 $ 272 $ 47,821 Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Total (in thousands) Balance at December 31, 2022 $ 11,532 $ 924 $ 280 $ 20,357 $ 4,645 $ 7,236 $ 262 $ 45,236 Charge-offs — — — (2,918) — (35) (49) (3,002) Recoveries 2 43 — 2 — 275 20 342 Provision 651 45 350 3,158 728 274 39 5,245 Balance at June 30, 2023 $ 12,185 $ 1,012 $ 630 $ 20,599 $ 5,373 $ 7,750 $ 272 $ 47,821 Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Total (in thousands) Balance at March 31, 2022 $ 8,884 $ 833 $ 314 $ 20,131 $ 4,210 $ 6,949 $ 444 $ 41,765 Charge-offs — — — — — — (11) (11) Recoveries — 81 — 6 — 406 23 516 Provision 1,198 (65) 13 294 160 (181) (129) 1,290 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ 43,560 Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2021 $ 3,631 $ 420 $ 69 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 Adoption of Topic 326 5,198 391 185 (10,194) 1,698 2,288 123 (1,000) (1,311) Charge-offs — — — (2,786) — (40) (31) — (2,857) Recoveries — 93 — 6 — 473 60 — 632 Provision 1,253 (55) 73 163 662 (185) (192) — 1,719 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ — $ 43,560 |
Schedule of carrying value of collateral dependent individually | June 30, 2023 December 31, 2022 Related Related Carrying Value Allowance Carrying Value Allowance (in thousands) Commercial: Commercial real estate $ 8,959 $ 54 $ 2,039 $ — Commercial and industrial 2,196 21 3,329 7 Commercial construction — — — — Total Commercial 11,155 75 5,368 7 Residential real estate 8,842 2 10,494 1 Total $ 19,997 $ 77 $ 15,862 $ 8 |
Summary of past due and non-accrual loans | 90 Days 30-59 Days 60-89 Days or More Total Loans on Past Due Past Due Past Due Past Due Non-accrual (in thousands) June 30, 2023 Residential real estate: One- to four-family $ 526 $ 709 $ 2,866 $ 4,101 $ 8,723 Second mortgages and equity lines of credit 181 132 47 360 332 Commercial real estate 6,999 — 79 7,078 8,960 Commercial construction — — — — — Commercial and industrial 10 104 1,298 1,412 2,183 Consumer: Auto 235 61 6 302 8 Personal 61 24 4 89 4 Total $ 8,012 $ 1,030 $ 4,300 $ 13,342 $ 20,210 December 31, 2022 Residential real estate: One- to four-family $ 3,711 $ 524 $ 6,526 $ 10,761 $ 8,927 Second mortgages and equity lines of credit 407 5 189 601 421 Commercial real estate — — 120 120 2,039 Commercial construction — — — — — Commercial and industrial 26 492 2,901 3,419 3,329 Consumer: Auto 348 101 51 500 64 Personal 18 — 6 24 6 Total $ 4,510 $ 1,122 $ 9,793 $ 15,425 $ 14,786 |
Schedule of loans by risk rating | Revolving Revolving Loans Loans Converted Term Loans at Amortized Cost by Origination Year Amortized to Term 2023 2022 2021 2020 2019 Prior Cost Loans Total (in thousands) As of June 30, 2023 Commercial real estate Pass $ 88,521 $ 825,188 $ 433,039 $ 240,382 $ 240,486 $ 423,597 $ — $ — $ 2,251,213 Special mention — 4,961 — — 9,159 12,395 — — 26,515 Substandard — — — — — 1,961 — — 1,961 Doubtful — — — — — 6,999 — — 6,999 Total commercial real estate 88,521 830,149 433,039 240,382 249,645 444,952 — — 2,286,688 YTD gross charge-offs — — — — — 2,918 — — 2,918 Commercial and industrial Pass 41,897 50,645 96,814 76,539 24,227 80,482 79,902 — 450,506 Special mention — 17 — — 2 714 — — 733 Substandard — 249 83 3 4 427 50 — 816 Doubtful — — — — — 1,317 50 — 1,367 Total commercial and industrial 41,897 50,911 96,897 76,542 24,233 82,940 80,002 — 453,422 YTD gross charge-offs — 18 10 2 4 1 — — 35 Commercial construction Pass 9,760 108,579 96,653 — 6,826 1,785 978 — 224,581 Special mention — — — 4,321 — — — — 4,321 Substandard — — — — — — — — — Doubtful — — — — — — — — — Total commercial construction 9,760 108,579 96,653 4,321 6,826 1,785 978 — 228,902 YTD gross charge-offs — — — — — — — — — Residential real estate Accrual 97,353 439,448 494,062 208,132 40,800 251,396 160,421 1,543 1,693,155 Non-accrual — — — 132 427 8,421 75 — 9,055 Total residential real estate 97,353 439,448 494,062 208,264 41,227 259,817 160,496 1,543 1,702,210 YTD gross charge-offs — — — — — — — — — Consumer Accrual 5,931 6,678 2,847 1,436 6,679 2,846 996 — 27,413 Non-accrual — — 4 — — 8 — — 12 Total Consumer 5,931 6,678 2,851 1,436 6,679 2,854 996 — 27,425 YTD gross charge-offs — 4 — 12 13 20 — — 49 Total loans before basis adjustment $ 243,462 $ 1,435,765 $ 1,123,502 $ 530,945 $ 328,610 $ 792,348 $ 242,472 $ 1,543 $ 4,698,647 Total YTD gross charge-offs $ — $ 22 $ 10 $ 14 $ 17 $ 2,939 $ — $ — $ 3,002 Revolving Revolving Loans Loans Converted Term Loans at Amortized Cost by Origination Year Amortized to Term 2022 2021 2020 2019 2018 Prior Cost Loans Total (in thousands) As of December 31, 2022 Commercial real estate Pass $ 817,320 $ 441,277 $ 241,700 $ 254,221 $ 121,351 $ 340,634 $ — $ — $ 2,216,503 Special mention — — — 9,328 22,474 — — — 31,802 Substandard — — — — — 2,039 — — 2,039 Doubtful — — — — — — — — — Total commercial real estate 817,320 441,277 241,700 263,549 143,825 342,673 — — 2,250,344 Commercial and industrial Pass 53,078 95,600 82,170 26,568 37,358 50,500 76,647 — 421,921 Special mention — — — — 49 92 492 — 633 Substandard — 4 3 — 1 323 — — 331 Doubtful — — — — — 1,340 50 — 1,390 Total commercial and industrial 53,078 95,604 82,173 26,568 37,408 52,255 77,189 — 424,275 Commercial construction Pass 88,173 87,569 11,769 9,174 318 1,487 821 — 199,311 Special mention — — — — — — — — — Substandard — — — — — — — — — Doubtful — — — — — — — — — Total commercial construction 88,173 87,569 11,769 9,174 318 1,487 821 — 199,311 Residential real estate Accrual 443,034 507,679 211,429 42,314 25,232 239,677 154,038 1,568 1,624,971 Non-accrual — 203 140 201 1,258 7,411 96 39 9,348 Total residential real estate 443,034 507,882 211,569 42,515 26,490 247,088 154,134 1,607 1,634,319 Consumer Accrual 9,948 3,588 1,971 16,955 6,122 1,733 1,034 — 41,351 Non-accrual 1 — — 28 20 17 4 — 70 Total Consumer 9,949 3,588 1,971 16,983 6,142 1,750 1,038 — 41,421 Total loans $ 1,411,554 $ 1,135,920 $ 549,182 $ 358,789 $ 214,183 $ 645,253 $ 233,182 $ 1,607 $ 4,549,670 |
MORTGAGE LOAN SERVICING (Tables
MORTGAGE LOAN SERVICING (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
MORTGAGE LOAN SERVICING | |
Tabular disclosure of assumptions used in the calculation of fair value of MSR | June 30, December 31, 2023 2022 Prepayment speed 7.20 % 7.10 % Discount rate 9.90 9.81 Default rate 1.41 1.63 |
Schedule of summarized changes to mortgage servicing rights | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Balance, beginning of period $ 47,080 $ 45,043 $ 48,138 $ 38,268 Additions 660 1,225 1,294 2,715 Changes in fair value due to: Reductions from loans paid off during the period (479) (771) (850) (1,604) Changes in valuation inputs or assumptions 915 1,633 (406) 7,751 Balance, end of period $ 48,176 $ 47,130 $ 48,176 $ 47,130 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
DEPOSITS | |
Summary of deposit balances, by type | June 30, December 31, 2023 2022 (in thousands) NOW and demand deposit accounts $ 1,004,528 $ 1,060,268 Regular savings and club accounts 1,390,906 1,468,172 Money market deposit accounts 834,120 861,704 Total non-certificate accounts 3,229,554 3,390,144 Term certificate accounts greater than $250,000 224,737 110,360 Term certificate accounts less than or equal to $250,000 518,194 387,615 Brokered deposits 315,003 301,380 Total certificate accounts 1,057,934 799,355 Total deposits $ 4,287,488 $ 4,189,499 |
Summary of certificate accounts by maturity | Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 896,526 3.87 % Over 1 year to 2 years 129,403 3.29 Over 2 years to 3 years 28,334 2.87 Over 3 years to 4 years 2,996 0.70 Over 4 years to 5 years 696 1.74 Total certificate deposits 1,057,955 3.76 % Less unaccreted acquisition discount (21) Total certificate deposits, net $ 1,057,934 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
BORROWINGS | |
Schedule of borrowed funds by maturity and call date | June 30, 2023 December 31, 2022 Amount by Weighted Amount by Weighted Scheduled Amount by Average Scheduled Average Maturity* Call Date (1) Rate (2) Maturity* Rate (2) (dollars in thousands) Year ending December 31: 2023 $ 90 $ 75,090 2.71 % $ 180 1.40 % 2024 13,400 13,400 1.39 13,400 1.39 2025 85,987 60,987 4.19 987 — 2026 80,000 40,000 4.28 — — 2027 — — — — — 2028 and thereafter 11,091 1,091 3.67 1,108 2.00 $ 190,568 $ 190,568 4.00 % $ 15,675 1.35 % * Includes an amortizing advance requiring monthly principal and interest payments. (1) (2) |
OTHER COMMITMENTS AND CONTING_2
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Schedule of financial instruments with off-balance sheet credit risk | June 30, December 31, 2023 2022 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 67,347 $ 57,916 Commitments to grant other loans 84,676 43,700 Unadvanced funds on home equity lines of credit 256,957 251,759 Unadvanced funds on revolving lines of credit 314,496 351,382 Unadvanced funds on construction loans 287,523 262,945 |
Schedule of activity in the ACL on unfunded commitments | Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Total (in thousands) Balance at March 31, 2023 $ 11,508 $ 967 $ 755 $ 20,942 $ 5,057 $ 7,484 $ 281 $ 46,994 Charge-offs — — — (2,918) — (28) (42) (2,988) Recoveries 1 36 — 1 — 275 4 317 Provision 676 9 (125) 2,574 316 19 29 3,498 Balance at June 30, 2023 $ 12,185 $ 1,012 $ 630 $ 20,599 $ 5,373 $ 7,750 $ 272 $ 47,821 Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Total (in thousands) Balance at December 31, 2022 $ 11,532 $ 924 $ 280 $ 20,357 $ 4,645 $ 7,236 $ 262 $ 45,236 Charge-offs — — — (2,918) — (35) (49) (3,002) Recoveries 2 43 — 2 — 275 20 342 Provision 651 45 350 3,158 728 274 39 5,245 Balance at June 30, 2023 $ 12,185 $ 1,012 $ 630 $ 20,599 $ 5,373 $ 7,750 $ 272 $ 47,821 Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Total (in thousands) Balance at March 31, 2022 $ 8,884 $ 833 $ 314 $ 20,131 $ 4,210 $ 6,949 $ 444 $ 41,765 Charge-offs — — — — — — (11) (11) Recoveries — 81 — 6 — 406 23 516 Provision 1,198 (65) 13 294 160 (181) (129) 1,290 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ 43,560 Second Mortgages Residential One- to Four- and Equity Real Estate Commercial Commercial Commercial Family Lines of Credit Construction Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2021 $ 3,631 $ 420 $ 69 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 Adoption of Topic 326 5,198 391 185 (10,194) 1,698 2,288 123 (1,000) (1,311) Charge-offs — — — (2,786) — (40) (31) — (2,857) Recoveries — 93 — 6 — 473 60 — 632 Provision 1,253 (55) 73 163 662 (185) (192) — 1,719 Balance at June 30, 2022 $ 10,082 $ 849 $ 327 $ 20,431 $ 4,370 $ 7,174 $ 327 $ — $ 43,560 |
Unfunded Commitment | |
Schedule of activity in the ACL on unfunded commitments | Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Total (in thousands) Balance at March 31, 2023 $ 262 $ 548 $ 3,277 $ 940 $ 19 $ 5,046 Provision 10 (58) (97) (70) — (215) Balance at June 30, 2023 $ 272 $ 490 $ 3,180 $ 870 $ 19 $ 4,831 Balance at March 31, 2022 $ 339 $ 538 $ 2,345 $ 604 $ 14 $ 3,840 Provision (2) (56) 1,293 20 1 1,256 Balance at June 30, 2022 $ 337 $ 482 $ 3,638 $ 624 $ 15 $ 5,096 Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Total (in thousands) Balance at December 31, 2022 $ 336 $ 628 $ 3,079 $ 870 $ 14 $ 4,927 Provision (64) (138) 101 — 5 (96) Balance at June 30, 2023 $ 272 $ 490 $ 3,180 $ 870 $ 19 $ 4,831 Balance at December 31, 2021 $ — $ — $ — $ — $ — $ — Adoption of Topic 326 318 380 2,561 658 14 3,931 Provision 19 102 1,077 (34) 1 1,165 Balance at June 30, 2022 $ 337 $ 482 $ 3,638 $ 624 $ 15 $ 5,096 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
DERIVATIVES | |
Schedule of amounts recorded on the consolidated statement of financial condition related to cumulative basis adjustment for fair value hedges | Cumulative Amount of Fair Value Hedging Adjustment Included in the Line Item in the Consolidated Balance Sheets Carrying Amount of the Hedged Carrying Amount of the Hedged in Which the Hedged Item is Included Assets Assets June 30, June 30, June 30, June 30, 2023 2022 2023 2022 (in thousands) Loans held for investment (1) $ 99,556 $ — $ (444) $ — Total $ 99,556 $ — $ (444) $ — |
