Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 28, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
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, $0.01 par value | |
Trading Symbol | HONE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001769617 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 58,342,464 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 29,180 | $ 24,464 |
Short-term investments | 108,338 | 187,152 |
Total cash and cash equivalents | 137,518 | 211,616 |
Securities available for sale, at fair value | 280,308 | 239,473 |
Securities held to maturity, at amortized cost | 26,372 | |
Federal Home Loan Bank stock, at cost | 11,631 | 17,121 |
Assets held for sale | 8,536 | |
Loans held for sale, at fair value | 190,373 | 110,552 |
Loans | 3,515,831 | 3,171,558 |
Less: Allowance for loan losses | (49,223) | (24,060) |
Net loans | 3,466,608 | 3,147,498 |
Accrued interest receivable | 12,504 | 9,807 |
Other real estate owned and repossessed assets | 898 | 719 |
Mortgage servicing rights, at fair value | 20,159 | 17,150 |
Property and equipment, net | 49,399 | 47,951 |
Retirement plan annuities | 13,641 | 13,333 |
Bank-owned life insurance | 87,400 | 85,735 |
Goodwill. | 69,802 | 69,802 |
Intangible assets | 4,694 | 6,035 |
Other assets | 83,384 | 47,221 |
Total assets | 4,428,319 | 4,058,921 |
Deposits: | ||
Demand deposit accounts | 650,336 | 406,403 |
NOW accounts | 202,020 | 165,877 |
Regular savings and club accounts | 912,017 | 626,685 |
Money market deposit accounts | 815,644 | 856,830 |
Term certificate accounts | 785,871 | 887,078 |
Total deposits | 3,365,888 | 2,942,873 |
Short-term borrowed funds | 95,000 | 183,000 |
Long-term borrowed funds | 141,106 | 171,132 |
Subordinated debt | 34,002 | 33,907 |
Mortgagors' escrow accounts | 7,979 | 6,053 |
Accrued interest payable | 1,001 | 1,669 |
Other liabilities and accrued expenses | 89,240 | 54,493 |
Total liabilities | 3,734,216 | 3,393,127 |
Commitments and contingencies (Notes 9 and 10) | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 58,480,543 shares issued; 58,342,464 and 58,418,021 shares outstanding at September 30, 2020 and December 31, 2019, respectively | 584 | 584 |
Additional paid-in capital | 463,531 | 460,232 |
Retained earnings | 261,304 | 237,356 |
Treasury stock, at cost, 138,079 and 71,201 shares at September 30, 2020 and December 31, 2019, respectively | (1,333) | (721) |
Accumulated other comprehensive income | 1,776 | 1,480 |
Unearned compensation - ESOP | (31,759) | (33,137) |
Total stockholders' equity | 694,103 | 665,794 |
Total liabilities and stockholders' equity | $ 4,428,319 | $ 4,058,921 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | ||
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 | 58,480,543 | 58,480,543 |
Common stock, shares outstanding | 58,342,464 | 58,418,021 |
Treasury, shares | 138,079 | 71,201 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Interest and dividend income: | |||||
Interest and fees on loans | $ 34,496 | $ 36,230 | $ 102,491 | $ 106,033 | |
Interest on loans held for sale | 1,060 | 747 | 2,625 | 1,647 | |
Interest on taxable securities | 1,312 | 1,450 | 4,446 | 4,816 | |
Interest on non-taxable securities | 5 | 92 | 103 | 423 | |
Other interest and dividend income | 175 | 1,211 | 1,173 | 2,142 | |
Total interest and dividend income | 37,048 | 39,730 | 110,838 | 115,061 | |
Interest expense: | |||||
Interest on deposits | 4,520 | 9,972 | 19,018 | 27,577 | |
Interest on FHLB borrowings | 835 | 1,249 | 2,933 | 5,203 | |
Interest on subordinated debentures | 524 | 524 | 1,571 | 1,553 | |
Total interest expense | 5,879 | 11,745 | 23,522 | 34,333 | |
Net interest and dividend income | 31,169 | 27,985 | 87,316 | 80,728 | |
Provision for loan losses | 13,454 | 889 | 27,207 | 3,496 | |
Net interest and dividend income, after provision for loan losses | 17,715 | 27,096 | 60,109 | 77,232 | |
Mortgage banking income: | |||||
Gain on sale of mortgage loans | 34,055 | 11,015 | 77,195 | 24,086 | |
Changes in mortgage servicing rights fair value | (193) | (2,474) | (5,691) | (6,866) | |
Other | 4,281 | 2,964 | 10,962 | 7,442 | |
Total mortgage banking income | 38,143 | 11,505 | 82,466 | 24,662 | |
Deposit account fees | 3,451 | 4,186 | 10,351 | 12,020 | |
Income on retirement plan annuities | 104 | 104 | 308 | 300 | |
Gain on sale and call of securities, net | 77 | 2,533 | 1,344 | ||
Bank-owned life insurance income | 560 | 256 | 1,665 | 762 | |
Other income | 2,203 | 1,145 | 4,642 | 3,745 | |
Total noninterest income | 44,461 | 17,273 | 101,965 | 42,833 | |
Noninterest expense: | |||||
Compensation and benefits | 29,839 | 23,238 | 78,493 | 63,068 | |
Occupancy and equipment | 4,581 | 4,171 | 13,296 | 13,030 | |
Data processing | 2,119 | 2,196 | 6,576 | 6,441 | |
Loan expenses | 3,189 | 1,704 | 7,433 | 4,309 | |
Marketing | 817 | 799 | 2,750 | 2,934 | |
Deposit expenses | 475 | 405 | 1,435 | 1,189 | |
Postage and printing | 455 | 435 | 1,386 | 1,345 | |
Professional fees | 1,458 | 889 | 4,204 | 3,219 | |
Foreclosed and repossessed assets | 27 | 42 | 165 | (34) | |
Deposit insurance | 310 | (225) | 860 | 1,030 | |
Other expenses | 2,452 | 2,549 | 8,350 | 7,345 | |
Total noninterest expense | 45,722 | 36,203 | 124,948 | 103,876 | |
Income before income taxes | 16,454 | 8,166 | 37,126 | 16,189 | |
Income tax provision | 4,561 | 1,053 | 9,934 | 2,228 | |
Net income | $ 11,893 | $ 7,113 | $ 27,192 | $ 13,961 | |
Earnings per common share: | |||||
Basic | [1] | $ 0.22 | $ 0.13 | $ 0.50 | $ 0.25 |
Diluted | [1] | $ 0.22 | $ 0.13 | $ 0.50 | $ 0.25 |
Weighted average shares outstanding: | |||||
Basic | [1] | 54,465,339 | 55,638,734 | 54,436,090 | 56,855,930 |
Diluted | [1] | 54,465,339 | 55,638,734 | 54,436,090 | 56,855,930 |
[1] | Share amounts related to periods prior to the August 14, 2019 closing of the conversion offering have been restated to give retroactive recognition to the 1.795431 exchange ratio applied in the conversion offering (see Note 1). |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) | Aug. 14, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Consolidated Statements of Operations | |||||
Stock conversion ratio | 1.795431 | 1.795431 | 1.795431 | 1.795431 | 1.795431 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Consolidated Statements of Comprehensive Income | ||||
Net income | $ 11,893 | $ 7,113 | $ 27,192 | $ 13,961 |
Cash flow hedge: | ||||
Unrealized holding gains (losses) | 32 | (1,581) | ||
Reclassification adjustment for net losses (gains) included in net income | 82 | (67) | ||
Net change in unrealized gains (losses) on derivatives in cash flow hedging instruments | 114 | (1,648) | ||
Related tax effect | (32) | 461 | ||
Net-of-tax amount | 82 | (1,187) | ||
Securities available for sale: | ||||
Unrealized holding gains (losses) | (1,335) | 609 | 4,212 | 6,780 |
Reclassification of unrealized gain on securities transferred to available for sale | 522 | |||
Reclassification adjustment for net realized gains | (77) | (2,533) | (1,344) | |
Net unrealized gains (losses) | (1,335) | 532 | 2,201 | 5,436 |
Related tax effect | 132 | (117) | (718) | (1,197) |
Net-of-tax amount | (1,203) | 415 | 1,483 | 4,239 |
Total other comprehensive income (loss) | (1,121) | 415 | 296 | 4,239 |
Comprehensive income | $ 10,772 | $ 7,528 | $ 27,488 | $ 18,200 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock, at Cost | Accumulated Other Comprehensive Income (Loss) | Unearned Compensation - ESOP | Total | ||
Balance at beginning of period at Dec. 31, 2018 | $ 327 | $ 152,156 | $ 219,088 | $ (1,548) | $ (2,358) | $ (10,091) | $ 357,574 | ||
Balance, beginning of period (in shares) at Dec. 31, 2018 | [1] | 58,465,505 | |||||||
Comprehensive income | 13,961 | 4,239 | 18,200 | ||||||
Conversion of HarborOne Bancorp, Inc. | $ 257 | 303,854 | 304,111 | ||||||
Conversion of HarborOne Bancorp, Inc. (in shares) | [1] | 8,760 | |||||||
Purchase of shares by the ESOP | (24,830) | (24,830) | |||||||
Treasury stock retired | (1,548) | 1,548 | |||||||
Contribution of HarborOne Bancorp Mutual Bancshares | 99 | 99 | |||||||
ESOP shares committed to be released | 370 | 1,083 | 1,453 | ||||||
Restricted stock awards granted, net of awards forfeited (in shares) | [1] | 26,520 | |||||||
Share-based compensation expense | 3,668 | 3,668 | |||||||
Treasury stock purchased | (721) | (721) | |||||||
Treasury stock purchased (in shares) | [1] | (71,201) | |||||||
Balance at end of period at Sep. 30, 2019 | $ 584 | 458,599 | 233,049 | (721) | 1,881 | (33,838) | 659,554 | ||
Balance, end of period (in shares) at Sep. 30, 2019 | [1] | 58,429,584 | |||||||
Balance at beginning of period at Jun. 30, 2019 | $ 327 | 154,730 | 225,936 | (1,548) | 1,466 | (9,793) | 371,118 | ||
Balance, beginning of period (in shares) at Jun. 30, 2019 | [1] | 58,483,025 | |||||||
Comprehensive income | 7,113 | 415 | 7,528 | ||||||
Conversion of HarborOne Bancorp, Inc. | $ 257 | 303,854 | 304,111 | ||||||
Conversion of HarborOne Bancorp, Inc. (in shares) | [1] | 8,760 | |||||||
Purchase of shares by the ESOP | (24,830) | (24,830) | |||||||
Treasury stock retired | (1,548) | 1,548 | |||||||
Contribution of HarborOne Bancorp Mutual Bancshares | 99 | 99 | |||||||
ESOP shares committed to be released | 158 | 785 | 943 | ||||||
Restricted stock awards granted, net of awards forfeited (in shares) | [1] | 9,000 | |||||||
Share-based compensation expense | 1,306 | 1,306 | |||||||
Treasury stock purchased | (721) | (721) | |||||||
Treasury stock purchased (in shares) | [1] | (71,201) | |||||||
Balance at end of period at Sep. 30, 2019 | $ 584 | 458,599 | 233,049 | (721) | 1,881 | (33,838) | 659,554 | ||
Balance, end of period (in shares) at Sep. 30, 2019 | [1] | 58,429,584 | |||||||
Balance at beginning of period at Dec. 31, 2019 | $ 584 | 460,232 | 237,356 | (721) | 1,480 | (33,137) | $ 665,794 | ||
Balance, beginning of period (in shares) at Dec. 31, 2019 | 58,418,021 | [1] | 58,418,021 | ||||||
Comprehensive income | 27,192 | 296 | $ 27,488 | ||||||
Dividends declared | (3,244) | (3,244) | |||||||
ESOP shares committed to be released | 156 | 1,378 | 1,534 | ||||||
Restricted stock awards forfeited (in shares) | [1] | 8,679 | |||||||
Share-based compensation expense | 3,143 | 3,143 | |||||||
Treasury stock purchased | (612) | (612) | |||||||
Treasury stock purchased (in shares) | [1] | (66,878) | |||||||
Balance at end of period at Sep. 30, 2020 | $ 584 | 463,531 | 261,304 | (1,333) | 1,776 | (31,759) | $ 694,103 | ||
Balance, end of period (in shares) at Sep. 30, 2020 | 58,342,464 | [1] | 58,342,464 | ||||||
Balance at beginning of period at Jun. 30, 2020 | $ 584 | 462,881 | 251,032 | (721) | 2,897 | (32,218) | $ 684,455 | ||
Balance, beginning of period (in shares) at Jun. 30, 2020 | [1] | 58,418,021 | |||||||
Comprehensive income | 11,893 | (1,121) | 10,772 | ||||||
Dividends declared | (1,621) | (1,621) | |||||||
ESOP shares committed to be released | 33 | 459 | 492 | ||||||
Restricted stock awards forfeited (in shares) | [1] | 8,679 | |||||||
Share-based compensation expense | 617 | 617 | |||||||
Treasury stock purchased | (612) | (612) | |||||||
Treasury stock purchased (in shares) | [1] | (66,878) | |||||||
Balance at end of period at Sep. 30, 2020 | $ 584 | $ 463,531 | $ 261,304 | $ (1,333) | $ 1,776 | $ (31,759) | $ 694,103 | ||
Balance, end of period (in shares) at Sep. 30, 2020 | 58,342,464 | [1] | 58,342,464 | ||||||
[1] | Share amounts related to periods prior to the August 14, 2019 closing of the conversion offering have been restated to give retroactive recognition to the 1.795431 exchange ratio applied in the conversion offering (see Note 1). |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020$ / sharesshares | Sep. 30, 2019USD ($)shares | Sep. 30, 2020$ / sharesshares | Sep. 30, 2019USD ($)shares | |
Consolidated Statements of Changes in Stockholders' Equity | ||||
Dividends declared per share | $ / shares | $ 0.03 | $ 0.06 | ||
ESOP shares committed to be released (in shares) | 57,680 | 78,588 | 173,042 | 108,268 |
Shares purchased by the ESOP | 2,482,945 | 2,482,945 | ||
Conversion costs | $ | $ 6.3 | $ 6.3 | ||
Stock conversion ratio | 1.795431 | 1.795431 | 1.795431 | 1.795431 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 27,192 | $ 13,961 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Provision for loan losses | 27,207 | 3,496 |
Net amortization of securities premiums/discounts | 1,371 | 196 |
Proceeds from sale of loans | 1,715,878 | 716,894 |
Loans originated for sale | (1,712,957) | (751,540) |
Net amortization of net deferred loan costs/fees and premiums | 984 | 2,152 |
Depreciation and amortization of premises and equipment | 2,997 | 3,296 |
Change in mortgage servicing rights fair value | 5,691 | 6,866 |
Mortgage and consumer servicing rights capitalized | (8,700) | (716) |
Accretion of fair value adjustment on loans and deposits, net | (2,848) | (1,800) |
Amortization of other intangible assets | 1,341 | 1,897 |
Amortization of subordinated debt issuance costs | 95 | 76 |
Gain on sale and call of securities, net | (2,533) | (1,344) |
Net gains on mortgage loan sales, including fair value adjustments | (82,741) | (25,368) |
Bank-owned life insurance income | (1,665) | (762) |
Income on retirement plan annuities | (308) | (300) |
Disposal of asset held for sale | 8,536 | |
Net loss on disposal of premises and equipment | 101 | |
Net (gain) loss on sale and write-down of other real estate owned and repossessed assets | 57 | (94) |
ESOP expense | 1,534 | 1,453 |
Share-based compensation expense | 3,143 | 3,668 |
Net change in: | ||
Change in other assets | (39,116) | (21,260) |
Change in other liabilities | 29,187 | 1,492 |
Net cash used by operating activities | (25,554) | (47,737) |
Activity in securities available for sale: | ||
Maturities, prepayments and calls | 69,870 | 38,786 |
Purchases | (153,747) | (55,369) |
Sales | 67,586 | 28,391 |
Activity in securities held to maturity: | ||
Maturities, prepayment and calls | 432 | 17,525 |
Sales | 4,759 | |
Net redemption of FHLB stock | 5,490 | 11,503 |
Participation-in loan purchases | (21,994) | (28,931) |
Loan originations, net of principal payments | (322,973) | (100,226) |
Proceeds from sale of other real estate owned and repossessed assets | 855 | 2,145 |
Additions to property and equipment | (4,546) | (3,248) |
Cash received in MHC merger | 99 | |
Net cash used by investing activities | (354,268) | (89,325) |
Cash flows from financing activities: | ||
Net increase in deposits | 422,436 | 238,708 |
Net change in short-term borrowed funds | (88,000) | (230,000) |
Proceeds from other borrowed funds and subordinated debt | 40,000 | 21,220 |
Repayment of other borrowed funds | (70,026) | (40,016) |
Net change in mortgagors' escrow accounts | 1,926 | 1,700 |
Purchase of shares by the ESOP | (24,830) | |
Treasury stock purchased | (612) | (721) |
Net proceeds from sale of common stock | 304,111 | |
Net cash provided by financing activities | 305,724 | 270,172 |
Net change in cash and cash equivalents | (74,098) | 133,110 |
Cash and cash equivalents at beginning of year | 211,616 | 105,521 |
Cash and cash equivalents at end of year | 137,518 | 238,631 |
Supplemental cash flow information: | ||
Interest paid on deposits | 19,282 | 27,654 |
Interest paid on borrowed funds | 5,146 | 7,531 |
Income taxes paid, net | 13,040 | 2,341 |
Transfer of loans to other real estate owned and repossessed assets | 1,093 | $ 1,680 |
Transfer of securities held to maturity to available for sale, fair value | 22,051 | |
Dividends declared | $ 3,244 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The unaudited interim Consolidated Financial Statements of HarborOne Bancorp, Inc. (the “Company”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by the U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying Consolidated Financial Statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2019 and 2018 and notes thereto included in the Company’s Annual Report on Form 10-K. The unaudited interim Consolidated Financial Statements include the accounts of the Company; the Company’s subsidiaries, Legion Parkway Company LLC, a security corporation, HarborOne Bank (the “Bank”); and the Bank’s wholly-owned subsidiaries, which consist of HarborOne Mortgage, LLC (“HarborOne Mortgage”), a passive investment corporation, and two security corporations. The passive investment corporation maintains and manages certain assets of the Bank. The security corporations were established for the purpose of buying, holding and selling securities on their own behalf. All significant intercompany balances and transactions have been eliminated in consolidation. Recent Events ● Net interest income could be reduced. In accordance with regulatory guidance, the Company is actively working with borrowers impacted by the COVID-19 pandemic to defer payments. While interest will continue to be recognized in accordance with GAAP, should eventual credit losses on these deferments emerge, interest income would be negatively impacted. As of September 30, 2020, the Bank had 99 active payment deferrals on loans with a total principal balance of $100.0 million, primarily commercial real estate loans. Loans with a total principal balance of $253.3 million were out of the deferral period and paying the loan as agreed and loans with a total principal balance of $5.8 million were out of the deferral period and delinquent more than 30 days. ● The provision for loan losses could increase. Continued uncertainty regarding the severity and duration of the COVID-19 pandemic and related economic effects will continue to affect the accounting for loan losses. It also is possible that asset quality could worsen, and loan charge-offs increase. The Company participated in the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) providing loans to small businesses negatively impacted by the COVID-19 pandemic. PPP loans are fully guaranteed by the U.S. government. ● Noninterest income could be reduced. Uncertainty regarding the severity and duration of the COVID-19 pandemic could cause further volatility in the financial markets. The COVID-19 pandemic and the measures taken to control its spread may disrupt the mortgage loan origination process. Mortgage banking revenues are dependent on mortgage origination volume and are sensitive to interest rates and the condition of housing markets. ● Valuation and fair value measurement challenges may occur. Management performed an interim impairment assessment on goodwill as a result of changes in the macroeconomic environment resulting from the COVID-19 pandemic. The results of the interim impairment assessment indicated that the remaining fair value exceeded the carrying value for both reporting units. The COVID-19 pandemic could cause further and sustained decline in the Company’s stock price or the occurrence of additional valuation triggering events that could result in an impairment charge to earnings. Conversion and Reorganization Depositors Insurance Fund and Share Insurance Fund Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 26 full-service branches in Massachusetts and Rhode Island, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains more than 30 offices in Massachusetts, Rhode Island, New Hampshire, Maine, New Jersey and Florida and originates loans in four 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. Use of Estimates In preparing unaudited interim Consolidated Financial Statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuations of mortgage servicing rights, derivatives, goodwill and deferred tax assets. Allowance for Loan Losses The allowance for loan losses is established based upon the level of estimated probable losses in the current loan portfolio. Loan losses are charged against the allowance when management believes the collectability of a loan balance is doubtful. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general, specific and unallocated components, as further described below. General component The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by the Company’s loan segments. Management uses a Residential real estate – The Company generally does not originate portfolio loans with a loan-to-value ratio greater than 80 percent without obtaining private mortgage insurance and does not generally grant loans that would be classified as subprime upon origination. The Company generally has first or second liens on the property securing equity lines of credit. Loans in this segment are generally collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, can have an effect on the credit quality in this segment. Residential construction – Residential construction loans include loans to build one- to four-family owner-occupied properties, which are subject to the same credit quality factors as residential real estate loans. Commercial real estate – Commercial real estate loans are primarily secured by income-producing properties in southeastern New England. The underlying cash flows generated by the properties can be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, could have an effect on the credit quality in this segment. Management obtains rent rolls annually and continually monitors the cash flows of these loans. Commercial construction – Commercial construction loans may include speculative real estate development loans for which payment is derived from lease or sale of the property. Credit risk is affected by cost overruns, time to lease or sell at an adequate price, and market conditions. Commercial and industrial – Commercial and industrial loans are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer or business spending, could have an effect on the credit quality in this segment. Consumer – Consumer loans are generally secured by automobiles or unsecured, and repayment is dependent on the credit quality of the individual borrower. Specific Reserves The specific reserves relate to loans that are classified as impaired. Residential real estate and commercial loans are evaluated for impairment on a loan-by-loan basis. Impairment is determined by nonaccrual status, whether a loan is subject to a troubled debt restructuring agreement or in the case of certain loans, based on the internal credit rating. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, except for troubled debt restructurings (“TDRs”), the Company does not separately identify individual consumer loans for impairment evaluation. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The Company periodically may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a TDR. All TDRs are initially classified as impaired. Impairment is measured by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance is established when the discounted cash flows or collateral value of the impaired loan is lower than the carrying value of that loan. Unallocated component The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general reserves in the portfolio. The unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. Additionally, the Company's unseasoned commercial portfolio and use of peer group data to establish general reserves for the commercial portfolio adds another element of risk to management's estimates. Earnings Per Share Basic earnings per share represents income available to common shareholders 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. The restricted stock awards are participating securities; therefore, unvested awards are included as common shares outstanding in the computation of basic earnings per share. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate to outstanding stock option awards and are determined using the treasury stock method. Recent Accounting Pronouncements As an “emerging growth company”, as defined in Title 1 of the Jumpstart Our Business Startups (“JOBS”) Act, the Company has elected to use the extended transition period to delay the adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. As of September 30, 2020, there is no significant difference in the comparability of the financial statements as a result of this extended transition period. The Company’s emerging growth company status is scheduled to end December 31, 2021 unless a triggering event occurs sooner. In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting These provisions apply to contract modifications that reference LIBOR or another reference rate expected to be discounted because of reference rate reform. Qualifying modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification would be considered “minor” so that any existing unamortized deferred loan origination fees and costs would carry forward and continue to be amortized. Qualifying modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for hedge accounting. ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022, with adoption permitted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected, the amendments must be applied prospectively for all eligible contract modifications. The Company is currently evaluating the effect that this ASU will have on the Company’s consolidated financial statements. ASU No. 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), was issued in December 2019 to simplify the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. Certain provisions under ASU 2019-12 require prospective application, some require modified retrospective application through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption, while other provisions require retrospective application to all periods presented in the consolidated financial statements upon adoption. The adoption of ASU 2019-12 is not expected to have a material impact on the Company’s consolidated financial statements. In August 2017, FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. corrections if a company applies the shortcut method inappropriately. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For non-public entities, this ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of this standard is not expected to have a material effect on the Company’s Consolidated Financial Statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) |
