Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 01, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 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 | ||
Document Financial Statement Error Correction [Flag] | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 45,237,234 | ||
Entity Central Index Key | 0001769617 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 312,776,057 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Crowe LLP | ||
Auditor Firm ID | 173 | ||
Auditor Location | New York, New York |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and due from banks | $ 38,876 | $ 39,712 |
Short-term investments | 188,474 | 58,305 |
Total cash and cash equivalents | 227,350 | 98,017 |
Securities available for sale, at fair value | 290,151 | 301,149 |
Securities held to maturity, at amortized cost (fair value of $19,262 and $19,274 at December 31, 2023 and 2022, respectively) | 19,796 | 19,949 |
Federal Home Loan Bank stock, at cost | 27,098 | 20,071 |
Asset held for sale | 348 | |
Loans held for sale, at fair value | 19,686 | 18,544 |
Loans | 4,750,311 | 4,549,670 |
Less: Allowance for credit losses on loans | (47,972) | (45,236) |
Net loans | 4,702,339 | 4,504,434 |
Accrued interest receivable | 18,169 | 15,139 |
Mortgage servicing rights, at fair value | 46,111 | 48,138 |
Property and equipment, net | 48,749 | 49,045 |
Retirement plan annuities | 15,170 | 14,630 |
Bank-owned life insurance | 94,675 | 91,953 |
Goodwill | 59,042 | 69,802 |
Intangible assets | 1,515 | 2,272 |
Other assets | 97,697 | 106,402 |
Total assets | 5,667,896 | 5,359,545 |
Deposits: | ||
Demand deposit accounts | 659,973 | 762,576 |
NOW accounts | 305,825 | 297,692 |
Regular savings and club accounts | 1,265,315 | 1,468,172 |
Money market deposit accounts | 966,201 | 861,704 |
Term certificate accounts | 863,457 | 497,975 |
Brokered deposits | 326,638 | 301,380 |
Total deposits | 4,387,409 | 4,189,499 |
FHLB short-term borrowings | 303,000 | 385,000 |
FHLB long-term borrowings | 265,462 | 15,675 |
Subordinated debt | 34,285 | |
Mortgagors' escrow accounts | 8,872 | 9,537 |
Accrued interest payable | 5,251 | 2,325 |
Other liabilities and accrued expenses | 114,143 | 106,248 |
Total liabilities | 5,084,137 | 4,742,569 |
Commitments and contingencies (Notes 7, 12 and 13) | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 60,255,288 and 60,061,527 shares issued; 45,401,224 and 48,961,452 shares outstanding at December 31, 2023 and December 31, 2022, respectively | 598 | 596 |
Additional paid-in capital | 486,502 | 483,031 |
Retained earnings | 359,656 | 356,438 |
Treasury stock, at cost, 14,854,064 and 11,100,075 shares at December 31, 2023 and 2022, respectively | (193,590) | (148,384) |
Accumulated other comprehensive loss | (43,622) | (47,082) |
Unearned compensation - ESOP | (25,785) | (27,623) |
Total stockholders' equity | 583,759 | 616,976 |
Total liabilities and stockholders' equity | $ 5,667,896 | $ 5,359,545 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Consolidated Balance Sheets | ||
Held-to-maturity securities, fair value | $ 19,262 | $ 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 | 60,255,288 | 60,061,527 |
Common stock, shares outstanding | 45,401,224 | 48,961,452 |
Treasury, shares | 14,854,064 | 11,100,075 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Interest and dividend income: | |||
Interest and fees on loans | $ 225,898 | $ 162,340 | $ 135,823 |
Interest on loans held for sale | 1,351 | 1,306 | 3,342 |
Interest on taxable securities | 8,118 | 7,590 | 4,212 |
Other interest and dividend income | 8,921 | 694 | 518 |
Total income | 244,288 | 171,930 | 143,895 |
Interest expense: | |||
Interest on deposits | 88,324 | 15,630 | 8,723 |
Interest on FHLB and FRB borrowings | 25,918 | 5,219 | 1,707 |
Interest on subordinated debentures | 2,775 | 2,095 | 2,095 |
Total interest expense | 117,017 | 22,944 | 12,525 |
Net interest and dividend income | 127,271 | 148,986 | 131,370 |
Provision (benefit) for credit losses | 5,680 | 5,660 | (7,258) |
Net interest and dividend income, after provision (benefit) for credit losses | 121,591 | 143,326 | 138,628 |
Mortgage banking income: | |||
Gain on sale of mortgage loans | 10,404 | 15,970 | 61,883 |
Changes in mortgage servicing rights fair value | (4,684) | 5,332 | (380) |
Other | 9,099 | 9,948 | 15,831 |
Total mortgage banking income | 14,819 | 31,250 | 77,334 |
Deposit account fees | 20,056 | 19,265 | 17,839 |
Income on retirement plan annuities | 540 | 456 | 427 |
Bank-owned life insurance income | 2,749 | 1,981 | 2,022 |
Other income | 3,690 | 4,357 | 2,823 |
Total noninterest income | 41,854 | 57,309 | 100,686 |
Noninterest expense: | |||
Compensation and benefits | 73,917 | 83,273 | 101,924 |
Occupancy and equipment | 18,773 | 19,767 | 19,646 |
Data processing | 9,771 | 9,170 | 9,154 |
Loan expenses | 798 | 1,387 | 5,740 |
Marketing | 3,711 | 3,916 | 3,644 |
Deposit expenses | 1,975 | 2,375 | 1,782 |
Postage and printing | 1,597 | 1,610 | 1,620 |
Professional fees | 5,679 | 6,122 | 5,875 |
Prepayment penalties on Federal Home Loan Bank advances | 1,095 | ||
Foreclosed and repossessed assets | (8) | 18 | (398) |
Deposit insurance | 3,485 | 1,445 | 1,338 |
Goodwill impairment | 10,760 | ||
Other expenses | 7,862 | 9,823 | 7,442 |
Total noninterest expense | 138,320 | 138,906 | 158,862 |
Income before income taxes | 25,125 | 61,729 | 80,452 |
Income tax provision | 9,048 | 16,140 | 21,935 |
Net income | $ 16,077 | $ 45,589 | $ 58,517 |
Earnings per common share: | |||
Basic | $ 0.37 | $ 0.98 | $ 1.15 |
Diluted | $ 0.37 | $ 0.97 | $ 1.14 |
Weighted average shares outstanding: | |||
Weighted average common shares, basic | 43,221,738 | 46,483,664 | 50,746,302 |
Weighted average common shares, diluted | 43,419,622 | 47,118,457 | 51,523,135 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 16,077 | $ 45,589 | $ 58,517 |
Unrealized gain/loss on cashflow hedge: | |||
Unrealized holding gains | 1,403 | 7,815 | 2,557 |
Reclassification adjustment for net (gains) losses included in net income | (4,622) | (1,164) | 513 |
Net change in unrealized (losses) gains on derivatives in cashflow hedging instruments | (3,219) | 6,651 | 3,070 |
Related tax effect | 905 | (1,868) | (860) |
Net-of-tax amount | (2,314) | 4,783 | 2,210 |
Unrealized gain/loss on securities available for sale: | |||
Unrealized holding gains (losses) | 6,249 | (64,620) | (7,496) |
Reclassification adjustment for net realized gains | (241) | ||
Net unrealized gains (losses) | 6,249 | (64,620) | (7,737) |
Related tax effect | (410) | 14,242 | 1,705 |
Net-of-tax amount | 5,839 | (50,378) | (6,032) |
Postretirement benefit: | |||
Adjustment of accumulated obligation for postretirement benefits | 1 | 251 | |
Reclassification adjustment for gains recognized in net periodic benefit cost | (66) | (42) | |
Net gains | (65) | 209 | |
Related tax effect | (59) | ||
Net-of-tax amount | (65) | 150 | |
Total other comprehensive income (loss) | 3,460 | (45,445) | (3,822) |
Comprehensive income | $ 19,537 | $ 144 | $ 54,695 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Treasury Stock, at Cost | Accumulated Other Comprehensive Income (Loss) | Unearned Compensation - ESOP | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance at beginning of period at Dec. 31, 2020 | $ 584 | $ 464,176 | $ 277,312 | $ (16,644) | $ 2,185 | $ (31,299) | $ 696,314 | ||
Balance, beginning of period (in shares) at Dec. 31, 2020 | 57,205,458 | ||||||||
Comprehensive income (loss) | 58,517 | (3,822) | 54,695 | ||||||
Dividends declared per share | (10,130) | (10,130) | |||||||
ESOP shares committed to be released | 1,332 | 1,838 | 3,170 | ||||||
Restricted stock awards granted, net of forfeitures (in shares) | 186,172 | ||||||||
Share-based compensation expense | 3,784 | 3,784 | |||||||
Stock option exercised | $ 1 | 642 | 643 | ||||||
Stock option exercised (in shares) | 62,840 | ||||||||
Treasury stock purchased | (69,215) | (69,215) | |||||||
Treasury stock purchased (in shares) | (5,063,992) | ||||||||
Balance at end of period at Dec. 31, 2021 | $ 585 | 469,934 | 325,699 | (85,859) | (1,637) | (29,461) | 679,261 | ||
Balance, end of period (in shares) at Dec. 31, 2021 | 52,390,478 | ||||||||
Comprehensive income (loss) | 45,589 | (45,445) | 144 | ||||||
Dividends declared per share | (12,966) | (12,966) | |||||||
ESOP shares committed to be released | 1,440 | 1,838 | 3,278 | ||||||
Restricted stock awards granted, net of forfeitures (in shares) | 94,141 | ||||||||
Performance stock units vested (in shares) | 14,596 | ||||||||
Share-based compensation expense | $ 2 | 3,303 | 3,305 | ||||||
Stock option exercised | $ 9 | 8,354 | 8,363 | ||||||
Stock option exercised (in shares) | 868,808 | ||||||||
Treasury stock purchased | (62,525) | (62,525) | |||||||
Treasury stock purchased (in shares) | (4,406,571) | ||||||||
Balance at end of period at Dec. 31, 2022 | $ 596 | 483,031 | $ (1,884) | 356,438 | (148,384) | (47,082) | (27,623) | $ (1,884) | $ 616,976 |
Balance, end of period (in shares) at Dec. 31, 2022 | 48,961,452 | 48,961,452 | |||||||
Comprehensive income (loss) | 16,077 | 3,460 | $ 19,537 | ||||||
Dividends declared per share | (12,859) | (12,859) | |||||||
ESOP shares committed to be released | 663 | 1,838 | 2,501 | ||||||
Restricted stock awards granted, net of forfeitures (in shares) | 130,921 | ||||||||
Share-based compensation expense | $ 2 | 2,166 | 2,168 | ||||||
Stock option exercised | 642 | 642 | |||||||
Stock option exercised (in shares) | 62,840 | ||||||||
Treasury stock purchased | (45,206) | (45,206) | |||||||
Treasury stock purchased (in shares) | (3,753,989) | ||||||||
Balance at end of period at Dec. 31, 2023 | $ 598 | $ 486,502 | $ 359,656 | $ (193,590) | $ (43,622) | $ (25,785) | $ 583,759 | ||
Balance, end of period (in shares) at Dec. 31, 2023 | 45,401,224 | 45,401,224 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Changes in Stockholders' Equity | |||
Dividends declared per share | $ 0.30 | $ 0.28 | $ 0.20 |
ESOP shares committed to be released | 230,723 | 230,723 | 230,722 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 16,077,000 | $ 45,589,000 | $ 58,517,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision (benefit) for credit losses | 5,680,000 | 5,660,000 | (7,258,000) |
Net amortization of securities premiums/discounts | 433,000 | 943,000 | 3,689,000 |
Proceeds from sale of loans | 433,233,000 | 602,948,000 | 2,190,295,000 |
Loans originated for sale | (423,776,000) | (560,942,000) | (1,973,672,000) |
Accretion of net deferred loan costs/fees and premiums | (190,000) | (399,000) | (2,530,000) |
Depreciation and amortization of premises and equipment | 3,843,000 | 3,924,000 | 4,412,000 |
Change in mortgage servicing rights fair value | 4,684,000 | (5,332,000) | 380,000 |
Mortgage servicing rights capitalized | (2,657,000) | (4,538,000) | (13,815,000) |
Accretion of fair value adjustment on loans and deposits, net | (366,000) | (1,204,000) | (3,455,000) |
Goodwill impairment | 10,760,000 | ||
Amortization of other intangible assets | 757,000 | 892,000 | 1,206,000 |
Amortization of subordinated debt issuance costs | 715,000 | 126,000 | 126,000 |
Gain on sale and call of securities, net | (241,000) | ||
Net gains on mortgage loan sales, including fair value adjustments | (10,600,000) | (14,908,000) | (53,653,000) |
Bank-owned life insurance income | (2,749,000) | (1,981,000) | (2,022,000) |
Income on retirement plan annuities | (540,000) | (456,000) | (427,000) |
Write-down of asset held for sale | 196,000 | ||
Net loss on disposal of premises and equipment | 19,000 | 41,000 | |
Net gain on sale of assets held for sale | (305,000) | ||
Net gain on sale and write-down of other real estate owned and repossessed assets | (9,000) | (30,000) | (243,000) |
Deferred income tax expense | (1,778,000) | 3,162,000 | 6,427,000 |
ESOP expense | 2,501,000 | 3,278,000 | 3,170,000 |
Share-based compensation expense | 2,168,000 | 3,305,000 | 3,784,000 |
Net change in: | |||
Decrease (increase) in operating lease ROU assets | 4,068,000 | (161,000) | (3,592,000) |
(Decrease) increase in operating lease liabilities | (4,067,000) | 220,000 | 4,000,000 |
Change in other assets | (192,000) | (20,388,000) | 32,974,000 |
Change in other liabilities | 15,799,000 | 8,954,000 | (23,777,000) |
Net cash provided by operating activities | 53,508,000 | 68,899,000 | 224,295,000 |
Activity in securities available for sale: | |||
Maturities, prepayments and calls | 21,414,000 | 43,426,000 | 148,702,000 |
Purchases | (4,606,000) | (16,102,000) | (316,746,000) |
Sales | 39,321,000 | ||
Activity in securities held to maturity: | |||
Maturities, prepayment and calls | 160,000 | ||
Purchases | (19,949,000) | ||
Net (purchase) redemption of FHLB stock | (7,027,000) | (14,140,000) | 2,807,000 |
Proceeds on asset held for sale | 874,000 | 685,000 | |
Loan pool purchase | (58,311,000) | (26,768,000) | |
Participation-in loan purchases | (33,169,000) | (197,000,000) | (87,837,000) |
Net loan (originations) payments | (170,145,000) | (688,689,000) | 4,352,000 |
Proceeds from sale of other real estate owned and repossessed assets | 267,000 | 327,000 | 1,576,000 |
Additions to property and equipment | (4,481,000) | (2,265,000) | (6,458,000) |
Net cash used by investing activities | (196,713,000) | (952,018,000) | (241,051,000) |
Cash flows from financing activities: | |||
Net increase in deposits | 197,806,000 | 506,725,000 | 176,035,000 |
Net change in short-term borrowed funds | (82,000,000) | 385,000,000 | (35,000,000) |
Proceeds from FHLB borrowings | 325,000,000 | 3,400,000 | |
Repayment of FHLB borrowings | (75,213,000) | (40,036,000) | (61,786,000) |
Repayment of subordinated debt | (35,000,000) | ||
Net change in mortgagors' escrow accounts | (665,000) | 1,078,000 | 723,000 |
Proceeds from exercise of stock options | 642,000 | 8,363,000 | 643,000 |
Treasury stock purchased | (45,206,000) | (62,525,000) | (69,215,000) |
Dividends paid | (12,826,000) | (12,188,000) | (9,195,000) |
Net cash provided by financing activities | 272,538,000 | 786,417,000 | 5,605,000 |
Net change in cash and cash equivalents | 129,333,000 | (96,702,000) | (11,151,000) |
Cash and cash equivalents at beginning of year | 98,017,000 | 194,719,000 | 205,870,000 |
Cash and cash equivalents at end of year | 227,350,000 | 98,017,000 | 194,719,000 |
Supplemental cash flow information: | |||
Interest paid on deposits | 86,538,000 | 14,235,000 | 8,714,000 |
Interest paid on borrowed funds | 28,464,000 | 6,783,000 | 3,951,000 |
Income taxes paid, net | 10,975,000 | 11,674,000 | 20,885,000 |
Transfer of loans to other real estate owned and repossessed assets | 273,000 | 297,000 | 792,000 |
Transfer of assets to assets held for sale | 918,000 | 881,000 | |
Dividends declared | $ 12,859,000 | $ 12,966,000 | 10,130,000 |
Supplemental disclosure related to adoption of ASU 2016-02, detailed in Note 1: | |||
ROU asset | 23,189,000 | ||
Operating lease liabilities | $ 24,370,000 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation HarborOne Bancorp, Inc. (the “Company”) is the stock holding company of HarborOne Bank (the “Bank”), a state-chartered trust company, which in turn owns a residential mortgage banking company, HarborOne Mortgage, LLC (“HarborOne Mortgage”). HarborOne Mortgage was acquired as Merrimack Mortgage, LLC on July 1, 2015 and effective April 3, 2018 became HarborOne Mortgage. The Consolidated Financial Statements include the accounts of the Company, the Company’s subsidiaries, Legion Parkway Company LLC, a security corporation formed on July 13, 2016 and HarborOne Bank; and the Bank’s wholly-owned subsidiaries, HarborOne Mortgage, one security corporation subsidiary, and one passive investment subsidiary. 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. Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 30 full-service bank 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, Rhode Island, New Hampshire and New Jersey 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. Currently new advances (with terms up to one year) under the BFTP can only be made through March 11, 2024. Macroeconomic trends are mixed as uncertainty remains about the economy and banking industry. Market conditions and external factors may unpredictably impact the competitive landscape for deposits in the banking industry. Additionally, the interest rate environment has increased competition for liquidity and the premium at which liquidity is available to meet funding needs. An unexpected increase of withdrawals of deposits could adversely impact the Company’s ability to fund its operations, potentially requiring greater reliance on secondary sources of liquidity to meet withdrawal demands or to fund continuing operations. These sources may include proceeds from FHLB advances, proceeds from the BTFP, sales of investment securities and loans, federal funds, lines of credit from correspondent banks, and brokered deposits. 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. Use of Estimates To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, Management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, however, actual results could differ. Significant Group Concentration of Credit Risk The Company has cash and federal fund balances on deposit at correspondent banks that exceed insurable limits. The Company has not experienced any losses on such amounts. Most of the Company’s lending activities are with borrowers located within south eastern New England. The ability and willingness of residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the borrowers’ geographic area and real estate values. Note 4 provides the detail of the Company’s loan portfolio and Note 2 provides the detail of the Company’s investment portfolio. The Company does not have any significant concentrations to any one industry or customer. Reclassifications 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. Cash Flows Cash and cash equivalents include cash, interest-bearing deposits with other financial institutions with maturities fewer than 90 days, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions and interest-bearing deposits in other financial institutions. Debt Securities Debt securities are classified as held-to-maturity and carried at amortized cost when Management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Effective January 1, 2022, the Company adopted the provisions of Topic 326 and modified its accounting for the assessment of available-for-sale debt securities for impairment as further described below. The Company has made an accounting policy election to exclude accrued interest from the amortized cost basis of debt securities and reports accrued interest separately in other assets in the Consolidated Balance Sheets. The Company also excludes accrued interest from the estimate of credit losses. A debt security is placed on non-accrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a debt security placed on non-accrual status is reversed against interest income. There were no debt securities on non-accrual status, and therefore there was no accrued interest related to debt securities reversed against interest income, for the years ended December 31, 2023 and 2022. The Company measures expected credit losses on held-to-maturity securities on a collective basis by major security type in accordance with the CECL methodology. As of December 31, 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. As a result, Management has determined these securities to have a zero loss expectation and therefore does not estimate an allowance for credit losses on these securities. For available-for-sale debt securities in an unrealized loss position, Management first assesses whether the Company intends to sell, or if it is likely that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through a provision for credit losses charge to earnings. For debt securities available for sale that do not meet either these criteria, Management evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, Management considers both quantitative and qualitative factors. A substantial portion of available-for-sale debt securities held by the Company are obligations issued by U.S. government agencies and U.S. government-sponsored enterprises, including mortgage-backed securities. These securities are either explicitly or implicitly guaranteed by the U.S. government, which are highly rated by major credit rating agencies and have a long history of no credit losses. For these securities, Management takes into consideration the long history of no credit losses and other factors to assess the risk of nonpayment even if the U.S. government were to default. As such, the Company has utilized a zero loss estimate due to credit for these securities. For available-for-sale debt securities that are not guaranteed by U.S. government agencies and U.S. government-sponsored enterprises, such as corporate bonds, Management utilizes a third-party credit modeling tool based on observable market data, which assists Management in identifying any potential credit risk associated with its available-for-sale debt securities. In addition, qualitative factors are also considered, including the extent to which fair value is less than amortized cost, changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If a credit loss exists based on the results of this assessment, an ACL (contra asset) is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is considered market-related and is recognized in other comprehensive income, net of taxes. Changes in the ACL on available-for-sale debt securities are recorded as provision for (or reversal of) credit losses. Losses are charged against the ACL when Management believes the uncollectability of an available-for-sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Federal Home Loan Bank Stock The Company, as a member of the FHLB system, is required to maintain an investment in capital stock of the FHLB of Boston. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. At its discretion, the FHLB may declare dividends on the stock. The Company reviews FHLB stock for impairment based on the ultimate recoverability of the cost basis. As of December 31, 2023 and 2022, no impairment has been recognized. Mortgage Loans Held for Sale Residential mortgage loans originated with the intent to sell are classified as held-for-sale and are carried at fair value. Loan origination costs for loans held for sale that the Company accounts for under the fair value option are recognized in noninterest expense when incurred. Changes in fair value are recognized in mortgage banking income. Gains and losses on residential loan sales are recognized at the time of sale and are included in mortgage banking income. Upfront fees and costs related to mortgage loans held for sale for which the fair value option was elected are recognized in mortgage banking income as received / incurred and are not deferred. Interest income on mortgage loans held for sale is recorded in interest income. Loans Loans held for investment are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for credit losses on loans, and any unamortized deferred origination fees and costs. Loan origination fees are offset with related direct incremental loan origination costs and the resulting net amount is deferred and amortized to interest income using the level-yield method over the remaining life of the loan without anticipating prepayment. Accrual of interest on loans is discontinued when collectability of principal or interest is uncertain or when payments of principal or interest have become contractually past due 90 days or more. Past due status is based on contractual terms of the loan. However, a loan may remain on accrual status if both the value of any collateral securing the loan is sufficient to cover principal and accrued interest thereon, and the loan is in the process of collection. In all cases, loans are placed on non-accrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on non-accrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company’s loan portfolio includes residential real estate, commercial real estate, construction, commercial and industrial and consumer segments. Residential real estate loans include classes for one- to four-family and second mortgages and equity lines of credit. Consumer loans include classes for auto and personal loans. The Company’s acquired loans are recorded at fair value with no carryover of the allowance for credit losses. Net discount on performing loans acquired are recognized as interest income over the remaining life of the loan. Acquired loans determined to have evidence of deterioration in credit quality and when it is probable, at acquisition, that all contractually required payments will not be collected, are deemed to be purchased credit deteriorated (“PCD”) loans. For PCD loans, the excess of cash flows expected to be collected over the carrying amount of the loans, referred to as the “accretable yield,” is accreted into interest income over the life of the loans using the effective yield method. The Company monitors actual cash flows to determine any deterioration from those forecasted at the acquisition date, which is evaluated and recorded through the allowance for credit losses. Allowance for Credit Losses on Loans Effective January 1, 2022, the Company has modified its accounting policy for the ACL on loans as described below. The Company has made an accounting policy election to exclude accrued interest from the amortized cost basis of loans and reports accrued interest separately in other assets in the Consolidated Balance Sheets. The Company also excludes accrued interest from the estimate of credit losses. Accrued interest receivable on loans totaled $15.6 million and $13.8 million, respectively, as of December 31, 2023 and 2022, respectively. The ACL on loans is Management’s estimate of expected credit losses over the expected life of the loans at the reporting date. The ACL on loans is increased through a provision for credit losses recognized in the Consolidated Statements of Income and by recoveries of amounts previously charged off. The ACL on loans is reduced by charge-offs on loans. Loan charge-offs are recognized when Management believes the collectability of the principal balance outstanding is unlikely. Full or partial charge-offs on collateral-dependent individually analyzed loans are generally recognized when the collateral is deemed to be insufficient to support the carrying value of the loan. The level of the ACL on loans is based on Management’s ongoing review of all relevant information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the calculation of probability of default, loss given default, exposure at default and the estimation of expected credit losses. As discussed further below, adjustments to historical information are made for differences in specific risk characteristics, such as differences in underwriting standards, portfolio mix, delinquency level, or term, as well as for changes in environmental conditions, that may not be reflected in historical loss rates. Management employs a process and methodology to estimate the ACL on loans that evaluates both quantitative and qualitative factors. The methodology for evaluating quantitative factors consists of two basic components. The first component involves pooling loans into portfolio segments for loans that share similar risk characteristics. Pooled loan portfolio segments include commercial real estate, commercial and industrial, commercial construction, residential real estate (including homeowner construction), home equity and consumer loans. The second component involves individually analyzed loans that do not share similar risk characteristics with loans that are pooled into portfolio segments. Individually analyzed loans include non-accrual loans, commercial loans risk-rated 8 or greater, and certain other loans based on the underlying risk characteristics and the discretion of Management to individually analyze such loans. For loans that are individually analyzed, the ACL is measured using a discounted cash flow (“DCF”) methodology based upon the loan’s contractual effective interest rate, or at the loan’s observable market price, or, if the loan is collateral-dependent, at the fair value of the collateral. Factors Management considers when measuring the extent of expected credit loss include payment status, collateral value, borrower financial condition, guarantor support and the probability of collecting scheduled principal and interest payments when due. For collateral-dependent loans for which repayment is to be provided substantially through the sale of the collateral, Management adjusts the fair value for estimated costs to sell. For collateral-dependent loans for which repayment is to be provided substantially through the operation of the collateral, estimated costs to sell are not incorporated into the measurement. Management may also adjust appraised values to reflect estimated market value declines or apply other discounts to appraised values for unobservable factors resulting from its knowledge of circumstances associated with the collateral. For pooled loans, the Company utilizes a DCF methodology to estimate credit losses over the expected life of the loan. The life of the loan excludes expected extensions, renewal and modifications, unless: (1) the extension or renewal options are included in the original or modified contract terms and not unconditionally cancellable by the Company; or (2) Management reasonably expects at the reporting date that a modification will be made to a borrower experiencing financial difficulty. The methodology incorporates the probability of default and loss given default, which are identified by default triggers such as past due by 90 or more days, whether a charge-off has occurred, the loan is non-accrual, or the loan is risk-rated as special mention, substandard, or doubtful. The probability of default for the life of the loan is determined by the use of an econometric factor. Management utilizes the national unemployment rate as an econometric factor with a one-year forecast period and one-year straight-line reversion period to the historical mean of its macroeconomic assumption in order to estimate the probability of default for each loan portfolio segment. Utilizing a third-party regression model, the forecasted national unemployment rate is correlated with the probability of default for each loan portfolio segment. The DCF methodology combines the probability of default, the loss given default, maturity date and prepayment speeds to estimate a reserve for each loan. The sum of all the loan level reserves are aggregated for each portfolio segment and a loss rate factor is derived. Quantitative loss factors are also supplemented by certain qualitative risk factors reflecting Management’s view of how losses may vary from those represented by quantitative loss rates. These qualitative risk factors include: (1) changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses; (2) changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments; (3) changes in the nature of the portfolio and in the volume of past due loans; (4) changes in the experience, ability, and depth of lending management and other relevant staff; (5) changes in the quality of the loan review system; (6) changes in the value of underlying collateral for collateral-dependent loans; (7) the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and (8) the effect of other external factors such as legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio. Qualitative loss factors are applied to each portfolio segment and determined based on the risk characteristics of each segment. Because the methodology is based upon historical experience and trends, current economic data, reasonable and supportable forecasts, as well as Management’s judgment, factors may arise that result in different estimations. Deteriorating conditions or assumptions could lead to further increases in the ACL on loans. In addition, various regulatory agencies periodically review the ACL on loans. Such agencies may require additions to the allowance based on their judgments about information available to them at the time of their examination. The ACL on loans is determined by an estimate of future credit losses, and ultimate losses may vary from Management’s estimate. Prior to January 1, 2022, the allowance for loan losses was based on an incurred loss methodology and represented Management’s estimate of the risk of loss inherent in the loan portfolio as of the balance sheet date. The level of the allowance was based on Management’s ongoing review of the growth and composition of the loan portfolio, historical loss experience, estimated loss emergence period (the period from the event that triggers the eventual default until the actual loss was recognized with a charge-off), economic conditions, analysis of asset quality and credit quality levels and trends, the performance of individual loans in relation to contract terms and other pertinent factors. A methodology was used to systematically measure the amount of estimated loan loss exposure inherent in the loan portfolio for the purposes of establishing a sufficient allowance for loan losses. The methodology included: (1) the identification of loss allocations for individual loans deemed to be impaired and (2) the application of loss allocation factors for non-impaired loans based on historical loss experience and estimated loss emergence period, with adjustments for various exposures that Management believed were not adequately represented by historical loss experience. Loss allocations for loans deemed to be impaired were measured using a discounted cash flow method based upon the loan’s contractual effective interest rate, or at the loan’s observable market price, or, if the loan was collateral dependent, at the fair value of the collateral. For loans that were collectively evaluated, loss allocation factors were derived by analyzing historical loss experience by loan segment over an established look-back period deemed to be relevant to the inherent risk of loss in the portfolios. Loans were segmented by loan type, collateral type, delinquency status and loan risk rating, where applicable. These loss allocation factors were adjusted to reflect the loss emergence period. These amounts were supplemented by certain qualitative risk factors reflecting Management’s view of how losses may vary from those represented by historical loss rates. The qualitative risk factors were the same as those considered under the ASC 326 accounting policy described above. Allowance for Credit Losses on Unfunded Commitments Effective January 1, 2022, the Company has modified its accounting policy for the ACL on unfunded commitments. The updated policy is detailed below. The ACL on unfunded commitments is Management’s estimate of expected credit losses over the expected contractual term (or life) in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. For each portfolio, estimated loss rates and funding factors are applied to the corresponding balance of unfunded commitments. For each portfolio, the estimated loss rates applied to unfunded commitments are the same quantitative and qualitative loss rates applied to the corresponding on-balance sheet amounts in determining the ACL on loans. The estimated funding factor applied to unfunded commitments represents the likelihood that the funding will occur and is based upon the Company’s average historical utilization rate for each portfolio. The ACL on unfunded commitments is included in other liabilities in the Consolidated Balance Sheets. The ACL on unfunded commitments is adjusted through a provision for credit losses recognized in the Consolidated Statements of Income. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Property and Equipment Land is carried at cost. Buildings, leasehold improvements, and furniture and equipment are carried at cost, less accumulated depreciation and amortization, computed on the straight-line method over the estimated useful lives of the assets or the terms of the leases, if shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured. Maintenance and repairs are charged to expense as incurred and improvements are capitalized. Leases The Company is committed to rent premises and equipment used in business operations under non-cancelable operating leases and determines if an arrangement meets the definition of a lease upon inception. Leases that transfer substantially all of the benefits and risks of ownership to the Company are classified as finance leases, while all others are classified as operating leases. At lease commencement, a lease liability and ROU asset are calculated and recognized on both types of leases. The lease liability is equal to the present value of the future minimum lease payments. The ROU asset is equal to the lease liability, plus any initial direct costs and prepaid lease payments, less any lessor incentives received. Operating lease ROU assets are included in other assets and finance lease ROU assets are included in premises and equipment, net. The Company’s leases do not provide an implicit interest rate; therefore, the Company used the appropriate FHLB term rate commensurate with the underlying lease terms to determine the present value of operating lease liabilities. The lease term used in the calculation includes any options to extend that the Company is reasonably certain to exercise, determined on a lease-by-lease basis. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. At December 31, 2023, the Company had no finance lease ROU assets or lease liabilities. For operating leases, total lease cost is comprised of lease expense, short-term lease cost, and variable lease cost. Lease expense includes future minimum lease payments, which are recognized on a straight-line basis over the lease term, as well as common area maintenance charges, real estate taxes, insurance and other expenses, where applicable, which are expensed as incurred. Total lease cost for operating leases is recorded in occupancy and equipment noninterest expense. See Note 14, Operating Lease Right-of-Use Assets and Liabilities, for further information. Retirement Plan Annuities Retirement plan annuities are reflected on the Consolidated Balance Sheets at the face amount of the policies. Changes in recorded value are reflected in income on retirement plan annuities on the Consolidated Statements of Income. Bank-owned Life Insurance Bank-owned life insurance policies are reflected on the Consolidated Balance Sheets at net cash surrender value. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in bank-owned life insurance income on the Consolidated Statements of Income and are not subject to income taxes. The Company is the beneficiary on these life insurance policies which are purchased for select employees of the Company. Employee Stock Ownership Plan (“ESOP”) Compensation expense for the Company’s ESOP is recorded at an amount equal to the shares committed to be allocated by the ESOP multiplied by the quarterly average fair market value of the shares during the year. The Company recognizes compensation expense ratably over the year based upon the Company’s estimate of the number of shares committed to be allocated by the ESOP. The difference between the average fair market value and the cost of the shares committed to be allocated by the ESOP is recorded as an adjustment to additional paid-in capital. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. Mortgage Servicing Rights When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. Under the fair value measurement method, the Company measures servicing rights at fair value at each reporting date and reports changes in fair value of servicing assets in earnings in the period in which the changes occur, and are included with changes in mortgage servicing rights fair value Servicing fee income, which is reported on the income statement as Mortgage banking income, Other income, Derivative Financial Instruments At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to the likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized a |
DEBT SECURITIES
DEBT SECURITIES | 12 Months Ended |
Dec. 31, 2023 | |
DEBT SECURITIES | |
DEBT SECURITIES | 2. DEBT SECURITIES The amortized cost and fair value of securities with gross unrealized gains and losses is as follows: Gross Gross Allowance Amortized Unrealized Unrealized for Credit Fair Cost Gains Losses Losses Value (in thousands) December 31, 2023: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 47,143 $ — $ 6,961 $ — $ 40,182 U.S. government agency and government-sponsored residential mortgage-backed securities 300,277 3 54,683 — 245,597 U.S. government-sponsored collateralized mortgage obligations 1,852 — 70 — 1,782 SBA asset-backed securities 1,885 — 107 — 1,778 Corporate bonds 1,000 — 188 — 812 Total securities available for sale $ 352,157 $ 3 $ 62,009 $ — $ 290,151 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 15,000 $ — $ 438 $ — $ 14,562 SBA asset-backed securities 4,796 — 96 — 4,700 Total securities held to maturity $ 19,796 $ — $ 534 $ — $ 19,262 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 $940,000 and $957,000 as of December 31, 2023 and 2022, respectively. At December 31, 2023, available-for-sale debt securities with a fair value of $287.6 million and held-to-maturity securities with an amortized cost of $15.0 million were pledged as collateral to provide BTFP borrowing capacity. The BTFP provides for funding based on the par value of the collateral which was $360.9 million. The amortized cost and fair value of debt securities by contractual maturity at December 31, 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 $ 6,998 $ 6,586 $ 15,000 $ 14,562 After 5 years through 10 years 41,145 34,408 — — Over 10 years — — — — 48,143 40,994 15,000 14,562 U.S. government agency and government-sponsored residential mortgage-backed securities 300,277 245,597 — — U.S. government-sponsored collateralized mortgage obligations 1,852 1,782 — — SBA asset-backed securities 1,885 1,778 4,796 4,700 Total $ 352,157 $ 290,151 $ 19,796 $ 19,262 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 one three The following table shows proceeds and gross realized gains and losses related to the sales and calls of securities for the periods indicated: Year Ended December 31, 2023 2022 2021 (in thousands) Sales Proceeds $ — $ — $ 39,321 Gross gains — — 241 Gross losses — — — Calls Proceeds $ — $ — $ 5,000 Gross gains — — — Gross losses — — — Information pertaining to securities with gross unrealized losses at December 31, 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) December 31, 2023: Securities available for sale U.S. government and government-sponsored enterprise obligations $ — $ — $ 6,961 $ 40,182 U.S. government agency and government-sponsored residential mortgage-backed securities — — 54,683 240,955 U.S. government-sponsored collateralized mortgage obligations — — 70 1,782 SBA asset-backed securities — — 107 1,778 Corporate bonds — — 188 812 $ — $ — $ 62,009 $ 285,509 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ — $ — 438 14,562 SBA asset-backed securities 96 4,700 — — $ 96 $ 4,700 $ 438 $ 14,562 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 December 31, 2023, the Company’s security portfolio consisted of 133 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 enterprises and agencies. The Company does not believe that the debt securities that were in an unrealized loss position as of December 31, 2023 represent a credit loss impairment. As of December 31, 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 unlikely that the Company will be required to sell these securities, before recovery of their cost basis, which may be at maturity. Therefore, no allowance for credit losses was recorded at December 31, 2023. As of December 31, 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 ACL on these securities. |
LOANS HELD FOR SALE
LOANS HELD FOR SALE | 12 Months Ended |
Dec. 31, 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: December 31, December 31, 2023 2022 (in thousands) Loans held for sale, fair value $ 19,686 $ 18,544 Loans held for sale, contractual principal outstanding 19,155 18,208 Fair value less unpaid principal balance $ 531 $ 336 The Company has elected the fair value option for mortgage loans held for sale to better match changes in the 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 $195,000 in the year ended December 31, 2023 to $531,000, compared to a decrease of $1.1 million in the year ended December 31, 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 Consolidated Statements of Income. At December 31, 2023 and 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 | 12 Months Ended |
Dec. 31, 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: December 31, December 31, 2023 2022 (in thousands) Residential real estate: One- to four-family $ 1,513,554 $ 1,432,263 Second mortgages and equity lines of credit 177,135 166,219 Residential real estate construction 18,132 35,837 Total residential real estate loans 1,708,821 1,634,319 Commercial: Commercial real estate 2,343,675 2,250,344 Commercial construction 208,443 199,311 Commercial and industrial 466,443 424,275 Total commercial loans 3,018,561 2,873,930 Consumer loans: Auto 13,603 33,625 Personal 8,433 7,796 Total consumer loans 22,036 41,421 Total loans before basis adjustment 4,749,418 4,549,670 Basis adjustment associated with fair value hedge (1) 893 — Total loans 4,750,311 4,549,670 Allowance for credit losses on loans (47,972) (45,236) Loans, net $ 4,702,339 $ 4,504,434 (1) Note 10 - Derivatives The net unamortized deferred loan origination fees and costs included in total loans and leases were $8.5 million and $7.4 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023 and December 31, 2022, the commercial and industrial loans include $321,000 and $2.1 million, respectively, of PPP loans and $36,000 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 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 December 31, 2023 and 2022, the Company was servicing loans for participants in the aggregate amount of $413.0 million and $366.4 million, respectively. The following table presents the activity in the ACL on loans for the years ended December 31, 2023 and 2022: Second Mortgages and Residential One- to Four- Equity Lines Real Estate Commercial Commercial Commercial Family 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 — — — (4,964) — (253) (76) — (5,293) Recoveries 2 117 — 38 — 1,563 79 — 1,799 Provision 2,701 (4) 26 2,235 937 (1,000) (231) — 4,664 Balance at December 31, 2022 $ 11,532 $ 924 $ 280 $ 20,357 $ 4,645 $ 7,236 $ 262 $ - $ 45,236 Charge-offs — — — (4,171) — (166) (89) — (4,426) Recoveries 1 88 — 4 — 309 71 — 473 Provision 568 (48) 138 5,098 179 728 26 — 6,689 Balance at December 31, 2023 $ 12,101 $ 964 $ 418 $ 21,288 $ 4,824 $ 8,107 $ 270 $ — $ 47,972 The following is the activity in the allowance for loan losses for the year ended December 31, 2021: Second Mortgages and Residential One- to Four- Equity Lines Real Estate Commercial Commercial Commercial Family Credit Construction Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2020 $ 6,168 $ 1,054 $ 197 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Provision for loan losses (2,755) (794) (128) (1,123) 55 2,055 (2,098) (2,470) (7,258) Charge-offs — — — (405) — (2,850) (177) — (3,432) Recoveries 218 160 — 5 — 122 167 — 672 Balance at December 31, 2021 $ 3,631 $ 420 $ 69 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 Effective January 1, 2022, individually analyzed loans include non-accrual loans and certain other loans based on the underlying risk characteristics and the discretion of Management to individually analyze such loans. As of December 31, 2023, the carrying value of individually analyzed loans amounted to $17.5 million, with a related allowance of $108,000 and $17.3 million 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 December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Related Related Carrying Value Allowance Carrying Value Allowance (in thousands) Commercial: Commercial real estate $ 7,416 $ 5 $ 2,039 $ — Commercial and industrial 1,793 101 3,329 7 Commercial construction — — — — Total Commercial 9,209 106 5,368 7 Residential real estate 8,054 — 10,494 1 Total $ 17,263 $ 106 $ 15,862 $ 8 The following is a summary of past due and non-accrual loans at December 31, 2023 and 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) December 31, 2023 Residential real estate: One- to four-family $ 4,704 $ 2,413 $ 4,418 $ 11,535 $ 7,785 Second mortgages and equity lines of credit 164 130 57 351 473 Commercial real estate — — 5,751 5,751 7,416 Commercial construction — — — — — Commercial and industrial 247 166 1,332 1,745 1,791 Consumer: Auto 96 69 4 169 4 Personal 16 5 31 52 44 Total $ 5,227 $ 2,783 $ 11,593 $ 19,603 $ 17,513 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 December 31, 2023 and 2022, there were no loans past due 90 days or more and still accruing. 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 year ended December 31, 2023. There was one TDR loan modification during the year ended December 31, 2022. The TDR loan modification in 2022 provided a deferral of principal. There were no loans to borrowers experiencing financial difficulty that had a payment default during the years ended December 31, 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 Information 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 substantially 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. 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 December 31, 2023 Commercial real estate Pass $ 152,047 $ 828,335 $ 455,996 $ 234,585 $ 233,713 $ 405,103 $ — $ — $ 2,309,779 Special mention — 10,971 — 4,300 8,977 2,232 — — 26,480 Substandard — — — — — 1,670 — — 1,670 Doubtful — — — — — 5,746 — — 5,746 Total commercial real estate 152,047 839,306 455,996 238,885 242,690 414,751 — — 2,343,675 YTD gross charge-offs — — — — — 4,171 — — 4,171 Commercial and industrial Pass 73,240 52,190 94,570 70,565 22,988 75,493 74,125 — 463,171 Special mention — 454 4 23 2 948 50 — 1,481 Substandard — 52 8 — — 367 18 — 445 Doubtful — — — — — 1,297 49 — 1,346 Total commercial and industrial 73,240 52,696 94,582 70,588 22,990 78,105 74,242 — 466,443 YTD gross charge-offs 24 113 14 5 8 2 — — 166 Commercial construction Pass 35,181 109,291 60,113 843 — — 425 — 205,853 Special mention — 2,590 — — — — — — 2,590 Substandard — — — — — — — — — Doubtful — — — — — — — — — Total commercial construction 35,181 111,881 60,113 843 — — 425 — 208,443 YTD gross charge-offs — — — — — — — — — Residential real estate Accrual 138,541 434,421 480,010 202,118 38,675 239,185 166,144 1,469 1,700,563 Non-accrual — — — 127 956 6,959 216 — 8,258 Total residential real estate 138,541 434,421 480,010 202,245 39,631 246,144 166,360 1,469 1,708,821 YTD gross charge-offs — — — — — — — — — Consumer Accrual 8,218 5,366 2,254 1,021 3,135 963 1,031 — 21,988 Non-accrual 14 18 5 — 2 4 5 — 48 Total Consumer 8,232 5,384 2,259 1,021 3,137 967 1,036 — 22,036 YTD gross charge-offs 7 16 4 15 18 29 — — 89 Total loans before basis adjustment $ 407,241 $ 1,443,688 $ 1,092,960 $ 513,582 $ 308,448 $ 739,967 $ 242,063 $ 1,469 $ 4,749,418 Total YTD gross charge-offs $ 31 $ 129 $ 18 $ 20 $ 26 $ 4,202 $ — $ — $ 4,426 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 | 12 Months Ended |
Dec. 31, 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 may retain the servicing rights of the loans sold. Mortgage loans serviced for others are not included in the accompanying 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 balances of mortgage loans serviced for others were $3.56 billion and $3.62 billion as of December 31, 2023 and 2022, respectively. 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. At December 31, 2023 and 2022, the following weighted average assumptions were used in the calculation of fair value of MSRs: December 31, December 31, 2023 2022 Prepayment speed 7.60 % 7.10 % Discount rate 9.81 9.81 Default rate 2.27 1.63 The following summarizes changes to MSRs for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 Balance, beginning of period $ 48,138 $ 38,268 $ 24,833 Additions 2,657 4,538 13,815 Changes in fair value due to: Reductions from loans paid off during the period (1,981) (2,921) (6,019) Changes in valuation inputs or assumptions (2,703) 8,253 5,639 Balance, end of period $ 46,111 $ 48,138 $ 38,268 |
OTHER REAL ESTATE LOANS AND REP
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | 6. OTHER REAL ESTATE OWNED AND REPOSSESSED ASSETS Income and expenses applicable to foreclosed and repossessed assets include the following: Year Ended December 31, 2023 2022 2021 (in thousands) Loss on sales of real estate, net $ — $ — $ (198) Net loss on sales of repossessed assets (9) (30) (45) Operating expenses 1 48 (155) $ (8) $ 18 $ (398) At December 31, 2023 and 2022, there were no foreclosed assets and repossessed assets were automobiles with a total recorded value of $69,000 and $54,000 , respectively. All foreclosed and repossessed assets are held for sale. Mortgage loans in the process of foreclosure totaled $2.1 million and $2.6 million as of December 31, 2023 and 2022, respectively, and are reported in loans. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 7. PROPERTY AND EQUIPMENT A summary of the cost and accumulated depreciation of property and equipment follows: December 31, 2023 2022 (in thousands) Land $ 12,053 $ 12,251 Buildings and leasehold improvements 49,355 50,693 Furniture, equipment and vehicles 18,762 17,345 Fixed assets in process 408 618 80,578 80,907 Less accumulated depreciation and amortization (31,829) (31,862) Property and equipment, net $ 48,749 $ 49,045 Depreciation and amortization expense amounted to $3.8 million, $3.9 million and $4.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. During the year ended December 31, 2023, the land and a building of two properties with a total net book value of $966,000 were transferred to assets held for sale. One of the properties was sold in 2023, and a gain of $305,000 was recognized. At December 31, 2023 and 2022, fixed assets in process represents building improvements and equipment not placed in service. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 8. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill In connection with the Company’s annual goodwill impairment test as of October 31, 2023, management tested goodwill for its reporting units, the Bank and HarborOne Mortgage, utilizing a quantitative impairment test. The Company determined that the estimated fair value of the Bank reporting unit exceeded its carrying value as of October 31, 2023 and that the goodwill at HarborOne Mortgage was fully impaired. For the year ended December 31, 2023 the Company recorded $10.8 million of goodwill impairment for HarborOne Mortgage, representing 100% of the goodwill balance. As of December 31, 2023 and 2022 the carrying value of goodwill at the Bank was $59.0 million. The quantitative assessment of goodwill includes comparing a reporting unit’s calculated fair value to its carrying value. The calculation of fair value requires significant judgments including estimation of future cash flows, which are dependent on internal forecasts, estimation of the projected long-term growth rate and determination of the Company’s weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment. The goodwill at the Bank is at risk of future impairment if projected operating results are not met or other inputs into the fair value measurement model change. As of December 31, 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, 2023. The Company determined there had been no such indicators, therefore, no interim goodwill impairment assessment as of December 31, 2023 was performed. Even though the Company determined that there was no goodwill impairment, a sustained decline in the value of its stock price as well as values of other financial institutions, declines in revenue for the Company beyond our current forecasts, or significant adverse changes in the operating environment for the financial industry may result in a future impairment charge. Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Core Deposit Intangible The Company’s change in the gross amount of core deposit intangibles and the related accumulated amortization consisted of the following: December 31, 2023 2022 (in thousands) Gross amount of CDI: Balance, beginning of period $ 8,952 $ 8,952 Additions due to acquisitions — — Balance, end of period 8,952 8,952 Accumulated amortization: Balance, beginning of period (6,680) (5,788) Amortization (757) (892) Balance, end of period (7,437) (6,680) Net CDI, end of period $ 1,515 $ 2,272 The estimated aggregate amortization expense related to the Company’s core deposit intangible assets is $757,000 per year from 2024 until 2025. The weighted average original amortization period was 7.3 years. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2023 | |
DEPOSITS | |
DEPOSITS | 9. DEPOSITS A summary of deposit balances, by type, is as follows: December 31, December 31, 2023 2022 (in thousands) NOW and demand deposit accounts $ 965,798 $ 1,060,268 Regular savings and club accounts 1,265,315 1,468,172 Money market deposit accounts 966,201 861,704 Total non-certificate accounts 3,197,314 3,390,144 Term certificate accounts greater than $250,000 240,702 110,360 Term certificate accounts less than or equal to $250,000 622,755 387,615 Brokered deposits 326,638 301,380 Total certificate accounts 1,190,095 799,355 Total deposits $ 4,387,409 $ 4,189,499 Total municipal deposits included in the table amounted to $471.8 million and $413.5 million at December 31, 2023 and 2022, respectively. 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 December 31, 2023 and 2022, total reciprocal deposits were $209.4 million and $28.6 million, respectively, consisting primarily of non-certificate accounts. A summary of certificate accounts by maturity at December 31, 2023 is as follows: Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 1,100,893 4.41 % Over 1 year to 2 years 63,108 3.88 Over 2 years to 3 years 23,899 3.40 Over 3 years to 4 years 1,881 1.50 Over 4 years to 5 years 314 0.80 Total certificate deposits $ 1,190,095 4.36 % |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2023 | |
BORROWINGS | |
BORROWINGS | 10. Borrowed funds at December 31, 2023 and 2022 consist of FHLB advances. Short-term advances were $303.0 million, with a weighted average rate of 5.53%, and $385.0 million, with a weighted average rate of 4.32%, at December 31, 2023 and 2022, respectively. Long-term advances are summarized by maturity date below: December 31, 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 $ — $ — — % $ 180 1.40 % 2024 13,400 163,400 1.39 13,400 1.39 2025 90,987 60,987 4.31 987 — 2026 110,000 40,000 4.20 — — 2027 10,000 — 3.72 — — 2028 40,000 — 3.86 — — 2029 and thereafter 1,075 1,075 2.00 1,108 2.00 $ 265,462 $ 265,462 4.02 % $ 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 $2.02 billion and $1.71 billion at December 31, 2023 and 2022, respectively. As of December 31, 2023, the Company had $727.5 million of available borrowing capacity with the FHLB. The Bank maintains two borrowing lines with the FRBB, both with total credit based on eligible collateral: BIC and BTFP. At December 31, 2023, the Bank had $69.4 million borrowing capacity secured by 70% of the carrying value of commercial loans with principal balances amounting to $99.7 million and no outstanding balance on the BIC line. At December 31, 2023, the Bank had no outstanding balance on the BTFP line, under which $360.9 million was available for future borrowings. 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 also has additional borrowing capacity under a $25.0 million unsecured federal funds line with a correspondent bank of which no amount was outstanding at December 31, 2023. On December 1, 2023, the Company fully redeemed its Subordinated Notes of $35 million and expensed the remaining unamortized issuance costs. Amortization of issuance costs was $715,000, $126,000, and $126,000 for the years ended December 31, 2023, 2022 and 2021, respectively. On September 30, 2021, the Company prepaid $20.0 million in FHLB borrowings that had maturity dates in 2023 and an aggregate prepayment penalty of $1.1 million was incurred and expensed, as the advances were not replaced with other FHLB borrowings. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | 11. INCOME TAXES Allocation of the federal and state income taxes between current and deferred portions for the years ended December 31, 2023, 2022 and 2021 are as follows: 2023 2022 2021 (in thousands) Current tax provision: Federal $ 7,264 $ 8,962 $ 10,693 State 3,562 4,016 4,815 10,826 12,978 15,508 Deferred tax provision: Federal (1,255) 2,000 4,451 State (523) 1,162 1,976 (1,778) 3,162 6,427 Income tax provision $ 9,048 $ 16,140 $ 21,935 The reasons for the differences between the statutory federal income tax and the actual income tax provision for the years ended December 31, 2023, 2022 and 2021 are summarized as follows: 2023 2022 2021 (dollars in thousands) Statutory tax rate 21% 21% 21% Statutory tax provision $ 5,276 $ 12,963 $ 16,895 Increase (decrease) resulting from: State taxes, net of federal tax benefit 2,401 4,092 5,365 Bank-owned life insurance (236) (416) (425) Employee stock ownership plan expenses 139 303 280 Tax-exempt income (503) (932) — Goodwill impairment 2,260 — — Net addition (reduction) in uncertain federal tax positions 6 (115) (712) Other, net (295) 245 532 Income tax provision $ 9,048 $ 16,140 $ 21,935 The tax effects of each item that give rise to deferred taxes at December 31, 2023 and 2022 are as follows: 2023 2022 (in thousands) Deferred tax assets: Allowance for credit losses $ 14,851 $ 14,097 Employee benefit plans 6,479 5,848 Mark-to-market loans 899 987 Accrued expenses not deducted for tax purposes 832 1,336 HarborOne Mortgage loan repurchase reserve 852 996 Net unrealized loss on securities available for sale 14,550 15,045 Operating lease liability 7,019 8,020 Other 519 — 46,001 46,329 Deferred tax liabilities: Derivatives (2,457) (3,726) Deferred income annuities (1,370) (1,835) Depreciation and amortization (1,470) (1,009) Deferred loan fees (4,445) (4,188) Mortgage servicing rights (13,201) (13,372) Right of use asset (6,547) (7,560) Core deposit intangible (433) (638) Other — (129) (29,923) (32,457) Net deferred tax asset $ 16,078 $ 13,872 A summary of the change in the net deferred tax asset (liability) for the years ended December 31, 2023, 2022 and 2021 is as follows: 2023 2022 2021 (in thousands) Balance at beginning of year $ 13,872 $ 3,975 $ 9,557 Deferred tax (provision) benefit 1,778 (3,162) (6,427) Adoption of CECL — 736 — Change in directors' retirement plan — (59) — Change in cash flow hedge 923 (1,862) (860) Change in securities available for sale (495) 14,244 1,705 Balance at end of year $ 16,078 $ 13,872 $ 3,975 The Company’s income tax returns are subject to review and examination by federal and state taxing authorities. The Company is currently open to audit under the applicable statutes of limitations by the Internal Revenue Service (“IRS”) and the state taxing authorities for the years ended December 31, 2020 through 2023. During 2022, tax benefits were recorded on the Company’s financial statements to reflect the income tax benefit for tax-exempt interest not previously recognized. Amended tax returns were filed for 2018 through 2020 to reflect this net impact of this change. The tax impact was approximately $340,000 for the amended returns and $227,000 for the 2021 tax period. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2023 2022 2021 (in thousands) Balance at beginning of year $ 599 $ 655 $ 1,162 Additions based on tax positions related to current year — — — Additions for tax positions for prior years 142 244 247 Reductions for tax positions for prior years (131) (300) (754) Settlements — — — Balance at end of year $ 610 $ 599 $ 655 The balance of unrecognized tax benefits, the amount of related interest accrued and what Management believes to be the range of reasonably possible changes in the next 12 months, are: Unrecognized tax benefits $ 292 Accrued interest on unrecognized tax benefits 319 Portion that, if recognized, would reduce tax expense and effective tax rate 611 Reasonably possible reduction to the balance of unrecognized tax in subsequent year 269 Portion that, if recognized, would reduce tax expense and effective tax rate 269 In assessing the realizability of deferred tax assets, Management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods the deferred tax assets are expected to be deductible, Management believes it is more likely than not that its deferred tax assets are realizable. It should be noted, however, that factors beyond Management’s control, such as the general economy and real estate values, can affect future levels of taxable income, and no assurance can be given that sufficient taxable income will be generated to fully absorb gross deductible temporary differences. |