Schedule of outstanding notional balances and fair values of outstanding derivative instruments | Assets Liabilities Notional Fair Fair Amount Value Value (in thousands) June 30, 2023: Derivatives designated as hedging instruments Fair value hedge - interest rate swaps $ 100,000 $ 437 $ — Cashflow hedge - interest rate swaps 100,000 7,569 — Total derivatives designated as hedging instruments $ 8,006 $ — Derivatives not designated as hedging instruments Derivative loan commitments $ 55,986 $ 521 $ 82 Forward loan sale commitments 51,000 262 3 Interest rate swaps 827,176 28,127 28,127 Risk participation agreements 182,304 — — Total derivatives not designated as hedging instruments $ 28,910 $ 28,212 Total derivatives $ 36,916 $ 28,212 December 31, 2022: Derivatives designated as hedging instruments Cashflow hedge - interest rate swaps $ 100,000 $ 8,314 $ — Total derivatives designated as hedging instruments $ 8,314 $ — Derivatives not designated as hedging instruments Derivative loan commitments $ 27,935 $ 238 $ 65 Forward loan sale commitments 29,000 249 39 Interest rate swaps 772,588 28,525 28,525 Risk participation agreements 164,528 — — Total derivatives not designated as hedging instruments $ 29,012 $ 28,629 Total derivatives $ 37,326 $ 28,629 |
Schedule of net gains and losses on derivative instruments | Location of gain (loss) recognized in Three Months Ended June 30, Six Months Ended June 30, Income 2023 2022 2023 2022 (in thousands) Derivatives designated as fair value hedge Hedged items - loans Interest income $ (444) $ — $ (444) $ — Interest rate swap contracts Interest income 437 — 437 — Total $ (7) $ — $ (7) $ — Derivatives not designated as hedging instruments Derivative loan commitments Mortgage banking income $ (293) $ 369 $ 266 $ (268) Forward loan sale commitments Mortgage banking income 527 (1,676) 49 (21) Interest rate swaps Other income — — — 330 Total $ 234 $ (1,307) $ 315 $ 41 |
Schedule of effect of cash flow hedge accounting on accumulated other comprehensive income | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Derivatives designated as hedging instruments (Loss) gain in OCI on derivatives (effective portion), net of tax $ 319 $ 624 $ (535) $ 3,428 Gain (loss) reclassified from OCI into interest expense (effective portion) $ 1,134 $ 71 $ 2,152 $ (40) |
Schedule of offsetting of derivative and amounts subject to an enforceable master netting arrangement, not offset in the consolidated balance sheet | Gross Amounts Not Offset in the Consolidated Balance Sheets Net Amounts Gross Amounts Gross Amounts Assets (Liabilities) Cash of Recognized Offset in the presented in the Collateral Assets Consolidated Consolidated Financial (Received) Net (Liabilities) Balance Sheets Balance Sheets Instruments Posted Amount (in thousands) Derivatives designated as hedging instruments Interest rate swap on deposits $ 7,569 $ — $ 7,569 $ — $ (7,569) $ — Interest rate swap on residential real estate loans $ 437 $ — $ 437 $ — $ — $ 437 Derivatives not designated as hedging instruments Customer interest rate swaps $ 26,543 $ — $ 26,543 $ — $ (22,431) $ 4,112 |
OPERATING LEASE ROU ASSETS AN_2
OPERATING LEASE ROU ASSETS AND LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
OPERATING LEASE ROU ASSETS AND LIABILITIES | |
Schedule of undiscounted future minimum operating lease payments | June 30, 2023 (in thousands) 2023 $ 1,529 2024 2,827 2025 2,552 2026 2,505 2027 2,445 Thereafter 19,421 Total lease payments 31,279 Imputed interest (5,476) Total present value of operating lease liabilities $ 25,803 |
Schedule of weighted-average discount rate and remaining lease term | June 30, 2023 December 31, 2022 Weighted-average discount rate 2.07 % 2.02 % Weighted-average remaining lease term (years) 16.27 17.33 |
Schedule of components of total lease expense | Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 (in thousands) Lease Expense: Operating lease expense $ 792 $ 822 $ 1,599 $ 1,636 Short-term lease expense 35 37 65 68 Variable lease expense 3 — 5 — Sublease income (4) (5) (9) (5) Total lease expense $ 826 $ 854 $ 1,660 $ 1,699 Other Information Cash paid for amounts included in the measurement of lease liabilities- operating cash flows for operating leases 779 802 1,614 1,601 Operating Lease - Operating cash flows (Liability reduction) 655 672 1,335 1,340 ROU assets obtained in exchange for new operating lease liabilities 596 778 596 1,083 |
MINIMUM REGULATORY CAPITAL RE_2
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | |
Summary of the company's and the bank's actual regulatory capital ratios | Minimum Required to be Considered "Well Capitalized" Minimum Required for Under Prompt Corrective Actual Capital Adequacy Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) HarborOne Bancorp, Inc. June 30, 2023 Common equity Tier 1 capital to risk-weighted assets $ 570,648 12.0 % $ 213,486 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 570,648 12.0 284,648 6.0 N/A N/A Total capital to risk-weighted assets 658,301 13.9 379,531 8.0 N/A N/A Tier 1 capital to average assets 570,648 10.2 223,471 4.0 N/A N/A December 31, 2022 Common equity Tier 1 capital to risk-weighted assets $ 592,610 12.8 % $ 208,541 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 592,610 12.8 278,054 6.0 N/A N/A Total capital to risk-weighted assets 677,774 14.6 370,739 8.0 N/A N/A Tier 1 capital to average assets 592,610 11.5 205,897 4.0 N/A N/A HarborOne Bank June 30, 2023 Common equity Tier 1 capital to risk-weighted assets $ 536,539 11.3 % $ 213,396 4.5 % $ 308,239 6.5 % Tier 1 capital to risk-weighted assets 536,539 11.3 284,529 6.0 379,371 8.0 Total capital to risk-weighted assets 589,191 12.4 379,371 8.0 474,214 10.0 Tier 1 capital to average assets 536,539 9.6 223,432 4.0 279,291 5.0 December 31, 2022 Common equity Tier 1 capital to risk-weighted assets $ 525,522 11.3 % $ 208,447 4.5 % $ 301,090 6.5 % Tier 1 capital to risk-weighted assets 525,522 11.3 277,929 6.0 370,572 8.0 Total capital to risk-weighted assets 575,686 12.4 370,572 8.0 463,215 10.0 Tier 1 capital to average assets 525,522 10.2 205,874 4.0 257,342 5.0 |
COMPREHENSIVE (LOSS) INCOME (Ta
COMPREHENSIVE (LOSS) INCOME (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
COMPREHENSIVE (LOSS) INCOME | |
Summary of changes in accumulated other comprehensive (loss) income | Three Months Ended June 30, 2023 2022 Available Cash Available Cash Postretirement for Sale Flow for Sale Flow Benefit Securities Hedge Total Securities Hedge Total (in thousands) Balance at beginning of period $ 150 $ (47,686) $ 5,126 $ (42,410) $ (23,048) $ 4,001 $ (19,047) Other comprehensive income (loss) before reclassifications 1 (5,366) 1,577 (3,788) (20,323) 939 (19,384) Amounts reclassified from accumulated other comprehensive (loss) income (39) — (1,134) (1,173) — (71) (71) Net current period other comprehensive (loss) income (38) (5,366) 443 (4,961) (20,323) 868 (19,455) Related tax effect — 1,205 (124) 1,081 4,479 (244) 4,235 Balance at end of period $ 112 $ (51,847) $ 5,445 $ (46,290) $ (38,892) $ 4,625 $ (34,267) |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
FAIR VALUE OF ASSETS AND LIABILITIES | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Total Level 1 Level 2 Level 3 Fair Value (in thousands) June 30, 2023 Assets Securities available for sale $ — $ 292,012 $ — $ 292,012 Loans held for sale — 20,949 — 20,949 Mortgage servicing rights — 48,176 — 48,176 Derivatives — 36,133 783 36,916 $ — $ 397,270 $ 783 $ 398,053 Liabilities Derivatives $ — $ 28,127 $ 85 $ 28,212 December 31, 2022 Assets Securities available for sale $ — $ 301,149 $ — $ 301,149 Loans held for sale — 18,544 — 18,544 Mortgage servicing rights — 48,138 — 48,138 Derivatives — 36,839 487 37,326 $ — $ 404,670 $ 487 $ 405,157 Liabilities Derivatives $ — $ 28,525 $ 104 $ 28,629 |
Schedule of changes in Level 3 assets measured at fair value on a recurring basis | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 766 $ 2,864 $ 487 $ 1,583 Total gains (losses) included in net income (1) 17 (1,520) 296 (239) Balance at end of period $ 783 $ 1,344 $ 783 $ 1,344 Changes in unrealized gains relating to instruments at period end $ 783 $ 1,344 $ 783 $ 1,344 |
Schedule of changes in Level 3 liabilities measured at fair value on a recurring basis | Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (302) $ (452) $ (104) $ (189) Total gains (losses) included in net income (1) 217 213 19 (50) Balance at end of period $ (85) $ (239) $ (85) $ (239) Changes in unrealized losses relating to instruments at period end $ (85) $ (239) $ (85) $ (239) (1) Included in mortgage banking income on the Consolidated Statements of Income. |
Schedule of assets measured at fair value on a non-recurring basis | June 30, December 31, 2023 2022 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Collateral-dependent impaired loans $ — $ — $ 7,108 $ — $ — $ 349 Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Collateral-dependent impaired loans $ 2,977 $ 9 $ 2,982 $ 819 |
Schedule of changes in Level 3 assets measured at fair value on a nonrecurring basis | The table below presents quantitative information about significant unobservable inputs (Level 3) for assets measured at fair value on a nonrecurring basis at the dates indicated. Fair Value June 30, December 31, Valuation Technique 2023 2022 (in thousands) Collateral-dependent impaired loans $ 7,108 $ 349 Sales Comparison Approach (1) (1) Fair value is generally determined through independent appraisals of the underlying collateral which includes unobservable inputs such as adjustments for differences between the comparable sales. The Company may also use another source of collateral assessment to determine a reasonable estimate of the fair value of the collateral. Appraisals may be adjusted by Management for qualitative factors and estimated liquidation expenses. Generally, appraisals for residential real estate and commercial real estate loan are discounted 20% . Commercial and industrial appraisals are generally discounted 25% - 50% . Management may take larger discounts to reflect market liquidity for certain types of assets not addressed in the appraisals. |
Schedule of estimated fair values and related carrying amounts of financial instruments | June 30, 2023 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 252,851 $ 252,851 $ — $ — $ 252,851 Securities available for sale 292,012 — 292,012 — 292,012 Securities held to maturity 19,839 — 19,005 — 19,005 Federal Home Loan Bank stock 27,123 N/A N/A N/A N/A Loans held for sale 20,949 — 20,949 — 20,949 Loans, net 4,650,382 — — 4,464,164 4,464,164 Retirement plan annuities 14,877 — — 14,877 14,877 Accrued interest receivable 16,948 — 16,948 — 16,948 Derivatives 36,916 — 36,133 783 36,916 Financial liabilities: Deposits 4,287,488 — — 4,262,936 4,262,936 Borrowed funds 604,568 — 602,341 — 602,341 Subordinated debt 34,348 — — 33,892 33,892 Mortgagors' escrow accounts 11,073 — — 11,073 11,073 Accrued interest payable 4,845 — 4,845 — 4,845 Derivatives 28,212 — 28,127 85 28,212 December 31, 2022 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 98,017 $ 98,017 $ — $ — $ 98,017 Securities available for sale 301,149 — 301,149 — 301,149 Securities held to maturity 19,949 — 19,274 — 19,274 Federal Home Loan Bank stock 20,071 N/A N/A N/A N/A Loans held for sale 18,544 — 18,544 — 18,544 Loans, net 4,504,434 — — 4,383,613 4,383,613 Retirement plan annuities 14,630 — — 14,630 14,630 Accrued interest receivable 15,139 — 15,139 — 15,139 Derivatives 37,326 — 36,839 487 37,326 Financial liabilities: Deposits 4,189,499 — — 4,166,796 4,166,796 Borrowed funds 400,675 — 399,655 — 399,655 Subordinated debt 34,285 — — 28,221 28,221 Mortgagors' escrow accounts 9,537 — — 9,537 9,537 Accrued interest payable 2,325 — 2,325 — 2,325 Derivatives 28,629 — 28,525 104 28,629 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share | Three Months Ended June 30, 2023 2022 Net income available to common stockholders (in thousands) $ 7,479 $ 9,987 Average number of common shares outstanding 46,620,893 50,487,259 Less: Average unallocated ESOP shares and non-vested restricted shares (3,557,386) (3,506,429) Weighted average number of common shares outstanding used to calculate basic earnings per common share 43,063,507 46,980,830 Dilutive effect of share-based compensation 69,948 555,203 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 43,133,455 47,536,033 Earnings per common share: Basic $ 0.17 $ 0.21 Diluted $ 0.17 $ 0.21 Six Months Ended June 30, 2023 2022 Net income available to common stockholders (in thousands) $ 14,776 $ 22,254 Average number of common shares outstanding 47,522,623 50,941,367 Less: Average unallocated ESOP shares and non-vested restricted shares (3,567,212) (3,535,110) Weighted average number of common shares outstanding used to calculate basic earnings per common share 43,955,411 47,406,257 Dilutive effect of share-based compensation 248,482 704,606 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 44,203,893 48,110,863 Earnings per common share: Basic $ 0.34 $ 0.47 Diluted $ 0.33 $ 0.46 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