SECURITIES
SECURITIES | 9 Months Ended |
Sep. 30, 2020 | |
SECURITIES | |
SECURITIES | 2. SECURITIES The amortized cost and fair value of securities with gross unrealized gains and losses is as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (in thousands) September 30, 2020: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 10,003 $ 134 $ — $ 10,137 U.S. government agency and government-sponsored residential mortgage-backed securities 230,072 3,067 512 232,627 U.S. government-sponsored collateralized mortgage obligations 19,675 465 — 20,140 SBA asset-backed securities 16,458 946 — 17,404 Total securities available for sale $ 276,208 $ 4,612 $ 512 $ 280,308 December 31, 2019: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 14,994 $ 210 $ — $ 15,204 U.S. government agency and government-sponsored residential mortgage-backed securities 163,982 1,456 265 165,173 U.S. government-sponsored collateralized mortgage obligations 26,137 243 7 26,373 SBA asset-backed securities 32,461 286 24 32,723 Total securities available for sale $ 237,574 $ 2,195 $ 296 $ 239,473 Securities held to maturity U.S. government agency and government-sponsored residential mortgage-backed securities $ 12,682 $ 86 $ 6 $ 12,762 U.S. government-sponsored collateralized mortgage obligations 1,433 69 — 1,502 SBA asset-backed securities 5,308 124 — 5,432 Municipal bonds 6,949 282 — 7,231 Total securities held to maturity $ 26,372 $ 561 $ 6 $ 26,927 In February 2020, with the intention to reduce credit risk in the investment portfolio and to support the Bank’s credit risk policy, the Bank executed the sale of five held-to-maturity investments. The securities had a total amortized cost of $4.5 million and a $1.3 million gain on sale was recorded during the three months ended March 31, 2020. As a result, the remaining held to maturity securities, with an amortized cost of $21.5 million and an unrealized gain of approximately $522,000, were transferred to the available for sale category at a fair value of $22.1 million. Twenty-six mortgage-backed securities with a combined fair value of $48.9 million are pledged as collateral for interest rate swap agreements as of September 30, 2020 (see Note 10). Seven mortgage-backed securities with a combined fair value of $15.7 million were pledged as collateral for interest rate swap agreements as of December 31, 2019. The amortized cost and fair value of debt securities by contractual maturity at September 30, 2020 is as follows: Available for Sale Amortized Fair Cost Value (in thousands) After 1 year through 5 years $ 5,000 $ 5,012 After 5 years through 10 years 5,003 5,125 Over 10 years — — 10,003 10,137 U.S. government agency and government-sponsored residential mortgage-backed securities 230,072 232,627 U.S. government-sponsored collateralized mortgage obligations 19,675 20,140 SBA asset-backed securities 16,458 17,404 Total $ 276,208 $ 280,308 SBA asset-backed securities are U.S. government-sponsored residential mortgage-backed securities, collateralized mortgage obligations and securities whose underlying assets are loans from the SBA and have stated maturities of 2 to 30 years ; however, it is expected that such securities will have shorter actual lives due to prepayments. U.S. government and government-sponsored enterprise obligations are callable at the discretion of the issuer. U.S. government and government-sponsored enterprise obligations with a total fair value of $10.1 million have final maturities ranging from 3 years to 8 years and call features ranging from 1 month to 1 year . The following table shows proceeds and gross realized gains and losses related to the sales and calls of securities for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Sales Proceeds $ — $ — $ 72,333 $ 28,391 Gross gains — — 2,521 1,267 Gross losses — — — — Calls Proceeds $ 2,000 $ 11,775 $ 8,635 $ 20,145 Gross gains — 77 12 77 Gross losses — — — — Information pertaining to securities with gross unrealized losses at September 30, 2020 and December 31, 2019 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) September 30, 2020: Securities available for sale U.S. government agency and government-sponsored residential mortgage-backed securities $ 493 $ 81,377 $ 19 $ 3,721 December 31, 2019: Securities available for sale U.S. government agency and government-sponsored residential mortgage-backed securities $ 147 $ 47,343 $ 118 $ 7,986 U.S. government-sponsored collateralized mortgage obligations 1 884 6 795 SBA asset-backed securities 24 3,964 — — $ 172 $ 52,191 $ 124 $ 8,781 Securities held to maturity U.S. government agency and government-sponsored residential mortgage-backed securities $ — $ — $ 6 $ 2,538 Management evaluates securities for other-than-temporary impairment (“OTTI”) at each reporting period, and more frequently when economic or market concerns warrant such evaluation. At September 30, 2020, 20 securities with an amortized cost of $85.6 million have unrealized losses with aggregate depreciation of 0.60% from the Company’s amortized cost basis. The unrealized losses on the Company’s securities were primarily caused by changes in interest rates. All of these investments are guaranteed by government and government-sponsored enterprises. Accordingly, it is expected that the securities would not be settled at a price less than the par value of the investment. Because the decline in fair value is attributable to changes in interest rates and not to credit quality, and because the Company does not intend to sell the investments and it is more likely than not that the Company will not be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider these investments to be OTTI at September 30, 2020. |
LOANS HELD FOR SALE
LOANS HELD FOR SALE | 9 Months Ended |
Sep. 30, 2020 | |
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: September 30, December 31, 2020 2019 (in thousands) Loans held for sale, fair value $ 190,373 $ 110,552 Loans held for sale, contractual principal outstanding 181,746 107,472 Fair value less unpaid principal balance $ 8,627 $ 3,080 The Company has elected the fair value option for mortgage loans held for sale to better match changes in fair value of the loans with changes in the fair value of the forward sale commitment contracts used to economically hedge them. Changes in fair value of mortgage loans held for sale accounted for under the fair value option election amounted to an increase of $5.5 million in the nine months ended September 30, 2020 to $8.6 million, compared to an increase of $1.3 million in the nine months ended September 30, 2019. These amounts are offset in earnings by the changes in fair value of forward sale commitments. The changes in fair value are reported as a component of gain on sale of mortgage loans in the Unaudited Consolidated Statements of Income. At September 30, 2020 and December 31, 2019, there were no loans held for sale that were greater than 90 days past due. |
LOANS
LOANS | 9 Months Ended |
Sep. 30, 2020 | |
LOANS | |
LOANS | 4. LOANS A summary of the balances of loans follows: September 30, December 31, 2020 2019 (in thousands) Residential real estate: One- to four-family $ 954,198 $ 937,305 Second mortgages and equity lines of credit 150,315 155,716 Residential real estate construction 26,422 14,055 1,130,935 1,107,076 Commercial: Commercial real estate 1,380,071 1,168,412 Commercial construction 211,953 153,907 Commercial and industrial 480,129 306,282 Total commercial loans 2,072,153 1,628,601 Consumer loans: Auto 303,598 424,592 Personal 9,145 11,289 Total consumer loans 312,743 435,881 Total loans 3,515,831 3,171,558 Allowance for loan losses (49,223) (24,060) Loans, net $ 3,466,608 $ 3,147,498 The Company has transferred a portion of its originated commercial real estate loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying unaudited interim Consolidated Balance Sheets. The Company and participating lenders share ratably in cash flows and any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders and disburses required escrow funds to relevant parties. At September 30, 2020 and December 31, 2019, the Company was servicing loans for participants aggregating $260.5 million and $195.2 million, respectively. Acquired Loans The loans purchased from Coastway Bancorp, Inc. included $5.4 million in purchased credit impaired (“PCI”) loans. PCI loans were primarily residential real estate loans. The following table provides certain information pertaining to PCI loans: September 30, December 31, 2020 2019 (in thousands) Outstanding balance $ 4,354 $ 4,609 Carrying amount $ 4,133 $ 4,378 The following table summarizes activity in the accretable yield for PCI loans: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Balance at beginning of period $ 145 $ 169 $ 149 $ 185 Additions — — — — Accretion (3) (5) (7) (7) Reclassification from nonaccretable difference — — — (14) Balance at end of period $ 142 $ 164 $ 142 $ 164 The following is the activity in the allowance for loan losses for the three and nine months ended September 30, 2020 and 2019: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at June 30, 2019 $ 3,100 $ 11,100 $ 2,927 $ 2,512 $ 1,063 $ 1,559 $ 22,261 Provision (credit) for loan losses 1 739 (366) 34 113 368 889 Charge-offs — — — (43) (216) — (259) Recoveries 74 1 — — 78 — 153 Balance at September 30, 2019 $ 3,175 $ 11,840 $ 2,561 $ 2,503 $ 1,038 $ 1,927 $ 23,044 Balance at June 30, 2020 $ 5,857 $ 18,389 $ 3,215 $ 3,562 $ 2,204 $ 2,880 $ 36,107 Provision (credit) for loan losses 1,721 7,771 962 1,617 643 740 13,454 Charge-offs — (62) — (213) (140) — (415) Recoveries 22 — — — 55 — 77 Balance at September 30, 2020 $ 7,600 $ 26,098 $ 4,177 $ 4,966 $ 2,762 $ 3,620 $ 49,223 Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2018 $ 3,239 $ 10,059 $ 2,707 $ 2,286 $ 1,154 $ 1,210 $ 20,655 Provision (credit) for loan losses (226) 1,775 (146) 1,035 341 717 3,496 Charge-offs (136) — — (833) (660) — (1,629) Recoveries 298 6 — 15 203 — 522 Balance at September 30, 2019 $ 3,175 $ 11,840 $ 2,561 $ 2,503 $ 1,038 $ 1,927 $ 23,044 Balance at December 31, 2019 $ 3,178 $ 12,875 $ 2,526 $ 2,977 $ 1,010 $ 1,494 $ 24,060 Provision (credit) for loan losses 4,270 14,458 1,651 2,560 2,142 2,126 27,207 Charge-offs (52) (1,236) — (790) (519) — (2,597) Recoveries 204 1 — 219 129 — 553 Balance at September 30, 2020 $ 7,600 $ 26,098 $ 4,177 $ 4,966 $ 2,762 $ 3,620 $ 49,223 Allocation of the allowance to loan segments at September 30, 2020 and December 31, 2019 follows: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) September 30, 2020: Loans: Impaired loans $ 28,061 $ 4,943 $ 10,971 $ 10,089 $ — $ 54,064 Non-impaired loans 1,102,874 1,375,128 200,982 470,040 312,743 3,461,767 Total loans $ 1,130,935 $ 1,380,071 $ 211,953 $ 480,129 $ 312,743 $ 3,515,831 Allowance for loan losses: Impaired loans $ 950 $ — $ 251 $ 611 $ — $ — $ 1,812 Non-impaired loans 6,650 26,098 3,926 4,355 2,762 3,620 47,411 Total allowance for loan losses $ 7,600 $ 26,098 $ 4,177 $ 4,966 $ 2,762 $ 3,620 $ 49,223 December 31, 2019: Loans: Impaired loans $ 27,275 $ 530 $ 11,244 $ 5,831 $ — $ 44,880 Non-impaired loans 1,079,801 1,167,882 142,663 300,451 435,881 3,126,678 Total loans $ 1,107,076 $ 1,168,412 $ 153,907 $ 306,282 $ 435,881 $ 3,171,558 Allowance for loan losses: Impaired loans $ 985 $ — $ — $ 176 $ — $ — $ 1,161 Non-impaired loans 2,193 12,875 2,526 2,801 1,010 1,494 22,899 Total allowance for loan losses $ 3,178 $ 12,875 $ 2,526 $ 2,977 $ 1,010 $ 1,494 $ 24,060 The following is a summary of past due and non-accrual loans at September 30, 2020 and December 31, 2019: 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) September 30, 2020 Residential real estate: One- to four-family $ 595 $ 2,114 $ 4,697 $ 7,406 $ 11,925 Second mortgages and equity lines of credit 660 24 297 981 951 Commercial real estate — 3,183 4,943 8,126 4,943 Commercial construction — — 10,939 10,939 10,939 Commercial and industrial 1,725 4,643 1,564 7,932 10,078 Consumer: Auto 819 380 923 2,122 1,150 Personal 31 49 2 82 41 Total $ 3,830 $ 10,393 $ 23,365 $ 37,588 $ 40,027 December 31, 2019 Residential real estate: One- to four-family $ 9,364 $ 5,622 $ 5,668 $ 20,654 $ 10,610 Second mortgages and equity lines of credit 418 77 760 1,255 1,561 Commercial real estate 261 4,730 191 5,182 530 Commercial construction — — 1,960 1,960 11,244 Commercial and industrial 2,000 722 3,133 5,855 5,831 Consumer: Auto 3,180 456 457 4,093 529 Personal 69 16 13 98 16 Total $ 15,292 $ 11,623 $ 12,182 $ 39,097 $ 30,321 At September 30, 2020 and December 31, 2019, there were no loans past due 90 days or more and still accruing. The following information pertains to impaired loans: September 30, 2020 December 31, 2019 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance (in thousands) Impaired loans without a specific reserve: Residential real estate $ 14,101 $ 15,322 $ — $ 11,610 $ 12,140 $ — Commercial real estate 4,943 6,194 — 530 530 — Commercial construction — — — 11,244 11,244 — Commercial and industrial 4,019 5,999 — 5,505 6,901 — Total 23,063 27,515 — 28,889 30,815 — Impaired loans with a specific reserve: Residential real estate 13,960 14,308 950 15,665 16,218 985 Commercial construction 10,971 11,244 251 — — — Commercial and industrial 6,070 6,287 611 326 326 176 Total 31,001 31,839 1,812 15,991 16,544 1,161 Total impaired loans $ 54,064 $ 59,354 $ 1,812 $ 44,880 $ 47,359 $ 1,161 Three Months Ended September 30, 2020 2019 Interest Interest Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 26,542 $ 272 $ 270 $ 29,375 $ 451 $ 367 Commercial real estate 4,287 — — — — — Commercial construction 10,971 — — 5,622 — — Commercial and industrial 10,334 9 9 5,467 21 21 Total $ 52,134 $ 281 $ 279 $ 40,464 $ 472 $ 388 Nine Months Ended September 30, 2020 2019 Interest Interest Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 26,454 $ 847 $ 788 $ 30,316 $ 1,399 $ 1,125 Commercial real estate 3,202 1 1 671 — — Commercial construction 11,039 — — 3,748 — — Commercial and industrial 7,863 16 16 5,497 44 44 Total $ 48,558 $ 864 $ 805 $ 40,232 $ 1,443 $ 1,169 Interest income recognized and interest income recognized on a cash basis in the tables above represent interest income for the three and nine months ended September 30, 2020 and 2019, not for the time period designated as impaired. No additional funds are committed to be advanced in connection with impaired loans. There were no material TDR loan modifications for the three months ended September 30, 2020 and 2019. The recorded investment in TDRs was $17.0 million and $20.0 million at September 30, 2020 and December 31, 2019, respectively. Commercial TDRs totaled $2.5 million and $3.0 million at September 30, 2020 and December 31, 2019, respectively. The remainder of the TDRs outstanding at the end of these periods were residential loans. Non-accrual TDRs totaled $3.9 million and $5.0 million at September 30, 2020 and December 31, 2019, respectively. Of these loans, $2.5 million and $3.0 million were non-accrual commercial TDRs at September 30, 2020 and December 31, 2019, respectively. All TDR loans are considered impaired and management performs a discounted cash flow calculation to determine the amount of impairment reserve required on each loan. TDR loans which subsequently default are reviewed to determine if the loan should be deemed collateral dependent. In either case, any reserve required is recorded as part of the allowance for loan losses. During the three and nine months ended September 30, 2020 and 2019, there were no payment defaults on TDRs. Credit Quality Information The Company uses a ten- grade internal loan rating system for commercial real estate, commercial construction and commercial loans, as follows: Loans rated 1 – 6 are considered “pass” rated loans with low to average risk. Loans rated 7 are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management. Loans rated 8 are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected. Loans rated 9 are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. Loans rated 10 are considered “uncollectible” (loss), and of such little value that their continuance as loans is not warranted. Loans not rated consist primarily of certain smaller balance commercial real estate and commercial loans that are managed by exception. On an annual basis, or more often if needed, the Company formally reviews on a risk adjusted basis, the ratings on all commercial real estate, construction and commercial loans. Semi-annually, the Company engages an independent third party to review a significant portion of loans within these segments. Management uses the results of these reviews as part of its annual review process. On a monthly basis, the Company reviews the residential construction, residential real estate and consumer installment portfolios for credit quality primarily through the use of delinquency reports. The following table presents the Company’s loans by risk rating at September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Commercial Commercial Commercial Commercial Commercial Commercial Real Estate Construction and Industrial Real Estate Construction and Industrial (in thousands) Loans rated 1 - 6 $ 1,352,794 $ 201,014 $ 466,254 $ 1,163,343 $ 127,962 $ 294,507 Loans rated 7 23,646 — 3,519 4,539 14,701 6,117 Loans rated 8 524 10,939 8,342 530 11,244 3,223 Loans rated 9 3,107 — 2,014 — — 2,435 Loans rated 10 — — — — — — $ 1,380,071 $ 211,953 $ 480,129 $ 1,168,412 $ 153,907 $ 306,282 |
MORTGAGE LOAN SERVICING
MORTGAGE LOAN SERVICING | 9 Months Ended |
Sep. 30, 2020 | |
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 unaudited interim Consolidated Balance Sheets. The risks inherent in mortgage servicing rights (“MSRs”) relate primarily to changes in prepayments that primarily result from shifts in mortgage interest rates. The unpaid principal balance of mortgage loans serviced for others was $2.65 billion and $1.83 billion as of September 30, 2020 and December 31, 2019, respectively. The Company accounts for MSRs at fair value. The Company obtains valuations from independent third parties to determine the fair value of MSRs. Key assumptions used in the estimation of fair value include prepayment speeds, discount rates, default rates, cost to service, and contractual servicing fees September 30, December 31, 2020 2019 Prepayment speed 15.90 % 12.43 % Discount rate 9.26 9.34 Default rate 2.51 2.61 The following summarizes changes to MSRs for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Balance, beginning of period $ 16,127 $ 18,156 $ 17,150 $ 22,217 Additions 4,225 385 8,700 716 Changes in fair value due to: Reductions from loans paid off during the period (1,083) (585) (2,773) (1,363) Changes in valuation inputs or assumptions 890 (1,889) (2,918) (5,503) Balance, end of period $ 20,159 $ 16,067 $ 20,159 $ 16,067 Contractually specified servicing fees included in other mortgage banking income amounted to $1.6 million and $4.2 million for the three and nine months ended September 30, 2020, respectively, and $1.3 million and $4.1 million for the three and nine months ended September 30, 2019, respectively. |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2020 | |
GOODWILL | |
GOODWILL | 6. GOODWILL As of September 30, 2020, the Company had $69.8 million in goodwill, of which $59.0 million was allocated to the Bank reporting unit and $10.8 million was allocated to the HarborOne Mortgage reporting unit. The Company typically performs its goodwill impairment test during the fourth quarter of the year, unless certain indicators suggest earlier testing to be warranted. The Company determined that an interim impairment test was warranted due to the operational disruption and uncertainty associated with the COVID-19 pandemic. Accordingly, the Company performed impairment tests as of June 30, 2020 and determined that there was no impairment to the goodwill of either reporting unit, as the fair value of each reporting unit was in excess of its carrying value. 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. The Company also considered the impact of the COVID-19 pandemic as it pertains to these intangible assets, and determined that there was no indication of impairment related to other intangible assets as of June 30, 2020. The Company determined that there was no triggering event that warranted an interim impairment test at September 30, 2020. |
