Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 02, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 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 | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Central Index Key | 0001769617 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 433,685,000 | ||
Entity Common Stock, Shares Outstanding | 56,622,138 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 31,777 | $ 24,464 |
Short-term investments | 174,093 | 187,152 |
Total cash and cash equivalents | 205,870 | 211,616 |
Securities available for sale, at fair value | 276,498 | 239,473 |
Securities held to maturity, at amortized cost | 26,372 | |
Federal Home Loan Bank stock, at cost | 8,738 | 17,121 |
Assets held for sale | 8,536 | |
Loans held for sale, at fair value | 208,612 | 110,552 |
Loans | 3,494,642 | 3,171,558 |
Less: Allowance for loan losses | (55,395) | (24,060) |
Net loans | 3,439,247 | 3,147,498 |
Accrued interest receivable | 11,874 | 9,807 |
Other real estate owned and repossessed assets | 595 | 719 |
Mortgage servicing rights, at fair value | 24,833 | 17,150 |
Property and equipment, net | 49,580 | 47,951 |
Retirement plan annuities | 13,747 | 13,333 |
Bank-owned life insurance | 87,950 | 85,735 |
Goodwill | 69,802 | 69,802 |
Intangible assets | 4,370 | 6,035 |
Other assets | 81,899 | 47,221 |
Total assets | 4,483,615 | 4,058,921 |
Deposits: | ||
Demand deposit accounts | 689,672 | 406,403 |
NOW accounts | 218,584 | 165,877 |
Regular savings and club accounts | 998,994 | 626,685 |
Money market deposit accounts | 866,661 | 856,830 |
Term certificate accounts | 732,298 | 887,078 |
Total deposits | 3,506,209 | 2,942,873 |
Short-term borrowed funds | 35,000 | 183,000 |
Long-term borrowed funds | 114,097 | 171,132 |
Subordinated debt | 34,033 | 33,907 |
Mortgagors' escrow accounts | 7,736 | 6,053 |
Accrued interest payable | 1,262 | 1,669 |
Other liabilities and accrued expenses | 88,964 | 54,493 |
Total liabilities | 3,787,301 | 3,393,127 |
Commitments and contingencies (Notes 9 and 10) | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 58,834,970 and 58,489,222 shares issued; 57,205,458 and 58,418,021 shares outstanding at December 31, 2020 and December 31, 2019, respectively | 584 | 584 |
Additional paid-in capital | 464,176 | 460,232 |
Retained earnings | 277,312 | 237,356 |
Treasury stock, at cost, 1,629,512 and 71,201 shares at December 31, 2020 and December 31, 2019, respectively | (16,644) | (721) |
Accumulated other comprehensive income | 2,185 | 1,480 |
Unearned compensation - ESOP | (31,299) | (33,137) |
Total stockholders' equity | 696,314 | 665,794 |
Total liabilities and stockholders' equity | $ 4,483,615 | $ 4,058,921 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 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 | 58,834,970 | 58,489,222 |
Common stock, shares outstanding | 57,205,458 | 58,418,021 |
Treasury, shares | 1,629,512 | 71,201 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest and dividend income: | |||
Interest and fees on loans | $ 137,765 | $ 142,228 | $ 105,432 |
Interest on loans held for sale | 3,892 | 2,767 | 2,205 |
Interest on taxable securities | 5,510 | 6,325 | 5,624 |
Interest on non-taxable securities | 103 | 494 | 856 |
Other interest and dividend income | 1,288 | 2,970 | 1,591 |
Total interest and dividend income | 148,558 | 154,784 | 115,708 |
Interest expense: | |||
Interest on deposits | 22,793 | 37,057 | 20,563 |
Interest on FHLB borrowings | 3,604 | 6,588 | 5,474 |
Interest on subordinated debentures | 2,095 | 2,077 | 741 |
Total interest expense | 28,492 | 45,722 | 26,778 |
Net interest and dividend income | 120,066 | 109,062 | 88,930 |
Provision for loan losses | 34,815 | 4,747 | 3,828 |
Net interest and dividend income, after provision for loan losses | 85,251 | 104,315 | 85,102 |
Mortgage banking income: | |||
Gain on sale of mortgage loans | 105,469 | 33,557 | 23,353 |
Changes in mortgage servicing rights fair value | (6,732) | (6,241) | (1,396) |
Other | 15,638 | 10,336 | 8,652 |
Total mortgage banking income | 114,375 | 37,652 | 30,609 |
Deposit account fees | 14,018 | 16,294 | 13,500 |
Income on retirement plan annuities | 414 | 402 | 433 |
Loss on disposal of asset held for sale | (482) | ||
Gain on sale and call of securities, net | 2,533 | 1,344 | 5 |
Bank-owned life insurance income | 2,215 | 1,105 | 1,728 |
Other income | 5,591 | 4,657 | 2,923 |
Total noninterest income | 139,146 | 60,972 | 49,198 |
Noninterest expense: | |||
Compensation and benefits | 105,615 | 86,787 | 70,568 |
Occupancy and equipment | 17,841 | 17,396 | 13,212 |
Data processing | 8,811 | 8,692 | 6,789 |
Loan expenses | 10,276 | 6,202 | 5,382 |
Marketing | 3,390 | 3,705 | 3,333 |
Deposit expenses | 1,874 | 1,583 | 1,320 |
Postage and printing | 1,819 | 1,935 | 1,494 |
Professional fees | 5,456 | 5,689 | 3,832 |
Foreclosed and repossessed assets | (4) | 13 | 95 |
Deposit insurance | 1,180 | 1,035 | 2,097 |
Amortization of intangible assets | 1,665 | 2,344 | 706 |
Merger expenses | 5,092 | ||
Other expenses | 8,465 | 7,230 | 6,173 |
Total noninterest expense | 166,388 | 142,611 | 120,093 |
Income before income taxes | 58,009 | 22,676 | 14,207 |
Income tax provision | 13,217 | 4,408 | 2,813 |
Net income | $ 44,792 | $ 18,268 | $ 11,394 |
Earnings per common share: | |||
Basic | $ 0.82 | $ 0.33 | $ 0.20 |
Diluted | $ 0.82 | $ 0.33 | $ 0.20 |
Weighted average shares outstanding: | |||
Basic | 54,313,368 | 55,731,637 | 56,689,591 |
Diluted | 54,319,835 | 55,731,776 | 56,689,591 |
Consolidated Statements of In_2
Consolidated Statements of Income (Parenthetical) | Aug. 14, 2019 |
Consolidated Statements of Income | |
Stock conversion ratio | 1.795431 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 44,792 | $ 18,268 | $ 11,394 |
Cash flow hedge: | |||
Unrealized holding losses | (1,453) | ||
Reclassification adjustment for net losses included in net income | 46 | ||
Net change in unrealized losses on derivatives in cash flow hedging instruments | (1,407) | ||
Related tax effect | 394 | ||
Net-of-tax amount | (1,013) | ||
Securities available for sale: | |||
Unrealized holding gains (losses) | 4,214 | 6,266 | (2,212) |
Reclassification of unrealized gain on securities transferred to available for sale | 522 | ||
Reclassification adjustment for net realized gains | (2,533) | (1,344) | |
Net unrealized gains (losses) | 2,203 | 4,922 | (2,212) |
Related tax effect | (485) | (1,084) | 486 |
Net-of-tax amount | 1,718 | 3,838 | (1,726) |
Total other comprehensive income (loss) | 705 | 3,838 | (1,726) |
Comprehensive income | $ 45,497 | $ 22,106 | $ 9,668 |
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, 2017 | $ 327 | $ 147,060 | $ 207,590 | $ (280) | $ (528) | $ (10,685) | $ 343,484 |
Balance, beginning of period (in shares) at Dec. 31, 2017 | 58,616,160 | ||||||
Comprehensive income (loss) | 11,394 | (1,726) | 9,668 | ||||
Reclassification of stranded effect of tax rate change | 104 | (104) | |||||
ESOP shares committed to be released | 503 | 594 | 1,097 | ||||
Restricted stock awards granted, net of awards forfeited (in shares) | (30,763) | ||||||
Share-based compensation expense | 4,593 | 4,593 | |||||
Treasury stock purchased | (1,268) | $ (1,268) | |||||
Treasury stock purchased (in shares) | (119,892) | (146,644) | |||||
Balance at end of period at Dec. 31, 2018 | $ 327 | 152,156 | 219,088 | (1,548) | (2,358) | (10,091) | $ 357,574 |
Balance, end of period (in shares) at Dec. 31, 2018 | 58,465,505 | ||||||
Comprehensive income (loss) | 18,268 | 3,838 | 22,106 | ||||
Conversion of HarborOne Bancorp, Inc. | $ 257 | 303,804 | 304,061 | ||||
Conversion of HarborOne Bancorp, Inc. (in shares) | 8,760 | ||||||
Purchase of shares by the ESOP | (24,829) | (24,829) | |||||
Treasury stock retired | (1,548) | 1,548 | |||||
Contribution of HarborOne Bancorp Mutual Bancshares | 99 | 99 | |||||
ESOP shares committed to be released | 872 | 1,783 | 2,655 | ||||
Restricted stock awards granted, net of awards forfeited (in shares) | 14,957 | ||||||
Share-based compensation expense | 4,849 | 4,849 | |||||
Treasury stock purchased | (721) | (721) | |||||
Treasury stock purchased (in shares) | (71,201) | ||||||
Balance at end of period at Dec. 31, 2019 | $ 584 | 460,232 | 237,356 | (721) | 1,480 | (33,137) | $ 665,794 |
Balance, end of period (in shares) at Dec. 31, 2019 | 58,418,021 | 58,418,021 | |||||
Comprehensive income (loss) | 44,792 | 705 | $ 45,497 | ||||
Dividends declared | (4,836) | (4,836) | |||||
ESOP shares committed to be released | 265 | 1,838 | 2,103 | ||||
Restricted stock awards granted, net of awards forfeited (in shares) | 345,748 | ||||||
Share-based compensation expense | 3,679 | 3,679 | |||||
Treasury stock purchased | (15,923) | $ (15,923) | |||||
Treasury stock purchased (in shares) | (1,558,311) | (1,533,500) | |||||
Balance at end of period at Dec. 31, 2020 | $ 584 | $ 464,176 | $ 277,312 | $ (16,644) | $ 2,185 | $ (31,299) | $ 696,314 |
Balance, end of period (in shares) at Dec. 31, 2020 | 57,205,458 | 57,205,458 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) $ in Millions | 12 Months Ended | |
Dec. 31, 2020$ / sharesshares | Dec. 31, 2019USD ($)shares | |
Consolidated Statements of Changes in Stockholders' Equity | ||
Dividends declared per share | $ / shares | $ 0.03 | |
Shares purchased by the ESOP | 2,482,945 | |
ESOP shares committed to be released | 230,723 | 230,724 |
Conversion costs | $ | $ 6.3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income | $ 44,792 | $ 18,268 | $ 11,394 |
Adjustments to reconcile net income to net cash used by operating activities: | |||
Provision for loan losses | 34,815 | 4,747 | 3,828 |
Net amortization of securities premiums/discounts | 2,263 | 391 | 534 |
Proceeds from loans held for sale | 2,460,786 | 1,105,494 | 849,949 |
Loans originated for sale | (2,446,830) | (1,138,718) | (800,642) |
Net amortization of net deferred loan costs/fees and premiums | 370 | 2,867 | 3,418 |
Depreciation and amortization of premises and equipment | 4,011 | 4,394 | 3,241 |
Change in mortgage servicing rights fair value | 6,732 | 6,241 | 1,396 |
Mortgage servicing rights capitalized | (14,415) | (1,173) | (2,521) |
Accretion of fair value adjustment on loans and deposits, net | (4,175) | (2,838) | (1,242) |
Amortization of intangible assets | 1,665 | 2,344 | 706 |
Amortization of subordinated debt issuance costs | 126 | 108 | 79 |
Gain on sale and call of securities, net | (2,533) | (1,344) | (5) |
Net gains on mortgage loan sales, including fair value adjustments | (112,016) | (35,221) | (22,883) |
Bank-owned life insurance income | (2,215) | (1,105) | (1,728) |
Income on retirement plan annuities | (414) | (402) | (433) |
Gain on sale of portfolio loans | (395) | ||
Loss on disposal of asset held for sale | 482 | ||
Net loss on disposal of premises and equipment | 101 | 116 | |
Net (gain) loss on sale and write-down of other real estate owned and repossessed assets | (41) | (69) | (15) |
Deferred income tax benefit | (3,614) | (556) | (1,140) |
ESOP expense | 2,103 | 2,655 | 1,097 |
Share-based compensation expense | 3,679 | 4,849 | 4,593 |
Net change in: | |||
Change in other assets | (33,222) | (11,619) | 1,929 |
Change in other liabilities | 31,080 | 3,962 | 10,005 |
Net cash (used) provided by operating activities | (26,952) | (36,127) | 61,165 |
Activity in securities available for sale: | |||
Maturities, prepayments and calls | 110,615 | 56,691 | 23,833 |
Purchases | (191,560) | (109,289) | (64,691) |
Sales | 67,574 | 28,391 | |
Activity in securities held to maturity: | |||
Maturities, prepayment and calls | 432 | 18,218 | 3,839 |
Purchases | (2,996) | ||
Sales | 4,759 | 1,015 | |
Net redemption (purchase) of FHLB stock | 8,383 | 7,848 | (9,437) |
Investment in bank-owned life insurance | (40,000) | ||
Proceeds from life insurance policies | 2,215 | ||
Disposal of asset held for sale | 8,536 | ||
Proceeds from sale of portfolio loans transferred to held for sale | 10,000 | 105,823 | |
Participation-in loan purchases | (27,133) | (112,259) | (91,939) |
Loan originations, net of principal payments | (306,421) | (76,389) | (105,671) |
Proceeds from sale of other real estate owned and repossessed assets | 1,704 | 2,290 | 1,638 |
Additions to property and equipment | (5,741) | (4,434) | (5,545) |
Cash paid, net of cash acquired, in business combinations | (73,987) | ||
Cash received in MHC merger | 99 | ||
Net cash used by investing activities | (318,852) | (228,834) | (215,903) |
Cash flows from financing activities: | |||
Net increase in deposits | 562,591 | 256,847 | 194,865 |
Net change in short-term borrowed funds | (148,000) | (107,000) | (29,000) |
Proceeds from other borrowed funds and other long term borrowings | 40,000 | 31,220 | 131,795 |
Repayment of other borrowed funds | (97,035) | (90,024) | (116,254) |
Net change in mortgagors' escrow accounts | 1,683 | 1,502 | (670) |
Purchase of shares by the ESOP | (24,829) | ||
Treasury stock purchased | (15,923) | (721) | (1,268) |
Net proceeds from sale of common stock | 304,061 | ||
Dividends paid | (3,258) | ||
Net cash provided by financing activities | 340,058 | 371,056 | 179,468 |
Net change in cash and cash equivalents | (5,746) | 106,095 | 24,730 |
Cash and cash equivalents at beginning of year | 211,616 | 105,521 | 80,791 |
Cash and cash equivalents at end of year | 205,870 | 211,616 | 105,521 |
Supplemental cash flow information: | |||
Interest paid on deposits | 23,253 | 36,824 | 20,423 |
Interest paid on borrowed funds | 5,910 | 8,933 | 5,227 |
Income taxes paid, net | 18,089 | 3,627 | 2,834 |
Transfer of loans to other real estate owned and repossessed assets | 1,540 | 2,191 | 1,654 |
Transfer of securities held to maturity to available for sale, fair value | 22,051 | $ 105,823 | |
Transfer of loans to loans held for sale | 10,937 | ||
Transfer of asset to asset held for sale | $ 8,536 | ||
Dividends declared | $ 4,836 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation HarborOne Bancorp, Inc. (the “Company”) is the stock holding company of HarborOne Bank (the “Bank”), a Massachusetts-chartered savings bank, which in turn owns a residential mortgage banking company, HarborOne Mortgage, LLC (“HarborOne Mortgage”). HarborOne Mortgage was acquired as Merrimack Mortgage, LLC on July 1, 2015 and effective April 3, 2018 became HarborOne Mortgage. The Consolidated Financial Statements include the accounts of the Company, the Company’s subsidiaries, Legion Parkway Company LLC, a security corporation formed on July 13, 2016 and HarborOne Bank; and the Bank’s wholly-owned subsidiaries. HarborOne Mortgage, two security corporation subsidiaries and one passive investment subsidiary, which 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. Conversion and Reorganization On August 14, 2019, the Company completed a second step conversion offering (the “Offering”). Prior to the completion of the Offering, approximately 53% of the shares of common stock of the Company were owned by HarborOne Mutual Bancshares, a mutual holding company (the “MHC”). The Company raised gross proceeds of $310.4 million and incurred expenses of $6.3 million, resulting in net cash proceeds of $304.1 million by selling 31,036,812 shares of common stock at $10.00 per share in the Offering, shares of common stock formerly held by the MHC. In addition, each share of the Company common stock owned by shareholders, other than the MHC, prior to the Offering was exchanged for 1.795431 shares of Company common stock, for a total of 12,162,763 shares of Company common stock that were issued in the exchange. The Company utilized $24.8 million to fund an additional ESOP loan, invested $151.3 million into the Bank’s operations, and retained the remaining amount for general corporate purposes. All historical share and per share information has been restated to reflect the 1.795431 exchange ratio. The Company established a liquidation account in connection with Offering. The liquidation accounts are maintained for the benefit of the eligible account holders and supplemental eligible account holders who maintain their accounts at the Bank after the offering. The liquidation accounts are reduced annually to the extent that such account holders have reduced their qualifying deposits as of each anniversary date. Subsequent increases will not restore an account holder’s interest in the liquidation account. The Company is not permitted to pay dividends on its capital stock if the Company’s shareholders’ equity would be reduced below the amount of the liquidation account. Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 25 full-service bank branches in Massachusetts and Rhode Island, one limited-service bank branch, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains 36 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 and consumer loans, including indirect automobile lease loans. The Company also originates, sells and services residential mortgage loans primarily through HarborOne Mortgage. Risks and Uncertainties On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic, and almost all public commerce and related business activities have been, to varying degrees, curtailed. The COVID-19 pandemic has caused economic and social disruption on an unprecedented scale. While some industries have been impacted more severely than others, all businesses have been impacted to some degree. The outbreak has also caused significant disruptions in the U.S. economy and has adversely impacted a broad range of industries in which the Company’s customers operate, which has impaired, or may impair in the future, their ability to fulfill their financial obligations to the Company. The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. Congress, the President, and the Board of Governors of the Federal Reserve System (the “Federal Reserve”) have taken several actions designed to cushion the economic fallout. Most notably, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), a $2 trillion legislative package, was signed into law at the end of March 2020. The goal of the CARES Act is to prevent a severe economic downturn through various measures, including direct financial aid to American families and economic stimulus to significantly impacted industry sectors. Additionally, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act was enacted on December 27, 2020, providing for a second round of PPP loans (“PPP-2”). Also on December 27, 2020, the Consolidated Appropriations Act passed on December 27, 2020 provided the option of postponing adoption of the standard until the earlier of the end of the national emergency declaration related to the COVID-19 pandemic or December 31, 2022. The Federal Reserve also took actions to mitigate the economic impact of the COVID-19 pandemic, including cutting the federal funds rate 150 basis points and targeting a 0 to 25 basis point rate. In addition to the general impact of the COVID-19 pandemic, certain provisions of the CARES Act as well as other legislative and regulatory relief efforts are expected to have a material impact on the Company’s operations. The fiscal stimulus and relief programs have been an effective mitigant to credit losses in the near term; however, once these programs are discontinued the severity of potential losses is uncertain and depends on numerous factors and future developments. The Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows. Effects may include: ● 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. ● 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. 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. Use of Estimates To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, however, actual results could differ. Business Combinations Business combinations are accounted for using the acquisition method of accounting. Under this method, the accounts of an acquired entity are included with the acquirer’s accounts as of the date of acquisition with any excess of purchase price over the fair value of the net assets acquired (including identifiable intangibles) capitalized as goodwill. As consideration for such transactions, the Company will typically issue common stock and/or pay cash, depending on the terms of the acquisition agreement. The value of common stock issued is based upon the market price of the stock as of the closing of the acquisition. Significant Group Concentration of Credit Risk The Company has cash and federal fund balances on deposit at correspondent banks that exceed insurable limits. The Company has not experienced any losses on such amounts. Most of the Company’s lending activities are with borrowers located within south eastern New England. The ability and willingness of residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the borrowers’ geographic area and real estate values. Note 6 provides the detail of the Company’s loan portfolio and Note 4 provides the detail of the Company’s investment portfolio. The Company does not have any significant concentrations to any one industry or customer. Reclassifications Certain previously reported amounts have been reclassified to conform to the current year’s presentation. Cash Flows Cash and cash equivalents include cash, interest-bearing deposits with other financial institutions with maturities fewer than 90 days, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions and interest-bearing deposits in other financial institutions. Debt Securities Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates debt securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For debt securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a debt security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. Federal Home Loan Bank Stock The Company, as a member of the Federal Home Loan Bank (“FHLB”) system, is required to maintain an investment in capital stock of the FHLB of Boston. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. At its discretion, the FHLB may declare dividends on the stock. The Company reviews FHLB stock for impairment based on the ultimate recoverability of the cost basis. As of December 31, 2020, no impairment has been recognized. Mortgage Loans Held for Sale Residential mortgage loans originated with the intent to sell are classified as held-for-sale and are carried at fair value. Loan origination costs for loans held for sale that the Company accounts for under the fair value option are recognized in noninterest expense when incurred. Changes in fair value are recognized in mortgage banking income. Interest income on mortgage loans held for sale is recorded in interest income. Loans Loans held for investment are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any unamortized deferred origination fees and costs. Loan origination fees are offset with related direct incremental loan origination costs and the resulting net amount is deferred and amortized to interest income using the level-yield method over the remaining life of the loan. Accrual of interest on loans is discontinued when collectability of principal or interest is uncertain or when payments of principal or interest have become contractually past due 90 days or more. Past due status is based on contractual terms of the loan. However, a loan may remain on accrual status if both the value of any collateral securing the loan is sufficient to cover principal and accrued interest thereon, and the loan is in the process of collection. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on non-accrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company’s loan portfolio includes residential real estate, commercial real estate, construction, commercial and industrial and consumer segments. Residential real estate loans include classes for one- to four-family and second mortgages and equity lines of credit. Consumer loans include classes for auto and personal loans. The Company’s acquired loans are recorded at fair value with no carryover of the allowance for loan losses. Net discount on performing loans acquired are recognized as interest income over the remaining life of the loan. Acquired loans determined to have evidence of deterioration in credit quality and when it is probable, at acquisition, that all contractually required payments will not be collected, are deemed to be purchased credit impaired (“PCI”) loans. For PCI loans, the excess of cash flows expected to be collected over the carrying amount of the loans, referred to as the “accretable yield,” is accreted into interest income over the life of the loans using the effective yield method. The Company monitors actual cash flows to determine any deterioration from those forecasted at the acquisition date, which is evaluated and recorded through the allowance for 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 rolling average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment except commercial real estate, commercial construction and commercial and industrial loans. Due to the lack of historical loss experience for our commercial real estate, commercial construction and commercial and industrial loan portfolio, we utilize peer loss data. Adjustments to loss factors are considered for the following qualitative factors: levels/trends in delinquencies; trends in volume and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows: 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 in this segment 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 in this segment are generally secured by automobiles or unsecured and repayment is dependent on the credit quality of the individual borrower. Specific Reserve 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 (“TDR”) 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 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. TDRs are individually evaluated for impairment and included in the separately identified impairment disclosures. TDRs are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently default, the Company determines the amount of the allowance on that loan in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired. The company incorporates recent historical experience related to TDRs including the performance of TDRs that subsequently default into the calculation of the allowance by loan portfolio segment. 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. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Property and Equipment Land is carried at cost. Buildings, leasehold improvements, and furniture and equipment are carried at cost, less accumulated depreciation and amortization, computed on the straight-line method over the estimated useful lives of the assets or the terms of the leases, if shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured. Maintenance and repairs are charged to expense as incurred and improvements are capitalized. Retirement Plan Annuities Retirement plan annuities are reflected on the Consolidated Balance Sheets at the face amount of the policies. Changes in recorded value are reflected in income on retirement plan annuities on the Consolidated Statements of Income. Bank-owned life insurance Bank-owned life insurance policies are reflected on the Consolidated Balance Sheets at net cash surrender value. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in bank-owned life insurance income on the Consolidated Statements of Income and are not subject to income taxes. The Company is the beneficiary on these life insurance policies which are purchased for select employees of the Company. Employee Stock Ownership Plan Compensation expense for the Company’s ESOP is recorded at an amount equal to the shares committed to be allocated by the ESOP multiplied by the quarterly average fair market value of the shares during the year. The Company recognizes compensation expense ratably over the year based upon the Company’s estimate of the number of shares committed to be allocated by the ESOP. The difference between the average fair market value and the cost of the shares committed to be allocated by the ESOP is recorded as an adjustment to additional paid-in capital. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. Mortgage Servicing Rights When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. Under the fair value measurement method, the Company measures servicing rights at fair value at each reporting date and reports changes in fair value of servicing assets in earnings in the period in which the changes occur, and are included with changes in mortgage servicing rights fair value Servicing fee income, which is reported on the income statement as Mortgage banking income, Other income, Derivative Financial Instruments At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to the likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), of (3) an instrument with no hedging designation (“stand alone derivative”). For a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings as fair values change. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and reclassified into earnings in the same periods during which the hedged transaction affects earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as non-interest income. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. The Company formally documents all relationships between derivatives and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting prospectively when it is determined that (1) the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item; (2) the derivative expires, is sold, or terminated; (3) the derivative instrument is de-designated as a hedge because the forecasted transaction is no longer probable of occurring; (4) a hedged firm commitment no longer meets the definition of a firm commitment; or (5) management otherwise determines that designation of the derivative as a hedging instrument is no longer appropriate. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as noninterest income. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transaction is still expected to occur, changes in value that were accumulated in other comprehensive income are amortized or accreted into earnings over the same periods which the hedged transactions will affect earnings. The Company accounts for commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans as free standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. In order to hedge the change in interest rates resulting from its commitments to fund the loans, the Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in fair value are recorded as gain on sale of mortgage loans. The Company also enters into interest rate swap contracts to meet the financing needs of the Company’s commercial customers. Offsetting swap agreements are simultaneously transacted to effectively eliminate the Company’s market and interest rate risk associated with the swaps. Interest rate swaps are recognized on the Consolidated Balance Sheets in other assets and other liabilities with changes in their fair values recorded in other income. Transfers of Financial Assets Transfers of an entire financial asset, a group of entire financial assets, or a participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets. During the normal course of business, the Company may transfer a portion of a financial asset, for example, a participation loan or the government guaranteed portion of a loan. In order to be eligible for sale treatment, the transfer of the portion of the loan must meet the criteria of a participating interest. If it does not meet the criteria of a participating interest, the transfer must be accounted for as a secured borrowing. In order to meet the criteria for a participating interest, all cash flows from the loan must be divided proportionately, the rights of each loan holder must have the same priority, the loan holders must have no recourse to the transferor other than standard representations and warranties and no loan holder has the right to pledge or exchange the entire loan. Other Real Estate Owned and Repossessed Assets Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated costs to sell when legal title is obtained, establishing a new cost basis. Subsequently, valuations are periodically updated by management and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell. The excess (deficiency) |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2020 | |
BUSINESS COMBINATIONS | |