OTHER COMMITMENTS AND CONTINGEN
OTHER COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
OTHER COMMITMENTS AND CONTINGENCIES | |
OTHER COMMITMENTS AND CONTINGENCIES | 12. OTHER COMMITMENTS AND CONTINGENCIES ACL on Unfunded Commitments The ACL on unfunded commitments amounted to $3.9 million and $4.9 million at December 31, 2023 and 2022, respectively. The activity in the ACL on unfunded commitments for the years ended December 31, 2023 and 2022 is presented below: 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 (82) (217) (728) 12 6 (1,009) Balance at December 31, 2023 $ 254 $ 411 $ 2,351 $ 882 $ 20 $ 3,918 Balance at December 31, 2021 $ — $ — $ — $ — $ — $ — Adoption of Topic 326 318 380 2,561 658 14 3,931 Provision 18 248 518 212 — 996 Balance at December 31, 2022 $ 336 $ 628 $ 3,079 $ 870 $ 14 $ 4,927 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 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 December 31, 2023 and 2022. The contract amounts represent credit risk. December 31, December 31, 2023 2022 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 35,029 $ 57,916 Commitments to grant other loans 48,547 43,700 Unadvanced funds on home equity lines of credit 260,376 251,759 Unadvanced funds on revolving lines of credit 306,943 351,382 Unadvanced funds on construction loans 210,829 262,945 Commitments to extend credit and unadvanced portions 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. Employment Agreement The Company has an employment agreement with an executive officer. The term of the agreement commenced on the effective date of the signed agreement and continues thereafter until terminated, as defined by the agreement. The agreement generally provides for a specified minimum annual compensation and the continuation of benefits currently received. However, such employment can be terminated for cause, as defined, without incurring any continuing obligations. In addition, the agreement provides for severance payment to the officer following a change in control, as defined. Reserve for Residential Mortgage Loan Repurchase Losses The Company sells residential mortgage loans on a “whole-loan” basis to Fannie Mae and Freddie Mac, and to non-agency investors. These loan sales occur under industry standard contractual provisions that include various representations and warranties, which typically cover ownership of the loan, compliance with loan criteria set forth in the applicable agreement, validity of the lien securing the loan and other similar matters. The Company may be required to repurchase certain loans sold with identified defects, indemnify the investor, or reimburse the investor for any credit losses incurred. The Company establishes mortgage repurchase reserves related to various representations and warranties that reflect Management’s estimate for which we have a repurchase obligation. The reserves are established by a charge to loan expenses in our Consolidated Statements of Income. At December 31, 2023 and 2022, this reserve totaled $3.0 million and $3.6 million, respectively, and it is included in other liabilities and accrued expenses on the Consolidated Balance Sheets. The repurchase reserve is applicable to loans the Company originated and sold with representations and warranties, which is representative of the entire sold portfolio. The repurchase loss liability is estimated by origination year and to the extent that repurchase demands are made by investors, we may be able to successfully appeal such repurchase demands. The reserve considers anticipated future losses and the Company’s lack of historical experience with the make-whole demands. The reserve for residential mortgage loan repurchase losses represents our best estimate of the probable loss that we may incur due to the representations and warranties in our loan sales contracts with investors. Repurchase losses depend upon economic factors and other external conditions that may change over the life of the underlying loans. Additionally, lack of access to the servicing records of loans sold on a service-released basis adds difficulty to the estimation process. To the extent that future investor repurchase demand and appeals success differ from past experience, the Company could have increased demands and increased loss severities on repurchases, causing future additions to the repurchase reserve. Certain loans were sold with recourse provisions, and at December 31, 2023 and 2022, the related maximum contingent liability related to loans sold amounted to $305,000 each year. Based on discounted cash flow of projected losses on sold loans in this portfolio at December 31, 2023 and 2022, the Company had no recourse liability. Other During the fiscal year ended December 31, 2023, except as set forth below, the Company was not involved in any material pending legal proceedings as a plaintiff or as a defendant other than routine legal proceedings occurring in the ordinary course of business. Management believes that those routine legal proceedings involve, in the aggregate, amounts that are immaterial to the Company’s financial condition or results of operations. The Company reached an agreement-in-principle to settle a purported class action lawsuit concerning overdraft fees on re-presented transactions. The settlement in the matter, captioned Rita Meaden v. HarborOne Bank |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Dec. 31, 2023 | |
DERIVATIVES | |
DERIVATIVES | 13. 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 December 31, 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 year ended December 31, 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 December 31, December 31, December 31, December 31, 2023 2022 2023 2022 (in thousands) Loans held for investment (1) $ 100,893 $ — $ 893 $ — Total $ 100,893 $ — $ 893 $ — (1) Cashflow Hedge As of December 31, 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 certificates of deposits. The interest rate swap agreement has an average maturity of 1.27 years, the current weighted average fixed rate paid is 0.67%, the weighted average three-month SOFR swap receive rate is 5.617% and the fair value is $5.1 million. The Company expects approximately $4.4 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 - 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 amount 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. 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 Company has entered into risk participation agreements with correspondent institutions and shares in any interest rate swap losses incurred as a result of the commercial loan customers’ termination of a loan level interest rate swap agreement prior to maturity. The Company records these risk participation agreements at fair value. The Company’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap. Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer. The following tables present the outstanding notional balances and fair values of outstanding derivative instruments: Assets Liabilities Notional Fair Fair Amount Value Value (in thousands) December 31, 2023: Derivatives designated as hedging instruments Fair value hedge - interest rate swaps $ 100,000 $ — $ 855 Cashflow hedge - interest rate swaps 100,000 5,095 — Total derivatives designated as hedging instruments $ 5,095 $ 855 Derivatives not designated as hedging instruments Derivative loan commitments $ 30,165 $ 480 $ 158 Forward loan sale commitments 30,000 4 293 Interest rate swaps 863,348 23,245 23,245 Risk participation agreements 189,275 — — Total derivatives not designated as hedging instruments $ 23,729 $ 23,696 Total derivatives $ 28,824 $ 24,551 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 Year Ended December 31, Income 2023 2022 2021 Derivatives designated as fair value hedge Hedged items - loans Interest income $ 893 $ — — Interest rate swap contracts Interest income (855) — — Total $ 38 $ — — Derivatives not designated as hedging instruments Derivative loan commitments Mortgage banking income $ 150 $ (1,259) (10,850) Forward loan sale commitments Mortgage banking income (500) 248 2,166 Interest rate swaps Other income — 330 (431) Total $ (350) $ (681) (9,115) The effect of cashflow hedge accounting on accumulated other comprehensive income is as follows: Year Ended December 31, 2023 2022 2021 Derivatives designated as hedging instruments (Loss) gain in OCI on derivatives (effective portion), net of tax $ (2,314) $ 4,783 $ 2,210 Gain (loss) reclassified from OCI into interest income or interest expense (effective portion) $ 4,622 $ 1,164 $ (513) 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 $ 5,095 $ — $ 5,095 $ — $ (5,095) $ — Interest rate swap on residential real estate loans $ (855) $ — $ (855) $ — $ 900 $ 45 Derivatives not designated as hedging instruments Customer interest rate swaps $ 19,840 $ — $ 19,840 $ — $ (17,155) $ 2,685 |
OPERATING LEASE RIGHT-OF-USE AS
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | 14. OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES Operating lease ROU assets, included in other assets, were $22.9 million and $26.9 million at December 31, 2023 and 2022, respectively. Operating lease liabilities, included in other liabilities and accrued expenses, were $24.5 million and $28.6 million at December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, there were no leases that had not yet commenced. At December 31, 2023, lease expiration dates ranged from two months to 34.7 years and have a weighted average remaining lease term of 16.2 17.3 Future minimum lease payments under non-cancellable leases and a reconciliation to the amount recorded as operating lease liabilities as of December 31, 2023 were as follows: December 31, 2023 (in thousands) 2024 $ 2,830 2025 2,699 2026 2,518 2027 2,445 2028 2,293 Thereafter 17,128 Total lease payments 29,913 Imputed interest (5,390) Total present value of operating lease liabilities $ 24,523 The weighted-average discount rate and remaining lease term for operating leases were as follows: December 31, 2023 December 31, 2022 Weighted-average discount rate 2.08 % 2.02 % Weighted-average remaining lease term (years) 16.24 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: Year Ended December 31, 2023 2022 Lease Expense: Operating lease expense $ 3,123 $ 3,301 Short-term lease expense 135 138 Variable lease expense 15 — Sublease income (12) (13) Total lease expense $ 3,261 $ 3,426 Other Information Cash paid for amounts included in the measurement of lease liabilities- operating cash flows for operating leases 3,143 3,261 Operating Lease - Operating cash flows (Liability reduction) 2,609 2,722 ROU assets obtained in exchange for new operating lease liabilities 606 3,257 |
COMPENSATION AND BENEFIT PLANS
COMPENSATION AND BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2023 | |
COMPENSATION AND BENEFIT PLANS | |
COMPENSATION AND BENEFIT PLANS | 15. Defined Contribution Plan The Company provides saving plans which qualify under Section 401(k) of the Internal Revenue Code and provides for voluntary contributions by participating employees up to the maximum amount permitted by law. For the years ended December 31, 2023, 2022 and 2021, the Bank contributed 3%, 4% and 5%, respectively, of each eligible employee’s compensation up to the social security wage base. For the years ended December 31, 2023, 2022 and 2021, HarborOne Mortgage matched 50% of the first 4% of employee contributions up to a maximum of $2,000. Contributions expensed were $1.2 million, $1.6 million and $1.9 million for the years ended December 31, 2023, 2022 and 2021, respectively. Management Incentive Program The Company maintains incentive compensation plans for senior management and other employees to participate in at varying levels. In addition, the Company may also pay a discretionary bonus to senior management, officers, and/or non-officers of the Company. These programs are administered by the Compensation Committee of the Board of Directors. The expense for the incentive plans amounted to $2.5 million, $4.1 million and $4.8 million for the years ended December 31, 2023, 2022 and 2021, respectively. Supplemental Retirement Plans The Company provides supplemental retirement benefits to one senior executive officer and one retired senior executive officer of the Company under the terms of Supplemental Executive Retirement Plan Agreement (the “SERPs”). Benefits to be paid under the SERPs are based primarily on the officer’s compensation and estimated mortality. At December 31, 2023, 2022 and 2021, included in other liabilities and accrued expenses is the Company’s obligation under the SERPs of $10.8 million, $10.1 million and $9.2 million, respectively. The retirement benefits, as defined in the SERPs, are accrued by charges to compensation expense over the required service periods of the officers. Expense related to these benefits was $1.0 million, $1.5 million and $1.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. Split-Dollar Life Insurance Arrangement The Company has an endorsement split-dollar life insurance agreement with a retired executive officer whereby the Company will pay to the retired executives’ estates or beneficiaries a portion of the death benefit that the Company will receive as beneficiary of such policy. At December 31, 2023 and 2022, included in other liabilities and accrued expenses is the Company’s obligation under the arrangement of $389,000 and $394,000, respectively. There was no expense for this benefit for the years ended December 31, 2023 and 2021. Expense associated with this post-retirement benefit for the year ended December 31, 2022 amounted to $42,000. The cash surrender value of the policy is included in bank-owned life insurance on the Consolidated Balance Sheets. Deferred Compensation Plans The Company is the sole owner of an annuity policy pertaining to one of the Company’s executives that is included in retirement plan annuities on the balance sheet. The Company has an agreement with this executive whereby upon retirement the Company will pay to the executive an amount equal to the cash surrender value of the annuity less premiums paid accumulated at an interest rate of 1.5% per year. At December 31, 2023, 2022 and 2021, included in other liabilities and accrued expenses is the Company’s obligation under the plan of $490,000, $454,000 and $419,000, respectively. For the years ended December 31, 2023, 2022 and 2021, the expense amounted to $36,000, $35,000 and $34,000, respectively. The Company has agreements with one executive officer and one former executive officer whereby the Company will pay the cost of the premium for individual supplemental medical and prescription drug coverage for their lifetime upon retirement at age 65 or later. Spousal coverage is provided each year the executive is eligible for coverage and the spouse is age 65 or over. At December 31, 2023, 2022 and 2021, included in other liabilities and accrued expenses is the Company’s obligation under the plan of $164,000, $160,000 and $380,000, respectively. For the years ended December 31, 2023 and 2022, a $59,000 credit and a $9,000 credit to expense, respectively, was recognized, reflecting updated calculation assumptions. For the year ended December 31, 2021, the expense amounted to $36,000. Post-Retirement Life Insurance Employees who are covered under the Company’s bank-owned life insurance program can elect to participate in the benefits of the program while employed by the Company. The Company granted post-employment coverage to certain executives. This post- retirement benefit is included in other liabilities and accrued expenses at December 31, 2023, 2022 and 2021 in the amount of $321,000, $295,000 and $261,000, respectively. For the years ended December 31, 2023, 2022 and 2021, the expense amounted to $26,000, $34,000 and $27,000, respectively. Employee Stock Ownership Plan On June 29, 2016, the Company established an ESOP to provide eligible employees the opportunity to own Company stock. The Company added shares to the ESOP as part of the Offering completed August 14, 2019. The plan is a tax-qualified retirement plan for the benefit of the eligible Company employees. The ESOP shares were purchased through a loan from the Company and as the debt is repaid, shares are released. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The unreleased shares are deducted from stockholders’ equity as unearned ESOP shares in the accompanying Consolidated Balance Sheets. The number of shares committed to be released per year is 230,723 through 2035 and 124,148 from 2036 through 2038. The following table presents share information held by the ESOP: December 31, 2023 2022 Allocated shares 1,336,207 1,140,538 Shares committed to be allocated 230,723 230,723 Unallocated shares 2,910,393 3,141,117 Total shares 4,477,323 4,512,378 Fair value of unallocated shares $ 34,866,506 $ 43,661,526 Total compensation expense recognized in connection with the ESOP was $2.5 million, $3.3 million and $3.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. ESOP Restoration Plan During 2016, the Company also adopted an ESOP Restoration Plan (“RESOP”) for the benefit of ESOP eligible employees whose annual compensation exceeds the amount of annual compensation permitted to be recognized under the ESOP by the Internal Revenue Code. Under the RESOP, eligible participants would receive a credit each year equal to the amount they would have received under the ESOP but for the Internal Revenue Service imposed compensation limit. Any benefits earned under the RESOP would become payable at the earliest of six months and a day after the participant’s separation of service from the Bank, the participant’s death, a change in control of the Company or upon termination of the RESOP. These benefits are accrued over the period during which employees provide services to earn these benefits. For the year ended December 31, 2023, a credit to compensation expense in the amount of $500,000 was recorded in connection with the RESOP. For the years ended December 31, 2022 and 2021, compensation expense recognized in connection with the RESOP was $636,000 and $656,000, respectively. Directors’ Retirement Plan The Company has an unfunded director fee continuation plan which provides postretirement benefits to eligible directors of the Company. Participants in the plan must have at least six years of service as a director to be vested in the benefit, which is determined based on number of years of service. The Company elected to freeze the plan in 2017. At December 31, 2023, the benefit obligation was $2.0 million. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 16. STOCK-BASED COMPENSATION Under the HarborOne Bancorp, Inc. 2020 Equity Incentive Plan (the “2020 Equity Plan”) adopted on September 29, 2020, the Company may grant stock options, restricted stock awards, restricted stock units, including performance stock units, and other equity incentives to its directors, officers and employees. Total shares reserved for issuance under the 2020 Equity Plans are 4,500,000. The 2017 Stock Option and Incentive Plan (the “2017 Equity Plan” and together with the 2020 Equity Plan, the “Equity Plans”), was adopted on August 9, 2017. The Company will only award shares under the 2020 Equity Plan. Expense related to awards granted to employees is recognized as compensation expense, and expense related to awards granted to directors is recognized as directors’ fees within noninterest expense. Total expense for the Equity Plans was $2.2 million, $3.3 million and $3.8 million for the years ended December 31, 2023, 2022 and 2021, respectively. Stock Options one The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions: ● Volatility is based on peer group volatility due to lack of sufficient trading history for the Company. ● Expected life represents the period of time that the option is expected to be outstanding, taking into account the contractual term and the vesting period. ● Expected dividend yield is based on the Company’s history and expectation of dividend payouts. ● The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period equivalent to the expected life of the option. During the years ended December 31, 2023 and 2022, the Company made no awards of nonqualified options to purchase shares of common stock. A summary of the status of the Company’s stock option grants for the year ended December 31, 2023 is presented in the table below: Outstanding Nonvested Weighted Average Weighted Weighted Remaining Aggregate Average Stock Option Average Contractual Intrinsic Stock Option Grant Date Awards Exercise Price Term (years) Value Awards Fair Value Balance at January 1, 2023 1,174,755 $ 10.02 — $ — Exercised (62,840) 10.23 — — Forfeited (62,840) 10.23 — — Expired — — — — Balance at December 31, 2023 1,049,075 $ 10.00 4.12 $ 2,081,233 — $ — Exercisable at December 31, 2023 1,049,075 $ 10.00 4.12 $ 2,081,233 Restricted Stock Shares issued upon vesting may be either authorized but unissued shares or reacquired shares held by the Company. Any shares not issued because vesting requirements are not met will again be available for issuance under the 2020 Equity Plan. The fair market value of shares awarded, based on the market price at the date of grant, is unearned compensation to be amortized over the applicable vesting period. The following table presents the activity in unvested stock awards under the Equity Plans for the year ended December 31, 2023: Restricted Weighted Average Stock Awards Grant Price Non-vested stock awards at January 1, 2023 222,068 $ 13.60 Vested (103,761) 13.41 Granted 171,143 13.62 Forfeited (40,222) 13.69 Non-vested stock awards at December 31, 2023 249,228 $ 13.68 Unrecognized cost inclusive of directors' awards $ 1,888,131 Weighted average remaining recognition period (years) 0.93 Performance Stock Units Performance restricted stock units vest based on a combination of performance and service requirements. The number of performance restricted stock units granted reflects the target number able to be earned under a given award. Non-vested performance restricted stock unit compensation expense is based on the most recent performance assumption available and is adjusted as assumptions change. Performance Weighted Average Restricted Stock Units Grant Price Non-vested performance restricted stock units at January 1, 2023 137,920 $ 13.19 Vested — — Granted 58,532 13.84 Forfeited (41,337) 13.35 Non-vested performance restricted stock units at December 31, 2023 155,115 $ 13.42 Unrecognized cost $ 668,928 Weighted average remaining recognition period (years) 0.89 |
MINIMUM REGULATORY CAPITAL REQU
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 12 Months Ended |
Dec. 31, 2023 | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 17. MINIMUM REGULATORY CAPITAL REQUIREMENTS Minimum Regulatory Capital Requirements The Company and Bank are subject to various regulatory capital requirements administered by the Board of Governors of the 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 December 31, 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 December 31, 2023 also exceeded the minimum capital requirements, including the currently applicable capital conservation buffer of 2.5%. The Company’s and Bank’s actual regulatory capital ratios as of December 31, 2023 and 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. December 31, 2023 Common equity Tier 1 capital to risk-weighted assets $ 567,248 12.0 % $ 212,816 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 567,248 12.0 283,755 6.0 N/A N/A Total capital to risk-weighted assets 619,138 13.1 378,340 8.0 N/A N/A Tier 1 capital to average assets 567,248 10.0 226,690 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 December 31, 2023 Common equity Tier 1 capital to risk-weighted assets $ 509,791 10.8 % $ 212,724 4.5 % $ 307,267 6.5 % Tier 1 capital to risk-weighted assets 509,791 10.8 283,632 6.0 378,175 8.0 Total capital to risk-weighted assets 561,682 11.9 378,175 8.0 472,719 10.0 Tier 1 capital to average assets 509,791 9.0 226,666 4.0 283,333 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 Dividend Restrictions The Bank is subject to dividend restrictions imposed by various regulators, including a limitation on the total of all dividends that the Bank may pay to the Company in any calendar year. The total of all dividends shall not exceed the Bank’s net income for the current year (as defined by statute), plus the Bank’s net income retained for the two requirements. The ability to pay such dividends in the future may be adversely affected by new legislation or regulations, or by changes in regulatory policies relating to capital, safety and soundness, and other regulatory concerns. Liquidation Account Upon completion of its initial and second-step conversions from mutual to stock form on June 29, 2016 and August 14, 2019, respectively, the Company established a liquidation account. The liquidation account is maintained for the benefit of the eligible account holders and supplemental eligible account holders who maintain their accounts at the Bank after the offering. The liquidation account is reduced annually to the extent that such account holders have reduced their qualifying deposits as of each anniversary date. Subsequent increases will not restore an account holder’s interest in the liquidation account. The Company is not permitted to pay dividends on its capital stock if the Company’s shareholders’ equity would be reduced below the amount of the liquidation account. Preferred Stock The Company has 1,000,000 shares of preferred stock, no par value, authorized, and none issued or outstanding. Treasury Stock Any shares repurchased under the Company’s share repurchase programs were purchased in open-market transactions and are held as treasury stock. All treasury stock is held at cost. During the year ended December 31, 2023, the Company repurchased a total of 3,728,550 shares at an average price of $12.03 for a total of $44.9 million under its share repurchase programs. During the year ended December 31, 2023, an additional 25,439 shares were acquired in connection with the satisfaction of tax obligations on vested restricted shares at an average price of $13.42 for a total of $341,000. A sixth share repurchase program of 2,325,489 shares was announced on July 5, 2023 that commenced after the completion of the fifth program which was completed in 2023. During the year ended December 31, 2022, the Company repurchased a total of 4,338,637 shares at an average price of $14.16 for a total of $61.5 million under its share repurchase programs. During the year ended December 31, 2022, an additional 67,934 shares were acquired in connection with the satisfaction of tax obligations on vested restricted shares at an average price of $14.44 for a total of $981,000. During the year ended December 31, 2021, the Company repurchased a total 5,021,067 shares at an average price of $13.68 for a total of $68.6 million under its share repurchase programs. During the year ended December 31, 2021, an additional 42,925 shares were acquired in connection with the satisfaction of tax obligations on vested restricted shares at an average price of $14.27 for a total of $613,000. |
COMPREHENSIVE INCOME (LOSS)
COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2023 | |
COMPREHENSIVE INCOME (LOSS) | |
COMPREHENSIVE INCOME (LOSS) | 18. COMPREHENSIVE INCOME (LOSS) 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 tables present changes in accumulated other comprehensive income (loss) by component for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 Post- Available Cash Post- Available Cash Available Cash retirement for Sale Flow retirement for Sale Flow for Sale Flow Benefit Securities Hedge Total 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) $ 3,198 $ (1,013) $ 2,185 Other comprehensive income (loss) before reclassifications 1 6,249 1,403 7,653 251 (64,620) 7,815 (56,554) (7,496) 2,557 (4,939) Amounts reclassified from accumulated other comprehensive income (loss) (66) — (4,622) (4,688) (42) — (1,164) (1,206) (241) 513 272 Net current period other comprehensive income (loss) (65) 6,249 (3,219) 2,965 209 (64,620) 6,651 (57,760) (7,737) 3,070 (4,667) Related tax effect — (410) 905 495 (59) 14,242 (1,868) 12,315 1,705 (860) 845 Balance at end of period $ 85 $ (47,373) $ 3,666 $ (43,622) $ 150 $ (53,212) $ 5,980 $ (47,082) $ (2,834) $ 1,197 $ (1,637) |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
FAIR VALUE OF ASSETS AND LIABILITIES | |
FAIR VALUE OF ASSETS AND LIABILITIES | 19. 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 December 31, 2023 and 2022. FHLB stock 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 e.g. i.e. 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 swaps calculate the sum of each instrument’s fixed and variable cash flows, which are then discounted using an appropriate yield curve to arrive at the fair value of each swap. The pricing models do not contain a high level of subjectivity as the methodologies used do not require significant judgment. 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 December 31, 2023 and 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 in 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) December 31, 2023 Assets Securities available for sale $ — $ 290,151 $ — $ 290,151 Loans held for sale — 19,686 — 19,686 Mortgage servicing rights — 46,111 — 46,111 Derivatives — 28,340 484 28,824 $ — $ 384,288 $ 484 $ 384,772 Liabilities Derivatives $ — $ 24,100 $ 451 $ 24,551 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 years ended December 31, 2023, 2022 and 2021, the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis. Year Ended December 31, 2023 2022 2021 Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 487 $ 1,583 $ 12,623 Total gains (losses) included in net income (1) (3) (1,096) (11,040) Balance at end of period $ 484 $ 487 $ 1,583 Changes in unrealized gains relating to instruments at period end $ 484 $ 487 $ 1,583 Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (104) $ (189) $ (2,545) Total gains (losses) included in net income (1) (347) 85 2,356 Balance at end of period $ (451) $ (104) $ (189) Changes in unrealized losses relating to instruments at period end $ (451) $ (104) $ (189) (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. December 31, December 31, 2023 2022 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Collateral-dependent impaired loans $ — $ — $ 5,746 $ — $ — $ 349 Losses in the following table represent the amount of the fair value adjustments recorded during the year on the carrying value of the assets held at December 31, 2023 and 2022, respectively. Losses on fully charged off loans are not included in the table. Year Ended December 31, 2023 2022 Collateral-dependent impaired loans $ 4,171 $ 8 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 December 31, December 31, Valuation Technique 2023 2022 (in thousands) Collateral-dependent impaired loans $ 5,908 $ 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. December 31, 2023 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 227,350 $ 227,350 $ — $ — $ 227,350 Securities available for sale 290,151 — 290,151 — 290,151 Securities held to maturity 19,796 — 19,262 — 19,262 Federal Home Loan Bank stock 27,098 N/A N/A N/A N/A Loans held for sale 19,686 — 19,686 — 19,686 Loans, net 4,702,339 — — 4,482,448 4,482,448 Retirement plan annuities 15,170 — — 15,170 15,170 Accrued interest receivable 18,169 — 18,169 — 18,169 Derivatives 28,824 — 28,340 484 28,824 Financial liabilities: Deposits 4,387,409 — — 4,376,269 4,376,269 Borrowed funds 568,462 — 567,158 — 567,158 Mortgagors' escrow accounts 8,872 — — 8,872 8,872 Accrued interest payable 5,251 — 5,251 — 5,251 Derivatives 24,551 — 24,100 451 24,551 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 | 12 Months Ended |