DEPOSITS
DEPOSITS | 9 Months Ended |
Sep. 30, 2020 | |
DEPOSITS | |
DEPOSITS | 7. DEPOSITS A summary of deposit balances, by type, is as follows: September 30, December 31, 2020 2019 (in thousands) NOW and demand deposit accounts $ 852,356 $ 572,280 Regular savings and club accounts 912,017 626,685 Money market deposit accounts 815,644 856,830 Total non-certificate accounts 2,580,017 2,055,795 Term certificate accounts greater than $250,000 142,266 169,595 Term certificate accounts less than or equal to $250,000 526,614 636,343 Brokered deposits 116,991 81,140 Total certificate accounts 785,871 887,078 Total deposits $ 3,365,888 $ 2,942,873 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 September 30, 2020 and December 31, 2019, total reciprocal deposits were $107.8 million and $277.9 million, respectively, consisting primarily of money market accounts. A summary of certificate accounts by maturity at September 30, 2020 is as follows: Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 720,786 1.25 % Over 1 year to 2 years 45,648 1.78 Over 2 years to 3 years 13,174 1.96 Over 3 years to 4 years 5,737 1.16 Over 4 years to 5 years 1,326 0.97 Total certificate deposits 786,671 1.29 % Less unaccreted acquisition discount (800) Total certificate deposits, net $ 785,871 |
BORROWED FUNDS
BORROWED FUNDS | 9 Months Ended |
Sep. 30, 2020 | |
BORROWED FUNDS | |
BORROWED FUNDS | 8. Borrowed funds at September 30, 2020 and December 31, 2019 consist of Federal Home Loan Bank (“FHLB”) advances. Short-term advances were $95.0 million with a weighted average rate of 0.43% at September 30, 2020. Short-term advances were $183.0 million with a weighted average rate of 1.80% at December 31, 2019. Long-term advances are summarized by maturity date below. September 30, 2020 December 31, 2019 Amount by Weighted Amount by Weighted Scheduled Amount by Average Scheduled Amount by Average Maturity* Call Date (1) Rate (2) Maturity* Call Date (1) Rate (2) (dollars in thousands) Year ending December 31: 2020 $ 27,000 $ 107,000 3.01 % $ 87,000 137,000 2.25 % 2021 41,750 21,750 2.47 41,750 21,750 2.47 2022 — — — 10,000 — 1.73 2023 20,191 191 3.48 20,195 195 2.43 2024 10,000 10,000 1.68 10,000 10,000 1.68 2025 and thereafter 42,165 2,165 1.34 2,187 2,187 1.10 $ 141,106 $ 141,106 2.32 % $ 171,132 $ 171,132 2.16 % * 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 certain multi-family and commercial real estate loans held in the Bank’s portfolio. The carrying value of the loans pledged as collateral for these borrowings totaled $1.3 billion at September 30, 2020 and $1.06 billion at December 31, 2019. As of September 30, 2020, the Company had $660.7 million of available borrowing capacity with the FHLB. The Company also has additional borrowing capacity under a $25.0 million unsecured federal funds line with a correspondent bank and a secured line of credit with the Federal Reserve Bank of Boston secured by 59% of the carrying value of indirect auto and commercial loans with principal balances amounting to $74.9 million and $46.9 million at September 30, 2020 and December 31, 2019, respectively. No amounts were outstanding under either line at September 30, 2020 or December 31, 2019. As a participating lender in the PPP, the Company also has access to additional borrowing capacity through the Federal Reserve’s Paycheck Protection Program Liquidity Facility. Only loans issued under the PPP may be pledged as collateral. |
OTHER COMMITMENTS AND CONTINGEN
OTHER COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
OTHER COMMITMENTS AND CONTINGENCIES | |
OTHER COMMITMENTS AND CONTINGENCIES | 9. OTHER COMMITMENTS AND CONTINGENCIES Loan Commitments The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and advance funds on various lines of credit. Those commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the accompanying unaudited interim Consolidated Financial Statements. The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments. The following off-balance sheet financial instruments were outstanding at September 30, 2020 and December 31, 2019. The contract amounts represent credit risk. September 30, December 31, 2020 2019 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 623,593 $ 24,752 Commitments to grant other loans 103,213 74,114 Unadvanced funds on home equity lines of credit 173,775 157,867 Unadvanced funds on revolving lines of credit 167,971 147,047 Unadvanced funds on construction loans 131,797 112,158 Commitments to extend credit and unadvanced portion of construction loans are agreements to lend to a customer, as long as there is no violation of any condition established in the contract. Commitments to grant loans generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for unadvanced funds on construction loans, home equity and revolving lines of credit may expire without being drawn upon; therefore, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. Commitments to grant loans, and unadvanced construction loans and home equity lines of credit are collateralized by real estate, while revolving lines of credit are unsecured. |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Sep. 30, 2020 | |
DERIVATIVES | |
DERIVATIVES | 10. DERIVATIVES The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally to manage the Company’s interest rate risk. Additionally , the Company enters into interest rate derivatives to accommodate the business requirements of its customers. All derivatives are recognized as either assets or liabilities on the balance sheet and are measured at fair value. The accounting for changes in the fair value of a derivative instrument depends upon whether or not it qualifies as a hedge for accounting purposes, and further, by the type of hedging relationship. Interest Rate Swaps Designated as a Cashflow Hedge As part of its interest rate risk management strategy, the Company utilizes interest rate swap agreements to help manage its interest rate risk positions. The notional amount of the interest rate swaps do not represent the amount exchanged by the parties. The exchange of cash flows is determined by reference to the notional amounts and the other terms of the interest rate swap agreements. The changes in fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income and subsequently reclassified to earnings when gains or losses are realized. In the second quarter the Company executed an interest swap agreement designated as a cash flow hedge. As of September 30, 2020, the Company had one interest rate swap agreement with a notional amount of $100.0 million that was designated as a cash flow hedge of certain short-term debt. The interest rate swap agreement has an average maturity of 4.5 years, the current weighted average fixed rate paid is 0.67% , the weighted average 3-month LIBOR swap receive rate is 0.35% , and the fair value is $1.6 million. The Company expects approximately $462,000 related to the cash flow hedge to be reclassified to interest expense, from other comprehensive income, in the next twelve months. Derivative Loan Commitments Mortgage loan commitments qualify as derivative loan commitments if the loan that will result from exercise of the commitment will be held for sale upon funding. The Company enters into commitments to fund residential mortgage loans at specified times in the future, with the intention that these loans will subsequently be sold in the secondary market. A mortgage loan commitment binds the Company to lend funds to a potential borrower at a specified interest rate and within a specified period of time, generally up to 60 days after inception of the rate lock. Outstanding derivative loan commitments expose the Company to the risk that the price of the loans arising from exercise of the loan commitment might decline from inception of a rate lock to funding of the loan due to increases in mortgage interest rates. If interest rates increase, the value of these loan commitments decreases. Conversely, if interest rates decrease, the value of these loan commitments increases. Forward Loan Sale Commitments The Company utilizes both “mandatory delivery” and “best efforts” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. With a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the number of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay a “pair-off” fee, based on then-current market prices, to the investor to compensate the investor for the shortfall. With a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. Generally, the price the investor will pay the seller for an individual loan is specified prior to the loan being funded (e.g., on the same day the lender commits to lend funds to a potential borrower). The Company expects that these forward loan sale commitments will experience changes in fair value opposite to the change in fair value of derivative loan commitments. Interest Rate Swaps The Company enters into interest rate swap agreements that are transacted to meet the financing needs of its commercial customers. Offsetting interest rate swap agreements are simultaneously transacted with a third-party financial institution to effectively eliminate the Company’s interest rate risk associated with the customer swaps. The primary risks associated with these transactions arise from exposure to the ability of the counterparties to meet the terms of the contract. Mortgage-backed securities with a fair value of $48.9 million are pledged to secure the Company’s liability for the offsetting interest rate swaps (see Note 2). The interest rate swap notional amount is the aggregate notional amount of the customer swap and the offsetting third-party swap. Risk Participation Agreements The Company has entered into risk participation agreements with the 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. 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. However, as of September 30, 2020 and December 31, 2019, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments a re not significant to the overall valuation of its derivatives. As a result, the Company has classified its derivative valuations in their entirety as Level 2. The following tables presents the outstanding notional balances and fair values of outstanding derivative instruments: Assets Liabilities Balance Balance Notional Sheet Fair Sheet Fair Amount Location Value Location Value (in thousands) September 30, 2020: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 — $ — Other liabilities $ 1,648 Derivatives not designated as Hedging Instruments Derivative loan commitments $ 623,593 Other assets $ 15,554 Other liabilities $ 77 Forward loan sale commitments 457,500 Other assets 193 Other liabilities 1,400 Interest rate swaps 869,700 Other assets 44,636 Other liabilities 44,636 Risk participation agreements 132,684 Other assets — Other liabilities — Total $ 60,383 $ 47,761 December 31, 2019: Derivatives designated as Hedging Instruments Interest rate swaps $ — — $ — — $ — Derivatives not designated as Hedging Instruments Derivative loan commitments $ 100,938 Other assets $ 1,385 Other liabilities $ 174 Forward loan sale commitments 88,000 Other assets 26 Other liabilities 158 Interest rate swaps 725,332 Other assets 15,092 Other liabilities 15,092 Risk participation agreements 134,346 Other assets — Other liabilities — Total $ 16,503 $ 15,424 The following table presents the recorded net gains and losses pertaining to the Company’s derivative instruments: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Derivatives designated as hedging instruments Gain (loss) in OCI on derivatives (effective portion), net of tax $ 82 $ — $ (1,187) $ — (Loss) gain reclassified from OCI into interest income or interest expense (effective portion) $ (82) $ — $ 67 $ — Derivatives not designated as hedging instruments Changes in fair value of derivative loan commitments Mortgage banking income $ 4,738 $ 421 $ 14,266 $ 1,435 Changes in fair value of forward loan sale commitments Mortgage banking income 755 782 (1,075) 449 Changes in fair value of interest rate swaps Other income — — — — Total $ 5,493 $ 1,203 $ 13,191 $ 1,884 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2020 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION Under the HarborOne Bancorp, Inc. 2017 Stock Option and Incentive Plan (the “Equity Plan”), adopted on August 9, 2017, the Company may grant options, stock appreciation rights, restricted stock, restricted units, unrestricted stock awards, cash-based awards, performance share awards, and dividend equivalent rights to its directors, officers and employees. Shareholders’ approved the HarborOne Bancorp, Inc. 2020 Equity Incentive Plan on September 29, 2020. No awards had been granted under the new plan as of September 30, 2020. 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 Plan was $617,000 and $3.1 million for the three and nine months ended September 30, 2020, respectively, and $1.3 million and $3.7 million for the three and nine months ended 2019, respectively. Share amounts related to periods prior to the date of the closing of the Offering on August 14, 2019 have been restated to give retroactive recognition to the 1.795431 exchange ratio applied in the Offering. Stock Options 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 nine months ended September 30, 2020, 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 nine months ended September 30, 2020, 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, 2020 2,169,243 $ 9.87 1,196,545 $ 2.66 Granted — — — — Vested — — (609,968) 2.72 Forfeited (20,948) 10.23 (20,948) 2.82 Expired — — — — Balance at September 30, 2020 2,148,295 $ 9.87 7.33 $ — 565,629 $ 2.59 Exercisable at September 30, 2020 1,582,663 $ 10.07 6.96 $ — Unrecognized cost inclusive of directors' awards $ 991,000 Weighted average remaining recognition period (years) 1.37 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 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 non-vested stock awards under the Equity Plan for the nine months ended September 30, 2020: Restricted Weighted Average Stock Awards Grant Price Non-vested stock awards at January 1, 2020 333,765 $ 10.20 Vested (293,688) 10.22 Granted — — Forfeited (8,679) 10.23 Non-vested stock awards at September 30, 2020 31,398 $ 10.00 Unrecognized cost inclusive of directors' awards $ 256,000 Weighted average remaining recognition period (years) 1.62 |
MINIMUM REGULATORY CAPITAL REQU
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 9 Months Ended |
Sep. 30, 2020 | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 12. The Company and Bank are subject to various regulatory capital requirements administered by the Federal Reserve and the FDIC. Failure to meet minimum capital requirements can result in mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s Consolidated Financial Statements. Under the capital rules, risk-based capital ratios are calculated by dividing Tier 1, common equity Tier 1, and total risk-based capital, respectively, by risk-weighted assets. Assets and off-balance sheet credit equivalents are assigned to one of several risk-weight categories, based primarily on relative risk. The rules require banks and bank holding companies to maintain a minimum common equity Tier 1 capital ratio of 4.5%, a minimum Tier 1 capital ratio of 6.0% and a total capital ratio of 8.0%. In addition, a Tier 1 leverage ratio of 4.0% is required. Additionally, the capital rules require a bank holding company to maintain a capital conservation buffer of common equity Tier 1 capital in an amount above the minimum risk-based capital requirements equal to 2.5% of total risk weighted assets, or face restrictions on the ability to pay dividends, pay discretionary bonuses, and to engage in share repurchases. Under the FDIC’s prompt corrective action rules, an insured state nonmember bank is considered “well capitalized” if its capital ratios meet or exceed the ratios as set forth in the following table and is not subject to any written agreement, order, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. The Bank must meet well capitalized requirements under prompt corrective action provisions. Prompt corrective action provisions are not applicable to bank holding companies. A bank holding company is considered “well capitalized” if the bank holding company (i) has a total risk-based capital ratio of at least 10.0%, (ii) has a Tier 1 risk-based capital ratio of at least 6.0%, and (iii) is not subject to any written agreement order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. At September 30, 2020, 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 September 30, 2020 also exceeded the minimum capital requirements, including the currently applicable capital conservation buffer of 2.5%. The Company’s and the Bank’s actual regulatory capital ratios as of September 30, 2020 and December 31, 2019 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. September 30, 2020 Common equity Tier 1 capital to risk-weighted assets $ 619,098 17.6 % $ 157,971 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 619,098 17.6 210,627 6.0 N/A N/A Total capital to risk-weighted assets 698,045 19.9 280,837 8.0 N/A N/A Tier 1 capital to average assets 619,098 14.5 171,035 4.0 N/A N/A December 31, 2019 Common equity Tier 1 capital to risk-weighted assets $ 590,122 18.7 % $ 142,048 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 590,122 18.7 189,397 6.0 N/A N/A Total capital to risk-weighted assets 649,182 20.6 252,529 8.0 N/A N/A Tier 1 capital to average assets 590,122 15.3 154,659 4.0 N/A N/A HarborOne Bank September 30, 2020 Common equity Tier 1 capital to risk-weighted assets $ 486,565 13.9 % $ 157,958 4.5 % $ 228,162 6.5 % Tier 1 capital to risk-weighted assets 486,565 13.9 210,611 6.0 280,815 8.0 Total capital to risk-weighted assets 530,508 15.1 280,815 8.0 351,018 10.0 Tier 1 capital to average assets 486,565 11.4 170,933 4.0 213,666 5.0 December 31, 2019 Common equity Tier 1 capital to risk-weighted assets $ 453,707 14.4 % $ 142,053 4.5 % $ 205,188 6.5 % Tier 1 capital to risk-weighted assets 453,707 14.4 189,404 6.0 252,539 8.0 Total capital to risk-weighted assets 477,767 15.1 252,539 8.0 315,674 10.0 Tier 1 capital to average assets 453,707 12.2 149,272 4.0 186,591 5.0 |
COMPREHENSIVE INCOME (LOSS)
COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2020 | |
COMPREHENSIVE INCOME (LOSS) | |
COMPREHENSIVE INCOME (LOSS) | 13. Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities are reported as a separate component of the stockholders’ equity section of the Consolidated Balance Sheets, such items, along with net income, are components of comprehensive income (loss). The components of accumulated other comprehensive income (loss), included in stockholders’ equity, are as follows: September 30, December 31, 2020 2019 (in thousands) Cash flow hedge: Net unrealized loss $ (1,648) $ — Related tax effect 461 — Total accumulated other comprehensive loss $ (1,187) $ — Securities available for sale: Net unrealized gain $ 4,100 $ 1,899 Related tax effect (1,137) (419) Total accumulated other comprehensive income $ 2,963 $ 1,480 The following tables present changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, 2020 2019 Available Cash Available for Sale Flow for Sale Securities Hedge Total Securities (in thousands) Balance at beginning of period $ 4,166 $ (1,269) $ 2,897 $ 1,466 Other comprehensive income (loss) before reclassifications (1,335) 32 (1,303) 609 Amounts reclassified from accumulated other comprehensive income (loss) — 82 82 (77) Net current period other comprehensive income (loss) (1,335) 114 (1,221) 532 Related tax effect 132 (32) 100 (117) Balance at end of period $ 2,963 $ (1,187) $ 1,776 $ 1,881 Nine Months Ended September 30, 2020 2019 Available Cash Available for Sale Flow for Sale Securities Hedge Total Securities (in thousands) Balance at beginning of period $ 1,480 $ — $ 1,480 $ (2,358) Other comprehensive income (loss) before reclassifications 4,212 (1,581) 2,631 6,780 Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale 522 — 522 (1,344) Amounts reclassified from accumulated other comprehensive income (loss) (2,533) (67) (2,600) — Net current period other comprehensive income (loss) 2,201 (1,648) 553 5,436 Related tax effect (718) 461 (257) (1,197) Balance at end of period $ 2,963 $ (1,187) $ 1,776 $ 1,881 |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE OF ASSETS AND LIABILITIES | |