BUSINESS COMBINATIONS | 2. BUSINESS COMBINATIONS Effective October 5, 2018, the Company completed the acquisition of Coastway Bancorp, Inc. (“Coastway”), the holding company of Coastway Community Bank, a Rhode Island chartered savings bank headquartered in Warwick, Rhode Island with $835.1 million in total assets, $736.2 million in gross loans and $478.3 million in total deposits. Pursuant to the merger agreement, each share of Coastway common outstanding was converted into the right to receive $28.25 in cash. Goodwill in the amount of $56.4 million was recognized in the Coastway acquisition. In 2018, HarborOne Mortgage acquired a primary third-party originator, Cumberland Mortgage, and recorded $327,000 in goodwill. Goodwill recognized in these transactions is not deductible for income tax purposes. The following table represents the assets acquired and liabilities assumed of Coastway as of October 5, 2018 and the fair value adjustments and amounts recorded by the Company in 2018 under the acquisition method of accounting, which are subject to adjustment for up to one year after the merger date: Coastway Fair Value Fair Carrying Value Adjustment Value (in thousands) Assets Acquired Cash and cash equivalents $ 45,453 $ — $ 45,453 Loans held for sale 9,071 — 9,071 Loans, gross 727,148 (23,234) 703,914 Allowance for loan losses (3,480) 3,480 — Fixed assets 30,965 (711) 30,254 Core deposit intangible — 8,952 8,952 Deferred tax assets 1,144 3,114 4,258 Other assets 24,783 (287) 24,496 Total assets acquired $ 835,084 $ (8,686) $ 826,398 Liabilities Assumed Deposits $ 478,336 $ (1,814) $ 476,522 Borrowings 276,750 — 276,750 Other liabilities 10,082 — 10,082 Total liabilities assumed 765,168 (1,814) 763,354 Net acquired $ 69,916 $ (6,872) $ 63,044 Consideration paid 119,440 Goodwill recognized $ 56,396 The fair value adjustment for loans represents the write-off of $5.4 million of deferred loan costs and the write down of the unpaid principal balance of loans to their estimated fair value based on interest rates and expected cash flows as of the acquisition date, which includes an estimate of expected loan loss inherent in the portfolio. Non-impaired loans had an unpaid principal balance of $716.4 million and a fair value of $698.8 resulting in a $17.5 million fair value adjustment that is accretable in earnings. Purchased credit impaired loans had an unpaid principal balance of $5.4 million and a fair value of $5.1 million. The core deposit intangible asset represents the value of the core deposit base assumed in the acquisition. The asset was recorded as an identifiable intangible asset and will be amortized over the estimated useful life of the deposit base. The fair value of time deposits was determined based on the present value of the contractual cash flows over the remaining period to maturity using a market interest rate. Fair value adjustments to assets acquired and liabilities assumed are generally amortized using either an effective yield or straight-line basis over periods consistent with the average life, useful life and/or contractual term of the related assets and liabilities. |
CASH AND DUE FROM BANKS
CASH AND DUE FROM BANKS | 12 Months Ended |
Dec. 31, 2020 | |
CASH AND DUE FROM BANKS | |
CASH AND DUE FROM BANKS | 3. Effective March 26, 2020, the Federal Reserve reduced the reserve requirement to 0% which eliminated reserve requirements for all depository institutions. Prior to March 26, 2020, the Company was required to maintain average balances on hand or with the Federal Reserve Bank of Boston. At December 31, 2019 reserve balances amounted to $7.0 million. |
DEBT SECURITIES
DEBT SECURITIES | 12 Months Ended |
Dec. 31, 2020 | |
DEBT SECURITIES | |
DEBT SECURITIES | 4. DEBT 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) December 31, 2020: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 5,002 $ 93 $ — $ 5,095 U.S. government agency and government-sponsored residential mortgage-backed securities 234,819 3,113 305 237,627 U.S. government-sponsored collateralized mortgage obligations 16,326 330 — 16,656 SBA asset-backed securities 16,249 871 — 17,120 Total securities available for sale $ 272,396 $ 4,407 $ 305 $ 276,498 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 $40.3 million are pledged as collateral for interest rate swap agreements as of December 31, 2020 (see Note 16). 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 December 31, 2020 is as follows: Available for Sale Amortized Fair Cost Value (in thousands) After 1 year through 5 years $ — $ — After 5 years through 10 years 5,002 5,095 Over 10 years — — 5,002 5,095 U.S. government agency and government-sponsored residential mortgage-backed securities 234,819 237,627 U.S. government-sponsored collateralized mortgage obligations 16,326 16,656 SBA asset-backed securities 16,249 17,120 Total $ 272,396 $ 276,498 U.S. government-sponsored residential mortgage-backed securities, collateralized mortgage obligations and securities whose underlying assets are loans from the SBA have stated maturities of 1 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. The U.S. government and government-sponsored enterprise obligations with a total fair value of $5.1 million have a final maturity of 7 years and a call feature of 8 months. At the year ended December 31, 2020 and 2019, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholder equity. The following table shows proceeds and gross realized gains and losses related to the sales and calls of securities for the periods indicated: Year Ended December 31, 2020 2019 2018 (in thousands) Sales Proceeds $ 72,333 $ 28,391 $ 1,015 Gross gains 2,521 1,267 5 Gross losses — — — Calls Proceeds $ 13,635 $ 20,145 $ 1,025 Gross gains 12 77 — Gross losses — — — Information pertaining to securities with gross unrealized losses at December 31, 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) December 31, 2020: Securities available for sale U.S. government agency and government-sponsored residential mortgage-backed securities $ 283 $ 67,460 $ 22 $ 3,668 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 OTTI at each reporting period, and more frequently when economic or market concerns warrant such evaluation. As of December 31, 2020, the Company’s security portfolio consisted of 98 debt securities, 18 of which were in an unrealized loss position. The unrealized losses are related to the Company’s mortgage-backed securities and were issued by U.S. government-sponsored entities and agencies. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at December 31, 2020. |
LOANS HELD FOR SALE
LOANS HELD FOR SALE | 12 Months Ended |
Dec. 31, 2020 | |
LOANS HELD FOR SALE | |
LOANS HELD FOR SALE | 5. LOANS HELD FOR SALE The following table provides the fair value and contractual principal balance outstanding of loans held for sale accounted for under the fair value option: December 31, 2020 2019 (in thousands) Loans held for sale, fair value $ 208,612 $ 110,552 Loans held for sale, contractual principal outstanding 198,984 107,472 Fair value less unpaid principal balance $ 9,628 $ 3,080 The Company has elected the fair value option for mortgage loans held for sale to better match changes in the fair value of the loans with changes in the fair value of the forward sale commitment contracts used to economically hedge them. Changes in fair value of mortgage loans held for sale accounted for under the fair value option election amounted to an increase of $6.5 million in the year ended December 31, 2020 to $9.6 million, compared to an increase of $1.7 million in the year ended December 31, 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 Consolidated Statements of Income. At December 31, 2020 and 2019, there were no loans held for sale that were greater than 90 days past due. |
LOANS
LOANS | 12 Months Ended |
Dec. 31, 2020 | |
LOANS | |
LOANS | 6. LOANS A summary of the balances of loans follows: December 31, 2020 2019 (in thousands) Residential real estate: One- to four-family $ 928,934 $ 937,305 Second mortgages and equity lines of credit 145,672 155,716 Residential real estate construction 31,217 14,055 1,105,823 1,107,076 Commercial: Commercial real estate 1,551,265 1,168,412 Commercial construction 99,331 153,907 Commercial and industrial 464,393 306,282 Total commercial loans 2,114,989 1,628,601 Consumer loans: Auto 265,266 424,592 Personal 8,564 11,289 Total consumer loans 273,830 435,881 Total loans 3,494,642 3,171,558 Allowance for loan losses (55,395) (24,060) Loans, net $ 3,439,247 $ 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 Consolidated Balance Sheets. The Company and participating lenders share ratably in cash flows and any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders and disburses required escrow funds to relevant parties. At December 31, 2020 and 2019, the Company was servicing loans for participants aggregating $284.2 million and $195.2 million, respectively. Acquired Loans The loans purchased from Coastway included $5.4 million in purchased credit impaired loans (“PCI”). The PCI loans were primarily residential real estate loans. The following table displays certain information pertaining to PCI loans at the dates indicated. December 31, 2020 2019 (in thousands) Outstanding balance $ 4,307 $ 4,609 Carrying amount $ 4,079 $ 4,378 The following table summarizes activity in the accretable yield for PCI loans: December 31, 2020 2019 (in thousands) Balance at beginning of period $ 149 $ 185 Additions — — Accretion (8) (8) Reclassification from nonaccretable difference — (28) Balance at end of period $ 141 $ 149 The following is the activity in the allowance for loan losses for the years ended December 31, 2020, 2019 and 2018 follows: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2017 $ 4,000 $ 7,835 $ 1,810 $ 2,254 $ 1,000 $ 1,590 $ 18,489 Provision (credit) for loan losses (761) 2,318 897 1,008 746 (380) 3,828 Charge-offs (50) (94) — (990) (847) — (1,981) Recoveries 50 — — 14 255 — 319 Balance at December 31, 2018 $ 3,239 $ 10,059 $ 2,707 $ 2,286 $ 1,154 $ 1,210 $ 20,655 Provision (credit) for loan losses (407) 2,810 (181) 1,744 497 284 4,747 Charge-offs (136) — — (1,075) (891) — (2,102) Recoveries 482 6 — 22 250 — 760 Balance at December 31, 2019 $ 3,178 $ 12,875 $ 2,526 $ 2,977 $ 1,010 $ 1,494 $ 24,060 Provision (credit) for loan losses 3,961 23,129 366 3,552 1,831 1,976 34,815 Charge-offs (60) (1,240) (937) (1,471) (599) — (4,307) Recoveries 340 1 — 253 233 — 827 Balance at December 31, 2020 $ 7,419 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Allocation of the allowance to loan segments at December 31, 2020 and 2019 follows: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) December 31, 2020: Loans: Impaired loans $ 24,384 $ 12,513 $ — $ 9,359 $ — $ 46,256 Non-impaired loans 1,081,439 1,538,752 99,331 455,034 273,830 3,448,386 Total loans $ 1,105,823 $ 1,551,265 $ 99,331 $ 464,393 $ 273,830 $ 3,494,642 Allowance for loan losses: Impaired loans $ 802 $ 1,845 $ — $ 31 $ — $ — $ 2,678 Non-impaired loans 6,617 32,920 1,955 5,280 2,475 3,470 52,717 Total allowance for loan losses $ 7,419 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 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 December 31, 2020 and 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) December 31, 2020 Residential real estate: One- to four-family $ 12,148 $ 2,223 $ 6,418 $ 20,789 $ 11,611 Second mortgages and equity lines of credit 460 46 433 939 834 Residential real estate construction 471 — — 471 — Commercial real estate 416 — 3,369 3,785 12,486 Commercial construction — — — — — Commercial and industrial 444 191 1,243 1,878 8,606 Consumer: Auto 1,657 397 488 2,542 557 Personal 88 11 2 101 7 Total $ 15,684 $ 2,868 $ 11,953 $ 30,505 $ 34,101 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 December 31, 2020 and 2019, there were no loans past due 90 days or more and still accruing. During the year ended December 31, 2020 two non-performing loans with a recorded investment of $10.9 million, were sold and a charge off of $937,000 was recorded. The following information pertains to impaired loans: December 31, 2020 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 $ 12,284 $ 13,039 $ — $ 11,610 $ 12,140 $ — Commercial real estate 3,552 4,741 — 530 530 — Commercial construction — — — 11,244 11,244 — Commercial and industrial 9,243 11,604 — 5,505 6,901 — Total 25,079 29,384 — 28,889 30,815 — Impaired loans with a specific reserve: Residential real estate 12,100 12,355 802 15,665 16,218 985 Commercial real estate 8,961 8,961 1,845 — — — Commercial and industrial 116 181 31 326 326 176 Total 21,177 21,497 2,678 15,991 16,544 1,161 Total impaired loans $ 46,256 $ 50,881 $ 2,678 $ 44,880 $ 47,359 $ 1,161 Year Ended December 31, 2020 2019 2018 Interest Interest Interest Average Interest Income Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 26,040 $ 1,115 $ 1,054 $ 29,708 $ 1,694 $ 1,335 $ 32,186 $ 1,764 $ 1,379 Commercial real estate 5,064 2 2 643 10 10 744 — — Commercial construction 8,831 — — 5,622 237 237 26 — — Commercial and industrial 8,162 80 80 5,564 54 54 2,729 35 32 Total $ 48,097 $ 1,197 $ 1,136 $ 41,537 $ 1,995 $ 1,636 $ 35,685 $ 1,799 $ 1,411 Interest income recognized and interest income recognized on a cash basis in the table above represent interest income for the years ended December 31, 2020, 2019 and 2018, not for the time period designated as impaired. No additional funds are committed to be advanced in connection with impaired loans. Loan modifications and payment deferrals as a result of the COVID-19 pandemic that meet the criteria established under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators are excluded from evaluation of TDR classification and will continue to be reported as current during the payment deferral period. The Company’s policy is to continue to accrue interest during the deferral period. Loans that do not meet the CARES Act or regulatory guidance criteria are evaluated for TDR and non-accrual treatment under the Company’s existing policies and procedures. There were no material TDR loan modifications for the year ended December 31, 2020. During the year ended December 31, 2019, there was one material TDR loan modification for a $2.0 million commercial loan. The TDR included an extension of maturity dates, interest only periods, and compliance with specific covenants. There were no material TDR loan modifications during the year ended December 31, 2018. The recorded investment of TDRs was $15.1 million and $20.0 million at December 31, 2020 and 2019, respectively. Of these loans, $3.6 million and $5.0 million were on non-accrual at December 31, 2020 and 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. For the years ended December 31, 2020, 2019 and 2018, there were no significant TDRs that defaulted in the first twelve months of restructure. A default is defined as two or more payments in arrears. As noted above, loan modifications and payment deferrals as a result of the COVID-19 pandemic that meet the criteria established under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators are excluded from evaluation of TDR classification and will continue to be reported as current during the payment deferral period. The Company’s policy is to continue to accrue interest during the deferral period. Loans not meeting the CARES Act or regulatory guidance are evaluated for TDR and non-accrual treatment under the Company’s existing policies and procedures. Loan modifications made pursuant to the CARES Act that were in payment deferral at December 31, 2020 totaled approximately $30.0 million. There were 5 commercial real estate loans that amounted to $26.0 million, 9 commercial and industrial loans that amounted to $811,000, 10 residential mortgage loans that amounted to $2.8 million and 18 consumer loans that amounted to $399,000. 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 at least an annual basis, in accordance with the Company’s loan policy, the Company analyzes commercial loans, individually by grading the loans based on credit risk. The loan grades assigned to all commercial loan types are also tested by the Company’s external loan review firm in accordance with the Company’s loan review policy. 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 December 31, 2020 and 2019: December 31, 2020 2019 Commercial Commercial Commercial Commercial Commercial Commercial Real Estate Construction and Industrial Real Estate Construction and Industrial (in thousands) Loans rated 1 - 6 $ 1,524,105 $ 99,331 $ 452,665 $ 1,163,343 $ 127,962 $ 294,507 Loans rated 7 14,674 3,122 4,539 14,701 6,117 Loans rated 8 9,455 — 7,080 530 11,244 3,223 Loans rated 9 3,031 — 1,526 — — 2,435 Loans rated 10 — — — — — — $ 1,551,265 $ 99,331 $ 464,393 $ 1,168,412 $ 153,907 $ 306,282 |
MORTGAGE LOAN SERVICING
MORTGAGE LOAN SERVICING | 12 Months Ended |
Dec. 31, 2020 | |
MORTGAGE LOAN SERVICING | |
MORTGAGE LOAN SERVICING | 7. MORTGAGE LOAN SERVICING The Company sells residential mortgages to government-sponsored entities and other parties. The Company retains no beneficial interests in these loans, but may retain the servicing rights of the loans sold. Mortgage loans serviced for others are not included in the accompanying Consolidated Balance Sheets. The risks inherent in mortgage servicing rights (“MSRs”) relate primarily to changes in prepayments that result from shifts in mortgage interest rates. The unpaid principal balances of mortgage loans serviced for others were $3.05 billion and $1.83 billion as of December 31, 2020 and 2019, respectively. The Company accounts for MSRs at fair value. The Company obtains and reviews 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, and default rates. At December 31, 2020 and 2019, the following weighted average assumptions were used in the calculation of fair value of MSRs: December 31, 2020 2019 Prepayment speed 14.30 % 12.43 % Discount rate 9.23 9.34 Default rate 2.27 2.61 The following summarizes changes to mortgage servicing rights for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, 2020 2019 2018 (in thousands) Balance, beginning of period $ 17,150 $ 22,217 $ 21,092 Additions 14,415 1,174 2,521 Changes in fair value due to: Reductions from loans paid off during the period (4,181) (1,972) (1,795) Changes in valuation inputs or assumptions (2,551) (4,269) 399 Balance, end of period $ 24,833 $ 17,150 $ 22,217 For the years ended December 31, 2020, 2019 and 2018, contractually specified servicing fees included in other mortgage banking income amounted to $6.1 million, $5.4 million, and $5.4 million respectively. |
OTHER REAL ESTATE LOANS AND REP
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | 8. OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS Income and expenses applicable to foreclosed and repossessed assets include the following: Year Ended December 31, 2020 2019 2018 (in thousands) Gain on sales of real estate, net $ (86) $ (181) $ (126) Net loss on sales of repossessed assets 45 112 106 Write-downs of real estate — — 5 Operating expenses 37 82 110 $ (4) $ 13 $ 95 At December 31, 2020 and 2019, foreclosed and repossessed assets include one residential real estate property with a recorded value of $297,000 , respectively. Foreclosed and repossessed assets also includes automobiles with total recorded values of $298,000 and $421,000 at December 31, 2020 and 2019, respectively. All foreclosed and repossessed assets are held for sale. Mortgage loans in the process of foreclosure totaled $4.3 million and $3.9 million as of December 31, 2020 and 2019, respectively, and are reported in loans. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 9. PROPERTY AND EQUIPMENT A summary of the cost and accumulated depreciation of property and equipment follows: December 31, 2020 2019 (in thousands) Land $ 12,420 $ 11,048 Buildings and leasehold improvements 46,216 45,357 Furniture, equipment and vehicles 14,719 12,247 Fixed assets in process 1,365 646 74,720 69,298 Less accumulated depreciation and amortization (25,140) (21,347) Property and equipment, net $ 49,580 $ 47,951 Depreciation and amortization expense amounted to $4.0 million, $4.4 million and $3.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. During the year ended December 31, 2019, land and a building with a total net book value of $9.0 million were transferred to asset held for sale, a loss of $482,000 was recognized on the transfer and the property was sold during 2020 with no additional gain or loss recorded. In addition, $17.7 million of fully depreciated property and equipment was purged from our fixed assets system when we converted to a new accounting platform in 2019. At December 31, 2020 and 2019, fixed assets in process represents buildings in process, building improvements and equipment not placed in service. Pursuant to the terms of noncancellable operating lease agreements in effect at December 31, 2020, pertaining to property and equipment, future minimum lease payments under various operating leases are as follows: Years Ending December 31, (in thousands) 2021 $ 2,452 2022 2,239 2023 1,847 2024 1,644 2025 1,684 Thereafter 13,134 $ 23,000 The noncancellable lease agreements contain options to extend for periods from five |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 10. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Year Ended December 31, 2020 2019 (in thousands) Balance, beginning of period $ 69,802 $ 70,088 Measurement period fair value adjustments — (286) Balance, end of period $ 69,802 $ 69,802 The Bank and HarborOne Mortgage are identified as a reporting unit for purposes of goodwill impairment testing. At December 31, 2020 and 2019, the carrying value of the Bank’s goodwill was $59.0 million and $59.6 million, respectively, and the carrying value of HarborOne Mortgage’s goodwill was $10.8 million and $10.5 million, respectively. 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 also warranted due to the operational disruption and uncertainty associated with the COVID-19 pandemic as of June 30, 2020 and performed a qualitative assessments for the Bank and HarborOne Mortgage. The qualitative assessment for HarborOne Mortgage indicated that it was more likely than not that the fair value of the reporting unit exceeded the carrying value, including goodwill and as such no further evaluation was performed. However, the Company proceeded with a quantitative assessment for the Bank. The quantitative impairment test includes comparing the carrying value of the reporting unit, including the existing goodwill and intangible assets, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, a goodwill impairment charge is recorded for the amount in which the carrying value of the reporting unit exceeds the fair value of the reporting unit, up to the amount of goodwill attributed to the reporting unit. We used a third party valuation specialist to assist management in performing a quantitative test to assess goodwill for impairment. The fair value of the Company was calculated using a weighted average of the results from three valuation approaches: comparable transactions approach, the control premium approach and the public market peers control premium approach. The indicated fair value of the Bank was determined to be in excess of the carrying amount of the Bank’s equity and therefore no impairment charge was recorded as of June 30, 2020. The extent to which the COVID-19 pandemic will continue to impact our business and financial condition is uncertain and may negatively impact key assumptions used in determining the fair value and the resultant fair 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 performed a qualitative impairment test as of October 31, 2020 and determined it was more likely than not that the fair value of the Bank exceeded the carrying value, including goodwill, and as such, no further evaluation was performed. Core Deposit Intangible The Company recognized core deposit intangibles (“CDI”) of $9.0 million in connection with the Coastway acquisition. The Company’s change in the gross amount of core deposit intangibles and the related accumulated amortization consisted of the following: December 31, 2020 2019 (in thousands) Gross amount of CDI: Balance, beginning of period $ 8,952 $ 8,952 Additions due to acquisitions — — Balance, end of period 8,952 8,952 Accumulated amortization: Balance, beginning of period (2,917) (618) Amortization (1,665) (2,299) Balance, end of period (4,582) (2,917) Net CDI, end of period $ 4,370 $ 6,035 The estimated aggregate amortization expense related to the Company’s core deposit intangible assets for each of the next five years Other Intangible Assets A non-compete intangible asset was recognized in connection with HarborOne Mortgage and was amortized over the four year period of the agreement ending in 2019. Amortization expense for this asset of $45,000, and $88,000 was recorded in 2019 and 2018, respectively. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2020 | |
DEPOSITS | |
DEPOSITS | 11. DEPOSITS A summary of deposit balances, by type, is as follows: December 31, 2020 2019 (in thousands) NOW and demand deposit accounts $ 908,256 $ 572,280 Regular savings and club accounts 998,994 626,685 Money market deposit accounts 866,661 856,830 Total non-certificate accounts 2,773,911 2,055,795 Term certificate accounts greater than $250,000 135,190 169,595 Term certificate accounts less than or equal to $250,000 497,108 636,343 Brokered deposits 100,000 81,140 Total certificate accounts 732,298 887,078 Total deposits $ 3,506,209 $ 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 December 31, 2020 and 2019, total reciprocal deposits were $104.9 million and $277.9 million, respectively, consisting primarily of money market accounts. A summary of certificate accounts by maturity at December 31, 2020 is as follows: Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 682,338 0.88 % Over 1 year to 2 years 28,238 1.68 Over 2 years to 3 years 9,007 1.88 Over 3 years to 4 years 11,604 1.00 Over 4 years to 5 years 1,745 0.81 Total certificate deposits 732,932 0.92 % Less unaccreted acquisition discount (634) Total certificate deposits, net $ 732,298 |
FHLB BORROWINGS
FHLB BORROWINGS | 12 Months Ended |
Dec. 31, 2020 | |
FHLB BORROWINGS | |
FHLB BORROWINGS | 12. Borrowed funds at December 31, 2020 and 2019 consisted of FHLB advances. Short-term advances were $35.0 million and $183.0 million at December 31, 2020 and 2019, respectively, with a weighted average rate of 0.42% and 1.80%, respectively. Long-term advances are summarized below: December 31, 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 $ — $ — — % $ 87,000 137,000 2.25 % 2021 41,750 101,750 2.47 41,750 21,750 2.47 2022 — — — 10,000 — 1.73 2023 20,190 190 3.48 20,195 195 2.43 2024 10,000 10,000 1.68 10,000 10,000 1.68 2025 40,987 987 1.32 987 987 — 2026 and thereafter 1,170 1,170 2.00 1,200 1,200 2.00 $ 114,097 $ 114,097 2.16 % $ 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 $1.25 billion and $1.06 billion at December 31, 2020 and 2019, respectively. As of December 31, 2020, the Company had $741.7 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 61% of the carrying value of indirect auto and commercial loans with principal balances amounting to $107.1 million and $46.9 million, respectively, of which no amount was outstanding at December 31, 2020 and 2019. |
SUBORDINATED DEBENTURES
SUBORDINATED DEBENTURES | 12 Months Ended |
Dec. 31, 2020 | |
SUBORDINATED DEBENTURES | |
SUBORDINATED DEBENTURES | 13. SUBORDINATED DEBENTURES On August 30, 2018, the Company issued $35.0 million in fixed-to-floating rate subordinated notes due 2028 (the “Notes”) in a private placement transaction to institutional accredited investors. The Notes bear interest at annual fixed rate of 5.625% until September 1, 2023 at which time the interest rate resets quarterly to an interest rate per annum equal to the three–month LIBOR plus 278 basis points. Interest is payable semi-annually on March 1 and September 1 each year through September 1, 2023 and quarterly thereafter. The Notes can be redeemed partially or in whole, prior to the maturity date beginning September 1, 2023 and on any scheduled interest payment date thereafter, at par. The Notes are carried on the Consolidated Balance Sheets net of unamortized issuance costs of $967,000 and $1.1 million at December 31, 2020 and 2019, respectively, which are being amortized over the period to maturity date using the interest method. At December 31, 2020 and 2019, the Notes qualified as Tier 2 capital for regulatory capital purposes. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | 14. INCOME TAXES Allocation of the federal and state income taxes between current and deferred portions for the years ended December 31, 2020, 2019 and 2018 are as follows: 2020 2019 2018 (in thousands) Current tax provision: Federal $ 11,591 $ 3,757 $ 2,576 State 5,240 1,207 1,377 16,831 4,964 3,953 Deferred tax benefit: Federal (2,124) (445) (740) State (1,490) (111) (400) (3,614) (556) (1,140) Income tax provision $ 13,217 $ 4,408 $ 2,813 The reasons for the differences between the statutory federal income tax and the actual income tax provision for the years ended December 31, 2020, 2019 and 2018 are summarized as follows: 2020 2019 2018 (dollars in thousands) Statutory federal tax rate 21% 21% 21% Statutory federal tax provision $ 12,182 $ 4,762 $ 2,983 Increase (decrease) resulting from: State taxes, net of federal tax benefit 2,962 866 772 Bank-owned life insurance (465) (232) (358) Non-deductible merger expenses — — 196 Employee Stock Ownership Plan expenses 56 172 106 Tax exempt income (22) (104) (180) Reduction in uncertain federal tax positions (1,864) (1,586) (801) Other, net 368 530 95 Income tax provision $ 13,217 $ 4,408 $ 2,813 The tax effects of each item that give rise to deferred taxes at December 31, 2020 and 2019 are as follows: 2020 2019 (in thousands) Deferred tax assets: Allowance for loan losses $ 15,493 $ 6,651 Employee benefit plans 4,999 5,036 Mark-to-market loans 2,387 3,687 Accrued expenses not deducted for tax purposes 1,799 1,093 HarborOne Mortgage loan repurchase reserve 743 231 Charitable contribution and other carryforwards — 15 25,421 16,713 Deferred tax liabilities: Net unrealized gain on securities available for sale (904) (419) Derivatives (2,349) - Deferred income annuities (1,580) (1,447) Depreciation and amortization (1,145) (370) Deferred loan fees (1,578) (1,995) Mortgage servicing rights (6,793) (4,759) Core deposit intangible (1,222) (1,668) Other (293) (21) (15,864) (10,679) Net deferred tax asset $ 9,557 $ 6,034 A summary of the change in the net deferred tax asset (liability) for the years ended December 31, 2020, 2019 and 2018 is as follows: 2020 2019 2018 (in thousands) Balance at beginning of year $ 6,034 $ 6,727 $ 843 Deferred tax benefit 3,614 556 1,140 Coastway deferred tax accounting / measurement period adjustment — (165) 4,258 Change in cash flow hedge 394 — — Change in securities available for sale (485) (1,084) 486 Balance at end of year $ 9,557 $ 6,034 $ 6,727 The Company’s income tax returns are subject to review and examination by federal and state taxing authorities. The Company is currently open to audit under the applicable statutes of limitations by the Internal Revenue Service (“IRS”) and the Massachusetts Department of Revenue for the years ended December 31, 2017 through 2020. At December 31, 2020, the Bank had a net operating loss carryforward in the state of New Hampshire of $1.7 million related to the acquisition of HarborOne Mortgage with a recorded deferred tax asset of $10,000 at December 31, 2020. The net operating loss expires on December 31, 2024. The state of New Hampshire limits the use of acquired net operating losses that can be used by the Bank each year based on Internal Revenue Code Section 382. This limitation is $552,000 per year. Management believes it is more likely than not that it will be able to utilize the New Hampshire net operating loss carryforward prior to expiration. At December 31, 2018, the Company had a charitable contribution carryforward of $1.1 million. This carryforward was generated from the Company’s creation of The HarborOne Foundation to which it contributed 385,450 shares of its common stock and $965,000 in cash in connection with the offering in June 2016. At December 31, 2019, the Company had no federal charitable contribution carryforward as it utilized the remaining $1.1 million benefit in the 2019 tax return. During 2017, federal and state amended tax returns were filed that requested tax refunds of approximately $3.2 million. These refunds reflected the change in the tax basis of certain assets not reflected on the original tax return filings. In addition, net operating loss carryforwards for 2016 and related uncertain tax benefits were recognized on the 2016 and 2017 tax return filings. The amended tax return filings net of the tax impact of a temporary difference adjustment of $320,000 reflect “unrecognized tax benefits”, which are defined as the aggregate differences between tax return positions and the benefits recognized in the Consolidated Financial Statements. Interest on the uncertain tax positions was reflected in the determination of tax expense for 2018 and 2017. In 2019, a Federal tax refund in the amount of $603,000 was received for 2013 and state tax refunds were received for years 2013, 2014 and 2015 in the amount of $211,000, $320,000 and $40,000, respectively. Federal tax refunds for years 2014 and 2015 in the amount of $826,000 and $1.3 million, respectively, were received during 2018. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2020 2019 2018 (in thousands) Balance at beginning of year $ 3,052 $ 3,769 $ 1,898 Additions based on tax positions related to current year — — — Additions for tax positions for prior years 168 1,471 2,672 Reductions for tax positions for prior years (2,058) (153) — Settlements — (2,035) (801) Balance at end of year $ 1,162 $ 3,052 $ 3,769 The balance of unrecognized tax benefits, the amount of related interest accrued and what management believes to be the range of reasonably possible changes in the next 12 months, are: Unrecognized tax benefits $ 1,060 Accrued interest on unrecognized tax benefits 102 Portion that, if recognized, would reduce tax expense and effective tax rate 1,162 Reasonably possible reduction to the balance of unrecognized tax in subsequent year 754 Portion that, if recognized, would reduce tax expense and effective tax rate in subsequent year 754 In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods the deferred tax assets are expected to be deductible, management believes it is more likely than not that its deferred tax assets are realizable. It should be noted, however, that factors beyond management’s control, such as the general economy and real estate values, can affect future levels of taxable income, and no assurance can be given that sufficient taxable income will be generated to fully absorb gross deductible temporary differences. |