Dec. 31, 2023 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 20. 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 earnings per share. 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 December 31, 2023, 2022, and 2021, respectively, potential common shares of 58,572 and 20 and 0 were considered to be anti-dilutive and excluded from EPS. The following table presents earnings per common share. Year Ended December 31, 2023 2022 2021 Net income available to common stockholders (in thousands) $ 16,077 $ 45,589 $ 58,517 Average number of common shares outstanding 46,732,435 50,293,762 54,454,113 Less: Average unallocated ESOP shares and non-vested restricted shares (3,510,697) (3,810,098) (3,707,811) Weighted average number of common shares outstanding used to calculate basic earnings per common share 43,221,738 46,483,664 50,746,302 Dilutive effect of share-based compensation 197,884 634,793 776,833 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 43,419,622 47,118,457 51,523,135 Earnings per common share: Basic $ 0.37 $ 0.98 $ 1.15 Diluted $ 0.37 $ 0.97 $ 1.14 |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2023 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 21. The reportable segments are determined by the products and services offered, primarily distinguished between banking and mortgage banking operations. They are also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business. 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 Consolidated Financial Statements at December 31, 2023, 2022 and 2021, and for the years then-ended are presented in the tables below. Year Ended December 31, 2023 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 129,157 $ 806 $ 127,271 Provision for credit losses 5,680 — 5,680 Net interest and dividend income, after provision for credit losses 123,477 806 121,591 Mortgage banking income: Gain on sale of mortgage loans — 10,404 10,404 Intersegment (loss) gain (1,063) 849 — Changes in mortgage servicing rights fair value (346) (4,338) (4,684) Other 769 8,330 9,099 Total mortgage banking (loss) income (640) 15,245 14,819 Other noninterest income 26,996 (2) 27,035 Total noninterest income 26,356 15,243 41,854 Noninterest expense 107,268 30,972 138,320 Income (loss) before income taxes 42,565 (14,923) 25,125 Provision (benefit) for income taxes 10,559 (944) 9,048 Net income (loss) $ 32,006 $ (13,979) $ 16,077 Total assets at period end $ 5,689,676 $ 96,942 $ 5,667,896 Goodwill at period end $ 59,042 $ — $ 59,042 Year Ended December 31, 2022 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 149,301 $ 1,617 $ 148,986 Provision for credit losses 5,660 — 5,660 Net interest and dividend income, after provision for credit losses 143,641 1,617 143,326 Mortgage banking income: Gain on sale of mortgage loans — 15,970 15,970 Intersegment (loss) gain (3,604) 3,185 — Changes in mortgage servicing rights fair value 618 4,714 5,332 Other 873 9,075 9,948 Total mortgage banking (loss) income (2,113) 32,944 31,250 Other noninterest income 25,930 129 26,059 Total noninterest income 23,817 33,073 57,309 Noninterest expense 110,407 27,065 138,906 Income before income taxes 57,051 7,625 61,729 Provision for income taxes 14,090 2,777 16,140 Net income $ 42,961 $ 4,848 $ 45,589 Total assets at period end $ 5,373,911 $ 124,229 $ 5,359,545 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 Year Ended December 31, 2021 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 129,785 $ 3,468 $ 131,370 (Benefit) provision for credit losses (7,258) — (7,258) Net interest and dividend income, after provision for credit losses 137,043 3,468 138,628 Mortgage banking income: Gain on sale of mortgage loans — 61,883 61,883 Intersegment (loss) gain (3,665) 4,434 — Changes in mortgage servicing rights fair value (137) (243) (380) Other 1,090 14,741 15,831 Total mortgage banking (loss) income (2,712) 80,815 77,334 Other noninterest income 23,308 44 23,352 Total noninterest income 20,596 80,859 100,686 Noninterest expense 102,557 55,012 158,862 Income before income taxes 55,082 29,315 80,452 Provision for income taxes 14,933 7,569 21,935 Net income $ 40,149 $ 21,746 $ 58,517 Total assets at period end $ 4,481,509 $ 173,545 $ 4,553,405 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 |
CONDENSED FINANCIAL STATEMENTS
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | 12 Months Ended |
Dec. 31, 2023 | |
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | |
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | 22. CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY Condensed financial information relative to HarborOne Bancorp, Inc.’s balance sheet at December 31, 2023 and 2022 and the related statements of net income and cash flows for the years ended December 31, 2023, 2022 and 2021 are presented below. The statement of stockholders’ equity is not presented below, as the parent company’s stockholders’ equity is that of the consolidated company. Balance Sheet December 31, 2023 2022 (in thousands) Assets Cash and due from banks $ 34,319 $ 77,014 Investment in common stock of HarborOne Bank 526,302 549,888 Loan receivable - ESOP 28,119 29,242 Other assets 500 483 Total assets $ 589,240 $ 656,627 Liabilities and Stockholders' Equity Subordinated debt $ — $ 34,285 Other liabilities and accrued expenses 5,481 5,366 Stockholders' equity 583,759 616,976 Total liabilities and stockholders' equity $ 589,240 $ 656,627 Statement of Net Income Year Ended December 31, 2023 2022 2021 (in thousands) Dividends from subsidiary $ 49,500 $ 13,000 $ 90,000 Interest from bank deposits 82 159 210 Interest on short-term investments — 4 2 Interest on ESOP loan 2,193 999 1,046 Other income 41 — — Total income 51,816 14,162 91,258 Interest expense 2,775 2,095 2,095 Operating expenses 2,273 2,432 2,338 Total expenses 5,048 4,527 4,433 Income before income taxes and equity in undistributed net income (loss) 46,768 9,635 86,825 of HarborOne Bank Income tax benefit (568) (726) (566) Income before equity in income (loss) of subsidiaries 47,336 10,361 87,391 Equity in undistributed net income (loss) of HarborOne Bank (31,259) 35,228 (28,874) Net income $ 16,077 $ 45,589 $ 58,517 Statement of Cash Flows Year Ended December 31, 2023 2022 2021 (in thousands) Cash flows from operating activities: Net income $ 16,077 $ 45,589 $ 58,517 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed net (income) loss of HarborOne Bank 31,259 (35,228) 28,874 Deferred income tax (benefit) provision (60) 138 (8) Share-based compensation 454 286 545 Net change in other assets 42 18 27 Net change in other liabilities 83 (97) 391 Net cash provided by operating activities 47,855 10,706 88,346 Cash flows from investing activities: Repayment of ESOP loan 1,123 1,497 1,450 Advances to subsidiary (2,193) (999) (1,046) Repayment of advances to subsidiary 2,194 998 1,659 Net cash provided by investing activities 1,124 1,496 2,063 Cash flows from financing activities: Issuance of common stock 643 8,366 643 Repurchase of common stock (45,206) (62,525) (69,215) Repayment of subordinated debt (35,000) — — Amortization of subordinated debt issuance costs 715 126 126 Dividends paid (12,826) (12,188) (9,195) Net cash used by financing activities (91,674) (66,221) (77,641) Net change in cash and cash equivalents (42,695) (54,019) 12,768 Cash and cash equivalents at beginning of year 77,014 131,033 118,265 Cash and cash equivalents at end of year $ 34,319 $ 77,014 $ 131,033 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 23. 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. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation HarborOne Bancorp, Inc. (the “Company”) is the stock holding company of HarborOne Bank (the “Bank”), a state-chartered trust company, which in turn owns a residential mortgage banking company, HarborOne Mortgage, LLC (“HarborOne Mortgage”). HarborOne Mortgage was acquired as Merrimack Mortgage, LLC on July 1, 2015 and effective April 3, 2018 became HarborOne Mortgage. The Consolidated Financial Statements include the accounts of the Company, the Company’s subsidiaries, Legion Parkway Company LLC, a security corporation formed on July 13, 2016 and HarborOne Bank; and the Bank’s wholly-owned subsidiaries, HarborOne Mortgage, one security corporation subsidiary, and one passive investment subsidiary. 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. |
Nature of Operations | The Company provides a variety of financial services to individuals and businesses through its 30 full-service bank 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, Rhode Island, New Hampshire and New Jersey 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. Currently new advances (with terms up to one year) under the BFTP can only be made through March 11, 2024. Macroeconomic trends are mixed as uncertainty remains about the economy and banking industry. Market conditions and external factors may unpredictably impact the competitive landscape for deposits in the banking industry. Additionally, the interest rate environment has increased competition for liquidity and the premium at which liquidity is available to meet funding needs. An unexpected increase of withdrawals of deposits could adversely impact the Company’s ability to fund its operations, potentially requiring greater reliance on secondary sources of liquidity to meet withdrawal demands or to fund continuing operations. These sources may include proceeds from FHLB advances, proceeds from the BTFP, sales of investment securities and loans, federal funds, lines of credit from correspondent banks, and brokered deposits. 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. |
Use of Estimates | Use of Estimates To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, Management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, however, actual results could differ. |
Significant Group Concentration of Credit Risk | Significant Group Concentration of Credit Risk The Company has cash and federal fund balances on deposit at correspondent banks that exceed insurable limits. The Company has not experienced any losses on such amounts. Most of the Company’s lending activities are with borrowers located within south eastern New England. The ability and willingness of residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the borrowers’ geographic area and real estate values. Note 4 provides the detail of the Company’s loan portfolio and Note 2 provides the detail of the Company’s investment portfolio. The Company does not have any significant concentrations to any one industry or customer. |
Reclassifications | Reclassifications 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. |
Cash Flows | Cash Flows Cash and cash equivalents include cash, interest-bearing deposits with other financial institutions with maturities fewer than 90 days, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions and interest-bearing deposits in other financial institutions. |
Debt Securities | Debt Securities Debt securities are classified as held-to-maturity and carried at amortized cost when Management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Effective January 1, 2022, the Company adopted the provisions of Topic 326 and modified its accounting for the assessment of available-for-sale debt securities for impairment as further described below. The Company has made an accounting policy election to exclude accrued interest from the amortized cost basis of debt securities and reports accrued interest separately in other assets in the Consolidated Balance Sheets. The Company also excludes accrued interest from the estimate of credit losses. A debt security is placed on non-accrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a debt security placed on non-accrual status is reversed against interest income. There were no debt securities on non-accrual status, and therefore there was no accrued interest related to debt securities reversed against interest income, for the years ended December 31, 2023 and 2022. The Company measures expected credit losses on held-to-maturity securities on a collective basis by major security type in accordance with the CECL methodology. As of December 31, 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. As a result, Management has determined these securities to have a zero loss expectation and therefore does not estimate an allowance for credit losses on these securities. For available-for-sale debt securities in an unrealized loss position, Management first assesses whether the Company intends to sell, or if it is likely that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through a provision for credit losses charge to earnings. For debt securities available for sale that do not meet either these criteria, Management evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, Management considers both quantitative and qualitative factors. A substantial portion of available-for-sale debt securities held by the Company are obligations issued by U.S. government agencies and U.S. government-sponsored enterprises, including mortgage-backed securities. These securities are either explicitly or implicitly guaranteed by the U.S. government, which are highly rated by major credit rating agencies and have a long history of no credit losses. For these securities, Management takes into consideration the long history of no credit losses and other factors to assess the risk of nonpayment even if the U.S. government were to default. As such, the Company has utilized a zero loss estimate due to credit for these securities. For available-for-sale debt securities that are not guaranteed by U.S. government agencies and U.S. government-sponsored enterprises, such as corporate bonds, Management utilizes a third-party credit modeling tool based on observable market data, which assists Management in identifying any potential credit risk associated with its available-for-sale debt securities. In addition, qualitative factors are also considered, including the extent to which fair value is less than amortized cost, changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If a credit loss exists based on the results of this assessment, an ACL (contra asset) is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is considered market-related and is recognized in other comprehensive income, net of taxes. Changes in the ACL on available-for-sale debt securities are recorded as provision for (or reversal of) credit losses. Losses are charged against the ACL when Management believes the uncollectability of an available-for-sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met. |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock The Company, as a member of the FHLB system, is required to maintain an investment in capital stock of the FHLB of Boston. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. At its discretion, the FHLB may declare dividends on the stock. The Company reviews FHLB stock for impairment based on the ultimate recoverability of the cost basis. As of December 31, 2023 and 2022, no impairment has been recognized. |
Mortgage Loans Held for Sale | Mortgage Loans Held for Sale Residential mortgage loans originated with the intent to sell are classified as held-for-sale and are carried at fair value. Loan origination costs for loans held for sale that the Company accounts for under the fair value option are recognized in noninterest expense when incurred. Changes in fair value are recognized in mortgage banking income. Gains and losses on residential loan sales are recognized at the time of sale and are included in mortgage banking income. Upfront fees and costs related to mortgage loans held for sale for which the fair value option was elected are recognized in mortgage banking income as received / incurred and are not deferred. Interest income on mortgage loans held for sale is recorded in interest income. |
Loans | Loans Loans held for investment are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for credit losses on loans, and any unamortized deferred origination fees and costs. Loan origination fees are offset with related direct incremental loan origination costs and the resulting net amount is deferred and amortized to interest income using the level-yield method over the remaining life of the loan without anticipating prepayment. Accrual of interest on loans is discontinued when collectability of principal or interest is uncertain or when payments of principal or interest have become contractually past due 90 days or more. Past due status is based on contractual terms of the loan. However, a loan may remain on accrual status if both the value of any collateral securing the loan is sufficient to cover principal and accrued interest thereon, and the loan is in the process of collection. In all cases, loans are placed on non-accrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on non-accrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company’s loan portfolio includes residential real estate, commercial real estate, construction, commercial and industrial and consumer segments. Residential real estate loans include classes for one- to four-family and second mortgages and equity lines of credit. Consumer loans include classes for auto and personal loans. The Company’s acquired loans are recorded at fair value with no carryover of the allowance for credit losses. Net discount on performing loans acquired are recognized as interest income over the remaining life of the loan. Acquired loans determined to have evidence of deterioration in credit quality and when it is probable, at acquisition, that all contractually required payments will not be collected, are deemed to be purchased credit deteriorated (“PCD”) loans. For PCD loans, the excess of cash flows expected to be collected over the carrying amount of the loans, referred to as the “accretable yield,” is accreted into interest income over the life of the loans using the effective yield method. The Company monitors actual cash flows to determine any deterioration from those forecasted at the acquisition date, which is evaluated and recorded through the allowance for credit losses. |
Allowance for Credit Losses on Loans | Allowance for Credit Losses on Loans Effective January 1, 2022, the Company has modified its accounting policy for the ACL on loans as described below. The Company has made an accounting policy election to exclude accrued interest from the amortized cost basis of loans and reports accrued interest separately in other assets in the Consolidated Balance Sheets. The Company also excludes accrued interest from the estimate of credit losses. Accrued interest receivable on loans totaled $15.6 million and $13.8 million, respectively, as of December 31, 2023 and 2022, respectively. The ACL on loans is Management’s estimate of expected credit losses over the expected life of the loans at the reporting date. The ACL on loans is increased through a provision for credit losses recognized in the Consolidated Statements of Income and by recoveries of amounts previously charged off. The ACL on loans is reduced by charge-offs on loans. Loan charge-offs are recognized when Management believes the collectability of the principal balance outstanding is unlikely. Full or partial charge-offs on collateral-dependent individually analyzed loans are generally recognized when the collateral is deemed to be insufficient to support the carrying value of the loan. The level of the ACL on loans is based on Management’s ongoing review of all relevant information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the calculation of probability of default, loss given default, exposure at default and the estimation of expected credit losses. As discussed further below, adjustments to historical information are made for differences in specific risk characteristics, such as differences in underwriting standards, portfolio mix, delinquency level, or term, as well as for changes in environmental conditions, that may not be reflected in historical loss rates. Management employs a process and methodology to estimate the ACL on loans that evaluates both quantitative and qualitative factors. The methodology for evaluating quantitative factors consists of two basic components. The first component involves pooling loans into portfolio segments for loans that share similar risk characteristics. Pooled loan portfolio segments include commercial real estate, commercial and industrial, commercial construction, residential real estate (including homeowner construction), home equity and consumer loans. The second component involves individually analyzed loans that do not share similar risk characteristics with loans that are pooled into portfolio segments. Individually analyzed loans include non-accrual loans, commercial loans risk-rated 8 or greater, and certain other loans based on the underlying risk characteristics and the discretion of Management to individually analyze such loans. For loans that are individually analyzed, the ACL is measured using a discounted cash flow (“DCF”) methodology based upon the loan’s contractual effective interest rate, or at the loan’s observable market price, or, if the loan is collateral-dependent, at the fair value of the collateral. Factors Management considers when measuring the extent of expected credit loss include payment status, collateral value, borrower financial condition, guarantor support and the probability of collecting scheduled principal and interest payments when due. For collateral-dependent loans for which repayment is to be provided substantially through the sale of the collateral, Management adjusts the fair value for estimated costs to sell. For collateral-dependent loans for which repayment is to be provided substantially through the operation of the collateral, estimated costs to sell are not incorporated into the measurement. Management may also adjust appraised values to reflect estimated market value declines or apply other discounts to appraised values for unobservable factors resulting from its knowledge of circumstances associated with the collateral. For pooled loans, the Company utilizes a DCF methodology to estimate credit losses over the expected life of the loan. The life of the loan excludes expected extensions, renewal and modifications, unless: (1) the extension or renewal options are included in the original or modified contract terms and not unconditionally cancellable by the Company; or (2) Management reasonably expects at the reporting date that a modification will be made to a borrower experiencing financial difficulty. The methodology incorporates the probability of default and loss given default, which are identified by default triggers such as past due by 90 or more days, whether a charge-off has occurred, the loan is non-accrual, or the loan is risk-rated as special mention, substandard, or doubtful. The probability of default for the life of the loan is determined by the use of an econometric factor. Management utilizes the national unemployment rate as an econometric factor with a one-year forecast period and one-year straight-line reversion period to the historical mean of its macroeconomic assumption in order to estimate the probability of default for each loan portfolio segment. Utilizing a third-party regression model, the forecasted national unemployment rate is correlated with the probability of default for each loan portfolio segment. The DCF methodology combines the probability of default, the loss given default, maturity date and prepayment speeds to estimate a reserve for each loan. The sum of all the loan level reserves are aggregated for each portfolio segment and a loss rate factor is derived. Quantitative loss factors are also supplemented by certain qualitative risk factors reflecting Management’s view of how losses may vary from those represented by quantitative loss rates. These qualitative risk factors include: (1) changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses; (2) changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments; (3) changes in the nature of the portfolio and in the volume of past due loans; (4) changes in the experience, ability, and depth of lending management and other relevant staff; (5) changes in the quality of the loan review system; (6) changes in the value of underlying collateral for collateral-dependent loans; (7) the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and (8) the effect of other external factors such as legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio. Qualitative loss factors are applied to each portfolio segment and determined based on the risk characteristics of each segment. Because the methodology is based upon historical experience and trends, current economic data, reasonable and supportable forecasts, as well as Management’s judgment, factors may arise that result in different estimations. Deteriorating conditions or assumptions could lead to further increases in the ACL on loans. In addition, various regulatory agencies periodically review the ACL on loans. Such agencies may require additions to the allowance based on their judgments about information available to them at the time of their examination. The ACL on loans is determined by an estimate of future credit losses, and ultimate losses may vary from Management’s estimate. Prior to January 1, 2022, the allowance for loan losses was based on an incurred loss methodology and represented Management’s estimate of the risk of loss inherent in the loan portfolio as of the balance sheet date. The level of the allowance was based on Management’s ongoing review of the growth and composition of the loan portfolio, historical loss experience, estimated loss emergence period (the period from the event that triggers the eventual default until the actual loss was recognized with a charge-off), economic conditions, analysis of asset quality and credit quality levels and trends, the performance of individual loans in relation to contract terms and other pertinent factors. A methodology was used to systematically measure the amount of estimated loan loss exposure inherent in the loan portfolio for the purposes of establishing a sufficient allowance for loan losses. The methodology included: (1) the identification of loss allocations for individual loans deemed to be impaired and (2) the application of loss allocation factors for non-impaired loans based on historical loss experience and estimated loss emergence period, with adjustments for various exposures that Management believed were not adequately represented by historical loss experience. Loss allocations for loans deemed to be impaired were measured using a discounted cash flow method based upon the loan’s contractual effective interest rate, or at the loan’s observable market price, or, if the loan was collateral dependent, at the fair value of the collateral. For loans that were collectively evaluated, loss allocation factors were derived by analyzing historical loss experience by loan segment over an established look-back period deemed to be relevant to the inherent risk of loss in the portfolios. Loans were segmented by loan type, collateral type, delinquency status and loan risk rating, where applicable. These loss allocation factors were adjusted to reflect the loss emergence period. These amounts were supplemented by certain qualitative risk factors reflecting Management’s view of how losses may vary from those represented by historical loss rates. The qualitative risk factors were the same as those considered under the ASC 326 accounting policy described above. |
Allowance for Credit Losses on Unfunded Commitments | Allowance for Credit Losses on Unfunded Commitments Effective January 1, 2022, the Company has modified its accounting policy for the ACL on unfunded commitments. The updated policy is detailed below. The ACL on unfunded commitments is Management’s estimate of expected credit losses over the expected contractual term (or life) in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. For each portfolio, estimated loss rates and funding factors are applied to the corresponding balance of unfunded commitments. For each portfolio, the estimated loss rates applied to unfunded commitments are the same quantitative and qualitative loss rates applied to the corresponding on-balance sheet amounts in determining the ACL on loans. The estimated funding factor applied to unfunded commitments represents the likelihood that the funding will occur and is based upon the Company’s average historical utilization rate for each portfolio. The ACL on unfunded commitments is included in other liabilities in the Consolidated Balance Sheets. The ACL on unfunded commitments is adjusted through a provision for credit losses recognized in the Consolidated Statements of Income. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. |
Property and Equipment | Property and Equipment Land is carried at cost. Buildings, leasehold improvements, and furniture and equipment are carried at cost, less accumulated depreciation and amortization, computed on the straight-line method over the estimated useful lives of the assets or the terms of the leases, if shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured. Maintenance and repairs are charged to expense as incurred and improvements are capitalized. |
Leases | Leases The Company is committed to rent premises and equipment used in business operations under non-cancelable operating leases and determines if an arrangement meets the definition of a lease upon inception. Leases that transfer substantially all of the benefits and risks of ownership to the Company are classified as finance leases, while all others are classified as operating leases. At lease commencement, a lease liability and ROU asset are calculated and recognized on both types of leases. The lease liability is equal to the present value of the future minimum lease payments. The ROU asset is equal to the lease liability, plus any initial direct costs and prepaid lease payments, less any lessor incentives received. Operating lease ROU assets are included in other assets and finance lease ROU assets are included in premises and equipment, net. The Company’s leases do not provide an implicit interest rate; therefore, the Company used the appropriate FHLB term rate commensurate with the underlying lease terms to determine the present value of operating lease liabilities. The lease term used in the calculation includes any options to extend that the Company is reasonably certain to exercise, determined on a lease-by-lease basis. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. At December 31, 2023, the Company had no finance lease ROU assets or lease liabilities. For operating leases, total lease cost is comprised of lease expense, short-term lease cost, and variable lease cost. Lease expense includes future minimum lease payments, which are recognized on a straight-line basis over the lease term, as well as common area maintenance charges, real estate taxes, insurance and other expenses, where applicable, which are expensed as incurred. Total lease cost for operating leases is recorded in occupancy and equipment noninterest expense. See Note 14, Operating Lease Right-of-Use Assets and Liabilities, for further information. |
Retirement Plan Annuities | Retirement Plan Annuities Retirement plan annuities are reflected on the Consolidated Balance Sheets at the face amount of the policies. Changes in recorded value are reflected in income on retirement plan annuities on the Consolidated Statements of Income. |
Bank-owned Life Insurance | Bank-owned Life Insurance Bank-owned life insurance policies are reflected on the Consolidated Balance Sheets at net cash surrender value. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in bank-owned life insurance income on the Consolidated Statements of Income and are not subject to income taxes. The Company is the beneficiary on these life insurance policies which are purchased for select employees of the Company. |
Employee Stock Ownership Plan | Employee Stock Ownership Plan (“ESOP”) Compensation expense for the Company’s ESOP is recorded at an amount equal to the shares committed to be allocated by the ESOP multiplied by the quarterly average fair market value of the shares during the year. The Company recognizes compensation expense ratably over the year based upon the Company’s estimate of the number of shares committed to be allocated by the ESOP. The difference between the average fair market value and the cost of the shares committed to be allocated by the ESOP is recorded as an adjustment to additional paid-in capital. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. |
Mortgage Servicing Rights | Mortgage Servicing Rights When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. Under the fair value measurement method, the Company measures servicing rights at fair value at each reporting date and reports changes in fair value of servicing assets in earnings in the period in which the changes occur, and are included with changes in mortgage servicing rights fair value Servicing fee income, which is reported on the income statement as Mortgage banking income, Other income, |