SEGMENT REPORTING | |
Summary of reportable segments | Three Months Ended June 30, 2023 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 32,490 $ 120 $ 32,100 Provision for credit losses 3,283 — 3,283 Net interest and dividend income, after provision for credit losses 29,207 120 28,817 Mortgage banking income: Gain on sale of mortgage loans — 3,300 3,300 Intersegment gain (loss) (358) 90 — Changes in mortgage servicing rights fair value 29 407 436 Other 195 2,117 2,312 Total mortgage banking income (loss) (134) 5,914 6,048 Other noninterest income 6,614 — 6,614 Total noninterest income 6,480 5,914 12,662 Noninterest expense 26,193 5,493 31,725 Income before income taxes 9,494 541 9,754 Provision for income taxes 2,193 232 2,275 Net income $ 7,301 $ 309 $ 7,479 Six Months Ended June 30, 2023 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 67,052 $ 447 $ 66,498 Provision for credit losses 5,149 — 5,149 Net interest and dividend income, after provision for credit losses 61,903 447 61,349 Mortgage banking income: Gain on sale of mortgage loans — 5,524 5,524 Intersegment gain (loss) (706) 544 — Changes in mortgage servicing rights fair value (107) (1,149) (1,256) Other 396 4,132 4,528 Total mortgage banking income (loss) (417) 9,051 8,796 Other noninterest income 12,556 — 12,556 Total noninterest income 12,139 9,051 21,352 Noninterest expense 52,383 10,815 63,234 Income (loss) before income taxes 21,659 (1,317) 19,467 Provision (benefit) for income taxes 5,308 (333) 4,691 Net income (loss) $ 16,351 $ (984) $ 14,776 Total assets at period end $ 5,668,582 $ 115,782 $ 5,659,254 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 Three Months Ended June 30, 2022 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 37,246 $ 411 $ 37,195 Provision for credit losses 2,546 — 2,546 Net interest and dividend income, after provision for credit losses 34,700 411 34,649 Mortgage banking income: Gain on sale of mortgage loans — 4,538 4,538 Intersegment gain (loss) (1,095) 1,097 — Changes in mortgage servicing rights fair value 127 735 862 Other 219 2,393 2,612 Total mortgage banking income (loss) (749) 8,763 8,012 Other noninterest income 6,084 7 6,091 Total noninterest income 5,335 8,770 14,103 Noninterest expense 27,131 7,242 34,954 Income before income taxes 12,904 1,939 13,798 Provision for income taxes 3,550 549 3,811 Net income $ 9,354 $ 1,390 $ 9,987 Six Months Ended June 30, 2022 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 70,670 $ 761 $ 70,465 Provision for credit losses 2,884 — 2,884 Net interest and dividend income, after provision for credit losses 67,786 761 67,581 Mortgage banking income: Gain on sale of mortgage loans — 9,860 9,860 Intersegment gain (loss) (1,703) 1,934 — Changes in mortgage servicing rights fair value 717 5,430 6,147 Other 452 4,718 5,170 Total mortgage banking income (loss) (534) 21,942 21,177 Other noninterest income 11,971 16 11,987 Total noninterest income 11,437 21,958 33,164 Noninterest expense 53,956 15,003 69,789 Income before income taxes 25,267 7,716 30,956 Provision for income taxes 7,107 2,090 8,702 Net income $ 18,160 $ 5,626 $ 22,254 Total assets at period end $ 4,718,584 $ 149,186 $ 4,704,044 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended |
Jun. 30, 2023 item state | |
Number of full-service bank offices | item | 30 |
HarborOne Mortgage | |
Additional states licensed to lend | state | 5 |
DEBT SECURITIES - Summary of se
DEBT SECURITIES - Summary of securities available for sale and held to maturity (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Securities | ||
Accrued interest receivable | $ 944,000 | $ 957,000 |
Securities available for sale, at fair value | 292,012,000 | 301,149,000 |
Amortized Cost | 19,839,000 | 19,949,000 |
Securities available for sale | ||
Amortized Cost | 358,544,000 | 369,404,000 |
Gross Unrealized Losses | 66,532,000 | 68,255,000 |
Allowance for Credit Loss | 0 | |
Fair Value | 292,012,000 | 301,149,000 |
Securities held to maturity | ||
Amortized Cost | 19,839,000 | 19,949,000 |
Gross Unrealized Losses | 834,000 | 675,000 |
Fair Value | 19,005,000 | 19,274,000 |
BTFP borrowing capacity | ||
Securities | ||
Amortized Cost | 15,000,000 | |
Securities held to maturity | ||
Amortized Cost | 15,000,000 | |
Asset Pledged as Collateral | ||
Securities | ||
Securities available for sale, at fair value | 289,200,000 | |
Securities available for sale | ||
Fair Value | 289,200,000 | |
U.S. government and government-sponsored enterprise obligations | ||
Securities | ||
Securities available for sale, at fair value | 39,185,000 | 38,494,000 |
Amortized Cost | 15,000,000 | 15,000,000 |
Securities available for sale | ||
Amortized Cost | 47,143,000 | 47,143,000 |
Gross Unrealized Losses | 7,958,000 | 8,649,000 |
Fair Value | 39,185,000 | 38,494,000 |
Securities held to maturity | ||
Amortized Cost | 15,000,000 | 15,000,000 |
Gross Unrealized Losses | 680,000 | 597,000 |
Fair Value | 14,320,000 | 14,403,000 |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Securities | ||
Securities available for sale, at fair value | 247,867,000 | 256,815,000 |
Securities available for sale | ||
Amortized Cost | 305,959,000 | 315,964,000 |
Gross Unrealized Losses | 58,092,000 | 59,149,000 |
Fair Value | 247,867,000 | 256,815,000 |
U.S. government-sponsored collateralized mortgage obligations | ||
Securities | ||
Securities available for sale, at fair value | 2,126,000 | 2,499,000 |
Securities available for sale | ||
Amortized Cost | 2,238,000 | 2,612,000 |
Gross Unrealized Losses | 112,000 | 113,000 |
Fair Value | 2,126,000 | 2,499,000 |
SBA asset-backed securities | ||
Securities | ||
Securities available for sale, at fair value | 2,032,000 | 2,495,000 |
Amortized Cost | 4,839,000 | 4,949,000 |
Securities available for sale | ||
Amortized Cost | 2,204,000 | 2,685,000 |
Gross Unrealized Losses | 172,000 | 190,000 |
Fair Value | 2,032,000 | 2,495,000 |
Securities held to maturity | ||
Amortized Cost | 4,839,000 | 4,949,000 |
Gross Unrealized Losses | 154,000 | 78,000 |
Fair Value | 4,685,000 | 4,871,000 |
Corporate bonds | ||
Securities | ||
Securities available for sale, at fair value | 802,000 | 846,000 |
Securities available for sale | ||
Amortized Cost | 1,000,000 | 1,000,000 |
Gross Unrealized Losses | 198,000 | 154,000 |
Fair Value | $ 802,000 | $ 846,000 |
DEBT SECURITIES - Contractual m
DEBT SECURITIES - Contractual maturity (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) security | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Securities | |||||
Gain on sale and call of securities, net | $ 0 | $ 0 | $ 0 | $ 0 | |
Fair Value | 292,012,000 | 292,012,000 | $ 301,149,000 | ||
Fair Value | 19,005,000 | 19,005,000 | 19,274,000 | ||
Allowance for Credit Loss | 0 | 0 | |||
Amortized Cost-Available-for-Sale | |||||
After 1 year through 5 years | 5,000,000 | 5,000,000 | |||
After 5 years through 10 years | 43,143,000 | 43,143,000 | |||
Total for contractual maturity | 48,143,000 | 48,143,000 | |||
Total | 358,544,000 | 358,544,000 | 369,404,000 | ||
Fair Value-Available-for-Sale | |||||
After 1 year through 5 years | 4,736,000 | 4,736,000 | |||
After 5 years through 10 years | 35,251,000 | 35,251,000 | |||
Total for contractual maturity | 39,987,000 | 39,987,000 | |||
Total | 292,012,000 | 292,012,000 | 301,149,000 | ||
Amortized Cost-Held-to-Maturity | |||||
Amortized Cost | 19,839,000 | 19,839,000 | 19,949,000 | ||
After 1 year through 5 years | 15,000,000 | 15,000,000 | |||
Total for contractual maturity | 15,000,000 | 15,000,000 | |||
Total | 19,839,000 | 19,839,000 | |||
Fair Value-Held-to-Maturity | |||||
After 1 year through 5 years | 14,320,000 | 14,320,000 | |||
Total for contractual maturity | 14,320,000 | 14,320,000 | |||
Total | 19,005,000 | $ 19,005,000 | 19,274,000 | ||
Sales and proceeds | |||||
Number of holdings greater than 10% of shareholder equity | security | 0 | ||||
Minimum | |||||
Securities | |||||
Maturity period | 2 years | ||||
Maximum | |||||
Securities | |||||
Maturity period | 28 years | ||||
Asset Pledged as Collateral | |||||
Securities | |||||
Fair Value | 289,200,000 | $ 289,200,000 | |||
Fair Value-Available-for-Sale | |||||
Total | 289,200,000 | 289,200,000 | |||
U.S. government agency and government-sponsored residential mortgage-backed securities | |||||
Securities | |||||
Fair Value | 247,867,000 | 247,867,000 | 256,815,000 | ||
Amortized Cost-Available-for-Sale | |||||
No single maturity date | 305,959,000 | 305,959,000 | |||
Total | 305,959,000 | 305,959,000 | 315,964,000 | ||
Fair Value-Available-for-Sale | |||||
No single maturity date | 247,867,000 | 247,867,000 | |||
Total | 247,867,000 | 247,867,000 | 256,815,000 | ||
U.S. government-sponsored collateralized mortgage obligations | |||||
Securities | |||||
Fair Value | 2,126,000 | 2,126,000 | 2,499,000 | ||
Amortized Cost-Available-for-Sale | |||||
No single maturity date | 2,238,000 | 2,238,000 | |||
Total | 2,238,000 | 2,238,000 | 2,612,000 | ||
Fair Value-Available-for-Sale | |||||
No single maturity date | 2,126,000 | 2,126,000 | |||
Total | 2,126,000 | 2,126,000 | 2,499,000 | ||
SBA asset-backed securities | |||||
Securities | |||||
Fair Value | 2,032,000 | 2,032,000 | 2,495,000 | ||
Fair Value | 4,685,000 | 4,685,000 | 4,871,000 | ||
Amortized Cost-Available-for-Sale | |||||
No single maturity date | 2,204,000 | 2,204,000 | |||
Total | 2,204,000 | 2,204,000 | 2,685,000 | ||
Fair Value-Available-for-Sale | |||||
No single maturity date | 2,032,000 | 2,032,000 | |||
Total | 2,032,000 | 2,032,000 | 2,495,000 | ||
Amortized Cost-Held-to-Maturity | |||||
Amortized Cost | 4,839,000 | 4,839,000 | 4,949,000 | ||
No single maturity date | 4,839,000 | 4,839,000 | |||
Fair Value-Held-to-Maturity | |||||
No single maturity date | 4,685,000 | 4,685,000 | |||
Total | 4,685,000 | 4,685,000 | 4,871,000 | ||
U.S. government and government-sponsored enterprise obligations | |||||
Securities | |||||
Fair Value | 39,185,000 | 39,185,000 | 38,494,000 | ||
Fair Value | 14,320,000 | 14,320,000 | 14,403,000 | ||
Amortized Cost-Available-for-Sale | |||||
Total | 47,143,000 | 47,143,000 | 47,143,000 | ||
Fair Value-Available-for-Sale | |||||
Total | 39,185,000 | 39,185,000 | 38,494,000 | ||
Amortized Cost-Held-to-Maturity | |||||
Amortized Cost | 15,000,000 | 15,000,000 | 15,000,000 | ||
Fair Value-Held-to-Maturity | |||||
Total | 14,320,000 | $ 14,320,000 | 14,403,000 | ||
U.S. government and government-sponsored enterprise obligations | Minimum | |||||
Securities | |||||
Maturity period | 4 years | ||||
Callable period | 1 month | ||||
U.S. government and government-sponsored enterprise obligations | Maximum | |||||
Securities | |||||
Maturity period | 9 years | ||||
Callable period | 4 years | ||||
Corporate bonds | |||||
Securities | |||||
Fair Value | 802,000 | $ 802,000 | 846,000 | ||
Amortized Cost-Available-for-Sale | |||||
Total | 1,000,000 | 1,000,000 | 1,000,000 | ||
Fair Value-Available-for-Sale | |||||
Total | 802,000 | 802,000 | $ 846,000 | ||
U.S. government and government-sponsored enterprise obligations and corporate bonds | |||||
Securities | |||||
Fair Value | 54,300,000 | 54,300,000 | |||
Fair Value-Available-for-Sale | |||||
Total | $ 54,300,000 | $ 54,300,000 |
DEBT SECURITIES - Gross unreali
DEBT SECURITIES - Gross unrealized losses aggregated by category (Details) | 6 Months Ended | |
Jun. 30, 2023 USD ($) security | Dec. 31, 2022 USD ($) | |
Marketable Securities [Line Items] | ||
Less than Twelve Months | $ 67,000 | $ 4,326,000 |
Twelve Months and Over | 66,465,000 | 63,929,000 |
Less Than Twelve Months | 1,547,000 | 45,805,000 |
Twelve Months and Over | 290,431,000 | 255,309,000 |
Less than 12 months | 329,000 | 675,000 |
Twelve months and over | 505,000 | |
Less than 12 months | 9,510,000 | 19,274,000 |
Twelve months and Over | $ 9,495,000 | |
Number of debt securities | security | 132 | |
Number of debt securities in unrealized loss position | security | 131 | |
Debt Securities, Available-for-Sale, Amortized Cost, Allowance for Credit Loss, Excluding Accrued Interest | $ 0 | |
U.S. government and government-sponsored enterprise obligations | ||