FAIR VALUE OF ASSETS AND LIABILITIES | 14. FAIR VALUE OF ASSETS AND LIABILITIES Determination of Fair Value The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of an asset or liability is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various assets or liabilities. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the asset or liability. The following methods and assumptions were used by the Company in estimating fair value disclosures: Cash and cash equivalents Securities FHLB stock Loans held for sale Loans Retirement plan annuities MSRs Deposits and mortgagors’ escrow accounts Borrowed funds Accrued interest Interest Rate Swap designated as a cashflow hedge- Forward loan sale commitments and derivative loan commitments Interest rate swaps and risk participation agreements not contain a high level of subjectivity as the methodologies used do not require significant judgment. The Company incorporates credit valuation analysis for counterparty nonperformance risk in the fair value measurement, including the impact of netting applicable credit enhancements such as available collateral. Off-balance sheet credit-related instruments Fair Value Hierarchy The Company groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2 – Valuation is based on 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 for substantially the full term of the assets or liabilities. Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include assets and liabilities whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as assets and liabilities for which the determination of fair value requires significant management judgment or estimation. Transfers between levels are recognized at the end of the reporting period, if applicable. There were no transfers during the periods presented. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below: Total Level 1 Level 2 Level 3 Fair Value (in thousands) September 30, 2020 Assets Securities available for sale $ — $ 280,308 $ — $ 280,308 Loans held for sale — 190,373 — 190,373 Mortgage servicing rights — 20,159 — 20,159 Derivative loan commitments — — 15,554 15,554 Forward loan sale commitments — — 193 193 Interest rate swaps — 44,636 — 44,636 $ — $ 535,476 $ 15,747 $ 551,223 Liabilities Derivative loan commitments $ — $ — $ 77 $ 77 Forward loan sale commitments — — 1,400 1,400 Interest rate management agreements — 1,648 — 1,648 Interest rate swaps — 44,636 — 44,636 $ — $ 46,284 $ 1,477 $ 47,761 December 31, 2019 Assets Securities available for sale $ — $ 239,473 $ — $ 239,473 Loans held for sale — 110,552 — 110,552 Mortgage servicing rights — 17,150 — 17,150 Derivative loan commitments — — 1,385 1,385 Forward loan sale commitments — — 26 26 Interest rate swaps — 15,092 — 15,092 $ — $ 382,267 $ 1,411 $ 383,678 Liabilities Derivative loan commitments $ — $ — $ 174 $ 174 Forward loan sale commitments — — 158 158 Interest rate swaps — 15,092 — 15,092 $ — $ 15,092 $ 332 $ 15,424 The table below presents, for the three and nine months ended September 30, 2020 and 2019, the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 10,844 $ 2,494 $ 1,411 $ 1,261 Total gains included in net income (1) 4,903 468 14,336 1,701 Balance at end of period $ 15,747 $ 2,962 $ 15,747 $ 2,962 Changes in unrealized gains relating to instruments at period end $ 15,747 $ 2,962 $ 15,747 $ 2,962 Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (2,067) $ (1,182) $ (332) $ (630) Total gains (losses) included in net income (1) 590 736 (1,145) 184 Balance at end of period $ (1,477) $ (446) $ (1,477) $ (446) Changes in unrealized losses relating to instruments at period end $ (1,477) $ (446) $ (1,477) $ (446) (1) Included in mortgage banking income on the Consolidated Statements of Net Income. Assets Measured at Fair Value on a Non-recurring Basis The Company may also be required, from time to time, to measure certain other financial assets on a nonrecurring basis in accordance with generally accepted accounting principles. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no liabilities measured at fair value on a non-recurring basis at September 30, 2020 and December 31, 2019. The following table summarizes the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets. September 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Asset held for sale $ — $ — $ — $ — $ — $ 8,536 Impaired loans: Residential — — 4,246 — — 2,272 Commercial — — 20,476 — — 1,606 Other real estate owned and repossessed assets — — 898 — — 719 $ — $ — $ 25,620 $ — $ — $ 13,133 Losses in the following table represent the amount of the fair value adjustments recorded during the period on the carrying value of the assets held at September 30, 2020 and December 31, 2019, respectively. Losses on fully charged off loans are not included in the table. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Impaired loans Residential $ 103 $ 26 $ 369 $ 58 Commercial 644 181 2,654 193 Other real estate owned and repossessed assets 2 21 58 88 $ 749 $ 228 $ 3,081 $ 339 Losses applicable to write-downs of impaired loans and other real estate owned and repossessed assets are based on the appraised value of the underlying collateral less estimated costs to sell. The losses on impaired loans are not recorded directly as an adjustment to current earnings, but rather as a component in determining the allowance for loan losses. The losses on other real estate owned and repossessed assets represent adjustments in valuation recorded during the time period indicated and not for losses incurred on sales. Appraised values are typically based on a blend of (a) an income approach using observable cash flows to measure fair value, and (b) a market approach using observable market comparables. These appraised values may be discounted based on management’s historical knowledge, expertise or changes in market conditions from time of valuation. 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. September 30, 2020 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 137,518 $ 137,518 $ — $ — $ 137,518 Securities available for sale 280,308 — 280,308 — 280,308 Federal Home Loan Bank stock 11,631 N/A N/A N/A N/A Loans held for sale 190,373 — 190,373 — 190,373 Loans, net 3,466,608 — — 3,509,251 3,509,251 Retirement plan annuities 13,641 — — 13,641 13,641 Accrued interest receivable 12,504 — 12,504 — 12,504 Financial liabilities: Deposits 3,365,888 — — 3,369,131 3,369,131 Borrowed funds 236,106 — 239,842 — 239,842 Subordinated debt 34,002 — — 35,291 35,291 Mortgagors' escrow accounts 7,979 — — 7,979 7,979 Accrued interest payable 1,001 — 1,001 — 1,001 Derivative loan commitments: Assets 15,554 — — 15,554 15,554 Liabilities 77 — — 77 77 Interest rate management agreements: Liabilities 1,648 — — — — Interest rate swap agreements: Assets 44,636 — 44,636 — 44,636 Liabilities 44,636 — 44,636 — 44,636 Forward loan sale commitments: Assets 193 — — 193 193 Liabilities 1,400 — — 1,400 1,400 December 31, 2019 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 211,616 $ 211,616 $ — $ — $ 211,616 Securities available for sale 239,473 — 239,473 — 239,473 Securities held to maturity 26,372 — 26,927 — 26,927 Federal Home Loan Bank stock 17,121 N/A N/A N/A N/A Loans held for sale 110,552 — 110,552 — 110,552 Loans, net 3,147,498 — — 3,176,442 3,176,442 Retirement plan annuities 13,333 — — 13,333 13,333 Accrued interest receivable 9,807 — 9,807 — 9,807 Financial liabilities: Deposits 2,942,873 — — 2,943,899 2,943,899 Borrowed funds 354,132 — 354,881 — 354,881 Subordinated debt 33,907 — — 34,619 34,619 Mortgagors' escrow accounts 6,053 — — 6,053 6,053 Accrued interest payable 1,669 — 1,669 — 1,669 Derivative loan commitments: Assets 1,385 — — 1,385 1,385 Liabilities 174 — — 174 174 Interest rate swap agreements: Assets 15,092 — 15,092 — 15,092 Liabilities 15,092 — 15,092 — 15,092 Forward loan sale commitments: Assets 26 — — 26 26 Liabilities 158 — — 158 158 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 15. EARNINGS PER SHARE (“EPS”) Basic EPS represents net income attributable to common shareholders divided by the weighted-average number of common shares outstanding during the period. Unvested restricted shares are participating securities and 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. Unallocated ESOP shares are not deemed outstanding for EPS calculations. Three Months Ended September 30, 2020 2019 Net income applicable to common stock (in thousands) $ 11,893 $ 7,113 Average number of common shares outstanding 58,375,742 58,453,259 Less: Average unallocated ESOP shares (3,910,403) (2,814,525) Average number of common shares outstanding used to calculate basic earnings per common share 54,465,339 55,638,734 Common stock equivalents — — Average number of common shares outstanding used to calculate diluted earnings per common share 54,465,339 55,638,734 Earnings per common share: Basic $ 0.22 $ 0.13 Diluted $ 0.22 $ 0.13 Nine Months Ended September 30, 2020 2019 Net income available to common stockholders (in thousands) $ 27,192 $ 13,961 Average number of common shares outstanding 58,403,825 58,461,953 Less: Average unallocated ESOP shares (3,967,735) (1,606,023) Weighted average number of common shares outstanding used to calculate basic earnings per common share 54,436,090 56,855,930 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 54,436,090 56,855,930 Earnings per common share: Basic $ 0.50 $ 0.25 Diluted $ 0.50 $ 0.25 Share amounts related to periods prior to the August 14, 2019 closing of the conversion offering have been restated to give retroactive recognition to the 1.795431 exchange ratio applied in the conversion offering. Stock options for 2,148,295 and 2,240,307 shares of common stock for the three and nine months ended September 30, 2020 and 2019, respectively, were not considered in computing diluted earnings per share because they were antidilutive. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2020 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 16. REVENUE RECOGNITION Revenue from contracts with customers in the scope of Accounting Standards Codification (“ASC”) (“Topic 606”) is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. The Company recognizes revenue from contracts with customers when it satisfies its performance obligations. The Company’s performance obligations are generally satisfied as services are rendered and can either be satisfied at a point in time or over time. Unsatisfied performance obligations at the report date are not material to our consolidated financial statements. In certain cases, other parties are involved with providing services to our customers. If the Company is a principal in the transaction (providing services itself or through a third party on its behalf), revenues are reported based on the gross consideration received from the customer and any related expenses are reported gross in noninterest expense. If the Company is an agent in the transaction (referring to another party to provide services), the Company reports its net fee or commission retained as revenue. The Company recognizes revenue that is transactional in nature and such revenue is earned at a point in time. Revenue that is recognized at a point in time includes card interchange fees (fee income related to debit card transactions), ATM fees, wire transfer fees, overdraft charge fees, and stop-payment and returned check fees. Additionally, revenue is collected from loan fees, such as letters of credit, line renewal fees and application fees. Such revenue is derived from transactional information and is recognized as revenue immediately as the transactions occur or upon providing the service to complete the customer’s transaction. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2020 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 17. SEGMENT REPORTING The Company has two reportable segments: HarborOne Bank and HarborOne Mortgage. Revenue from HarborOne Bank consists primarily of interest earned on loans and investment securities and service charges on deposit accounts. Revenue from HarborOne Mortgage comprises interest earned on loans and fees received as a result of the residential mortgage origination, sale and servicing process. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Segment profit and loss is measured by net income on a legal entity basis. Intercompany transactions are eliminated in consolidation. Information about the reportable segments and reconciliation to the unaudited interim Consolidated Financial Statements at September 30, 2020 and 2019 and for the three and nine months then ended is presented in the tables below. Three Months Ended September 30, 2020 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 30,599 $ 1,000 $ (430) $ — $ 31,169 Provision for loan losses 13,454 — — — 13,454 Net interest and dividend income (loss), after provision for loan losses 17,145 1,000 (430) — 17,715 Mortgage banking income: Gain on sale of mortgage loans — 34,055 — — 34,055 Intersegment gain (loss) (645) 645 — — — Changes in mortgage servicing rights fair value (354) 161 — — (193) Other 334 3,947 — — 4,281 Total mortgage banking income (loss) (665) 38,808 — — 38,143 Other noninterest income (loss) 6,326 (8) — — 6,318 Total noninterest income 5,661 38,800 — — 44,461 Noninterest expense 26,300 19,156 266 — 45,722 Income (loss) before income taxes (3,494) 20,644 (696) — 16,454 Provision (benefit) for income taxes 571 4,550 (560) — 4,561 Net income (loss) $ (4,065) $ 16,094 $ (136) $ — $ 11,893 Nine Months Ended September 30, 2020 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 86,248 $ 2,020 $ (952) $ — $ 87,316 Provision for loan losses 27,207 — — — 27,207 Net interest and dividend income (loss), after provision for loan losses 59,041 2,020 (952) — 60,109 Mortgage banking income: Gain on sale of mortgage loans — 77,195 — — 77,195 Intersegment gain (loss) (2,444) 2,444 — — — Changes in mortgage servicing rights fair value (2,014) (3,677) — — (5,691) Other 1,031 9,931 — — 10,962 Total mortgage banking income (loss) (3,427) 85,893 — — 82,466 Other noninterest income (loss) 19,640 (141) — — 19,499 Total noninterest income 16,213 85,752 — — 101,965 Noninterest expense 75,806 48,235 907 — 124,948 Income (loss) before income taxes (552) 39,537 (1,859) — 37,126 Provision (benefit) for income taxes 2,199 8,667 (932) — 9,934 Net income (loss) $ (2,751) $ 30,870 $ (927) $ — $ 27,192 Total assets at period end $ 4,404,842 $ 280,983 $ 729,838 $ (987,344) $ 4,428,319 Goodwill at period end $ 59,042 $ 10,760 $ — $ — $ 69,802 Three Months Ended September 30, 2019 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income $ 27,855 $ 285 $ (155) $ — $ 27,985 Provision for loan losses 889 — — — 889 Net interest and dividend income, after provision for loan losses 26,966 285 (155) — 27,096 Mortgage banking income: Gain on sale of mortgage loans — 11,015 — — 11,015 Intersegment gain (loss) (393) 393 — — — Changes in mortgage servicing rights fair value (591) (1,883) — — (2,474) Other 369 2,595 — — 2,964 Total mortgage banking income (615) 12,120 — — 11,505 Other noninterest income 5,772 (4) — — 5,768 Total noninterest income 5,157 12,116 — — 17,273 Noninterest expense 24,405 11,227 571 — 36,203 Income (loss) before income taxes 7,718 1,174 (726) — 8,166 Provision (benefit) for income taxes 1,019 171 (137) — 1,053 Net income (loss) $ 6,699 $ 1,003 $ (589) $ — $ 7,113 Nine Months Ended September 30, 2019 HarborOne HarborOne HarborOne Bank Mortgage Bancorp Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 81,296 $ 604 $ (1,172) $ — $ 80,728 Provision for loan losses 3,496 — — — 3,496 Net interest and dividend income (loss), after provision for loan losses 77,800 604 (1,172) — 77,232 Mortgage banking income: Gain on sale of mortgage loans 1 24,085 — — 24,086 Intersegment gain (loss) (866) 866 — — — Changes in mortgage servicing rights fair value (1,599) (5,267) — — (6,866) Other 1,127 6,315 — — 7,442 Total mortgage banking income (loss) (1,337) 25,999 — — 24,662 Other noninterest income (loss) 18,191 (20) — — 18,171 Total noninterest income 16,854 25,979 — — 42,833 Noninterest expense 74,527 27,496 1,853 — 103,876 Income (loss) before income taxes 20,127 (913) (3,025) — 16,189 Provision (benefit) for income taxes 3,267 (256) (783) — 2,228 Net income (loss) $ 16,860 $ (657) $ (2,242) $ — $ 13,961 Total assets at period end $ 3,821,671 $ 152,800 $ 693,851 $ (719,302) $ 3,949,020 Goodwill at period end $ 58,875 $ 10,760 $ — $ — $ 69,635 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Bais of Presentation and Consolidation | Basis of Presentation and Consolidation The unaudited interim Consolidated Financial Statements of HarborOne Bancorp, Inc. (the “Company”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by the U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying Consolidated Financial Statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2019 and 2018 and notes thereto included in the Company’s Annual Report on Form 10-K. The unaudited interim Consolidated Financial Statements include the accounts of the Company; the Company’s subsidiaries, Legion Parkway Company LLC, a security corporation, HarborOne Bank (the “Bank”); and the Bank’s wholly-owned subsidiaries, which consist of HarborOne Mortgage, LLC (“HarborOne Mortgage”), a passive investment corporation, and two security corporations. The passive investment corporation maintains and manages certain assets of the Bank. The security corporations were established for the purpose of buying, holding and selling securities on their own behalf. All significant intercompany balances and transactions have been eliminated in consolidation. |
Recent Events | Recent Events ● Net interest income could be reduced. In accordance with regulatory guidance, the Company is actively working with borrowers impacted by the COVID-19 pandemic to defer payments. While interest will continue to be recognized in accordance with GAAP, should eventual credit losses on these deferments emerge, interest income would be negatively impacted. As of September 30, 2020, the Bank had 99 active payment deferrals on loans with a total principal balance of $100.0 million, primarily commercial real estate loans. Loans with a total principal balance of $253.3 million were out of the deferral period and paying the loan as agreed and loans with a total principal balance of $5.8 million were out of the deferral period and delinquent more than 30 days. ● The provision for loan losses could increase. Continued uncertainty regarding the severity and duration of the COVID-19 pandemic and related economic effects will continue to affect the accounting for loan losses. It also is possible that asset quality could worsen, and loan charge-offs increase. The Company participated in the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) providing loans to small businesses negatively impacted by the COVID-19 pandemic. PPP loans are fully guaranteed by the U.S. government. ● Noninterest income could be reduced. Uncertainty regarding the severity and duration of the COVID-19 pandemic could cause further volatility in the financial markets. The COVID-19 pandemic and the measures taken to control its spread may disrupt the mortgage loan origination process. Mortgage banking revenues are dependent on mortgage origination volume and are sensitive to interest rates and the condition of housing markets. ● Valuation and fair value measurement challenges may occur. Management performed an interim impairment assessment on goodwill as a result of changes in the macroeconomic environment resulting from the COVID-19 pandemic. The results of the interim impairment assessment indicated that the remaining fair value exceeded the carrying value for both reporting units. The COVID-19 pandemic could cause further and sustained decline in the Company’s stock price or the occurrence of additional valuation triggering events that could result in an impairment charge to earnings. |
Conversion and Reorganization | Conversion and Reorganization |
Depositors Insurance Fund and Share Insurance Fund | Depositors Insurance Fund and Share Insurance Fund |
Nature of Operations | Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 26 full-service branches in Massachusetts and Rhode Island, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains more than 30 offices in Massachusetts, Rhode Island, New Hampshire, Maine, New Jersey and Florida and originates loans in four 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. |
Use of Estimates | Use of Estimates In preparing unaudited interim Consolidated Financial Statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuations of mortgage servicing rights, derivatives, goodwill and deferred tax assets. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is established based upon the level of estimated probable losses in the current loan portfolio. Loan losses are charged against the allowance when management believes the collectability of a loan balance is doubtful. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general, specific and unallocated components, as further described below. General component The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by the Company’s loan segments. Management uses a Residential real estate – The Company generally does not originate portfolio loans with a loan-to-value ratio greater than 80 percent without obtaining private mortgage insurance and does not generally grant loans that would be classified as subprime upon origination. The Company generally has first or second liens on the property securing equity lines of credit. Loans in this segment are generally collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, can have an effect on the credit quality in this segment. Residential construction – Residential construction loans include loans to build one- to four-family owner-occupied properties, which are subject to the same credit quality factors as residential real estate loans. Commercial real estate – Commercial real estate loans are primarily secured by income-producing properties in southeastern New England. The underlying cash flows generated by the properties can be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, could have an effect on the credit quality in this segment. Management obtains rent rolls annually and continually monitors the cash flows of these loans. Commercial construction – Commercial construction loans may include speculative real estate development loans for which payment is derived from lease or sale of the property. Credit risk is affected by cost overruns, time to lease or sell at an adequate price, and market conditions. Commercial and industrial – Commercial and industrial loans are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer or business spending, could have an effect on the credit quality in this segment. Consumer – Consumer loans are generally secured by automobiles or unsecured, and repayment is dependent on the credit quality of the individual borrower. Specific Reserves The specific reserves relate to loans that are classified as impaired. Residential real estate and commercial loans are evaluated for impairment on a loan-by-loan basis. Impairment is determined by nonaccrual status, whether a loan is subject to a troubled debt restructuring agreement or in the case of certain loans, based on the internal credit rating. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, except for troubled debt restructurings (“TDRs”), the Company does not separately identify individual consumer loans for impairment evaluation. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The Company periodically may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a TDR. All TDRs are initially classified as impaired. Impairment is measured by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance is established when the discounted cash flows or collateral value of the impaired loan is lower than the carrying value of that loan. Unallocated component The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general reserves in the portfolio. The unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. Additionally, the Company's unseasoned commercial portfolio and use of peer group data to establish general reserves for the commercial portfolio adds another element of risk to management's estimates. |