Derivative Financial Instruments | Derivative Financial Instruments At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to the likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cashflow hedge”), of (3) an instrument with no hedging designation (“stand-alone derivative”). For a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings as fair values change. For a cashflow hedge, the gain or loss on the derivative is reported in other comprehensive income and reclassified into earnings in the same periods during which the hedged transaction affects earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as non-interest income. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. The Company formally documents all relationships between derivatives and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This documentation includes linking fair value or cashflow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting prospectively when it is determined that (1) the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item; (2) the derivative expires, is sold, or terminated; (3) the derivative instrument is de-designated as a hedge because the forecasted transaction is no longer probable of occurring; (4) a hedged firm commitment no longer meets the definition of a firm commitment; or (5) Management otherwise determines that designation of the derivative as a hedging instrument is no longer appropriate. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as noninterest income. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cashflow hedge is discontinued but the hedged cash flows or forecasted transaction is still expected to occur, changes in value that were accumulated in other comprehensive income are amortized or accreted into earnings over the same periods which the hedged transactions will affect earnings. The Company accounts for commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans as free standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. In order to hedge the change in interest rates resulting from its commitments to fund the loans, the Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in fair value are recorded as gain on sale of mortgage loans. The Company also enters into interest rate swap contracts to meet the financing needs of the Company’s commercial customers. Offsetting swap agreements are simultaneously transacted to effectively eliminate the Company’s market and interest rate risk associated with the swaps. Interest rate swaps are recognized on the Consolidated Balance Sheets in other assets and other liabilities with changes in their fair values recorded in other income. |
Transfers of Financial Assets | Transfers of Financial Assets Transfers of an entire financial asset, a group of entire financial assets, or a participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets. During the normal course of business, the Company may transfer a portion of a financial asset, for example, a participation loan or the government guaranteed portion of a loan. In order to be eligible for sale treatment, the transfer of the portion of the loan must meet the criteria of a participating interest. If it does not meet the criteria of a participating interest, the transfer must be accounted for as a secured borrowing. In order to meet the criteria for a participating interest, all cash flows from the loan must be divided proportionately, the rights of each loan holder must have the same priority, the loan holders must have no recourse to the transferor other than standard representations and warranties and no loan holder has the right to pledge or exchange the entire loan. |
Other Real Estate Owned and Repossessed Assets | Other Real Estate Owned and Repossessed Assets Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated costs to sell when legal title is obtained, establishing a new cost basis. Subsequently, valuations are periodically updated by Management and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell. The excess (deficiency) of any consideration received as compared to the carrying value of other real estate owned is recorded as a gain (loss) on sale of other real estate owned. Revenues and expenses from operations and changes in the valuation allowance and any direct write-downs are included in foreclosed and repossessed assets expense. Repossessed assets includes automobiles to be sold which are recorded at estimated fair value, less costs to sell, with the initial charge to the allowance for credit losses and the subsequent gain or loss on sale recorded to foreclosed and repossessed assets expense. |
Goodwill and Identifiable Intangible Assets | Goodwill and Identifiable Intangible Assets The assets (including identifiable intangible assets) and liabilities acquired in a business combination are recorded at fair value at the date of acquisition. Goodwill is recognized for the excess of the acquisition cost over the fair values of the net assets acquired and is not subsequently amortized. Identifiable intangible assets include core deposit premium and non-compete contracts and are being amortized over their estimated lives. Management assesses the recoverability of goodwill at least on an annual basis and all intangible assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The impairment test uses a combined qualitative and quantitative approach. The initial qualitative approach assesses whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after this assessment, the Company determines that it is more likely than not that the fair value is less than the carrying value, a quantitative impairment test is performed. The quantitative impairment test compares book value to the fair value of the reporting unit. If the carrying amount exceeds fair value, an impairment charge is recorded through earnings. Management has identified two reporting units for purposes of testing goodwill for impairment. The Company’s reporting units are the same as the segments used for segment reporting - the Bank, including one security corporation and one passive investment company, and HarborOne Mortgage. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are determined using the asset and liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws in the period on enactment. A valuation allowance is established against deferred tax assets when, based upon the available evidence including historical and projected taxable income, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company records uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The determination of whether or not a tax position has met the more likely than not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to Management’s judgment. The Company records interest and penalties as part of income tax expense. |
Fair Values of Financial Instruments | Fair Value of Financial Instruments The fair value of financial instruments is estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgement regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates. |
Share-based Compensation Plans | Share-based Compensation Plans The Company’s share-based compensation plans provide for awards of stock options, restricted stock and other stock-based compensation to directors, officers and employees. The cost of employee services received in exchange for awards of equity instruments is based on the grant-date fair value of those awards. Compensation cost is recognized over the requisite service period as a component of compensation expense. The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options granted, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards and performance stock units. Nonvested performance share unit compensation expense is based on the most recent performance assumption available and is adjusted as assumptions change. Dividends declared on restricted stock are accrued at each dividend declaration date and paid upon the issuance of the shares after the award vests. Dividends on performance share units are accrued at each dividend declaration date based on the most recent performance assumptions available and paid upon the issuance of the shares after the award vest. The Company has elected to recognize forfeitures of awards as they occur ( e.g. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income and other comprehensive income (loss). Other comprehensive income includes unrealized gains and losses on debt securities available for sale and cashflow hedges, net of taxes, which are also recognized as a separate component of equity. |
Revenue Recognition | Revenue Recognition ASC 606, Revenue from Contracts with Customers, provides a revenue recognition framework for contracts with customers unless those contracts are within the scope of other accounting standards. Revenue from deposit account-related fees, including general service fees charged for deposit account maintenance and activity and transaction-based fees charged for certain services, such as debit card, wire transfer or overdraft activities, is recognized when the performance obligation is completed, which is generally after a transaction is completed or monthly for account maintenance services. |
Earnings Per Share | Earnings Per Share Basic earnings per common share is net income divided by the weighted-average number of common shares outstanding during the period. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations. Restricted stock awards are included in weighted average common shares outstanding as they are earned. Outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities for this calculation. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable. Potential common shares that may be issued by the Company relate to outstanding stock options awards and restricted stock awards and are determined using the treasury stock method. |
Loss Contingencies | Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. Public entities are required to disclose significant expense categories and amounts for each reportable segment. Significant expense categories are derived from expenses that are regularly reported to an entity’s CODM, and included in a segment’s reported measures of profit or loss. Public entities are also required to disclose the title and position of the CODM and explain how the CODM uses the reported measures of profit or loss to assess segment performance. The ASU requires interim disclosures of certain segment-related disclosures that previously were only required annually. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the ASU should be applied prospectively. The adoption of the ASU is not expected to have a material impact on the Company’s consolidated financial position or results of operations. |
DEBT SECURITIES (Tables)
DEBT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 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) December 31, 2023: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 47,143 $ — $ 6,961 $ — $ 40,182 U.S. government agency and government-sponsored residential mortgage-backed securities 300,277 3 54,683 — 245,597 U.S. government-sponsored collateralized mortgage obligations 1,852 — 70 — 1,782 SBA asset-backed securities 1,885 — 107 — 1,778 Corporate bonds 1,000 — 188 — 812 Total securities available for sale $ 352,157 $ 3 $ 62,009 $ — $ 290,151 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ 15,000 $ — $ 438 $ — $ 14,562 SBA asset-backed securities 4,796 — 96 — 4,700 Total securities held to maturity $ 19,796 $ — $ 534 $ — $ 19,262 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 $ 6,998 $ 6,586 $ 15,000 $ 14,562 After 5 years through 10 years 41,145 34,408 — — Over 10 years — — — — 48,143 40,994 15,000 14,562 U.S. government agency and government-sponsored residential mortgage-backed securities 300,277 245,597 — — U.S. government-sponsored collateralized mortgage obligations 1,852 1,782 — — SBA asset-backed securities 1,885 1,778 4,796 4,700 Total $ 352,157 $ 290,151 $ 19,796 $ 19,262 |
Schedule of proceeds and gross realized gains and losses related to sales and calls of securities | Year Ended December 31, 2023 2022 2021 (in thousands) Sales Proceeds $ — $ — $ 39,321 Gross gains — — 241 Gross losses — — — Calls Proceeds $ — $ — $ 5,000 Gross gains — — — Gross losses — — — |
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) December 31, 2023: Securities available for sale U.S. government and government-sponsored enterprise obligations $ — $ — $ 6,961 $ 40,182 U.S. government agency and government-sponsored residential mortgage-backed securities — — 54,683 240,955 U.S. government-sponsored collateralized mortgage obligations — — 70 1,782 SBA asset-backed securities — — 107 1,778 Corporate bonds — — 188 812 $ — $ — $ 62,009 $ 285,509 Securities held to maturity U.S. government and government-sponsored enterprise obligations $ — $ — 438 14,562 SBA asset-backed securities 96 4,700 — — $ 96 $ 4,700 $ 438 $ 14,562 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) | 12 Months Ended |
Dec. 31, 2023 | |
LOANS HELD FOR SALE | |
Schedule of fair value and contractual principal balance outstanding of loans held for sale | December 31, December 31, 2023 2022 (in thousands) Loans held for sale, fair value $ 19,686 $ 18,544 Loans held for sale, contractual principal outstanding 19,155 18,208 Fair value less unpaid principal balance $ 531 $ 336 |
LOANS AND ALLOWANCE FOR CREDI_2
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
Summary of balances of loans | December 31, December 31, 2023 2022 (in thousands) Residential real estate: One- to four-family $ 1,513,554 $ 1,432,263 Second mortgages and equity lines of credit 177,135 166,219 Residential real estate construction 18,132 35,837 Total residential real estate loans 1,708,821 1,634,319 Commercial: Commercial real estate 2,343,675 2,250,344 Commercial construction 208,443 199,311 Commercial and industrial 466,443 424,275 Total commercial loans 3,018,561 2,873,930 Consumer loans: Auto 13,603 33,625 Personal 8,433 7,796 Total consumer loans 22,036 41,421 Total loans before basis adjustment 4,749,418 4,549,670 Basis adjustment associated with fair value hedge (1) 893 — Total loans 4,750,311 4,549,670 Allowance for credit losses on loans (47,972) (45,236) Loans, net $ 4,702,339 $ 4,504,434 (1) Note 10 - Derivatives |
Schedule of activity in allowance for loan losses and allocation of allowance to loan segments | Second Mortgages and Residential One- to Four- Equity Lines Real Estate Commercial Commercial Commercial Family 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 — — — (4,964) — (253) (76) — (5,293) Recoveries 2 117 — 38 — 1,563 79 — 1,799 Provision 2,701 (4) 26 2,235 937 (1,000) (231) — 4,664 Balance at December 31, 2022 $ 11,532 $ 924 $ 280 $ 20,357 $ 4,645 $ 7,236 $ 262 $ - $ 45,236 Charge-offs — — — (4,171) — (166) (89) — (4,426) Recoveries 1 88 — 4 — 309 71 — 473 Provision 568 (48) 138 5,098 179 728 26 — 6,689 Balance at December 31, 2023 $ 12,101 $ 964 $ 418 $ 21,288 $ 4,824 $ 8,107 $ 270 $ — $ 47,972 Second Mortgages and Residential One- to Four- Equity Lines Real Estate Commercial Commercial Commercial Family Credit Construction Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2020 $ 6,168 $ 1,054 $ 197 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Provision for loan losses (2,755) (794) (128) (1,123) 55 2,055 (2,098) (2,470) (7,258) Charge-offs — — — (405) — (2,850) (177) — (3,432) Recoveries 218 160 — 5 — 122 167 — 672 Balance at December 31, 2021 $ 3,631 $ 420 $ 69 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 |
Schedule of carrying value of collateral dependent individually analyzed loans | December 31, 2023 December 31, 2022 Related Related Carrying Value Allowance Carrying Value Allowance (in thousands) Commercial: Commercial real estate $ 7,416 $ 5 $ 2,039 $ — Commercial and industrial 1,793 101 3,329 7 Commercial construction — — — — Total Commercial 9,209 106 5,368 7 Residential real estate 8,054 — 10,494 1 Total $ 17,263 $ 106 $ 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) December 31, 2023 Residential real estate: One- to four-family $ 4,704 $ 2,413 $ 4,418 $ 11,535 $ 7,785 Second mortgages and equity lines of credit 164 130 57 351 473 Commercial real estate — — 5,751 5,751 7,416 Commercial construction — — — — — Commercial and industrial 247 166 1,332 1,745 1,791 Consumer: Auto 96 69 4 169 4 Personal 16 5 31 52 44 Total $ 5,227 $ 2,783 $ 11,593 $ 19,603 $ 17,513 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 December 31, 2023 Commercial real estate Pass $ 152,047 $ 828,335 $ 455,996 $ 234,585 $ 233,713 $ 405,103 $ — $ — $ 2,309,779 Special mention — 10,971 — 4,300 8,977 2,232 — — 26,480 Substandard — — — — — 1,670 — — 1,670 Doubtful — — — — — 5,746 — — 5,746 Total commercial real estate 152,047 839,306 455,996 238,885 242,690 414,751 — — 2,343,675 YTD gross charge-offs — — — — — 4,171 — — 4,171 Commercial and industrial Pass 73,240 52,190 94,570 70,565 22,988 75,493 74,125 — 463,171 Special mention — 454 4 23 2 948 50 — 1,481 Substandard — 52 8 — — 367 18 — 445 Doubtful — — — — — 1,297 49 — 1,346 Total commercial and industrial 73,240 52,696 94,582 70,588 22,990 78,105 74,242 — 466,443 YTD gross charge-offs 24 113 14 5 8 2 — — 166 Commercial construction Pass 35,181 109,291 60,113 843 — — 425 — 205,853 Special mention — 2,590 — — — — — — 2,590 Substandard — — — — — — — — — Doubtful — — — — — — — — — Total commercial construction 35,181 111,881 60,113 843 — — 425 — 208,443 YTD gross charge-offs — — — — — — — — — Residential real estate Accrual 138,541 434,421 480,010 202,118 38,675 239,185 166,144 1,469 1,700,563 Non-accrual — — — 127 956 6,959 216 — 8,258 Total residential real estate 138,541 434,421 480,010 202,245 39,631 246,144 166,360 1,469 1,708,821 YTD gross charge-offs — — — — — — — — — Consumer Accrual 8,218 5,366 2,254 1,021 3,135 963 1,031 — 21,988 Non-accrual 14 18 5 — 2 4 5 — 48 Total Consumer 8,232 5,384 2,259 1,021 3,137 967 1,036 — 22,036 YTD gross charge-offs 7 16 4 15 18 29 — — 89 Total loans before basis adjustment $ 407,241 $ 1,443,688 $ 1,092,960 $ 513,582 $ 308,448 $ 739,967 $ 242,063 $ 1,469 $ 4,749,418 Total YTD gross charge-offs $ 31 $ 129 $ 18 $ 20 $ 26 $ 4,202 $ — $ — $ 4,426 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) | 12 Months Ended |
Dec. 31, 2023 | |
MORTGAGE LOAN SERVICING | |
Tabular disclosure of assumptions used in the calculation of fair value of MSR | December 31, December 31, 2023 2022 Prepayment speed 7.60 % 7.10 % Discount rate 9.81 9.81 Default rate 2.27 1.63 |
Schedule of summarized changes to mortgage servicing rights | Year Ended December 31, 2023 2022 2021 Balance, beginning of period $ 48,138 $ 38,268 $ 24,833 Additions 2,657 4,538 13,815 Changes in fair value due to: Reductions from loans paid off during the period (1,981) (2,921) (6,019) Changes in valuation inputs or assumptions (2,703) 8,253 5,639 Balance, end of period $ 46,111 $ 48,138 $ 38,268 |
OTHER REAL ESTATE LOANS AND R_2
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS (Table) | 12 Months Ended |
Dec. 31, 2023 | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | |
Schedule of expenses applicable to foreclosed and repossessed assets | Year Ended December 31, 2023 2022 2021 (in thousands) Loss on sales of real estate, net $ — $ — $ (198) Net loss on sales of repossessed assets (9) (30) (45) Operating expenses 1 48 (155) $ (8) $ 18 $ (398) |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT | |
Summary of the cost and accumulated depreciation of property and equipment | December 31, 2023 2022 (in thousands) Land $ 12,053 $ 12,251 Buildings and leasehold improvements 49,355 50,693 Furniture, equipment and vehicles 18,762 17,345 Fixed assets in process 408 618 80,578 80,907 Less accumulated depreciation and amortization (31,829) (31,862) Property and equipment, net $ 48,749 $ 49,045 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of intangible assets | December 31, 2023 2022 (in thousands) Gross amount of CDI: Balance, beginning of period $ 8,952 $ 8,952 Additions due to acquisitions — — Balance, end of period 8,952 8,952 Accumulated amortization: Balance, beginning of period (6,680) (5,788) Amortization (757) (892) Balance, end of period (7,437) (6,680) Net CDI, end of period $ 1,515 $ 2,272 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
DEPOSITS | |
Summary of deposit balances, by type | December 31, December 31, 2023 2022 (in thousands) NOW and demand deposit accounts $ 965,798 $ 1,060,268 Regular savings and club accounts 1,265,315 1,468,172 Money market deposit accounts 966,201 861,704 Total non-certificate accounts 3,197,314 3,390,144 Term certificate accounts greater than $250,000 240,702 110,360 Term certificate accounts less than or equal to $250,000 622,755 387,615 Brokered deposits 326,638 301,380 Total certificate accounts 1,190,095 799,355 Total deposits $ 4,387,409 $ 4,189,499 |
Summary of certificate accounts by maturity | Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 1,100,893 4.41 % Over 1 year to 2 years 63,108 3.88 Over 2 years to 3 years 23,899 3.40 Over 3 years to 4 years 1,881 1.50 Over 4 years to 5 years 314 0.80 Total certificate deposits $ 1,190,095 4.36 % |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
BORROWINGS | |
Schedule of borrowed funds by maturity and call date | December 31, 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 $ — $ — — % $ 180 1.40 % 2024 13,400 163,400 1.39 13,400 1.39 2025 90,987 60,987 4.31 987 — 2026 110,000 40,000 4.20 — — 2027 10,000 — 3.72 — — 2028 40,000 — 3.86 — — 2029 and thereafter 1,075 1,075 2.00 1,108 2.00 $ 265,462 $ 265,462 4.02 % $ 15,675 1.35 % * Includes an amortizing advance requiring monthly principal and interest payments. (1) (2) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
Schedule of allocation of federal and state income taxes between current and deferred portions | 2023 2022 2021 (in thousands) Current tax provision: Federal $ 7,264 $ 8,962 $ 10,693 State 3,562 4,016 4,815 10,826 12,978 15,508 Deferred tax provision: Federal (1,255) 2,000 4,451 State (523) 1,162 1,976 (1,778) 3,162 6,427 Income tax provision $ 9,048 $ 16,140 $ 21,935 |
Schedule of difference between the statutory federal income tax and the actual income tax provision | 2023 2022 2021 (dollars in thousands) Statutory tax rate 21% 21% 21% Statutory tax provision $ 5,276 $ 12,963 $ 16,895 Increase (decrease) resulting from: State taxes, net of federal tax benefit 2,401 4,092 5,365 Bank-owned life insurance (236) (416) (425) Employee stock ownership plan expenses 139 303 280 Tax-exempt income (503) (932) — Goodwill impairment 2,260 — — Net addition (reduction) in uncertain federal tax positions 6 (115) (712) Other, net (295) 245 532 Income tax provision $ 9,048 $ 16,140 $ 21,935 |
Schedule of tax effects give rise to deferred taxes | 2023 2022 (in thousands) Deferred tax assets: Allowance for credit losses $ 14,851 $ 14,097 Employee benefit plans 6,479 5,848 Mark-to-market loans 899 987 Accrued expenses not deducted for tax purposes 832 1,336 HarborOne Mortgage loan repurchase reserve 852 996 Net unrealized loss on securities available for sale 14,550 15,045 Operating lease liability 7,019 8,020 Other 519 — 46,001 46,329 Deferred tax liabilities: Derivatives (2,457) (3,726) Deferred income annuities (1,370) (1,835) Depreciation and amortization (1,470) (1,009) Deferred loan fees (4,445) (4,188) Mortgage servicing rights (13,201) (13,372) Right of use asset (6,547) (7,560) Core deposit intangible (433) (638) Other — (129) (29,923) (32,457) Net deferred tax asset $ 16,078 $ 13,872 |
Schedule of change in net deferred tax asset (liability) | 2023 2022 2021 (in thousands) Balance at beginning of year $ 13,872 $ 3,975 $ 9,557 Deferred tax (provision) benefit 1,778 (3,162) (6,427) Adoption of CECL — 736 — Change in directors' retirement plan — (59) — Change in cash flow hedge 923 (1,862) (860) Change in securities available for sale (495) 14,244 1,705 Balance at end of year $ 16,078 $ 13,872 $ 3,975 |
Schedule of changes in unrecognized tax benefits | 2023 2022 2021 (in thousands) Balance at beginning of year $ 599 $ 655 $ 1,162 Additions based on tax positions related to current year — — — Additions for tax positions for prior years 142 244 247 Reductions for tax positions for prior years (131) (300) (754) Settlements — — — Balance at end of year $ 610 $ 599 $ 655 |
Schedule of unrecognized tax benefits, the amount of interest accrued and range of reasonably possible changes | Unrecognized tax benefits $ 292 Accrued interest on unrecognized tax benefits 319 Portion that, if recognized, would reduce tax expense and effective tax rate 611 Reasonably possible reduction to the balance of unrecognized tax in subsequent year 269 Portion that, if recognized, would reduce tax expense and effective tax rate 269 |
OTHER COMMITMENTS AND CONTING_2
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Schedule of financial instruments with off-balance sheet credit risk | December 31, December 31, 2023 2022 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 35,029 $ 57,916 Commitments to grant other loans 48,547 43,700 Unadvanced funds on home equity lines of credit 260,376 251,759 Unadvanced funds on revolving lines of credit 306,943 351,382 Unadvanced funds on construction loans 210,829 262,945 |
Schedule of activity in the ACL on unfunded commitments | Second Mortgages and Residential One- to Four- Equity Lines Real Estate Commercial Commercial Commercial Family 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 — — — (4,964) — (253) (76) — (5,293) Recoveries 2 117 — 38 — 1,563 79 — 1,799 Provision 2,701 (4) 26 2,235 937 (1,000) (231) — 4,664 Balance at December 31, 2022 $ 11,532 $ 924 $ 280 $ 20,357 $ 4,645 $ 7,236 $ 262 $ - $ 45,236 Charge-offs — — — (4,171) — (166) (89) — (4,426) Recoveries 1 88 — 4 — 309 71 — 473 Provision 568 (48) 138 5,098 179 728 26 — 6,689 Balance at December 31, 2023 $ 12,101 $ 964 $ 418 $ 21,288 $ 4,824 $ 8,107 $ 270 $ — $ 47,972 Second Mortgages and Residential One- to Four- Equity Lines Real Estate Commercial Commercial Commercial Family Credit Construction Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2020 $ 6,168 $ 1,054 $ 197 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Provision for loan losses (2,755) (794) (128) (1,123) 55 2,055 (2,098) (2,470) (7,258) Charge-offs — — — (405) — (2,850) (177) — (3,432) Recoveries 218 160 — 5 — 122 167 — 672 Balance at December 31, 2021 $ 3,631 $ 420 $ 69 $ 33,242 $ 2,010 $ 4,638 $ 367 $ 1,000 $ 45,377 |
Unfunded Commitment | |
Schedule of activity in the ACL on unfunded commitments | Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Total (in thousands) Balance at December 31, 2022 $ 336 $ 628 $ 3,079 $ 870 $ 14 $ 4,927 Provision (82) (217) (728) 12 6 (1,009) Balance at December 31, 2023 $ 254 $ 411 $ 2,351 $ 882 $ 20 $ 3,918 Balance at December 31, 2021 $ — $ — $ — $ — $ — $ — Adoption of Topic 326 318 380 2,561 658 14 3,931 Provision 18 248 518 212 — 996 Balance at December 31, 2022 $ 336 $ 628 $ 3,079 $ 870 $ 14 $ 4,927 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
DERIVATIVES | |
Schedule of amounts recorded on the Consolidated Balance Sheets 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 December 31, December 31, December 31, December 31, 2023 2022 2023 2022 (in thousands) Loans held for investment (1) $ 100,893 $ — $ 893 $ — Total $ 100,893 $ — $ 893 $ — (1) |
Schedule of outstanding notional balances and fair values of outstanding derivative instruments | Assets Liabilities Notional Fair Fair Amount Value Value (in thousands) December 31, 2023: Derivatives designated as hedging instruments Fair value hedge - interest rate swaps $ 100,000 $ — $ 855 Cashflow hedge - interest rate swaps 100,000 5,095 — Total derivatives designated as hedging instruments $ 5,095 $ 855 Derivatives not designated as hedging instruments Derivative loan commitments $ 30,165 $ 480 $ 158 Forward loan sale commitments 30,000 4 293 Interest rate swaps 863,348 23,245 23,245 Risk participation agreements 189,275 — — Total derivatives not designated as hedging instruments $ 23,729 $ 23,696 Total derivatives $ 28,824 $ 24,551 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 Year Ended December 31, Income 2023 2022 2021 Derivatives designated as fair value hedge Hedged items - loans Interest income $ 893 $ — — Interest rate swap contracts Interest income (855) — — Total $ 38 $ — — Derivatives not designated as hedging instruments Derivative loan commitments Mortgage banking income $ 150 $ (1,259) (10,850) Forward loan sale commitments Mortgage banking income (500) 248 2,166 Interest rate swaps Other income — 330 (431) Total $ (350) $ (681) (9,115) |
Schedule of effect of cash flow hedge accounting on accumulated other comprehensive income | Year Ended December 31, 2023 2022 2021 Derivatives designated as hedging instruments (Loss) gain in OCI on derivatives (effective portion), net of tax $ (2,314) $ 4,783 $ 2,210 Gain (loss) reclassified from OCI into interest income or interest expense (effective portion) $ 4,622 $ 1,164 $ (513) |
Schedule of offsetting of derivative and amounts subject to an enforceable master netting arrangement, not offset in the Consolidated Balance Sheets | 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 $ 5,095 $ — $ 5,095 $ — $ (5,095) $ — Interest rate swap on residential real estate loans $ (855) $ — $ (855) $ — $ 900 $ 45 Derivatives not designated as hedging instruments Customer interest rate swaps $ 19,840 $ — $ 19,840 $ — $ (17,155) $ 2,685 |
OPERATING LEASE RIGHT-OF-USE _2
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | |
Schedule of undiscounted future minimum operating lease payments | December 31, 2023 (in thousands) 2024 $ 2,830 2025 2,699 2026 2,518 2027 2,445 2028 2,293 Thereafter 17,128 Total lease payments 29,913 Imputed interest (5,390) Total present value of operating lease liabilities $ 24,523 |
Schedule of weighted-average discount rate and remaining lease term | December 31, 2023 December 31, 2022 Weighted-average discount rate 2.08 % 2.02 % Weighted-average remaining lease term (years) 16.24 17.33 |
Schedule of components of total lease expense | Year Ended December 31, 2023 2022 Lease Expense: Operating lease expense $ 3,123 $ 3,301 Short-term lease expense 135 138 Variable lease expense 15 — Sublease income (12) (13) Total lease expense $ 3,261 $ 3,426 Other Information Cash paid for amounts included in the measurement of lease liabilities- operating cash flows for operating leases 3,143 3,261 Operating Lease - Operating cash flows (Liability reduction) 2,609 2,722 ROU assets obtained in exchange for new operating lease liabilities 606 3,257 |
COMPENSATION AND BENEFIT PLANS
COMPENSATION AND BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
COMPENSATION AND BENEFIT PLANS | |
Schedule of share information held by the ESOP | December 31, 2023 2022 Allocated shares 1,336,207 1,140,538 Shares committed to be allocated 230,723 230,723 Unallocated shares 2,910,393 3,141,117 Total shares 4,477,323 4,512,378 Fair value of unallocated shares $ 34,866,506 $ 43,661,526 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Schedule of stock option grants | Outstanding Nonvested Weighted Average Weighted Weighted Remaining Aggregate Average Stock Option Average Contractual Intrinsic Stock Option Grant Date Awards Exercise Price Term (years) Value Awards Fair Value Balance at January 1, 2023 1,174,755 $ 10.02 — $ — Exercised (62,840) 10.23 — — Forfeited (62,840) 10.23 — — Expired — — — — Balance at December 31, 2023 1,049,075 $ 10.00 4.12 $ 2,081,233 — $ — Exercisable at December 31, 2023 1,049,075 $ 10.00 4.12 $ 2,081,233 |
Restricted Stock Awards | |
Schedule of unvested stock award activity | Restricted Weighted Average Stock Awards Grant Price Non-vested stock awards at January 1, 2023 222,068 $ 13.60 Vested (103,761) 13.41 Granted 171,143 13.62 Forfeited (40,222) 13.69 Non-vested stock awards at December 31, 2023 249,228 $ 13.68 Unrecognized cost inclusive of directors' awards $ 1,888,131 Weighted average remaining recognition period (years) 0.93 |
Performance Restricted Stock Units | |
Schedule of unvested stock award activity | Performance Weighted Average Restricted Stock Units Grant Price Non-vested performance restricted stock units at January 1, 2023 137,920 $ 13.19 Vested — — Granted 58,532 13.84 Forfeited (41,337) 13.35 Non-vested performance restricted stock units at December 31, 2023 155,115 $ 13.42 Unrecognized cost $ 668,928 Weighted average remaining recognition period (years) 0.89 |
MINIMUM REGULATORY CAPITAL RE_2
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Tables) | 12 Months Ended |