Marketable Securities [Line Items] | ||
Less than Twelve Months | 249,000 | |
Twelve Months and Over | 7,958,000 | 8,400,000 |
Less Than Twelve Months | 4,751,000 | |
Twelve Months and Over | 39,185,000 | 33,743,000 |
Less than 12 months | 175,000 | 597,000 |
Twelve months and over | 505,000 | |
Less than 12 months | 4,825,000 | 14,403,000 |
Twelve months and Over | 9,495,000 | |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Marketable Securities [Line Items] | ||
Less than Twelve Months | 67,000 | 3,620,000 |
Twelve Months and Over | 58,025,000 | 55,529,000 |
Less Than Twelve Months | 1,547,000 | 35,214,000 |
Twelve Months and Over | 246,286,000 | 221,566,000 |
U.S. government-sponsored collateralized mortgage obligations | ||
Marketable Securities [Line Items] | ||
Less than Twelve Months | 113,000 | |
Twelve Months and Over | 112,000 | |
Less Than Twelve Months | 2,499,000 | |
Twelve Months and Over | 2,126,000 | |
SBA asset-backed securities | ||
Marketable Securities [Line Items] | ||
Less than Twelve Months | 190,000 | |
Twelve Months and Over | 172,000 | |
Less Than Twelve Months | 2,495,000 | |
Twelve Months and Over | 2,032,000 | |
Less than 12 months | 154,000 | 78,000 |
Less than 12 months | 4,685,000 | 4,871,000 |
Corporate bonds | ||
Marketable Securities [Line Items] | ||
Less than Twelve Months | 154,000 | |
Twelve Months and Over | 198,000 | |
Less Than Twelve Months | $ 846,000 | |
Twelve Months and Over | $ 802,000 |
LOANS HELD FOR SALE (Details)
LOANS HELD FOR SALE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Fair value and contractual principal outstanding: | |||||
Loans held for sale, fair value | $ 20,949,000 | $ 20,949,000 | $ 18,544,000 | ||
Loans held for sale, contractual principal outstanding | 20,578,000 | 20,578,000 | 18,208,000 | ||
Fair value less unpaid principal balance | 371,000 | 371,000 | 336,000 | ||
Change in fair value of mortgage loans held for sale | 28,000 | $ 522,000 | 35,000 | $ (791,000) | |
90 Days or More | |||||
Fair value and contractual principal outstanding: | |||||
Loans held for sale, fair value | $ 0 | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR CREDI_3
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Summary of Balances of Loans (Details) - USD ($) | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Loans | ||||||
Total loans | $ 4,698,203,000 | $ 4,549,670,000 | ||||
Total loans before basis adjustment | 4,698,647,000 | 4,549,670,000 | ||||
Basis adjustment associated with fair value hedge | (444,000) | |||||
Net deferred loan costs | 8,000,000 | 7,400,000 | ||||
Less: Allowance for credit losses on loans | (47,821,000) | $ (46,994,000) | (45,236,000) | $ (43,560,000) | $ (41,765,000) | $ (45,377,000) |
Net loans | 4,650,382,000 | 4,504,434,000 | ||||
PPP loans | Commercial and industrial | ||||||
Loans | ||||||
Loans before fees | 389,000 | 2,100,000 | ||||
Deferred processing fee income | 52,000 | 65,000 | ||||
Residential | ||||||
Loans | ||||||
Total loans | 1,702,210,000 | 1,634,319,000 | ||||
Total loans before basis adjustment | 1,702,210,000 | |||||
Residential | 1-4 family | ||||||
Loans | ||||||
Total loans | 1,504,142,000 | 1,432,263,000 | ||||
Less: Allowance for credit losses on loans | (12,185,000) | (11,508,000) | (11,532,000) | (10,082,000) | (8,884,000) | (3,631,000) |
Residential | Second mortgages and equity lines of credit | ||||||
Loans | ||||||
Total loans | 171,073,000 | 166,219,000 | ||||
Less: Allowance for credit losses on loans | (1,012,000) | (967,000) | (924,000) | (849,000) | (833,000) | (420,000) |
Residential | Residential real estate construction | ||||||
Loans | ||||||
Total loans | 26,995,000 | 35,837,000 | ||||
Less: Allowance for credit losses on loans | (630,000) | (755,000) | (280,000) | (327,000) | (314,000) | (69,000) |
Commercial | ||||||
Loans | ||||||
Total loans | 2,969,012,000 | 2,873,930,000 | ||||
Commercial | Commercial real estate | ||||||
Loans | ||||||
Total loans | 2,286,688,000 | 2,250,344,000 | ||||
Total loans before basis adjustment | 2,286,688,000 | |||||
Less: Allowance for credit losses on loans | (20,599,000) | (20,942,000) | (20,357,000) | (20,431,000) | (20,131,000) | (33,242,000) |
Commercial | Commercial construction | ||||||
Loans | ||||||
Total loans | 228,902,000 | 199,311,000 | ||||
Total loans before basis adjustment | 228,902,000 | |||||
Less: Allowance for credit losses on loans | (5,373,000) | (5,057,000) | (4,645,000) | (4,370,000) | (4,210,000) | (2,010,000) |
Commercial | Commercial and industrial | ||||||
Loans | ||||||
Total loans | 453,422,000 | 424,275,000 | ||||
Total loans before basis adjustment | 453,422,000 | |||||
Less: Allowance for credit losses on loans | (7,750,000) | (7,484,000) | (7,236,000) | (7,174,000) | (6,949,000) | (4,638,000) |
Consumer loans | ||||||
Loans | ||||||
Total loans | 27,425,000 | 41,421,000 | ||||
Total loans before basis adjustment | 27,425,000 | |||||
Less: Allowance for credit losses on loans | (272,000) | $ (281,000) | (262,000) | $ (327,000) | $ (444,000) | $ (367,000) |
Consumer loans | Auto | ||||||
Loans | ||||||
Total loans | 19,107,000 | 33,625,000 | ||||
Consumer loans | Personal | ||||||
Loans | ||||||
Total loans | $ 8,318,000 | $ 7,796,000 |
LOANS AND ALLOWANCE FOR CREDI_4
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Loans Sold or Transferred (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Commercial real estate | ||
Loans | ||
Unpaid principal balance of loans serviced for others | $ 386.5 | $ 366.4 |
LOANS AND ALLOWANCE FOR CREDI_5
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Allowance for Loan Losses Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | $ 46,994 | $ 41,765 | $ 45,236 | $ 45,377 |
Charge-offs | (2,988) | (11) | (3,002) | (2,857) |
Recoveries | 317 | 516 | 342 | 632 |
Provision | 3,498 | 1,290 | 5,245 | 1,719 |
Balance | 47,821 | 43,560 | 47,821 | 43,560 |
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | (1,311) | (1,311) | ||
Residential | 1-4 family | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 11,508 | 8,884 | 11,532 | 3,631 |
Recoveries | 1 | 2 | ||
Provision | 676 | 1,198 | 651 | 1,253 |
Balance | 12,185 | 10,082 | 12,185 | 10,082 |
Residential | 1-4 family | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 5,198 | 5,198 | ||
Residential | Second mortgages and equity lines of credit | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 967 | 833 | 924 | 420 |
Recoveries | 36 | 81 | 43 | 93 |
Provision | 9 | (65) | 45 | (55) |
Balance | 1,012 | 849 | 1,012 | 849 |
Residential | Second mortgages and equity lines of credit | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 391 | 391 | ||
Residential | Residential real estate construction | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 755 | 314 | 280 | 69 |
Provision | (125) | 13 | 350 | 73 |
Balance | 630 | 327 | 630 | 327 |
Residential | Residential real estate construction | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 185 | 185 | ||
Commercial | Commercial real estate | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 20,942 | 20,131 | 20,357 | 33,242 |
Charge-offs | (2,918) | (2,918) | (2,786) | |
Recoveries | 1 | 6 | 2 | 6 |
Provision | 2,574 | 294 | 3,158 | 163 |
Balance | 20,599 | 20,431 | 20,599 | 20,431 |
Commercial | Commercial real estate | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | (10,194) | (10,194) | ||
Commercial | Commercial construction | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 5,057 | 4,210 | 4,645 | 2,010 |
Provision | 316 | 160 | 728 | 662 |
Balance | 5,373 | 4,370 | 5,373 | 4,370 |
Commercial | Commercial construction | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 1,698 | 1,698 | ||
Commercial | Commercial and industrial | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 7,484 | 6,949 | 7,236 | 4,638 |
Charge-offs | (28) | (35) | (40) | |
Recoveries | 275 | 406 | 275 | 473 |
Provision | 19 | (181) | 274 | (185) |
Balance | 7,750 | 7,174 | 7,750 | 7,174 |
Commercial | Commercial and industrial | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 2,288 | 2,288 | ||
Consumer loans | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 281 | 444 | 262 | 367 |
Charge-offs | (42) | (11) | (49) | (31) |
Recoveries | 4 | 23 | 20 | 60 |
Provision | 29 | (129) | 39 | (192) |
Balance | $ 272 | 327 | $ 272 | 327 |
Consumer loans | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 123 | 123 | ||
Unallocated | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | 1,000 | |||
Unallocated | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | ||||
Balance | $ (1,000) | $ (1,000) |
LOANS AND ALLOWANCE FOR CREDI_6
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Carrying value (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | $ 20,200,000 | $ 23,800,000 |
Related Allowance | 80,000 | 203,000 |
Collateral Dependent | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | 19,997,000 | 15,862,000 |
Related Allowance | 77,000 | 8,000 |
Residential | Collateral Dependent | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | 8,842,000 | 10,494,000 |
Related Allowance | 2,000 | 1,000 |
Commercial | Collateral Dependent | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | 11,155,000 | 5,368,000 |
Related Allowance | 75,000 | 7,000 |
Commercial | Commercial real estate | Collateral Dependent | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | 8,959,000 | 2,039,000 |
Related Allowance | 54,000 | |
Commercial | Commercial and industrial | Collateral Dependent | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | 2,196,000 | 3,329,000 |
Related Allowance | $ 21,000 | $ 7,000 |
LOANS AND ALLOWANCE FOR CREDI_7
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Summary of Past Due and Non-Accrual Loans (Details) $ in Thousands | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 |
Summary of past due and non-accrual loans | |||
Total loans | $ 4,698,203 | $ 4,549,670 | |
Loans on Non-accrual | 20,210 | 14,786 | |
Loans past due 90 days or more and still accruing | $ 0 | 0 | |
Borrowers experiencing financial | 0 | 0 | |
Total Past Due | |||
Summary of past due and non-accrual loans | |||
Total loans | $ 13,342 | 15,425 | |
30 to 59 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 8,012 | 4,510 | |
60 to 89 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 1,030 | 1,122 | |
90 Days or More | |||
Summary of past due and non-accrual loans | |||
Total loans | 4,300 | 9,793 | |
Residential | |||
Summary of past due and non-accrual loans | |||
Total loans | 1,702,210 | 1,634,319 | |
Residential | 1-4 family | |||
Summary of past due and non-accrual loans | |||
Total loans | 1,504,142 | 1,432,263 | |
Loans on Non-accrual | 8,723 | 8,927 | |
Residential | 1-4 family | Total Past Due | |||
Summary of past due and non-accrual loans | |||
Total loans | 4,101 | 10,761 | |
Residential | 1-4 family | 30 to 59 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 526 | 3,711 | |
Residential | 1-4 family | 60 to 89 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 709 | 524 | |
Residential | 1-4 family | 90 Days or More | |||
Summary of past due and non-accrual loans | |||
Total loans | 2,866 | 6,526 | |
Residential | Second mortgages and equity lines of credit | |||
Summary of past due and non-accrual loans | |||
Total loans | 171,073 | 166,219 | |
Loans on Non-accrual | 332 | 421 | |
Residential | Second mortgages and equity lines of credit | Total Past Due | |||
Summary of past due and non-accrual loans | |||
Total loans | 360 | 601 | |
Residential | Second mortgages and equity lines of credit | 30 to 59 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 181 | 407 | |
Residential | Second mortgages and equity lines of credit | 60 to 89 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 132 | 5 | |
Residential | Second mortgages and equity lines of credit | 90 Days or More | |||
Summary of past due and non-accrual loans | |||
Total loans | 47 | 189 | |
Commercial | |||
Summary of past due and non-accrual loans | |||
Total loans | 2,969,012 | 2,873,930 | |
Commercial | Commercial real estate | |||
Summary of past due and non-accrual loans | |||
Total loans | 2,286,688 | 2,250,344 | |
Loans on Non-accrual | 8,960 | 2,039 | |
Commercial | Commercial real estate | Total Past Due | |||
Summary of past due and non-accrual loans | |||
Total loans | 7,078 | 120 | |
Commercial | Commercial real estate | 30 to 59 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 6,999 | ||