Earnings Per Share | Earnings Per Share Basic earnings per share represents income available to common shareholders 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. The restricted stock awards are participating securities; therefore, unvested awards are included as common shares outstanding in the computation of basic earnings per share. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate to outstanding stock option awards and are determined using the treasury stock method. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements As an “emerging growth company”, as defined in Title 1 of the Jumpstart Our Business Startups (“JOBS”) Act, the Company has elected to use the extended transition period to delay the adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. As of September 30, 2020, there is no significant difference in the comparability of the financial statements as a result of this extended transition period. The Company’s emerging growth company status is scheduled to end December 31, 2021 unless a triggering event occurs sooner. In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting These provisions apply to contract modifications that reference LIBOR or another reference rate expected to be discounted because of reference rate reform. Qualifying modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification would be considered “minor” so that any existing unamortized deferred loan origination fees and costs would carry forward and continue to be amortized. Qualifying modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for hedge accounting. ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022, with adoption permitted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected, the amendments must be applied prospectively for all eligible contract modifications. The Company is currently evaluating the effect that this ASU will have on the Company’s consolidated financial statements. ASU No. 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), was issued in December 2019 to simplify the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. Certain provisions under ASU 2019-12 require prospective application, some require modified retrospective application through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption, while other provisions require retrospective application to all periods presented in the consolidated financial statements upon adoption. The adoption of ASU 2019-12 is not expected to have a material impact on the Company’s consolidated financial statements. In August 2017, FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. corrections if a company applies the shortcut method inappropriately. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For non-public entities, this ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of this standard is not expected to have a material effect on the Company’s Consolidated Financial Statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) |
SECURITIES (Tables)
SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
SECURITIES | |
Schedule of securities with gross unrealized gains and losses | Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (in thousands) September 30, 2020: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 10,003 $ 134 $ — $ 10,137 U.S. government agency and government-sponsored residential mortgage-backed securities 230,072 3,067 512 232,627 U.S. government-sponsored collateralized mortgage obligations 19,675 465 — 20,140 SBA asset-backed securities 16,458 946 — 17,404 Total securities available for sale $ 276,208 $ 4,612 $ 512 $ 280,308 December 31, 2019: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 14,994 $ 210 $ — $ 15,204 U.S. government agency and government-sponsored residential mortgage-backed securities 163,982 1,456 265 165,173 U.S. government-sponsored collateralized mortgage obligations 26,137 243 7 26,373 SBA asset-backed securities 32,461 286 24 32,723 Total securities available for sale $ 237,574 $ 2,195 $ 296 $ 239,473 Securities held to maturity U.S. government agency and government-sponsored residential mortgage-backed securities $ 12,682 $ 86 $ 6 $ 12,762 U.S. government-sponsored collateralized mortgage obligations 1,433 69 — 1,502 SBA asset-backed securities 5,308 124 — 5,432 Municipal bonds 6,949 282 — 7,231 Total securities held to maturity $ 26,372 $ 561 $ 6 $ 26,927 |
Schedule of debt securities by contractual maturity | Available for Sale Amortized Fair Cost Value (in thousands) After 1 year through 5 years $ 5,000 $ 5,012 After 5 years through 10 years 5,003 5,125 Over 10 years — — 10,003 10,137 U.S. government agency and government-sponsored residential mortgage-backed securities 230,072 232,627 U.S. government-sponsored collateralized mortgage obligations 19,675 20,140 SBA asset-backed securities 16,458 17,404 Total $ 276,208 $ 280,308 |
Schedule of proceeds and gross realized gains and losses related to sales and calls of securities | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Sales Proceeds $ — $ — $ 72,333 $ 28,391 Gross gains — — 2,521 1,267 Gross losses — — — — Calls Proceeds $ 2,000 $ 11,775 $ 8,635 $ 20,145 Gross gains — 77 12 77 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) September 30, 2020: Securities available for sale U.S. government agency and government-sponsored residential mortgage-backed securities $ 493 $ 81,377 $ 19 $ 3,721 December 31, 2019: Securities available for sale U.S. government agency and government-sponsored residential mortgage-backed securities $ 147 $ 47,343 $ 118 $ 7,986 U.S. government-sponsored collateralized mortgage obligations 1 884 6 795 SBA asset-backed securities 24 3,964 — — $ 172 $ 52,191 $ 124 $ 8,781 Securities held to maturity U.S. government agency and government-sponsored residential mortgage-backed securities $ — $ — $ 6 $ 2,538 |
LOANS HELD FOR SALE (Tables)
LOANS HELD FOR SALE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
LOANS HELD FOR SALE | |
Schedule of fair value and contractual principal balance outstanding of loans held for sale | September 30, December 31, 2020 2019 (in thousands) Loans held for sale, fair value $ 190,373 $ 110,552 Loans held for sale, contractual principal outstanding 181,746 107,472 Fair value less unpaid principal balance $ 8,627 $ 3,080 |
LOANS (Tables)
LOANS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of balances of loans | September 30, December 31, 2020 2019 (in thousands) Residential real estate: One- to four-family $ 954,198 $ 937,305 Second mortgages and equity lines of credit 150,315 155,716 Residential real estate construction 26,422 14,055 1,130,935 1,107,076 Commercial: Commercial real estate 1,380,071 1,168,412 Commercial construction 211,953 153,907 Commercial and industrial 480,129 306,282 Total commercial loans 2,072,153 1,628,601 Consumer loans: Auto 303,598 424,592 Personal 9,145 11,289 Total consumer loans 312,743 435,881 Total loans 3,515,831 3,171,558 Allowance for loan losses (49,223) (24,060) Loans, net $ 3,466,608 $ 3,147,498 |
Schedule of activity in allowance for loan losses and allocation of allowance to loan segments | The following is the activity in the allowance for loan losses for the three and nine months ended September 30, 2020 and 2019: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at June 30, 2019 $ 3,100 $ 11,100 $ 2,927 $ 2,512 $ 1,063 $ 1,559 $ 22,261 Provision (credit) for loan losses 1 739 (366) 34 113 368 889 Charge-offs — — — (43) (216) — (259) Recoveries 74 1 — — 78 — 153 Balance at September 30, 2019 $ 3,175 $ 11,840 $ 2,561 $ 2,503 $ 1,038 $ 1,927 $ 23,044 Balance at June 30, 2020 $ 5,857 $ 18,389 $ 3,215 $ 3,562 $ 2,204 $ 2,880 $ 36,107 Provision (credit) for loan losses 1,721 7,771 962 1,617 643 740 13,454 Charge-offs — (62) — (213) (140) — (415) Recoveries 22 — — — 55 — 77 Balance at September 30, 2020 $ 7,600 $ 26,098 $ 4,177 $ 4,966 $ 2,762 $ 3,620 $ 49,223 Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2018 $ 3,239 $ 10,059 $ 2,707 $ 2,286 $ 1,154 $ 1,210 $ 20,655 Provision (credit) for loan losses (226) 1,775 (146) 1,035 341 717 3,496 Charge-offs (136) — — (833) (660) — (1,629) Recoveries 298 6 — 15 203 — 522 Balance at September 30, 2019 $ 3,175 $ 11,840 $ 2,561 $ 2,503 $ 1,038 $ 1,927 $ 23,044 Balance at December 31, 2019 $ 3,178 $ 12,875 $ 2,526 $ 2,977 $ 1,010 $ 1,494 $ 24,060 Provision (credit) for loan losses 4,270 14,458 1,651 2,560 2,142 2,126 27,207 Charge-offs (52) (1,236) — (790) (519) — (2,597) Recoveries 204 1 — 219 129 — 553 Balance at September 30, 2020 $ 7,600 $ 26,098 $ 4,177 $ 4,966 $ 2,762 $ 3,620 $ 49,223 Allocation of the allowance to loan segments at September 30, 2020 and December 31, 2019 follows: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) September 30, 2020: Loans: Impaired loans $ 28,061 $ 4,943 $ 10,971 $ 10,089 $ — $ 54,064 Non-impaired loans 1,102,874 1,375,128 200,982 470,040 312,743 3,461,767 Total loans $ 1,130,935 $ 1,380,071 $ 211,953 $ 480,129 $ 312,743 $ 3,515,831 Allowance for loan losses: Impaired loans $ 950 $ — $ 251 $ 611 $ — $ — $ 1,812 Non-impaired loans 6,650 26,098 3,926 4,355 2,762 3,620 47,411 Total allowance for loan losses $ 7,600 $ 26,098 $ 4,177 $ 4,966 $ 2,762 $ 3,620 $ 49,223 December 31, 2019: Loans: Impaired loans $ 27,275 $ 530 $ 11,244 $ 5,831 $ — $ 44,880 Non-impaired loans 1,079,801 1,167,882 142,663 300,451 435,881 3,126,678 Total loans $ 1,107,076 $ 1,168,412 $ 153,907 $ 306,282 $ 435,881 $ 3,171,558 Allowance for loan losses: Impaired loans $ 985 $ — $ — $ 176 $ — $ — $ 1,161 Non-impaired loans 2,193 12,875 2,526 2,801 1,010 1,494 22,899 Total allowance for loan losses $ 3,178 $ 12,875 $ 2,526 $ 2,977 $ 1,010 $ 1,494 $ 24,060 |
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) September 30, 2020 Residential real estate: One- to four-family $ 595 $ 2,114 $ 4,697 $ 7,406 $ 11,925 Second mortgages and equity lines of credit 660 24 297 981 951 Commercial real estate — 3,183 4,943 8,126 4,943 Commercial construction — — 10,939 10,939 10,939 Commercial and industrial 1,725 4,643 1,564 7,932 10,078 Consumer: Auto 819 380 923 2,122 1,150 Personal 31 49 2 82 41 Total $ 3,830 $ 10,393 $ 23,365 $ 37,588 $ 40,027 December 31, 2019 Residential real estate: One- to four-family $ 9,364 $ 5,622 $ 5,668 $ 20,654 $ 10,610 Second mortgages and equity lines of credit 418 77 760 1,255 1,561 Commercial real estate 261 4,730 191 5,182 530 Commercial construction — — 1,960 1,960 11,244 Commercial and industrial 2,000 722 3,133 5,855 5,831 Consumer: Auto 3,180 456 457 4,093 529 Personal 69 16 13 98 16 Total $ 15,292 $ 11,623 $ 12,182 $ 39,097 $ 30,321 |
Schedule of information pertaining to impaired loans | The following information pertains to impaired loans: September 30, 2020 December 31, 2019 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance (in thousands) Impaired loans without a specific reserve: Residential real estate $ 14,101 $ 15,322 $ — $ 11,610 $ 12,140 $ — Commercial real estate 4,943 6,194 — 530 530 — Commercial construction — — — 11,244 11,244 — Commercial and industrial 4,019 5,999 — 5,505 6,901 — Total 23,063 27,515 — 28,889 30,815 — Impaired loans with a specific reserve: Residential real estate 13,960 14,308 950 15,665 16,218 985 Commercial construction 10,971 11,244 251 — — — Commercial and industrial 6,070 6,287 611 326 326 176 Total 31,001 31,839 1,812 15,991 16,544 1,161 Total impaired loans $ 54,064 $ 59,354 $ 1,812 $ 44,880 $ 47,359 $ 1,161 Three Months Ended September 30, 2020 2019 Interest Interest Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 26,542 $ 272 $ 270 $ 29,375 $ 451 $ 367 Commercial real estate 4,287 — — — — — Commercial construction 10,971 — — 5,622 — — Commercial and industrial 10,334 9 9 5,467 21 21 Total $ 52,134 $ 281 $ 279 $ 40,464 $ 472 $ 388 Nine Months Ended September 30, 2020 2019 Interest Interest Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 26,454 $ 847 $ 788 $ 30,316 $ 1,399 $ 1,125 Commercial real estate 3,202 1 1 671 — — Commercial construction 11,039 — — 3,748 — — Commercial and industrial 7,863 16 16 5,497 44 44 Total $ 48,558 $ 864 $ 805 $ 40,232 $ 1,443 $ 1,169 |
Schedule of loans by risk rating | September 30, 2020 December 31, 2019 Commercial Commercial Commercial Commercial Commercial Commercial Real Estate Construction and Industrial Real Estate Construction and Industrial (in thousands) Loans rated 1 - 6 $ 1,352,794 $ 201,014 $ 466,254 $ 1,163,343 $ 127,962 $ 294,507 Loans rated 7 23,646 — 3,519 4,539 14,701 6,117 Loans rated 8 524 10,939 8,342 530 11,244 3,223 Loans rated 9 3,107 — 2,014 — — 2,435 Loans rated 10 — — — — — — $ 1,380,071 $ 211,953 $ 480,129 $ 1,168,412 $ 153,907 $ 306,282 |
PCI | |
Schedule of information pertaining to impaired loans | September 30, December 31, 2020 2019 (in thousands) Outstanding balance $ 4,354 $ 4,609 Carrying amount $ 4,133 $ 4,378 |
Summary of activity in accretable yield for purchased credit impaired loans | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Balance at beginning of period $ 145 $ 169 $ 149 $ 185 Additions — — — — Accretion (3) (5) (7) (7) Reclassification from nonaccretable difference — — — (14) Balance at end of period $ 142 $ 164 $ 142 $ 164 |
MORTGAGE LOAN SERVICING (Tables
MORTGAGE LOAN SERVICING (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
MORTGAGE LOAN SERVICING | |
Tabular disclosure of assumptions used in the calculation of fair value of MSR | September 30, December 31, 2020 2019 Prepayment speed 15.90 % 12.43 % Discount rate 9.26 9.34 Default rate 2.51 2.61 |
Schedule of summarized changes to mortgage servicing rights | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Balance, beginning of period $ 16,127 $ 18,156 $ 17,150 $ 22,217 Additions 4,225 385 8,700 716 Changes in fair value due to: Reductions from loans paid off during the period (1,083) (585) (2,773) (1,363) Changes in valuation inputs or assumptions 890 (1,889) (2,918) (5,503) Balance, end of period $ 20,159 $ 16,067 $ 20,159 $ 16,067 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
DEPOSITS | |
Summary of deposit balances, by type | September 30, December 31, 2020 2019 (in thousands) NOW and demand deposit accounts $ 852,356 $ 572,280 Regular savings and club accounts 912,017 626,685 Money market deposit accounts 815,644 856,830 Total non-certificate accounts 2,580,017 2,055,795 Term certificate accounts greater than $250,000 142,266 169,595 Term certificate accounts less than or equal to $250,000 526,614 636,343 Brokered deposits 116,991 81,140 Total certificate accounts 785,871 887,078 Total deposits $ 3,365,888 $ 2,942,873 |
Summary of certificate accounts by maturity | Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 720,786 1.25 % Over 1 year to 2 years 45,648 1.78 Over 2 years to 3 years 13,174 1.96 Over 3 years to 4 years 5,737 1.16 Over 4 years to 5 years 1,326 0.97 Total certificate deposits 786,671 1.29 % Less unaccreted acquisition discount (800) Total certificate deposits, net $ 785,871 |
BORROWED FUNDS (Tables)
BORROWED FUNDS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
BORROWED FUNDS | |
Schedule of borrowed funds by maturity and call date | September 30, 2020 December 31, 2019 Amount by Weighted Amount by Weighted Scheduled Amount by Average Scheduled Amount by Average Maturity* Call Date (1) Rate (2) Maturity* Call Date (1) Rate (2) (dollars in thousands) Year ending December 31: 2020 $ 27,000 $ 107,000 3.01 % $ 87,000 137,000 2.25 % 2021 41,750 21,750 2.47 41,750 21,750 2.47 2022 — — — 10,000 — 1.73 2023 20,191 191 3.48 20,195 195 2.43 2024 10,000 10,000 1.68 10,000 10,000 1.68 2025 and thereafter 42,165 2,165 1.34 2,187 2,187 1.10 $ 141,106 $ 141,106 2.32 % $ 171,132 $ 171,132 2.16 % * Includes an amortizing advance requiring monthly principal and interest payments. (1) (2) |
OTHER COMMITMENTS AND CONTING_2
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
OTHER COMMITMENTS AND CONTINGENCIES | |
Schedule of financial instruments with off-balance sheet credit risk | September 30, December 31, 2020 2019 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 623,593 $ 24,752 Commitments to grant other loans 103,213 74,114 Unadvanced funds on home equity lines of credit 173,775 157,867 Unadvanced funds on revolving lines of credit 167,971 147,047 Unadvanced funds on construction loans 131,797 112,158 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
DERIVATIVES | |
Schedule of outstanding notional balances and fair values of outstanding derivative instruments | Assets Liabilities Balance Balance Notional Sheet Fair Sheet Fair Amount Location Value Location Value (in thousands) September 30, 2020: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 — $ — Other liabilities $ 1,648 Derivatives not designated as Hedging Instruments Derivative loan commitments $ 623,593 Other assets $ 15,554 Other liabilities $ 77 Forward loan sale commitments 457,500 Other assets 193 Other liabilities 1,400 Interest rate swaps 869,700 Other assets 44,636 Other liabilities 44,636 Risk participation agreements 132,684 Other assets — Other liabilities — Total $ 60,383 $ 47,761 December 31, 2019: Derivatives designated as Hedging Instruments Interest rate swaps $ — — $ — — $ — Derivatives not designated as Hedging Instruments Derivative loan commitments $ 100,938 Other assets $ 1,385 Other liabilities $ 174 Forward loan sale commitments 88,000 Other assets 26 Other liabilities 158 Interest rate swaps 725,332 Other assets 15,092 Other liabilities 15,092 Risk participation agreements 134,346 Other assets — Other liabilities — Total $ 16,503 $ 15,424 |
Schedule of net gains and losses on derivative instruments | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Derivatives designated as hedging instruments Gain (loss) in OCI on derivatives (effective portion), net of tax $ 82 $ — $ (1,187) $ — (Loss) gain reclassified from OCI into interest income or interest expense (effective portion) $ (82) $ — $ 67 $ — Derivatives not designated as hedging instruments Changes in fair value of derivative loan commitments Mortgage banking income $ 4,738 $ 421 $ 14,266 $ 1,435 Changes in fair value of forward loan sale commitments Mortgage banking income 755 782 (1,075) 449 Changes in fair value of interest rate swaps Other income — — — — Total $ 5,493 $ 1,203 $ 13,191 $ 1,884 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
STOCK-BASED COMPENSATION | |
Schedule of stock option activity | 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, 2020 2,169,243 $ 9.87 1,196,545 $ 2.66 Granted — — — — Vested — — (609,968) 2.72 Forfeited (20,948) 10.23 (20,948) 2.82 Expired — — — — Balance at September 30, 2020 2,148,295 $ 9.87 7.33 $ — 565,629 $ 2.59 Exercisable at September 30, 2020 1,582,663 $ 10.07 6.96 $ — Unrecognized cost inclusive of directors' awards $ 991,000 Weighted average remaining recognition period (years) 1.37 |
Schedule of non-vested stock award activity | Restricted Weighted Average Stock Awards Grant Price Non-vested stock awards at January 1, 2020 333,765 $ 10.20 Vested (293,688) 10.22 Granted — — Forfeited (8,679) 10.23 Non-vested stock awards at September 30, 2020 31,398 $ 10.00 Unrecognized cost inclusive of directors' awards $ 256,000 Weighted average remaining recognition period (years) 1.62 |
MINIMUM REGULATORY CAPITAL RE_2
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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. September 30, 2020 Common equity Tier 1 capital to risk-weighted assets $ 619,098 17.6 % $ 157,971 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 619,098 17.6 210,627 6.0 N/A N/A Total capital to risk-weighted assets 698,045 19.9 280,837 8.0 N/A N/A Tier 1 capital to average assets 619,098 14.5 171,035 4.0 N/A N/A December 31, 2019 Common equity Tier 1 capital to risk-weighted assets $ 590,122 18.7 % $ 142,048 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 590,122 18.7 189,397 6.0 N/A N/A Total capital to risk-weighted assets 649,182 20.6 252,529 8.0 N/A N/A Tier 1 capital to average assets 590,122 15.3 154,659 4.0 N/A N/A HarborOne Bank September 30, 2020 Common equity Tier 1 capital to risk-weighted assets $ 486,565 13.9 % $ 157,958 4.5 % $ 228,162 6.5 % Tier 1 capital to risk-weighted assets 486,565 13.9 210,611 6.0 280,815 8.0 Total capital to risk-weighted assets 530,508 15.1 280,815 8.0 351,018 10.0 Tier 1 capital to average assets 486,565 11.4 170,933 4.0 213,666 5.0 December 31, 2019 Common equity Tier 1 capital to risk-weighted assets $ 453,707 14.4 % $ 142,053 4.5 % $ 205,188 6.5 % Tier 1 capital to risk-weighted assets 453,707 14.4 189,404 6.0 252,539 8.0 Total capital to risk-weighted assets 477,767 15.1 252,539 8.0 315,674 10.0 Tier 1 capital to average assets 453,707 12.2 149,272 4.0 186,591 5.0 |
COMPREHENSIVE INCOME (LOSS) (Ta
COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
COMPREHENSIVE INCOME (LOSS) | |
Schedule of components of accumulated other comprehensive income (loss) | September 30, December 31, 2020 2019 (in thousands) Cash flow hedge: Net unrealized loss $ (1,648) $ — Related tax effect 461 — Total accumulated other comprehensive loss $ (1,187) $ — Securities available for sale: Net unrealized gain $ 4,100 $ 1,899 Related tax effect (1,137) (419) Total accumulated other comprehensive income $ 2,963 $ 1,480 |
Summary of changes in accumulated other comprehensive income (loss) | Three Months Ended September 30, 2020 2019 Available Cash Available for Sale Flow for Sale Securities Hedge Total Securities (in thousands) Balance at beginning of period $ 4,166 $ (1,269) $ 2,897 $ 1,466 Other comprehensive income (loss) before reclassifications (1,335) 32 (1,303) 609 Amounts reclassified from accumulated other comprehensive income (loss) — 82 82 (77) Net current period other comprehensive income (loss) (1,335) 114 (1,221) 532 Related tax effect 132 (32) 100 (117) Balance at end of period $ 2,963 $ (1,187) $ 1,776 $ 1,881 Nine Months Ended September 30, 2020 2019 Available Cash Available for Sale Flow for Sale Securities Hedge Total Securities (in thousands) Balance at beginning of period $ 1,480 $ — $ 1,480 $ (2,358) Other comprehensive income (loss) before reclassifications 4,212 (1,581) 2,631 6,780 Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale 522 — 522 (1,344) Amounts reclassified from accumulated other comprehensive income (loss) (2,533) (67) (2,600) — Net current period other comprehensive income (loss) 2,201 (1,648) 553 5,436 Related tax effect (718) 461 (257) (1,197) Balance at end of period $ 2,963 $ (1,187) $ 1,776 $ 1,881 |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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) September 30, 2020 Assets Securities available for sale $ — $ 280,308 $ — $ 280,308 Loans held for sale — 190,373 — 190,373 Mortgage servicing rights — 20,159 — 20,159 Derivative loan commitments — — 15,554 15,554 Forward loan sale commitments — — 193 193 Interest rate swaps — 44,636 — 44,636 $ — $ 535,476 $ 15,747 $ 551,223 Liabilities Derivative loan commitments $ — $ — $ 77 $ 77 Forward loan sale commitments — — 1,400 1,400 Interest rate management agreements — 1,648 — 1,648 Interest rate swaps — 44,636 — 44,636 $ — $ 46,284 $ 1,477 $ 47,761 December 31, 2019 Assets Securities available for sale $ — $ 239,473 $ — $ 239,473 Loans held for sale — 110,552 — 110,552 Mortgage servicing rights — 17,150 — 17,150 Derivative loan commitments — — 1,385 1,385 Forward loan sale commitments — — 26 26 Interest rate swaps — 15,092 — 15,092 $ — $ 382,267 $ 1,411 $ 383,678 Liabilities Derivative loan commitments $ — $ — $ 174 $ 174 Forward loan sale commitments — — 158 158 Interest rate swaps — 15,092 — 15,092 $ — $ 15,092 $ 332 $ 15,424 |