Dec. 31, 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. December 31, 2023 Common equity Tier 1 capital to risk-weighted assets $ 567,248 12.0 % $ 212,816 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 567,248 12.0 283,755 6.0 N/A N/A Total capital to risk-weighted assets 619,138 13.1 378,340 8.0 N/A N/A Tier 1 capital to average assets 567,248 10.0 226,690 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 December 31, 2023 Common equity Tier 1 capital to risk-weighted assets $ 509,791 10.8 % $ 212,724 4.5 % $ 307,267 6.5 % Tier 1 capital to risk-weighted assets 509,791 10.8 283,632 6.0 378,175 8.0 Total capital to risk-weighted assets 561,682 11.9 378,175 8.0 472,719 10.0 Tier 1 capital to average assets 509,791 9.0 226,666 4.0 283,333 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 INCOME (LOSS) (Ta
COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
COMPREHENSIVE INCOME (LOSS) | |
Summary of changes in accumulated other comprehensive (loss) income | Year Ended December 31, 2023 2022 2021 Post- Available Cash Post- Available Cash Available Cash retirement for Sale Flow retirement for Sale Flow for Sale Flow Benefit Securities Hedge Total 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) $ 3,198 $ (1,013) $ 2,185 Other comprehensive income (loss) before reclassifications 1 6,249 1,403 7,653 251 (64,620) 7,815 (56,554) (7,496) 2,557 (4,939) Amounts reclassified from accumulated other comprehensive income (loss) (66) — (4,622) (4,688) (42) — (1,164) (1,206) (241) 513 272 Net current period other comprehensive income (loss) (65) 6,249 (3,219) 2,965 209 (64,620) 6,651 (57,760) (7,737) 3,070 (4,667) Related tax effect — (410) 905 495 (59) 14,242 (1,868) 12,315 1,705 (860) 845 Balance at end of period $ 85 $ (47,373) $ 3,666 $ (43,622) $ 150 $ (53,212) $ 5,980 $ (47,082) $ (2,834) $ 1,197 $ (1,637) |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 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) December 31, 2023 Assets Securities available for sale $ — $ 290,151 $ — $ 290,151 Loans held for sale — 19,686 — 19,686 Mortgage servicing rights — 46,111 — 46,111 Derivatives — 28,340 484 28,824 $ — $ 384,288 $ 484 $ 384,772 Liabilities Derivatives $ — $ 24,100 $ 451 $ 24,551 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 | Year Ended December 31, 2023 2022 2021 Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 487 $ 1,583 $ 12,623 Total gains (losses) included in net income (1) (3) (1,096) (11,040) Balance at end of period $ 484 $ 487 $ 1,583 Changes in unrealized gains relating to instruments at period end $ 484 $ 487 $ 1,583 |
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 $ (104) $ (189) $ (2,545) Total gains (losses) included in net income (1) (347) 85 2,356 Balance at end of period $ (451) $ (104) $ (189) Changes in unrealized losses relating to instruments at period end $ (451) $ (104) $ (189) (1) Included in mortgage banking income on the Consolidated Statements of Income. |
Schedule of assets measured at fair value on a non-recurring basis | December 31, December 31, 2023 2022 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Collateral-dependent impaired loans $ — $ — $ 5,746 $ — $ — $ 349 Losses in the following table represent the amount of the fair value adjustments recorded during the year on the carrying value of the assets held at December 31, 2023 and 2022, respectively. Losses on fully charged off loans are not included in the table. Year Ended December 31, 2023 2022 Collateral-dependent impaired loans $ 4,171 $ 8 |
Schedule of changes in Level 3 assets measured at fair value on a nonrecurring basis | Fair Value December 31, December 31, Valuation Technique 2023 2022 (in thousands) Collateral-dependent impaired loans $ 5,908 $ 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 | December 31, 2023 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 227,350 $ 227,350 $ — $ — $ 227,350 Securities available for sale 290,151 — 290,151 — 290,151 Securities held to maturity 19,796 — 19,262 — 19,262 Federal Home Loan Bank stock 27,098 N/A N/A N/A N/A Loans held for sale 19,686 — 19,686 — 19,686 Loans, net 4,702,339 — — 4,482,448 4,482,448 Retirement plan annuities 15,170 — — 15,170 15,170 Accrued interest receivable 18,169 — 18,169 — 18,169 Derivatives 28,824 — 28,340 484 28,824 Financial liabilities: Deposits 4,387,409 — — 4,376,269 4,376,269 Borrowed funds 568,462 — 567,158 — 567,158 Mortgagors' escrow accounts 8,872 — — 8,872 8,872 Accrued interest payable 5,251 — 5,251 — 5,251 Derivatives 24,551 — 24,100 451 24,551 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) | 12 Months Ended |
Dec. 31, 2023 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share | Year Ended December 31, 2023 2022 2021 Net income available to common stockholders (in thousands) $ 16,077 $ 45,589 $ 58,517 Average number of common shares outstanding 46,732,435 50,293,762 54,454,113 Less: Average unallocated ESOP shares and non-vested restricted shares (3,510,697) (3,810,098) (3,707,811) Weighted average number of common shares outstanding used to calculate basic earnings per common share 43,221,738 46,483,664 50,746,302 Dilutive effect of share-based compensation 197,884 634,793 776,833 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 43,419,622 47,118,457 51,523,135 Earnings per common share: Basic $ 0.37 $ 0.98 $ 1.15 Diluted $ 0.37 $ 0.97 $ 1.14 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SEGMENT REPORTING | |
Summary of reportable segments | Information about the reportable segments and reconciliation to the Consolidated Financial Statements at December 31, 2023, 2022 and 2021, and for the years then-ended are presented in the tables below. Year Ended December 31, 2023 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 129,157 $ 806 $ 127,271 Provision for credit losses 5,680 — 5,680 Net interest and dividend income, after provision for credit losses 123,477 806 121,591 Mortgage banking income: Gain on sale of mortgage loans — 10,404 10,404 Intersegment (loss) gain (1,063) 849 — Changes in mortgage servicing rights fair value (346) (4,338) (4,684) Other 769 8,330 9,099 Total mortgage banking (loss) income (640) 15,245 14,819 Other noninterest income 26,996 (2) 27,035 Total noninterest income 26,356 15,243 41,854 Noninterest expense 107,268 30,972 138,320 Income (loss) before income taxes 42,565 (14,923) 25,125 Provision (benefit) for income taxes 10,559 (944) 9,048 Net income (loss) $ 32,006 $ (13,979) $ 16,077 Total assets at period end $ 5,689,676 $ 96,942 $ 5,667,896 Goodwill at period end $ 59,042 $ — $ 59,042 Year Ended December 31, 2022 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 149,301 $ 1,617 $ 148,986 Provision for credit losses 5,660 — 5,660 Net interest and dividend income, after provision for credit losses 143,641 1,617 143,326 Mortgage banking income: Gain on sale of mortgage loans — 15,970 15,970 Intersegment (loss) gain (3,604) 3,185 — Changes in mortgage servicing rights fair value 618 4,714 5,332 Other 873 9,075 9,948 Total mortgage banking (loss) income (2,113) 32,944 31,250 Other noninterest income 25,930 129 26,059 Total noninterest income 23,817 33,073 57,309 Noninterest expense 110,407 27,065 138,906 Income before income taxes 57,051 7,625 61,729 Provision for income taxes 14,090 2,777 16,140 Net income $ 42,961 $ 4,848 $ 45,589 Total assets at period end $ 5,373,911 $ 124,229 $ 5,359,545 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 Year Ended December 31, 2021 HarborOne HarborOne Bank Mortgage Consolidated (in thousands) Net interest and dividend income $ 129,785 $ 3,468 $ 131,370 (Benefit) provision for credit losses (7,258) — (7,258) Net interest and dividend income, after provision for credit losses 137,043 3,468 138,628 Mortgage banking income: Gain on sale of mortgage loans — 61,883 61,883 Intersegment (loss) gain (3,665) 4,434 — Changes in mortgage servicing rights fair value (137) (243) (380) Other 1,090 14,741 15,831 Total mortgage banking (loss) income (2,712) 80,815 77,334 Other noninterest income 23,308 44 23,352 Total noninterest income 20,596 80,859 100,686 Noninterest expense 102,557 55,012 158,862 Income before income taxes 55,082 29,315 80,452 Provision for income taxes 14,933 7,569 21,935 Net income $ 40,149 $ 21,746 $ 58,517 Total assets at period end $ 4,481,509 $ 173,545 $ 4,553,405 Goodwill at period end $ 59,042 $ 10,760 $ 69,802 |
CONDENSED FINANCIAL STATEMENT_2
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | |
Schedule of Condensed Balance Sheet | Balance Sheet December 31, 2023 2022 (in thousands) Assets Cash and due from banks $ 34,319 $ 77,014 Investment in common stock of HarborOne Bank 526,302 549,888 Loan receivable - ESOP 28,119 29,242 Other assets 500 483 Total assets $ 589,240 $ 656,627 Liabilities and Stockholders' Equity Subordinated debt $ — $ 34,285 Other liabilities and accrued expenses 5,481 5,366 Stockholders' equity 583,759 616,976 Total liabilities and stockholders' equity $ 589,240 $ 656,627 |
Schedule of Condensed Statement of Net Income | Statement of Net Income Year Ended December 31, 2023 2022 2021 (in thousands) Dividends from subsidiary $ 49,500 $ 13,000 $ 90,000 Interest from bank deposits 82 159 210 Interest on short-term investments — 4 2 Interest on ESOP loan 2,193 999 1,046 Other income 41 — — Total income 51,816 14,162 91,258 Interest expense 2,775 2,095 2,095 Operating expenses 2,273 2,432 2,338 Total expenses 5,048 4,527 4,433 Income before income taxes and equity in undistributed net income (loss) 46,768 9,635 86,825 of HarborOne Bank Income tax benefit (568) (726) (566) Income before equity in income (loss) of subsidiaries 47,336 10,361 87,391 Equity in undistributed net income (loss) of HarborOne Bank (31,259) 35,228 (28,874) Net income $ 16,077 $ 45,589 $ 58,517 |
Schedule of Condensed Statement of Cash Flows | Statement of Cash Flows Year Ended December 31, 2023 2022 2021 (in thousands) Cash flows from operating activities: Net income $ 16,077 $ 45,589 $ 58,517 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed net (income) loss of HarborOne Bank 31,259 (35,228) 28,874 Deferred income tax (benefit) provision (60) 138 (8) Share-based compensation 454 286 545 Net change in other assets 42 18 27 Net change in other liabilities 83 (97) 391 Net cash provided by operating activities 47,855 10,706 88,346 Cash flows from investing activities: Repayment of ESOP loan 1,123 1,497 1,450 Advances to subsidiary (2,193) (999) (1,046) Repayment of advances to subsidiary 2,194 998 1,659 Net cash provided by investing activities 1,124 1,496 2,063 Cash flows from financing activities: Issuance of common stock 643 8,366 643 Repurchase of common stock (45,206) (62,525) (69,215) Repayment of subordinated debt (35,000) — — Amortization of subordinated debt issuance costs 715 126 126 Dividends paid (12,826) (12,188) (9,195) Net cash used by financing activities (91,674) (66,221) (77,641) Net change in cash and cash equivalents (42,695) (54,019) 12,768 Cash and cash equivalents at beginning of year 77,014 131,033 118,265 Cash and cash equivalents at end of year $ 34,319 $ 77,014 $ 131,033 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) item state | Dec. 31, 2022 USD ($) | Sep. 21, 2022 shares | |
Number of passive investment subsidiaries | 1 | ||
Number of full-service bank offices | 30 | ||
Impairment of federal home loan bank stock | $ | $ 0 | $ 0 | |
Number of reporting units | 2 | ||
Number of security corporations | 1 | ||
Shares available for repurchase | shares | 2,325,489 | ||
Accrued interest receivable | $ | $ 15,600 | 13,800 | |
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-13 | |||
Debt securities | $ | 0 | 0 | |
Accrued interest related to debt securities | $ | $ 0 | $ 0 | |
HarborOne Mortgage | |||
Additional states licensed to lend | state | 5 | ||
HarborOne Bank. | |||
Number of security corporation subsidiaries | 1 |
DEBT SECURITIES - Summary of se
DEBT SECURITIES - Summary of securities available for sale and held to maturity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Securities | ||
Accrued interest receivable | $ 940,000 | $ 957,000 |
Securities available for sale, at fair value | 290,151,000 | 301,149,000 |
Amortized Cost | 19,796,000 | 19,949,000 |
Securities available for sale | ||
Amortized Cost | 352,157,000 | 369,404,000 |
Gross Unrealized Gains | 3,000 | |
Gross Unrealized Losses | 62,009,000 | 68,255,000 |
Allowance for Credit Loss | 0 | |
Fair Value | 290,151,000 | 301,149,000 |
Securities held to maturity | ||
Amortized Cost | 19,796,000 | 19,949,000 |
Gross Unrealized Losses | 534,000 | 675,000 |
Fair Value | 19,262,000 | 19,274,000 |
BTFP borrowing capacity | ||
Securities | ||
Pledged as collateral | 360,900,000 | |
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 | 287,600,000 | |
Securities available for sale | ||
Fair Value | 287,600,000 | |
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||
Securities | ||
Debt securities | 0 | 0 |
Accrued interest related to debt securities | 0 | 0 |
U.S. government and government-sponsored enterprise obligations | ||
Securities | ||
Securities available for sale, at fair value | 40,182,000 | 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 | 6,961,000 | 8,649,000 |
Fair Value | 40,182,000 | 38,494,000 |
Securities held to maturity | ||
Amortized Cost | 15,000,000 | 15,000,000 |
Gross Unrealized Losses | 438,000 | 597,000 |
Fair Value | 14,562,000 | 14,403,000 |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Securities | ||
Securities available for sale, at fair value | 245,597,000 | 256,815,000 |
Securities available for sale | ||
Amortized Cost | 300,277,000 | 315,964,000 |
Gross Unrealized Gains | 3,000 | |
Gross Unrealized Losses | 54,683,000 | 59,149,000 |
Fair Value | 245,597,000 | 256,815,000 |
U.S. government-sponsored collateralized mortgage obligations | ||
Securities | ||
Securities available for sale, at fair value | 1,782,000 | 2,499,000 |
Securities available for sale | ||
Amortized Cost | 1,852,000 | 2,612,000 |
Gross Unrealized Losses | 70,000 | 113,000 |
Fair Value | 1,782,000 | 2,499,000 |
SBA asset-backed securities | ||
Securities | ||
Securities available for sale, at fair value | 1,778,000 | 2,495,000 |
Amortized Cost | 4,796,000 | 4,949,000 |
Securities available for sale | ||
Amortized Cost | 1,885,000 | 2,685,000 |
Gross Unrealized Losses | 107,000 | 190,000 |
Fair Value | 1,778,000 | 2,495,000 |
Securities held to maturity | ||
Amortized Cost | 4,796,000 | 4,949,000 |
Gross Unrealized Losses | 96,000 | 78,000 |
Fair Value | 4,700,000 | 4,871,000 |
Corporate bonds | ||
Securities | ||
Securities available for sale, at fair value | 812,000 | 846,000 |
Securities available for sale | ||
Amortized Cost | 1,000,000 | 1,000,000 |
Gross Unrealized Losses | 188,000 | 154,000 |
Fair Value | $ 812,000 | $ 846,000 |
DEBT SECURITIES - Contractual m
DEBT SECURITIES - Contractual maturity (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) security | Dec. 31, 2022 USD ($) security | Dec. 31, 2021 USD ($) | |
Securities | |||
Gain on sale and call of securities, net | $ 241 | ||
Fair Value | $ 290,151 | $ 301,149 | |
Fair Value | 19,262 | 19,274 | |
Allowance for Credit Loss | 0 | ||
Amortized Cost-Available-for-Sale | |||
After 1 year through 5 years | 6,998 | ||
After 5 years through 10 years | 41,145 | ||
Total for contractual maturity | 48,143 | ||
Total | 352,157 | 369,404 | |
Fair Value-Available-for-Sale | |||
After 1 year through 5 years | 6,586 | ||
After 5 years through 10 years | 34,408 | ||
Total for contractual maturity | 40,994 | ||
Total | 290,151 | 301,149 | |
Amortized Cost-Held-to-Maturity | |||
Amortized Cost | 19,796 | 19,949 | |
After 1 year through 5 years | 15,000 | ||
Total for contractual maturity | 15,000 | ||
Total | 19,796 | ||
Fair Value-Held-to-Maturity | |||
After 1 year through 5 years | 14,562 | ||
Total for contractual maturity | 14,562 | ||
Total | $ 19,262 | $ 19,274 | |
Sales | |||
Proceeds | 39,321 | ||
Gross gains | 241 | ||
Calls | |||
Proceeds | $ 5,000 | ||
Number of holdings greater than 10% of shareholder equity | security | 0 | 0 | |
Minimum | |||
Securities | |||
Maturity period | 1 year | ||
Maximum | |||
Securities | |||
Maturity period | 29 years | ||
Asset Pledged as Collateral | |||
Securities | |||
Fair Value | $ 287,600 | ||
Fair Value-Available-for-Sale | |||
Total | 287,600 | ||
U.S. government agency and government-sponsored residential mortgage-backed securities | |||
Securities | |||
Fair Value | 245,597 | $ 256,815 | |
Amortized Cost-Available-for-Sale | |||
No single maturity date | 300,277 | ||
Total | 300,277 | 315,964 | |
Fair Value-Available-for-Sale | |||
No single maturity date | 245,597 | ||
Total | 245,597 | 256,815 | |
U.S. government-sponsored collateralized mortgage obligations | |||
Securities | |||
Fair Value | 1,782 | 2,499 | |
Amortized Cost-Available-for-Sale | |||
No single maturity date | 1,852 | ||
Total | 1,852 | 2,612 | |
Fair Value-Available-for-Sale | |||
No single maturity date | 1,782 | ||
Total | 1,782 | 2,499 | |
SBA asset-backed securities | |||
Securities | |||
Fair Value | 1,778 | 2,495 | |
Fair Value | 4,700 | 4,871 | |
Amortized Cost-Available-for-Sale | |||
No single maturity date | 1,885 | ||
Total | 1,885 | 2,685 | |
Fair Value-Available-for-Sale | |||
No single maturity date | 1,778 | ||
Total | 1,778 | 2,495 | |
Amortized Cost-Held-to-Maturity | |||
Amortized Cost | 4,796 | 4,949 | |
No single maturity date | 4,796 | ||
Fair Value-Held-to-Maturity | |||
No single maturity date | 4,700 | ||
Total | 4,700 | 4,871 | |
U.S. government and government-sponsored enterprise obligations | |||
Securities | |||
Fair Value | 40,182 | 38,494 | |
Fair Value | 14,562 | 14,403 | |
Amortized Cost-Available-for-Sale | |||
Total | 47,143 | 47,143 | |
Fair Value-Available-for-Sale | |||
Total | 40,182 | 38,494 | |
Amortized Cost-Held-to-Maturity | |||
Amortized Cost | 15,000 | 15,000 | |
Fair Value-Held-to-Maturity | |||
Total | $ 14,562 | 14,403 | |
U.S. government and government-sponsored enterprise obligations | Minimum | |||
Securities | |||
Maturity period | 3 years | ||
Callable period | 1 month | ||
U.S. government and government-sponsored enterprise obligations | Maximum | |||
Securities | |||
Maturity period | 8 years | ||
Callable period | 3 years | ||
Corporate bonds | |||
Securities | |||
Fair Value | $ 812 | 846 | |
Amortized Cost-Available-for-Sale | |||
Total | 1,000 | 1,000 | |
Fair Value-Available-for-Sale | |||
Total | 812 | $ 846 | |
U.S. government and government-sponsored enterprise obligations and corporate bonds | |||
Securities | |||
Fair Value | 55,600 | ||
Fair Value-Available-for-Sale | |||
Total | $ 55,600 |
DEBT SECURITIES - Gross unreali
DEBT SECURITIES - Gross unrealized losses aggregated by category (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) security | Dec. 31, 2022 USD ($) | |
Marketable Securities [Line Items] | ||
Securities available for sale, gross unrealized losses, less than twelve months | $ 4,326 | |
Securities available for sale, gross unrealized losses, twelve months and over | $ 62,009 | 63,929 |
Securities available for sale, fair value, less than twelve months | 45,805 | |
Securities available for sale, fair value, twelve months and over | 285,509 | 255,309 |
Securities held to maturity, gross unrealized losses, less than twelve months | 96 | 675 |
Securities held to maturity, gross unrealized losses, twelve months and over | 438 | |
Securities held to maturity, fair value, less than twelve months | 4,700 | 19,274 |
Securities held to maturity, fair value, twelve months and over | $ 14,562 | |
Number of debt securities | security | 133 | |
Number of debt securities in unrealized loss position | security | 131 | |
Allowance for credit loss | $ 0 | |
U.S. government and government-sponsored enterprise obligations | ||
Marketable Securities [Line Items] | ||
Securities available for sale, gross unrealized losses, less than twelve months | 249 | |
Securities available for sale, gross unrealized losses, twelve months and over | 6,961 | 8,400 |
Securities available for sale, fair value, less than twelve months | 4,751 | |
Securities available for sale, fair value, twelve months and over | 40,182 | 33,743 |
Securities held to maturity, gross unrealized losses, less than twelve months | 597 | |
Securities held to maturity, gross unrealized losses, twelve months and over | 438 | |
Securities held to maturity, fair value, less than twelve months | 14,403 | |
Securities held to maturity, fair value, twelve months and over | 14,562 | |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Marketable Securities [Line Items] | ||
Securities available for sale, gross unrealized losses, less than twelve months | 3,620 | |
Securities available for sale, gross unrealized losses, twelve months and over | 54,683 | 55,529 |
Securities available for sale, fair value, less than twelve months | 35,214 | |
Securities available for sale, fair value, twelve months and over | 240,955 | 221,566 |
U.S. government-sponsored collateralized mortgage obligations | ||
Marketable Securities [Line Items] | ||
Securities available for sale, gross unrealized losses, less than twelve months | 113 | |
Securities available for sale, gross unrealized losses, twelve months and over | 70 | |
Securities available for sale, fair value, less than twelve months | 2,499 | |
Securities available for sale, fair value, twelve months and over | 1,782 | |
SBA asset-backed securities | ||
Marketable Securities [Line Items] | ||
Securities available for sale, gross unrealized losses, less than twelve months | 190 | |
Securities available for sale, gross unrealized losses, twelve months and over | 107 | |
Securities available for sale, fair value, less than twelve months | 2,495 | |
Securities available for sale, fair value, twelve months and over | 1,778 | |
Securities held to maturity, gross unrealized losses, less than twelve months | 96 | 78 |
Securities held to maturity, fair value, less than twelve months | 4,700 | 4,871 |
Corporate bonds | ||
Marketable Securities [Line Items] | ||
Securities available for sale, gross unrealized losses, less than twelve months | 154 | |
Securities available for sale, gross unrealized losses, twelve months and over | 188 | |
Securities available for sale, fair value, less than twelve months | $ 846 | |
Securities available for sale, fair value, twelve months and over | $ 812 |
LOANS HELD FOR SALE (Details)
LOANS HELD FOR SALE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair value and contractual principal outstanding: | ||
Loans held for sale, fair value | $ 19,686,000 | $ 18,544,000 |
Loans held for sale, contractual principal outstanding | 19,155,000 | 18,208,000 |
Fair value less unpaid principal balance | 531,000 | 336,000 |
Change in fair value of mortgage loans held for sale | 195,000 | (1,100,000) |
90 Days or More | ||
Fair value and contractual principal outstanding: | ||
Loans held for sale, fair value | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR CREDI_3
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Summary of Balances of Loans (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Loans | ||||
Total loans | $ 4,750,311,000 | $ 4,549,670,000 | ||
Total loans before basis adjustment | 4,749,418,000 | 4,549,670,000 | ||
Basis adjustment associated with fair value hedge | 893,000 | |||
Net deferred loan costs | 8,500,000 | 7,400,000 | ||
Allowance for credit losses on loans | (47,972,000) | (45,236,000) | $ (45,377,000) | $ (55,395,000) |
Net loans | 4,702,339,000 | 4,504,434,000 | ||
Accrued interest receivable | 15,600,000 | 13,800,000 | ||
PPP loans | Commercial and industrial | ||||
Loans | ||||
Net deferred loan costs | 36,000 | 65,000 | ||
Loans before fees | 321,000 | 2,100,000 | ||
Residential | ||||
Loans | ||||
Total loans | 1,708,821,000 | 1,634,319,000 | ||
Total loans before basis adjustment | 1,708,821,000 | |||
Residential | 1-4 family | ||||
Loans | ||||
Total loans | 1,513,554,000 | 1,432,263,000 | ||
Allowance for credit losses on loans | (12,101,000) | (11,532,000) | (3,631,000) | (6,168,000) |
Residential | Second mortgages and equity lines of credit | ||||
Loans | ||||
Total loans | 177,135,000 | 166,219,000 | ||
Allowance for credit losses on loans | (964,000) | (924,000) | (420,000) | (1,054,000) |
Residential | Residential real estate construction | ||||
Loans | ||||
Total loans | 18,132,000 | 35,837,000 | ||
Allowance for credit losses on loans | (418,000) | (280,000) | (69,000) | (197,000) |
Commercial | ||||
Loans | ||||
Total loans | 3,018,561,000 | 2,873,930,000 | ||
Commercial | Commercial real estate | ||||
Loans | ||||
Total loans | 2,343,675,000 | 2,250,344,000 | ||
Total loans before basis adjustment | 2,343,675,000 | |||
Allowance for credit losses on loans | (21,288,000) | (20,357,000) | (33,242,000) | (34,765,000) |
Commercial | Commercial construction | ||||
Loans | ||||
Total loans | 208,443,000 | 199,311,000 | ||
Total loans before basis adjustment | 208,443,000 | |||
Allowance for credit losses on loans | (4,824,000) | (4,645,000) | (2,010,000) | (1,955,000) |
Commercial | Commercial and industrial | ||||
Loans | ||||
Total loans | 466,443,000 | 424,275,000 | ||
Total loans before basis adjustment | 466,443,000 | |||
Allowance for credit losses on loans | (8,107,000) | (7,236,000) | (4,638,000) | (5,311,000) |
Consumer loans | ||||
Loans | ||||
Total loans | 22,036,000 | 41,421,000 | ||
Total loans before basis adjustment | 22,036,000 | |||
Allowance for credit losses on loans | (270,000) | (262,000) | $ (367,000) | $ (2,475,000) |
Consumer loans | Auto | ||||
Loans | ||||
Total loans | 13,603,000 | 33,625,000 | ||
Consumer loans | Personal | ||||
Loans | ||||
Total loans | $ 8,433,000 | $ 7,796,000 |
LOANS AND ALLOWANCE FOR CREDI_4
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Loans Sold or Transferred (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Commercial real estate | ||
Loans | ||
Unpaid principal balance of loans serviced for others | $ 413 | $ 366.4 |
LOANS AND ALLOWANCE FOR CREDI_5
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Allowance for Loan Losses Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Activity in the allowance for loan losses and allocation of the allowance to loan segments | |||
Balance | $ 45,236 | $ 45,377 | $ 55,395 |
Charge-offs | (4,426) | (5,293) | (3,432) |
Recoveries | 473 | 1,799 | 672 |
Provision for loan losses | 6,689 | 4,664 | (7,258) |
Balance | 47,972 | 45,236 | 45,377 |
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) | ||
Balance | (1,311) | ||
Residential | 1-4 family | |||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | |||
Balance | 11,532 | 3,631 | 6,168 |
Recoveries | 1 | 2 | 218 |
Provision for loan losses | 568 | 2,701 | (2,755) |
Balance | 12,101 | 11,532 | 3,631 |
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 | ||
Balance | 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 | 924 | 420 | 1,054 |
Recoveries | 88 | 117 | 160 |
Provision for loan losses | (48) | (4) | (794) |
Balance | 964 | 924 | 420 |
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 | ||
Balance | 391 | ||
Residential | Residential real estate construction | |||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | |||
Balance | 280 | 69 | 197 |
Provision for loan losses | 138 | 26 | (128) |
Balance | 418 | 280 | 69 |
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 | ||
Balance | 185 | ||
Commercial | Commercial real estate | |||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | |||
Balance | 20,357 | 33,242 | 34,765 |
Charge-offs | (4,171) | (4,964) | (405) |
Recoveries | 4 | 38 | 5 |
Provision for loan losses | 5,098 | 2,235 | (1,123) |
Balance | 21,288 | 20,357 | 33,242 |
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) | ||
Balance | (10,194) | ||
Commercial | Commercial construction | |||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | |||
Balance | 4,645 | 2,010 | 1,955 |
Provision for loan losses | 179 | 937 | 55 |
Balance | 4,824 | 4,645 | 2,010 |
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 | ||
Balance | 1,698 | ||
Commercial | Commercial and industrial | |||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | |||
Balance | 7,236 | 4,638 | 5,311 |
Charge-offs | (166) | (253) | (2,850) |
Recoveries | 309 | 1,563 | 122 |
Provision for loan losses | 728 | (1,000) | 2,055 |
Balance | 8,107 | 7,236 | 4,638 |
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 | ||
Balance | 2,288 | ||
Consumer loans | |||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | |||
Balance | 262 | 367 | 2,475 |
Charge-offs | (89) | (76) | (177) |
Recoveries | 71 | 79 | 167 |
Provision for loan losses | 26 | (231) | (2,098) |
Balance | 270 | 262 | 367 |
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 | ||
Balance | 123 | ||
Unallocated | |||
Activity in the allowance for loan losses and allocation of the allowance to loan segments | |||
Balance | 1,000 | 3,470 | |
Provision for loan losses | (2,470) | ||
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) | ||
Balance | $ (1,000) |
LOANS AND ALLOWANCE FOR CREDI_6
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Carrying value (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | $ 17,500,000 | $ 23,800,000 |
Related Allowance | 108,000 | 203,000 |
Collateral Dependent | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | 17,263,000 | 15,862,000 |
Related Allowance | 106,000 | 8,000 |
Residential | Collateral Dependent | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | 8,054,000 | 10,494,000 |
Related Allowance | 1,000 | |
Commercial | Collateral Dependent | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | 9,209,000 | 5,368,000 |
Related Allowance | 106,000 | 7,000 |
Commercial | Commercial real estate | Collateral Dependent | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | 7,416,000 | 2,039,000 |
Related Allowance | 5,000 | |
Commercial | Commercial and industrial | Collateral Dependent | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Carrying value | 1,793,000 | 3,329,000 |
Related Allowance | $ 101,000 | $ 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 | 12 Months Ended | |
Dec. 31, 2022 USD ($) item | Dec. 31, 2023 USD ($) item | |
Summary of past due and non-accrual loans | ||
Total loans | $ 4,549,670 | $ 4,750,311 |
Loans on Non-accrual | 14,786 | 17,513 |
Loans past due 90 days or more and still accruing | $ 0 | $ 0 |
Borrowers experiencing financial difficulty | item | 0 | 0 |
Number of loan modifications | item | 1 | |
Total Past Due | ||
Summary of past due and non-accrual loans | ||
Total loans | $ 15,425 | $ 19,603 |
30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 4,510 | 5,227 |
60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 1,122 | 2,783 |
90 Days or More | ||
Summary of past due and non-accrual loans | ||
Total loans | 9,793 | 11,593 |
Residential | ||
Summary of past due and non-accrual loans | ||
Total loans | 1,634,319 | 1,708,821 |
Residential | 1-4 family | ||
Summary of past due and non-accrual loans | ||
Total loans | 1,432,263 | 1,513,554 |
Loans on Non-accrual | 8,927 | 7,785 |
Residential | 1-4 family | Total Past Due | ||
Summary of past due and non-accrual loans | ||
Total loans | 10,761 | 11,535 |
Residential | 1-4 family | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 3,711 | 4,704 |
Residential | 1-4 family | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 524 | 2,413 |
Residential | 1-4 family | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Total loans | 6,526 | 4,418 |
Residential | Second mortgages and equity lines of credit | ||
Summary of past due and non-accrual loans | ||
Total loans | 166,219 | 177,135 |
Loans on Non-accrual | 421 | 473 |
Residential | Second mortgages and equity lines of credit | Total Past Due | ||
Summary of past due and non-accrual loans | ||
Total loans | 601 | 351 |
Residential | Second mortgages and equity lines of credit | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 407 | 164 |
Residential | Second mortgages and equity lines of credit | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 5 | 130 |
Residential | Second mortgages and equity lines of credit | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Total loans | 189 | 57 |
Commercial | ||
Summary of past due and non-accrual loans | ||
Total loans | 2,873,930 | 3,018,561 |
Commercial | Commercial real estate | ||
Summary of past due and non-accrual loans | ||
Total loans | 2,250,344 | 2,343,675 |
Loans on Non-accrual | 2,039 | 7,416 |
Commercial | Commercial real estate | Total Past Due | ||
Summary of past due and non-accrual loans | ||
Total loans | 120 | 5,751 |
Commercial | Commercial real estate | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Total loans | 120 | 5,751 |
Commercial | Commercial construction | ||
Summary of past due and non-accrual loans | ||
Total loans | 199,311 | 208,443 |