OTHER COMMITMENTS AND CONTINGEN
OTHER COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
OTHER COMMITMENTS AND CONTINGENCIES | |
OTHER COMMITMENTS AND CONTINGENCIES | 15. 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 Consolidated Financial Statements. The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments. The following off-balance sheet financial instruments were outstanding at December 31, 2020 and 2019. The contract amounts represent credit risk. December 31, 2020 2019 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 485,428 $ 24,752 Commitments to grant other loans 53,714 74,114 Unadvanced funds on home equity lines of credit 178,432 157,867 Unadvanced funds on revolving lines of credit 169,907 147,047 Unadvanced funds on construction loans 127,776 112,158 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, unadvanced construction loans and home equity lines of credit are collateralized by real estate, while revolving lines of credit are unsecured. Employment Agreements The Company has entered into employment agreements with certain executive officers. The term of the agreements commenced on the effective date of the signed agreements and continues thereafter until terminated, as defined by the agreements. The agreements generally provide for a specified minimum annual compensation and the continuation of benefits currently received. However, such employment can be terminated for cause, as defined, without incurring any continuing obligations. In addition, all of the agreements provide for severance payments to the officers following a change in control, as defined. The Company entered into an employment agreement with the former President and Chief Executive Officer of Coastway in connection with the Coastway acquisition. The agreement had a five-year term that provided total compensation of $2.2 million. Generally, in the event of termination after the first twelve months, the remaining total compensation was payable and as such the total amount was fully expensed over twelve months, ending in 2019. For the years ended December 31, 2019 and 2018, the Company recognized compensation expense of $1.7 million and $509,000, respectively. Reserve for Residential Mortgage Loan Repurchase Losses The Company sells residential mortgage loans on a “whole-loan” basis to Fannie Mae and Freddie Mac, and to non-agency investors. These loan sales occur under industry standard contractual provisions that include various representations and warranties, which typically cover ownership of the loan, compliance with loan criteria set forth in the applicable agreement, validity of the lien securing the loan and other similar matters. The Company may be required to repurchase certain loans sold with identified defects, indemnify the investor, or reimburse the investor for any credit losses incurred. The Company establishes mortgage repurchase reserves related to various representations and warranties that reflect management’s estimate for which we have a repurchase obligation. The reserves are established by a charge to loan expenses in our Consolidated Statements of Income. At December 31, 2020 and 2019, this reserve totaled $2.7 million and $834,000, respectively, and is included in other liabilities and accrued expenses on the Consolidated Balance Sheets. The repurchase reserve is applicable to loans the Company originated and sold with representations and warranties, which is representative of the entire sold portfolio. The repurchase loss liability is estimated by origination year and to the extent that repurchase demands are made by investors, we may be able to successfully appeal such repurchase demands. The reserve considers anticipated future losses and the Company’s lack of historical experience with the make-whole demands. The reserve for residential mortgage loan repurchase losses represents our best estimate of the probable loss that we may incur due to the representations and warranties in our loan sales contracts with investors. Repurchase losses depend upon economic factors and other external conditions that may change over the life of the underlying loans. Additionally, lack of access to the servicing records of loans sold on a service released basis adds difficulty to the estimation process. To the extent that future investor repurchase demand and appeals success differ from past experience, the Company could have increased demands and increased loss severities on repurchases, causing future additions to the repurchase reserve. Certain loans were sold with recourse provisions, and at December 31, 2020 and 2019, the related maximum contingent liability related to loans sold amounted to $1.3 million and $1.3 million, respectively. Based on discounted cash flow of projected losses on sold loans in this portfolio at December 31, 2020 and 2019, the Company had no recourse liability. Other In the ordinary course of business, various legal claims arise from time to time and, in the opinion of management based on discussion with legal counsel, management does not believe these claims will have a material effect on the Company’s financial position or results of operations. |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Dec. 31, 2020 | |
DERIVATIVES | |
DERIVATIVES | 16. 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 Cash Flow 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. As of December 31, 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 4.3 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 $1.4 million. The Company expects approximately $489,000 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 as 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 amount of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay a “pair-off” fee, based on then-current market prices, to the investor to compensate the investor for the shortfall. With a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. Generally, the price the investor will pay the seller for an individual loan is specified prior to the loan being funded (e.g., 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 $40.3 million are pledged to secure the Company’s liability for the offsetting interest rate swaps (see Note 4). The interest rate swap notional amount below 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 December 31, 2020 and 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 are 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 present 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) December 31, 2020: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 — $ — Other liabilities $ 1,407 Derivatives not designated as Hedging Instruments Derivative loan commitments $ 485,428 Other assets $ 12,623 Other liabilities $ 341 Forward loan sale commitments 356,500 Other assets — Other liabilities 2,204 Interest rate swaps 867,728 Other assets 39,320 Other liabilities 39,320 Risk participation agreements 132,379 Other assets — Other liabilities — Total $ 51,943 $ 43,272 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: Year Ended December 31, 2020 2019 2018 (in thousands) Derivatives designated as hedging instruments Gain (loss) in OCI on derivatives (effective portion), net of tax $ (1,013) $ — $ — (Loss) gain reclassified from OCI into interest income or interest expense (effective portion) $ (46) $ — $ — Derivatives not designated as hedging instruments Changes in fair value of derivative loan commitments Mortgage banking income $ 11,072 $ 62 $ 129 Changes in fair value of forward loan sale commitments Mortgage banking income (2,073) 386 (472) Changes in fair value of interest rate swaps Other income — — — Total $ 8,999 $ 448 $ (343) |
COMPENSATION AND BENEFIT PLANS
COMPENSATION AND BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2020 | |
COMPENSATION AND BENEFIT PLANS | |
COMPENSATION AND BENEFIT PLANS | 17. COMPENSATION AND BENEFIT PLANS Defined Contribution Plan The Company provides saving plans which qualifies under Section 401(k) of the Internal Revenue Code and provides for voluntary contributions by participating employees up to the maximum amount permitted by law. For the year ended December 31, 2020 the Bank contributed 5% of each employee’s compensation up to the social security wage base and HarborOne Mortgage matched 50% of the first 4% of employee contributions up to a maximum of $2,000. For the years ended December 31, 2019 and 2018, the Bank contributed 9.3% of each employee’s compensation up to the social security wage base, plus an additional 5.7% of the employee’s compensation in excess of the social security wage base on a discretionary basis up to regulatory maximums. HarborOne Mortgage made no contributions in 2019 and 2018. Contributions expensed were $1.8 million, $2.5 million and $2.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. Management Incentive Program The Company from time to time creates incentive compensation plans for senior management and other officers to participate in at varying levels. In addition, the Company may also pay a discretionary bonus to senior management, officers, and/or nonofficers of the Company. These programs are administered by the Compensation Committee of the Board of Directors. The expense for the incentive plans amounted to $4.7 million, $2.1 million and $3.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. Supplemental Retirement Plans The Company provides supplemental retirement benefits to two senior executive officers of the Company under the terms of two Supplemental Executive Retirement Plan Agreements (the “SERPs”). Benefits to be paid under the SERPs are based primarily on the officer’s compensation and estimated mortality. At December 31, 2020, 2019 and 2018, included in Other liabilities and accrued expenses is the Company’s obligation under the SERPs of $8.0 million, $7.1 million and $5.3 million, respectively. The retirement benefits, as defined in the SERPs, are accrued by charges to compensation expense over the required service periods of the officers. Expense related to these benefits was $955,000, $1.8 million and $658,000 for the years ended December 31, 2020, 2019 and 2018, respectively. The Company assumed a supplemental retirement plan in the Coastway acquisition. At December 31, 2018, the Company’s obligation under the plan of $3.4 million is included in other liabilities and accrued expenses. Compensation expense related to this benefit was $90,000 for the year ended December 31, 2018. The plan was frozen as part of the merger agreement and the settlement of the plan was completed in 2019. Split-Dollar Life Insurance Arrangement The Company has an endorsement split-dollar life insurance agreement with an executive officer whereby the Company will pay to the executives’ estates or beneficiaries a portion of the death benefit that the Company will receive as beneficiary of such policy. Expense associated with this post-retirement benefit for the years ended December 31, 2020, 2019 and 2018 amounted to $21,000, $38,000 and $73,000, respectively. The cash surrender value of the policy is included in Bank-owned life insurance on the Consolidated Balance Sheets. Deferred Compensation Plans The Company is the sole owner of an annuity policy pertaining to one of the Company’s executives. The Company has an agreement with this executive whereby upon retirement the Company will pay to the executive an amount equal to the cash surrender value of the annuity less premiums paid accumulated at an interest rate of 1.5% per year. At December 31, 2020, 2019 and 2018, included in other liabilities and accrued expenses is the Company’s obligation under the plan of $385,000, $353,000 and $322,000, respectively. For the years ended December 31, 2020, 2019 and 2018, the expense amounted to $32,000, $31,000 and $29,000, respectively. The Company has agreements with two executive officers whereby the Company will pay the cost of the premium for individual supplemental medical and prescription drug coverage for their lifetime upon retirement at age 65 or later. Spousal coverage is provided each year the executive is eligible for coverage and the spouse is age 65 or over. At December 31, 2020, 2019 and 2018, included in other liabilities and accrued expenses is the Company’s obligation under the plan of $344,000, $297,000 and $229,000, respectively. For the years ended December 31, 2020, 2019 and 2018, the expense amounted to $47,000, $66,000 and $3,000, respectively. The Company assumed a deferred compensation plan in the Coastway acquisition. At December 31, 2018, other assets included $1.5 million in plan assets and other liabilities and accrued expenses included a liability for the benefit obligation of $1.5 million. Compensation expense related to this plan for the year ended December 31, 2018 was $46,000. The plan was terminated and paid to the former Coastway executive in 2019. Long-Term Incentive Plan During 2015, the Company entered into a long-term incentive plan with several executive officers. Benefits are earned annually based on the Company’s achievement of performance goals. The plan is administered by the Company’s Board of Directors. The plan was amended effective January 1, 2018 and no further incentive awards are awarded under the plan. Included in other liabilities and accrued expenses at December 31, 2020, 2019 and 2018 is $437,000, $838,000 and $1.3 million, respectively, for this plan. For the years ended December 31, 2020 and 2018, the expense amounted to $20,000 and $56,000, respectively. For the year ended December 31, 2019, the Company reversed $82,000 of expense related to a former executive officer. Post-Retirement Life Insurance Employees who are covered under the Company’s bank-owned life insurance program can elect to participate in the benefits of the program while employed by the Company. The Company granted post-employment coverage to certain executives. This post retirement benefit is included in other liabilities and accrued expenses at December 31, 2020, 2019 and 2018 in the amount of $234,000, $186,000 and $171,000, respectively. For the years ended December 31, 2020, 2019 and 2018, the expense amounted to $47,000, $17,000 and $29,000, respectively. Employee Stock Ownership Plan On June 29, 2016, the Company established an ESOP to provide eligible employees the opportunity to own Company stock. The Company added shares to the ESOP as part of the Offering completed August 14, 2019. The plan is a tax-qualified retirement plan for the benefit of the eligible Company employees. The ESOP shares were purchased through a loan from the Company and as the debt is repaid, shares are released. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The unreleased shares are deducted from stockholders’ equity as unearned ESOP shares in the accompanying Consolidated Balance Sheets. The number of shares committed to be released per year is 230,723 through 2035 and 124,148 from 2036 through 2038. The following table presents share information held by the ESOP: December 31, 2020 2019 Allocated shares 639,525 408,803 Shares committed to be allocated 230,723 230,724 Unallocated shares 3,602,562 3,833,283 Total shares 4,472,810 4,472,810 Fair value of unallocated shares $ 39,123,823 $ 42,127,780 Total compensation expense recognized in connection with the ESOP was $2.1 million, $2.7 million and $1.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. ESOP Restoration Plan During 2016, the Company also adopted an ESOP Restoration Plan for the benefit of ESOP eligible employees whose annual compensation exceeds the amount of annual compensation permitted to be recognized under the ESOP by the Internal Revenue Code. Under the ESOP Restoration Plan, eligible participants would receive a credit each year equal to the amount they would have received under the ESOP but for the Internal Revenue Service imposed compensation limit. Any benefits earned under the ESOP Restoration Plan would become payable at the earliest of six months and a day after the participant’s separation of service from the Bank, the participant’s death, a change in control of the Company or upon termination of the ESOP Restoration Plan. These benefits are accrued over the period during which employees provide services to earn these benefits. For the year ended December 31, 2020, 2019 and 2018, $487,000, $210,000 and $24,000, respectively, was accrued for the ESOP Restoration Plan. Defined Benefit Plan The Company assumed a frozen noncontributory defined benefit pension plan in the Coastway acquisition. At December 31, 2018 the fair value of the plan assets was $1.4 million and the projected benefit obligation was $1.6 million. The unfunded liability balance of $202,000 was included in other liabilities and accrued expenses. The Company settled the plan in 2019 and recognized a gain on settlement of $43,000, included in other income. Directors’ Retirement Plan The Company has an unfunded director fee continuation plan which provides postretirement benefits to eligible directors of the Company. Participants in the plan must have at least six years of service as a director to be vested in the benefit, which is determined based on number of years of service. The Company elected to freeze the plan in 2017. Based on the actuarial analysis, the funded status of the plan and the components of net periodic cost are as follows: Year Ended December 31, 2020 2019 2018 (in thousands) Change in projected benefit obligation: Benefit obligation at beginning of year $ 1,915 $ 1,876 $ 1,837 Service cost — — — Interest cost 75 76 76 Loss — — — Benefits paid (37) (37) (37) Benefit obligation and funded status at end of year $ 1,953 $ 1,915 $ 1,876 Accumulated benefit obligation $ 1,953 $ 1,915 $ 1,876 Service cost $ — $ — $ — Interest cost 75 76 76 Loss recognized — — — Prior service cost recognized — — — Net periodic cost $ 75 $ 76 $ 76 The following assumption was used to determine the benefit obligation and net periodic cost at or for the years ended December 31: 2020 2019 2018 Discount rate 4.14 % 4.14 % 4.14 % Rate of compensation increase N/A N/A % 3.00 % The following is a summary of benefit payments expected to be paid by the director’s retirement plan over the next ten years: Years Ending December 31, (in thousands) 2021 $ 37 2022 399 2023 230 2024 230 2025 231 2026-2030 1,050 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 18. STOCK-BASED COMPENSATION The Company has two share-based compensation plans. Under the HarborOne, Inc. 2020 Equity Incentive Plan (the “2020 Equity Plan”), adopted on September 29, 2020, and the 2017 Stock Option and Incentive Plan (the “2017 Equity Plan”), adopted on August 9, 2017, the Company may grant stock options, restricted stock awards, and other equity incentives to its directors, officers and employees. Total shares reserved for issuance under the 2020 Equity Plan are 4,500,000. The 2017 Equity Plan was discontinued upon the adoption of the 2020 Equity Plan and as such the Company may only award shares from the 2020 Equity Plan. Expense related to awards granted to employees is recognized as compensation expense, and expense related to awards granted to directors is recognized as directors’ fees within noninterest expense. The following table presents the pre-tax expense associated with stock options and restricted stock awards and the related tax benefits recognized for the years presented: Year Ended December 31, 2020 2019 2018 (in thousands) Stock-based compensation expense Stock options $ 1,099 $ 1,213 $ 694 Restricted stock awards 1,618 2,204 2,360 Directors' fee expense Stock options 358 572 629 Restricted stock awards 604 860 910 Total stock-based award expense $ 3,679 $ 4,849 $ 4,593 Related tax benefits recognized in earnings $ 773 $ 1,042 $ 965 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 year ended December 31, 2020, the Company made no awards of nonqualified options to purchase shares of common stock. During the years ended December 31, 2019 and 2018, the Company made the following awards of nonqualified options to purchase shares of common stock: Year Ended December 31, 2019 2018 Options granted 583,565 289,890 Vesting period (years) 3 3 Term (years) 10 10 Weighted average expected volatility 22.09 % 22.16 % Expected life (years) 6 6 Expected dividend yield — % — % Weighted average risk free interest rate 2.46 % 2.93 % Weighted average fair value per option $2.49 $2.83 A summary of the status of the Company’s stock option grants for the year ended December 31, 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 — — (702,155) 2.73 Forfeited (20,948) 10.23 (20,948) 2.82 Expired (41,892) 10.23 (41,892) 2.82 Balance at December 31, 2020 2,106,403 $ 9.86 7.22 $ 2,097,257 431,550 $ 2.55 Exercisable at December 31, 2020 1,632,958 $ 10.05 6.96 $ 1,321,686 Unrecognized cost inclusive of directors' awards $ 805,000 Weighted average remaining recognition period (years) 1.12 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 unvested stock awards under the 2020 Equity Plan and the 2017 Equity Plan for the year ended December 31, 2020: Restricted Weighted Average Stock Awards Grant Price Unvested stock awards at January 1, 2020 333,766 $ 10.20 Vested (294,822) 10.22 Granted 355,427 9.28 Forfeited (9,679) 10.13 Unvested stock awards at December 31, 2020 384,692 $ 9.33 Unrecognized cost inclusive of directors' awards $ 3,194,000 Weighted average remaining recognition period (years) 1.75 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 19. STOCKHOLDERS’ EQUITY Minimum Regulatory Capital Requirements 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 December 31, 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 December 31, 2020 also exceeded the minimum capital requirements, including the currently applicable capital conservation buffer of 2.5%. The Company’s and Bank’s regulatory capital ratios as of December 31, 2020 and 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. December 31, 2020 Common equity Tier 1 capital to risk-weighted assets $ 621,153 17.7 % $ 158,050 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 621,153 17.7 210,733 6.0 N/A N/A Total capital to risk-weighted assets 700,197 19.9 280,978 8.0 N/A N/A Tier 1 capital to average assets 621,153 14.5 171,578 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 December 31, 2020 Common equity Tier 1 capital to risk-weighted assets $ 506,822 14.4 % $ 158,081 4.5 % $ 228,339 6.5 % Tier 1 capital to risk-weighted assets 506,822 14.4 210,775 6.0 281,033 8.0 Total capital to risk-weighted assets 550,875 15.7 281,033 8.0 351,291 10.0 Tier 1 capital to average assets 506,822 11.8 171,501 4.0 214,377 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 Dividend Restrictions The Bank is subject to dividend restrictions imposed by various regulators, including a limitation on the total of all dividends that the Bank may pay to the Company in any calendar year. The total of all dividends shall not exceed the Bank’s net income for the current year (as defined by statute), plus the Bank’s net income retained for the two Preferred Stock The Company has 1,000,000 shares of preferred stock, no par value, authorized, and none issued or outstanding. Treasury Stock Any shares repurchased under the Company’s share repurchase programs were purchased in open-market transactions and are held as treasury stock. All treasury stock is held at cost. The Company adopted a share repurchase program on September 3, 2020 to repurchase up to approximately 5% of the Company’s outstanding shares. During the year ended December 31, 2020, the Company purchased 1,533,500 shares at an average price of $10.29 for a total of $15.9 million. The Company’s prior share repurchase program expired in 2019. Treasury stock at December 31, 2019 consisted of shares acquired in connection with the satisfaction of tax obligations on vested restricted stock issued pursuant to the Stock Option and Incentive Plan. As of December 31, 2018, the Company had repurchased 146,644 shares, including 75,544 shares acquired by the Company in connection with the satisfaction of tax obligations on vested restricted stock issued pursuant to the Stock Option and Incentive Plan. |
COMPREHENSIVE INCOME (LOSS)
COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2020 | |
COMPREHENSIVE INCOME (LOSS) | |
COMPREHENSIVE INCOME (LOSS) | 20. COMPREHENSIVE INCOME (LOSS) Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities are reported as a separate component of the stockholders’ equity section of the Consolidated Balance Sheets, such items, along with net income, are components of comprehensive income (loss). The components of accumulated other comprehensive income (loss), included in stockholders’ equity, are as follows: December 31, 2020 2019 (in thousands) Cash flow hedge: Net unrealized loss $ (1,407) $ — Related tax effect 394 — Total accumulated other comprehensive loss $ (1,013) $ — Securities available for sale: Net unrealized gain $ 4,102 $ 1,899 Related tax effect (904) (419) Total accumulated other comprehensive income $ 3,198 $ 1,480 The following tables present changes in accumulated other comprehensive income (loss) by component for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, 2020 2019 2018 Available Cash Available Available for Sale Flow for Sale for Sale Securities Hedge Total Securities Securities (in thousands) Balance at beginning of period $ 1,480 $ — $ 1,480 $ (2,358) $ (528) Other comprehensive income (loss) before reclassifications 4,214 (1,453) 2,761 6,266 (2,212) Reclassification of stranded effect of tax rate changes — — — — (104) Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale 522 — 522 — — Amounts reclassified from accumulated other comprehensive income (loss) (2,533) 46 (2,487) (1,344) — Net current period other comprehensive income (loss) 2,203 (1,407) 796 4,922 (2,316) Related tax effect (485) 394 (91) (1,084) 486 Balance at end of period $ 3,198 $ (1,013) $ 2,185 $ 1,480 $ (2,358) |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
FAIR VALUE OF ASSETS AND LIABILITIES | |
FAIR VALUE OF ASSETS AND LIABILITIES | 21. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: •Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. •Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. •Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The following methods and assumptions were used by the Company in estimating fair value disclosures: Cash and cash equivalents Debt Securities - Level 2 debt securities are traded less frequently than exchange-traded instruments. The fair value of these securities is determined using matrix pricing with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category includes obligations of U.S. government-sponsored enterprises, including mortgage-backed securities, individual name issuer trust preferred debt securities and corporate bonds. Debt securities not actively traded whose fair value is determined through the use of cash flows utilizing inputs that are unobservable are classified as Level 3. There were no Level 3 securities held at December 31, 2020 and 2019. FHLB stock Loans held for sale Collateral Dependent Impaired Loans Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, the Company reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Retirement plan annuities MSRs Deposits and mortgagors’ escrow accounts 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 Off-balance sheet credit-related instruments Transfers between levels are recognized at the end of the reporting period, if applicable. There were no transfers in the periods presented. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below: Total Level 1 Level 2 Level 3 Fair Value (in thousands) December 31, 2020 Assets Securities available for sale $ — $ 276,498 $ — $ 276,498 Loans held for sale — 208,612 — 208,612 Mortgage servicing rights — 24,833 — 24,833 Derivative loan commitments — — 12,623 12,623 Forward loan sale commitments — — — — Interest rate swaps — 39,320 — 39,320 $ — $ 549,263 $ 12,623 $ 561,886 Liabilities Derivative loan commitments $ — $ — $ 341 $ 341 Forward loan sale commitments — — 2,204 2,204 Interest rate management agreements — 1,407 — 1,407 Interest rate swaps — 39,320 — 39,320 $ — $ 40,727 $ 2,545 $ 43,272 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 years ended December 31, 2020, 2019 and 2018, the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis. Year Ended December 31, 2020 2019 2018 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 1,411 $ 1,261 $ 1,093 Total gains included in net income (1) 11,212 150 168 Balance at end of period $ 12,623 $ 1,411 $ 1,261 Changes in unrealized gains relating to instruments at period end $ 12,623 $ 1,411 $ 1,261 Year Ended December 31, 2020 2019 2018 (in thousands) Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (332) $ (630) $ (119) Total gains (losses) included in net income (1) (2,213) 298 (511) Balance at end of period $ (2,545) $ (332) (630) Changes in unrealized losses relating to instruments at period end $ (2,545) $ (332) (630) (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 December 31, 2020 and 2019. The following table summarizes the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets. December 31, 2020 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Asset held for sale $ — $ — $ — $ — $ — $ 8,536 Impaired loans: Residential — — 919 — — 2,272 Commercial — — 7,242 — — 1,606 Other real estate owned and repossessed assets — — 595 — — 719 $ — $ — $ 8,756 $ — $ — $ 13,133 Losses in the following table represent the amount of the fair value adjustments recorded during the year on the carrying value of the assets held at December 31, 2020 and 2019, respectively. Losses on fully charged off loans are not included in the table. Year Ended December 31, 2020 2019 (in thousands) Asset held for sale $ — $ 482 Impaired loans Residential 118 28 Commercial 2,197 605 $ 2,315 $ 1,115 The table below presents quantitative information about significant unobservable inputs (Level 3) for assets measured at fair value on a recurring basis at the dates indicated. Fair Value December 31, Valuation Technique 2020 2019 (in thousands) Impaired loans: Residential $ 919 $ 2,272 Sales Comparison Approach (1) Commercial $ 7,242 $ 1,606 Sales Comparison Approach (1) Real estate owned: Residential $ 298 $ 298 Sales Comparison Approach (1) (1) Summary of Fair Values of Financial Instruments The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments are as follows. Certain financial instruments and all nonfinancial instruments are exempt from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company. December 31, 2020 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 205,870 $ 205,870 $ — $ — $ 205,870 Securities available for sale 276,498 — 276,498 — 276,498 Federal Home Loan Bank stock 8,738 N/A N/A N/A N/A Loans held for sale 208,612 — 208,612 — 208,612 Loans, net 3,439,247 — — 3,473,751 3,473,751 Retirement plan annuities 13,747 — — 13,747 13,747 Accrued interest receivable 11,874 — 11,874 — 11,874 Financial liabilities: Deposits 3,506,209 — — 3,509,996 3,509,996 Borrowed funds 149,097 — 152,373 — 152,373 Subordinated debt 34,033 — — 34,799 34,799 Mortgagors' escrow accounts 7,736 — — 7,736 7,736 Accrued interest payable 1,262 — 1,262 — 1,262 Derivative loan commitments: Assets 12,623 — — 12,623 12,623 Liabilities 341 — — 341 341 Interest rate management agreements: Liabilities 1,407 — 1,407 — 1,407 Interest rate swap agreements: Assets 39,320 — 39,320 — 39,320 Liabilities 39,320 — 39,320 — 39,320 Forward loan sale commitments: Assets — — — — — Liabilities 2,204 — — 2,204 2,204 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 | 12 Months Ended |