Schedule of changes in Level 3 assets measured at fair value on a recurring basis | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 10,844 $ 2,494 $ 1,411 $ 1,261 Total gains included in net income (1) 4,903 468 14,336 1,701 Balance at end of period $ 15,747 $ 2,962 $ 15,747 $ 2,962 Changes in unrealized gains relating to instruments at period end $ 15,747 $ 2,962 $ 15,747 $ 2,962 |
Schedule of changes in Level 3 liabilities measured at fair value on a recurring basis | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (2,067) $ (1,182) $ (332) $ (630) Total gains (losses) included in net income (1) 590 736 (1,145) 184 Balance at end of period $ (1,477) $ (446) $ (1,477) $ (446) Changes in unrealized losses relating to instruments at period end $ (1,477) $ (446) $ (1,477) $ (446) (1) Included in mortgage banking income on the Consolidated Statements of Net Income. |
Schedule of assets measured at fair value on a non-recurring basis | The following table summarizes the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets. September 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Asset held for sale $ — $ — $ — $ — $ — $ 8,536 Impaired loans: Residential — — 4,246 — — 2,272 Commercial — — 20,476 — — 1,606 Other real estate owned and repossessed assets — — 898 — — 719 $ — $ — $ 25,620 $ — $ — $ 13,133 Losses in the following table represent the amount of the fair value adjustments recorded during the period on the carrying value of the assets held at September 30, 2020 and December 31, 2019, respectively. Losses on fully charged off loans are not included in the table. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Impaired loans Residential $ 103 $ 26 $ 369 $ 58 Commercial 644 181 2,654 193 Other real estate owned and repossessed assets 2 21 58 88 $ 749 $ 228 $ 3,081 $ 339 |
Schedule of estimated fair values and related carrying amounts of financial instruments | September 30, 2020 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 137,518 $ 137,518 $ — $ — $ 137,518 Securities available for sale 280,308 — 280,308 — 280,308 Federal Home Loan Bank stock 11,631 N/A N/A N/A N/A Loans held for sale 190,373 — 190,373 — 190,373 Loans, net 3,466,608 — — 3,509,251 3,509,251 Retirement plan annuities 13,641 — — 13,641 13,641 Accrued interest receivable 12,504 — 12,504 — 12,504 Financial liabilities: Deposits 3,365,888 — — 3,369,131 3,369,131 Borrowed funds 236,106 — 239,842 — 239,842 Subordinated debt 34,002 — — 35,291 35,291 Mortgagors' escrow accounts 7,979 — — 7,979 7,979 Accrued interest payable 1,001 — 1,001 — 1,001 Derivative loan commitments: Assets 15,554 — — 15,554 15,554 Liabilities 77 — — 77 77 Interest rate management agreements: Liabilities 1,648 — — — — Interest rate swap agreements: Assets 44,636 — 44,636 — 44,636 Liabilities 44,636 — 44,636 — 44,636 Forward loan sale commitments: Assets 193 — — 193 193 Liabilities 1,400 — — 1,400 1,400 December 31, 2019 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 211,616 $ 211,616 $ — $ — $ 211,616 Securities available for sale 239,473 — 239,473 — 239,473 Securities held to maturity 26,372 — 26,927 — 26,927 Federal Home Loan Bank stock 17,121 N/A N/A N/A N/A Loans held for sale 110,552 — 110,552 — 110,552 Loans, net 3,147,498 — — 3,176,442 3,176,442 Retirement plan annuities 13,333 — — 13,333 13,333 Accrued interest receivable 9,807 — 9,807 — 9,807 Financial liabilities: Deposits 2,942,873 — — 2,943,899 2,943,899 Borrowed funds 354,132 — 354,881 — 354,881 Subordinated debt 33,907 — — 34,619 34,619 Mortgagors' escrow accounts 6,053 — — 6,053 6,053 Accrued interest payable 1,669 — 1,669 — 1,669 Derivative loan commitments: Assets 1,385 — — 1,385 1,385 Liabilities 174 — — 174 174 Interest rate swap agreements: Assets 15,092 — 15,092 — 15,092 Liabilities 15,092 — 15,092 — 15,092 Forward loan sale commitments: Assets 26 — — 26 26 Liabilities 158 — — 158 158 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share | Three Months Ended September 30, 2020 2019 Net income applicable to common stock (in thousands) $ 11,893 $ 7,113 Average number of common shares outstanding 58,375,742 58,453,259 Less: Average unallocated ESOP shares (3,910,403) (2,814,525) Average number of common shares outstanding used to calculate basic earnings per common share 54,465,339 55,638,734 Common stock equivalents — — Average number of common shares outstanding used to calculate diluted earnings per common share 54,465,339 55,638,734 Earnings per common share: Basic $ 0.22 $ 0.13 Diluted $ 0.22 $ 0.13 Nine Months Ended September 30, 2020 2019 Net income available to common stockholders (in thousands) $ 27,192 $ 13,961 Average number of common shares outstanding 58,403,825 58,461,953 Less: Average unallocated ESOP shares (3,967,735) (1,606,023) Weighted average number of common shares outstanding used to calculate basic earnings per common share 54,436,090 56,855,930 Weighted average number of common shares outstanding used to calculate diluted earnings per common share 54,436,090 56,855,930 Earnings per common share: Basic $ 0.50 $ 0.25 Diluted $ 0.50 $ 0.25 Share amounts related to periods prior to the August 14, 2019 closing of the conversion offering have been restated to give retroactive recognition to the 1.795431 exchange ratio applied in the conversion offering. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
SEGMENT REPORTING | |
Summary of reportable segments | Three Months Ended September 30, 2020 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 30,599 $ 1,000 $ (430) $ — $ 31,169 Provision for loan losses 13,454 — — — 13,454 Net interest and dividend income (loss), after provision for loan losses 17,145 1,000 (430) — 17,715 Mortgage banking income: Gain on sale of mortgage loans — 34,055 — — 34,055 Intersegment gain (loss) (645) 645 — — — Changes in mortgage servicing rights fair value (354) 161 — — (193) Other 334 3,947 — — 4,281 Total mortgage banking income (loss) (665) 38,808 — — 38,143 Other noninterest income (loss) 6,326 (8) — — 6,318 Total noninterest income 5,661 38,800 — — 44,461 Noninterest expense 26,300 19,156 266 — 45,722 Income (loss) before income taxes (3,494) 20,644 (696) — 16,454 Provision (benefit) for income taxes 571 4,550 (560) — 4,561 Net income (loss) $ (4,065) $ 16,094 $ (136) $ — $ 11,893 Nine Months Ended September 30, 2020 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 86,248 $ 2,020 $ (952) $ — $ 87,316 Provision for loan losses 27,207 — — — 27,207 Net interest and dividend income (loss), after provision for loan losses 59,041 2,020 (952) — 60,109 Mortgage banking income: Gain on sale of mortgage loans — 77,195 — — 77,195 Intersegment gain (loss) (2,444) 2,444 — — — Changes in mortgage servicing rights fair value (2,014) (3,677) — — (5,691) Other 1,031 9,931 — — 10,962 Total mortgage banking income (loss) (3,427) 85,893 — — 82,466 Other noninterest income (loss) 19,640 (141) — — 19,499 Total noninterest income 16,213 85,752 — — 101,965 Noninterest expense 75,806 48,235 907 — 124,948 Income (loss) before income taxes (552) 39,537 (1,859) — 37,126 Provision (benefit) for income taxes 2,199 8,667 (932) — 9,934 Net income (loss) $ (2,751) $ 30,870 $ (927) $ — $ 27,192 Total assets at period end $ 4,404,842 $ 280,983 $ 729,838 $ (987,344) $ 4,428,319 Goodwill at period end $ 59,042 $ 10,760 $ — $ — $ 69,802 Three Months Ended September 30, 2019 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income $ 27,855 $ 285 $ (155) $ — $ 27,985 Provision for loan losses 889 — — — 889 Net interest and dividend income, after provision for loan losses 26,966 285 (155) — 27,096 Mortgage banking income: Gain on sale of mortgage loans — 11,015 — — 11,015 Intersegment gain (loss) (393) 393 — — — Changes in mortgage servicing rights fair value (591) (1,883) — — (2,474) Other 369 2,595 — — 2,964 Total mortgage banking income (615) 12,120 — — 11,505 Other noninterest income 5,772 (4) — — 5,768 Total noninterest income 5,157 12,116 — — 17,273 Noninterest expense 24,405 11,227 571 — 36,203 Income (loss) before income taxes 7,718 1,174 (726) — 8,166 Provision (benefit) for income taxes 1,019 171 (137) — 1,053 Net income (loss) $ 6,699 $ 1,003 $ (589) $ — $ 7,113 Nine Months Ended September 30, 2019 HarborOne HarborOne HarborOne Bank Mortgage Bancorp Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 81,296 $ 604 $ (1,172) $ — $ 80,728 Provision for loan losses 3,496 — — — 3,496 Net interest and dividend income (loss), after provision for loan losses 77,800 604 (1,172) — 77,232 Mortgage banking income: Gain on sale of mortgage loans 1 24,085 — — 24,086 Intersegment gain (loss) (866) 866 — — — Changes in mortgage servicing rights fair value (1,599) (5,267) — — (6,866) Other 1,127 6,315 — — 7,442 Total mortgage banking income (loss) (1,337) 25,999 — — 24,662 Other noninterest income (loss) 18,191 (20) — — 18,171 Total noninterest income 16,854 25,979 — — 42,833 Noninterest expense 74,527 27,496 1,853 — 103,876 Income (loss) before income taxes 20,127 (913) (3,025) — 16,189 Provision (benefit) for income taxes 3,267 (256) (783) — 2,228 Net income (loss) $ 16,860 $ (657) $ (2,242) $ — $ 13,961 Total assets at period end $ 3,821,671 $ 152,800 $ 693,851 $ (719,302) $ 3,949,020 Goodwill at period end $ 58,875 $ 10,760 $ — $ — $ 69,635 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ / shares in Units, $ in Thousands | Aug. 14, 2019USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Sep. 30, 2019 | Sep. 30, 2020USD ($)itemOfficeloanstate | Sep. 30, 2019USD ($) | Aug. 13, 2019 |
Shares issued | shares | 31,036,812 | |||||
Shares issued (in dollars per share) | $ / shares | $ 10 | |||||
Net proceeds from sale of common stock | $ 304,100 | $ 304,111 | ||||
Stock conversion ratio | 1.795431 | 1.795431 | 1.795431 | 1.795431 | 1.795431 | |
Shares issued in exchange | shares | 12,162,763 | |||||
Number of full-service bank offices | item | 26 | |||||
LTV 80 to 100 Percent | Residential | ||||||
Loan To Value Ratio | 80.00% | |||||
HarborOne Mortgage | ||||||
Number of offices | Office | 30 | |||||
Additional states licensed to lend | state | 4 | |||||
MHC | HarborOne Bancorp Inc. | ||||||
Ownership percentage | 53.00% | |||||
HarborOne Bank | ||||||
Number of security corporation subsidiaries | item | 2 | |||||
Principal amount of loans out of deferral period | $ 253,300 | $ 253,300 | ||||
Principal amount of loans out of deferral period and delinquent more than 30 days | 5,800 | $ 5,800 | ||||
HarborOne Bank | Commercial | ||||||
Number of payment deferrals | loan | 99 | |||||
Principal amount of loans impacted by deferral payments | $ 100,000 | $ 100,000 |
SECURITIES - Gross unrealized g
SECURITIES - Gross unrealized gains and losses (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Securities available for sale | ||
Amortized Cost | $ 276,208 | $ 237,574 |
Gross Unrealized Gains | 4,612 | 2,195 |
Gross Unrealized Losses | 512 | 296 |
Fair Value | 280,308 | 239,473 |
Securities held to maturity | ||
Amortized Cost | 26,372 | |
Gross Unrealized Gains | 561 | |
Gross Unrealized Losses | 6 | |
Fair Value | 26,927 | |
U.S. government and government-sponsored enterprise obligations | ||
Securities available for sale | ||
Amortized Cost | 10,003 | 14,994 |
Gross Unrealized Gains | 134 | 210 |
Fair Value | 10,137 | 15,204 |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Securities available for sale | ||
Amortized Cost | 230,072 | 163,982 |
Gross Unrealized Gains | 3,067 | 1,456 |
Gross Unrealized Losses | 512 | 265 |
Fair Value | 232,627 | 165,173 |
Securities held to maturity | ||
Amortized Cost | 12,682 | |
Gross Unrealized Gains | 86 | |
Gross Unrealized Losses | 6 | |
Fair Value | 12,762 | |
U.S. government-sponsored collateralized mortgage obligations | ||
Securities available for sale | ||
Amortized Cost | 19,675 | 26,137 |
Gross Unrealized Gains | 465 | 243 |
Gross Unrealized Losses | 7 | |
Fair Value | 20,140 | 26,373 |
Securities held to maturity | ||
Amortized Cost | 1,433 | |
Gross Unrealized Gains | 69 | |
Fair Value | 1,502 | |
SBA asset-backed securities | ||
Securities available for sale | ||
Amortized Cost | 16,458 | 32,461 |
Gross Unrealized Gains | 946 | 286 |
Gross Unrealized Losses | 24 | |
Fair Value | $ 17,404 | 32,723 |
Securities held to maturity | ||
Amortized Cost | 5,308 | |
Gross Unrealized Gains | 124 | |
Fair Value | 5,432 | |
Municipal bonds | ||
Securities held to maturity | ||
Amortized Cost | 6,949 | |
Gross Unrealized Gains | 282 | |
Fair Value | $ 7,231 |
SECURITIES - Contractual maturi
SECURITIES - Contractual maturity (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2020USD ($)security | Sep. 30, 2020USD ($)security | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)security | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)security | |
Securities | ||||||
Pledged as collateral | $ 48,900,000 | $ 48,900,000 | ||||
Fair Value | $ 26,927,000 | |||||
Amortized Cost-Available-for-Sale | ||||||
After 1 year through 5 years | 5,000,000 | 5,000,000 | ||||
After 5 years through 10 years | 5,003,000 | 5,003,000 | ||||
Total for contractual maturity | 10,003,000 | 10,003,000 | ||||
Amortized Cost | 276,208,000 | 276,208,000 | 237,574,000 | |||
Fair Value-Available-for-Sale | ||||||
After 1 year through 5 years | 5,012,000 | 5,012,000 | ||||
After 5 years through 10 years | 5,125,000 | 5,125,000 | ||||
Total for contractual maturity | 10,137,000 | 10,137,000 | ||||
Total | 280,308,000 | 280,308,000 | 239,473,000 | |||
Amortized Cost-Held-to-Maturity | ||||||
Amortized Cost | 26,372,000 | |||||
Gross Unrealized Gains | $ 561,000 | |||||
Sales | ||||||
Proceeds | 72,333,000 | $ 28,391,000 | ||||
Gross gains | 2,521,000 | 1,267,000 | ||||
Calls | ||||||
Proceeds | $ 2,000,000 | $ 11,775,000 | 8,635,000 | 20,145,000 | ||
Gross gains | $ 77,000 | $ 12,000 | $ 77,000 | |||
Mortgage-backed securities | ||||||
Securities | ||||||
Number of securities pledged | security | 26 | 26 | 7 | |||
Pledged as collateral | $ 48,900,000 | $ 48,900,000 | $ 15,700,000 | |||
HTM securities | ||||||
Securities | ||||||
Number of securities sold | security | 5 | |||||
Sold HTM securities | ||||||
Securities | ||||||
Realized gain | $ 1,300,000 | |||||
Amortized Cost-Held-to-Maturity | ||||||
Amortized Cost | 4,500,000 | |||||
Transferred securities | ||||||
Securities | ||||||
Transfer amount | 21,500,000 | |||||
Fair Value-Available-for-Sale | ||||||
Total | 22,100,000 | |||||
Amortized Cost-Held-to-Maturity | ||||||
Gross Unrealized Gains | $ 522,000 | |||||
U.S. government agency and government-sponsored residential mortgage-backed securities | ||||||
Securities | ||||||
Fair Value | 12,762,000 | |||||
Amortized Cost-Available-for-Sale | ||||||
No single maturity date | 230,072,000 | 230,072,000 | ||||
Amortized Cost | 230,072,000 | 230,072,000 | 163,982,000 | |||
Fair Value-Available-for-Sale | ||||||
No single maturity date | 232,627,000 | 232,627,000 | ||||
Total | 232,627,000 | 232,627,000 | 165,173,000 | |||
Amortized Cost-Held-to-Maturity | ||||||
Amortized Cost | 12,682,000 | |||||
Gross Unrealized Gains | 86,000 | |||||
U.S. government-sponsored collateralized mortgage obligations | ||||||
Securities | ||||||
Fair Value | 1,502,000 | |||||
Amortized Cost-Available-for-Sale | ||||||
No single maturity date | 19,675,000 | 19,675,000 | ||||
Amortized Cost | 19,675,000 | 19,675,000 | 26,137,000 | |||
Fair Value-Available-for-Sale | ||||||
No single maturity date | 20,140,000 | 20,140,000 | ||||
Total | 20,140,000 | 20,140,000 | 26,373,000 | |||
Amortized Cost-Held-to-Maturity | ||||||
Amortized Cost | 1,433,000 | |||||
Gross Unrealized Gains | 69,000 | |||||
SBA asset-backed securities | ||||||
Securities | ||||||
Fair Value | 5,432,000 | |||||
Amortized Cost-Available-for-Sale | ||||||
No single maturity date | 16,458,000 | 16,458,000 | ||||
Amortized Cost | 16,458,000 | 16,458,000 | 32,461,000 | |||
Fair Value-Available-for-Sale | ||||||
No single maturity date | 17,404,000 | 17,404,000 | ||||
Total | 17,404,000 | $ 17,404,000 | 32,723,000 | |||
Amortized Cost-Held-to-Maturity | ||||||
Amortized Cost | 5,308,000 | |||||
Gross Unrealized Gains | 124,000 | |||||
SBA asset-backed securities | Minimum | ||||||
Securities | ||||||
Maturity period | 2 years | |||||
SBA asset-backed securities | Maximum | ||||||
Securities | ||||||
Maturity period | 30 years | |||||
Municipal bonds | ||||||
Securities | ||||||
Fair Value | 7,231,000 | |||||
Amortized Cost-Held-to-Maturity | ||||||
Amortized Cost | 6,949,000 | |||||
Gross Unrealized Gains | 282,000 | |||||
U.S. government and government-sponsored enterprise obligations | ||||||
Amortized Cost-Available-for-Sale | ||||||
Amortized Cost | 10,003,000 | $ 10,003,000 | 14,994,000 | |||
Fair Value-Available-for-Sale | ||||||
Total | $ 10,137,000 | $ 10,137,000 | $ 15,204,000 | |||
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 | 1 year |
SECURITIES - Gross unrealized l
SECURITIES - Gross unrealized losses aggregated by category (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($)security | Dec. 31, 2019USD ($) | |
Marketable Securities [Line Items] | ||
Number of debt securities with unrealized loss | security | 20 | |
Amortized cost of securities with unrealized losses | $ 85,600 | |
Aggregate depreciation of securities with unrealized losses (as a percent) | 0.60% | |
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | $ 172 | |
Twelve Months and Over | 124 | |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 52,191 | |
Twelve Months and Over | 8,781 | |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | $ 493 | 147 |
Twelve Months and Over | 19 | 118 |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 81,377 | 47,343 |
Twelve Months and Over | $ 3,721 | 7,986 |
Continuous unrealized losses, Gross Unrealized Losses, Held-to-Maturity | ||
Twelve Months and Over | 6 | |
Continuous unrealized losses, Fair Value, Held-for-Maturity | ||
Twelve Months and Over | 2,538 | |
U.S. government-sponsored collateralized mortgage obligations | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | 1 | |
Twelve Months and Over | 6 | |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 884 | |
Twelve Months and Over | 795 | |
SBA asset-backed securities | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | 24 | |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | $ 3,964 |
LOANS HELD FOR SALE (Details)
LOANS HELD FOR SALE (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Fair value and contractual principal outstanding: | |||
Loans held for sale, fair value | $ 190,373,000 | $ 110,552,000 | |
Loans held for sale, contractual principal outstanding | 181,746,000 | 107,472,000 | |
Fair value less unpaid principal balance | 8,627,000 | 3,080,000 | |
Change in fair value of mortgage loans held for sale | 5,500,000 | $ 1,300,000 | |
90 Days or More | |||
Fair value and contractual principal outstanding: | |||
Loans held for sale, fair value | $ 0 | $ 0 |
LOANS - Summary of Balances of
LOANS - Summary of Balances of Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Loans | ||||||
Total loans | $ 3,515,831 | $ 3,171,558 | ||||
Less: Allowance for loan losses | (49,223) | $ (36,107) | (24,060) | $ (23,044) | $ (22,261) | $ (20,655) |
Net loans | 3,466,608 | 3,147,498 | ||||
Residential | ||||||
Loans | ||||||
Total loans | 1,130,935 | 1,107,076 | ||||
Less: Allowance for loan losses | (7,600) | (5,857) | (3,178) | (3,175) | (3,100) | (3,239) |
Residential | 1-4 family | ||||||
Loans | ||||||
Total loans | 954,198 | 937,305 | ||||
Residential | Second mortgages and equity lines of credit | ||||||
Loans | ||||||
Total loans | 150,315 | 155,716 | ||||
Residential | Residential real estate construction | ||||||
Loans | ||||||
Total loans | 26,422 | 14,055 | ||||
Commercial | ||||||
Loans | ||||||
Total loans | 2,072,153 | 1,628,601 | ||||
Commercial | Commercial real estate | ||||||
Loans | ||||||
Total loans | 1,380,071 | 1,168,412 | ||||
Less: Allowance for loan losses | (26,098) | (18,389) | (12,875) | (11,840) | (11,100) | (10,059) |
Commercial | Commercial construction | ||||||
Loans | ||||||
Total loans | 211,953 | 153,907 | ||||
Less: Allowance for loan losses | (4,177) | (3,215) | (2,526) | (2,561) | (2,927) | (2,707) |
Commercial | Commercial and industrial | ||||||
Loans | ||||||
Total loans | 480,129 | 306,282 | ||||
Less: Allowance for loan losses | (4,966) | (3,562) | (2,977) | (2,503) | (2,512) | (2,286) |
Consumer loans | ||||||
Loans | ||||||
Total loans | 312,743 | 435,881 | ||||
Less: Allowance for loan losses | (2,762) | $ (2,204) | (1,010) | $ (1,038) | $ (1,063) | $ (1,154) |
Consumer loans | Auto | ||||||
Loans | ||||||
Total loans | 303,598 | 424,592 | ||||
Consumer loans | Personal | ||||||
Loans | ||||||
Total loans | $ 9,145 | $ 11,289 |
LOANS - Loans Sold or Transferr
LOANS - Loans Sold or Transferred (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Commercial real estate | ||
Loans | ||
Unpaid principal balance of loans serviced for others | $ 260.5 | $ 195.2 |
LOANS - Acquired Loans (Details
LOANS - Acquired Loans (Details) - PCI - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Oct. 05, 2018 |
Loans | |||
Outstanding balance | $ 4,354 | $ 4,609 | |
Carrying amount | $ 4,133 | $ 4,378 | |
Coastway | |||
Loans | |||
Loans purchased | $ 5,400 |
LOANS - PCI Loans (Details)
LOANS - PCI Loans (Details) - PCI - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accretable yield: | ||||
Balance at beginning of period | $ 145 | $ 169 | $ 149 | $ 185 |
Accretion | (3) | (5) | (7) | (7) |
Reclassification from nonaccretable difference | (14) | |||
Balance at end of period | $ 142 | $ 164 | $ 142 | $ 164 |
LOANS - Allowance for Loan Loss
LOANS - Allowance for Loan Losses Activity and Allocation to Loan Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Activity in the allowance for loan losses | ||||||
Balance | $ 36,107 | $ 22,261 | $ 24,060 | $ 20,655 | ||
Provision (credit) for loan losses | 13,454 | 889 | 27,207 | 3,496 | ||
Charge-offs | (415) | (259) | (2,597) | (1,629) | ||
Recoveries | 77 | 153 | 553 | 522 | ||
Balance | 49,223 | 23,044 | 49,223 | 23,044 | ||
Allocation of the allowance to loan segments | ||||||
Total loans | $ 3,515,831 | $ 3,171,558 | ||||
Total allowance for loan losses | 36,107 | 23,044 | 24,060 | 20,655 | 49,223 | 24,060 |
Impaired loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 1,161 | |||||
Balance | 1,812 | 1,812 | ||||
Allocation of the allowance to loan segments | ||||||
Total loans | 54,064 | 44,880 | ||||
Total allowance for loan losses | 1,812 | 1,161 | 1,812 | 1,161 | ||
Non-impaired loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 22,899 | |||||
Balance | 47,411 | 47,411 | ||||
Allocation of the allowance to loan segments | ||||||
Total loans | 3,461,767 | 3,126,678 | ||||
Total allowance for loan losses | 47,411 | 22,899 | 47,411 | 22,899 | ||
Residential | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 5,857 | 3,100 | 3,178 | 3,239 | ||
Provision (credit) for loan losses | 1,721 | 1 | 4,270 | (226) | ||
Charge-offs | (52) | (136) | ||||
Recoveries | 22 | 74 | 204 | 298 | ||
Balance | 7,600 | 3,175 | 7,600 | 3,175 | ||
Allocation of the allowance to loan segments | ||||||
Total loans | 1,130,935 | 1,107,076 | ||||
Total allowance for loan losses | 7,600 | 3,175 | 3,178 | 3,239 | 7,600 | 3,178 |
Residential | Impaired loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 985 | |||||
Balance | 950 | 950 | ||||
Allocation of the allowance to loan segments | ||||||
Total loans | 28,061 | 27,275 | ||||
Total allowance for loan losses | 950 | 985 | 950 | 985 | ||
Residential | Non-impaired loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 2,193 | |||||
Balance | 6,650 | 6,650 | ||||
Allocation of the allowance to loan segments | ||||||
Total loans | 1,102,874 | 1,079,801 | ||||
Total allowance for loan losses | 6,650 | 2,193 | 6,650 | 2,193 | ||
Commercial | ||||||
Allocation of the allowance to loan segments | ||||||
Total loans | 2,072,153 | 1,628,601 | ||||
Consumer loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 2,204 | 1,063 | 1,010 | 1,154 | ||
Provision (credit) for loan losses | 643 | 113 | 2,142 | 341 | ||
Charge-offs | (140) | (216) | (519) | (660) | ||
Recoveries | 55 | 78 | 129 | 203 | ||
Balance | 2,762 | 1,038 | 2,762 | 1,038 | ||
Allocation of the allowance to loan segments | ||||||
Total loans | 312,743 | 435,881 | ||||
Total allowance for loan losses | 2,762 | 1,038 | 1,010 | 1,154 | 2,762 | 1,010 |
Consumer loans | Non-impaired loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 1,010 | |||||
Balance | 2,762 | 2,762 | ||||
Allocation of the allowance to loan segments | ||||||
Total loans | 312,743 | 435,881 | ||||
Total allowance for loan losses | 2,762 | 1,010 | 2,762 | 1,010 | ||
Unallocated | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 2,880 | 1,559 | 1,494 | 1,210 | ||
Provision (credit) for loan losses | 740 | 368 | 2,126 | 717 | ||
Balance | 3,620 | 1,927 | 3,620 | 1,927 | ||
Allocation of the allowance to loan segments | ||||||
Total allowance for loan losses | 3,620 | 1,927 | 1,494 | 1,210 | 3,620 | 1,494 |
Unallocated | Non-impaired loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 1,494 | |||||
Balance | 3,620 | 3,620 | ||||
Allocation of the allowance to loan segments | ||||||
Total allowance for loan losses | 3,620 | 1,494 | 3,620 | 1,494 | ||
Commercial real estate | Commercial | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 18,389 | 11,100 | 12,875 | 10,059 | ||
Provision (credit) for loan losses | 7,771 | 739 | 14,458 | 1,775 | ||
Charge-offs | (62) | (1,236) | ||||
Recoveries | 1 | 1 | 6 | |||
Balance | 26,098 | 11,840 | 26,098 | 11,840 | ||
Allocation of the allowance to loan segments | ||||||
Total loans | 1,380,071 | 1,168,412 | ||||
Total allowance for loan losses | 26,098 | 11,840 | 12,875 | 10,059 | 26,098 | 12,875 |
Commercial real estate | Commercial | Impaired loans | ||||||
Allocation of the allowance to loan segments | ||||||
Total loans | 4,943 | 530 | ||||
Commercial real estate | Commercial | Non-impaired loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 12,875 | |||||
Balance | 26,098 | 26,098 | ||||
Allocation of the allowance to loan segments | ||||||
Total loans | 1,375,128 | 1,167,882 | ||||
Total allowance for loan losses | 26,098 | 12,875 | 26,098 | 12,875 | ||
Commercial construction | Commercial | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 3,215 | 2,927 | 2,526 | 2,707 | ||
Provision (credit) for loan losses | 962 | (366) | 1,651 | (146) | ||
Balance | 4,177 | 2,561 | 4,177 | 2,561 | ||
Allocation of the allowance to loan segments | ||||||
Total loans | 211,953 | 153,907 | ||||
Total allowance for loan losses | 4,177 | 2,561 | 2,526 | 2,707 | 4,177 | 2,526 |
Commercial construction | Commercial | Impaired loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 251 | 251 | ||||
Allocation of the allowance to loan segments | ||||||
Total loans | 10,971 | 11,244 | ||||
Total allowance for loan losses | 251 | 251 | 251 | |||
Commercial construction | Commercial | Non-impaired loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 2,526 | |||||
Balance | 3,926 | 3,926 | ||||
Allocation of the allowance to loan segments | ||||||
Total loans | 200,982 | 142,663 | ||||
Total allowance for loan losses | 3,926 | 2,526 | 3,926 | 2,526 | ||
Commercial and industrial | Commercial | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 3,562 | 2,512 | 2,977 | 2,286 | ||
Provision (credit) for loan losses | 1,617 | 34 | 2,560 | 1,035 | ||
Charge-offs | (213) | (43) | (790) | (833) | ||
Recoveries | 219 | 15 | ||||
Balance | 4,966 | 2,503 | 4,966 | 2,503 | ||
Allocation of the allowance to loan segments | ||||||
Total loans | 480,129 | 306,282 | ||||
Total allowance for loan losses | 4,966 | $ 2,503 | 2,977 | $ 2,286 | 4,966 | 2,977 |
Commercial and industrial | Commercial | Impaired loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 176 | |||||
Balance | 611 | 611 | ||||
Allocation of the allowance to loan segments | ||||||
Total loans | 10,089 | 5,831 | ||||
Total allowance for loan losses | 611 | 176 | 611 | 176 | ||
Commercial and industrial | Commercial | Non-impaired loans | ||||||
Activity in the allowance for loan losses | ||||||
Balance | 2,801 | |||||
Balance | 4,355 | 4,355 | ||||
Allocation of the allowance to loan segments | ||||||
Total loans | 470,040 | 300,451 | ||||
Total allowance for loan losses | $ 4,355 | $ 2,801 | $ 4,355 | $ 2,801 |
LOANS - Summary of Past Due and
LOANS - Summary of Past Due and Non-Accrual Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Summary of past due and non-accrual loans | ||
Past Due | $ 37,588 | $ 39,097 |
Loans on Non-accrual | 40,027 | 30,321 |
Loans past due 90 days or more and still accruing | 0 | 0 |
30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 3,830 | 15,292 |
60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 10,393 | 11,623 |
90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 23,365 | 12,182 |
Residential | 1-4 family | ||
Summary of past due and non-accrual loans | ||
Past Due | 7,406 | 20,654 |
Loans on Non-accrual | 11,925 | 10,610 |
Residential | 1-4 family | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 595 | 9,364 |
Residential | 1-4 family | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 2,114 | 5,622 |
Residential | 1-4 family | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 4,697 | 5,668 |
Residential | Second mortgages and equity lines of credit | ||
Summary of past due and non-accrual loans | ||
Past Due | 981 | 1,255 |
Loans on Non-accrual | 951 | 1,561 |
Residential | Second mortgages and equity lines of credit | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 660 | 418 |
Residential | Second mortgages and equity lines of credit | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 24 | 77 |
Residential | Second mortgages and equity lines of credit | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 297 | 760 |
Commercial | Commercial real estate | ||
Summary of past due and non-accrual loans | ||
Past Due | 8,126 | 5,182 |
Loans on Non-accrual | 4,943 | 530 |
Commercial | Commercial real estate | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 261 | |
Commercial | Commercial real estate | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 3,183 | 4,730 |
Commercial | Commercial real estate | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 4,943 | 191 |
Commercial | Commercial construction | ||
Summary of past due and non-accrual loans | ||
Past Due | 10,939 | 1,960 |
Loans on Non-accrual | 10,939 | 11,244 |
Commercial | Commercial construction | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 10,939 | 1,960 |
Commercial | Commercial and industrial | ||
Summary of past due and non-accrual loans | ||
Past Due | 7,932 | 5,855 |
Loans on Non-accrual | 10,078 | 5,831 |
Commercial | Commercial and industrial | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,725 | 2,000 |
Commercial | Commercial and industrial | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 4,643 | 722 |
Commercial | Commercial and industrial | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,564 | 3,133 |
Consumer loans | Auto | ||
Summary of past due and non-accrual loans | ||
Past Due | 2,122 | 4,093 |
Loans on Non-accrual | 1,150 | 529 |
Consumer loans | Auto | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 819 | 3,180 |
Consumer loans | Auto | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 380 | 456 |
Consumer loans | Auto | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 923 | 457 |
Consumer loans | Personal | ||
Summary of past due and non-accrual loans | ||
Past Due | 82 | 98 |
Loans on Non-accrual | 41 | 16 |
Consumer loans | Personal | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 31 | 69 |
Consumer loans | Personal | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 49 | 16 |
Consumer loans | Personal | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | $ 2 | $ 13 |
LOANS - Impaired Loans (Details
LOANS - Impaired Loans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Recorded Investment | |||||
Impaired loans without a valuation allowance | $ 23,063,000 | $ 23,063,000 | $ 28,889,000 | ||
Impaired loans with a valuation allowance | 31,001,000 | 31,001,000 | 15,991,000 | ||
Total impaired loans | 54,064,000 | 54,064,000 | 44,880,000 | ||
Unpaid Principal Balance | |||||
Impaired loans without a valuation allowance | 27,515,000 | 27,515,000 | 30,815,000 | ||
Impaired loans with a valuation allowance | 31,839,000 | 31,839,000 | 16,544,000 | ||
Total impaired loans | 59,354,000 | 59,354,000 | 47,359,000 | ||
Activity in the allowance for loan losses | |||||
Allowance for loan losses for impaired loans | 1,812,000 | 1,812,000 | 1,161,000 | ||
Impaired loans | |||||
Average Recorded Investment | 52,134,000 | $ 40,464,000 | 48,558,000 | $ 40,232,000 | |
Interest Income Recognized | 281,000 | 472,000 | 864,000 | 1,443,000 | |
Interest Income Recognized on Cash Basis | 279,000 | 388,000 | 805,000 | 1,169,000 | |
Additional funds committed to be advanced in connection with impaired loans | 0 | 0 | 0 | 0 | |
Residential | |||||
Recorded Investment | |||||
Impaired loans without a valuation allowance | 14,101,000 | 14,101,000 | 11,610,000 | ||
Impaired loans with a valuation allowance | 13,960,000 | 13,960,000 | 15,665,000 | ||
Unpaid Principal Balance | |||||
Impaired loans without a valuation allowance | 15,322,000 | 15,322,000 | 12,140,000 | ||
Impaired loans with a valuation allowance | 14,308,000 | 14,308,000 | 16,218,000 | ||
Activity in the allowance for loan losses | |||||
Allowance for loan losses for impaired loans | 950,000 | 950,000 | 985,000 | ||
Impaired loans | |||||
Average Recorded Investment | 26,542,000 | 29,375,000 | 26,454,000 | 30,316,000 | |
Interest Income Recognized | 272,000 | 451,000 | 847,000 | 1,399,000 | |
Interest Income Recognized on Cash Basis | 270,000 | 367,000 | 788,000 | 1,125,000 | |
Commercial real estate | Commercial | |||||
Recorded Investment | |||||
Impaired loans without a valuation allowance | 4,943,000 | 4,943,000 | 530,000 | ||
Unpaid Principal Balance | |||||
Impaired loans without a valuation allowance | 6,194,000 | 6,194,000 | 530,000 | ||
Impaired loans | |||||
Average Recorded Investment | 4,287,000 | 3,202,000 | 671,000 | ||
Interest Income Recognized | 1,000 | ||||
Interest Income Recognized on Cash Basis | 1,000 | ||||
Commercial construction | Commercial | |||||
Recorded Investment | |||||
Impaired loans without a valuation allowance | 11,244,000 | ||||
Impaired loans with a valuation allowance | 10,971,000 | 10,971,000 | |||
Unpaid Principal Balance | |||||
Impaired loans without a valuation allowance | 11,244,000 | ||||
Impaired loans with a valuation allowance | 11,244,000 | 11,244,000 | |||
Activity in the allowance for loan losses | |||||
Allowance for loan losses for impaired loans | 251,000 | 251,000 | |||
Impaired loans | |||||
Average Recorded Investment | 10,971,000 | 5,622,000 | 11,039,000 | 3,748,000 | |
Commercial and industrial | Commercial | |||||
Recorded Investment | |||||
Impaired loans without a valuation allowance | 4,019,000 | 4,019,000 | 5,505,000 | ||
Impaired loans with a valuation allowance | 6,070,000 | 6,070,000 | 326,000 | ||
Unpaid Principal Balance | |||||
Impaired loans without a valuation allowance | 5,999,000 | 5,999,000 | 6,901,000 | ||
Impaired loans with a valuation allowance | 6,287,000 | 6,287,000 | 326,000 | ||
Activity in the allowance for loan losses | |||||
Allowance for loan losses for impaired loans | 611,000 | 611,000 | $ 176,000 | ||
Impaired loans | |||||
Average Recorded Investment | 10,334,000 | 5,467,000 | 7,863,000 | 5,497,000 | |
Interest Income Recognized | 9,000 | 21,000 | 16,000 | 44,000 | |
Interest Income Recognized on Cash Basis | $ 9,000 | $ 21,000 | $ 16,000 | $ 44,000 |
LOANS - Troubled Debt Restructu
LOANS - Troubled Debt Restructurings (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($)contract | Sep. 30, 2019USD ($)contract | Sep. 30, 2020USD ($)contract | Sep. 30, 2019contract | Dec. 31, 2019USD ($) | |
Troubled debt restructurings | |||||
TDR modifications | $ 0 | $ 0 | |||
Recorded investment of troubled debt restructurings | 17,000 | $ 17,000 | $ 20,000 | ||
Recorded investment of troubled debt restructurings that were nonaccruing | $ 3,900 | $ 3,900 | 5,000 | ||
Number of troubled debt restructurings that defaulted | contract | 0 | 0 | 0 | 0 | |
Commercial | |||||
Troubled debt restructurings | |||||
Recorded investment of troubled debt restructurings | $ 2,500 | $ 2,500 | 3,000 | ||
Recorded investment of troubled debt restructurings that were nonaccruing | $ 2,500 | $ 2,500 | $ 3,000 |
LOANS - Risk Rating (Details)
LOANS - Risk Rating (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Loans by risk rating | ||
Total loans | $ 3,515,831 | $ 3,171,558 |
Commercial | ||
Loans by risk rating | ||
Total loans | 2,072,153 | 1,628,601 |
Commercial real estate | Commercial | ||
Loans by risk rating | ||
Total loans | 1,380,071 | 1,168,412 |
Commercial real estate | Commercial | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 1,352,794 | 1,163,343 |
Commercial real estate | Commercial | Loans rated 7, special mention | ||
Loans by risk rating | ||
Total loans | 23,646 | 4,539 |
Commercial real estate | Commercial | Loans rated 8, substandard | ||
Loans by risk rating | ||
Total loans | 524 | 530 |
Commercial real estate | Commercial | Loans rated 9, doubtful | ||
Loans by risk rating | ||
Total loans | 3,107 | |
Commercial construction | Commercial | ||
Loans by risk rating | ||
Total loans | 211,953 | 153,907 |
Commercial construction | Commercial | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 201,014 | 127,962 |
Commercial construction | Commercial | Loans rated 7, special mention | ||
Loans by risk rating | ||
Total loans | 14,701 | |
Commercial construction | Commercial | Loans rated 8, substandard | ||
Loans by risk rating | ||
Total loans | 10,939 | 11,244 |
Commercial and industrial | Commercial | ||
Loans by risk rating | ||
Total loans | 480,129 | 306,282 |
Commercial and industrial | Commercial | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 466,254 | 294,507 |
Commercial and industrial | Commercial | Loans rated 7, special mention | ||
Loans by risk rating | ||
Total loans | 3,519 | 6,117 |
Commercial and industrial | Commercial | Loans rated 8, substandard | ||
Loans by risk rating | ||
Total loans | 8,342 | 3,223 |
Commercial and industrial | Commercial | Loans rated 9, doubtful | ||
Loans by risk rating | ||
Total loans | $ 2,014 | $ 2,435 |
MORTGAGE LOAN SERVICING - Key A
MORTGAGE LOAN SERVICING - Key Assumptions (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Unpaid Principal Balance | ||
Unpaid principal balances of mortgage loans serviced | $ 2,650 | $ 1,830 |
Prepayment speed | 15.90% | 12.43% |
Discount rate | 9.26% | 9.34% |
Default rate | 2.51% | 2.61% |
MORTGAGE LOAN SERVICING - Fair
MORTGAGE LOAN SERVICING - Fair value of MSR (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Changes to the fair value of Mortgage Servicing Rights | ||||
Mortgage servicing rights, at fair value, beginning of year | $ 16,127 | $ 18,156 | $ 17,150 | $ 22,217 |
Additions | 4,225 | 385 | 8,700 | 716 |
Changes in fair value due to : | ||||
Reductions from loans paid off during the period | (1,083) | (585) | (2,773) | (1,363) |
Changes in valuation inputs or assumptions | 890 | (1,889) | (2,918) | (5,503) |
Mortgage servicing rights, at fair value, end of year | 20,159 | 16,067 | 20,159 | 16,067 |
Fees and commissions, mortgage banking and servicing | $ 1,600 | $ 1,300 | $ 4,200 | $ 4,100 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | 6 Months Ended | |||
Jun. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
Goodwill [Line Items] | ||||
Goodwill | $ 69,802,000 | $ 69,802,000 | $ 69,635,000 | |
Goodwill impairment | $ 0 | |||
Impairment of intangible assets | $ 0 | |||
HarborOne Bank | ||||
Goodwill [Line Items] | ||||
Goodwill | 59,000,000 | |||
HarborOne Mortgage | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 10,800,000 |
DEPOSITS - Summary of deposits
DEPOSITS - Summary of deposits (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
DEPOSITS | ||
NOW and demand deposit accounts | $ 852,356 | $ 572,280 |
Regular savings and club accounts | 912,017 | 626,685 |
Money market deposit accounts | 815,644 | 856,830 |
Total non-certificate accounts | 2,580,017 | 2,055,795 |
Term certificate accounts greater than $250,000 | 142,266 | 169,595 |
Term certificate accounts less than or equal to $250,000 | 526,614 | 636,343 |
Brokered deposits | 116,991 | 81,140 |
Total certificate deposits, net | 785,871 | 887,078 |
Total deposits | 3,365,888 | 2,942,873 |
Total reciprocal deposits | $ 107,800 | $ 277,900 |
DEPOSITS - Maturity of deposits
DEPOSITS - Maturity of deposits (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Summary of certificate accounts by maturity | ||
Within 1 year | $ 720,786 | |
Over 1 year to 2 years | 45,648 | |
Over 2 years to 3 years | 13,174 | |
Over 3 years to 4 years | 5,737 | |
Over 4 years to 5 years | 1,326 | |
Total certificate deposits | 786,671 | |
Less unaccreted acquisition discount | (800) | |
Total certificate deposits, net | $ 785,871 | $ 887,078 |
Summary of certificate accounts by maturity | ||
Within 1 year | 1.25% | |
Over 1 year to 2 years | 1.78% | |
Over 2 years to 3 years | 1.96% | |
Over 3 years to 4 years | 1.16% | |
Over 4 years to 5 years | 0.97% | |
Weighted average interest rate | 1.29% |
BORROWED FUNDS - FHLB Advances
BORROWED FUNDS - FHLB Advances (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Short-term borrowed funds | $ 95,000 | $ 183,000 |
Scheduled Maturity | ||
2020 | 27,000 | 87,000 |
2021 | 41,750 | 41,750 |
2022 | 10,000 | |
2023 | 20,191 | 20,195 |
2024 | 10,000 | 10,000 |
2025 and thereafter | 42,165 | 2,187 |
Total | 141,106 | 171,132 |
Redeemable at Call Date | ||
2020 | 107,000 | 137,000 |
2021 | 21,750 | 21,750 |
2023 | 191 | 195 |
2024 | 10,000 | 10,000 |
2025 and thereafter | 2,165 | 2,187 |
Total | $ 141,106 | $ 171,132 |
Weighted Average Rate | ||
2020 | 3.01% | 2.25% |
2021 | 2.47% | 2.47% |
2022 | 1.73% | |
2023 | 3.48% | 2.43% |
2024 | 1.68% | 1.68% |
2025 and thereafter | 1.34% | 1.10% |
Total | 2.32% | 2.16% |
Weighted Average Rate | ||
Weighted average rate | 0.43% | 1.80% |
BORROWED FUNDS - Others (Detail
BORROWED FUNDS - Others (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Borrowed funds | ||
Amount outstanding | $ 0 | $ 0 |
Federal Reserve Bank of Boston | ||
Borrowed funds | ||
Percentage of carrying value pledged as collateral | 59.00% | |
Amortized borrowing capacity | $ 74.9 | 46.9 |
Federal Home Loan Bank Advances | ||
Borrowed funds | ||
Carrying value of the loans pledged as collateral | 1,300 | $ 1,060 |
Available borrowing capacity | 660.7 | |
Other Loans | ||
Borrowed funds | ||
Additional borrowing capacity | $ 25 |
OTHER COMMITMENTS AND CONTING_3
OTHER COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Commitments to grant residential real estate loans - HarborOne Mortgage | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | $ 623,593 | $ 24,752 |
Commitments to grant other loans | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 103,213 | 74,114 |
Unadvanced funds on home equity lines of credit | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 173,775 | 157,867 |
Unadvanced funds on revolving lines of credit | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | 167,971 | 147,047 |
Unadvanced funds on construction loans | ||
OTHER COMMITMENTS AND CONTINGENCIES | ||
Financial instruments committed contract amount | $ 131,797 | $ 112,158 |
DERIVATIVES (Details)
DERIVATIVES (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($)derivative | Dec. 31, 2019USD ($) | |
Derivative disclosures | ||
Pledged as collateral | $ 48,900 | |
Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 60,383 | $ 16,503 |
Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | $ 47,761 | 15,424 |
Derivative loan commitments | ||
Derivative disclosures | ||
Loan commitment specified period | 60 days | |
Derivative loan commitments | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | $ 623,593 | 100,938 |
Derivative loan commitments | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 15,554 | 1,385 |
Derivative loan commitments | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 77 | 174 |
Forward loan sale commitments | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | 457,500 | 88,000 |
Forward loan sale commitments | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 193 | 26 |
Forward loan sale commitments | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | $ 1,400 | 158 |
Interest rate swaps | Cash Flow Hedging | ||
Derivative disclosures | ||
Number of Derivative Instruments Held | derivative | 1 | |
Maturity term | 4 years 6 months | |
Variable rate | 0.67% | |
Fixed rate | 0.35% | |
Amount to be reclassified in next 12 months | $ 462 | |
Notional Amount | 100,000 | |
Fair Value, Liabilities | 1,600 | |
Interest rate swaps | Designated as Hedging Instrument | ||
Derivative disclosures | ||
Notional Amount | 100,000 | |
Interest rate swaps | Designated as Hedging Instrument | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 1,648 | |
Interest rate swaps | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | 869,700 | 725,332 |
Interest rate swaps | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 44,636 | 15,092 |
Interest rate swaps | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 44,636 | 15,092 |
Risk Participation Agreements | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | $ 132,684 | $ 134,346 |
DERIVATIVES - Net gain and loss
DERIVATIVES - Net gain and losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative [Line Items] | ||||
Gain (loss) in OCI on derivatives (effective portion), net of tax | $ (1,121) | $ 415 | $ 296 | $ 4,239 |
Total | 5,493 | 1,203 | 13,191 | 1,884 |
Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Gain (loss) in OCI on derivatives (effective portion), net of tax | 82 | (1,187) | ||
(Loss) gain reclassified from OCI into interest income or interest expense (effective portion) | (82) | 67 | ||
Mortgage banking income | Not designated as hedging instruments | Derivative loan commitments | ||||
Derivative [Line Items] | ||||
Total | 4,738 | 421 | 14,266 | 1,435 |
Mortgage banking income | Not designated as hedging instruments | Forward loan sale commitments | ||||
Derivative [Line Items] | ||||
Total | $ 755 | $ 782 | $ (1,075) | $ 449 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) | Aug. 14, 2019 | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
STOCK-BASED COMPENSATION | |||||
Stock based compensation expense | $ 617,000 | $ 1,300,000 | $ 3,100,000 | $ 3,700,000 | |
Stock conversion ratio | 1.795431 | 1.795431 | 1.795431 | 1.795431 | 1.795431 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock options (Details) - Stock Options | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Stock Option Awards | |
Balance at the beginning of the period | shares | 2,169,243 |
Forfeited | shares | (20,948) |
Balance at the end of the period | shares | 2,148,295 |
Exercisable at end of the period | shares | 1,582,663 |
Unrecognized cost inclusive of directors' awards | $ | $ 991,000 |
Weighted average remaining recognition period (years) | 1 year 4 months 13 days |
Weighted Average Exercise Price | |
Balance at the beginning of the period | $ / shares | $ 9.87 |
Forfeited | $ / shares | 10.23 |
Balance at the end of the period | $ / shares | 9.87 |
Exercisable at end of the period | $ / shares | $ 10.07 |
Weighted Average Remaining Contractual Term (years) | |
Weighted average remaining contractual term, balance (years) | 7 years 3 months 29 days |
Exercisable at end of the period | 6 years 11 months 15 days |
Stock Option Awards, Nonvested | |
Balance at the beginning of the period | shares | 1,196,545 |
Vested | shares | (609,968) |
Forfeited | shares | (20,948) |
Balance at the end of the period | shares | 565,629 |
Weighted Average Exercise Price, Nonvested | |
Balance at the beginning of the period | $ / shares | $ 2.66 |
Vested | $ / shares | 2.72 |
Forfeited | $ / shares | 2.82 |
Balance at the end of the period | $ / shares | $ 2.59 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted stock (Details) - Restricted Stock | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Outstanding Restricted Stock Awards | |
Non-vested stock awards, beginning balance | shares | 333,765 |
Vested | shares | (293,688) |
Forfeited | shares | (8,679) |
Non-vested stock awards, ending balance | shares | 31,398 |
Unrecognized cost inclusive of directors' awards | $ | $ 256,000 |
Weighted average remaining recognition period (years) | 1 year 7 months 13 days |
Weighted Average Grant Price | |
Non-vested stock awards, beginning balance | $ / shares | $ 10.20 |
Vested | $ / shares | 10.22 |
Forfeited | $ / shares | 10.23 |
Non-vested stock awards, ending balance | $ / shares | $ 10 |
MINIMUM REGULATORY CAPITAL RE_3
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Common equity Tier 1 capital conversation buffer ratio | 0.025 | |
Applicable capital conversation buffer ratio | 0.025 | |
Common equity Tier 1 to risk-weighted assets [Abstract] | ||
Actual, Capital amount | $ 619,098 | $ 590,122 |
Actual, Ratio | 0.176 | 0.187 |
Minimum Requirement for Capital Adequacy Purposes | $ 157,971 | $ 142,048 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.045 | 0.045 |
Tier 1 capital to risk weighted assets | ||
Actual, Capital amount | $ 619,098 | $ 590,122 |
Actual, Ratio | 0.176 | 0.187 |
Minimum Requirement for Capital Adequacy Purposes | $ 210,627 | $ 189,397 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.060 | 0.060 |
Total capital to risk-weighted assets | ||
Actual, Capital amount | $ 698,045 | $ 649,182 |
Actual, Ratio | 0.199 | 0.206 |
Minimum Requirement for Capital Adequacy Purposes | $ 280,837 | $ 252,529 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.080 | 0.080 |
Tier 1 capital to average assets | ||
Actual, Capital amount | $ 619,098 | $ 590,122 |
Actual, Ratio | 0.145 | 0.153 |
Minimum Requirement for Capital Adequacy Purposes | $ 171,035 | $ 154,659 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.040 | 0.040 |
HarborOne Bank | ||
Common equity Tier 1 to risk-weighted assets [Abstract] | ||
Actual, Capital amount | $ 486,565 | $ 453,707 |
Actual, Ratio | 0.139 | 0.144 |
Minimum Requirement for Capital Adequacy Purposes | $ 157,958 | $ 142,053 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.045 | 0.045 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 228,162 | $ 205,188 |
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 | $ 486,565 | $ 453,707 |
Actual, Ratio | 0.139 | 0.144 |
Minimum Requirement for Capital Adequacy Purposes | $ 210,611 | $ 189,404 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.060 | 0.060 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 280,815 | $ 252,539 |
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 | $ 530,508 | $ 477,767 |
Actual, Ratio | 0.151 | 0.151 |
Minimum Requirement for Capital Adequacy Purposes | $ 280,815 | $ 252,539 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.080 | 0.080 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 351,018 | $ 315,674 |
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 | $ 486,565 | $ 453,707 |
Actual, Ratio | 0.114 | 0.122 |
Minimum Requirement for Capital Adequacy Purposes | $ 170,933 | $ 149,272 |
Minimum Requirement for Capital Adequacy Purposes, ratio | 0.040 | 0.040 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 213,666 | $ 186,591 |
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 0.050 | 0.050 |
COMPREHENSIVE INCOME (LOSS) (De
COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Components of AOCI | ||
Total accumulated other comprehensive income | $ 1,776 | $ 1,480 |
Securities available for sale | ||
Components of AOCI | ||
Net unrealized gain | 4,100 | 1,899 |
Related tax effect | (1,137) | (419) |
Total accumulated other comprehensive income | 2,963 | $ 1,480 |
Cash flow hedge | ||
Components of AOCI | ||
Net unrealized gain | (1,648) | |
Related tax effect | 461 | |
Total accumulated other comprehensive income | $ (1,187) |
COMPREHENSIVE INCOME (LOSS) - C
COMPREHENSIVE INCOME (LOSS) - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 684,455 | $ 371,118 | $ 665,794 | $ 357,574 |
Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale | 522 | |||
Balance at end of period | 694,103 | 659,554 | 694,103 | 659,554 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 2,897 | 1,466 | 1,480 | (2,358) |
Other comprehensive income (loss) before reclassifications | (1,303) | 2,631 | ||
Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale | 522 | |||
(Loss) gain reclassified from OCI into interest income or interest expense (effective portion) | 82 | (2,600) | ||
Net current period other comprehensive income (loss) | (1,221) | 553 | ||
Related tax effect | 100 | (257) | ||
Balance at end of period | 1,776 | 1,881 | 1,776 | 1,881 |
Securities available for sale | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 4,166 | 1,466 | 1,480 | (2,358) |
Other comprehensive income (loss) before reclassifications | (1,335) | 609 | 4,212 | 6,780 |
Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale | 522 | (1,344) | ||
(Loss) gain reclassified from OCI into interest income or interest expense (effective portion) | (77) | (2,533) | ||
Net current period other comprehensive income (loss) | (1,335) | 532 | 2,201 | 5,436 |
Related tax effect | 132 | (117) | (718) | (1,197) |
Balance at end of period | 2,963 | $ 1,881 | 2,963 | $ 1,881 |
Cash flow hedge | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (1,269) | |||
Other comprehensive income (loss) before reclassifications | 32 | (1,581) | ||
(Loss) gain reclassified from OCI into interest income or interest expense (effective portion) | 82 | (67) | ||
Net current period other comprehensive income (loss) | 114 | (1,648) | ||
Related tax effect | (32) | 461 | ||
Balance at end of period | $ (1,187) | $ (1,187) |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABILITIES - Derivatives (Details) | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative loan commitments | ||
Assets and liabilities measured on recurring basis | ||
Weighted average pull-through rate | 73.00% | 85.00% |
FAIR VALUE OF ASSETS AND LIAB_4
FAIR VALUE OF ASSETS AND LIABILITIES - Recurring basis (Details) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2020USD ($)item | Sep. 30, 2019USD ($)item | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Assets and liabilities measured on recurring basis | ||||||
Number of transfers | item | 0 | 0 | ||||
Assets | ||||||
Securities available for sale, at fair value | $ 280,308 | $ 239,473 | ||||
Loans held for sale | 190,373 | 110,552 | ||||
Mortgage servicing rights | 20,159 | $ 16,067 | $ 16,127 | 17,150 | $ 18,156 | $ 22,217 |
Recurring | ||||||
Assets | ||||||
Securities available for sale, at fair value | 280,308 | 239,473 | ||||
Loans held for sale | 190,373 | 110,552 | ||||
Mortgage servicing rights | 20,159 | 17,150 | ||||
Total assets | 551,223 | 383,678 | ||||
Liabilities | ||||||
Total liabilities | 47,761 | 15,424 | ||||
Recurring | Derivative loan commitments | ||||||
Assets | ||||||
Derivative assets | 15,554 | 1,385 | ||||
Liabilities | ||||||
Derivative liabilities | 77 | 174 | ||||
Recurring | Interest rate management agreement | ||||||
Liabilities | ||||||
Derivative liabilities | 1,648 | |||||
Recurring | Forward loan sale commitments | ||||||
Assets | ||||||
Derivative assets | 193 | 26 | ||||
Liabilities | ||||||
Derivative liabilities | 1,400 | 158 | ||||
Recurring | Interest rate swaps | ||||||
Assets | ||||||
Derivative assets | 44,636 | 15,092 | ||||
Liabilities | ||||||
Derivative liabilities | 44,636 | 15,092 | ||||
Recurring | Level 2 | ||||||
Assets | ||||||
Securities available for sale, at fair value | 280,308 | 239,473 | ||||
Loans held for sale | 190,373 | 110,552 | ||||
Mortgage servicing rights | 20,159 | 17,150 | ||||
Total assets | 535,476 | 382,267 | ||||
Liabilities | ||||||
Total liabilities | 46,284 | 15,092 | ||||
Recurring | Level 2 | Interest rate management agreement | ||||||
Liabilities | ||||||
Derivative liabilities | 1,648 | |||||
Recurring | Level 2 | Interest rate swaps | ||||||
Assets | ||||||
Derivative assets | 44,636 | 15,092 | ||||
Liabilities | ||||||
Derivative liabilities | 44,636 | 15,092 | ||||
Recurring | Level 3 | ||||||
Assets | ||||||
Total assets | 15,747 | 1,411 | ||||
Liabilities | ||||||
Total liabilities | 1,477 | 332 | ||||
Recurring | Level 3 | Derivative loan commitments | ||||||
Assets | ||||||
Derivative assets | 15,554 | 1,385 | ||||
Liabilities | ||||||
Derivative liabilities | 77 | 174 | ||||
Recurring | Level 3 | Forward loan sale commitments | ||||||
Assets | ||||||
Derivative assets | 193 | 26 | ||||
Liabilities | ||||||
Derivative liabilities | $ 1,400 | $ 158 |
FAIR VALUE OF ASSETS AND LIAB_5
FAIR VALUE OF ASSETS AND LIABILITIES - Level 3 (Details) - Derivative and Forward Loan Sale Commitments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Changes in Level 3 assets | ||||
Balance at beginning of year | $ 10,844 | $ 2,494 | $ 1,411 | $ 1,261 |
Total gains included in net income | 4,903 | 468 | 14,336 | 1,701 |
Balance at end of period | 15,747 | 2,962 | 15,747 | 2,962 |
Changes in unrealized gains relating to instruments at period end | 15,747 | 2,962 | 15,747 | 2,962 |
Changes in Level 3 liabilities | ||||
Balance at beginning of year | (2,067) | (1,182) | (332) | (630) |
Total gains (losses) included in net income | 590 | 736 | (1,145) | 184 |
Balance at end of period | (1,477) | (446) | (1,477) | (446) |
Changes in unrealized losses relating to instruments at period end | $ (1,477) | $ (446) | $ (1,477) | $ (446) |
FAIR VALUE OF ASSETS AND LIAB_6
FAIR VALUE OF ASSETS AND LIABILITIES - Impaired Loans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | $ 749,000 | $ 228,000 | $ 3,081,000 | $ 339,000 | |
Residential loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | 103,000 | 26,000 | 369,000 | 58,000 | |
Commercial loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | 644,000 | 181,000 | 2,654,000 | 193,000 | |
Other real estate owned and repossessed assets | |||||
Assets and liabilities measured on non-recurring basis | |||||
Total Losses | 2,000 | $ 21,000 | 58,000 | $ 88,000 | |
Non-recurring | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | 0 | 0 | $ 0 | ||
Non-recurring | Level 3 | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | 25,620,000 | 25,620,000 | 13,133,000 | ||
Non-recurring | Level 3 | Asset held for sale | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | 8,536,000 | ||||
Non-recurring | Level 3 | Residential loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | 4,246,000 | 4,246,000 | 2,272,000 | ||
Non-recurring | Level 3 | Commercial loans | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | 20,476,000 | 20,476,000 | 1,606,000 | ||
Non-recurring | Level 3 | Other real estate owned and repossessed assets | |||||
Assets and liabilities measured on non-recurring basis | |||||
Fair value | $ 898,000 | $ 898,000 | $ 719,000 |
FAIR VALUE OF ASSETS AND LIAB_7
FAIR VALUE OF ASSETS AND LIABILITIES - Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financial assets: | ||
Cash and cash equivalents | $ 137,518 | $ 211,616 |
Securities available for sale, at fair value | 280,308 | 239,473 |
Securities held to maturity, at amortized cost | 26,372 | |
Federal Home Loan Bank stock | 11,631 | 17,121 |
Loans held for sale | 190,373 | 110,552 |
Loans, net | 3,466,608 | 3,147,498 |
Retirement plan annuities | 13,641 | 13,333 |
Accrued interest receivable | 12,504 | 9,807 |
Financial liabilities: | ||
Deposits | 3,365,888 | 2,942,873 |
Subordinated debt | 34,002 | 33,907 |
Mortgagors' escrow accounts | 7,979 | 6,053 |
Accrued interest payable | 1,001 | 1,669 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 137,518 | 211,616 |
Securities available for sale, at fair value | 280,308 | 239,473 |
Securities held to maturity, at amortized cost | 26,372 | |
Federal Home Loan Bank stock | 11,631 | 17,121 |
Loans held for sale | 190,373 | 110,552 |
Loans, net | 3,466,608 | 3,147,498 |
Retirement plan annuities | 13,641 | 13,333 |
Accrued interest receivable | 12,504 | 9,807 |
Financial liabilities: | ||
Deposits | 3,365,888 | 2,942,873 |
Borrowed funds | 236,106 | 354,132 |
Subordinated debt | 34,002 | 33,907 |
Mortgagors' escrow accounts | 7,979 | 6,053 |
Accrued interest payable | 1,001 | 1,669 |
Carrying Amount | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 15,554 | 1,385 |
Liabilities | 77 | 174 |
Carrying Amount | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Liabilities | 1,648 | |
Carrying Amount | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 44,636 | 15,092 |
Liabilities | 44,636 | 15,092 |
Carrying Amount | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 193 | 26 |
Liabilities | 1,400 | 158 |
Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 137,518 | 211,616 |
Securities available for sale, at fair value | 280,308 | 239,473 |
Securities held to maturity, at amortized cost | 26,927 | |
Loans held for sale | 190,373 | 110,552 |
Loans, net | 3,509,251 | 3,176,442 |
Retirement plan annuities | 13,641 | 13,333 |
Accrued interest receivable | 12,504 | 9,807 |
Financial liabilities: | ||
Deposits | 3,369,131 | 2,943,899 |
Borrowed funds | 239,842 | 354,881 |
Subordinated debt | 35,291 | 34,619 |
Mortgagors' escrow accounts | 7,979 | 6,053 |
Accrued interest payable | 1,001 | 1,669 |
Fair Value | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 15,554 | 1,385 |
Liabilities | 77 | 174 |
Fair Value | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 44,636 | 15,092 |
Liabilities | 44,636 | 15,092 |
Fair Value | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 193 | 26 |
Liabilities | 1,400 | 158 |
Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 137,518 | 211,616 |
Fair Value | Level 2 | ||
Financial assets: | ||
Securities available for sale, at fair value | 280,308 | 239,473 |
Securities held to maturity, at amortized cost | 26,927 | |
Loans held for sale | 190,373 | 110,552 |
Accrued interest receivable | 12,504 | 9,807 |
Financial liabilities: | ||
Borrowed funds | 239,842 | 354,881 |
Accrued interest payable | 1,001 | 1,669 |
Fair Value | Level 2 | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 44,636 | 15,092 |
Liabilities | 44,636 | 15,092 |
Fair Value | Level 3 | ||
Financial assets: | ||
Loans, net | 3,509,251 | 3,176,442 |
Retirement plan annuities | 13,641 | 13,333 |
Financial liabilities: | ||
Deposits | 3,369,131 | 2,943,899 |
Subordinated debt | 35,291 | 34,619 |
Mortgagors' escrow accounts | 7,979 | 6,053 |
Fair Value | Level 3 | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 15,554 | 1,385 |
Liabilities | 77 | 174 |
Fair Value | Level 3 | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 193 | 26 |
Liabilities | $ 1,400 | $ 158 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) $ / shares in Units, $ in Thousands | Aug. 14, 2019 | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | |
EARNINGS PER SHARE | ||||||
Net income applicable to common stock | $ | $ 11,893 | $ 7,113 | $ 27,192 | $ 13,961 | ||
Average number of common shares outstanding | 58,375,742 | 58,453,259 | 58,403,825 | 58,461,953 | ||
Less: Average unallocated ESOP shares | (3,910,403) | (2,814,525) | (3,967,735) | (1,606,023) | ||
Average number of common shares outstanding used to calculate basic earnings per common share | [1] | 54,465,339 | 55,638,734 | 54,436,090 | 56,855,930 | |
Average number of common shares outstanding used to calculate diluted earnings per common share | [1] | 54,465,339 | 55,638,734 | 54,436,090 | 56,855,930 | |
Basic | $ / shares | [1] | $ 0.22 | $ 0.13 | $ 0.50 | $ 0.25 | |
Diluted | $ / shares | [1] | $ 0.22 | $ 0.13 | $ 0.50 | $ 0.25 | |
Stock conversion ratio | 1.795431 | 1.795431 | 1.795431 | 1.795431 | 1.795431 | |
Stock Options | ||||||
EARNINGS PER SHARE | ||||||
Antidilutive securities excluded from computation of earnings per share | 2,148,295 | 2,240,307 | 2,148,295 | 2,240,307 | ||
[1] | Share amounts related to periods prior to the August 14, 2019 closing of the conversion offering have been restated to give retroactive recognition to the 1.795431 exchange ratio applied in the conversion offering (see Note 1). |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information | |||||
Number of reportable segments | segment | 2 | ||||
Net interest and dividend income (expense) | $ 31,169 | $ 27,985 | $ 87,316 | $ 80,728 | |
Provision for loan losses | 13,454 | 889 | 27,207 | 3,496 | |
Net interest and dividend income, after provision for loan losses | 17,715 | 27,096 | 60,109 | 77,232 | |
Mortgage banking income: | |||||
Gain on sale of mortgage loans | 34,055 | 11,015 | 77,195 | 24,086 | |
Changes in mortgage servicing rights fair value | (193) | (2,474) | (5,691) | (6,866) | |
Other | 4,281 | 2,964 | 10,962 | 7,442 | |
Total mortgage banking income | 38,143 | 11,505 | 82,466 | 24,662 | |
Other noninterest income (loss) | 6,318 | 5,768 | 19,499 | 18,171 | |
Total noninterest income | 44,461 | 17,273 | 101,965 | 42,833 | |
Noninterest expense | 45,722 | 36,203 | 124,948 | 103,876 | |
Income (loss) before income taxes | 16,454 | 8,166 | 37,126 | 16,189 | |
Provision for income taxes | 4,561 | 1,053 | 9,934 | 2,228 | |
Net income | 11,893 | 7,113 | 27,192 | 13,961 | |
Total assets at year end | 4,428,319 | 3,949,020 | 4,428,319 | 3,949,020 | $ 4,058,921 |
Balance, end of year | 69,802 | 69,635 | 69,802 | 69,635 | |
HarborOne Bank | |||||
Mortgage banking income: | |||||
Balance, end of year | 59,000 | 59,000 | |||
HarborOne Mortgage | |||||
Mortgage banking income: | |||||
Balance, end of year | 10,800 | 10,800 | |||
Operating Segments | HarborOne Bank | |||||
Segment Reporting Information | |||||
Net interest and dividend income (expense) | 30,599 | 27,855 | 86,248 | 81,296 | |
Provision for loan losses | 13,454 | 889 | 27,207 | 3,496 | |
Net interest and dividend income, after provision for loan losses | 17,145 | 26,966 | 59,041 | 77,800 | |
Mortgage banking income: | |||||
Gain on sale of mortgage loans | 1 | ||||
Intersegment gain (loss) | (645) | (393) | (2,444) | (866) | |
Changes in mortgage servicing rights fair value | (354) | (591) | (2,014) | (1,599) | |
Other | 334 | 369 | 1,031 | 1,127 | |
Total mortgage banking income | (665) | (615) | (3,427) | (1,337) | |
Other noninterest income (loss) | 6,326 | 5,772 | 19,640 | 18,191 | |
Total noninterest income | 5,661 | 5,157 | 16,213 | 16,854 | |
Noninterest expense | 26,300 | 24,405 | 75,806 | 74,527 | |
Income (loss) before income taxes | (3,494) | 7,718 | (552) | 20,127 | |
Provision for income taxes | 571 | 1,019 | 2,199 | 3,267 | |
Net income | (4,065) | 6,699 | (2,751) | 16,860 | |
Total assets at year end | 4,404,842 | 3,821,671 | 4,404,842 | 3,821,671 | |
Balance, end of year | 59,042 | 58,875 | 59,042 | 58,875 | |
Operating Segments | HarborOne Mortgage | |||||
Segment Reporting Information | |||||
Net interest and dividend income (expense) | 1,000 | 285 | 2,020 | 604 | |
Net interest and dividend income, after provision for loan losses | 1,000 | 285 | 2,020 | 604 | |
Mortgage banking income: | |||||
Gain on sale of mortgage loans | 34,055 | 11,015 | 77,195 | 24,085 | |
Intersegment gain (loss) | 645 | 393 | 2,444 | 866 | |
Changes in mortgage servicing rights fair value | 161 | (1,883) | (3,677) | (5,267) | |
Other | 3,947 | 2,595 | 9,931 | 6,315 | |
Total mortgage banking income | 38,808 | 12,120 | 85,893 | 25,999 | |
Other noninterest income (loss) | (8) | (4) | (141) | (20) | |
Total noninterest income | 38,800 | 12,116 | 85,752 | 25,979 | |
Noninterest expense | 19,156 | 11,227 | 48,235 | 27,496 | |
Income (loss) before income taxes | 20,644 | 1,174 | 39,537 | (913) | |
Provision for income taxes | 4,550 | 171 | 8,667 | (256) | |
Net income | 16,094 | 1,003 | 30,870 | (657) | |
Total assets at year end | 280,983 | 152,800 | 280,983 | 152,800 | |
Balance, end of year | 10,760 | 10,760 | 10,760 | 10,760 | |
Operating Segments | HarborOne Bancorp, Inc. | |||||
Segment Reporting Information | |||||
Net interest and dividend income (expense) | (430) | (155) | (952) | (1,172) | |
Net interest and dividend income, after provision for loan losses | (430) | (155) | (952) | (1,172) | |
Mortgage banking income: | |||||
Noninterest expense | 266 | 571 | 907 | 1,853 | |
Income (loss) before income taxes | (696) | (726) | (1,859) | (3,025) | |
Provision for income taxes | (560) | (137) | (932) | (783) | |
Net income | (136) | (589) | (927) | (2,242) | |
Total assets at year end | 729,838 | 693,851 | 729,838 | 693,851 | |
Eliminations | |||||
Mortgage banking income: | |||||
Total assets at year end | $ (987,344) | $ (719,302) | $ (987,344) | $ (719,302) |