Commercial | Commercial real estate | 90 Days or More | |||
Summary of past due and non-accrual loans | |||
Total loans | 79 | 120 | |
Commercial | Commercial construction | |||
Summary of past due and non-accrual loans | |||
Total loans | 228,902 | 199,311 | |
Commercial | Commercial and industrial | |||
Summary of past due and non-accrual loans | |||
Total loans | 453,422 | 424,275 | |
Loans on Non-accrual | 2,183 | 3,329 | |
Commercial | Commercial and industrial | Total Past Due | |||
Summary of past due and non-accrual loans | |||
Total loans | 1,412 | 3,419 | |
Commercial | Commercial and industrial | 30 to 59 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 10 | 26 | |
Commercial | Commercial and industrial | 60 to 89 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 104 | 492 | |
Commercial | Commercial and industrial | 90 Days or More | |||
Summary of past due and non-accrual loans | |||
Total loans | 1,298 | 2,901 | |
Consumer loans | |||
Summary of past due and non-accrual loans | |||
Total loans | 27,425 | 41,421 | |
Consumer loans | Auto | |||
Summary of past due and non-accrual loans | |||
Total loans | 19,107 | 33,625 | |
Loans on Non-accrual | 8 | 64 | |
Consumer loans | Auto | Total Past Due | |||
Summary of past due and non-accrual loans | |||
Total loans | 302 | 500 | |
Consumer loans | Auto | 30 to 59 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 235 | 348 | |
Consumer loans | Auto | 60 to 89 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 61 | 101 | |
Consumer loans | Auto | 90 Days or More | |||
Summary of past due and non-accrual loans | |||
Total loans | 6 | 51 | |
Consumer loans | Personal | |||
Summary of past due and non-accrual loans | |||
Total loans | 8,318 | 7,796 | |
Loans on Non-accrual | 4 | 6 | |
Consumer loans | Personal | Total Past Due | |||
Summary of past due and non-accrual loans | |||
Total loans | 89 | 24 | |
Consumer loans | Personal | 30 to 59 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 61 | 18 | |
Consumer loans | Personal | 60 to 89 Days | |||
Summary of past due and non-accrual loans | |||
Total loans | 24 | ||
Consumer loans | Personal | 90 Days or More | |||
Summary of past due and non-accrual loans | |||
Total loans | $ 4 | $ 6 |
LOANS AND ALLOWANCE FOR CREDI_8
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Risk Rating (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) grade | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Loans by risk rating | |||||
Number of grades utilized in internal loan rating system | grade | 10 | ||||
Year one, originated current fiscal year | $ 243,462 | $ 243,462 | $ 1,411,554 | ||
Year two, originated fiscal year before current fiscal year | 1,435,765 | 1,435,765 | 1,135,920 | ||
Year three, originated two years before current fiscal year | 1,123,502 | 1,123,502 | 549,182 | ||
Year four, originated three years before current fiscal year | 530,945 | 530,945 | 358,789 | ||
Year five, originated four years before current fiscal year | 328,610 | 328,610 | 214,183 | ||
Prior | 792,348 | 792,348 | 645,253 | ||
Revolving Loans Amortized Cost | 242,472 | 242,472 | 233,182 | ||
Revolving Loans Converted to Term Loans | 1,543 | 1,543 | 1,607 | ||
Total loans before basis adjustment | 4,698,647 | 4,698,647 | 4,549,670 | ||
Total loans | 4,698,203 | 4,698,203 | 4,549,670 | ||
YTD gross charge-offs, originated fiscal year before current fiscal year | 22 | ||||
YTD gross charge-offs, originated two years before current fiscal year | 10 | ||||
YTD gross charge-offs, originated three years before current fiscal year | 14 | ||||
YTD gross charge-offs, originated four years before current fiscal year | 17 | ||||
YTD gross charge-offs, prior | 2,939 | ||||
YTD gross charge-offs | 2,988 | $ 11 | 3,002 | $ 2,857 | |
Commercial | |||||
Loans by risk rating | |||||
Total loans | 2,969,012 | 2,969,012 | 2,873,930 | ||
Commercial | Commercial real estate | |||||
Loans by risk rating | |||||
Year one, originated current fiscal year | 88,521 | 88,521 | 817,320 | ||
Year two, originated fiscal year before current fiscal year | 830,149 | 830,149 | 441,277 | ||
Year three, originated two years before current fiscal year | 433,039 | 433,039 | 241,700 | ||
Year four, originated three years before current fiscal year | 240,382 | 240,382 | 263,549 | ||
Year five, originated four years before current fiscal year | 249,645 | 249,645 | 143,825 | ||
Prior | 444,952 | 444,952 | 342,673 | ||
Total loans before basis adjustment | 2,286,688 | 2,286,688 | |||
Total loans | 2,286,688 | 2,286,688 | 2,250,344 | ||
YTD gross charge-offs, prior | 2,918 | ||||
YTD gross charge-offs | 2,918 | 2,918 | 2,786 | ||
Commercial | Commercial real estate | Pass | |||||
Loans by risk rating | |||||
Year one, originated current fiscal year | 88,521 | 88,521 | 817,320 | ||
Year two, originated fiscal year before current fiscal year | 825,188 | 825,188 | 441,277 | ||
Year three, originated two years before current fiscal year | 433,039 | 433,039 | 241,700 | ||
Year four, originated three years before current fiscal year | 240,382 | 240,382 | 254,221 | ||
Year five, originated four years before current fiscal year | 240,486 | 240,486 | 121,351 | ||
Prior | 423,597 | 423,597 | 340,634 | ||
Total loans before basis adjustment | 2,251,213 | 2,251,213 | |||
Total loans | 2,216,503 | ||||
Commercial | Commercial real estate | Special mention | |||||
Loans by risk rating | |||||
Year two, originated fiscal year before current fiscal year | 4,961 | 4,961 | |||
Year four, originated three years before current fiscal year | 9,328 | ||||
Year five, originated four years before current fiscal year | 9,159 | 9,159 | 22,474 | ||
Prior | 12,395 | 12,395 | |||
Total loans before basis adjustment | 26,515 | 26,515 | |||
Total loans | 31,802 | ||||
Commercial | Commercial real estate | Substandard | |||||
Loans by risk rating | |||||
Prior | 1,961 | 1,961 | 2,039 | ||
Total loans before basis adjustment | 1,961 | 1,961 | |||
Total loans | 2,039 | ||||
Commercial | Commercial real estate | Doubtful | |||||
Loans by risk rating | |||||
Prior | 6,999 | 6,999 | |||
Total loans before basis adjustment | 6,999 | 6,999 | |||
Commercial | Commercial construction | |||||
Loans by risk rating | |||||
Year one, originated current fiscal year | 9,760 | 9,760 | 88,173 | ||
Year two, originated fiscal year before current fiscal year | 108,579 | 108,579 | 87,569 | ||
Year three, originated two years before current fiscal year | 96,653 | 96,653 | 11,769 | ||
Year four, originated three years before current fiscal year | 4,321 | 4,321 | 9,174 | ||
Year five, originated four years before current fiscal year | 6,826 | 6,826 | 318 | ||
Prior | 1,785 | 1,785 | 1,487 | ||
Revolving Loans Amortized Cost | 978 | 978 | 821 | ||
Total loans before basis adjustment | 228,902 | 228,902 | |||
Total loans | 228,902 | 228,902 | 199,311 | ||
Commercial | Commercial construction | Pass | |||||
Loans by risk rating | |||||
Year one, originated current fiscal year | 9,760 | 9,760 | 88,173 | ||
Year two, originated fiscal year before current fiscal year | 108,579 | 108,579 | 87,569 | ||
Year three, originated two years before current fiscal year | 96,653 | 96,653 | 11,769 | ||
Year four, originated three years before current fiscal year | 9,174 | ||||
Year five, originated four years before current fiscal year | 6,826 | 6,826 | 318 | ||
Prior | 1,785 | 1,785 | 1,487 | ||
Revolving Loans Amortized Cost | 978 | 978 | 821 | ||
Total loans before basis adjustment | 224,581 | 224,581 | |||
Total loans | 199,311 | ||||
Commercial | Commercial construction | Special mention | |||||
Loans by risk rating | |||||
Year four, originated three years before current fiscal year | 4,321 | 4,321 | |||
Total loans before basis adjustment | 4,321 | 4,321 | |||
Commercial | Commercial and industrial | |||||
Loans by risk rating | |||||
Year one, originated current fiscal year | 41,897 | 41,897 | 53,078 | ||
Year two, originated fiscal year before current fiscal year | 50,911 | 50,911 | 95,604 | ||
Year three, originated two years before current fiscal year | 96,897 | 96,897 | 82,173 | ||
Year four, originated three years before current fiscal year | 76,542 | 76,542 | 26,568 | ||
Year five, originated four years before current fiscal year | 24,233 | 24,233 | 37,408 | ||
Prior | 82,940 | 82,940 | 52,255 | ||
Revolving Loans Amortized Cost | 80,002 | 80,002 | 77,189 | ||
Total loans before basis adjustment | 453,422 | 453,422 | |||
Total loans | 453,422 | 453,422 | 424,275 | ||
YTD gross charge-offs, originated fiscal year before current fiscal year | 18 | ||||
YTD gross charge-offs, originated two years before current fiscal year | 10 | ||||
YTD gross charge-offs, originated three years before current fiscal year | 2 | ||||
YTD gross charge-offs, originated four years before current fiscal year | 4 | ||||
YTD gross charge-offs, prior | 1 | ||||
YTD gross charge-offs | 28 | 35 | 40 | ||
Commercial | Commercial and industrial | Pass | |||||
Loans by risk rating | |||||
Year one, originated current fiscal year | 41,897 | 41,897 | 53,078 | ||
Year two, originated fiscal year before current fiscal year | 50,645 | 50,645 | 95,600 | ||
Year three, originated two years before current fiscal year | 96,814 | 96,814 | 82,170 | ||
Year four, originated three years before current fiscal year | 76,539 | 76,539 | 26,568 | ||
Year five, originated four years before current fiscal year | 24,227 | 24,227 | 37,358 | ||
Prior | 80,482 | 80,482 | 50,500 | ||
Revolving Loans Amortized Cost | 79,902 | 79,902 | 76,647 | ||
Total loans before basis adjustment | 450,506 | 450,506 | |||
Total loans | 421,921 | ||||
Commercial | Commercial and industrial | Special mention | |||||
Loans by risk rating | |||||
Year two, originated fiscal year before current fiscal year | 17 | 17 | |||
Year five, originated four years before current fiscal year | 2 | 2 | 49 | ||
Prior | 714 | 714 | 92 | ||
Revolving Loans Amortized Cost | 492 | ||||
Total loans before basis adjustment | 733 | 733 | |||
Total loans | 633 | ||||
Commercial | Commercial and industrial | Substandard | |||||
Loans by risk rating | |||||
Year two, originated fiscal year before current fiscal year | 249 | 249 | 4 | ||
Year three, originated two years before current fiscal year | 83 | 83 | 3 | ||
Year four, originated three years before current fiscal year | 3 | 3 | |||
Year five, originated four years before current fiscal year | 4 | 4 | 1 | ||
Prior | 427 | 427 | 323 | ||
Revolving Loans Amortized Cost | 50 | 50 | |||
Total loans before basis adjustment | 816 | 816 | |||
Total loans | 331 | ||||
Commercial | Commercial and industrial | Doubtful | |||||
Loans by risk rating | |||||
Prior | 1,317 | 1,317 | 1,340 | ||
Revolving Loans Amortized Cost | 50 | 50 | 50 | ||
Total loans before basis adjustment | 1,367 | 1,367 | |||
Total loans | 1,390 | ||||
Residential | |||||
Loans by risk rating | |||||
Year one, originated current fiscal year | 97,353 | 97,353 | 443,034 | ||
Year two, originated fiscal year before current fiscal year | 439,448 | 439,448 | 507,882 | ||
Year three, originated two years before current fiscal year | 494,062 | 494,062 | 211,569 | ||
Year four, originated three years before current fiscal year | 208,264 | 208,264 | 42,515 | ||
Year five, originated four years before current fiscal year | 41,227 | 41,227 | 26,490 | ||
Prior | 259,817 | 259,817 | 247,088 | ||
Revolving Loans Amortized Cost | 160,496 | 160,496 | 154,134 | ||
Revolving Loans Converted to Term Loans | 1,543 | 1,543 | 1,607 | ||
Total loans before basis adjustment | 1,702,210 | 1,702,210 | |||
Total loans | 1,702,210 | 1,702,210 | 1,634,319 | ||
Residential | Accrual | |||||
Loans by risk rating | |||||
Year one, originated current fiscal year | 97,353 | 97,353 | 443,034 | ||
Year two, originated fiscal year before current fiscal year | 439,448 | 439,448 | 507,679 | ||
Year three, originated two years before current fiscal year | 494,062 | 494,062 | 211,429 | ||
Year four, originated three years before current fiscal year | 208,132 | 208,132 | 42,314 | ||
Year five, originated four years before current fiscal year | 40,800 | 40,800 | 25,232 | ||
Prior | 251,396 | 251,396 | 239,677 | ||
Revolving Loans Amortized Cost | 160,421 | 160,421 | 154,038 | ||
Revolving Loans Converted to Term Loans | 1,543 | 1,543 | 1,568 | ||
Total loans before basis adjustment | 1,693,155 | 1,693,155 | |||
Total loans | 1,624,971 | ||||
Residential | Nonaccrual | |||||
Loans by risk rating | |||||