Dec. 31, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 22. 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. The following table presents earnings per common share. Year Ended December 31, 2020 2019 2018 Net income available to common stockholders (in thousands) $ 44,792 $ 18,268 $ 11,394 Average number of common shares outstanding 58,252,140 58,451,387 58,549,990 Less: Average unallocated ESOP shares (3,938,772) (2,719,750) (1,860,399) Weighted average common shares outstanding used to calculate basic earnings per common share 54,313,368 55,731,637 56,689,591 Dilutive effect of share-based compensation 6,467 139 — Weighted average common shares outstanding used to calculate diluted earnings per common share 54,319,835 55,731,776 56,689,591 Earnings per common share: Basic $ 0.82 $ 0.33 $ 0.20 Diluted $ 0.82 $ 0.33 $ 0.20 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 2,106,403, 2,169,243 and 1,778,407 shares were not considered in computing diluted earnings per share for the years ended December 31, 2020, 2019 and 2018, respectively, because they were antidilutive. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2020 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 23. The reportable segments are determined by the products and services offered, primarily distinguished between banking and mortgage banking operations. They are also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business. The Company has two reportable segments: HarborOne Bank and HarborOne Mortgage. Revenue from HarborOne Bank consists primarily of interest earned on loans and investment securities and service charges on deposit accounts. Revenue from HarborOne Mortgage comprises interest earned on loans and fees received as a result of the residential mortgage origination, sale and servicing process. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Segment profit and loss is measured by net income on a legal entity basis. Intercompany transactions are eliminated in consolidation. Information about the reportable segments and reconciliation to the Consolidated Financial Statements at December 31, 2020, 2019 and 2018, and for the years then-ended are presented in the tables below. Year Ended December 31, 2020 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 118,217 $ 3,235 $ (1,386) $ — $ 120,066 Provision for loan losses 34,815 — — — 34,815 Net interest and dividend income (loss), after provision for loan losses 83,402 3,235 (1,386) — 85,251 Mortgage banking income: Gain on sale of mortgage loans — 105,469 — — 105,469 Intersegment (loss) gain (3,148) 3,148 — — — Changes in mortgage servicing rights fair value (2,376) (4,356) — — (6,732) Other 1,360 14,278 — — 15,638 Total mortgage banking income (loss) (4,164) 118,539 — — 114,375 Other noninterest income (loss) 24,909 (138) — — 24,771 Total noninterest income 20,745 118,401 — — 139,146 Noninterest expense 98,354 66,859 1,175 — 166,388 Income (loss) before income taxes 5,793 54,777 (2,561) — 58,009 Provision (benefit) for income taxes 527 12,964 (274) — 13,217 Net income (loss) $ 5,266 $ 41,813 $ (2,287) $ — $ 44,792 Total assets at period end $ 4,460,164 $ 312,194 $ 733,993 $ (1,022,736) $ 4,483,615 Goodwill at period end $ 59,042 $ 10,760 $ — $ — $ 69,802 Year Ended December 31, 2019 HarborOne HarborOne HarborOne Bank Mortgage Bancorp Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 109,106 $ 1,064 $ (1,108) $ — $ 109,062 Provision for loan losses 4,747 — — — 4,747 Net interest and dividend income (loss), after provision for loan losses 104,359 1,064 (1,108) — 104,315 Mortgage banking income: Gain on sale of mortgage loans 1 33,556 — — 33,557 Intersegment (loss) gain (1,183) 1,183 — — — Changes in mortgage servicing rights fair value (1,431) (4,810) — — (6,241) Other 1,494 8,842 — — 10,336 Total mortgage banking income (loss) (1,119) 38,771 — — 37,652 Other noninterest income (loss) 23,365 (45) — — 23,320 Total noninterest income 22,246 38,726 — — 60,972 Noninterest expense 100,688 39,753 2,170 — 142,611 Income (loss) before income taxes 25,917 37 (3,278) — 22,676 Provision (benefit) for income taxes 5,019 (77) (534) — 4,408 Net income (loss) $ 20,898 $ 114 $ (2,744) $ — $ 18,268 Total assets at period end $ 3,925,328 $ 165,863 $ 701,181 $ (733,451) $ 4,058,921 Goodwill at period end $ 59,042 $ 10,760 $ — $ — $ 69,802 Year Ended December 31, 2018 HarborOne HarborOne HarborOne Bank Mortgage Bancorp Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 88,478 $ 1,018 $ 39,434 $ (40,000) $ 88,930 Provision for loan losses 3,828 — — — 3,828 Net interest and dividend income (loss), after provision for loan losses 84,650 1,018 39,434 (40,000) 85,102 Mortgage banking income: Gain on sale of mortgage loans 784 22,569 — — 23,353 Intersegment (loss) gain (205) 205 — — — Changes in mortgage servicing rights fair value (375) (1,021) — — (1,396) Other 1,445 7,207 — — 8,652 Total mortgage banking income 1,649 28,960 — — 30,609 Other noninterest income 18,587 2 — — 18,589 Total noninterest income 20,236 28,962 — — 49,198 Noninterest expense 86,586 31,639 1,868 — 120,093 Income (loss) before income taxes 18,300 (1,659) 37,566 (40,000) 14,207 Provision (benefit) for income taxes 3,463 (262) (388) — 2,813 Net income (loss) $ 14,837 $ (1,397) $ 37,954 $ (40,000) $ 11,394 Total assets at period end $ 3,657,982 $ 89,461 $ 391,692 $ (486,014) $ 3,653,121 Goodwill at period end $ 59,582 $ 10,506 $ — $ — $ 70,088 |
CONDENSED FINANCIAL STATEMENTS
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | 12 Months Ended |
Dec. 31, 2020 | |
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | |
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | 24. CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY Condensed financial information relative to HarborOne Bancorp, Inc.’s balance sheet at December 31, 2020 and 2019 and the related statements of net income and cash flows for the years ended December 31, 2020, 2019 and 2018 are presented below. The statement of stockholders’ equity is not presented below as the parent company’s stockholders’ equity is that of the consolidated company. Balance Sheet December 31, 2020 2019 (in thousands) Assets Cash and due from banks $ 118,265 $ 135,067 Investment in common stock of HarborOne Bank 581,982 529,380 Loan receivable - ESOP 32,190 33,407 Due from subsidiary 612 2,456 Other assets 657 871 Total assets $ 733,706 $ 701,181 Liabilities and Stockholders' Equity Subordinated debt $ 34,033 $ 33,907 Other liabilities and accrued expenses 3,359 1,480 Due to subsidiary — — Stockholders' equity 696,314 665,794 Total liabilities and stockholders' equity $ 733,706 $ 701,181 Statement of Net Income Year Ended December 31, 2020 2019 2018 (in thousands) Dividends from subsidiary $ — $ — $ 40,000 Interest from bank deposits 260 15 163 Interest on short-term investments 449 953 12 Interest on ESOP loan 1,596 1,062 488 Total income 2,305 2,030 40,663 Interest expense 2,095 2,076 741 Operating expenses 2,771 3,232 2,356 Total expenses 4,866 5,308 3,097 Income (loss) before income taxes and equity in undistributed net income (loss) of HarborOne Bank (2,561) (3,278) 37,566 Income tax provision (benefit) (274) (534) (388) Income (loss) before equity in income of subsidiaries (2,287) (2,744) 37,954 Equity in undistributed net income (loss) of HarborOne Bank 47,079 21,012 (26,560) Net income $ 44,792 $ 18,268 $ 11,394 Statement of Cash Flows Year Ended December 31, 2020 2019 2018 (in thousands) Cash flows from operating activities: Net income $ 44,792 $ 18,268 $ 11,394 Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed net (income) loss of HarborOne Bank (47,079) (21,012) 26,560 Deferred income tax provision (benefit) (18) 139 440 Share-based compensation 963 1,432 1,568 Net change in other assets 231 (284) (841) Net change in other liabilities 302 1,299 577 Net cash provided (used) by operating activities (809) (158) 39,698 Cash flows from investing activities: Investment in HarborOne Bank — (152,713) (10,000) Repayment of ESOP loan 1,218 1,862 404 Advances to subsidiary (1,884) (2,456) — Repayment of advances to subsidiary 3,728 — — Cash paid for acquisitions, net of cash acquired — — (122,235) Net cash provided (used) by investing activities 3,062 (153,307) (131,831) Cash flows from financing activities: Issuance of common stock — 304,161 — Repurchase of common stock (15,923) (721) (1,267) Purchase of shares by ESOP — (24,829) — Proceeds from advance from subsidiary — — 139 Repayment of advance from subsidiary — (139) — Proceeds from subordinated debt issuance — — 33,720 Amortization of subordinated debt issuance costs 126 108 79 Dividends paid (3,258) — — Net cash provided (used) by financing activities (19,055) 278,580 32,671 Net change in cash and cash equivalents (16,802) 125,115 (59,462) Cash and cash equivalents at beginning of year 135,067 9,952 69,414 Cash and cash equivalents at end of year $ 118,265 $ 135,067 $ 9,952 |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2020 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 25. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) First Quarter Second Quarter Third Quarter Fourth Quarter 2020 2019 2020 2019 2020 2019 2020 2019 (in thousands, except share data) Interest and dividend income $ 37,169 $ 37,053 $ 36,621 $ 38,278 $ 37,048 $ 39,730 $ 37,720 $ 39,723 Interest expense 10,469 11,023 7,174 11,565 5,879 11,745 4,970 11,389 Net interest and dividend income 26,700 26,030 29,447 26,713 31,169 27,985 32,750 28,334 Provision for loan losses 3,749 857 10,004 1,750 13,454 889 7,608 1,251 Other noninterest income 16,341 9,842 38,630 14,451 44,461 17,196 37,181 18,139 Gain on sale and call of securities, net 2,525 — 8 1,267 — 77 — — Total noninterest income 18,866 9,842 38,638 15,718 44,461 17,273 37,181 18,139 Total noninterest expenses 35,388 32,592 43,838 35,081 45,722 36,203 41,440 38,735 Provision for income taxes 1,705 356 3,668 819 4,561 1,053 3,283 2,180 Net income $ 4,724 $ 2,067 $ 10,575 $ 4,781 $ 11,893 $ 7,113 $ 17,600 $ 4,307 Basic earnings per share (1) $ 0.09 $ 0.04 $ 0.19 $ 0.08 $ 0.22 $ 0.13 $ 0.33 $ 0.08 Diluted earnings per share (1) $ 0.09 $ 0.04 $ 0.19 $ 0.08 $ 0.22 $ 0.13 $ 0.33 $ 0.08 Weighted average common shares, basic (1) 54,392,465 56,666,979 54,450,146 56,704,297 54,465,339 55,638,734 53,947,868 54,208,629 Weighted average common shares, diluted (1) 54,392,465 56,666,979 54,450,146 56,704,297 54,465,339 55,638,734 53,973,737 54,209,182 (1) |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2020 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 26. 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. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Bais of Presentation and Consolidation | Basis of Presentation and Consolidation HarborOne Bancorp, Inc. (the “Company”) is the stock holding company of HarborOne Bank (the “Bank”), a Massachusetts-chartered savings bank, which in turn owns a residential mortgage banking company, HarborOne Mortgage, LLC (“HarborOne Mortgage”). HarborOne Mortgage was acquired as Merrimack Mortgage, LLC on July 1, 2015 and effective April 3, 2018 became HarborOne Mortgage. The Consolidated Financial Statements include the accounts of the Company, the Company’s subsidiaries, Legion Parkway Company LLC, a security corporation formed on July 13, 2016 and HarborOne Bank; and the Bank’s wholly-owned subsidiaries. HarborOne Mortgage, two security corporation subsidiaries and one passive investment subsidiary, which 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. |
Conversion and Reorganization | Conversion and Reorganization On August 14, 2019, the Company completed a second step conversion offering (the “Offering”). Prior to the completion of the Offering, approximately 53% of the shares of common stock of the Company were owned by HarborOne Mutual Bancshares, a mutual holding company (the “MHC”). The Company raised gross proceeds of $310.4 million and incurred expenses of $6.3 million, resulting in net cash proceeds of $304.1 million by selling 31,036,812 shares of common stock at $10.00 per share in the Offering, shares of common stock formerly held by the MHC. In addition, each share of the Company common stock owned by shareholders, other than the MHC, prior to the Offering was exchanged for 1.795431 shares of Company common stock, for a total of 12,162,763 shares of Company common stock that were issued in the exchange. The Company utilized $24.8 million to fund an additional ESOP loan, invested $151.3 million into the Bank’s operations, and retained the remaining amount for general corporate purposes. All historical share and per share information has been restated to reflect the 1.795431 exchange ratio. The Company established a liquidation account in connection with Offering. The liquidation accounts are maintained for the benefit of the eligible account holders and supplemental eligible account holders who maintain their accounts at the Bank after the offering. The liquidation accounts are reduced annually to the extent that such account holders have reduced their qualifying deposits as of each anniversary date. Subsequent increases will not restore an account holder’s interest in the liquidation account. The Company is not permitted to pay dividends on its capital stock if the Company’s shareholders’ equity would be reduced below the amount of the liquidation account. |
Nature of Operations | Nature of Operations The Company provides a variety of financial services to individuals and businesses through its 25 full-service bank branches in Massachusetts and Rhode Island, one limited-service bank branch, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains 36 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 and consumer loans, including indirect automobile lease loans. The Company also originates, sells and services residential mortgage loans primarily through HarborOne Mortgage. |
Risks and Uncertainties | Risks and Uncertainties On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic, and almost all public commerce and related business activities have been, to varying degrees, curtailed. The COVID-19 pandemic has caused economic and social disruption on an unprecedented scale. While some industries have been impacted more severely than others, all businesses have been impacted to some degree. The outbreak has also caused significant disruptions in the U.S. economy and has adversely impacted a broad range of industries in which the Company’s customers operate, which has impaired, or may impair in the future, their ability to fulfill their financial obligations to the Company. The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. Congress, the President, and the Board of Governors of the Federal Reserve System (the “Federal Reserve”) have taken several actions designed to cushion the economic fallout. Most notably, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), a $2 trillion legislative package, was signed into law at the end of March 2020. The goal of the CARES Act is to prevent a severe economic downturn through various measures, including direct financial aid to American families and economic stimulus to significantly impacted industry sectors. Additionally, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act was enacted on December 27, 2020, providing for a second round of PPP loans (“PPP-2”). Also on December 27, 2020, the Consolidated Appropriations Act passed on December 27, 2020 provided the option of postponing adoption of the standard until the earlier of the end of the national emergency declaration related to the COVID-19 pandemic or December 31, 2022. The Federal Reserve also took actions to mitigate the economic impact of the COVID-19 pandemic, including cutting the federal funds rate 150 basis points and targeting a 0 to 25 basis point rate. In addition to the general impact of the COVID-19 pandemic, certain provisions of the CARES Act as well as other legislative and regulatory relief efforts are expected to have a material impact on the Company’s operations. The fiscal stimulus and relief programs have been an effective mitigant to credit losses in the near term; however, once these programs are discontinued the severity of potential losses is uncertain and depends on numerous factors and future developments. The Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows. Effects may include: ● 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. ● 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. 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. |
Use of Estimates | Use of Estimates To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, however, actual results could differ. |
Business Combination | Business Combinations Business combinations are accounted for using the acquisition method of accounting. Under this method, the accounts of an acquired entity are included with the acquirer’s accounts as of the date of acquisition with any excess of purchase price over the fair value of the net assets acquired (including identifiable intangibles) capitalized as goodwill. As consideration for such transactions, the Company will typically issue common stock and/or pay cash, depending on the terms of the acquisition agreement. The value of common stock issued is based upon the market price of the stock as of the closing of the acquisition. |
Significant Group Concentration of Credit Risk | Significant Group Concentration of Credit Risk The Company has cash and federal fund balances on deposit at correspondent banks that exceed insurable limits. The Company has not experienced any losses on such amounts. Most of the Company’s lending activities are with borrowers located within south eastern New England. The ability and willingness of residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the borrowers’ geographic area and real estate values. Note 6 provides the detail of the Company’s loan portfolio and Note 4 provides the detail of the Company’s investment portfolio. The Company does not have any significant concentrations to any one industry or customer. |
Reclassifications | Reclassifications Certain previously reported amounts have been reclassified to conform to the current year’s presentation. |
Cash Flows | Cash Flows Cash and cash equivalents include cash, interest-bearing deposits with other financial institutions with maturities fewer than 90 days, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions and interest-bearing deposits in other financial institutions. |
Debt Securities | Debt Securities Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates debt securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For debt securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a debt security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock The Company, as a member of the Federal Home Loan Bank (“FHLB”) system, is required to maintain an investment in capital stock of the FHLB of Boston. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. At its discretion, the FHLB may declare dividends on the stock. The Company reviews FHLB stock for impairment based on the ultimate recoverability of the cost basis. As of December 31, 2020, no impairment has been recognized. |
Mortgage Loans Held for Sale | Mortgage Loans Held for Sale Residential mortgage loans originated with the intent to sell are classified as held-for-sale and are carried at fair value. Loan origination costs for loans held for sale that the Company accounts for under the fair value option are recognized in noninterest expense when incurred. Changes in fair value are recognized in mortgage banking income. Interest income on mortgage loans held for sale is recorded in interest income. |
Loans | Loans Loans held for investment are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any unamortized deferred origination fees and costs. Loan origination fees are offset with related direct incremental loan origination costs and the resulting net amount is deferred and amortized to interest income using the level-yield method over the remaining life of the loan. Accrual of interest on loans is discontinued when collectability of principal or interest is uncertain or when payments of principal or interest have become contractually past due 90 days or more. Past due status is based on contractual terms of the loan. However, a loan may remain on accrual status if both the value of any collateral securing the loan is sufficient to cover principal and accrued interest thereon, and the loan is in the process of collection. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on non-accrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company’s loan portfolio includes residential real estate, commercial real estate, construction, commercial and industrial and consumer segments. Residential real estate loans include classes for one- to four-family and second mortgages and equity lines of credit. Consumer loans include classes for auto and personal loans. The Company’s acquired loans are recorded at fair value with no carryover of the allowance for loan losses. Net discount on performing loans acquired are recognized as interest income over the remaining life of the loan. Acquired loans determined to have evidence of deterioration in credit quality and when it is probable, at acquisition, that all contractually required payments will not be collected, are deemed to be purchased credit impaired (“PCI”) loans. For PCI loans, the excess of cash flows expected to be collected over the carrying amount of the loans, referred to as the “accretable yield,” is accreted into interest income over the life of the loans using the effective yield method. The Company monitors actual cash flows to determine any deterioration from those forecasted at the acquisition date, which is evaluated and recorded through the allowance for loan losses. |
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 rolling average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment except commercial real estate, commercial construction and commercial and industrial loans. Due to the lack of historical loss experience for our commercial real estate, commercial construction and commercial and industrial loan portfolio, we utilize peer loss data. Adjustments to loss factors are considered for the following qualitative factors: levels/trends in delinquencies; trends in volume and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows: 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 in this segment 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 in this segment are generally secured by automobiles or unsecured and repayment is dependent on the credit quality of the individual borrower. Specific Reserve 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 (“TDR”) 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 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. TDRs are individually evaluated for impairment and included in the separately identified impairment disclosures. TDRs are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently default, the Company determines the amount of the allowance on that loan in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired. The company incorporates recent historical experience related to TDRs including the performance of TDRs that subsequently default into the calculation of the allowance by loan portfolio segment. 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. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. |
Property and Equipment | Property and Equipment Land is carried at cost. Buildings, leasehold improvements, and furniture and equipment are carried at cost, less accumulated depreciation and amortization, computed on the straight-line method over the estimated useful lives of the assets or the terms of the leases, if shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured. Maintenance and repairs are charged to expense as incurred and improvements are capitalized. |
Retirement Plan Annuities | Retirement Plan Annuities Retirement plan annuities are reflected on the Consolidated Balance Sheets at the face amount of the policies. Changes in recorded value are reflected in income on retirement plan annuities on the Consolidated Statements of Income. |
Bank-owned life insurance | Bank-owned life insurance Bank-owned life insurance policies are reflected on the Consolidated Balance Sheets at net cash surrender value. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in bank-owned life insurance income on the Consolidated Statements of Income and are not subject to income taxes. The Company is the beneficiary on these life insurance policies which are purchased for select employees of the Company. |
Employee Stock Ownership Plan | Employee Stock Ownership Plan Compensation expense for the Company’s ESOP is recorded at an amount equal to the shares committed to be allocated by the ESOP multiplied by the quarterly average fair market value of the shares during the year. The Company recognizes compensation expense ratably over the year based upon the Company’s estimate of the number of shares committed to be allocated by the ESOP. The difference between the average fair market value and the cost of the shares committed to be allocated by the ESOP is recorded as an adjustment to additional paid-in capital. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. |
Mortgage Servicing Rights | Mortgage Servicing Rights When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. Under the fair value measurement method, the Company measures servicing rights at fair value at each reporting date and reports changes in fair value of servicing assets in earnings in the period in which the changes occur, and are included with changes in mortgage servicing rights fair value Servicing fee income, which is reported on the income statement as Mortgage banking income, Other income, |
Derivative Financial Instruments | Derivative Financial Instruments At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to the likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), of (3) an instrument with no hedging designation (“stand alone derivative”). For a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings as fair values change. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and reclassified into earnings in the same periods during which the hedged transaction affects earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as non-interest income. Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. The Company formally documents all relationships between derivatives and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting prospectively when it is determined that (1) the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item; (2) the derivative expires, is sold, or terminated; (3) the derivative instrument is de-designated as a hedge because the forecasted transaction is no longer probable of occurring; (4) a hedged firm commitment no longer meets the definition of a firm commitment; or (5) management otherwise determines that designation of the derivative as a hedging instrument is no longer appropriate. When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as noninterest income. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transaction is still expected to occur, changes in value that were accumulated in other comprehensive income are amortized or accreted into earnings over the same periods which the hedged transactions will affect earnings. The Company accounts for commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans as free standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. In order to hedge the change in interest rates resulting from its commitments to fund the loans, the Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in fair value are recorded as gain on sale of mortgage loans. The Company also enters into interest rate swap contracts to meet the financing needs of the Company’s commercial customers. Offsetting swap agreements are simultaneously transacted to effectively eliminate the Company’s market and interest rate risk associated with the swaps. Interest rate swaps are recognized on the Consolidated Balance Sheets in other assets and other liabilities with changes in their fair values recorded in other income. |
Transfers of Financial Assets | Transfers of Financial Assets Transfers of an entire financial asset, a group of entire financial assets, or a participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets. During the normal course of business, the Company may transfer a portion of a financial asset, for example, a participation loan or the government guaranteed portion of a loan. In order to be eligible for sale treatment, the transfer of the portion of the loan must meet the criteria of a participating interest. If it does not meet the criteria of a participating interest, the transfer must be accounted for as a secured borrowing. In order to meet the criteria for a participating interest, all cash flows from the loan must be divided proportionately, the rights of each loan holder must have the same priority, the loan holders must have no recourse to the transferor other than standard representations and warranties and no loan holder has the right to pledge or exchange the entire loan. |
Other Real Estate Owned and Repossessed Assets | Other Real Estate Owned and Repossessed Assets Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated costs to sell when legal title is obtained, establishing a new cost basis. Subsequently, valuations are periodically updated by management and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell. The excess (deficiency) of any consideration received as compared to the carrying value of other real estate owned is recorded as a gain (loss) on sale of other real estate owned. Revenues and expenses from operations and changes in the valuation allowance and any direct write-downs are included in foreclosed and repossessed assets expense. Repossessed assets includes automobiles to be sold which are recorded at estimated fair value, less costs to sell, with the initial charge to the allowance for loan losses and the subsequent gain or loss on sale recorded to foreclosed and repossessed assets expense. |
Goodwill and Identifiable Intangible Assets | Goodwill and Identifiable Intangible Assets The assets (including identifiable intangible assets) and liabilities acquired in a business combination are recorded at fair value at the date of acquisition. Goodwill is recognized for the excess of the acquisition cost over the fair values of the net assets acquired and is not subsequently amortized. Identifiable intangible assets include core deposit premium and non-compete contracts and are being amortized over their estimated lives. Management assesses the recoverability of goodwill at least on an annual basis and all intangible assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The impairment test uses a combined qualitative and quantitative approach. The initial qualitative approach assesses whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after this assessment, the Company determines that it is more likely than not that the fair value is less than the carrying value, a quantitative impairment test is performed. The quantitative impairment test compares book value to the fair value of the reporting unit. If the carrying amount exceeds fair value, an impairment charge is recorded through earnings. Management has identified two reporting units for purposes of testing goodwill for impairment. The Company’s reporting units are the same as the segments used for segment reporting - the Bank, including the two security corporations, and one passive investment company, and HarborOne Mortgage. No impairment has been recognized as of December 31, 2020. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws in the period on enactment. A valuation allowance is established against deferred tax assets when, based upon the available evidence including historical and projected taxable income, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company records uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The determination of whether or not a tax position has met the more likely than not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment. The Company records interest and penalties as part of income tax expense. |