Commercial | Commercial and industrial | ||
Summary of past due and non-accrual loans | ||
Total loans | 424,275 | 466,443 |
Loans on Non-accrual | 3,329 | 1,791 |
Commercial | Commercial and industrial | Total Past Due | ||
Summary of past due and non-accrual loans | ||
Total loans | 3,419 | 1,745 |
Commercial | Commercial and industrial | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 26 | 247 |
Commercial | Commercial and industrial | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 492 | 166 |
Commercial | Commercial and industrial | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Total loans | 2,901 | 1,332 |
Consumer loans | ||
Summary of past due and non-accrual loans | ||
Total loans | 41,421 | 22,036 |
Consumer loans | Auto | ||
Summary of past due and non-accrual loans | ||
Total loans | 33,625 | 13,603 |
Loans on Non-accrual | 64 | 4 |
Consumer loans | Auto | Total Past Due | ||
Summary of past due and non-accrual loans | ||
Total loans | 500 | 169 |
Consumer loans | Auto | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 348 | 96 |
Consumer loans | Auto | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 101 | 69 |
Consumer loans | Auto | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Total loans | 51 | 4 |
Consumer loans | Personal | ||
Summary of past due and non-accrual loans | ||
Total loans | 7,796 | 8,433 |
Loans on Non-accrual | 6 | 44 |
Consumer loans | Personal | Total Past Due | ||
Summary of past due and non-accrual loans | ||
Total loans | 24 | 52 |
Consumer loans | Personal | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 18 | 16 |
Consumer loans | Personal | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Total loans | 5 | |
Consumer loans | Personal | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Total loans | $ 6 | $ 31 |
LOANS AND ALLOWANCE FOR CREDI_8
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Risk Rating (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) grade | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Loans by risk rating | |||
Number of grades utilized in internal loan rating system | grade | 10 | ||
Year one, originated current fiscal year | $ 407,241 | $ 1,411,554 | |
Year two, originated fiscal year before current fiscal year | 1,443,688 | 1,135,920 | |
Year three, originated two years before current fiscal year | 1,092,960 | 549,182 | |
Year four, originated three years before current fiscal year | 513,582 | 358,789 | |
Year five, originated four years before current fiscal year | 308,448 | 214,183 | |
Prior | 739,967 | 645,253 | |
Revolving Loans Amortized Cost | 242,063 | 233,182 | |
Revolving Loans Converted to Term Loans | 1,469 | 1,607 | |
Total loans before basis adjustment | 4,749,418 | 4,549,670 | |
Total loans | 4,750,311 | 4,549,670 | |
YTD gross charge-offs, originated current fiscal year | 31 | ||
YTD gross charge-offs, originated fiscal year before current fiscal year | 129 | ||
YTD gross charge-offs, originated two years before current fiscal year | 18 | ||
YTD gross charge-offs, originated three years before current fiscal year | 20 | ||
YTD gross charge-offs, originated four years before current fiscal year | 26 | ||
YTD gross charge-offs, prior | 4,202 | ||
YTD gross charge-offs | 4,426 | 5,293 | $ 3,432 |
Commercial | |||
Loans by risk rating | |||
Total loans | 3,018,561 | 2,873,930 | |
Commercial | Commercial real estate | |||
Loans by risk rating | |||
Year one, originated current fiscal year | 152,047 | 817,320 | |
Year two, originated fiscal year before current fiscal year | 839,306 | 441,277 | |
Year three, originated two years before current fiscal year | 455,996 | 241,700 | |
Year four, originated three years before current fiscal year | 238,885 | 263,549 | |
Year five, originated four years before current fiscal year | 242,690 | 143,825 | |
Prior | 414,751 | 342,673 | |
Total loans before basis adjustment | 2,343,675 | ||
Total loans | 2,343,675 | 2,250,344 | |
YTD gross charge-offs, prior | 4,171 | ||
YTD gross charge-offs | 4,171 | 4,964 | 405 |
Commercial | Commercial real estate | Pass | |||
Loans by risk rating | |||
Year one, originated current fiscal year | 152,047 | 817,320 | |
Year two, originated fiscal year before current fiscal year | 828,335 | 441,277 | |
Year three, originated two years before current fiscal year | 455,996 | 241,700 | |
Year four, originated three years before current fiscal year | 234,585 | 254,221 | |
Year five, originated four years before current fiscal year | 233,713 | 121,351 | |
Prior | 405,103 | 340,634 | |
Total loans before basis adjustment | 2,309,779 | ||
Total loans | 2,216,503 | ||
Commercial | Commercial real estate | Special mention | |||
Loans by risk rating | |||
Year two, originated fiscal year before current fiscal year | 10,971 | ||
Year four, originated three years before current fiscal year | 4,300 | 9,328 | |
Year five, originated four years before current fiscal year | 8,977 | 22,474 | |
Prior | 2,232 | ||
Total loans before basis adjustment | 26,480 | ||
Total loans | 31,802 | ||
Commercial | Commercial real estate | Substandard | |||
Loans by risk rating | |||
Prior | 1,670 | 2,039 | |
Total loans before basis adjustment | 1,670 | ||
Total loans | 2,039 | ||
Commercial | Commercial real estate | Doubtful | |||
Loans by risk rating | |||
Prior | 5,746 | ||
Total loans before basis adjustment | 5,746 | ||
Commercial | Commercial construction | |||
Loans by risk rating | |||
Year one, originated current fiscal year | 35,181 | 88,173 | |
Year two, originated fiscal year before current fiscal year | 111,881 | 87,569 | |
Year three, originated two years before current fiscal year | 60,113 | 11,769 | |
Year four, originated three years before current fiscal year | 843 | 9,174 | |
Year five, originated four years before current fiscal year | 318 | ||
Prior | 1,487 | ||
Revolving Loans Amortized Cost | 425 | 821 | |
Total loans before basis adjustment | 208,443 | ||
Total loans | 208,443 | 199,311 | |
Commercial | Commercial construction | Pass | |||
Loans by risk rating | |||
Year one, originated current fiscal year | 35,181 | 88,173 | |
Year two, originated fiscal year before current fiscal year | 109,291 | 87,569 | |
Year three, originated two years before current fiscal year | 60,113 | 11,769 | |
Year four, originated three years before current fiscal year | 843 | 9,174 | |
Year five, originated four years before current fiscal year | 318 | ||
Prior | 1,487 | ||
Revolving Loans Amortized Cost | 425 | 821 | |
Total loans before basis adjustment | 205,853 | ||
Total loans | 199,311 | ||
Commercial | Commercial construction | Special mention | |||
Loans by risk rating | |||
Year two, originated fiscal year before current fiscal year | 2,590 | ||
Total loans before basis adjustment | 2,590 | ||
Commercial | Commercial and industrial | |||
Loans by risk rating | |||
Year one, originated current fiscal year | 73,240 | 53,078 | |
Year two, originated fiscal year before current fiscal year | 52,696 | 95,604 | |
Year three, originated two years before current fiscal year | 94,582 | 82,173 | |
Year four, originated three years before current fiscal year | 70,588 | 26,568 | |
Year five, originated four years before current fiscal year | 22,990 | 37,408 | |
Prior | 78,105 | 52,255 | |
Revolving Loans Amortized Cost | 74,242 | 77,189 | |
Total loans before basis adjustment | 466,443 | ||
Total loans | 466,443 | 424,275 | |
YTD gross charge-offs, originated current fiscal year | 24 | ||
YTD gross charge-offs, originated fiscal year before current fiscal year | 113 | ||
YTD gross charge-offs, originated two years before current fiscal year | 14 | ||
YTD gross charge-offs, originated three years before current fiscal year | 5 | ||
YTD gross charge-offs, originated four years before current fiscal year | 8 | ||
YTD gross charge-offs, prior | 2 | ||
YTD gross charge-offs | 166 | 253 | 2,850 |
Commercial | Commercial and industrial | Pass | |||
Loans by risk rating | |||
Year one, originated current fiscal year | 73,240 | 53,078 | |
Year two, originated fiscal year before current fiscal year | 52,190 | 95,600 | |
Year three, originated two years before current fiscal year | 94,570 | 82,170 | |
Year four, originated three years before current fiscal year | 70,565 | 26,568 | |
Year five, originated four years before current fiscal year | 22,988 | 37,358 | |
Prior | 75,493 | 50,500 | |
Revolving Loans Amortized Cost | 74,125 | 76,647 | |
Total loans before basis adjustment | 463,171 | ||
Total loans | 421,921 | ||
Commercial | Commercial and industrial | Special mention | |||
Loans by risk rating | |||
Year two, originated fiscal year before current fiscal year | 454 | ||
Year three, originated two years before current fiscal year | 4 | ||
Year four, originated three years before current fiscal year | 23 | ||
Year five, originated four years before current fiscal year | 2 | 49 | |
Prior | 948 | 92 | |
Revolving Loans Amortized Cost | 50 | 492 | |
Total loans before basis adjustment | 1,481 | ||
Total loans | 633 | ||
Commercial | Commercial and industrial | Substandard | |||
Loans by risk rating | |||
Year two, originated fiscal year before current fiscal year | 52 | 4 | |
Year three, originated two years before current fiscal year | 8 | 3 | |
Year five, originated four years before current fiscal year | 1 | ||
Prior | 367 | 323 | |
Revolving Loans Amortized Cost | 18 | ||
Total loans before basis adjustment | 445 | ||
Total loans | 331 | ||
Commercial | Commercial and industrial | Doubtful | |||
Loans by risk rating | |||
Prior | 1,297 | 1,340 | |
Revolving Loans Amortized Cost | 49 | 50 | |
Total loans before basis adjustment | 1,346 | ||
Total loans | 1,390 | ||
Residential | |||
Loans by risk rating | |||
Year one, originated current fiscal year | 138,541 | 443,034 | |
Year two, originated fiscal year before current fiscal year | 434,421 | 507,882 | |
Year three, originated two years before current fiscal year | 480,010 | 211,569 | |
Year four, originated three years before current fiscal year | 202,245 | 42,515 | |
Year five, originated four years before current fiscal year | 39,631 | 26,490 | |
Prior | 246,144 | 247,088 | |
Revolving Loans Amortized Cost | 166,360 | 154,134 | |
Revolving Loans Converted to Term Loans | 1,469 | 1,607 | |
Total loans before basis adjustment | 1,708,821 | ||
Total loans | 1,708,821 | 1,634,319 | |
Residential | Accrual | |||
Loans by risk rating | |||
Year one, originated current fiscal year | 138,541 | 443,034 | |
Year two, originated fiscal year before current fiscal year | 434,421 | 507,679 | |
Year three, originated two years before current fiscal year | 480,010 | 211,429 | |
Year four, originated three years before current fiscal year | 202,118 | 42,314 | |
Year five, originated four years before current fiscal year | 38,675 | 25,232 | |
Prior | 239,185 | 239,677 | |
Revolving Loans Amortized Cost | 166,144 | 154,038 | |
Revolving Loans Converted to Term Loans | 1,469 | 1,568 | |
Total loans before basis adjustment | 1,700,563 | ||
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 | 127 | 201 | |
Year five, originated four years before current fiscal year | 956 | 1,258 | |
Prior | 6,959 | 7,411 | |
Revolving Loans Amortized Cost | 216 | 96 | |
Revolving Loans Converted to Term Loans | 39 | ||
Total loans before basis adjustment | 8,258 | ||
Total loans | 9,348 | ||
Consumer loans | |||
Loans by risk rating | |||
Year one, originated current fiscal year | 8,232 | 9,949 | |
Year two, originated fiscal year before current fiscal year | 5,384 | 3,588 | |
Year three, originated two years before current fiscal year | 2,259 | 1,971 | |
Year four, originated three years before current fiscal year | 1,021 | 16,983 | |
Year five, originated four years before current fiscal year | 3,137 | 6,142 | |
Prior | 967 | 1,750 | |
Revolving Loans Amortized Cost | 1,036 | 1,038 | |
Total loans before basis adjustment | 22,036 | ||
Total loans | 22,036 | 41,421 | |
YTD gross charge-offs, originated current fiscal year | 7 | ||
YTD gross charge-offs, originated fiscal year before current fiscal year | 16 | ||
YTD gross charge-offs, originated two years before current fiscal year | 4 | ||
YTD gross charge-offs, originated three years before current fiscal year | 15 | ||
YTD gross charge-offs, originated four years before current fiscal year | 18 | ||
YTD gross charge-offs, prior | 29 | ||
YTD gross charge-offs | 89 | 76 | $ 177 |
Consumer loans | Accrual | |||
Loans by risk rating | |||
Year one, originated current fiscal year | 8,218 | 9,948 | |
Year two, originated fiscal year before current fiscal year | 5,366 | 3,588 | |
Year three, originated two years before current fiscal year | 2,254 | 1,971 | |
Year four, originated three years before current fiscal year | 1,021 | 16,955 | |
Year five, originated four years before current fiscal year | 3,135 | 6,122 | |
Prior | 963 | 1,733 | |
Revolving Loans Amortized Cost | 1,031 | 1,034 | |
Total loans before basis adjustment | 21,988 | ||
Total loans | 41,351 | ||
Consumer loans | Nonaccrual | |||
Loans by risk rating | |||
Year one, originated current fiscal year | 14 | 1 | |
Year two, originated fiscal year before current fiscal year | 18 | ||
Year three, originated two years before current fiscal year | 5 | ||
Year four, originated three years before current fiscal year | 28 | ||
Year five, originated four years before current fiscal year | 2 | 20 | |
Prior | 4 | 17 | |
Revolving Loans Amortized Cost | 5 | 4 | |
Total loans before basis adjustment | $ 48 | ||
Total loans | $ 70 |
MORTGAGE LOAN SERVICING - Key A
MORTGAGE LOAN SERVICING - Key Assumptions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
MORTGAGE LOAN SERVICING | ||
Unpaid principal balances of mortgage loans serviced | $ 3,560 | $ 3,620 |
Prepayment speed | 7.60% | 7.10% |
Discount rate | 9.81% | 9.81% |
Default rate | 2.27% | 1.63% |
MORTGAGE LOAN SERVICING - Fair
MORTGAGE LOAN SERVICING - Fair value of MSR (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes to the fair value of Mortgage Servicing Rights | |||
Balance, beginning of period | $ 48,138 | $ 38,268 | $ 24,833 |
Additions | 2,657 | 4,538 | 13,815 |
Changes in fair value due to: | |||
Reductions from loans paid off during the period | (1,981) | (2,921) | (6,019) |
Changes in valuation inputs or assumptions | (2,703) | 8,253 | 5,639 |
Balance, end of period | 46,111 | 48,138 | 38,268 |
Fees and commissions, mortgage banking and servicing | $ 7,800 | $ 8,100 | $ 7,400 |
Contractually Specified Servicing Fee Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other | Other | Other |
OTHER REAL ESTATE LOANS AND R_3
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | |||
Loss on sales of real estate, net | $ (198,000) | ||
Net loss on sales of repossessed assets | $ (9,000) | $ (30,000) | (45,000) |
Operating expenses | 1,000 | 48,000 | (155,000) |
Foreclosed and repossessed assets | $ (8,000) | $ 18,000 | $ (398,000) |
Number of real estate properties foreclosed and repossessed | item | 0 | 0 | |
Foreclosed and repossessed assets, automobiles | $ 69,000 | $ 54,000 | |
Mortgage loans in the process of foreclosure | $ 2,100,000 | $ 2,600,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 80,578,000 | $ 80,907,000 | |
Less accumulated depreciation and amortization | (31,829,000) | (31,862,000) | |
Property and equipment, net | 48,749,000 | 49,045,000 | |
Depreciation and amortization of premises and equipment | 3,843,000 | 3,924,000 | $ 4,412,000 |
Net book value asset transfer to asset held for sale | $ 966,000 | ||
Gain recognized on transfer of asset held for sale | 305,000 | ||
Write-down of asset held for sale | $ 305,000 | ||
Number of properties transferred | item | 2 | ||
Number of transfer properties sold | item | 1 | ||
Land | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 12,053,000 | 12,251,000 | |
Buildings and leasehold improvements | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 49,355,000 | 50,693,000 | |
Furniture, equipment and vehicles | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 18,762,000 | 17,345,000 | |
Fixed assets in process | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 408,000 | $ 618,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill | $ 59,042,000 | $ 69,802,000 | $ 69,802,000 |
Goodwill impairment | 10,760,000 | ||
Intangible assets | $ 1,515,000 | 2,272,000 | |
HarborOne Mortgage | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Percentage of goodwill balance | 100% | ||
Goodwill impairment | $ 10,800,000 | ||
HarborOne Bank. | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill | 59,000,000 | $ 59,000,000 | |
Goodwill impairment | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated amortization and net amount of intangible assets | |||
Amortization | $ (757,000) | $ (892,000) | $ (1,206,000) |
Core deposit intangibles | |||
Gross amount of intangible assets | |||
Gross amount, beginning of period | 8,952,000 | 8,952,000 | |
Gross amount, end of period | 8,952,000 | 8,952,000 | 8,952,000 |
Accumulated amortization and net amount of intangible assets | |||
Accumulated amortization, beginning of period | (6,680,000) | (5,788,000) | |
Amortization | (757,000) | (892,000) | |
Accumulated amortization, end of period | (7,437,000) | (6,680,000) | $ (5,788,000) |
Net CDI, end of year | 1,515,000 | $ 2,272,000 | |
Estimated future amortization expense | |||
2023 | $ 757,000 | ||
Weighted average original amortization period | 7 years 3 months 18 days |
DEPOSITS - Summary of deposits
DEPOSITS - Summary of deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
DEPOSITS | ||
NOW and demand deposit accounts | $ 965,798 | $ 1,060,268 |
Regular savings and club accounts | 1,265,315 | 1,468,172 |
Money market deposit accounts | 966,201 | 861,704 |
Total non-certificate accounts | 3,197,314 | 3,390,144 |
Term certificate accounts greater than $250,000 | 240,702 | 110,360 |
Term certificate accounts less than or equal to $250,000 | 622,755 | 387,615 |
Brokered deposits | 326,638 | 301,380 |
Total certificate accounts | 1,190,095 | 799,355 |
Total deposits | 4,387,409 | 4,189,499 |
Total municipal deposits | 471,800 | 413,500 |
Total reciprocal deposits | $ 209,400 | $ 28,600 |
DEPOSITS - Maturity of deposits
DEPOSITS - Maturity of deposits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Summary of certificate accounts by maturity | ||
Within 1 year | $ 1,100,893 | |
Over 1 year to 2 years | 63,108 | |
Over 2 years to 3 years | 23,899 | |
Over 3 years to 4 years | 1,881 | |
Over 4 years to 5 years | 314 | |
Total certificate accounts | $ 1,190,095 | $ 799,355 |
Summary of certificate accounts by maturity | ||
Within 1 year | 4.41% | |
Over 1 year to 2 years | 3.88% | |
Over 2 years to 3 years | 3.40% | |
Over 3 years to 4 years | 1.50% | |
Over 4 years to 5 years | 0.80% | |
Total certificate deposits | 4.36% |
BORROWINGS - FHLB Advances (Det
BORROWINGS - FHLB Advances (Details) | 12 Months Ended | |
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
BORROWINGS | ||
FHLB short-term borrowings | $ 303,000,000 | $ 385,000,000 |
Weighted average rate | 5.53% | 4.32% |
Number of callable advances | 12 | |
Scheduled Maturity | ||
2023 | $ 180,000 | |
2024 | $ 13,400,000 | 13,400,000 |
2025 | 90,987,000 | 987,000 |
2026 | 110,000,000 | |
2027 | 10,000,000 | |
2028 | 40,000,000 | |
2029 and thereafter | 1,075,000 | 1,108,000 |
Total | 265,462,000 | $ 15,675,000 |
Redeemable at Call Date | ||
2024 | 163,400,000 | |
2025 | 60,987,000 | |
2026 | 40,000,000 | |
2029 and thereafter | 1,075,000 | |
Total | $ 265,462,000 | |
Weighted Average Rate | ||
2023 | 1.40% | |
2024 | 1.39% | 1.39% |
2025 | 4.31% | |
2026 | 4.20% | |
2027 | 3.72% | |
2028 | 3.86% | |
2029 and thereafter | 2% | 2% |
Total | 4.02% | 1.35% |
BORROWINGS - Others (Details)
BORROWINGS - Others (Details) | 12 Months Ended | ||||
Sep. 30, 2021 USD ($) | Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Aug. 30, 2018 USD ($) | |
Borrowed funds | |||||
Carrying value of the loans pledged as collateral | $ 4,702,339,000 | $ 4,504,434,000 | |||
Prepayment on FHLB borrowings | $ 20,000,000 | ||||
Prepayment penalties on Federal Home Loan Bank advances | $ 1,095,000 | ||||
Amount outstanding | 0 | 0 | |||
FHLB short-term borrowings | 303,000,000 | 385,000,000 | |||
Amortization of issuance costs | 715,000 | 126,000 | $ 126,000 | ||
BIC | |||||
Borrowed funds | |||||
Available borrowing capacity | $ 69,400,000 | ||||
Federal Reserve Bank of Boston | |||||
Borrowed funds | |||||
Percentage of carrying value pledged as collateral | 70% | ||||
Number of borrowing lines | item | 2 | ||||
Federal Reserve Bank of Boston | BTFP | |||||
Borrowed funds | |||||
Available borrowing capacity | $ 360,900,000 | ||||
Amount outstanding | 0 | ||||
Federal Home Loan Bank Advances | |||||
Borrowed funds | |||||
Available borrowing capacity | 727,500,000 | ||||
Other Loans | |||||
Borrowed funds | |||||
Additional borrowing capacity | 25,000,000 | ||||
Subordinated Notes due 2028 | |||||
Borrowed funds | |||||
Notes issued | $ 35,000,000 | ||||
Asset Pledged as Collateral | Federal Reserve Bank of Boston | |||||
Borrowed funds | |||||
Carrying value of the loans pledged as collateral | 99,700,000 | ||||
Asset Pledged as Collateral | Federal Reserve Bank of Boston | BIC | |||||
Borrowed funds | |||||
Carrying value of the loans pledged as collateral | 0 | ||||
Asset Pledged as Collateral | Federal Home Loan Bank Advances | |||||
Borrowed funds | |||||
Carrying value of the loans pledged as collateral | $ 2,020,000,000 | $ 1,710,000,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current tax provision: | |||
Federal | $ 7,264 | $ 8,962 | $ 10,693 |
State | 3,562 | 4,016 | 4,815 |
Total current tax provision | 10,826 | 12,978 | 15,508 |
Deferred tax provision (benefit): | |||
Federal | (1,255) | 2,000 | 4,451 |
State | (523) | 1,162 | 1,976 |
Deferred tax provision (benefit) | (1,778) | 3,162 | 6,427 |
Income tax provision | $ 9,048 | $ 16,140 | $ 21,935 |
INCOME TAXES - Differences Betw
INCOME TAXES - Differences Between Federal Income Tax and Actual Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | |||
Statutory tax rate (as a percent) | 21% | 21% | 21% |
Differences between the statutory federal income tax and the actual income tax provision (benefit) | |||
Statutory federal tax provision | $ 5,276 | $ 12,963 | $ 16,895 |
Increase (decrease) resulting from: | |||
State taxes, net of federal tax benefit | 2,401 | 4,092 | 5,365 |
Bank-owned life insurance | (236) | (416) | (425) |
Employee stock ownership plan expenses | 139 | 303 | 280 |
Tax exempt income | (503) | (932) | |
Goodwill impairment | 2,260 | ||
Net addition (reduction) in uncertain federal tax positions | 6 | (115) | (712) |
Other, net | (295) | 245 | 532 |
Income tax provision | $ 9,048 | $ 16,140 | $ 21,935 |
INCOME TAXES - Deferred taxes (
INCOME TAXES - Deferred taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||||
Allowance for credit losses | $ 14,851 | $ 14,097 | ||
Employee benefit plans | 6,479 | 5,848 | ||
Mark-to-market loans | 899 | 987 | ||
Accrued expenses not deducted for tax purposes | 832 | 1,336 | ||
HarborOne Mortgage loan repurchase reserve | 852 | 996 | ||
Net unrealized loss on securities available for sale | 14,550 | 15,045 | ||
Operating lease liability | 7,019 | 8,020 | ||
Other | 519 | |||
Total deferred tax assets | 46,001 | 46,329 | ||
Deferred tax liabilities: | ||||
Derivatives | (2,457) | (3,726) | ||
Deferred income annuities | (1,370) | (1,835) | ||
Depreciation and amortization | (1,470) | (1,009) | ||
Deferred loan fees | (4,445) | (4,188) | ||
Mortgage servicing rights | (13,201) | (13,372) | ||
Right of use asset | (6,547) | (7,560) | ||
Core deposit intangible | (433) | (638) | ||
Other | (129) | |||
Total deferred tax liabilities | (29,923) | (32,457) | ||
Net deferred tax asset | $ 16,078 | $ 13,872 | $ 3,975 | $ 9,557 |
INCOME TAXES - Changes In Net D
INCOME TAXES - Changes In Net Deferred Tax Asset (Liability) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | |||
Balance at beginning of year | $ 13,872 | $ 3,975 | $ 9,557 |
Deferred tax (provision) benefit | 1,778 | (3,162) | (6,427) |
Adoption of CECL | 736 | ||
Change in directors' retirement plan | (59) | ||
Change in cash flow hedge | 923 | (1,862) | (860) |
Change in securities available for sale | (495) | 14,244 | 1,705 |
Balance at end of year | $ 16,078 | $ 13,872 | $ 3,975 |
INCOME TAXES - Carryforwards (D
INCOME TAXES - Carryforwards (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
INCOME TAXES | ||
Temporary difference adjustment | $ 340,000 | $ 227,000 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized Tax Benefits, Beginning Balance | $ 599 | $ 655 | $ 1,162 |
Additions for tax positions for prior years | 142 | 244 | 247 |
Reductions for tax positions for prior years | (131) | (300) | (754) |
Unrecognized Tax Benefits, Ending Balance | $ 610 | $ 599 | $ 655 |
INCOME TAXES - Unrecognized t_2
INCOME TAXES - Unrecognized tax benefits, interest accrued, and range of reasonably possible changes (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Unrecognized tax benefits | |
Unrecognized tax benefits | $ 292 |
Accrued interest on unrecognized tax benefits | 319 |
Portion that, if recognized, would reduce tax expense and effective tax rate | 611 |
Reasonably possible reduction to the balance of unrecognized tax in subsequent year | 269 |
Portion that, if recognized, would reduce tax expense and effective tax rate | $ 269 |
OTHER COMMITMENTS AND CONTING_3
OTHER COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Obligation to Repurchase Receivables Sold | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Contingent liability | $ 305,000 | $ 305,000 |
Other Liabilities And Accrued Expenses | Obligation to Repurchase Receivables Sold | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Contingent liability | 3,000,000 | 3,600,000 |
Recourse liability | 0 | 0 |
Commitments to grant residential real estate loans - HarborOne Mortgage | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 35,029,000 | 57,916,000 |
Commitments to grant other loans | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 48,547,000 | 43,700,000 |
Unadvanced funds on home equity lines of credit | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 260,376,000 | 251,759,000 |
Unadvanced funds on revolving lines of credit | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 306,943,000 | 351,382,000 |
Unadvanced funds on construction loans | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | $ 210,829,000 | $ 262,945,000 |
OTHER COMMITMENTS AND CONTING_4
OTHER COMMITMENTS AND CONTINGENCIES - Unfunded commitments (Details) - Unfunded Commitment - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||
Beginning balance | $ 4,927 | |
Provision | (1,009) | $ 996 |
Ending balance | 3,918 | 4,927 |
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 | 336 | |
Provision | (82) | 18 |
Ending balance | 254 | 336 |
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 | 628 | |
Provision | (217) | 248 |
Ending balance | 411 | 628 |
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 | 3,079 | |
Provision | (728) | 518 |
Ending balance | 2,351 | 3,079 |
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 | 870 | |
Provision | 12 | 212 |
Ending balance | 882 | 870 |
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 | 14 | |
Provision | 6 | |
Ending balance | $ 20 | 14 |
Consumer loans | Cumulative Effect, Period of Adoption, Adjustment | ||
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||
Beginning balance | $ 14 |
DERIVATIVES (Details)
DERIVATIVES (Details) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) derivative | Dec. 31, 2021 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Derivative disclosures | |||||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities and Other Liabilities | ||||
Other assets | |||||
Derivative disclosures | |||||
Fair Value, Assets | $ 28,824,000 | $ 37,326,000 | |||
Other liabilities | |||||
Derivative disclosures | |||||
Fair Value, Liabilities | 24,551,000 | 28,629,000 | |||
Designated as hedging instruments | Other assets | |||||
Derivative disclosures | |||||
Fair Value, Assets | 5,095,000 | 8,314,000 | |||
Designated as hedging instruments | Other liabilities | |||||
Derivative disclosures | |||||
Fair Value, Liabilities | 855,000 | ||||
Not designated as hedging instruments | Other assets | |||||
Derivative disclosures | |||||
Fair Value, Assets | 23,729,000 | 29,012,000 | |||
Not designated as hedging instruments | Other liabilities | |||||
Derivative disclosures | |||||
Fair Value, Liabilities | $ 23,696,000 | 28,629,000 | |||
Derivative loan commitments | |||||
Derivative disclosures | |||||
Loan commitment specified period | 60 days | ||||
Derivative loan commitments | Not designated as hedging instruments | |||||
Derivative disclosures | |||||
Notional Amount | $ 30,165,000 | 27,935,000 | |||
Derivative loan commitments | Not designated as hedging instruments | Other assets | |||||
Derivative disclosures | |||||
Fair Value, Assets | 480,000 | 238,000 | |||
Derivative loan commitments | Not designated as hedging instruments | Other liabilities | |||||
Derivative disclosures | |||||
Fair Value, Liabilities | 158,000 | 65,000 | |||
Forward loan sale commitments | Not designated as hedging instruments | |||||
Derivative disclosures | |||||
Notional Amount | 30,000,000 | 29,000,000 | |||
Forward loan sale commitments | Not designated as hedging instruments | Other assets | |||||
Derivative disclosures | |||||
Fair Value, Assets | 4,000 | 249,000 | |||
Forward loan sale commitments | Not designated as hedging instruments | Other liabilities | |||||
Derivative disclosures | |||||
Fair Value, Liabilities | 293,000 | 39,000 | |||
Interest rate swaps | |||||
Derivative disclosures | |||||
Securities pledged to secure the Company's liability for the offsetting interest rate swaps | $ 0 | ||||
Fair value adjustment | $ 330,000 | $ (431,000) | |||
Interest rate swaps | Designated as hedging instruments | Fair Value Hedging | |||||
Derivative disclosures | |||||
Number of Derivative Instruments Held | derivative | 2 | ||||
Notional Amount | $ 100,000,000 | $ 100,000,000 | |||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss | ||||
Portfolio layer hedged asset | $ 1,210,000,000 | ||||
Interest rate swaps | Designated as hedging instruments | Cash Flow Hedging | |||||
Derivative disclosures | |||||
Number of Derivative Instruments Held | derivative | 1 | ||||
Maturity term | 1 year 3 months 7 days | ||||
Fixed rate | 0.67% | ||||
Variable rate | 5.617% | ||||
Amount to be reclassified in next 12 months | $ 4,400,000 | ||||
Notional Amount | 100,000,000 | 100,000,000 | |||
Fair Value, Assets | 5,100,000 | ||||
Interest rate swaps | Designated as hedging instruments | Other assets | Cash Flow Hedging | |||||
Derivative disclosures | |||||
Fair Value, Assets | 5,095,000 | 8,314,000 | |||
Interest rate swaps | Designated as hedging instruments | Other liabilities | Fair Value Hedging | |||||
Derivative disclosures | |||||
Fair Value, Liabilities | 855,000 | ||||
Interest rate swaps | Not designated as hedging instruments | |||||
Derivative disclosures | |||||
Notional Amount | 863,348,000 | 772,588,000 | |||
Interest rate swaps | Not designated as hedging instruments | Other assets | |||||
Derivative disclosures | |||||
Fair Value, Assets | 23,245,000 | 28,525,000 | |||
Interest rate swaps | Not designated as hedging instruments | Other liabilities | |||||
Derivative disclosures | |||||
Fair Value, Liabilities | 23,245,000 | 28,525,000 | |||
Risk Participation Agreements | Not designated as hedging instruments | |||||
Derivative disclosures | |||||
Notional Amount | $ 189,275,000 | $ 164,528,000 |
DERIVATIVES - Cumulative basis
DERIVATIVES - Cumulative basis adjustment for fair value hedges (Details) - Fair Value Hedging - Designated as hedging instruments | Dec. 31, 2023 USD ($) |
Derivative disclosures | |
Carrying Amount of the Hedged Assets | $ 100,893,000 |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | 893,000 |
Interest rate swaps | |
Derivative disclosures | |
Carrying Amount of the Hedged Assets | 100,893,000 |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | 893,000 |
Amortized cost | 1,210,000,000 |
Designated amount of hedged items | $ 100,000,000 |
DERIVATIVES - Net gain and loss
DERIVATIVES - Net gain and losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative [Line Items] | |||
(Loss) gain in OCI on derivatives (effective portion), net of tax | $ 3,460 | $ (45,445) | $ (3,822) |
Designated as hedging instruments | |||
Derivative [Line Items] | |||
(Loss) gain in OCI on derivatives (effective portion), net of tax | (2,314) | 4,783 | 2,210 |