Year two, originated fiscal year before current fiscal year | 203 | ||||
Year three, originated two years before current fiscal year | 140 | ||||
Year four, originated three years before current fiscal year | 132 | 132 | 201 | ||
Year five, originated four years before current fiscal year | 427 | 427 | 1,258 | ||
Prior | 8,421 | 8,421 | 7,411 | ||
Revolving Loans Amortized Cost | 75 | 75 | 96 | ||
Revolving Loans Converted to Term Loans | 39 | ||||
Total loans before basis adjustment | 9,055 | 9,055 | |||
Total loans | 9,348 | ||||
Consumer loans | |||||
Loans by risk rating | |||||
Year one, originated current fiscal year | 5,931 | 5,931 | 9,949 | ||
Year two, originated fiscal year before current fiscal year | 6,678 | 6,678 | 3,588 | ||
Year three, originated two years before current fiscal year | 2,851 | 2,851 | 1,971 | ||
Year four, originated three years before current fiscal year | 1,436 | 1,436 | 16,983 | ||
Year five, originated four years before current fiscal year | 6,679 | 6,679 | 6,142 | ||
Prior | 2,854 | 2,854 | 1,750 | ||
Revolving Loans Amortized Cost | 996 | 996 | 1,038 | ||
Total loans before basis adjustment | 27,425 | 27,425 | |||
Total loans | 27,425 | 27,425 | 41,421 | ||
YTD gross charge-offs, originated fiscal year before current fiscal year | 4 | ||||
YTD gross charge-offs, originated three years before current fiscal year | 12 | ||||
YTD gross charge-offs, originated four years before current fiscal year | 13 | ||||
YTD gross charge-offs, prior | 20 | ||||
YTD gross charge-offs | 42 | $ 11 | 49 | $ 31 | |
Consumer loans | Accrual | |||||
Loans by risk rating | |||||
Year one, originated current fiscal year | 5,931 | 5,931 | 9,948 | ||
Year two, originated fiscal year before current fiscal year | 6,678 | 6,678 | 3,588 | ||
Year three, originated two years before current fiscal year | 2,847 | 2,847 | 1,971 | ||
Year four, originated three years before current fiscal year | 1,436 | 1,436 | 16,955 | ||
Year five, originated four years before current fiscal year | 6,679 | 6,679 | 6,122 | ||
Prior | 2,846 | 2,846 | 1,733 | ||
Revolving Loans Amortized Cost | 996 | 996 | 1,034 | ||
Total loans before basis adjustment | 27,413 | 27,413 | |||
Total loans | 41,351 | ||||
Consumer loans | Nonaccrual | |||||
Loans by risk rating | |||||
Year one, originated current fiscal year | 1 | ||||
Year three, originated two years before current fiscal year | 4 | 4 | |||
Year four, originated three years before current fiscal year | 28 | ||||
Year five, originated four years before current fiscal year | 20 | ||||
Prior | 8 | 8 | 17 | ||
Revolving Loans Amortized Cost | 4 | ||||
Total loans before basis adjustment | $ 12 | $ 12 | |||
Total loans | $ 70 |
MORTGAGE LOAN SERVICING - Key A
MORTGAGE LOAN SERVICING - Key Assumptions (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
MORTGAGE LOAN SERVICING | ||
Unpaid principal balances of mortgage loans serviced | $ 3,600 | $ 3,620 |
Prepayment speed | 7.20% | 7.10% |
Discount rate | 9.90% | 9.81% |
Default rate | 1.41% | 1.63% |
MORTGAGE LOAN SERVICING - Fair
MORTGAGE LOAN SERVICING - Fair value of MSR (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Changes to the fair value of Mortgage Servicing Rights | ||||
Balance, beginning of period | $ 47,080 | $ 45,043 | $ 48,138 | $ 38,268 |
Additions | 660 | 1,225 | 1,294 | 2,715 |
Changes in fair value due to: | ||||
Reductions from loans paid off during the period | (479) | (771) | (850) | (1,604) |
Changes in valuation inputs or assumptions | 915 | 1,633 | (406) | 7,751 |
Balance, end of period | 48,176 | 47,130 | 48,176 | 47,130 |
Fees and commissions, mortgage banking and servicing | $ 1,900 | $ 2,100 | $ 3,900 | $ 4,000 |
Contractually Specified Servicing Fee Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other | Other | Other | Other |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |||
Change in goodwill | $ 0 | $ 0 | |
Goodwill | 69,802 | 69,802 | $ 69,802 |
Goodwill impairment | 0 | ||
Intangible assets | 1,893 | 2,272 | |
HarborOne Mortgage | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill | 10,800 | 10,800 | |
HarborOne Bank. | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill | $ 59,000 | $ 59,000 |
DEPOSITS - Summary of deposits
DEPOSITS - Summary of deposits (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
DEPOSITS | ||
NOW and demand deposit accounts | $ 1,004,528 | $ 1,060,268 |
Regular savings and club accounts | 1,390,906 | 1,468,172 |
Money market deposit accounts | 834,120 | 861,704 |
Total non-certificate accounts | 3,229,554 | 3,390,144 |
Term certificate accounts greater than $250,000 | 224,737 | 110,360 |
Term certificate accounts less than or equal to $250,000 | 518,194 | 387,615 |
Brokered deposits | 315,003 | 301,380 |
Total certificate accounts | 1,057,934 | 799,355 |
Total deposits | 4,287,488 | 4,189,499 |
Total municipal deposits | 497,900 | 413,500 |
Total reciprocal deposits | $ 149,200 | $ 28,600 |
DEPOSITS - Maturity of deposits
DEPOSITS - Maturity of deposits (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Summary of certificate accounts by maturity | ||
Within 1 year | $ 896,526 | |
Over 1 year to 2 years | 129,403 | |
Over 2 years to 3 years | 28,334 | |
Over 3 years to 4 years | 2,996 | |
Over 4 years to 5 years | 696 | |
Total certificate deposits | 1,057,955 | |
Less unaccreted acquisition discount | (21) | |
Total certificate accounts | $ 1,057,934 | $ 799,355 |
Summary of certificate accounts by maturity | ||
Within 1 year | 3.87% | |
Over 1 year to 2 years | 3.29% | |
Over 2 years to 3 years | 2.87% | |
Over 3 years to 4 years | 0.70% | |
Over 4 years to 5 years | 1.74% | |
Total certificate deposits | 3.76% |
BORROWINGS - FHLB Advances (Det
BORROWINGS - FHLB Advances (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 USD ($) item | Dec. 31, 2022 USD ($) | |
BORROWINGS | ||
Short-term borrowed funds | $ 414,000 | $ 385,000 |
Weighted average rate | 5.31% | 4.32% |
Number of callable advances | item | 4 | |
Scheduled Maturity | ||
2023 | $ 90 | $ 180 |
2024 | 13,400 | 13,400 |
2025 | 85,987 | 987 |
2026 | 80,000 | |
2028 and thereafter | 11,091 | 1,108 |
Total | 190,568 | $ 15,675 |
Redeemable at Call Date | ||
2023 | 75,090 | |
2024 | 13,400 | |
2025 | 60,987 | |
2026 | 40,000 | |
2028 and thereafter | 1,091 | |
Total | $ 190,568 | |
Weighted Average Rate | ||
2023 | 2.71% | 1.40% |
2024 | 1.39% | 1.39% |
2025 | 4.19% | |
2026 | 4.28% | |
2028 and thereafter | 3.67% | 2% |
Total | 4% | 1.35% |
BORROWINGS - Others (Details)
BORROWINGS - Others (Details) - USD ($) | 6 Months Ended | |||
Sep. 01, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Aug. 30, 2018 | |
Borrowed funds | ||||
Carrying value of the loans pledged as collateral | $ 4,650,382,000 | $ 4,504,434,000 | ||
Amount outstanding | 0 | 0 | ||
Short-term borrowed funds | 414,000,000 | 385,000,000 | ||
BTFP | ||||
Borrowed funds | ||||
Amount of available borrowing capacity | 366,800,000 | |||
Short-term borrowed funds | $ 0 | |||
Federal Reserve Bank of Boston | ||||
Borrowed funds | ||||
Percentage of carrying value pledged as collateral | 69% | |||
Federal Home Loan Bank Advances | ||||
Borrowed funds | ||||
Available borrowing capacity | $ 583,700,000 | |||
Other Loans | ||||
Borrowed funds | ||||
Additional borrowing capacity | 25,000,000 | |||
Subordinated Notes due 2028 | ||||
Borrowed funds | ||||
Notes issued | $ 35,000,000 | |||
Annual fixed interest rate until September 1, 2023 | 5.625% | |||
Issuance costs | 652,000 | 715,000 | ||
Asset Pledged as Collateral | Federal Home Loan Bank Advances | ||||
Borrowed funds | ||||
Carrying value of the loans pledged as collateral | 1,830,000,000 | 1,710,000,000 | ||
Asset Pledged as Collateral | Federal Home Loan Bank Advances | Federal Reserve Bank of Boston | ||||
Borrowed funds | ||||
Carrying value of the loans pledged as collateral | $ 99,700,000 | $ 100,200,000 | ||
Forecast | Subordinated Notes due 2028 | SOFR | ||||
Borrowed funds | ||||
Basis points | 2.78% |
OTHER COMMITMENTS AND CONTING_3
OTHER COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments to grant residential real estate loans - HarborOne Mortgage | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | $ 67,347 | $ 57,916 |
Commitments to grant other loans | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 84,676 | 43,700 |
Unadvanced funds on home equity lines of credit | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 256,957 | 251,759 |
Unadvanced funds on revolving lines of credit | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 314,496 | 351,382 |
Unadvanced funds on construction loans | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | $ 287,523 | $ 262,945 |
OTHER COMMITMENTS AND CONTING_4
OTHER COMMITMENTS AND CONTINGENCIES - Unfunded commitments (Details) - Unfunded Commitment - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | $ 5,046 | $ 3,840 | $ 4,927 | |
Provision | (215) | 1,256 | (96) | $ 1,165 |
Ending balance | 4,831 | 5,096 | 4,831 | 5,096 |
Cumulative Effect, Period of Adoption, Adjustment | ||||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | 3,931 | |||
Residential | Residential Real Estate | ||||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | 262 | 339 | 336 | |
Provision | 10 | (2) | (64) | 19 |
Ending balance | 272 | 337 | 272 | 337 |
Residential | Residential Real Estate | Cumulative Effect, Period of Adoption, Adjustment | ||||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | 318 | |||
Commercial | Commercial real estate | ||||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | 548 | 538 | 628 | |
Provision | (58) | (56) | (138) | 102 |
Ending balance | 490 | 482 | 490 | 482 |
Commercial | Commercial real estate | Cumulative Effect, Period of Adoption, Adjustment | ||||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | 380 | |||
Commercial | Commercial construction | ||||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | 3,277 | 2,345 | 3,079 | |
Provision | (97) | 1,293 | 101 | 1,077 |
Ending balance | 3,180 | 3,638 | 3,180 | 3,638 |
Commercial | Commercial construction | Cumulative Effect, Period of Adoption, Adjustment | ||||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | 2,561 | |||
Commercial | Commercial and industrial | ||||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | 940 | 604 | 870 | |
Provision | (70) | 20 | (34) | |
Ending balance | 870 | 624 | 870 | 624 |
Commercial | Commercial and industrial | Cumulative Effect, Period of Adoption, Adjustment | ||||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | 658 | |||
Consumer loans | ||||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | 19 | 14 | 14 | |
Provision | 1 | 5 | 1 | |
Ending balance | $ 19 | $ 15 | $ 19 | 15 |
Consumer loans | Cumulative Effect, Period of Adoption, Adjustment | ||||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | $ 14 |
DERIVATIVES (Details)
DERIVATIVES (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 USD ($) item derivative | Dec. 31, 2022 USD ($) | |
Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | $ 36,916 | $ 37,326 |
Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 28,212 | 28,629 |
Designated as Hedging Instrument | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 8,006 | 8,314 |
Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 28,910 | 29,012 |
Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | $ 28,212 | 28,629 |
Derivative loan commitments | ||
Derivative disclosures | ||
Loan commitment specified period | 60 days | |
Derivative loan commitments | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | $ 55,986 | 27,935 |
Derivative loan commitments | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 521 | 238 |
Derivative loan commitments | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 82 | 65 |
Forward loan sale commitments | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | 51,000 | 29,000 |
Forward loan sale commitments | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 262 | 249 |
Forward loan sale commitments | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | $ 3 | 39 |
Interest rate swaps | Designated as Hedging Instrument | Fair Value Hedging [Member] | ||
Derivative disclosures | ||
Number of Derivative Instruments Held | item | 2 | |
Notional Amount | $ 100,000 | |
Portfolio layer hedged asset | $ 1,250,000 | |
Interest rate swaps | Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivative disclosures | ||