Fair Values of Financial Instruments | Fair Value of Financial Instruments The fair value of financial instruments is estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgement regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates. |
Share-based Compensation Plans | Share-based Compensation Plans The Company’s share-based compensation plans provide for awards of stock options, restricted stock and other stock-based compensation to directors, officers and employees. The cost of employee services received in exchange for awards of equity instruments is based on the grant-date fair value of those awards. Compensation cost is recognized over the requisite service period as a component of compensation expense. The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options granted, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. The Company has elected to recognize forfeitures of awards as they occur (e.g., when an award does not vest because the employee leaves the Company or does not meet specific performance measures). |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income and other comprehensive income (loss). Other comprehensive income includes unrealized gains and losses on debt securities available for sale and cash flow hedges, net of taxes, which are also recognized as a separate component of equity. |
Revenue Recognition | Revenue Recognition Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) with no cumulative effect adjustment to retained earnings upon adoption. |
Earnings Per Share | Earnings Per Share Basic earnings per common share is net income divided by the weighted-average number of common shares outstanding during the period. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations. Restricted stock awards are included in weighted average common shares outstanding as they are earned. Outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities for this calculation. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable. Potential common shares that may be issued by the Company relate to outstanding stock options awards and restricted stock awards and are determined using the treasury stock method. |
Loss Contingencies | Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe such matters exist that will have a material effect on the financial statements. |
Recent Accounting Pronouncements and Accounting Guidance Issued But Not Yet Adopted | Recent Accounting Pronouncements As an “emerging growth company” (“EGC”) as defined in Title 1 of the Jumpstart Our Business Startups Act of 2012, or the “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 non-public companies. As of December 31, 2020, there is no significant difference in the comparability of the financial statements as a result of this extended transition period. The Company’s EGC status is scheduled to end December 31, 2021. Accounting Guidance Issued But Not Yet Adopted In October 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-08, Codification Improvements to Subtopic 310-20, Receivables-Nonrefundable Fees and Other Costs, to clarify that an entity should reevaluate whether a callable security is within the scope of ASC paragraph 310-20-35-33 for each reporting period. The ASU is effective for fiscal years, and interim periods within those fiscal years beginning after December 31, 2020 and early application is not permitted. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early application is permitted for all other entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is currently evaluating the effect that this ASU will have on the Company’s consolidated financial statements. 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 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. 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) The Company will adopt the ASU in the first quarter of 2021 and expects an increase in the right of use assets and operating lease liabilities of approximately $20.0 million to $30.0 million, as we finalize evaluation of items within scope, with no material effect on the Company’s key financial ratios. |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
BUSINESS COMBINATIONS | |
Schedule of assets acquired and liabilities assumed and fair value adjustments | Coastway Fair Value Fair Carrying Value Adjustment Value (in thousands) Assets Acquired Cash and cash equivalents $ 45,453 $ — $ 45,453 Loans held for sale 9,071 — 9,071 Loans, gross 727,148 (23,234) 703,914 Allowance for loan losses (3,480) 3,480 — Fixed assets 30,965 (711) 30,254 Core deposit intangible — 8,952 8,952 Deferred tax assets 1,144 3,114 4,258 Other assets 24,783 (287) 24,496 Total assets acquired $ 835,084 $ (8,686) $ 826,398 Liabilities Assumed Deposits $ 478,336 $ (1,814) $ 476,522 Borrowings 276,750 — 276,750 Other liabilities 10,082 — 10,082 Total liabilities assumed 765,168 (1,814) 763,354 Net acquired $ 69,916 $ (6,872) $ 63,044 Consideration paid 119,440 Goodwill recognized $ 56,396 |
DEBT SECURITIES (Tables)
DEBT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
DEBT SECURITIES | |
Schedule of securities with gross unrealized gains and losses | Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (in thousands) December 31, 2020: Securities available for sale U.S. government and government-sponsored enterprise obligations $ 5,002 $ 93 $ — $ 5,095 U.S. government agency and government-sponsored residential mortgage-backed securities 234,819 3,113 305 237,627 U.S. government-sponsored collateralized mortgage obligations 16,326 330 — 16,656 SBA asset-backed securities 16,249 871 — 17,120 Total securities available for sale $ 272,396 $ 4,407 $ 305 $ 276,498 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 $ — $ — After 5 years through 10 years 5,002 5,095 Over 10 years — — 5,002 5,095 U.S. government agency and government-sponsored residential mortgage-backed securities 234,819 237,627 U.S. government-sponsored collateralized mortgage obligations 16,326 16,656 SBA asset-backed securities 16,249 17,120 Total $ 272,396 $ 276,498 |
Schedule of proceeds and gross realized gains and losses related to sales and calls of securities | Year Ended December 31, 2020 2019 2018 (in thousands) Sales Proceeds $ 72,333 $ 28,391 $ 1,015 Gross gains 2,521 1,267 5 Gross losses — — — Calls Proceeds $ 13,635 $ 20,145 $ 1,025 Gross gains 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) December 31, 2020: Securities available for sale U.S. government agency and government-sponsored residential mortgage-backed securities $ 283 $ 67,460 $ 22 $ 3,668 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) | 12 Months Ended |
Dec. 31, 2020 | |
LOANS HELD FOR SALE | |
Schedule of fair value and contractual principal balance outstanding of loans held for sale | December 31, 2020 2019 (in thousands) Loans held for sale, fair value $ 208,612 $ 110,552 Loans held for sale, contractual principal outstanding 198,984 107,472 Fair value less unpaid principal balance $ 9,628 $ 3,080 |
LOANS (Tables)
LOANS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of balances of loans | December 31, 2020 2019 (in thousands) Residential real estate: One- to four-family $ 928,934 $ 937,305 Second mortgages and equity lines of credit 145,672 155,716 Residential real estate construction 31,217 14,055 1,105,823 1,107,076 Commercial: Commercial real estate 1,551,265 1,168,412 Commercial construction 99,331 153,907 Commercial and industrial 464,393 306,282 Total commercial loans 2,114,989 1,628,601 Consumer loans: Auto 265,266 424,592 Personal 8,564 11,289 Total consumer loans 273,830 435,881 Total loans 3,494,642 3,171,558 Allowance for loan losses (55,395) (24,060) Loans, net $ 3,439,247 $ 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 years ended December 31, 2020, 2019 and 2018 follows: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) Balance at December 31, 2017 $ 4,000 $ 7,835 $ 1,810 $ 2,254 $ 1,000 $ 1,590 $ 18,489 Provision (credit) for loan losses (761) 2,318 897 1,008 746 (380) 3,828 Charge-offs (50) (94) — (990) (847) — (1,981) Recoveries 50 — — 14 255 — 319 Balance at December 31, 2018 $ 3,239 $ 10,059 $ 2,707 $ 2,286 $ 1,154 $ 1,210 $ 20,655 Provision (credit) for loan losses (407) 2,810 (181) 1,744 497 284 4,747 Charge-offs (136) — — (1,075) (891) — (2,102) Recoveries 482 6 — 22 250 — 760 Balance at December 31, 2019 $ 3,178 $ 12,875 $ 2,526 $ 2,977 $ 1,010 $ 1,494 $ 24,060 Provision (credit) for loan losses 3,961 23,129 366 3,552 1,831 1,976 34,815 Charge-offs (60) (1,240) (937) (1,471) (599) — (4,307) Recoveries 340 1 — 253 233 — 827 Balance at December 31, 2020 $ 7,419 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 Allocation of the allowance to loan segments at December 31, 2020 and 2019 follows: Residential Commercial Commercial Commercial Real Estate Real Estate Construction and Industrial Consumer Unallocated Total (in thousands) December 31, 2020: Loans: Impaired loans $ 24,384 $ 12,513 $ — $ 9,359 $ — $ 46,256 Non-impaired loans 1,081,439 1,538,752 99,331 455,034 273,830 3,448,386 Total loans $ 1,105,823 $ 1,551,265 $ 99,331 $ 464,393 $ 273,830 $ 3,494,642 Allowance for loan losses: Impaired loans $ 802 $ 1,845 $ — $ 31 $ — $ — $ 2,678 Non-impaired loans 6,617 32,920 1,955 5,280 2,475 3,470 52,717 Total allowance for loan losses $ 7,419 $ 34,765 $ 1,955 $ 5,311 $ 2,475 $ 3,470 $ 55,395 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) December 31, 2020 Residential real estate: One- to four-family $ 12,148 $ 2,223 $ 6,418 $ 20,789 $ 11,611 Second mortgages and equity lines of credit 460 46 433 939 834 Residential real estate construction 471 — — 471 — Commercial real estate 416 — 3,369 3,785 12,486 Commercial construction — — — — — Commercial and industrial 444 191 1,243 1,878 8,606 Consumer: Auto 1,657 397 488 2,542 557 Personal 88 11 2 101 7 Total $ 15,684 $ 2,868 $ 11,953 $ 30,505 $ 34,101 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 | December 31, 2020 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 $ 12,284 $ 13,039 $ — $ 11,610 $ 12,140 $ — Commercial real estate 3,552 4,741 — 530 530 — Commercial construction — — — 11,244 11,244 — Commercial and industrial 9,243 11,604 — 5,505 6,901 — Total 25,079 29,384 — 28,889 30,815 — Impaired loans with a specific reserve: Residential real estate 12,100 12,355 802 15,665 16,218 985 Commercial real estate 8,961 8,961 1,845 — — — Commercial and industrial 116 181 31 326 326 176 Total 21,177 21,497 2,678 15,991 16,544 1,161 Total impaired loans $ 46,256 $ 50,881 $ 2,678 $ 44,880 $ 47,359 $ 1,161 Year Ended December 31, 2020 2019 2018 Interest Interest Interest Average Interest Income Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis Investment Recognized on Cash Basis (in thousands) Residential real estate $ 26,040 $ 1,115 $ 1,054 $ 29,708 $ 1,694 $ 1,335 $ 32,186 $ 1,764 $ 1,379 Commercial real estate 5,064 2 2 643 10 10 744 — — Commercial construction 8,831 — — 5,622 237 237 26 — — Commercial and industrial 8,162 80 80 5,564 54 54 2,729 35 32 Total $ 48,097 $ 1,197 $ 1,136 $ 41,537 $ 1,995 $ 1,636 $ 35,685 $ 1,799 $ 1,411 |
Schedule of loans by risk rating | December 31, 2020 2019 Commercial Commercial Commercial Commercial Commercial Commercial Real Estate Construction and Industrial Real Estate Construction and Industrial (in thousands) Loans rated 1 - 6 $ 1,524,105 $ 99,331 $ 452,665 $ 1,163,343 $ 127,962 $ 294,507 Loans rated 7 14,674 3,122 4,539 14,701 6,117 Loans rated 8 9,455 — 7,080 530 11,244 3,223 Loans rated 9 3,031 — 1,526 — — 2,435 Loans rated 10 — — — — — — $ 1,551,265 $ 99,331 $ 464,393 $ 1,168,412 $ 153,907 $ 306,282 |
PCI | |
Schedule of information pertaining to impaired loans | December 31, 2020 2019 (in thousands) Outstanding balance $ 4,307 $ 4,609 Carrying amount $ 4,079 $ 4,378 |
Summary of activity in accretable yield for purchased credit impaired loans | December 31, 2020 2019 (in thousands) Balance at beginning of period $ 149 $ 185 Additions — — Accretion (8) (8) Reclassification from nonaccretable difference — (28) Balance at end of period $ 141 $ 149 |
MORTGAGE LOAN SERVICING (Tables
MORTGAGE LOAN SERVICING (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
MORTGAGE LOAN SERVICING | |
Tabular disclosure of assumptions used in the calculation of fair value of MSR | December 31, 2020 2019 Prepayment speed 14.30 % 12.43 % Discount rate 9.23 9.34 Default rate 2.27 2.61 |
Schedule of summarized changes to mortgage servicing rights | Year Ended December 31, 2020 2019 2018 (in thousands) Balance, beginning of period $ 17,150 $ 22,217 $ 21,092 Additions 14,415 1,174 2,521 Changes in fair value due to: Reductions from loans paid off during the period (4,181) (1,972) (1,795) Changes in valuation inputs or assumptions (2,551) (4,269) 399 Balance, end of period $ 24,833 $ 17,150 $ 22,217 |
OTHER REAL ESTATE LOANS AND R_2
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS (Table) | 12 Months Ended |
Dec. 31, 2020 | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | |
Schedule of expenses applicable to foreclosed and repossessed assets | Year Ended December 31, 2020 2019 2018 (in thousands) Gain on sales of real estate, net $ (86) $ (181) $ (126) Net loss on sales of repossessed assets 45 112 106 Write-downs of real estate — — 5 Operating expenses 37 82 110 $ (4) $ 13 $ 95 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY AND EQUIPMENT | |
Summary of the cost and accumulated depreciation of property and equipment | December 31, 2020 2019 (in thousands) Land $ 12,420 $ 11,048 Buildings and leasehold improvements 46,216 45,357 Furniture, equipment and vehicles 14,719 12,247 Fixed assets in process 1,365 646 74,720 69,298 Less accumulated depreciation and amortization (25,140) (21,347) Property and equipment, net $ 49,580 $ 47,951 |
Schedule of future minimum lease payments under operating leases | Pursuant to the terms of noncancellable operating lease agreements in effect at December 31, 2020, pertaining to property and equipment, future minimum lease payments under various operating leases are as follows: Years Ending December 31, (in thousands) 2021 $ 2,452 2022 2,239 2023 1,847 2024 1,644 2025 1,684 Thereafter 13,134 $ 23,000 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedules of changes in carrying value of goodwill | Year Ended December 31, 2020 2019 (in thousands) Balance, beginning of period $ 69,802 $ 70,088 Measurement period fair value adjustments — (286) Balance, end of period $ 69,802 $ 69,802 |
Schedule of intangible assets | December 31, 2020 2019 (in thousands) Gross amount of CDI: Balance, beginning of period $ 8,952 $ 8,952 Additions due to acquisitions — — Balance, end of period 8,952 8,952 Accumulated amortization: Balance, beginning of period (2,917) (618) Amortization (1,665) (2,299) Balance, end of period (4,582) (2,917) Net CDI, end of period $ 4,370 $ 6,035 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
DEPOSITS | |
Summary of deposit balances, by type | December 31, 2020 2019 (in thousands) NOW and demand deposit accounts $ 908,256 $ 572,280 Regular savings and club accounts 998,994 626,685 Money market deposit accounts 866,661 856,830 Total non-certificate accounts 2,773,911 2,055,795 Term certificate accounts greater than $250,000 135,190 169,595 Term certificate accounts less than or equal to $250,000 497,108 636,343 Brokered deposits 100,000 81,140 Total certificate accounts 732,298 887,078 Total deposits $ 3,506,209 $ 2,942,873 |
Summary of certificate accounts by maturity | Weighted Average Amount Rate (dollars in thousands) Within 1 year $ 682,338 0.88 % Over 1 year to 2 years 28,238 1.68 Over 2 years to 3 years 9,007 1.88 Over 3 years to 4 years 11,604 1.00 Over 4 years to 5 years 1,745 0.81 Total certificate deposits 732,932 0.92 % Less unaccreted acquisition discount (634) Total certificate deposits, net $ 732,298 |
FHLB BORROWINGS (Tables)
FHLB BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
FHLB BORROWINGS | |
Schedule of borrowed funds by maturity and call date | December 31, 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 $ — $ — — % $ 87,000 137,000 2.25 % 2021 41,750 101,750 2.47 41,750 21,750 2.47 2022 — — — 10,000 — 1.73 2023 20,190 190 3.48 20,195 195 2.43 2024 10,000 10,000 1.68 10,000 10,000 1.68 2025 40,987 987 1.32 987 987 — 2026 and thereafter 1,170 1,170 2.00 1,200 1,200 2.00 $ 114,097 $ 114,097 2.16 % $ 171,132 $ 171,132 2.16 % * Includes an amortizing advance requiring monthly principal and interest payments. (1) (2) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
Schedule of allocation of federal and state income taxes between current and deferred portions | 2020 2019 2018 (in thousands) Current tax provision: Federal $ 11,591 $ 3,757 $ 2,576 State 5,240 1,207 1,377 16,831 4,964 3,953 Deferred tax benefit: Federal (2,124) (445) (740) State (1,490) (111) (400) (3,614) (556) (1,140) Income tax provision $ 13,217 $ 4,408 $ 2,813 |
Schedule of difference between the statutory federal income tax and the actual income tax provision (benefit) | 2020 2019 2018 (dollars in thousands) Statutory federal tax rate 21% 21% 21% Statutory federal tax provision $ 12,182 $ 4,762 $ 2,983 Increase (decrease) resulting from: State taxes, net of federal tax benefit 2,962 866 772 Bank-owned life insurance (465) (232) (358) Non-deductible merger expenses — — 196 Employee Stock Ownership Plan expenses 56 172 106 Tax exempt income (22) (104) (180) Reduction in uncertain federal tax positions (1,864) (1,586) (801) Other, net 368 530 95 Income tax provision $ 13,217 $ 4,408 $ 2,813 |
Schedule of tax effects give rise to deferred taxes | 2020 2019 (in thousands) Deferred tax assets: Allowance for loan losses $ 15,493 $ 6,651 Employee benefit plans 4,999 5,036 Mark-to-market loans 2,387 3,687 Accrued expenses not deducted for tax purposes 1,799 1,093 HarborOne Mortgage loan repurchase reserve 743 231 Charitable contribution and other carryforwards — 15 25,421 16,713 Deferred tax liabilities: Net unrealized gain on securities available for sale (904) (419) Derivatives (2,349) - Deferred income annuities (1,580) (1,447) Depreciation and amortization (1,145) (370) Deferred loan fees (1,578) (1,995) Mortgage servicing rights (6,793) (4,759) Core deposit intangible (1,222) (1,668) Other (293) (21) (15,864) (10,679) Net deferred tax asset $ 9,557 $ 6,034 |
Schedule of change in net deferred tax asset (liability) | 2020 2019 2018 (in thousands) Balance at beginning of year $ 6,034 $ 6,727 $ 843 Deferred tax benefit 3,614 556 1,140 Coastway deferred tax accounting / measurement period adjustment — (165) 4,258 Change in cash flow hedge 394 — — Change in securities available for sale (485) (1,084) 486 Balance at end of year $ 9,557 $ 6,034 $ 6,727 |
Schedule of changes in unrecognized tax benefits | December 31, 2020 2019 2018 (in thousands) Balance at beginning of year $ 3,052 $ 3,769 $ 1,898 Additions based on tax positions related to current year — — — Additions for tax positions for prior years 168 1,471 2,672 Reductions for tax positions for prior years (2,058) (153) — Settlements — (2,035) (801) Balance at end of year $ 1,162 $ 3,052 $ 3,769 |
Schedule of unrecognized tax benefits, the amount of interest accrued and range of reasonably possible changes | Unrecognized tax benefits $ 1,060 Accrued interest on unrecognized tax benefits 102 Portion that, if recognized, would reduce tax expense and effective tax rate 1,162 Reasonably possible reduction to the balance of unrecognized tax in subsequent year 754 Portion that, if recognized, would reduce tax expense and effective tax rate in subsequent year 754 |
OTHER COMMITMENTS AND CONTING_2
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
OTHER COMMITMENTS AND CONTINGENCIES | |
Schedule of financial instruments with off-balance sheet credit risk | December 31, 2020 2019 (in thousands) Commitments to grant residential real estate loans-HarborOne Mortgage $ 485,428 $ 24,752 Commitments to grant other loans 53,714 74,114 Unadvanced funds on home equity lines of credit 178,432 157,867 Unadvanced funds on revolving lines of credit 169,907 147,047 Unadvanced funds on construction loans 127,776 112,158 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Dec. 31, 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) December 31, 2020: Derivatives designated as Hedging Instruments Interest rate swaps $ 100,000 — $ — Other liabilities $ 1,407 Derivatives not designated as Hedging Instruments Derivative loan commitments $ 485,428 Other assets $ 12,623 Other liabilities $ 341 Forward loan sale commitments 356,500 Other assets — Other liabilities 2,204 Interest rate swaps 867,728 Other assets 39,320 Other liabilities 39,320 Risk participation agreements 132,379 Other assets — Other liabilities — Total $ 51,943 $ 43,272 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 | Year Ended December 31, 2020 2019 2018 (in thousands) Derivatives designated as hedging instruments Gain (loss) in OCI on derivatives (effective portion), net of tax $ (1,013) $ — $ — (Loss) gain reclassified from OCI into interest income or interest expense (effective portion) $ (46) $ — $ — Derivatives not designated as hedging instruments Changes in fair value of derivative loan commitments Mortgage banking income $ 11,072 $ 62 $ 129 Changes in fair value of forward loan sale commitments Mortgage banking income (2,073) 386 (472) Changes in fair value of interest rate swaps Other income — — — Total $ 8,999 $ 448 $ (343) |
COMPENSATION AND BENEFIT PLANS
COMPENSATION AND BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
COMPENSATION AND BENEFIT PLANS | |
Schedule of share information held by the ESOP | December 31, 2020 2019 Allocated shares 639,525 408,803 Shares committed to be allocated 230,723 230,724 Unallocated shares 3,602,562 3,833,283 Total shares 4,472,810 4,472,810 Fair value of unallocated shares $ 39,123,823 $ 42,127,780 |
Schedule of funded status of plan and components of net periodic cost | Year Ended December 31, 2020 2019 2018 (in thousands) Change in projected benefit obligation: Benefit obligation at beginning of year $ 1,915 $ 1,876 $ 1,837 Service cost — — — Interest cost 75 76 76 Loss — — — Benefits paid (37) (37) (37) Benefit obligation and funded status at end of year $ 1,953 $ 1,915 $ 1,876 Accumulated benefit obligation $ 1,953 $ 1,915 $ 1,876 Service cost $ — $ — $ — Interest cost 75 76 76 Loss recognized — — — Prior service cost recognized — — — Net periodic cost $ 75 $ 76 $ 76 |
Schedule of assumption used to determine benefit obligation and net periodic cost | 2020 2019 2018 Discount rate 4.14 % 4.14 % 4.14 % Rate of compensation increase N/A N/A % 3.00 % |
Schedule of benefit payments expected to be paid | Years Ending December 31, (in thousands) 2021 $ 37 2022 399 2023 230 2024 230 2025 231 2026-2030 1,050 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
STOCK-BASED COMPENSATION | |
Schedule of pre-tax expense associated with stock options and restricted stock awards and related tax benefit | Year Ended December 31, 2020 2019 2018 (in thousands) Stock-based compensation expense Stock options $ 1,099 $ 1,213 $ 694 Restricted stock awards 1,618 2,204 2,360 Directors' fee expense Stock options 358 572 629 Restricted stock awards 604 860 910 Total stock-based award expense $ 3,679 $ 4,849 $ 4,593 Related tax benefits recognized in earnings $ 773 $ 1,042 $ 965 |
Schedule of stock options, valuation assumptions | Year Ended December 31, 2019 2018 Options granted 583,565 289,890 Vesting period (years) 3 3 Term (years) 10 10 Weighted average expected volatility 22.09 % 22.16 % Expected life (years) 6 6 Expected dividend yield — % — % Weighted average risk free interest rate 2.46 % 2.93 % Weighted average fair value per option $2.49 $2.83 |
Schedule of stock option grants | Outstanding Nonvested Weighted Average Weighted Weighted Remaining Aggregate Average Stock Option Average Contractual Intrinsic Stock Option Grant Date Awards Exercise Price Term (years) Value Awards Fair Value Balance at January 1, 2020 2,169,243 $ 9.87 1,196,545 $ 2.66 Granted — — — — Vested — — (702,155) 2.73 Forfeited (20,948) 10.23 (20,948) 2.82 Expired (41,892) 10.23 (41,892) 2.82 Balance at December 31, 2020 2,106,403 $ 9.86 7.22 $ 2,097,257 431,550 $ 2.55 Exercisable at December 31, 2020 1,632,958 $ 10.05 6.96 $ 1,321,686 Unrecognized cost inclusive of directors' awards $ 805,000 Weighted average remaining recognition period (years) 1.12 |
Schedule of unvested stock award activity | Restricted Weighted Average Stock Awards Grant Price Unvested stock awards at January 1, 2020 333,766 $ 10.20 Vested (294,822) 10.22 Granted 355,427 9.28 Forfeited (9,679) 10.13 Unvested stock awards at December 31, 2020 384,692 $ 9.33 Unrecognized cost inclusive of directors' awards $ 3,194,000 Weighted average remaining recognition period (years) 1.75 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | |
Summary of the company's and the bank's actual regulatory capital ratios | Minimum Required to be Considered "Well Capitalized" Minimum Required for Under Prompt Corrective Actual Capital Adequacy Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) HarborOne Bancorp, Inc. December 31, 2020 Common equity Tier 1 capital to risk-weighted assets $ 621,153 17.7 % $ 158,050 4.5 % N/A N/A Tier 1 capital to risk-weighted assets 621,153 17.7 210,733 6.0 N/A N/A Total capital to risk-weighted assets 700,197 19.9 280,978 8.0 N/A N/A Tier 1 capital to average assets 621,153 14.5 171,578 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 December 31, 2020 Common equity Tier 1 capital to risk-weighted assets $ 506,822 14.4 % $ 158,081 4.5 % $ 228,339 6.5 % Tier 1 capital to risk-weighted assets 506,822 14.4 210,775 6.0 281,033 8.0 Total capital to risk-weighted assets 550,875 15.7 281,033 8.0 351,291 10.0 Tier 1 capital to average assets 506,822 11.8 171,501 4.0 214,377 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) | 12 Months Ended |
Dec. 31, 2020 | |
COMPREHENSIVE INCOME (LOSS) | |
Schedule of components of accumulated other comprehensive income (loss) | December 31, 2020 2019 (in thousands) Cash flow hedge: Net unrealized loss $ (1,407) $ — Related tax effect 394 — Total accumulated other comprehensive loss $ (1,013) $ — Securities available for sale: Net unrealized gain $ 4,102 $ 1,899 Related tax effect (904) (419) Total accumulated other comprehensive income $ 3,198 $ 1,480 |
Summary of changes in accumulated other comprehensive income (loss) | Year Ended December 31, 2020 2019 2018 Available Cash Available Available for Sale Flow for Sale for Sale Securities Hedge Total Securities Securities (in thousands) Balance at beginning of period $ 1,480 $ — $ 1,480 $ (2,358) $ (528) Other comprehensive income (loss) before reclassifications 4,214 (1,453) 2,761 6,266 (2,212) Reclassification of stranded effect of tax rate changes — — — — (104) Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale 522 — 522 — — Amounts reclassified from accumulated other comprehensive income (loss) (2,533) 46 (2,487) (1,344) — Net current period other comprehensive income (loss) 2,203 (1,407) 796 4,922 (2,316) Related tax effect (485) 394 (91) (1,084) 486 Balance at end of period $ 3,198 $ (1,013) $ 2,185 $ 1,480 $ (2,358) |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 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) December 31, 2020 Assets Securities available for sale $ — $ 276,498 $ — $ 276,498 Loans held for sale — 208,612 — 208,612 Mortgage servicing rights — 24,833 — 24,833 Derivative loan commitments — — 12,623 12,623 Forward loan sale commitments — — — — Interest rate swaps — 39,320 — 39,320 $ — $ 549,263 $ 12,623 $ 561,886 Liabilities Derivative loan commitments $ — $ — $ 341 $ 341 Forward loan sale commitments — — 2,204 2,204 Interest rate management agreements — 1,407 — 1,407 Interest rate swaps — 39,320 — 39,320 $ — $ 40,727 $ 2,545 $ 43,272 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 | Year Ended December 31, 2020 2019 2018 (in thousands) Assets: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ 1,411 $ 1,261 $ 1,093 Total gains included in net income (1) 11,212 150 168 Balance at end of period $ 12,623 $ 1,411 $ 1,261 Changes in unrealized gains relating to instruments at period end $ 12,623 $ 1,411 $ 1,261 |
Schedule of changes in Level 3 liabilities measured at fair value on a recurring basis | Year Ended December 31, 2020 2019 2018 (in thousands) Liabilities: Derivative and Forward Loan Sale Commitments: Balance at beginning of period $ (332) $ (630) $ (119) Total gains (losses) included in net income (1) (2,213) 298 (511) Balance at end of period $ (2,545) $ (332) (630) Changes in unrealized losses relating to instruments at period end $ (2,545) $ (332) (630) (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. December 31, 2020 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Asset held for sale $ — $ — $ — $ — $ — $ 8,536 Impaired loans: Residential — — 919 — — 2,272 Commercial — — 7,242 — — 1,606 Other real estate owned and repossessed assets — — 595 — — 719 $ — $ — $ 8,756 $ — $ — $ 13,133 Losses in the following table represent the amount of the fair value adjustments recorded during the year on the carrying value of the assets held at December 31, 2020 and 2019, respectively. Losses on fully charged off loans are not included in the table. Year Ended December 31, 2020 2019 (in thousands) Asset held for sale $ — $ 482 Impaired loans Residential 118 28 Commercial 2,197 605 $ 2,315 $ 1,115 |
Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis | Fair Value December 31, Valuation Technique 2020 2019 (in thousands) Impaired loans: Residential $ 919 $ 2,272 Sales Comparison Approach (1) Commercial $ 7,242 $ 1,606 Sales Comparison Approach (1) Real estate owned: Residential $ 298 $ 298 Sales Comparison Approach (1) (1) |
Schedule of estimated fair values and related carrying amounts of financial instruments | December 31, 2020 Carrying Fair Value Amount Level 1 Level 2 Level 3 Total (in thousands) Financial assets: Cash and cash equivalents $ 205,870 $ 205,870 $ — $ — $ 205,870 Securities available for sale 276,498 — 276,498 — 276,498 Federal Home Loan Bank stock 8,738 N/A N/A N/A N/A Loans held for sale 208,612 — 208,612 — 208,612 Loans, net 3,439,247 — — 3,473,751 3,473,751 Retirement plan annuities 13,747 — — 13,747 13,747 Accrued interest receivable 11,874 — 11,874 — 11,874 Financial liabilities: Deposits 3,506,209 — — 3,509,996 3,509,996 Borrowed funds 149,097 — 152,373 — 152,373 Subordinated debt 34,033 — — 34,799 34,799 Mortgagors' escrow accounts 7,736 — — 7,736 7,736 Accrued interest payable 1,262 — 1,262 — 1,262 Derivative loan commitments: Assets 12,623 — — 12,623 12,623 Liabilities 341 — — 341 341 Interest rate management agreements: Liabilities 1,407 — 1,407 — 1,407 Interest rate swap agreements: Assets 39,320 — 39,320 — 39,320 Liabilities 39,320 — 39,320 — 39,320 Forward loan sale commitments: Assets — — — — — Liabilities 2,204 — — 2,204 2,204 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) | 12 Months Ended |
Dec. 31, 2020 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share | Year Ended December 31, 2020 2019 2018 Net income available to common stockholders (in thousands) $ 44,792 $ 18,268 $ 11,394 Average number of common shares outstanding 58,252,140 58,451,387 58,549,990 Less: Average unallocated ESOP shares (3,938,772) (2,719,750) (1,860,399) Weighted average common shares outstanding used to calculate basic earnings per common share 54,313,368 55,731,637 56,689,591 Dilutive effect of share-based compensation 6,467 139 — Weighted average common shares outstanding used to calculate diluted earnings per common share 54,319,835 55,731,776 56,689,591 Earnings per common share: Basic $ 0.82 $ 0.33 $ 0.20 Diluted $ 0.82 $ 0.33 $ 0.20 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) | 12 Months Ended |
Dec. 31, 2020 | |
SEGMENT REPORTING | |