Gain (loss) reclassified from OCI into interest income or interest expense (effective portion) | 4,622 | $ 1,164 | $ (513) |
Total | 38 | ||
Designated as hedging instruments | Derivative loan commitments | |||
Derivative [Line Items] | |||
Total | $ 893 | ||
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 |
Designated as hedging instruments | Interest rate swaps | |||
Derivative [Line Items] | |||
Total | $ (855) | ||
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 |
Not designated as hedging instruments | |||
Derivative [Line Items] | |||
Total | $ (350) | $ (681) | $ (9,115) |
Not designated as hedging instruments | Derivative loan commitments | |||
Derivative [Line Items] | |||
Total | $ 150 | $ (1,259) | $ (10,850) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | 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 | $ (500) | $ 248 | $ 2,166 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | 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 | $ (431) | |
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 |
DERIVATIVES - Offsetting (Detai
DERIVATIVES - Offsetting (Details) - Interest rate swaps $ in Thousands | Dec. 31, 2023 USD ($) |
Designated as hedging instruments | Fair Value Hedging | |
Derivative disclosures | |
Gross Amounts of Recognized Assets (Liabilities) | $ (855) |
Net Amounts Assets (Liabilities) presented in the Consolidated Balance Sheets | (855) |
Cash Collateral (Received) Posted | 900 |
Net Amount | 45 |
Designated as hedging instruments | Cash Flow Hedging | |
Derivative disclosures | |
Gross Amounts of Recognized Assets (Liabilities) | 5,095 |
Net Amounts Assets (Liabilities) presented in the Consolidated Balance Sheets | 5,095 |
Cash Collateral (Received) Posted | (5,095) |
Not designated as hedging instruments | |
Derivative disclosures | |
Gross Amounts of Recognized Assets (Liabilities) | 19,840 |
Net Amounts Assets (Liabilities) presented in the Consolidated Balance Sheets | 19,840 |
Cash Collateral (Received) Posted | (17,155) |
Net Amount | $ 2,685 |
OPERATING LEASE RIGHT-OF-USE _3
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating lease ROU assets | $ 22,900 | $ 26,900 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets. | Other Assets. |
Operating lease liabilities | $ 24,523 | $ 28,600 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accrued Liabilities and Other Liabilities | Accrued Liabilities and Other Liabilities |
Weighted-average remaining lease term (years) | 16 years 2 months 27 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 | 34 years 8 months 12 days | 35 years 8 months 12 days |
OPERATING LEASE RIGHT-OF-USE _4
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES - Maturities Due (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2024 | $ 2,830 | |
2025 | 2,699 | |
2026 | 2,518 | |
2027 | 2,445 | |
2027 | 2,293 | |
Thereafter | 17,128 | |
Total lease payments | 29,913 | |
Imputed interest | (5,390) | |
Total present value of operating lease liabilities | $ 24,523 | $ 28,600 |
OPERATING LEASE RIGHT-OF-USE _5
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES - Weighted average discount and remaining lease term (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | ||
Weighted-average discount rate | 2.08% | 2.02% |
Weighted-average remaining lease term (years) | 16 years 2 months 27 days | 17 years 3 months 29 days |
OPERATING LEASE RIGHT-OF-USE _6
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES - Lease expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
OPERATING LEASE RIGHT-OF-USE ASSETS AND LIABILITIES | ||
Operating lease expense | $ 3,123 | $ 3,301 |
Short-term lease expense | 135 | 138 |
Variable lease expense | 15 | |
Sublease income | (12) | (13) |
Total lease expense | 3,261 | 3,426 |
Other Information | ||
Cash paid for amounts included in the measurement of lease liabilities-operating cash flows for operating leases | 3,143 | 3,261 |
Operating Lease - Operating cash flows (Liability reduction) | 2,609 | 2,722 |
ROU assets obtained in exchange for new operating lease liabilities | $ 606 | $ 3,257 |
COMPENSATION AND BENEFIT PLAN_2
COMPENSATION AND BENEFIT PLANS (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) item shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | |
Defined Contribution Plan | |||
Contributions expenses | $ 1,200,000 | $ 1,600,000 | $ 1,900,000 |
Allocated shares | shares | 1,336,207 | 1,140,538 | |
Shares committed to be allocated | shares | 230,723 | 230,723 | 230,722 |
Unallocated shares | shares | 2,910,393 | 3,141,117 | |
Total shares | shares | 4,477,323 | 4,512,378 | |
Fair value of unallocated shares, end of period | $ 34,866,506 | $ 43,661,526 | |
ESOP compensation expense | $ 2,501,000 | $ 3,278,000 | $ 3,170,000 |
ESOP restoration benefit payable period | six months and a day | ||
Through 2035 | |||
Defined Contribution Plan | |||
Shares committed to be allocated | shares | 230,723 | ||
From 2036 to 2038 | |||
Defined Contribution Plan | |||
Shares committed to be allocated | shares | 124,148 | ||
HarborOne Bank. | |||
Defined Contribution Plan | |||
Employee compensation the bank contributed (as a percent) | 3% | 4% | 5% |
HarborOne Mortgage | |||
Defined Contribution Plan | |||
Percentage of matched contribution | 50% | 50% | 50% |
Employee contributions matched 50% (as a percent) | 4% | 4% | 4% |
Maximum | HarborOne Mortgage | |||
Defined Contribution Plan | |||
Maximum amount employer will match | $ 2,000 | $ 2,000 | $ 2,000 |
Split-dollar Life Insurance Arrangements | |||
Defined Contribution Plan | |||
Expense amount | 0 | 42,000 | 0 |
Split-dollar Life Insurance Arrangements | Other Liabilities And Accrued Expenses | |||
Defined Contribution Plan | |||
Employer obligation | 389,000 | 394,000 | |
Deferred Compensation Plan | |||
Defined Contribution Plan | |||
Expense amount | $ 36,000 | 35,000 | 34,000 |
Number of executive officers | item | 1 | ||
Interest rate (as a percent) | 1.50% | ||
Eligible age for medical insurance plan | 65 years | ||
Deferred Compensation Plan | Other Liabilities And Accrued Expenses | |||
Defined Contribution Plan | |||
Employer obligation | $ 490,000 | 454,000 | 419,000 |
Supplemental medical and prescription drug | |||
Defined Contribution Plan | |||
Expense amount | 36,000 | ||
Number of executive officers | item | 1 | ||
Number of former executive officers | item | 1 | ||
Deferred compensation expense | $ (59,000) | (9,000) | |
Supplemental medical and prescription drug | Other Liabilities And Accrued Expenses | |||
Defined Contribution Plan | |||
Employer obligation | 164,000 | 160,000 | 380,000 |
Management Incentive Program | |||
Defined Contribution Plan | |||
Expense amount | 2,500,000 | 4,100,000 | 4,800,000 |
Supplemental Retirement Plans | |||
Defined Contribution Plan | |||
Contributions expenses | 1,000,000 | 1,500,000 | 1,200,000 |
Supplemental Retirement Plans | Other Liabilities And Accrued Expenses | |||
Defined Contribution Plan | |||
Employer obligation | $ 10,800,000 | 10,100,000 | 9,200,000 |
Supplemental Retirement Plans | Executive | |||
Defined Contribution Plan | |||
Number of executive officers | item | 1 | ||
Supplemental Retirement Plans | Retired senior executive officer | |||
Defined Contribution Plan | |||
Number of executive officers | item | 1 | ||
Post-Retirement Life Insurance | |||
Defined Contribution Plan | |||
Expense amount | $ 26,000 | 34,000 | 27,000 |
Post-Retirement Life Insurance | Other Liabilities And Accrued Expenses | |||
Defined Contribution Plan | |||
Employer obligation | 321,000 | 295,000 | 261,000 |
Directors Retirement Plan | |||
Defined Contribution Plan | |||
Benefit plan liability | $ 2,000,000 | ||
Directors Retirement Plan | Maximum | |||
Defined Contribution Plan | |||
Vesting period | 6 years | ||
ESOP Restoration Plan | |||
Defined Contribution Plan | |||
Credit to ESOP compensation expense | $ 500,000 | ||
ESOP compensation expense | $ 636,000 | $ 656,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 29, 2020 | |
STOCK-BASED COMPENSATION | ||||
Stock based compensation expense | $ 2.2 | $ 3.3 | $ 3.8 | |
2020 Equity Plan | ||||
STOCK-BASED COMPENSATION | ||||
Shares reserved for issuance | 4,500,000 | |||
Employee Stock Option [Member] | ||||
STOCK-BASED COMPENSATION | ||||
Term (years) | 10 years | |||
Minimum | Employee Stock Option [Member] | ||||
STOCK-BASED COMPENSATION | ||||
Vesting period (years) | 1 year | |||
Maximum | Employee Stock Option [Member] | ||||
STOCK-BASED COMPENSATION | ||||
Vesting period (years) | 3 years |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock options (Details) - Employee Stock Option [Member] | 12 Months Ended |
Dec. 31, 2023 USD ($) $ / shares shares | |
Stock Option Awards | |
Balance at the beginning of the period | shares | 1,174,755 |
Exercised | shares | (62,840) |
Forfeited | shares | (62,840) |
Balance at the end of the period | shares | 1,049,075 |
Exercisable at end of the period | shares | 1,049,075 |
Weighted Average Exercise Price | |
Balance at the beginning of the period | $ / shares | $ 10.02 |
Exercised | $ / shares | 10.23 |
Forfeited | $ / shares | 10.23 |
Balance at the end of the period | $ / shares | 10 |
Exercisable at end of the period | $ / shares | $ 10 |
Weighted Average Remaining Contractual Term (years) | |
Weighted average remaining contractual term, balance (years) | 4 years 1 month 13 days |
Exercisable at end of the period | 4 years 1 month 13 days |
Aggregate Intrinsic Value | |
Balance at the end of the period | $ | $ 2,081,233 |
Exercisable at end of the period | $ | $ 2,081,233 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock and Performance Restricted Stock Units (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) $ / shares shares | |
Restricted Stock Awards | |
Outstanding Restricted Stock Awards | |
Non-vested stock awards, beginning balance | shares | 222,068 |
Vested | shares | (103,761) |
Granted | shares | 171,143 |
Forfeited | shares | (40,222) |
Non-vested stock awards, ending balance | shares | 249,228 |
Unrecognized cost | $ | $ 1,888,131 |
Weighted average remaining recognition period (years) | 11 months 4 days |
Weighted Average Grant Price | |
Non-vested stock awards, beginning balance | $ / shares | $ 13.60 |
Vested | $ / shares | 13.41 |
Granted | $ / shares | 13.62 |
Forfeited | $ / shares | 13.69 |
Non-vested stock awards, ending balance | $ / shares | $ 13.68 |
Performance Restricted Stock Units | |
Outstanding Restricted Stock Awards | |
Non-vested stock awards, beginning balance | shares | 137,920 |
Granted | shares | 58,532 |
Forfeited | shares | (41,337) |
Non-vested stock awards, ending balance | shares | 155,115 |
Unrecognized cost | $ | $ 668,928 |
Weighted average remaining recognition period (years) | 10 months 20 days |
Weighted Average Grant Price | |
Non-vested stock awards, beginning balance | $ / shares | $ 13.19 |
Granted | $ / shares | 13.84 |
Forfeited | $ / shares | 13.35 |
Non-vested stock awards, ending balance | $ / shares | $ 13.42 |
MINIMUM REGULATORY CAPITAL RE_3
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Details) | 12 Months Ended | |||
Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Sep. 21, 2022 shares | |
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 | |||
Number of previous years net income is retained | 2 years | |||
Common equity Tier 1 to risk-weighted assets | ||||
Actual, Capital amount | $ 567,248,000 | $ 592,610,000 | ||
Actual, Ratio | 0.120 | 0.128 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 212,816,000 | $ 208,541,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.045 | 0.045 | ||
Tier 1 capital to risk weighted assets | ||||
Actual, Capital amount | $ 567,248,000 | $ 592,610,000 | ||
Actual, Ratio | 0.120 | 0.128 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 283,755,000 | $ 278,054,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.060 | 0.060 | ||
Total capital to risk-weighted assets | ||||
Actual, Capital amount | $ 619,138,000 | $ 677,774,000 | ||
Actual, Ratio | 0.131 | 0.146 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 378,340,000 | $ 370,739,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.080 | 0.080 | ||
Tier 1 capital to average assets | ||||
Actual, Capital amount | $ 567,248,000 | $ 592,610,000 | ||
Actual, Ratio | 0.100 | 0.115 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 226,690,000 | $ 205,897,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.040 | 0.040 | ||
Preferred Stock | ||||
Preferred stock, shares authorized | shares | 1,000,000 | 1,000,000 | ||
Preferred Stock, Par Value Per Share | $ / shares | $ 0 | $ 0 | ||
Preferred Stock, shares issued | shares | 0 | 0 | ||
Preferred Stock, shares outstanding | shares | 0 | 0 | ||
Treasury Stock | ||||
Shares available for repurchase | shares | 2,325,489 | |||
Treasury stock, additional shares acquired related to tax obligations | shares | 25,439 | 67,934 | 42,925 | |
Treasury stock additional shares acquired associated with tax obligations, average cost per share | $ / shares | $ 13.42 | $ 14.44 | $ 14.27 | |
Treasury stock, additional shares acquired related to tax obligations, value | $ 341,000 | $ 981,000 | $ 613,000 | |
Total treasury stock | $ 45,206,000 | $ 62,525,000 | $ 69,215,000 | |
Share Repurchase Programs | ||||
Treasury Stock | ||||
Shares acquired, average cost per share | $ / shares | $ 12.03 | $ 14.16 | $ 13.68 | |
Total treasury stock | $ 44,900,000 | $ 61,500,000 | $ 68,600,000 | |
Treasury Stock purchased (in shares) | shares | 3,728,550 | 4,338,637 | 5,021,067 | |
HarborOne Bank. | ||||
Common equity Tier 1 to risk-weighted assets | ||||
Actual, Capital amount | $ 509,791,000 | $ 525,522,000 | ||
Actual, Ratio | 0.108 | 0.113 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 212,724,000 | $ 208,447,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.045 | 0.045 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 307,267,000 | $ 301,090,000 | ||
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 | $ 509,791,000 | $ 525,522,000 | ||
Actual, Ratio | 0.108 | 0.113 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 283,632,000 | $ 277,929,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.060 | 0.060 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 378,175,000 | $ 370,572,000 | ||
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 | $ 561,682,000 | $ 575,686,000 | ||
Actual, Ratio | 0.119 | 0.124 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 378,175,000 | $ 370,572,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.080 | 0.080 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 472,719,000 | $ 463,215,000 | ||
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 | $ 509,791,000 | $ 525,522,000 | ||
Actual, Ratio | 0.090 | 0.102 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 226,666,000 | $ 205,874,000 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.040 | 0.040 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 283,333,000 | $ 257,342,000 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.050 | 0.050 |
COMPREHENSIVE INCOME (LOSS) - C
COMPREHENSIVE INCOME (LOSS) - Changes in AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | $ 616,976 | $ 679,261 | $ 696,314 |
Balance at end of period | 583,759 | 616,976 | 679,261 |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (47,082) | (1,637) | 2,185 |
Other comprehensive income (loss) before reclassifications | 7,653 | (56,554) | (4,939) |
Amounts reclassified from accumulated other comprehensive income (loss) | (4,688) | (1,206) | 272 |
Net current period other comprehensive income (loss) | 2,965 | (57,760) | (4,667) |
Related tax effect | 495 | 12,315 | 845 |
Balance at end of period | (43,622) | (47,082) | (1,637) |
Securities available for sale | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (53,212) | (2,834) | 3,198 |
Other comprehensive income (loss) before reclassifications | 6,249 | (64,620) | (7,496) |
Amounts reclassified from accumulated other comprehensive income (loss) | (241) | ||
Net current period other comprehensive income (loss) | 6,249 | (64,620) | (7,737) |
Related tax effect | (410) | 14,242 | 1,705 |
Balance at end of period | (47,373) | (53,212) | (2,834) |
Cash flow hedge | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | 5,980 | 1,197 | (1,013) |
Other comprehensive income (loss) before reclassifications | 1,403 | 7,815 | 2,557 |
Amounts reclassified from accumulated other comprehensive income (loss) | (4,622) | (1,164) | 513 |
Net current period other comprehensive income (loss) | (3,219) | 6,651 | 3,070 |
Related tax effect | 905 | (1,868) | (860) |
Balance at end of period | 3,666 | 5,980 | $ 1,197 |
Postretirement Benefit | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | 150 | ||
Other comprehensive income (loss) before reclassifications | 1 | 251 | |
Amounts reclassified from accumulated other comprehensive income (loss) | (66) | (42) | |
Net current period other comprehensive income (loss) | (65) | 209 | |
Related tax effect | (59) | ||
Balance at end of period | $ 85 | $ 150 |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Assets and liabilities measured on recurring basis | ||
Fair Value | $ 290,151,000 | $ 301,149,000 |
Derivative loan commitments | ||
Assets and liabilities measured on recurring basis | ||
Weighted average pull-through rate | 89% | 91% |
Recurring | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | $ 290,151,000 | $ 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 | 290,151,000 | 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) | 12 Months Ended | |||
Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Assets and liabilities measured on recurring basis | ||||
Number of transfers | item | 0 | 0 | ||
Assets | ||||
Securities available for sale, at fair value | $ 290,151,000 | $ 301,149,000 | ||
Loans held for sale | 19,686,000 | 18,544,000 | ||
Mortgage servicing rights | 46,111,000 | 48,138,000 | $ 38,268,000 | $ 24,833,000 |
Recurring | ||||
Assets | ||||
Securities available for sale, at fair value | 290,151,000 | 301,149,000 | ||
Loans held for sale | 19,686,000 | 18,544,000 | ||
Mortgage servicing rights | 46,111,000 | 48,138,000 | ||
Total assets | 384,772,000 | 405,157,000 | ||
Recurring | Derivative loan commitments | ||||
Assets | ||||
Derivative assets | 28,824,000 | 37,326,000 | ||
Liabilities | ||||
Derivative liabilities | 24,551,000 | 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 | 290,151,000 | 301,149,000 | ||
Loans held for sale | 19,686,000 | 18,544,000 | ||
Mortgage servicing rights | 46,111,000 | 48,138,000 | ||
Total assets | 384,288,000 | 404,670,000 | ||
Recurring | Level 2 | Derivative loan commitments | ||||
Assets | ||||
Derivative assets | 28,340,000 | 36,839,000 | ||
Liabilities | ||||
Derivative liabilities | 24,100,000 | 28,525,000 | ||
Recurring | Level 3 | ||||
Assets | ||||
Securities available for sale, at fair value | 0 | 0 | ||
Total assets | 484,000 | 487,000 | ||
Recurring | Level 3 | Derivative loan commitments | ||||
Assets | ||||
Derivative assets | 484,000 | 487,000 | ||
Liabilities | ||||
Derivative liabilities | $ 451,000 | $ 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 | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in Level 3 assets | |||
Balance at beginning of period | $ 487 | $ 1,583 | $ 12,623 |
Total gains (losses) included in net income | (3) | (1,096) | (11,040) |
Balance at end of period | 484 | 487 | 1,583 |
Changes in unrealized gains relating to instruments at period end | 484 | 487 | 1,583 |
Changes in Level 3 liabilities | |||
Balance at beginning of period | (104) | (189) | (2,545) |
Total gains (losses) included in net income | (347) | 85 | 2,356 |
Balance at end of period | (451) | (104) | (189) |
Changes in unrealized losses relating to instruments at period end | $ (451) | $ (104) | $ (189) |
FAIR VALUE OF ASSETS AND LIAB_6
FAIR VALUE OF ASSETS AND LIABILITIES - Impaired Loans (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Collateral-dependent impaired loans | ||
Assets and liabilities measured on non-recurring basis | ||
Total Losses | $ 4,171 | $ 8 |
Level 3 | Discount | Minimum | Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0.20 | |
Level 3 | Discount | Minimum | Commercial and industrial | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0.25 | |
Level 3 | Discount | Maximum | Commercial real estate | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0.20 | |
Level 3 | Discount | Maximum | Commercial and industrial | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0.50 | |
Non-recurring | Level 3 | Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Assets, Fair value | $ 5,746 | 349 |
Non-recurring | Level 3 | Collateral-dependent impaired loans | Sales Comparison Approach | ||
Assets and liabilities measured on non-recurring basis | ||
Assets, Fair value | $ 5,908 | $ 349 |
FAIR VALUE OF ASSETS AND LIAB_7
FAIR VALUE OF ASSETS AND LIABILITIES - Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Financial assets: | ||
Cash and cash equivalents | $ 227,350 | $ 98,017 |
Securities available for sale, at fair value | 290,151 | 301,149 |
Securities held to maturity | 19,262 | 19,274 |
Federal Home Loan Bank stock | 27,098 | 20,071 |
Loans held for sale | 19,686 | 18,544 |
Loans, net | 4,702,339 | 4,504,434 |
Retirement plan annuities | 15,170 | 14,630 |
Accrued interest receivable | 18,169 | 15,139 |
Financial liabilities: | ||
Deposits | 4,387,409 | 4,189,499 |
Subordinated debt | 34,285 | |
Mortgagors' escrow accounts | 8,872 | 9,537 |
Accrued interest payable | 5,251 | 2,325 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 227,350 | 98,017 |
Securities available for sale, at fair value | 290,151 | 301,149 |
Securities held to maturity | 19,796 | 19,949 |
Federal Home Loan Bank stock | 27,098 | 20,071 |
Loans held for sale | 19,686 | 18,544 |
Loans, net | 4,702,339 | 4,504,434 |
Retirement plan annuities | 15,170 | 14,630 |
Accrued interest receivable | 18,169 | 15,139 |
Derivatives | 28,824 | 37,326 |
Financial liabilities: | ||
Deposits | 4,387,409 | 4,189,499 |
Borrowed funds | 568,462 | 400,675 |
Subordinated debt | 34,285 | |
Mortgagors' escrow accounts | 8,872 | 9,537 |
Accrued interest payable | 5,251 | 2,325 |
Derivatives | 24,551 | 28,629 |
Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 227,350 | 98,017 |
Securities available for sale, at fair value | 290,151 | 301,149 |
Securities held to maturity | 19,262 | 19,274 |
Loans held for sale | 19,686 | 18,544 |
Loans, net | 4,482,448 | 4,383,613 |
Retirement plan annuities | 15,170 | 14,630 |
Accrued interest receivable | 18,169 | 15,139 |
Derivatives | 28,824 | 37,326 |
Financial liabilities: | ||
Deposits | 4,376,269 | 4,166,796 |
Borrowed funds | 567,158 | 399,655 |
Subordinated debt | 28,221 | |
Mortgagors' escrow accounts | 8,872 | 9,537 |
Accrued interest payable | 5,251 | 2,325 |
Derivatives | 24,551 | 28,629 |
Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 227,350 | 98,017 |
Fair Value | Level 2 | ||
Financial assets: | ||
Securities available for sale, at fair value | 290,151 | 301,149 |
Securities held to maturity | 19,262 | 19,274 |
Loans held for sale | 19,686 | 18,544 |
Accrued interest receivable | 18,169 | 15,139 |
Derivatives | 28,340 | 36,839 |
Financial liabilities: | ||
Borrowed funds | 567,158 | 399,655 |
Accrued interest payable | 5,251 | 2,325 |
Derivatives | 24,100 | 28,525 |
Fair Value | Level 3 | ||
Financial assets: | ||
Loans, net | 4,482,448 | 4,383,613 |
Retirement plan annuities | 15,170 | 14,630 |
Derivatives | 484 | 487 |
Financial liabilities: | ||
Deposits | 4,376,269 | 4,166,796 |
Subordinated debt | 28,221 | |
Mortgagors' escrow accounts | 8,872 | 9,537 |
Derivatives | $ 451 | $ 104 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
EARNINGS PER SHARE | |||
Net income available to common stockholders (in thousands) | $ 16,077 | $ 45,589 | $ 58,517 |
Average number of common shares outstanding | 46,732,435 | 50,293,762 | 54,454,113 |
Less: Average unallocated ESOP shares and non-vested restricted shares | (3,510,697) | (3,810,098) | (3,707,811) |
Weighted average number of common shares outstanding used to calculate basic earnings per common share | 43,221,738 | 46,483,664 | 50,746,302 |
Dilutive effect of share-based compensation | 197,884 | 634,793 | 776,833 |
Weighted average number of common shares outstanding used to calculate diluted earnings per common share | 43,419,622 | 47,118,457 | 51,523,135 |
Basic | $ 0.37 | $ 0.98 | $ 1.15 |
Diluted | $ 0.37 | $ 0.97 | $ 1.14 |
Antidilutive securities excluded from computation of earnings per share | 58,572 | 20 | 0 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Reporting Information | |||
Number of reportable segments | segment | 2 | ||
Net interest and dividend income | $ 127,271 | $ 148,986 | $ 131,370 |
Provision (benefit) for credit losses | 5,680 | 5,660 | (7,258) |
Net interest and dividend income, after provision (benefit) for credit losses | 121,591 | 143,326 | 138,628 |
Mortgage banking income: | |||
Gain on sale of mortgage loans | 10,404 | 15,970 | 61,883 |
Changes in mortgage servicing rights fair value | (4,684) | 5,332 | (380) |
Other | 9,099 | 9,948 | 15,831 |
Total mortgage banking income | 14,819 | 31,250 | 77,334 |
Other noninterest income (loss) | 27,035 | 26,059 | 23,352 |
Total noninterest income | 41,854 | 57,309 | 100,686 |
Noninterest expense | 138,320 | 138,906 | 158,862 |
Income before income taxes | 25,125 | 61,729 | 80,452 |
Income tax provision | 9,048 | 16,140 | 21,935 |
Net income | 16,077 | 45,589 | 58,517 |
Total assets at period end | 5,667,896 | 5,359,545 | 4,553,405 |
Goodwill at period end | 59,042 | 69,802 | 69,802 |
Operating Segments | HarborOne Bank | |||
Segment Reporting Information | |||
Net interest and dividend income | 129,157 | 149,301 | 129,785 |
Provision (benefit) for credit losses | 5,680 | 5,660 | (7,258) |
Net interest and dividend income, after provision (benefit) for credit losses | 123,477 | 143,641 | 137,043 |
Mortgage banking income: | |||
Intersegment gain (loss) | (1,063) | (3,604) | (3,665) |
Changes in mortgage servicing rights fair value | (346) | 618 | (137) |
Other | 769 | 873 | 1,090 |
Total mortgage banking income | (640) | (2,113) | (2,712) |
Other noninterest income (loss) | 26,996 | 25,930 | 23,308 |
Total noninterest income | 26,356 | 23,817 | 20,596 |
Noninterest expense | 107,268 | 110,407 | 102,557 |
Income before income taxes | 42,565 | 57,051 | 55,082 |
Income tax provision | 10,559 | 14,090 | 14,933 |
Net income | 32,006 | 42,961 | 40,149 |
Total assets at period end | 5,689,676 | 5,373,911 | 4,481,509 |
Goodwill at period end | 59,042 | 59,042 | 59,042 |
Operating Segments | HarborOne Mortgage. | |||
Segment Reporting Information | |||
Net interest and dividend income | 806 | 1,617 | 3,468 |
Net interest and dividend income, after provision (benefit) for credit losses | 806 | 1,617 | 3,468 |
Mortgage banking income: | |||
Gain on sale of mortgage loans | 10,404 | 15,970 | 61,883 |
Intersegment gain (loss) | 849 | 3,185 | 4,434 |
Changes in mortgage servicing rights fair value | (4,338) | 4,714 | (243) |
Other | 8,330 | 9,075 | 14,741 |
Total mortgage banking income | 15,245 | 32,944 | 80,815 |
Other noninterest income (loss) | (2) | 129 | 44 |
Total noninterest income | 15,243 | 33,073 | 80,859 |
Noninterest expense | 30,972 | 27,065 | 55,012 |
Income before income taxes | (14,923) | 7,625 | 29,315 |
Income tax provision | (944) | 2,777 | 7,569 |
Net income | (13,979) | 4,848 | 21,746 |
Total assets at period end | $ 96,942 | 124,229 | 173,545 |
Goodwill at period end | $ 10,760 | $ 10,760 |
CONDENSED FINANCIAL STATEMENT_3
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||||
Cash and due from banks | $ 38,876 | $ 39,712 | ||
Other assets | 97,697 | 106,402 | ||
Total assets | 5,667,896 | 5,359,545 | $ 4,553,405 | |
Liabilities and Stockholders' Equity | ||||
Subordinated debt | 34,285 | |||
Other liabilities and accrued expenses | 114,143 | 106,248 | ||
Stockholders' equity | 583,759 | 616,976 | $ 679,261 | $ 696,314 |
Total liabilities and stockholders' equity | 5,667,896 | 5,359,545 | ||
Parent Company | Reportable Legal Entities | ||||
Assets | ||||
Cash and due from banks | 34,319 | 77,014 | ||
Investment in common stock of HarborOne Bank | 526,302 | 549,888 | ||
Loan receivable - ESOP | 28,119 | 29,242 | ||
Other assets | 500 | 483 | ||
Total assets | 589,240 | 656,627 | ||
Liabilities and Stockholders' Equity | ||||
Subordinated debt | 34,285 | |||
Other liabilities and accrued expenses | 5,481 | 5,366 | ||
Stockholders' equity | 583,759 | 616,976 | ||
Total liabilities and stockholders' equity | $ 589,240 | $ 656,627 |
CONDENSED FINANCIAL STATEMENT_4
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY - Statement Of Net Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Net Income | |||
Other income | $ 3,690 | $ 4,357 | $ 2,823 |
Total income | 244,288 | 171,930 | 143,895 |
Interest expense | 117,017 | 22,944 | 12,525 |
Income tax benefit | 9,048 | 16,140 | 21,935 |
Net income | 16,077 | 45,589 | 58,517 |
Parent Company | Reportable Legal Entities | |||
Statement of Net Income | |||
Dividends from subsidiary | 49,500 | 13,000 | 90,000 |
Interest from bank deposits | 82 | 159 | 210 |
Interest on short-term investments | 4 | 2 | |
Interest on ESOP loan | 2,193 | 999 | 1,046 |
Other income | 41 | ||
Total income | 51,816 | 14,162 | 91,258 |
Interest expense | 2,775 | 2,095 | 2,095 |
Operating expenses | 2,273 | 2,432 | 2,338 |
Total expenses | 5,048 | 4,527 | 4,433 |
Income before income taxes and equity in undistributed net income (loss) of HarborOne Bank | 46,768 | 9,635 | 86,825 |
Income tax benefit | (568) | (726) | (566) |
Income before equity in income (loss) of subsidiaries | 47,336 | 10,361 | 87,391 |
Equity in undistributed net income (loss) of HarborOne Bank | (31,259) | 35,228 | (28,874) |
Net income | $ 16,077 | $ 45,589 | $ 58,517 |
CONDENSED FINANCIAL STATEMENT_5
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY - Statement of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 16,077 | $ 45,589 | $ 58,517 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Deferred income tax (benefit) provision | (1,778) | 3,162 | 6,427 |
Share-based compensation | 2,168 | 3,305 | 3,784 |
Net change in other assets | (192) | (20,388) | 32,974 |
Net change in other liabilities | 15,799 | 8,954 | (23,777) |
Net cash provided by operating activities | 53,508 | 68,899 | 224,295 |
Cash flows from investing activities: | |||
Net cash used by investing activities | (196,713) | (952,018) | (241,051) |
Cash flows from financing activities: | |||
Repurchase of common stock | (45,206) | (62,525) | (69,215) |
Repayment of subordinated debt | (35,000) | ||
Dividends paid | (12,826) | (12,188) | (9,195) |
Net cash provided by financing activities | 272,538 | 786,417 | 5,605 |
Net change in cash and cash equivalents | 129,333 | (96,702) | (11,151) |
Cash and cash equivalents at beginning of year | 98,017 | 194,719 | 205,870 |
Cash and cash equivalents at end of year | 227,350 | 98,017 | 194,719 |
Parent Company | Reportable Legal Entities | |||
Cash flows from operating activities: | |||
Net income | 16,077 | 45,589 | 58,517 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in undistributed net (income) loss of HarborOne Bank | 31,259 | (35,228) | 28,874 |
Deferred income tax (benefit) provision | (60) | 138 | (8) |
Share-based compensation | 454 | 286 | 545 |
Net change in other assets | 42 | 18 | 27 |
Net change in other liabilities | 83 | (97) | 391 |
Net cash provided by operating activities | 47,855 | 10,706 | 88,346 |
Cash flows from investing activities: | |||
Repayment of ESOP loan | 1,123 | 1,497 | 1,450 |
Advances to subsidiary | (2,193) | (999) | (1,046) |
Repayment of advances to subsidiary | 2,194 | 998 | 1,659 |
Net cash used by investing activities | 1,124 | 1,496 | 2,063 |
Cash flows from financing activities: | |||
Issuance of common stock | 643 | 8,366 | 643 |
Repurchase of common stock | (45,206) | (62,525) | (69,215) |
Repayment of subordinated debt | (35,000) | ||
Amortization of subordinated debt issuance costs | 715 | 126 | 126 |
Dividends paid | (12,826) | (12,188) | (9,195) |
Net cash provided by financing activities | (91,674) | (66,221) | (77,641) |
Net change in cash and cash equivalents | (42,695) | (54,019) | 12,768 |
Cash and cash equivalents at beginning of year | 77,014 | 131,033 | 118,265 |
Cash and cash equivalents at end of year | $ 34,319 | $ 77,014 | $ 131,033 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 16,077 | $ 45,589 | $ 58,517 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 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 |