Number of Derivative Instruments Held | derivative | 1 | |
Maturity term | 1 year 9 months 10 days | |
Fixed rate | 0.671% | |
Variable rate | 5.157% | |
Amount to be reclassified in next 12 months | $ 4,700 | |
Notional Amount | 100,000 | 100,000 |
Fair Value, Assets | 7,600 | |
Interest rate swaps | Designated as Hedging Instrument | Other assets | Fair Value Hedging [Member] | ||
Derivative disclosures | ||
Fair Value, Assets | 437 | |
Interest rate swaps | Designated as Hedging Instrument | Other assets | Cash Flow Hedging | ||
Derivative disclosures | ||
Fair Value, Assets | 7,569 | 8,314 |
Interest rate swaps | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | 827,176 | 772,588 |
Interest rate swaps | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 28,127 | 28,525 |
Interest rate swaps | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 28,127 | 28,525 |
Risk Participation Agreements | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | $ 182,304 | $ 164,528 |
DERIVATIVES - Cumulative basis
DERIVATIVES - Cumulative basis adjustment for fair value hedges (Details) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Fair Value Hedging | Designated as Hedging Instrument | ||
Derivative disclosures | ||
Carrying Amount of the Hedged Assets | $ 99,556,000 | |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | $ (444,000) | |
Interest rate swaps | ||
Derivative disclosures | ||
Hedged Asset, Statement of Financial Position [Extensible Enumeration] | Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss | Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss |
Interest rate swaps | Fair Value Hedging | Designated as Hedging Instrument | ||
Derivative disclosures | ||
Carrying Amount of the Hedged Assets | $ 99,556,000 | |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | (444,000) | |
Amortized cost | 1,250,000,000 | |
Designated amount of hedged items | $ 100,000,000 |
DERIVATIVES - Net gain and loss
DERIVATIVES - Net gain and losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Derivative [Line Items] | ||||
(Loss) gain in OCI on derivatives (effective portion), net of tax | $ (3,880) | $ (15,220) | $ 792 | $ (32,630) |
Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
(Loss) gain in OCI on derivatives (effective portion), net of tax | 319 | 624 | (535) | 3,428 |
Gain (loss) reclassified from OCI into interest expense (effective portion) | 1,134 | $ 71 | 2,152 | $ (40) |
Total | (7) | (7) | ||
Designated as Hedging Instrument | Derivative loan commitments | ||||
Derivative [Line Items] | ||||
Total | $ (444) | $ (444) | ||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Dividend Income, Operating | Interest and Dividend Income, Operating | Interest and Dividend Income, Operating | Interest and Dividend Income, Operating |
Designated as Hedging Instrument | Interest rate swaps | ||||
Derivative [Line Items] | ||||
Total | $ 437 | $ 437 | ||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Dividend Income, Operating | Interest and Dividend Income, Operating | Interest and Dividend Income, Operating | Interest and Dividend Income, Operating |
Not designated as hedging instruments | ||||
Derivative [Line Items] | ||||
Total | $ 234 | $ (1,307) | $ 315 | $ 41 |
Not designated as hedging instruments | Derivative loan commitments | ||||
Derivative [Line Items] | ||||
Total | $ (293) | $ 369 | $ 266 | $ (268) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Mortgage Banking Noninterest Income | Mortgage Banking Noninterest Income | Mortgage Banking Noninterest Income | Mortgage Banking Noninterest Income |
Not designated as hedging instruments | Forward loan sale commitments | ||||
Derivative [Line Items] | ||||
Total | $ 527 | $ (1,676) | $ 49 | $ (21) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Mortgage Banking Noninterest Income | Mortgage Banking Noninterest Income | Mortgage Banking Noninterest Income | Mortgage Banking Noninterest Income |
Not designated as hedging instruments | Interest rate swaps | ||||
Derivative [Line Items] | ||||
Total | $ 330 | |||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Noninterest Income, Other Operating Income | Noninterest Income, Other Operating Income | Noninterest Income, Other Operating Income | Noninterest Income, Other Operating Income |
DERIVATIVES - Offsetting (Detai
DERIVATIVES - Offsetting (Details) - Interest rate swaps $ in Thousands | Jun. 30, 2023 USD ($) |
Designated as Hedging Instrument | Fair Value Hedging [Member] | |
Derivative disclosures | |
Gross Amounts of Recognized Assets | $ 437 |
Net Amounts Presented in the Statement of Financial Position | 437 |
Net Amounts Not Offset | 437 |
Designated as Hedging Instrument | Cash Flow Hedging | |
Derivative disclosures | |
Gross Amounts of Recognized Assets | 7,569 |
Net Amounts Presented in the Statement of Financial Position | 7,569 |
Gross Amounts Not Offset - Cash Collateral | (7,569) |
Not designated as hedging instruments | |
Derivative disclosures | |
Gross Amounts of Recognized Assets | 26,543 |
Net Amounts Presented in the Statement of Financial Position | 26,543 |
Gross Amounts Not Offset - Cash Collateral | (22,431) |
Net Amounts Not Offset | $ 4,112 |
OPERATING LEASE ROU ASSETS AN_3
OPERATING LEASE ROU ASSETS AND LIABILITIES (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Operating lease ROU assets | $ 24,100,000 | $ 26,900,000 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets. | Other Assets. |
Operating lease liabilities | $ 25,803,000 | $ 28,600,000 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | hone:OtherLiabilitiesAndAccruedExpensesMember | hone:OtherLiabilitiesAndAccruedExpensesMember |
Lessee, Operating Lease, Lease Not Yet Commenced Amount | $ 0 | |
Weighted-average remaining lease term (years) | 16 years 3 months 7 days | 17 years 3 months 29 days |
Minimum | ||
Lessee, Operating Lease, Remaining Lease Term | 2 months | 3 months |
Maximum | ||
Lessee, Operating Lease, Remaining Lease Term | 35 years 2 months 12 days | 35 years 8 months 12 days |
OPERATING LEASE ROU ASSETS AN_4
OPERATING LEASE ROU ASSETS AND LIABILITIES - Maturities Due (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2023 | $ 1,529 | |
2024 | 2,827 | |
2025 | 2,552 | |
2026 | 2,505 | |
2027 | 2,445 | |
Thereafter | 19,421 | |
Total lease payments | 31,279 | |
Imputed interest | (5,476) | |
Total present value of operating lease liabilities | $ 25,803 | $ 28,600 |
OPERATING LEASE ROU ASSETS AN_5
OPERATING LEASE ROU ASSETS AND LIABILITIES - Weighted average discount and remaining lease term (Details) | Jun. 30, 2023 | Dec. 31, 2022 |
OPERATING LEASE ROU ASSETS AND LIABILITIES | ||
Weighted-average discount rate | 2.07% | 2.02% |
Weighted-average remaining lease term (years) | 16 years 3 months 7 days | 17 years 3 months 29 days |
OPERATING LEASE ROU ASSETS AN_6
OPERATING LEASE ROU ASSETS AND LIABILITIES - Lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
OPERATING LEASE ROU ASSETS AND LIABILITIES | ||||
Operating lease expense | $ 792 | $ 822 | $ 1,599 | $ 1,636 |
Short-term lease expense | 35 | 37 | 65 | 68 |
Variable lease expense | 3 | 5 | ||
Sublease income | (4) | (5) | (9) | (5) |
Total lease expense | 826 | 854 | 1,660 | 1,699 |
Other Information | ||||
Cash paid for amounts included in the measurement of lease liabilities-operating cash flows for operating leases | 779 | 802 | 1,614 | 1,601 |
Operating Lease - Operating cash flows (Liability reduction) | 655 | 672 | 1,335 | 1,340 |
ROU assets obtained in exchange for new operating lease liabilities | $ 596 | $ 778 | $ 596 | $ 1,083 |
MINIMUM REGULATORY CAPITAL RE_3
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Compliance with Regulatory Capital Requirements under Banking Regulations | ||
Common equity Tier 1 capital conversation buffer ratio | 0.025 | |
Applicable capital conversation buffer ratio | 0.025 | |
Common equity Tier 1 to risk-weighted assets | ||
Actual, Capital amount | $ 570,648 | $ 592,610 |
Actual, Ratio | 0.120 | 0.128 |
Minimum Requirement for Capital Adequacy Purposes | $ 213,486 | $ 208,541 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.045 | 0.045 |
Tier 1 capital to risk weighted assets | ||
Actual, Capital amount | $ 570,648 | $ 592,610 |
Actual, Ratio | 0.120 | 0.128 |
Minimum Requirement for Capital Adequacy Purposes | $ 284,648 | $ 278,054 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.060 | 0.060 |
Total capital to risk-weighted assets | ||
Actual, Capital amount | $ 658,301 | $ 677,774 |
Actual, Ratio | 0.139 | 0.146 |
Minimum Requirement for Capital Adequacy Purposes | $ 379,531 | $ 370,739 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.080 | 0.080 |
Tier 1 capital to average assets | ||
Actual, Capital amount | $ 570,648 | $ 592,610 |
Actual, Ratio | 0.102 | 0.115 |
Minimum Requirement for Capital Adequacy Purposes | $ 223,471 | $ 205,897 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.040 | 0.040 |
HarborOne Bank. | ||
Common equity Tier 1 to risk-weighted assets | ||
Actual, Capital amount | $ 536,539 | $ 525,522 |
Actual, Ratio | 0.113 | 0.113 |
Minimum Requirement for Capital Adequacy Purposes | $ 213,396 | $ 208,447 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.045 | 0.045 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 308,239 | $ 301,090 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.065 | 0.065 |
Tier 1 capital to risk weighted assets | ||
Actual, Capital amount | $ 536,539 | $ 525,522 |
Actual, Ratio | 0.113 | 0.113 |
Minimum Requirement for Capital Adequacy Purposes | $ 284,529 | $ 277,929 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.060 | 0.060 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 379,371 | $ 370,572 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.080 | 0.080 |
Total capital to risk-weighted assets | ||
Actual, Capital amount | $ 589,191 | $ 575,686 |
Actual, Ratio | 0.124 | 0.124 |
Minimum Requirement for Capital Adequacy Purposes | $ 379,371 | $ 370,572 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.080 | 0.080 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 474,214 | $ 463,215 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.100 | 0.100 |
Tier 1 capital to average assets | ||
Actual, Capital amount | $ 536,539 | $ 525,522 |
Actual, Ratio | 0.096 | 0.102 |
Minimum Requirement for Capital Adequacy Purposes | $ 223,432 | $ 205,874 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.040 | 0.040 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 279,291 | $ 257,342 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.050 | 0.050 |
COMPREHENSIVE (LOSS) INCOME - C
COMPREHENSIVE (LOSS) INCOME - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 599,794 | $ 649,065 | $ 616,976 | $ 679,261 |
Balance at end of period | 595,532 | 624,478 | 595,532 | 624,478 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (42,410) | (19,047) | (47,082) | (1,637) |
Other comprehensive income (loss) before reclassifications | (3,788) | (19,384) | 3,131 | (41,524) |
Amounts reclassified from accumulated other comprehensive (loss) income | (1,173) | (71) | (2,191) | 40 |
Net current period other comprehensive (loss) income | (4,961) | (19,455) | 940 | (41,484) |
Related tax effect | 1,081 | 4,235 | (148) | 8,854 |
Balance at end of period | (46,290) | (34,267) | (46,290) | (34,267) |
Securities available for sale | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (47,686) | (23,048) | (53,212) | (2,834) |
Other comprehensive income (loss) before reclassifications | (5,366) | (20,323) | 1,723 | (46,252) |
Net current period other comprehensive (loss) income | (5,366) | (20,323) | 1,723 | (46,252) |
Related tax effect | 1,205 | 4,479 | (358) | 10,194 |
Balance at end of period | (51,847) | (38,892) | (51,847) | (38,892) |
Cash flow hedge | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 5,126 | 4,001 | 5,980 | 1,197 |
Other comprehensive income (loss) before reclassifications | 1,577 | 939 | 1,407 | 4,728 |
Amounts reclassified from accumulated other comprehensive (loss) income | (1,134) | (71) | (2,152) | 40 |
Net current period other comprehensive (loss) income | 443 | 868 | (745) | 4,768 |
Related tax effect | (124) | (244) | 210 | (1,340) |
Balance at end of period | 5,445 | $ 4,625 | 5,445 | $ 4,625 |
Postretirement Benefit | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 150 | 150 | ||
Other comprehensive income (loss) before reclassifications | 1 | 1 | ||
Amounts reclassified from accumulated other comprehensive (loss) income | (39) | (39) | ||