Summary of reportable segments | Year Ended December 31, 2020 HarborOne HarborOne HarborOne Bank Mortgage Bancorp, Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 118,217 $ 3,235 $ (1,386) $ — $ 120,066 Provision for loan losses 34,815 — — — 34,815 Net interest and dividend income (loss), after provision for loan losses 83,402 3,235 (1,386) — 85,251 Mortgage banking income: Gain on sale of mortgage loans — 105,469 — — 105,469 Intersegment (loss) gain (3,148) 3,148 — — — Changes in mortgage servicing rights fair value (2,376) (4,356) — — (6,732) Other 1,360 14,278 — — 15,638 Total mortgage banking income (loss) (4,164) 118,539 — — 114,375 Other noninterest income (loss) 24,909 (138) — — 24,771 Total noninterest income 20,745 118,401 — — 139,146 Noninterest expense 98,354 66,859 1,175 — 166,388 Income (loss) before income taxes 5,793 54,777 (2,561) — 58,009 Provision (benefit) for income taxes 527 12,964 (274) — 13,217 Net income (loss) $ 5,266 $ 41,813 $ (2,287) $ — $ 44,792 Total assets at period end $ 4,460,164 $ 312,194 $ 733,993 $ (1,022,736) $ 4,483,615 Goodwill at period end $ 59,042 $ 10,760 $ — $ — $ 69,802 Year Ended December 31, 2019 HarborOne HarborOne HarborOne Bank Mortgage Bancorp Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 109,106 $ 1,064 $ (1,108) $ — $ 109,062 Provision for loan losses 4,747 — — — 4,747 Net interest and dividend income (loss), after provision for loan losses 104,359 1,064 (1,108) — 104,315 Mortgage banking income: Gain on sale of mortgage loans 1 33,556 — — 33,557 Intersegment (loss) gain (1,183) 1,183 — — — Changes in mortgage servicing rights fair value (1,431) (4,810) — — (6,241) Other 1,494 8,842 — — 10,336 Total mortgage banking income (loss) (1,119) 38,771 — — 37,652 Other noninterest income (loss) 23,365 (45) — — 23,320 Total noninterest income 22,246 38,726 — — 60,972 Noninterest expense 100,688 39,753 2,170 — 142,611 Income (loss) before income taxes 25,917 37 (3,278) — 22,676 Provision (benefit) for income taxes 5,019 (77) (534) — 4,408 Net income (loss) $ 20,898 $ 114 $ (2,744) $ — $ 18,268 Total assets at period end $ 3,925,328 $ 165,863 $ 701,181 $ (733,451) $ 4,058,921 Goodwill at period end $ 59,042 $ 10,760 $ — $ — $ 69,802 Year Ended December 31, 2018 HarborOne HarborOne HarborOne Bank Mortgage Bancorp Inc. Eliminations Consolidated (in thousands) Net interest and dividend income (expense) $ 88,478 $ 1,018 $ 39,434 $ (40,000) $ 88,930 Provision for loan losses 3,828 — — — 3,828 Net interest and dividend income (loss), after provision for loan losses 84,650 1,018 39,434 (40,000) 85,102 Mortgage banking income: Gain on sale of mortgage loans 784 22,569 — — 23,353 Intersegment (loss) gain (205) 205 — — — Changes in mortgage servicing rights fair value (375) (1,021) — — (1,396) Other 1,445 7,207 — — 8,652 Total mortgage banking income 1,649 28,960 — — 30,609 Other noninterest income 18,587 2 — — 18,589 Total noninterest income 20,236 28,962 — — 49,198 Noninterest expense 86,586 31,639 1,868 — 120,093 Income (loss) before income taxes 18,300 (1,659) 37,566 (40,000) 14,207 Provision (benefit) for income taxes 3,463 (262) (388) — 2,813 Net income (loss) $ 14,837 $ (1,397) $ 37,954 $ (40,000) $ 11,394 Total assets at period end $ 3,657,982 $ 89,461 $ 391,692 $ (486,014) $ 3,653,121 Goodwill at period end $ 59,582 $ 10,506 $ — $ — $ 70,088 |
CONDENSED FINANCIAL STATEMENT_2
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY | |
Schedule of Condensed Balance Sheet | Balance Sheet December 31, 2020 2019 (in thousands) Assets Cash and due from banks $ 118,265 $ 135,067 Investment in common stock of HarborOne Bank 581,982 529,380 Loan receivable - ESOP 32,190 33,407 Due from subsidiary 612 2,456 Other assets 657 871 Total assets $ 733,706 $ 701,181 Liabilities and Stockholders' Equity Subordinated debt $ 34,033 $ 33,907 Other liabilities and accrued expenses 3,359 1,480 Due to subsidiary — — Stockholders' equity 696,314 665,794 Total liabilities and stockholders' equity $ 733,706 $ 701,181 |
Schedule of Condensed Statement of Net Income | Statement of Net Income Year Ended December 31, 2020 2019 2018 (in thousands) Dividends from subsidiary $ — $ — $ 40,000 Interest from bank deposits 260 15 163 Interest on short-term investments 449 953 12 Interest on ESOP loan 1,596 1,062 488 Total income 2,305 2,030 40,663 Interest expense 2,095 2,076 741 Operating expenses 2,771 3,232 2,356 Total expenses 4,866 5,308 3,097 Income (loss) before income taxes and equity in undistributed net income (loss) of HarborOne Bank (2,561) (3,278) 37,566 Income tax provision (benefit) (274) (534) (388) Income (loss) before equity in income of subsidiaries (2,287) (2,744) 37,954 Equity in undistributed net income (loss) of HarborOne Bank 47,079 21,012 (26,560) Net income $ 44,792 $ 18,268 $ 11,394 |
Schedule of Condensed Statement of Cash Flows | Statement of Cash Flows Year Ended December 31, 2020 2019 2018 (in thousands) Cash flows from operating activities: Net income $ 44,792 $ 18,268 $ 11,394 Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed net (income) loss of HarborOne Bank (47,079) (21,012) 26,560 Deferred income tax provision (benefit) (18) 139 440 Share-based compensation 963 1,432 1,568 Net change in other assets 231 (284) (841) Net change in other liabilities 302 1,299 577 Net cash provided (used) by operating activities (809) (158) 39,698 Cash flows from investing activities: Investment in HarborOne Bank — (152,713) (10,000) Repayment of ESOP loan 1,218 1,862 404 Advances to subsidiary (1,884) (2,456) — Repayment of advances to subsidiary 3,728 — — Cash paid for acquisitions, net of cash acquired — — (122,235) Net cash provided (used) by investing activities 3,062 (153,307) (131,831) Cash flows from financing activities: Issuance of common stock — 304,161 — Repurchase of common stock (15,923) (721) (1,267) Purchase of shares by ESOP — (24,829) — Proceeds from advance from subsidiary — — 139 Repayment of advance from subsidiary — (139) — Proceeds from subordinated debt issuance — — 33,720 Amortization of subordinated debt issuance costs 126 108 79 Dividends paid (3,258) — — Net cash provided (used) by financing activities (19,055) 278,580 32,671 Net change in cash and cash equivalents (16,802) 125,115 (59,462) Cash and cash equivalents at beginning of year 135,067 9,952 69,414 Cash and cash equivalents at end of year $ 118,265 $ 135,067 $ 9,952 |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Schedule of selected quarterly financial data | First Quarter Second Quarter Third Quarter Fourth Quarter 2020 2019 2020 2019 2020 2019 2020 2019 (in thousands, except share data) Interest and dividend income $ 37,169 $ 37,053 $ 36,621 $ 38,278 $ 37,048 $ 39,730 $ 37,720 $ 39,723 Interest expense 10,469 11,023 7,174 11,565 5,879 11,745 4,970 11,389 Net interest and dividend income 26,700 26,030 29,447 26,713 31,169 27,985 32,750 28,334 Provision for loan losses 3,749 857 10,004 1,750 13,454 889 7,608 1,251 Other noninterest income 16,341 9,842 38,630 14,451 44,461 17,196 37,181 18,139 Gain on sale and call of securities, net 2,525 — 8 1,267 — 77 — — Total noninterest income 18,866 9,842 38,638 15,718 44,461 17,273 37,181 18,139 Total noninterest expenses 35,388 32,592 43,838 35,081 45,722 36,203 41,440 38,735 Provision for income taxes 1,705 356 3,668 819 4,561 1,053 3,283 2,180 Net income $ 4,724 $ 2,067 $ 10,575 $ 4,781 $ 11,893 $ 7,113 $ 17,600 $ 4,307 Basic earnings per share (1) $ 0.09 $ 0.04 $ 0.19 $ 0.08 $ 0.22 $ 0.13 $ 0.33 $ 0.08 Diluted earnings per share (1) $ 0.09 $ 0.04 $ 0.19 $ 0.08 $ 0.22 $ 0.13 $ 0.33 $ 0.08 Weighted average common shares, basic (1) 54,392,465 56,666,979 54,450,146 56,704,297 54,465,339 55,638,734 53,947,868 54,208,629 Weighted average common shares, diluted (1) 54,392,465 56,666,979 54,450,146 56,704,297 54,465,339 55,638,734 53,973,737 54,209,182 (1) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ / shares in Units, $ in Thousands | Aug. 14, 2019USD ($)$ / sharesshares | Jun. 30, 2016shares | Dec. 31, 2020 | Dec. 31, 2020USD ($) | Dec. 31, 2020company | Dec. 31, 2020item | Dec. 31, 2020state | Dec. 31, 2019USD ($) | Aug. 13, 2019 |
Number of passive investment subsidiaries | 1 | 1 | |||||||
Shares issued | shares | 31,036,812 | ||||||||
Shares issued (in dollars per share) | $ / shares | $ 10 | ||||||||
Net proceeds from sale of common stock | $ 310,400 | $ 304,061 | |||||||
Expenses incurred | $ 6,300 | 6,300 | |||||||
Stock conversion ratio | 1.795431 | ||||||||
Shares issued in exchange | shares | 12,162,763 | ||||||||
Net proceeds from sale of common stock | $ 304,100 | ||||||||
Amount utilized to fund new ESOP | 24,800 | $ 24,829 | |||||||
Number of full-service bank offices | item | 25 | ||||||||
Number of limited-service bank offices | item | 1 | ||||||||
Impairment of federal home loan bank stock | $ 0 | ||||||||
Number of reporting units | item | 2 | ||||||||
Number of security corporations | item | 2 | ||||||||
Impairment recognized of goodwill and intangible assets | $ 0 | ||||||||
LTV 80 to 100 Percent | Residential | |||||||||
Loan To Value Ratio | 80.00% | ||||||||
HarborOne Mortgage | |||||||||
Number of offices | item | 36 | ||||||||
Additional states licensed to lend | state | 4 | ||||||||
MHC | HarborOne Bancorp Inc. | |||||||||
Ownership percentage | 53.00% | ||||||||
HarborOne Foundation | |||||||||
Shares issued | shares | 385,450 | ||||||||
HarborOne Bank | |||||||||
Number of security corporation subsidiaries | company | 2 | ||||||||
Cash invested into Bank's operations | $ 151,300 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent Accounting Pronouncements (Details) - Forecast - ASU 2016-02 $ in Millions | Mar. 31, 2021USD ($) |
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Lease assets | $ 20 |
Lease liabilities | 20 |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Lease assets | 30 |
Lease liabilities | $ 30 |
BUSINESS COMBINATIONS - Acquisi
BUSINESS COMBINATIONS - Acquisition of Coastway Bancorp, Inc. (Details) - USD ($) | Oct. 05, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 12, 2018 |
Liabilities Assumed | |||||
Goodwill recognized | $ 69,802,000 | $ 69,802,000 | $ 70,088,000 | ||
Coastway | |||||
Business Acquisition [Line Items] | |||||
Gross loans | $ 736,200,000 | ||||
Right to receive cash per share (in dollars per share) | $ 28.25 | ||||
Adjustment period (in years) | 1 year | ||||
Assets Acquired | |||||
Total assets acquired | $ 835,100,000 | ||||
Liabilities Assumed | |||||
Deposits | 478,300,000 | ||||
Goodwill recognized | 56,400,000 | ||||
Fair value adjustment of loan and write-off of deferred loans costs | 5,400,000 | ||||
Unpaid principal balance of non-impaired loans | 716,400,000 | ||||
Fair value of non-impaired loans | 698,800,000 | ||||
Fair value adjustment of non-impaired loans | 17,500,000 | ||||
Loans purchased | 5,400,000 | ||||
Fair value of purchased credit impaired loans | 5,100,000 | ||||
Coastway | Carrying Amount | |||||
Assets Acquired | |||||
Cash and cash equivalents | 45,453,000 | ||||
Loans held for sale | 9,071,000 | ||||
Loans, gross | 727,148,000 | ||||
Allowance for loan losses | (3,480,000) | ||||
Fixed assets | 30,965,000 | ||||
Deferred tax assets | 1,144,000 | ||||
Other assets | 24,783,000 | ||||
Total assets acquired | 835,084,000 | ||||
Liabilities Assumed | |||||
Deposits | 478,336,000 | ||||
Borrowings | 276,750,000 | ||||
Other liabilities | 10,082,000 | ||||
Total liabilities assumed | 765,168,000 | ||||
Net acquired | 69,916,000 | ||||
Coastway | Fair Value Adjustment | |||||
Assets Acquired | |||||
Loans, gross | (23,234,000) | ||||
Allowance for loan losses | 3,480,000 | ||||
Fixed assets | (711,000) | ||||
Core deposit intangible | 8,952,000 | ||||
Deferred tax assets | 3,114,000 | ||||
Other assets | (287,000) | ||||
Total assets acquired | (8,686,000) | ||||
Liabilities Assumed | |||||
Deposits | (1,814,000) | ||||
Total liabilities assumed | (1,814,000) | ||||
Net acquired | (6,872,000) | ||||
Coastway | Fair Value | |||||
Assets Acquired | |||||
Cash and cash equivalents | 45,453,000 | ||||
Loans held for sale | 9,071,000 | ||||
Loans, gross | 703,914,000 | ||||
Fixed assets | 30,254,000 | ||||
Core deposit intangible | 8,952,000 | ||||
Deferred tax assets | 4,258,000 | ||||
Other assets | 24,496,000 | ||||
Total assets acquired | 826,398,000 | ||||
Liabilities Assumed | |||||
Deposits | 476,522,000 | ||||
Borrowings | 276,750,000 | ||||
Other liabilities | 10,082,000 | ||||
Total liabilities assumed | 763,354,000 | ||||
Net acquired | 63,044,000 | ||||
Consideration paid | 119,440,000 | ||||
Goodwill recognized | $ 56,396,000 | ||||
HarborOne Mortgage | Cumberland Mortgage | |||||
Liabilities Assumed | |||||
Goodwill recognized | $ 327,000 |
CASH AND DUE FROM BANKS (Detail
CASH AND DUE FROM BANKS (Details) $ in Millions | Dec. 31, 2019USD ($) |
Federal Reserve Bank | |
Cash and due from banks | |
Reserve balance | $ 7 |
DEBT SECURITIES - Gross unreali
DEBT SECURITIES - Gross unrealized gains and losses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Securities available for sale | ||
Amortized Cost | $ 272,396 | $ 237,574 |
Gross Unrealized Gains | 4,407 | 2,195 |
Gross Unrealized Losses | 305 | 296 |
Fair Value | 276,498 | 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 | 5,002 | 14,994 |
Gross Unrealized Gains | 93 | 210 |
Fair Value | 5,095 | 15,204 |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Securities available for sale | ||
Amortized Cost | 234,819 | 163,982 |
Gross Unrealized Gains | 3,113 | 1,456 |
Gross Unrealized Losses | 305 | 265 |
Fair Value | 237,627 | 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 | 16,326 | 26,137 |
Gross Unrealized Gains | 330 | 243 |
Gross Unrealized Losses | 7 | |
Fair Value | 16,656 | 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 | 16,249 | 32,461 |
Gross Unrealized Gains | 871 | 286 |
Gross Unrealized Losses | 24 | |
Fair Value | $ 17,120 | 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 |
DEBT SECURITIES - Contractual m
DEBT SECURITIES - Contractual maturity (Details) | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2020USD ($)security | Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($)security | Dec. 31, 2018USD ($) | |
Securities | ||||
Fair Value | $ 26,927,000 | |||
Amortized Cost-Available-for-Sale | ||||
After 5 years through 10 years | $ 5,002,000 | |||
Total for contractual maturity | 5,002,000 | |||
Amortized Cost | 272,396,000 | 237,574,000 | ||
Fair Value-Available-for-Sale | ||||
After 5 years through 10 years | 5,095,000 | |||
Total for contractual maturity | 5,095,000 | |||
Total | 276,498,000 | 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 | $ 1,015,000 | |
Gross gains | 2,521,000 | 1,267,000 | 5,000 | |
Calls | ||||
Proceeds | 13,635,000 | 20,145,000 | $ 1,025,000 | |
Gross gains | $ 12,000 | $ 77,000 | ||
Number of holdings greater than 10% of shareholder equity | security | 0 | 0 | ||
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 | |||
Interest rate swaps | Mortgage-backed securities | ||||
Securities | ||||
Number of securities pledged | security | 26 | 7 | ||
Pledged as collateral | $ 40,300,000 | $ 15,700,000 | ||
Minimum | ||||
Securities | ||||
Maturity period | 1 year | |||
Maximum | ||||
Securities | ||||
Maturity period | 30 years | |||
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 | $ 234,819,000 | |||
Amortized Cost | 234,819,000 | 163,982,000 | ||
Fair Value-Available-for-Sale | ||||
No single maturity date | 237,627,000 | |||
Total | 237,627,000 | 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 | 16,326,000 | |||
Amortized Cost | 16,326,000 | 26,137,000 | ||
Fair Value-Available-for-Sale | ||||
No single maturity date | 16,656,000 | |||
Total | 16,656,000 | 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 | 16,249,000 | |||
Amortized Cost | 16,249,000 | 32,461,000 | ||
Fair Value-Available-for-Sale | ||||
No single maturity date | 17,120,000 | |||
Total | $ 17,120,000 | 32,723,000 | ||
Amortized Cost-Held-to-Maturity | ||||
Amortized Cost | 5,308,000 | |||
Gross Unrealized Gains | 124,000 | |||
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 | ||||
Securities | ||||
Maturity period | 7 years | |||
Callable period | 8 months | |||
Amortized Cost-Available-for-Sale | ||||
Amortized Cost | $ 5,002,000 | 14,994,000 | ||
Fair Value-Available-for-Sale | ||||
Total | $ 5,095,000 | $ 15,204,000 |
DEBT SECURITIES - Gross unrea_2
DEBT SECURITIES - Gross unrealized losses aggregated by category (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($) | |
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 | |
Continuous unrealized losses, Fair Value, Held-for-Maturity | ||
Number of debt securities | security | 98 | |
Number of debt securities in unrealized loss position | security | 18 | |
U.S. government agency and government-sponsored residential mortgage-backed securities | ||
Continuous unrealized losses, Gross Unrealized Losses, Available-for-Sale | ||
Less than Twelve Months | $ 283 | 147 |
Twelve Months and Over | 22 | 118 |
Continuous unrealized losses, Fair Value, Available-for-Sale | ||
Less Than Twelve Months | 67,460 | 47,343 |
Twelve Months and Over | $ 3,668 | 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 ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair value and contractual principal outstanding: | ||
Loans held for sale, fair value | $ 208,612 | $ 110,552 |
Loans held for sale, contractual principal outstanding | 198,984 | 107,472 |
Fair value less unpaid principal balance | 9,628 | 3,080 |
Change in fair value of mortgage loans held for sale | 6,500 | 1,700 |
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 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Loans | ||||
Total loans | $ 3,494,642 | $ 3,171,558 | ||
Less: Allowance for loan losses | (55,395) | (24,060) | $ (20,655) | $ (18,489) |
Net loans | 3,439,247 | 3,147,498 | ||
Residential | ||||
Loans | ||||
Total loans | 1,105,823 | 1,107,076 | ||
Less: Allowance for loan losses | (7,419) | (3,178) | (3,239) | (4,000) |
Residential | 1-4 family | ||||
Loans | ||||
Total loans | 928,934 | 937,305 | ||
Residential | Second mortgages and equity lines of credit | ||||
Loans | ||||
Total loans | 145,672 | 155,716 | ||
Residential | Residential real estate construction | ||||
Loans | ||||
Total loans | 31,217 | 14,055 | ||
Commercial | ||||
Loans | ||||
Total loans | 2,114,989 | 1,628,601 | ||
Commercial | Commercial real estate | ||||
Loans | ||||
Total loans | 1,551,265 | 1,168,412 | ||
Less: Allowance for loan losses | (34,765) | (12,875) | (10,059) | (7,835) |
Commercial | Commercial construction | ||||
Loans | ||||
Total loans | 99,331 | 153,907 | ||
Less: Allowance for loan losses | (1,955) | (2,526) | (2,707) | (1,810) |
Commercial | Commercial and industrial | ||||
Loans | ||||
Total loans | 464,393 | 306,282 | ||
Less: Allowance for loan losses | (5,311) | (2,977) | (2,286) | (2,254) |
Consumer loans | ||||
Loans | ||||
Total loans | 273,830 | 435,881 | ||
Less: Allowance for loan losses | (2,475) | (1,010) | $ (1,154) | $ (1,000) |
Consumer loans | Auto | ||||
Loans | ||||
Total loans | 265,266 | 424,592 | ||
Consumer loans | Personal | ||||
Loans | ||||
Total loans | $ 8,564 | $ 11,289 |
LOANS - Loans Sold or Transferr
LOANS - Loans Sold or Transferred (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Loans | ||
Transfer of loans to loans held for sale | $ 10,937 | |
Commercial real estate | ||
Loans | ||
Unpaid principal balance of loans serviced for others | $ 284,200 | $ 195,200 |
LOANS - Acquired Loans (Details
LOANS - Acquired Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2018 | Oct. 05, 2018 |
PCI | ||||
Loans | ||||
Outstanding balance | $ 4,307 | $ 4,609 | ||
Carrying amount | $ 4,079 | $ 4,378 | ||
Coastway | ||||
Loans | ||||
Loans purchased | $ 5,400 | |||
Coastway | PCI | ||||
Loans | ||||
Loans purchased | $ 5,400 |
LOANS - PCI Loans (Details)
LOANS - PCI Loans (Details) - PCI - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accretable yield: | ||
Balance at beginning of period | $ 149 | $ 185 |
Accretion | (8) | (8) |
Reclassification from nonaccretable difference | (28) | |
Balance at end of period | $ 141 | $ 149 |
LOANS - Allowance for Loan Loss
LOANS - Allowance for Loan Losses Activity and Allocation to Loan Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Activity in the allowance for loan losses | |||||||||||||
Balance | $ 24,060 | $ 20,655 | $ 24,060 | $ 20,655 | $ 18,489 | ||||||||
Provision (credit) for loan losses | $ 7,608 | $ 13,454 | $ 10,004 | 3,749 | $ 1,251 | $ 889 | $ 1,750 | 857 | 34,815 | 4,747 | 3,828 | ||
Charge-offs | (4,307) | (2,102) | (1,981) | ||||||||||
Recoveries | 827 | 760 | 319 | ||||||||||
Balance | 55,395 | 24,060 | 55,395 | 24,060 | 20,655 | ||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | $ 3,494,642 | $ 3,171,558 | |||||||||||
Total allowance for loan losses | 55,395 | 24,060 | 24,060 | 20,655 | 24,060 | 20,655 | 20,655 | 55,395 | 24,060 | ||||
Impaired loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 1,161 | 1,161 | |||||||||||
Balance | 2,678 | 1,161 | 2,678 | 1,161 | |||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 46,256 | 44,880 | |||||||||||
Total allowance for loan losses | 2,678 | 1,161 | 1,161 | 1,161 | 1,161 | 2,678 | 1,161 | ||||||
Non-impaired loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 22,899 | 22,899 | |||||||||||
Balance | 52,717 | 22,899 | 52,717 | 22,899 | |||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 3,448,386 | 3,126,678 | |||||||||||
Total allowance for loan losses | 52,717 | 22,899 | 22,899 | 22,899 | 22,899 | 52,717 | 22,899 | ||||||
Residential | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 3,178 | 3,239 | 3,178 | 3,239 | 4,000 | ||||||||
Provision (credit) for loan losses | 3,961 | (407) | (761) | ||||||||||
Charge-offs | (60) | (136) | (50) | ||||||||||
Recoveries | 340 | 482 | 50 | ||||||||||
Balance | 7,419 | 3,178 | 7,419 | 3,178 | 3,239 | ||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 1,105,823 | 1,107,076 | |||||||||||
Total allowance for loan losses | 7,419 | 3,178 | 3,178 | 3,239 | 7,419 | 3,178 | 3,239 | 7,419 | 3,178 | ||||
Residential | Impaired loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 985 | 985 | |||||||||||
Balance | 802 | 985 | 802 | 985 | |||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 24,384 | 27,275 | |||||||||||
Total allowance for loan losses | 802 | 985 | 985 | 985 | 985 | 802 | 985 | ||||||
Residential | Non-impaired loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 2,193 | 2,193 | |||||||||||
Balance | 6,617 | 2,193 | 6,617 | 2,193 | |||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 1,081,439 | 1,079,801 | |||||||||||
Total allowance for loan losses | 6,617 | 2,193 | 2,193 | 2,193 | 2,193 | 6,617 | 2,193 | ||||||
Commercial | |||||||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 2,114,989 | 1,628,601 | |||||||||||
Commercial | Commercial real estate | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 12,875 | 10,059 | 12,875 | 10,059 | 7,835 | ||||||||
Provision (credit) for loan losses | 23,129 | 2,810 | 2,318 | ||||||||||
Charge-offs | (1,240) | (94) | |||||||||||
Recoveries | 1 | 6 | |||||||||||
Balance | 34,765 | 12,875 | 34,765 | 12,875 | 10,059 | ||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 1,551,265 | 1,168,412 | |||||||||||
Total allowance for loan losses | 34,765 | 12,875 | 12,875 | 10,059 | 34,765 | 12,875 | 10,059 | 34,765 | 12,875 | ||||
Commercial | Commercial real estate | Impaired loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 1,845 | 1,845 | |||||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 12,513 | 530 | |||||||||||
Total allowance for loan losses | 1,845 | 1,845 | 1,845 | ||||||||||
Commercial | Commercial real estate | Non-impaired loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 12,875 | 12,875 | |||||||||||
Balance | 32,920 | 12,875 | 32,920 | 12,875 | |||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 1,538,752 | 1,167,882 | |||||||||||
Total allowance for loan losses | 32,920 | 12,875 | 12,875 | 12,875 | 12,875 | 32,920 | 12,875 | ||||||
Commercial | Commercial construction | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 2,526 | 2,707 | 2,526 | 2,707 | 1,810 | ||||||||
Provision (credit) for loan losses | 366 | (181) | 897 | ||||||||||
Charge-offs | (937) | ||||||||||||
Balance | 1,955 | 2,526 | 1,955 | 2,526 | 2,707 | ||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 99,331 | 153,907 | |||||||||||
Total allowance for loan losses | 1,955 | 2,526 | 2,526 | 2,707 | 1,955 | 2,526 | 2,707 | 1,955 | 2,526 | ||||
Commercial | Commercial construction | Impaired loans | |||||||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 11,244 | ||||||||||||
Commercial | Commercial construction | Non-impaired loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 2,526 | 2,526 | |||||||||||
Balance | 1,955 | 2,526 | 1,955 | 2,526 | |||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 99,331 | 142,663 | |||||||||||
Total allowance for loan losses | 1,955 | 2,526 | 2,526 | 2,526 | 2,526 | 1,955 | 2,526 | ||||||
Commercial | Commercial and industrial | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 2,977 | 2,286 | 2,977 | 2,286 | 2,254 | ||||||||
Provision (credit) for loan losses | 3,552 | 1,744 | 1,008 | ||||||||||
Charge-offs | (1,471) | (1,075) | (990) | ||||||||||
Recoveries | 253 | 22 | 14 | ||||||||||
Balance | 5,311 | 2,977 | 5,311 | 2,977 | 2,286 | ||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 464,393 | 306,282 | |||||||||||
Total allowance for loan losses | 5,311 | 2,977 | 2,977 | 2,286 | 5,311 | 2,977 | 2,286 | 5,311 | 2,977 | ||||
Commercial | Commercial and industrial | Impaired loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 176 | 176 | |||||||||||
Balance | 31 | 176 | 31 | 176 | |||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 9,359 | 5,831 | |||||||||||
Total allowance for loan losses | 31 | 176 | 176 | 176 | 176 | 31 | 176 | ||||||
Commercial | Commercial and industrial | Non-impaired loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 2,801 | 2,801 | |||||||||||
Balance | 5,280 | 2,801 | 5,280 | 2,801 | |||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 455,034 | 300,451 | |||||||||||
Total allowance for loan losses | 5,280 | 2,801 | 2,801 | 2,801 | 2,801 | 5,280 | 2,801 | ||||||
Consumer loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 1,010 | 1,154 | 1,010 | 1,154 | 1,000 | ||||||||
Provision (credit) for loan losses | 1,831 | 497 | 746 | ||||||||||
Charge-offs | (599) | (891) | (847) | ||||||||||
Recoveries | 233 | 250 | 255 | ||||||||||
Balance | 2,475 | 1,010 | 2,475 | 1,010 | 1,154 | ||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 273,830 | 435,881 | |||||||||||
Total allowance for loan losses | 2,475 | 1,010 | 1,010 | 1,154 | 2,475 | 1,010 | 1,154 | 2,475 | 1,010 | ||||
Consumer loans | Non-impaired loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 1,010 | 1,010 | |||||||||||
Balance | 2,475 | 1,010 | 2,475 | 1,010 | |||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total loans | 273,830 | 435,881 | |||||||||||
Total allowance for loan losses | 2,475 | 1,010 | 1,010 | 1,010 | 1,010 | 2,475 | 1,010 | ||||||
Unallocated | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 1,494 | 1,210 | 1,494 | 1,210 | 1,590 | ||||||||
Provision (credit) for loan losses | 1,976 | 284 | (380) | ||||||||||
Balance | 3,470 | 1,494 | 3,470 | 1,494 | 1,210 | ||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total allowance for loan losses | 3,470 | 1,494 | 1,494 | $ 1,210 | 3,470 | 1,494 | $ 1,210 | 3,470 | 1,494 | ||||
Unallocated | Non-impaired loans | |||||||||||||
Activity in the allowance for loan losses | |||||||||||||
Balance | 1,494 | 1,494 | |||||||||||
Balance | 3,470 | 1,494 | 3,470 | 1,494 | |||||||||
Allocation of the allowance to loan segments | |||||||||||||
Total allowance for loan losses | $ 3,470 | $ 1,494 | $ 1,494 | $ 1,494 | $ 1,494 | $ 3,470 | $ 1,494 |
LOANS - Summary of Past Due and
LOANS - Summary of Past Due and Non-Accrual Loans (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($) | |
Summary of past due and non-accrual loans | ||
Past Due | $ 30,505 | $ 39,097 |
Loans on Non-accrual | 34,101 | 30,321 |
Loans past due 90 days or more and still accruing | $ 0 | 0 |
Number of non-performing loans | loan | 2 | |
Recorded investment | $ 10,900 | |
Charge offs | 937 | |
30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 15,684 | 15,292 |
60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 2,868 | 11,623 |
90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 11,953 | 12,182 |
Residential | 1-4 family | ||
Summary of past due and non-accrual loans | ||
Past Due | 20,789 | 20,654 |
Loans on Non-accrual | 11,611 | 10,610 |
Residential | 1-4 family | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 12,148 | 9,364 |
Residential | 1-4 family | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 2,223 | 5,622 |
Residential | 1-4 family | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 6,418 | 5,668 |
Residential | Second mortgages and equity lines of credit | ||
Summary of past due and non-accrual loans | ||
Past Due | 939 | 1,255 |
Loans on Non-accrual | 834 | 1,561 |
Residential | Second mortgages and equity lines of credit | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 460 | 418 |
Residential | Second mortgages and equity lines of credit | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 46 | 77 |
Residential | Second mortgages and equity lines of credit | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 433 | 760 |
Residential | Residential real estate | ||
Summary of past due and non-accrual loans | ||
Past Due | 471 | |
Residential | Residential real estate | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 471 | |
Commercial | Commercial real estate | ||
Summary of past due and non-accrual loans | ||
Past Due | 3,785 | 5,182 |
Loans on Non-accrual | 12,486 | 530 |
Commercial | Commercial real estate | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 416 | 261 |
Commercial | Commercial real estate | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 4,730 | |
Commercial | Commercial real estate | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 3,369 | 191 |
Commercial | Commercial construction | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,960 | |
Loans on Non-accrual | 11,244 | |
Commercial | Commercial construction | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,960 | |
Commercial | Commercial and industrial | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,878 | 5,855 |
Loans on Non-accrual | 8,606 | 5,831 |
Commercial | Commercial and industrial | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 444 | 2,000 |
Commercial | Commercial and industrial | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 191 | 722 |
Commercial | Commercial and industrial | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,243 | 3,133 |
Consumer loans | Auto | ||
Summary of past due and non-accrual loans | ||
Past Due | 2,542 | 4,093 |
Loans on Non-accrual | 557 | 529 |
Consumer loans | Auto | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 1,657 | 3,180 |
Consumer loans | Auto | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 397 | 456 |
Consumer loans | Auto | 90 Days or More | ||
Summary of past due and non-accrual loans | ||
Past Due | 488 | 457 |
Consumer loans | Personal | ||
Summary of past due and non-accrual loans | ||
Past Due | 101 | 98 |
Loans on Non-accrual | 7 | 16 |
Consumer loans | Personal | 30 to 59 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 88 | 69 |
Consumer loans | Personal | 60 to 89 Days | ||
Summary of past due and non-accrual loans | ||
Past Due | 11 | 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 ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Recorded Investment | |||
Impaired loans without a valuation allowance | $ 25,079 | $ 28,889 | |
Impaired loans with a valuation allowance | 21,177 | 15,991 | |
Total impaired loans | 46,256 | 44,880 | |
Unpaid Principal Balance | |||
Impaired loans without a valuation allowance | 29,384 | 30,815 | |
Impaired loans with a valuation allowance | 21,497 | 16,544 | |
Total impaired loans | 50,881 | 47,359 | |
Activity in the allowance for loan losses | |||
Allowance for loan losses for impaired loans | 2,678 | 1,161 | |
Impaired loans | |||
Average Recorded Investment | 48,097 | 41,537 | $ 35,685 |
Interest Income Recognized | 1,197 | 1,995 | 1,799 |
Interest Income Recognized on Cash Basis | 1,136 | 1,636 | 1,411 |
Additional funds committed to be advanced in connection with impaired loans | 0 | ||
Residential | |||
Recorded Investment | |||
Impaired loans without a valuation allowance | 12,284 | 11,610 | |
Impaired loans with a valuation allowance | 12,100 | 15,665 | |
Unpaid Principal Balance | |||
Impaired loans without a valuation allowance | 13,039 | 12,140 | |
Impaired loans with a valuation allowance | 12,355 | 16,218 | |
Activity in the allowance for loan losses | |||
Allowance for loan losses for impaired loans | 802 | 985 | |
Impaired loans | |||
Average Recorded Investment | 26,040 | 29,708 | 32,186 |
Interest Income Recognized | 1,115 | 1,694 | 1,764 |
Interest Income Recognized on Cash Basis | 1,054 | 1,335 | 1,379 |
Commercial | Commercial real estate | |||
Recorded Investment | |||
Impaired loans without a valuation allowance | 3,552 | 530 | |
Impaired loans with a valuation allowance | 8,961 | ||
Unpaid Principal Balance | |||
Impaired loans without a valuation allowance | 4,741 | 530 | |
Impaired loans with a valuation allowance | 8,961 | ||
Activity in the allowance for loan losses | |||
Allowance for loan losses for impaired loans | 1,845 | ||
Impaired loans | |||
Average Recorded Investment | 5,064 | 643 | 744 |
Interest Income Recognized | 2 | 10 | |
Interest Income Recognized on Cash Basis | 2 | 10 | |
Commercial | Commercial construction | |||
Recorded Investment | |||
Impaired loans without a valuation allowance | 11,244 | ||
Unpaid Principal Balance | |||
Impaired loans without a valuation allowance | 11,244 | ||
Impaired loans | |||
Average Recorded Investment | 8,831 | 5,622 | 26 |
Interest Income Recognized | 237 | ||
Interest Income Recognized on Cash Basis | 237 | ||
Commercial | Commercial and industrial | |||
Recorded Investment | |||
Impaired loans without a valuation allowance | 9,243 | 5,505 | |
Impaired loans with a valuation allowance | 116 | 326 | |
Unpaid Principal Balance | |||
Impaired loans without a valuation allowance | 11,604 | 6,901 | |
Impaired loans with a valuation allowance | 181 | 326 | |
Activity in the allowance for loan losses | |||
Allowance for loan losses for impaired loans | 31 | 176 | |
Impaired loans | |||
Average Recorded Investment | 8,162 | 5,564 | 2,729 |
Interest Income Recognized | 80 | 54 | 35 |
Interest Income Recognized on Cash Basis | $ 80 | $ 54 | $ 32 |
LOANS - Troubled Debt Restructu
LOANS - Troubled Debt Restructurings (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)loanitem | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Troubled debt restructurings | |||
Troubled debt restructurings during the period | item | 1 | ||
TDR modifications | $ 2,000 | $ 0 | |
Recorded investment of troubled debt restructurings | $ 15,100 | 20,000 | |
Recorded investment of troubled debt restructurings that were nonaccruing | $ 3,600 | $ 5,000 | |
Number of troubled debt restructurings that defaulted | 0 | 0 | 0 |
Loans, net | $ 3,439,247 | $ 3,147,498 | |
Minimum | |||
Troubled debt restructurings | |||
Payment in arrears before considered in default | item | 2 | ||
Payment deferral | Loan Modification Made Pursuant To CARES Act | |||
Troubled debt restructurings | |||
Loans, net | $ 30,000 | ||
Residential | Payment deferral | Loan Modification Made Pursuant To CARES Act | |||
Troubled debt restructurings | |||
Number of loans under payment deferral. | loan | 10 | ||
Loans, net | $ 2,800 | ||
Commercial | Commercial real estate | Payment deferral | Loan Modification Made Pursuant To CARES Act | |||
Troubled debt restructurings | |||
Number of loans under payment deferral. | loan | 5 | ||
Loans, net | $ 26,000 | ||
Commercial | Commercial and industrial | Payment deferral | Loan Modification Made Pursuant To CARES Act | |||
Troubled debt restructurings | |||
Number of loans under payment deferral. | loan | 9 | ||
Loans, net | $ 811 | ||
Consumer loans | Payment deferral | Loan Modification Made Pursuant To CARES Act | |||
Troubled debt restructurings | |||
Number of loans under payment deferral. | loan | 18 | ||
Loans, net | $ 399 |
LOANS - Risk Rating (Details)
LOANS - Risk Rating (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)grade | Dec. 31, 2019USD ($) | |
Loans by risk rating | ||
Number of grades utilized in internal loan rating system | grade | 10 | |
Total loans | $ 3,494,642 | $ 3,171,558 |
Commercial | ||
Loans by risk rating | ||
Total loans | 2,114,989 | 1,628,601 |
Commercial | Commercial real estate | ||
Loans by risk rating | ||
Total loans | 1,551,265 | 1,168,412 |
Commercial | Commercial real estate | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 1,524,105 | 1,163,343 |
Commercial | Commercial real estate | Loans rated 7, special mention | ||
Loans by risk rating | ||
Total loans | 14,674 | 4,539 |
Commercial | Commercial real estate | Loans rated 8, substandard | ||
Loans by risk rating | ||
Total loans | 9,455 | 530 |
Commercial | Commercial real estate | Loans rated 9, doubtful | ||
Loans by risk rating | ||
Total loans | 3,031 | |
Commercial | Commercial construction | ||
Loans by risk rating | ||
Total loans | 99,331 | 153,907 |
Commercial | Commercial construction | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 99,331 | 127,962 |
Commercial | Commercial construction | Loans rated 7, special mention | ||
Loans by risk rating | ||
Total loans | 14,701 | |
Commercial | Commercial construction | Loans rated 8, substandard | ||
Loans by risk rating | ||
Total loans | 11,244 | |
Commercial | Commercial and industrial | ||
Loans by risk rating | ||
Total loans | 464,393 | 306,282 |
Commercial | Commercial and industrial | Loans rated 1 - 6, pass | ||
Loans by risk rating | ||
Total loans | 452,665 | 294,507 |
Commercial | Commercial and industrial | Loans rated 7, special mention | ||
Loans by risk rating | ||
Total loans | 3,122 | 6,117 |
Commercial | Commercial and industrial | Loans rated 8, substandard | ||
Loans by risk rating | ||
Total loans | 7,080 | 3,223 |
Commercial | Commercial and industrial | Loans rated 9, doubtful | ||
Loans by risk rating | ||
Total loans | $ 1,526 | $ 2,435 |
MORTGAGE LOAN SERVICING - Key A
MORTGAGE LOAN SERVICING - Key Assumptions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Unpaid Principal Balance | ||
Unpaid principal balances of mortgage loans serviced | $ 3,050 | $ 1,830 |
Prepayment speed | 14.30% | 12.43% |
Discount rate | 9.23% | 9.34% |
Default rate | 2.27% | 2.61% |
MORTGAGE LOAN SERVICING - Fair
MORTGAGE LOAN SERVICING - Fair value of MSR (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes to the fair value of Mortgage Servicing Rights | |||
Mortgage servicing rights, at fair value, beginning of period | $ 17,150 | $ 22,217 | $ 21,092 |
Additions | 14,415 | 1,174 | 2,521 |
Changes in fair value due to : | |||
Reductions from loans paid off during the period | (4,181) | (1,972) | (1,795) |
Changes in valuation inputs or assumptions | (2,551) | (4,269) | 399 |
Mortgage servicing rights, at fair value, end of period | 24,833 | 17,150 | 22,217 |
Fees and commissions, mortgage banking and servicing | $ 6,100 | $ 5,400 | $ 5,400 |
OTHER REAL ESTATE LOANS AND R_3
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
OTHER REAL ESTATE LOANS AND REPOSSESSED ASSETS | |||
Gain on sale of real estate, net | $ (86,000) | $ (181,000) | $ (126,000) |
Net loss on sales of repossessed assets | 45,000 | 112,000 | 106,000 |
Write-downs of real estate | 5,000 | ||
Operating expenses | 37,000 | 82,000 | 110,000 |
Expenses applicable to foreclosed and repossessed assets | $ (4,000) | $ 13,000 | $ 95,000 |
Number of real estate properties foreclosed and repossessed | item | 1 | 1 | |
Foreclosed and repossessed assets, residential real estate properties | $ 297,000 | $ 297,000 | |
Foreclosed and repossessed assets, automobiles | 298,000 | 421,000 | |
Mortgage loans in the process of foreclosure | $ 4,300,000 | $ 3,900,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 74,720,000 | $ 69,298,000 | |
Less accumulated depreciation and amortization | (25,140,000) | (21,347,000) | |
Property and equipment, net | 49,580,000 | 47,951,000 | |
Depreciation and amortization of premises and equipment | 4,011,000 | 4,394,000 | $ 3,241,000 |
Net book value asset transfer to asset held for sale | 9,000,000 | ||
Loss recognized on transfer of asset held for sale | (482,000) | ||
Fully depreciated property equipment | 17,700,000 | ||
Future Minimum lease payments under the noncancelable operating lease agreements | |||
2021 | 2,452,000 | ||
2022 | 2,239,000 | ||
2023 | 1,847,000 | ||
2024 | 1,644,000 | ||
2025 | 1,684,000 | ||
Thereafter | 13,134,000 | ||
Total | 23,000,000 | ||
Rent expense | $ 2,900,000 | 2,500,000 | $ 2,000,000 |
Minimum | |||
Future Minimum lease payments under the noncancelable operating lease agreements | |||
Extension term | 5 years | ||
Maximum | |||
Future Minimum lease payments under the noncancelable operating lease agreements | |||
Extension term | 25 years | ||
Land | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 12,420,000 | 11,048,000 | |
Buildings and leasehold improvements | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 46,216,000 | 45,357,000 | |
Furniture, equipment and vehicles | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | 14,719,000 | 12,247,000 | |
Fixed assets in process | |||
PROPERTY AND EQUIPMENT | |||
Property and equipment, gross | $ 1,365,000 | $ 646,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | ||||
Balance, beginning of year | $ 69,802,000 | $ 69,802,000 | $ 70,088,000 | |
Measurement period fair value adjustments | (286,000) | |||
Balance, end of year | 69,802,000 | 69,802,000 | ||
Impairment recognized of goodwill and intangible assets | 0 | |||
Goodwill impairment | 0 | |||
Impairment of intangible assets | $ 0 | |||
HarborOne Mortgage | ||||
Goodwill [Line Items] | ||||
Balance, beginning of year | 10,500,000 | 10,500,000 | ||
Balance, end of year | 10,800,000 | 10,500,000 | ||
HarborOne Bank | ||||
Goodwill [Line Items] | ||||
Balance, beginning of year | $ 59,600,000 | 59,600,000 | ||
Balance, end of year | $ 59,000,000 | $ 59,600,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated amortization and net amount of intangible assets | |||
Amortization | $ (1,665,000) | $ (2,344,000) | $ (706,000) |
Core deposit intangibles | |||
Gross amount of intangible assets | |||
Gross amount, beginning of period | 8,952,000 | 8,952,000 | |
Gross amount, end of period | 8,952,000 | 8,952,000 | 8,952,000 |
Accumulated amortization and net amount of intangible assets | |||
Accumulated amortization, beginning of period | (2,917,000) | (618,000) | |
Amortization | (1,665,000) | (2,299,000) | |
Accumulated amortization, end of period | (4,582,000) | (2,917,000) | $ (618,000) |
Net CDI, end of year | 4,370,000 | $ 6,035,000 | |
Estimated future amortization expense | |||
2021 | 1,200,000 | ||
2022 | 893,000 | ||
2023 | 758,000 | ||
2024 | 758,000 | ||
2025 | 758,000 | ||
Thereafter | $ 758,000 | ||
Weighted average original amortization period | 7 years 3 months 18 days |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 1,665,000 | $ 2,344,000 | $ 706,000 |
Non-compete intangible asset | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 4 years | ||
Amortization expense | $ 45,000 | $ 88,000 |
DEPOSITS - Summary of deposits
DEPOSITS - Summary of deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
DEPOSITS | ||
NOW and demand deposit accounts | $ 908,256 | $ 572,280 |
Regular savings and club accounts | 998,994 | 626,685 |
Money market deposit accounts | 866,661 | 856,830 |
Total non-certificate accounts | 2,773,911 | 2,055,795 |
Term certificate accounts greater than $250,000 | 135,190 | 169,595 |
Term certificate accounts less than or equal to $250,000 | 497,108 | 636,343 |
Brokered deposits | 100,000 | 81,140 |
Total certificate deposits, net | 732,298 | 887,078 |
Total deposits | 3,506,209 | 2,942,873 |
Total reciprocal deposits | $ 104,900 | $ 277,900 |
DEPOSITS - Maturity of deposits
DEPOSITS - Maturity of deposits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Summary of certificate accounts by maturity | ||
Within 1 year | $ 682,338 | |
Over 1 year to 2 years | 28,238 | |
Over 2 years to 3 years | 9,007 | |
Over 3 years to 4 years | 11,604 | |
Over 4 years to 5 years | 1,745 | |
Total certificate deposits | 732,932 | |
Less unaccreted acquisition discount | (634) | |
Total certificate deposits, net | $ 732,298 | $ 887,078 |
Summary of certificate accounts by maturity | ||
Within 1 year | 0.88% | |
Over 1 year to 2 years | 1.68% | |
Over 2 years to 3 years | 1.88% | |
Over 3 years to 4 years | 1.00% | |
Over 4 years to 5 years | 0.81% | |
Weighted average interest rate | 0.92% |
FHLB BORROWINGS - FHLB Advances
FHLB BORROWINGS - FHLB Advances (Details) $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Short-term borrowed funds | $ 35,000 | $ 183,000 |
Scheduled Maturity | ||
2020 | 87,000 | |
2021 | 41,750 | 41,750 |
2022 | 10,000 | |
2023 | 20,190 | 20,195 |
2024 | 10,000 | 10,000 |
2025 | 40,987 | 987 |
2026 and thereafter | 1,170 | 1,200 |
Total | 114,097 | 171,132 |
Redeemable at Call Date | ||
2020 | 137,000 | |
2021 | 101,750 | 21,750 |
2023 | 190 | 195 |
2024 | 10,000 | 10,000 |
2025 | 987 | 987 |
2026 and thereafter | 1,170 | 1,200 |
Total | $ 114,097 | $ 171,132 |
Weighted Average Rate | ||
Short-term advances, weighted average rate | 0.42 | 1.80 |
Weighted Average Rate | ||
2020 | 2.25% | |
2021 | 2.47% | 2.47% |
2022 | 1.73% | |
2023 | 3.48% | 2.43% |
2024 | 1.68% | 1.68% |
2025 | 1.32% | |
2026 and thereafter | 2.00% | 2.00% |
Total | 2.16% | 2.16% |
FHLB BORROWINGS - Others (Detai
FHLB BORROWINGS - Others (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Federal Home Loan Bank Advances | ||
Borrowed funds | ||
Percentage of carrying value pledged as collateral | 61.00% | |
Carrying value of the loans pledged as collateral | $ 1,250 | $ 1,060 |
Available borrowing capacity | 741.7 | |
Amortized borrowing capacity | 107.1 | 46.9 |
Amount outstanding | 0 | $ 0 |
Other Loans | ||
Borrowed funds | ||
Additional borrowing capacity | $ 25 |
SUBORDINATED DEBENTURES (Detail
SUBORDINATED DEBENTURES (Details) - Subordinated Notes due 2028 - USD ($) | Sep. 01, 2023 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 30, 2018 |
Notes issued | $ 35,000,000 | |||
Annual fixed interest rate until September 1, 2023 | 5.625% | |||
Issuance costs | $ 967,000 | $ 1,100,000 | ||
Forecast | LIBOR | ||||
Basis points | 2.78% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current tax provision: | |||||||||||
Federal | $ 11,591 | $ 3,757 | $ 2,576 | ||||||||
State | 5,240 | 1,207 | 1,377 | ||||||||
Total current tax provision | 16,831 | 4,964 | 3,953 | ||||||||
Deferred tax benefit: | |||||||||||
Federal | (2,124) | (445) | (740) | ||||||||
State | (1,490) | (111) | (400) | ||||||||
Deferred tax benefit | (3,614) | (556) | (1,140) | ||||||||
Income tax provision | $ 3,283 | $ 4,561 | $ 3,668 | $ 1,705 | $ 2,180 | $ 1,053 | $ 819 | $ 356 | 13,217 | $ 4,408 | $ 2,813 |
Deferred tax liability for derivatives | $ 2,349 | $ 2,349 |
INCOME TAXES - Differences Betw
INCOME TAXES - Differences Between Federal Income Tax and Actual Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME TAXES | |||||||||||
Statutory tax rate (as a percent) | 21.00% | 21.00% | 21.00% | ||||||||
Differences between the statutory federal income tax and the actual income tax provision (benefit) | |||||||||||
Statutory federal tax provision | $ 12,182 | $ 4,762 | $ 2,983 | ||||||||
Increase (decrease) resulting from: | |||||||||||
State taxes, net of federal tax benefit | 2,962 | 866 | 772 | ||||||||
Bank-owned life insurance | (465) | (232) | (358) | ||||||||
Non-deductible merger expenses | 196 | ||||||||||
Employee Stock Ownership Plan expenses | 56 | 172 | 106 | ||||||||
Tax exempt income | (22) | (104) | (180) | ||||||||
Reduction in uncertain federal tax positions | (1,864) | (1,586) | (801) | ||||||||
Other, net | 368 | 530 | 95 | ||||||||
Income tax provision | $ 3,283 | $ 4,561 | $ 3,668 | $ 1,705 | $ 2,180 | $ 1,053 | $ 819 | $ 356 | $ 13,217 | $ 4,408 | $ 2,813 |
INCOME TAXES - Deferred taxes (
INCOME TAXES - Deferred taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||||
Allowance for loan losses | $ 15,493 | $ 6,651 | ||
Employee benefit plans | 4,999 | 5,036 | ||
Mark-to-market loans | 2,387 | 3,687 | ||
Accrued expenses not deducted for tax purposes | 1,799 | 1,093 | ||
HarborOne Mortgage loan repurchase reserve | 743 | 231 | ||
Charitable contribution and other carryforwards | 15 | |||
Total deferred tax assets | 25,421 | 16,713 | ||
Deferred tax liabilities: | ||||
Net unrealized gain on securities available for sale | (904) | (419) | ||
Derivatives | (2,349) | |||
Deferred income annuities | (1,580) | (1,447) | ||
Depreciation and amortization | (1,145) | (370) | ||
Deferred loan fees | (1,578) | (1,995) | ||
Mortgage servicing rights | (6,793) | (4,759) | ||
Core deposit intangible | (1,222) | (1,668) | ||
Other | (293) | (21) | ||
Total deferred tax liabilities | (15,864) | (10,679) | ||
Net deferred tax asset | $ 9,557 | $ 6,034 | $ 6,727 | $ 843 |
INCOME TAXES - Changes In Net D
INCOME TAXES - Changes In Net Deferred Tax Asset (Liability) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME TAXES | |||
Balance at beginning of year | $ 6,034 | $ 6,727 | $ 843 |
Deferred tax benefit | 3,614 | 556 | 1,140 |
Coastway deferred tax accounting / measurement period adjustment | (165) | 4,258 | |
Change in cash flow hedge | 394 | ||
Change in securities available for sale | (485) | (1,084) | 486 |
Balance at end of year | $ 9,557 | $ 6,034 | $ 6,727 |
INCOME TAXES - Carryforwards (D
INCOME TAXES - Carryforwards (Details) - USD ($) | Aug. 14, 2019 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Loss Carryforwards [Line Items] | ||||||
Net deferred tax asset balance | $ 843,000 | $ 9,557,000 | $ 6,034,000 | $ 6,727,000 | ||
Charitable contribution and other carryforwards | 15,000 | |||||
Shares issued | 31,036,812 | |||||
Temporary difference adjustment | 320,000 | |||||
Charitable contribution carryforward expected to be used | 1,100,000 | |||||
Request tax refunds | $ 3,200,000 | |||||
Federal | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Charitable contribution and other carryforwards | 1,100,000 | |||||
Federal | Tax Year 2013 | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Tax refund | (603,000) | |||||
Federal | Tax Year 2014 | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Tax refund | (826,000) | |||||
Federal | Tax Year 2015 | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Tax refund | $ (1,300,000) | |||||
State | Tax Year 2013 | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Tax refund | (211,000) | |||||
State | Tax Year 2014 | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Tax refund | (320,000) | |||||
State | Tax Year 2015 | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Tax refund | $ (40,000) | |||||
HarborOne Foundation | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Shares issued | 385,450 | |||||
Cash | $ 965,000 | |||||
HarborOne Bank | Maximum | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating loss that can be used per year | 552,000 | |||||
HarborOne Bank | New Hampshire | HarborOne Mortgage | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating loss | 1,700,000 | |||||
Net deferred tax asset balance | $ 10,000 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized Tax Benefits, Beginning Balance | $ 3,052 | $ 3,769 | $ 1,898 |
Additions for tax positions for prior years | 168 | 1,471 | 2,672 |
Reductions for tax positions for prior years | (2,058) | (153) | |
Settlements | (2,035) | (801) | |
Unrecognized Tax Benefits, Ending Balance | $ 1,162 | $ 3,052 | $ 3,769 |
INCOME TAXES - Unrecognized t_2
INCOME TAXES - Unrecognized tax benefits, interest accrued, and range of reasonably possible changes (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Unrecognized tax benefits | |
Unrecognized tax benefits | $ 1,060 |
Accrued interest on unrecognized tax benefits | 102 |
Portion that, if recognized, would reduce tax expense and effective tax rate | 1,162 |
Reasonably possible reduction to the balance of unrecognized tax in subsequent year | 754 |
Portion that, if recognized, would reduce tax expense and effective tax rate in subsequent year | $ 754 |
OTHER COMMITMENTS AND CONTING_3
OTHER COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
OTHER COMMITMENTS AND CONTINGENCIES | |||
Compensation to employees | $ 5,092,000 | ||
Employee Agreements | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Employee agreement term | 5 years | ||
Total compensation to employees | $ 2,200,000 | ||
Compensation to employees | $ 1,700,000 | $ 509,000 | |
Obligation to Repurchase Receivables Sold | Maximum | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Reserve | 1,300,000 | $ 1,300,000 | |
Other Liabilities And Accrued Expenses | Obligation to Repurchase Receivables Sold | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Reserve | 834,000 | 2,700,000 | |
Recourse liability | 0 | 0 | |
Commitments to grant residential real estate loans - HarborOne Mortgage | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Financial instruments committed contract amount | 24,752,000 | 485,428,000 | |
Commitments to grant other loans | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Financial instruments committed contract amount | 74,114,000 | 53,714,000 | |
Unadvanced funds on home equity lines of credit | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Financial instruments committed contract amount | 157,867,000 | 178,432,000 | |
Unadvanced funds on revolving lines of credit | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Financial instruments committed contract amount | 147,047,000 | 169,907,000 | |
Unadvanced funds on construction loans | |||
OTHER COMMITMENTS AND CONTINGENCIES | |||
Financial instruments committed contract amount | $ 112,158,000 | $ 127,776,000 |
DERIVATIVES (Details)
DERIVATIVES (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)derivative | Dec. 31, 2019USD ($) | |
Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | $ 51,943 | $ 16,503 |
Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | $ 43,272 | 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 | $ 485,428 | 100,938 |
Derivative loan commitments | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 12,623 | 1,385 |
Derivative loan commitments | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 341 | 174 |
Forward loan sale commitments | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | 356,500 | 88,000 |
Forward loan sale commitments | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 26 | |
Forward loan sale commitments | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | $ 2,204 | 158 |
Interest rate swaps | Cash Flow Hedging | ||
Derivative disclosures | ||
Number of Derivative Instruments Held | derivative | 1 | |
Maturity term | 4 years 3 months 18 days | |
Fixed rate | 0.67% | |
Variable rate | 0.35% | |
Amount to be reclassified in next 12 months | $ (489) | |
Notional Amount | 100,000 | |
Fair Value, Liabilities | 1,400 | |
Interest rate swaps | Mortgage-backed securities | ||
Derivative disclosures | ||
Securities pledged to secure the Company's liability for the offsetting interest rate swaps | 40,300 | |
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 | 1,407 | |
Interest rate swaps | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | 867,728 | 725,332 |
Interest rate swaps | Not designated as hedging instruments | Other assets | ||
Derivative disclosures | ||
Fair Value, Assets | 39,320 | 15,092 |
Interest rate swaps | Not designated as hedging instruments | Other liabilities | ||
Derivative disclosures | ||
Fair Value, Liabilities | 39,320 | 15,092 |
Risk Participation Agreements | Not designated as hedging instruments | ||
Derivative disclosures | ||
Notional Amount | $ 132,379 | $ 134,346 |
DERIVATIVES - Net gain and loss
DERIVATIVES - Net gain and losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | |||
Gain (loss) in OCI on derivatives (effective portion), net of tax | $ 705 | $ 3,838 | $ (1,726) |
Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Gain (loss) in OCI on derivatives (effective portion), net of tax | (1,013) | ||
(Loss) gain reclassified from OCI into interest income or interest expense (effective portion) | (46) | ||
Not designated as hedging instruments | |||
Derivative [Line Items] | |||
Total | 8,999 | 448 | (343) |
Mortgage banking income | Not designated as hedging instruments | Derivative loan commitments | |||
Derivative [Line Items] | |||
Total | 11,072 | 62 | 129 |
Mortgage banking income | Not designated as hedging instruments | Forward loan sale commitments | |||
Derivative [Line Items] | |||
Total | $ (2,073) | $ 386 | $ (472) |
COMPENSATION AND BENEFIT PLAN_2
COMPENSATION AND BENEFIT PLANS (Details) | 12 Months Ended | |||
Dec. 31, 2020USD ($)itemshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Benefit plan liability | $ 1,953,000 | $ 1,915,000 | $ 1,876,000 | $ 1,837,000 |
Gain on settlements | 43,000 | |||
Contributions expenses | $ 1,800,000 | $ 2,500,000 | $ 2,300,000 | |
Allocated shares | shares | 639,525 | 408,803 | ||
Shares committed to be allocated | shares | 230,723 | 230,724 | 106,576 | |
Unallocated shares | shares | 3,602,562 | 3,833,283 | ||
Total shares | shares | 4,472,810 | 4,472,810 | ||
Fair value of unallocated shares, end of period | $ 39,123,823 | $ 42,127,780 | ||
ESOP compensation expense | $ 2,103,000 | 2,655,000 | $ 1,097,000 | |
ESOP restoration benefit payable period | six months and a day | |||
Restoration accrual | $ 487,000 | $ 210,000 | $ 24,000 | |
Through 2035 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Shares committed to be allocated | shares | 230,723 | |||
From 2036 to 2038 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Shares committed to be allocated | shares | 124,148 | |||
HarborOne Bank | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employee compensation the bank contributed (as a percent) | 5.00% | 9.30% | 9.30% | |
Employee's compensation in exess of social security wage match (as a percent) | 5.70% | 5.70% | ||
HarborOne Mortgage | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of matched contribution | 50.00% | |||
Employee contributions matched 50% (as a percent) | 4.00% | |||
Maximum amount employer will match | $ 0 | $ 0 | ||
Maximum | HarborOne Mortgage | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Maximum amount employer will match | $ 2,000 | |||
Split-dollar Life Insurance Arrangements | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expense amount | $ 21,000 | 38,000 | 73,000 | |
Deferred Compensation Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of executive officers | item | 1 | |||
Interest rate (as a percent) | 1.50% | |||
Expense amount | $ 32,000 | 31,000 | 29,000 | |
Eligible age for medical insurance plan | 65 years | |||
Deferred Compensation Plan | Coastway | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expense amount | 46,000 | |||
Deferred Compensation Plan | Other Liabilities And Accrued Expenses | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer obligation | $ 385,000 | 353,000 | 322,000 | |
Deferred Compensation Plan | Other Liabilities And Accrued Expenses | Coastway | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Benefit plan liability | 1,500,000 | |||
Deferred Compensation Plan | Other assets | Coastway | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan Assets | 1,500,000 | |||
Supplemental medical and prescription drug | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of executive officers | item | 2 | |||
Expense amount | $ 47,000 | 66,000 | 3,000 | |
Supplemental medical and prescription drug | Other Liabilities And Accrued Expenses | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer obligation | 344,000 | 297,000 | 229,000 | |
Management Incentive Program | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expense amount | 4,700,000 | 2,100,000 | 3,300,000 | |
Supplemental Retirement Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions expenses | $ 955,000 | 1,800,000 | 658,000 | |
Number of SERP agreements | item | 2 | |||
Supplemental Retirement Plans | Coastway | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expense amount | 90,000 | |||
Supplemental Retirement Plans | Other Liabilities And Accrued Expenses | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer obligation | $ 8,000,000 | 7,100,000 | 5,300,000 | |
Supplemental Retirement Plans | Other Liabilities And Accrued Expenses | Coastway | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer obligation | 3,400,000 | |||
Supplemental Retirement Plans | Executive | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of executive officers | item | 2 | |||
Long-Term Incentive Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expense amount | $ 20,000 | 56,000 | ||
Long-Term Incentive Plan | Other Liabilities And Accrued Expenses | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer obligation | 437,000 | 838,000 | 1,300,000 | |
Long-Term Incentive Plan | Executive | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expense amount | (82,000) | |||
Post-Retirement Life Insurance | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expense amount | 47,000 | 17,000 | 29,000 | |
Post-Retirement Life Insurance | Other Liabilities And Accrued Expenses | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer obligation | $ 234,000 | $ 186,000 | 171,000 | |
Directors Retirement Plan | Maximum | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Vesting period | 6 years | |||
Defined benefit pension plan | Coastway | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Plan Assets | 1,400,000 | |||
Benefit plan liability | 1,600,000 | |||
Defined benefit pension plan | Unfunded Plan | Other Liabilities And Accrued Expenses | Coastway | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Benefit plan liability | $ 202,000 |
COMPENSATION AND BENEFIT PLAN_3
COMPENSATION AND BENEFIT PLANS - Net Periodic Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in projected benefit obligation: | |||
Benefit obligation at beginning of year | $ 1,915 | $ 1,876 | $ 1,837 |
Interest cost | 75 | 76 | 76 |
Benefits paid | (37) | (37) | (37) |
Benefit obligation and funded status at end of year | 1,953 | 1,915 | 1,876 |
Accumulated benefit obligation | 1,953 | 1,915 | 1,876 |
Net periodic cost | $ 75 | $ 76 | $ 76 |
COMPENSATION AND BENEFIT PLAN_4
COMPENSATION AND BENEFIT PLANS - Assumptions Used to Determine Benefit Obligation and Net Periodic Cost (Details) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assumptions used to determine benefit obligation | |||
Discount rate | 4.14% | 4.14% | 4.14% |
Rate of compensation increase | 3.00% |
COMPENSATION AND BENEFIT PLAN_5
COMPENSATION AND BENEFIT PLANS - Expected Benefit Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Expected benefit payments | |
2021 | $ 37 |
2022 | 399 |
2023 | 230 |
2024 | 230 |
2025 | 231 |
2026-2030 | $ 1,050 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 29, 2020shares | |
STOCK-BASED COMPENSATION | ||||
Number of shares based compensation plans | 2 | |||
Share-based compensation | $ 3,679,000 | $ 4,849,000 | $ 4,593,000 | |
Related tax benefits recognized in earnings | 773,000 | 1,042,000 | 965,000 | |
2020 Equity Plan | ||||
STOCK-BASED COMPENSATION | ||||
Shares reserved for issuance | shares | 4,500,000 | |||
Stock Options | ||||
STOCK-BASED COMPENSATION | ||||
Stock based compensation expense | 1,099,000 | 1,213,000 | 694,000 | |
Directors' fee expense | 358,000 | 572,000 | 629,000 | |
Restricted Stock | ||||
STOCK-BASED COMPENSATION | ||||
Stock based compensation expense | 1,618,000 | 2,204,000 | 2,360,000 | |
Directors' fee expense | $ 604,000 | $ 860,000 | $ 910,000 |
STOCK-BASED COMPENSATION - Valu
STOCK-BASED COMPENSATION - Valuation assumptions (Details) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
STOCK-BASED COMPENSATION | |||
Options granted | 583,565 | 289,890 | |
Vesting period (years) | 3 years | 3 years | |
Term (years) | 10 years | 10 years | 10 years |
Weighted average expected volatility | 22.09% | 22.16% | |
Expected life (years) | 6 years | 6 years | |
Weighted average risk free interest rate | 2.46% | 2.93% | |
Weighted average fair value per option | $ 2.49 | $ 2.83 | |
Minimum | |||
STOCK-BASED COMPENSATION | |||
Vesting period (years) | 1 year | ||
Maximum | |||
STOCK-BASED COMPENSATION | |||
Vesting period (years) | 3 years |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock options (Details) - Stock Options - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Option Awards | |||
Balance at the beginning of the period | 2,169,243 | ||
Granted | 583,565 | 289,890 | |
Forfeited | (20,948) | ||
Expired | (41,892) | ||
Balance at the end of the period | 2,106,403 | 2,169,243 | |
Exercisable at end of the period | 1,632,958 | ||
Unrecognized cost inclusive of directors' awards | $ 805,000 | ||
Weighted average remaining recognition period (years) | 1 year 1 month 13 days | ||
Weighted Average Exercise Price | |||
Balance at the beginning of the period | $ 9.87 | ||
Forfeited | 10.23 | ||
Expired | 10.23 | ||
Balance at the end of the period | 9.86 | $ 9.87 | |
Exercisable at end of the period | $ 10.05 | ||
Weighted Average Remaining Contractual Term (years) | |||
Weighted average remaining contractual term, balance (years) | 7 years 2 months 19 days | ||
Exercisable at end of the period | 6 years 11 months 15 days | ||
Aggregate Intrinsic Value | |||
Balance at the end of the period | $ 2,097,257 | ||
Exercisable at end of the period | $ 1,321,686 | ||
Stock Option Awards, Nonvested | |||
Balance at the beginning of the period | 1,196,545 | ||
Granted | 583,565 | 289,890 | |
Vested | (702,155) | ||
Forfeited | (20,948) | ||
Expired | (41,892) | ||
Balance at the end of the period | 431,550 | 1,196,545 | |
Weighted Average Exercise Price, Nonvested | |||
Balance at the beginning of the period | $ 2.66 | ||
Vested | 2.73 | ||
Forfeited | 2.82 | ||
Expired | 2.82 | ||
Balance at the end of the period | $ 2.55 | $ 2.66 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted stock (Details) - Restricted Stock | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Outstanding Restricted Stock Awards | |
Non-vested stock awards, beginning balance | shares | 333,766 |
Vested | shares | (294,822) |
Granted | shares | 355,427 |
Forfeited | shares | (9,679) |
Non-vested stock awards, ending balance | shares | 384,692 |
Unrecognized cost inclusive of directors' awards | $ | $ 3,194,000 |
Weighted average remaining recognition period (years) | 1 year 9 months |
Weighted Average Grant Price | |
Non-vested stock awards, beginning balance | $ / shares | $ 10.20 |
Vested | $ / shares | 10.22 |
Granted | $ / shares | 9.28 |
Forfeited | $ / shares | 10.13 |
Non-vested stock awards, ending balance | $ / shares | $ 9.33 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)shares | Sep. 03, 2020 | |
Compliance with Regulatory Capital Requirements under Banking Regulations | ||||
Common equity Tier 1 capital conversation buffer ratio | 2.5 | |||
Applicable capital conversation buffer ratio | 2.5 | |||
Number of previous years net income is retained | 2 years | |||
Common equity Tier 1 to risk-weighted assets | ||||
Actual, Capital amount | $ 621,153 | $ 590,122 | ||
Actual, Ratio | 17.7 | 18.7 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 158,050 | $ 142,048 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 4.5 | 4.5 | ||
Tier 1 capital to risk weighted assets | ||||
Actual, Capital amount | $ 621,153 | $ 590,122 | ||
Actual, Ratio | 17.7 | 18.7 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 210,733 | $ 189,397 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 6 | 6 | ||
Total capital to risk-weighted assets | ||||
Actual, Capital amount | $ 700,197 | $ 649,182 | ||
Actual, Ratio | 19.9 | 20.6 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 280,978 | $ 252,529 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 8 | 8 | ||
Tier 1 capital to average assets | ||||
Actual, Capital amount | $ 621,153 | $ 590,122 | ||
Actual, Ratio | 14.5 | 15.3 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 171,578 | $ 154,659 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 4 | 4 | ||
Preferred Stock | ||||
Preferred stock, shares authorized | shares | 1,000,000 | 1,000,000 | ||
Preferred Stock, Par Value Per Share | $ / shares | $ 0 | $ 0 | ||
Preferred Stock, shares issued | shares | 0 | 0 | ||
Preferred Stock, shares outstanding | shares | 0 | 0 | ||
Treasury Stock | ||||
Authorized percentage of outstanding shares | 5.00% | |||
Treasury stock purchased | shares | 1,533,500 | 146,644 | ||
Average price of treasury stock | $ / shares | $ 10.29 | |||
Total treasury stock | $ 15,923 | $ 721 | $ 1,268 | |
Shares acquired in connection with satisfaction of tax obligations | shares | 75,544 | |||
HarborOne Bank | ||||
Common equity Tier 1 to risk-weighted assets | ||||
Actual, Capital amount | $ 506,822 | $ 453,707 | ||
Actual, Ratio | 14.4 | 14.4 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 158,081 | $ 142,053 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 4.5 | 4.5 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 228,339 | $ 205,188 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 6.5 | 6.5 | ||
Tier 1 capital to risk weighted assets | ||||
Actual, Capital amount | $ 506,822 | $ 453,707 | ||
Actual, Ratio | 14.4 | 14.4 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 210,775 | $ 189,404 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 6 | 6 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 281,033 | $ 252,539 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 8 | 8 | ||
Total capital to risk-weighted assets | ||||
Actual, Capital amount | $ 550,875 | $ 477,767 | ||
Actual, Ratio | 15.7 | 15.1 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 281,033 | $ 252,539 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 8 | 8 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 351,291 | $ 315,674 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 10 | 10 | ||
Tier 1 capital to average assets | ||||
Actual, Capital amount | $ 506,822 | $ 453,707 | ||
Actual, Ratio | 11.8 | 12.2 | ||
Minimum Requirement for Capital Adequacy Purposes | $ 171,501 | $ 149,272 | ||
Minimum Requirement for Capital Adequacy Purposes, ratio | 4 | 4 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions | $ 214,377 | $ 186,591 | ||
Minimum Required to be Considered "Well Capitalized" Under Prompt Corrective Action Provisions, ratio | 5 | 5 |
COMPREHENSIVE INCOME (LOSS) (De
COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Components of AOCI | ||
Total accumulated other comprehensive income | $ 2,185 | $ 1,480 |
Cash flow hedge | ||
Components of AOCI | ||
Net unrealized gain (loss) | (1,407) | |
Related tax effect | 394 | |
Total accumulated other comprehensive income | (1,013) | |
Securities available for sale | ||
Components of AOCI | ||
Net unrealized gain (loss) | 4,102 | 1,899 |
Related tax effect | (904) | (419) |
Total accumulated other comprehensive income | $ 3,198 | $ 1,480 |
COMPREHENSIVE INCOME (LOSS) - C
COMPREHENSIVE INCOME (LOSS) - Changes in AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | $ 665,794 | $ 357,574 | $ 343,484 |
Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale | 522 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (2,533) | (1,344) | |
Balance at end of period | 696,314 | 665,794 | 357,574 |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | 1,480 | (2,358) | (528) |
Other comprehensive income (loss) before reclassifications | 2,761 | ||
Reclassification of stranded effect of tax rate change | (104) | ||
Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale | 522 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (2,487) | ||
Net current period other comprehensive income (loss) | 796 | ||
Related tax effect | (91) | ||
Balance at end of period | 2,185 | 1,480 | (2,358) |
Securities available for sale | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | 1,480 | (2,358) | (528) |
Other comprehensive income (loss) before reclassifications | 4,214 | 6,266 | (2,212) |
Reclassification of stranded effect of tax rate change | (104) | ||
Amounts reclassified to accumulated other comprehensive income for transfer of securities to available for sale | 522 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (2,533) | (1,344) | |
Net current period other comprehensive income (loss) | 2,203 | 4,922 | (2,316) |
Related tax effect | (485) | (1,084) | 486 |
Balance at end of period | 3,198 | $ 1,480 | $ (2,358) |
Cash flow hedge | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Other comprehensive income (loss) before reclassifications | (1,453) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 46 | ||
Net current period other comprehensive income (loss) | (1,407) | ||
Related tax effect | 394 | ||
Balance at end of period | $ (1,013) |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABILITIES - Derivatives (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets and liabilities measured on recurring basis | ||
Fair Value | $ 276,498,000 | $ 239,473,000 |
Derivative loan commitments | ||
Assets and liabilities measured on recurring basis | ||
Weighted average pull-through rate | 76.00% | 85.00% |
Recurring | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | $ 276,498,000 | $ 239,473,000 |
Recurring | Level 1 | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | 0 | 0 |
Recurring | Level 2 | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | 276,498,000 | 239,473,000 |
Recurring | Level 3 | ||
Assets and liabilities measured on recurring basis | ||
Fair Value | 0 | 0 |
90 Days or More | Recurring | Level 2 | ||
Assets and liabilities measured on recurring basis | ||
Loans held for sale | $ 0 | $ 0 |
FAIR VALUE OF ASSETS AND LIAB_4
FAIR VALUE OF ASSETS AND LIABILITIES - Recurring basis (Details) | 12 Months Ended | |||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Assets and liabilities measured on recurring basis | ||||
Number of transfers | item | 0 | 0 | ||
Assets | ||||
Securities available for sale, at fair value | $ 276,498,000 | $ 239,473,000 | ||
Loans held for sale | 208,612,000 | 110,552,000 | ||
Mortgage servicing rights | 24,833,000 | 17,150,000 | $ 22,217,000 | $ 21,092,000 |
Recurring | ||||
Assets | ||||
Securities available for sale, at fair value | 276,498,000 | 239,473,000 | ||
Loans held for sale | 208,612,000 | 110,552,000 | ||
Mortgage servicing rights | 24,833,000 | 17,150,000 | ||
Total assets | 561,886,000 | 383,678,000 | ||
Liabilities | ||||
Total liabilities | 43,272,000 | 15,424,000 | ||
Recurring | Derivative loan commitments | ||||
Assets | ||||
Derivative assets | 12,623,000 | 1,385,000 | ||
Liabilities | ||||
Derivative liabilities | 341,000 | 174,000 | ||
Recurring | Forward loan sale commitments | ||||
Assets | ||||
Derivative assets | 26,000 | |||
Liabilities | ||||
Derivative liabilities | 2,204,000 | 158,000 | ||
Recurring | Interest rate swaps | ||||
Assets | ||||
Derivative assets | 39,320,000 | 15,092,000 | ||
Liabilities | ||||
Derivative liabilities | 39,320,000 | 15,092,000 | ||
Recurring | Interest rate management agreement | ||||
Liabilities | ||||
Derivative liabilities | 1,407,000 | |||
Recurring | Level 1 | ||||
Assets | ||||
Securities available for sale, at fair value | 0 | 0 | ||
Recurring | Level 2 | ||||
Assets | ||||
Securities available for sale, at fair value | 276,498,000 | 239,473,000 | ||
Loans held for sale | 208,612,000 | 110,552,000 | ||
Mortgage servicing rights | 24,833,000 | 17,150,000 | ||
Total assets | 549,263,000 | 382,267,000 | ||
Liabilities | ||||
Total liabilities | 40,727,000 | 15,092,000 | ||
Recurring | Level 2 | Interest rate swaps | ||||
Assets | ||||
Derivative assets | 39,320,000 | 15,092,000 | ||
Liabilities | ||||
Derivative liabilities | 39,320,000 | 15,092,000 | ||
Recurring | Level 2 | Interest rate management agreement | ||||
Liabilities | ||||
Derivative liabilities | 1,407,000 | |||
Recurring | Level 3 | ||||
Assets | ||||
Securities available for sale, at fair value | 0 | 0 | ||
Total assets | 12,623,000 | 1,411,000 | ||
Liabilities | ||||
Total liabilities | 2,545,000 | 332,000 | ||
Recurring | Level 3 | Derivative loan commitments | ||||
Assets | ||||
Derivative assets | 12,623,000 | 1,385,000 | ||
Liabilities | ||||
Derivative liabilities | 341,000 | 174,000 | ||
Recurring | Level 3 | Forward loan sale commitments | ||||
Assets | ||||
Derivative assets | 26,000 | |||
Liabilities | ||||
Derivative liabilities | $ 2,204,000 | $ 158,000 |
FAIR VALUE OF ASSETS AND LIAB_5
FAIR VALUE OF ASSETS AND LIABILITIES - Level 3 (Details) - Derivative and Forward Loan Sale Commitments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in Level 3 assets | |||
Balance at beginning of period | $ 1,411 | $ 1,261 | $ 1,093 |
Total gains included in net income | 11,212 | 150 | 168 |
Balance at end of period | 12,623 | 1,411 | 1,261 |
Changes in unrealized gains relating to instruments at period end | 12,623 | 1,411 | 1,261 |
Changes in Level 3 liabilities | |||
Balance at beginning of period | (332) | (630) | (119) |
Total gains (losses) included in net income | (2,213) | 298 | (511) |
Balance at end of period | (2,545) | (332) | (630) |
Changes in unrealized losses relating to instruments at period end | $ (2,545) | $ (332) | $ (630) |
FAIR VALUE OF ASSETS AND LIAB_6
FAIR VALUE OF ASSETS AND LIABILITIES - Impaired Loans (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Assets and liabilities measured on non-recurring basis | ||
Total Losses | $ 2,315,000 | $ 1,115,000 |
Asset held for sale | ||
Assets and liabilities measured on non-recurring basis | ||
Total Losses | 482,000 | |
Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Total Losses | 118,000 | 28,000 |
Commercial loans | ||
Assets and liabilities measured on non-recurring basis | ||
Total Losses | 2,197,000 | 605,000 |
Level 3 | Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | 919,000 | 2,272,000 |
Level 3 | Commercial loans | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | 7,242,000 | 1,606,000 |
Level 3 | Other real estate owned | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | $ 298,000 | 298,000 |
Level 3 | Weighted Average Rate | Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0.15 | |
Level 3 | Weighted Average Rate | Commercial loans | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0.27 | |
Level 3 | Discount | Minimum | Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0 | |
Level 3 | Discount | Minimum | Commercial loans | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0 | |
Level 3 | Discount | Maximum | Residential loans | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0.20 | |
Level 3 | Discount | Maximum | Commercial loans | ||
Assets and liabilities measured on non-recurring basis | ||
Measurement input | 0.50 | |
Non-recurring | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | $ 0 | 0 |
Non-recurring | Level 3 | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | 8,756,000 | 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 | 919,000 | 2,272,000 |
Non-recurring | Level 3 | Commercial loans | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | 7,242,000 | 1,606,000 |
Non-recurring | Level 3 | Other real estate owned and repossessed assets | ||
Assets and liabilities measured on non-recurring basis | ||
Fair value | $ 595,000 | $ 719,000 |
FAIR VALUE OF ASSETS AND LIAB_7
FAIR VALUE OF ASSETS AND LIABILITIES - Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financial assets: | ||
Cash and cash equivalents | $ 205,870 | $ 211,616 |
Securities available for sale, at fair value | 276,498 | 239,473 |
Securities held to maturity, at amortized cost | 26,372 | |
Federal Home Loan Bank stock | 8,738 | 17,121 |
Loans held for sale | 208,612 | 110,552 |
Loans, net | 3,439,247 | 3,147,498 |
Retirement plan annuities | 13,747 | 13,333 |
Accrued interest receivable | 11,874 | 9,807 |
Financial liabilities: | ||
Deposits | 3,506,209 | 2,942,873 |
Subordinated debt | 34,033 | 33,907 |
Mortgagors' escrow accounts | 7,736 | 6,053 |
Accrued interest payable | 1,262 | 1,669 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 205,870 | 211,616 |
Securities available for sale, at fair value | 276,498 | 239,473 |
Securities held to maturity, at amortized cost | 26,372 | |
Federal Home Loan Bank stock | 8,738 | 17,121 |
Loans held for sale | 208,612 | 110,552 |
Loans, net | 3,439,247 | 3,147,498 |
Retirement plan annuities | 13,747 | 13,333 |
Accrued interest receivable | 11,874 | 9,807 |
Financial liabilities: | ||
Deposits | 3,506,209 | 2,942,873 |
Borrowed funds | 149,097 | 354,132 |
Subordinated debt | 34,033 | 33,907 |
Mortgagors' escrow accounts | 7,736 | 6,053 |
Accrued interest payable | 1,262 | 1,669 |
Carrying Amount | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 12,623 | 1,385 |
Liabilities | 341 | 174 |
Carrying Amount | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Liabilities | 1,407 | |
Carrying Amount | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 39,320 | 15,092 |
Liabilities | 39,320 | 15,092 |
Carrying Amount | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 26 | |
Liabilities | 2,204 | 158 |
Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 205,870 | 211,616 |
Securities available for sale, at fair value | 276,498 | 239,473 |
Securities held to maturity, at amortized cost | 26,927 | |
Loans held for sale | 208,612 | 110,552 |
Loans, net | 3,473,751 | 3,176,442 |
Retirement plan annuities | 13,747 | 13,333 |
Accrued interest receivable | 11,874 | 9,807 |
Financial liabilities: | ||
Deposits | 3,509,996 | 2,943,899 |
Borrowed funds | 152,373 | 354,881 |
Subordinated debt | 34,799 | 34,619 |
Mortgagors' escrow accounts | 7,736 | 6,053 |
Accrued interest payable | 1,262 | 1,669 |
Fair Value | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 12,623 | 1,385 |
Liabilities | 341 | 174 |
Fair Value | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Liabilities | 1,407 | |
Fair Value | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 39,320 | 15,092 |
Liabilities | 39,320 | 15,092 |
Fair Value | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 26 | |
Liabilities | 2,204 | 158 |
Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 205,870 | 211,616 |
Fair Value | Level 2 | ||
Financial assets: | ||
Securities available for sale, at fair value | 276,498 | 239,473 |
Securities held to maturity, at amortized cost | 26,927 | |
Loans held for sale | 208,612 | 110,552 |
Accrued interest receivable | 11,874 | 9,807 |
Financial liabilities: | ||
Borrowed funds | 152,373 | 354,881 |
Accrued interest payable | 1,262 | 1,669 |
Fair Value | Level 2 | Interest rate management agreement | ||
Derivative commitments/agreements: | ||
Liabilities | 1,407 | |
Fair Value | Level 2 | Interest rate swaps | ||
Derivative commitments/agreements: | ||
Assets | 39,320 | 15,092 |
Liabilities | 39,320 | 15,092 |
Fair Value | Level 3 | ||
Financial assets: | ||
Loans, net | 3,473,751 | 3,176,442 |
Retirement plan annuities | 13,747 | 13,333 |
Financial liabilities: | ||
Deposits | 3,509,996 | 2,943,899 |
Subordinated debt | 34,799 | 34,619 |
Mortgagors' escrow accounts | 7,736 | 6,053 |
Fair Value | Level 3 | Derivative loan commitments | ||
Derivative commitments/agreements: | ||
Assets | 12,623 | 1,385 |
Liabilities | 341 | 174 |
Fair Value | Level 3 | Forward loan sale commitments | ||
Derivative commitments/agreements: | ||
Assets | 26 | |
Liabilities | $ 2,204 | $ 158 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) $ / shares in Units, $ in Thousands | Aug. 14, 2019 | Dec. 31, 2020$ / sharesshares | Sep. 30, 2020$ / sharesshares | Jun. 30, 2020$ / sharesshares | Mar. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares | Sep. 30, 2019$ / sharesshares | Jun. 30, 2019$ / sharesshares | Mar. 31, 2019$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares |
EARNINGS PER SHARE | ||||||||||||
Net income available to common stockholders (in thousands) | $ | $ 44,792 | $ 18,268 | $ 11,394 | |||||||||
Average number of common shares outstanding | 58,252,140 | 58,451,387 | 58,549,990 | |||||||||
Less: Average unallocated ESOP shares | (3,938,772) | (2,719,750) | (1,860,399) | |||||||||
Weighted average common shares outstanding used to calculate basic earnings per common share | 53,947,868 | 54,465,339 | 54,450,146 | 54,392,465 | 54,208,629 | 55,638,734 | 56,704,297 | 56,666,979 | 54,313,368 | 55,731,637 | 56,689,591 | |
Dilutive effect of share-based compensation | 6,467 | 139 | ||||||||||
Weighted average common shares outstanding used to calculate diluted earnings per common share | 53,973,737 | 54,465,339 | 54,450,146 | 54,392,465 | 54,209,182 | 55,638,734 | 56,704,297 | 56,666,979 | 54,319,835 | 55,731,776 | 56,689,591 | |
Basic | $ / shares | $ 0.33 | $ 0.22 | $ 0.19 | $ 0.09 | $ 0.08 | $ 0.13 | $ 0.08 | $ 0.04 | $ 0.82 | $ 0.33 | $ 0.20 | |
Diluted | $ / shares | $ 0.33 | $ 0.22 | $ 0.19 | $ 0.09 | $ 0.08 | $ 0.13 | $ 0.08 | $ 0.04 | $ 0.82 | $ 0.33 | $ 0.20 | |
Stock conversion ratio | 1.795431 | |||||||||||
Stock Options | ||||||||||||
EARNINGS PER SHARE | ||||||||||||
Antidilutive securities excluded from computation of earnings per share | 2,106,403 | 2,169,243 | 1,778,407 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting Information | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Net interest and dividend income (expense) | $ 32,750 | $ 31,169 | $ 29,447 | $ 26,700 | $ 28,334 | $ 27,985 | $ 26,713 | $ 26,030 | $ 120,066 | $ 109,062 | $ 88,930 |
Provision for loan losses | 7,608 | 13,454 | 10,004 | 3,749 | 1,251 | 889 | 1,750 | 857 | 34,815 | 4,747 | 3,828 |
Net interest and dividend income, after provision for loan losses | 85,251 | 104,315 | 85,102 | ||||||||
Mortgage banking income: | |||||||||||
Gain on sale of mortgage loans | 105,469 | 33,557 | 23,353 | ||||||||
Changes in mortgage servicing rights fair value | (6,732) | (6,241) | (1,396) | ||||||||
Other | 15,638 | 10,336 | 8,652 | ||||||||
Total mortgage banking income | 114,375 | 37,652 | 30,609 | ||||||||
Other noninterest income (loss) | 24,771 | 23,320 | 18,589 | ||||||||
Total noninterest income | 37,181 | 44,461 | 38,638 | 18,866 | 18,139 | 17,273 | 15,718 | 9,842 | 139,146 | 60,972 | 49,198 |
Noninterest expense | 41,440 | 45,722 | 43,838 | 35,388 | 38,735 | 36,203 | 35,081 | 32,592 | 166,388 | 142,611 | 120,093 |
Income (loss) before income taxes | 58,009 | 22,676 | 14,207 | ||||||||
Provision (benefit) for income taxes | 3,283 | 4,561 | 3,668 | 1,705 | 2,180 | 1,053 | 819 | 356 | 13,217 | 4,408 | 2,813 |
Net income | 17,600 | $ 11,893 | $ 10,575 | $ 4,724 | 4,307 | $ 7,113 | $ 4,781 | $ 2,067 | 44,792 | 18,268 | 11,394 |
Total assets at year end | 4,483,615 | 4,058,921 | 4,483,615 | 4,058,921 | 3,653,121 | ||||||
Balance, end of year | 69,802 | 69,802 | 69,802 | 69,802 | 70,088 | ||||||
Operating Segments | HarborOne Bank | |||||||||||
Segment Reporting Information | |||||||||||
Net interest and dividend income (expense) | 118,217 | 109,106 | 88,478 | ||||||||
Provision for loan losses | 34,815 | 4,747 | 3,828 | ||||||||
Net interest and dividend income, after provision for loan losses | 83,402 | 104,359 | 84,650 | ||||||||
Mortgage banking income: | |||||||||||
Gain on sale of mortgage loans | 1 | 784 | |||||||||
Intersegment (loss) gain | (3,148) | (1,183) | (205) | ||||||||
Changes in mortgage servicing rights fair value | (2,376) | (1,431) | (375) | ||||||||
Other | 1,360 | 1,494 | 1,445 | ||||||||
Total mortgage banking income | (4,164) | (1,119) | 1,649 | ||||||||
Other noninterest income (loss) | 24,909 | 23,365 | 18,587 | ||||||||
Total noninterest income | 20,745 | 22,246 | 20,236 | ||||||||
Noninterest expense | 98,354 | 100,688 | 86,586 | ||||||||
Income (loss) before income taxes | 5,793 | 25,917 | 18,300 | ||||||||
Provision (benefit) for income taxes | 527 | 5,019 | 3,463 | ||||||||
Net income | 5,266 | 20,898 | 14,837 | ||||||||
Total assets at year end | 4,460,164 | 3,925,328 | 4,460,164 | 3,925,328 | 3,657,982 | ||||||
Balance, end of year | 59,042 | 59,042 | 59,042 | 59,042 | 59,582 | ||||||
Operating Segments | HarborOne Mortgage | |||||||||||
Segment Reporting Information | |||||||||||
Net interest and dividend income (expense) | 3,235 | 1,064 | 1,018 | ||||||||
Net interest and dividend income, after provision for loan losses | 3,235 | 1,064 | 1,018 | ||||||||
Mortgage banking income: | |||||||||||
Gain on sale of mortgage loans | 105,469 | 33,556 | 22,569 | ||||||||
Intersegment (loss) gain | 3,148 | 1,183 | 205 | ||||||||
Changes in mortgage servicing rights fair value | (4,356) | (4,810) | (1,021) | ||||||||
Other | 14,278 | 8,842 | 7,207 | ||||||||
Total mortgage banking income | 118,539 | 38,771 | 28,960 | ||||||||
Other noninterest income (loss) | (138) | (45) | 2 | ||||||||
Total noninterest income | 118,401 | 38,726 | 28,962 | ||||||||
Noninterest expense | 66,859 | 39,753 | 31,639 | ||||||||
Income (loss) before income taxes | 54,777 | 37 | (1,659) | ||||||||
Provision (benefit) for income taxes | 12,964 | (77) | (262) | ||||||||
Net income | 41,813 | 114 | (1,397) | ||||||||
Total assets at year end | 312,194 | 165,863 | 312,194 | 165,863 | 89,461 | ||||||
Balance, end of year | 10,760 | 10,760 | 10,760 | 10,760 | 10,506 | ||||||
Operating Segments | HarborOne Bancorp, Inc. | |||||||||||
Segment Reporting Information | |||||||||||
Net interest and dividend income (expense) | (1,386) | (1,108) | 39,434 | ||||||||
Net interest and dividend income, after provision for loan losses | (1,386) | (1,108) | 39,434 | ||||||||
Mortgage banking income: | |||||||||||
Noninterest expense | 1,175 | 2,170 | 1,868 | ||||||||
Income (loss) before income taxes | (2,561) | (3,278) | 37,566 | ||||||||
Provision (benefit) for income taxes | (274) | (534) | (388) | ||||||||
Net income | (2,287) | (2,744) | 37,954 | ||||||||
Total assets at year end | 733,993 | 701,181 | 733,993 | 701,181 | 391,692 | ||||||
Eliminations | |||||||||||
Segment Reporting Information | |||||||||||
Net interest and dividend income (expense) | (40,000) | ||||||||||
Net interest and dividend income, after provision for loan losses | (40,000) | ||||||||||
Mortgage banking income: | |||||||||||
Income (loss) before income taxes | (40,000) | ||||||||||
Net income | (40,000) | ||||||||||
Total assets at year end | $ (1,022,736) | $ (733,451) | $ (1,022,736) | $ (733,451) | $ (486,014) |
CONDENSED FINANCIAL STATEMENT_3
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||||
Cash and due from banks | $ 31,777 | $ 24,464 | ||
Other assets | 81,899 | 47,221 | ||
Total assets | 4,483,615 | 4,058,921 | $ 3,653,121 | |
Liabilities and Stockholders' Equity | ||||
Subordinated debt | 34,033 | 33,907 | ||
Other liabilities and accrued expenses | 88,964 | 54,493 | ||
Stockholders' equity | 696,314 | 665,794 | $ 357,574 | $ 343,484 |
Total liabilities and stockholders' equity | 4,483,615 | 4,058,921 | ||
Parent Company | Reportable Legal Entities | ||||
Assets | ||||
Cash and due from banks | 118,265 | 135,067 | ||
Investment in common stock of HarborOne Bank | 581,982 | 529,380 | ||
Loan receivable - ESOP | 32,190 | 33,407 | ||
Due from subsidiary | 612 | 2,456 | ||
Other assets | 657 | 871 | ||
Total assets | 733,706 | 701,181 | ||
Liabilities and Stockholders' Equity | ||||
Subordinated debt | 34,033 | 33,907 | ||
Other liabilities and accrued expenses | 3,359 | 1,480 | ||
Stockholders' equity | 696,314 | 665,794 | ||
Total liabilities and stockholders' equity | $ 733,706 | $ 701,181 |
CONDENSED FINANCIAL STATEMENT_4
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY - Statement Of Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Net Income | |||||||||||
Total interest and dividend income | $ 37,720 | $ 37,048 | $ 36,621 | $ 37,169 | $ 39,723 | $ 39,730 | $ 38,278 | $ 37,053 | $ 148,558 | $ 154,784 | $ 115,708 |
Interest expense | 4,970 | 5,879 | 7,174 | 10,469 | 11,389 | 11,745 | 11,565 | 11,023 | 28,492 | 45,722 | 26,778 |
Provision (benefit) for income taxes | 3,283 | 4,561 | 3,668 | 1,705 | 2,180 | 1,053 | 819 | 356 | 13,217 | 4,408 | 2,813 |
Net income | $ 17,600 | $ 11,893 | $ 10,575 | $ 4,724 | $ 4,307 | $ 7,113 | $ 4,781 | $ 2,067 | 44,792 | 18,268 | 11,394 |
Parent Company | Reportable Legal Entities | |||||||||||
Statement of Net Income | |||||||||||
Dividends from subsidiary | 40,000 | ||||||||||
Interest from bank deposits | 260 | 15 | 163 | ||||||||
Interest on short-term investments | 449 | 953 | 12 | ||||||||
Interest on ESOP loan | 1,596 | 1,062 | 488 | ||||||||
Total interest and dividend income | 2,305 | 2,030 | 40,663 | ||||||||
Interest expense | 2,095 | 2,076 | 741 | ||||||||
Operating expenses | 2,771 | 3,232 | 2,356 | ||||||||
Total expenses | 4,866 | 5,308 | 3,097 | ||||||||
Income (loss) before income taxes and equity in undistributed net income (loss) of HarborOne Bank | (2,561) | (3,278) | 37,566 | ||||||||
Provision (benefit) for income taxes | (274) | (534) | (388) | ||||||||
Income (loss) before equity in income of subsidiaries | (2,287) | (2,744) | 37,954 | ||||||||
Equity in undistributed net income (loss) of HarborOne Bank | 47,079 | 21,012 | (26,560) | ||||||||
Net income | $ 44,792 | $ 18,268 | $ 11,394 |
CONDENSED FINANCIAL STATEMENT_5
CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY - Statement of Cash Flows (Details) - USD ($) $ in Thousands | Aug. 14, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash flows from operating activities: | ||||
Net income | $ 44,792 | $ 18,268 | $ 11,394 | |
Adjustments to reconcile net income to net cash used by operating activities: | ||||
Deferred income tax benefit | (3,614) | (556) | (1,140) | |
Share-based compensation | 3,679 | 4,849 | 4,593 | |
Net change in other assets | (33,222) | (11,619) | 1,929 | |
Net change in other liabilities | 31,080 | 3,962 | 10,005 | |
Net cash (used) provided by operating activities | (26,952) | (36,127) | 61,165 | |
Cash flows from investing activities: | ||||
Cash paid for acquisitions, net of cash acquired | (73,987) | |||
Net cash used by investing activities | (318,852) | (228,834) | (215,903) | |
Cash flows from financing activities: | ||||
Net proceeds from sale of common stock | $ 310,400 | 304,061 | ||
Repurchase of common stock | (15,923) | (721) | (1,268) | |
Purchase of shares by the ESOP | $ (24,800) | (24,829) | ||
Dividends paid | (3,258) | |||
Net cash provided by financing activities | 340,058 | 371,056 | 179,468 | |
Net change in cash and cash equivalents | (5,746) | 106,095 | 24,730 | |
Cash and cash equivalents at beginning of year | 211,616 | 105,521 | 80,791 | |
Cash and cash equivalents at end of year | 205,870 | 211,616 | 105,521 | |
Parent Company | Reportable Legal Entities | ||||
Cash flows from operating activities: | ||||
Net income | 44,792 | 18,268 | 11,394 | |
Adjustments to reconcile net income to net cash used by operating activities: | ||||
Equity in undistributed net (income) loss of HarborOne Bank | (47,079) | (21,012) | 26,560 | |
Deferred income tax benefit | (18) | 139 | 440 | |
Share-based compensation | 963 | 1,432 | 1,568 | |
Net change in other assets | 231 | (284) | (841) | |
Net change in other liabilities | 302 | 1,299 | 577 | |
Net cash (used) provided by operating activities | (809) | (158) | 39,698 | |
Cash flows from investing activities: | ||||
Investment in HarborOne Bank | (152,713) | (10,000) | ||
Repayment of ESOP loan | 1,218 | 1,862 | 404 | |
Advances to subsidiary | (1,884) | (2,456) | ||
Repayment of advances to subsidiary | 3,728 | |||
Cash paid for acquisitions, net of cash acquired | (122,235) | |||
Net cash used by investing activities | 3,062 | (153,307) | (131,831) | |
Cash flows from financing activities: | ||||
Net proceeds from sale of common stock | 304,161 | |||
Repurchase of common stock | (15,923) | (721) | (1,267) | |
Purchase of shares by the ESOP | (24,829) | |||
Proceeds from advance from subsidiary | 139 | |||
Repayment of advance from subsidiary | (139) | |||
Proceeds from subordinated debt issuance | 33,720 | |||
Amortization of subordinated debt issuance costs | 126 | 108 | 79 | |
Dividends paid | (3,258) | |||
Net cash provided by financing activities | (19,055) | 278,580 | 32,671 | |
Net change in cash and cash equivalents | (16,802) | 125,115 | (59,462) | |
Cash and cash equivalents at beginning of year | 135,067 | 9,952 | 69,414 | |
Cash and cash equivalents at end of year | $ 118,265 | $ 135,067 | $ 9,952 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) $ / shares in Units, $ in Thousands | Aug. 14, 2019 | Dec. 31, 2020USD ($)$ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Mar. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Mar. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares |
Selected Quarterly Financial Information [Abstract] | ||||||||||||
Interest and dividend income | $ 37,720 | $ 37,048 | $ 36,621 | $ 37,169 | $ 39,723 | $ 39,730 | $ 38,278 | $ 37,053 | $ 148,558 | $ 154,784 | $ 115,708 | |
Interest expense | 4,970 | 5,879 | 7,174 | 10,469 | 11,389 | 11,745 | 11,565 | 11,023 | 28,492 | 45,722 | 26,778 | |
Net interest and dividend income | 32,750 | 31,169 | 29,447 | 26,700 | 28,334 | 27,985 | 26,713 | 26,030 | 120,066 | 109,062 | 88,930 | |
Provision for loan losses | 7,608 | 13,454 | 10,004 | 3,749 | 1,251 | 889 | 1,750 | 857 | 34,815 | 4,747 | 3,828 | |
Other noninterest income | 37,181 | 44,461 | 38,630 | 16,341 | 18,139 | 17,196 | 14,451 | 9,842 | ||||
Gain on sale and call of securities, net | 8 | 2,525 | 77 | 1,267 | 2,533 | 1,344 | 5 | |||||
Total noninterest income | 37,181 | 44,461 | 38,638 | 18,866 | 18,139 | 17,273 | 15,718 | 9,842 | 139,146 | 60,972 | 49,198 | |
Total noninterest expenses | 41,440 | 45,722 | 43,838 | 35,388 | 38,735 | 36,203 | 35,081 | 32,592 | 166,388 | 142,611 | 120,093 | |
Provision (benefit) for income taxes | 3,283 | 4,561 | 3,668 | 1,705 | 2,180 | 1,053 | 819 | 356 | 13,217 | 4,408 | 2,813 | |
Net income | $ 17,600 | $ 11,893 | $ 10,575 | $ 4,724 | $ 4,307 | $ 7,113 | $ 4,781 | $ 2,067 | $ 44,792 | $ 18,268 | $ 11,394 | |
Basic earnings per share (in dollars per share) | $ / shares | $ 0.33 | $ 0.22 | $ 0.19 | $ 0.09 | $ 0.08 | $ 0.13 | $ 0.08 | $ 0.04 | $ 0.82 | $ 0.33 | $ 0.20 | |
Diluted earnings per share (in dollars per share) | $ / shares | $ 0.33 | $ 0.22 | $ 0.19 | $ 0.09 | $ 0.08 | $ 0.13 | $ 0.08 | $ 0.04 | $ 0.82 | $ 0.33 | $ 0.20 | |
Basic | shares | 53,947,868 | 54,465,339 | 54,450,146 | 54,392,465 | 54,208,629 | 55,638,734 | 56,704,297 | 56,666,979 | 54,313,368 | 55,731,637 | 56,689,591 | |
Diluted | shares | 53,973,737 | 54,465,339 | 54,450,146 | 54,392,465 | 54,209,182 | 55,638,734 | 56,704,297 | 56,666,979 | 54,319,835 | 55,731,776 | 56,689,591 | |
Exchange Ratio Applied In Conversion Offering | 1.795431 |