Net current period other comprehensive (loss) income | (38) | (38) | ||
Balance at end of period | $ 112 | $ 112 |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABILITIES (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Assets and liabilities measured on recurring basis | ||
Fair Value | $ 292,012,000 | $ 301,149,000 |
Derivative loan commitments | ||
Assets and liabilities measured on recurring basis | ||
Weighted average pull-through rate | 91% | 91% |
Recurring | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | $ 292,012,000 | $ 301,149,000 |
Recurring | Level 1 | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | 0 | 0 |
Recurring | Level 2 | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | 292,012,000 | 301,149,000 |
Recurring | Level 3 | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | 0 | 0 |
90 Days or More | Recurring | Level 2 | ||
Assets and liabilities measured on recurring basis | ||
Loans held for sale | $ 0 | $ 0 |
FAIR VALUE OF ASSETS AND LIAB_4
FAIR VALUE OF ASSETS AND LIABILITIES - Recurring basis (Details) | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 USD ($) item | Dec. 31, 2022 USD ($) item | Mar. 31, 2023 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Assets and liabilities measured on recurring basis | ||||||
Number of transfers | item | 0 | 0 | ||||
Assets | ||||||
Securities available for sale, at fair value | $ 292,012,000 | $ 301,149,000 | ||||
Loans held for sale | 20,949,000 | 18,544,000 | ||||
Mortgage servicing rights | 48,176,000 | 48,138,000 | $ 47,080,000 | $ 47,130,000 | $ 45,043,000 | $ 38,268,000 |
Recurring | ||||||
Assets | ||||||
Securities available for sale, at fair value | 292,012,000 | 301,149,000 | ||||
Loans held for sale | 20,949,000 | 18,544,000 | ||||
Mortgage servicing rights | 48,176,000 | 48,138,000 | ||||
Total assets | 398,053,000 | 405,157,000 | ||||
Recurring | Derivative loan commitments | ||||||
Assets | ||||||
Derivative assets | 36,916,000 | 37,326,000 | ||||
Liabilities | ||||||
Derivative liabilities | 28,212,000 | 28,629,000 | ||||
Recurring | Level 1 | ||||||
Assets | ||||||
Securities available for sale, at fair value | 0 | 0 | ||||
Recurring | Level 2 | ||||||
Assets | ||||||
Securities available for sale, at fair value | 292,012,000 | 301,149,000 | ||||
Loans held for sale | 20,949,000 | 18,544,000 | ||||
Mortgage servicing rights | 48,176,000 | 48,138,000 | ||||
Total assets | 397,270,000 | 404,670,000 | ||||
Recurring | Level 2 | Derivative loan commitments | ||||||
Assets | ||||||
Derivative assets | 36,133,000 | 36,839,000 | ||||
Liabilities | ||||||
Derivative liabilities | 28,127,000 | 28,525,000 | ||||
Recurring | Level 3 | ||||||
Assets | ||||||
Securities available for sale, at fair value | 0 | 0 | ||||
Total assets | 783,000 | 487,000 | ||||
Recurring | Level 3 | Derivative loan commitments | ||||||
Assets | ||||||
Derivative assets | 783,000 | 487,000 | ||||
Liabilities | ||||||
Derivative liabilities | $ 85,000 | $ 104,000 |
FAIR VALUE OF ASSETS AND LIAB_5
FAIR VALUE OF ASSETS AND LIABILITIES - Level 3 (Details) - Derivative and Forward Loan Sale Commitments - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Changes in Level 3 assets | ||||
Balance at beginning of period | $ 766 | $ 2,864 | $ 487 | $ 1,583 |
Total gains (losses) included in net income | 17 | (1,520) | 296 | (239) |
Balance at end of period | 783 | 1,344 | 783 | 1,344 |
Changes in unrealized gains relating to instruments at period end | 783 | 1,344 | 783 | 1,344 |
Changes in Level 3 liabilities | ||||
Balance at beginning of period | (302) | (452) | (104) | (189) |
Total gains (losses) included in net income | 217 | 213 | 19 | (50) |
Balance at end of period | (85) | (239) | (85) | (239) |
Changes in unrealized losses relating to instruments at period end | $ (85) | $ (239) | $ (85) | $ (239) |
FAIR VALUE OF ASSETS AND LIAB_6
FAIR VALUE OF ASSETS AND LIABILITIES - Impaired Loans (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Collateral-dependent impaired loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | $ 2,977 | $ 9 | $ 2,982 | $ 819 | |
Level 3 | Discount | Residential loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Measurement input | 0.20 | 0.20 | |||
Level 3 | Discount | Commercial real estate | |||||
Assets and liabilities measured on non-recurring basis | |||||
Measurement input | 0.20 | 0.20 | |||
Level 3 | Discount | Minimum | Commercial and industrial | |||||
Assets and liabilities measured on non-recurring basis | |||||
Measurement input | 0.25 | 0.25 | |||
Level 3 | Discount | Maximum | Commercial and industrial | |||||
Assets and liabilities measured on non-recurring basis | |||||
Measurement input | 0.50 | 0.50 | |||
Non-recurring | Level 3 | Residential loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Assets, Fair value | $ 7,108 | $ 7,108 | $ 349 | ||
Non-recurring | Level 3 | Collateral-dependent impaired loans | Sales Comparison Approach | |||||
Assets and liabilities measured on non-recurring basis | |||||
Assets, Fair value | $ 7,108 | $ 7,108 | $ 349 |
FAIR VALUE OF ASSETS AND LIAB_7
FAIR VALUE OF ASSETS AND LIABILITIES - Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financial assets: | ||
Cash and cash equivalents | $ 252,851 | $ 98,017 |
Securities available for sale, at fair value | 292,012 | 301,149 |
Securities held to maturity | 19,005 | 19,274 |
Federal Home Loan Bank stock | 27,123 | 20,071 |
Loans held for sale | 20,949 | 18,544 |
Loans, net | 4,650,382 | 4,504,434 |
Retirement plan annuities | 14,877 | 14,630 |
Accrued interest receivable | 16,948 | 15,139 |
Financial liabilities: | ||
Deposits | 4,287,488 | 4,189,499 |
Subordinated debt | 34,348 | 34,285 |
Mortgagors' escrow accounts | 11,073 | 9,537 |
Accrued interest payable | 4,845 | 2,325 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 252,851 | 98,017 |
Securities available for sale, at fair value | 292,012 | 301,149 |
Securities held to maturity | 19,839 | 19,949 |
Federal Home Loan Bank stock | 27,123 | 20,071 |
Loans held for sale | 20,949 | 18,544 |
Loans, net | 4,650,382 | 4,504,434 |
Retirement plan annuities | 14,877 | 14,630 |
Accrued interest receivable | 16,948 | 15,139 |
Derivatives | 36,916 | 37,326 |
Financial liabilities: | ||
Deposits | 4,287,488 | 4,189,499 |
Borrowed funds | 604,568 | 400,675 |
Subordinated debt | 34,348 | 34,285 |
Mortgagors' escrow accounts | 11,073 | 9,537 |
Accrued interest payable | 4,845 | 2,325 |
Derivatives | 28,212 | 28,629 |
Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 252,851 | 98,017 |
Securities available for sale, at fair value | 292,012 | 301,149 |
Securities held to maturity | 19,005 | 19,274 |
Loans held for sale | 20,949 | 18,544 |
Loans, net | 4,464,164 | 4,383,613 |
Retirement plan annuities | 14,877 | 14,630 |
Accrued interest receivable | 16,948 | 15,139 |
Derivatives | 36,916 | 37,326 |
Financial liabilities: | ||
Deposits | 4,262,936 | 4,166,796 |
Borrowed funds | 602,341 | 399,655 |
Subordinated debt | 33,892 | 28,221 |
Mortgagors' escrow accounts | 11,073 | 9,537 |
Accrued interest payable | 4,845 | 2,325 |
Derivatives | 28,212 | 28,629 |
Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 252,851 | 98,017 |
Fair Value | Level 2 | ||
Financial assets: | ||
Securities available for sale, at fair value | 292,012 | 301,149 |
Securities held to maturity | 19,005 | 19,274 |
Loans held for sale | 20,949 | 18,544 |
Accrued interest receivable | 16,948 | 15,139 |
Derivatives | 36,133 | 36,839 |
Financial liabilities: | ||
Borrowed funds | 602,341 | 399,655 |
Accrued interest payable | 4,845 | 2,325 |
Derivatives | 28,127 | 28,525 |
Fair Value | Level 3 | ||
Financial assets: | ||
Loans, net | 4,464,164 | 4,383,613 |
Retirement plan annuities | 14,877 | 14,630 |
Derivatives | 783 | 487 |
Financial liabilities: | ||
Deposits | 4,262,936 | 4,166,796 |
Subordinated debt | 33,892 | 28,221 |
Mortgagors' escrow accounts | 11,073 | 9,537 |
Derivatives | $ 85 | $ 104 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
EARNINGS PER SHARE | ||||
Net income available to common stockholders (in thousands) | $ 7,479 | $ 9,987 | $ 14,776 | $ 22,254 |
Average number of common shares outstanding | 46,620,893 | 50,487,259 | 47,522,623 | 50,941,367 |
Less: Average unallocated ESOP shares and non-vested restricted shares | (3,557,386) | (3,506,429) | (3,567,212) | (3,535,110) |
Weighted average number of common shares outstanding used to calculate basic earnings per common share | 43,063,507 | 46,980,830 | 43,955,411 | 47,406,257 |
Dilutive effect of share-based compensation | 69,948 | 555,203 | 248,482 | 704,606 |
Weighted average number of common shares outstanding used to calculate diluted earnings per common share | 43,133,455 | 47,536,033 | 44,203,893 | 48,110,863 |
Basic | $ 0.17 | $ 0.21 | $ 0.34 | $ 0.47 |
Diluted | $ 0.17 | $ 0.21 | $ 0.33 | $ 0.46 |
Antidilutive securities excluded from computation of earnings per share | 1,308,266 | 0 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment Reporting Information | |||||
Number of reportable segments | segment | 2 | ||||
Net interest and dividend income | $ 32,100 | $ 37,195 | $ 66,498 | $ 70,465 | |
Provision for credit losses | 3,283 | 2,546 | 5,149 | 2,884 | |
Net interest and dividend income, after provision for credit losses | 28,817 | 34,649 | 61,349 | 67,581 | |
Mortgage banking income: | |||||
Gain on sale of mortgage loans | 3,300 | 4,538 | 5,524 | 9,860 | |
Changes in mortgage servicing rights fair value | 436 | 862 | (1,256) | 6,147 | |
Other | 2,312 | 2,612 | 4,528 | 5,170 | |
Total mortgage banking income | 6,048 | 8,012 | 8,796 | 21,177 | |
Other noninterest income (loss) | 6,614 | 6,091 | 12,556 | 11,987 | |
Total noninterest income | 12,662 | 14,103 | 21,352 | 33,164 | |
Noninterest expense | 31,725 | 34,954 | 63,234 | 69,789 | |
Income before income taxes | 9,754 | 13,798 | 19,467 | 30,956 | |
Income tax provision | 2,275 | 3,811 | 4,691 | 8,702 | |
Net income | 7,479 | 9,987 | 14,776 | 22,254 | |
Total assets at period end | 5,659,254 | 4,704,044 | 5,659,254 | 4,704,044 | $ 5,359,545 |
Goodwill at period end | 69,802 | 69,802 | 69,802 | 69,802 | $ 69,802 |
Operating Segments | HarborOne Bank | |||||
Segment Reporting Information | |||||
Net interest and dividend income | 32,490 | 37,246 | 67,052 | 70,670 | |
Provision for credit losses | 3,283 | 2,546 | 5,149 | 2,884 | |
Net interest and dividend income, after provision for credit losses | 29,207 | 34,700 | 61,903 | 67,786 | |
Mortgage banking income: | |||||
Intersegment gain (loss) | (358) | (1,095) | (706) | (1,703) | |
Changes in mortgage servicing rights fair value | 29 | 127 | (107) | 717 | |
Other | 195 | 219 | 396 | 452 | |
Total mortgage banking income | (134) | (749) | (417) | (534) | |
Other noninterest income (loss) | 6,614 | 6,084 | 12,556 | 11,971 | |
Total noninterest income | 6,480 | 5,335 | 12,139 | 11,437 | |
Noninterest expense | 26,193 | 27,131 | 52,383 | 53,956 | |
Income before income taxes | 9,494 | 12,904 | 21,659 | 25,267 | |
Income tax provision | 2,193 | 3,550 | 5,308 | 7,107 | |
Net income | 7,301 | 9,354 | 16,351 | 18,160 | |
Total assets at period end | 5,668,582 | 4,718,584 | 5,668,582 | 4,718,584 | |
Goodwill at period end | 59,042 | 59,042 | 59,042 | 59,042 | |
Operating Segments | HarborOne Mortgage. | |||||
Segment Reporting Information | |||||
Net interest and dividend income | 120 | 411 | 447 | 761 | |
Net interest and dividend income, after provision for credit losses | 120 | 411 | 447 | 761 | |
Mortgage banking income: | |||||
Gain on sale of mortgage loans | 3,300 | 4,538 | 5,524 | 9,860 | |
Intersegment gain (loss) | 90 | 1,097 | 544 | 1,934 | |
Changes in mortgage servicing rights fair value | 407 | 735 | (1,149) | 5,430 | |
Other | 2,117 | 2,393 | 4,132 | 4,718 | |
Total mortgage banking income | 5,914 | 8,763 | 9,051 | 21,942 | |
Other noninterest income (loss) | 7 | 16 | |||
Total noninterest income | 5,914 | 8,770 | 9,051 | 21,958 | |
Noninterest expense | 5,493 | 7,242 | 10,815 | 15,003 | |
Income before income taxes | 541 | 1,939 | (1,317) | 7,716 | |
Income tax provision | 232 | 549 | (333) | 2,090 | |
Net income | 309 | 1,390 | (984) | 5,626 | |
Total assets at period end | 115,782 | 149,186 | 115,782 | 149,186 | |
Goodwill at period end | $ 10,760 | $ 10,760 | $ 10,760 | $ 10,760 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 7,479 | $ 9,987 | $ 14,776 | $ 22,254 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |