[Table of Contents](index=1&type=section&id=Table%20of%20Contents) [Glossary of Acronyms and Terms](index=5&type=section&id=Glossary%20of%20Acronyms%20and%20Terms) [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. Financial Statements](index=6&type=section&id=ITEM%201.%20Financial%20Statements) This section presents HarborOne Bancorp, Inc.'s unaudited consolidated financial statements and notes, detailing key financial positions and policies [Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022](index=6&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202023%20and%20December%2031%2C%202022) Consolidated Balance Sheets ($ thousands) | Metric ($ thousands) | June 30, 2023 | December 31, 2022 | | :----------------------- | :------------- | :--------------- | | **Assets** | | | | Cash and bank deposits | 43,525 | 39,712 | | Short-term investments | 209,326 | 58,305 | | Total cash and cash equivalents | 252,851 | 98,017 | | Available-for-sale securities (at fair value) | 292,012 | 301,149 | | Held-to-maturity securities (at amortized cost) | 19,839 | 19,949 | | Net loans | 4,650,382 | 4,504,434 | | Mortgage servicing rights (at fair value) | 48,176 | 48,138 | | Goodwill | 69,802 | 69,802 | | Total assets | 5,659,254 | 5,359,545 | | **Liabilities and Stockholders' Equity** | | | | Total deposits | 4,287,488 | 4,189,499 | | FHLB borrowings | 604,568 | 400,675 | | Total liabilities | 5,063,722 | 4,742,569 | | Total stockholders' equity | 595,532 | 616,976 | | Total liabilities and stockholders' equity | 5,659,254 | 5,359,545 | - As of June 30, 2023, total assets increased to **$5.66 billion**, a **5.6% increase** from $5.36 billion on December 31, 2022, primarily driven by increases in short-term investments and loans[11](index=11&type=chunk)[176](index=176&type=chunk) - Cash and cash equivalents significantly increased by **$154.8 million**, from $98.0 million on December 31, 2022, to **$252.9 million** on June 30, 2023, mainly reflecting an increase in short-term investments[11](index=11&type=chunk)[177](index=177&type=chunk) [Consolidated Statements of Income for the Three and Six Months Ended June 30, 2023 and 2022](index=8&type=section&id=Consolidated%20Statements%20of%20Income%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) Consolidated Statements of Income ($ thousands) | Metric ($ thousands) | June 30, 2023 (3 months) | June 30, 2022 (3 months) | June 30, 2023 (6 months) | June 30, 2022 (6 months) | | :----------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Total interest and dividend income | 60,800 | 39,857 | 116,739 | 75,459 | | Total interest expense | 28,700 | 2,662 | 50,241 | 4,994 | | Net interest and dividend income | 32,100 | 37,195 | 66,498 | 70,465 | | Provision for credit losses | 3,283 | 2,546 | 5,149 | 2,884 | | Total non-interest income | 12,662 | 14,103 | 21,352 | 33,164 | | Total non-interest expense | 31,725 | 34,954 | 63,234 | 69,789 | | Net income | 7,479 | 9,987 | 14,776 | 22,254 | | Basic earnings per share | 0.17 | 0.21 | 0.34 | 0.47 | | Diluted earnings per share | 0.17 | 0.21 | 0.33 | 0.46 | - For the three months ended June 30, 2023, net income was **$7.5 million**, a **25.1% decrease** year-over-year (compared to $10.0 million in the prior year period)[14](index=14&type=chunk)[197](index=197&type=chunk) - For the six months ended June 30, 2023, net income was **$14.8 million**, a **33.5% decrease** year-over-year (compared to $22.3 million in the prior year period)[14](index=14&type=chunk)[197](index=197&type=chunk) - Net interest and dividend income decreased by **13.1% to $32.3 million** for the three months ended June 30, 2023, primarily due to the growth in interest rates on interest-bearing liabilities exceeding the growth in yields on interest-earning assets[14](index=14&type=chunk)[217](index=217&type=chunk) [Consolidated Statements of Comprehensive (Loss) Income for the Three and Six Months Ended June 30, 2023 and 2022](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29%20Income%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) Consolidated Statements of Comprehensive (Loss) Income ($ thousands) | Metric ($ thousands) | June 30, 2023 (3 months) | June 30, 2022 (3 months) | June 30, 2023 (6 months) | June 30, 2022 (6 months) | | :----------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net income | 7,479 | 9,987 | 14,776 | 22,254 | | Total other comprehensive (loss) income | (3,880) | (15,220) | 792 | (32,630) | | Comprehensive (loss) income | 3,599 | (5,233) | 15,568 | (10,376) | - For the three months ended June 30, 2023, comprehensive income was **$3.6 million**, compared to a comprehensive loss of $5.2 million in the prior year period, primarily influenced by changes in unrealized gains and losses on available-for-sale securities[15](index=15&type=chunk) - For the six months ended June 30, 2023, comprehensive income was **$15.6 million**, compared to a comprehensive loss of $10.4 million in the prior year period[15](index=15&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity for the Three and Six Months Ended June 30, 2023 and 2022](index=10&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) Consolidated Statements of Changes in Stockholders' Equity ($ thousands) | Metric ($ thousands) | June 30, 2023 | June 30, 2022 | | :----------------------- | :------------- | :------------- | | Total stockholders' equity (beginning balance) | 599,794 | 649,065 | | Comprehensive (loss) income | 3,599 | (5,233) | | Dividends declared | (3,224) | (3,250) | | Treasury stock repurchases | (5,810) | (18,783) | | Total stockholders' equity (ending balance) | 595,532 | 624,478 | - As of June 30, 2023, total stockholders' equity was **$595.5 million**, a **3.5% decrease** from $617.0 million on December 31, 2022, primarily due to earnings being offset by stock repurchases[17](index=17&type=chunk)[192](index=192&type=chunk) - The company completed its fifth stock repurchase program on April 13, 2023, repurchasing **2,450,208 shares** at an average price of **$13.01 per share**[17](index=17&type=chunk)[192](index=192&type=chunk) [Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) Consolidated Statements of Cash Flows ($ thousands) | Metric ($ thousands) | June 30, 2023 (6 months) | June 30, 2022 (6 months) | | :----------------------- | :--------------------- | :--------------------- | | Net cash provided by operating activities | 41,568 | 21,060 | | Net cash used in investing activities | (150,201) | (302,108) | | Net cash provided by financing activities | 263,467 | 170,667 | | Net change in cash and cash equivalents | 154,834 | (110,381) | | Cash and cash equivalents (ending balance) | 252,851 | 84,338 | - For the six months ended June 30, 2023, net cash provided by operating activities increased to **$41.6 million**, a **97.4% increase** from $21.1 million in the prior year period[19](index=19&type=chunk) - Net cash provided by financing activities significantly increased to **$263.5 million**, compared to $170.7 million in the prior year period, primarily due to a net increase in deposits and FHLB borrowings[22](index=22&type=chunk) [Notes to Consolidated Financial Statements (unaudited)](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20%28unaudited%29) [Note 1. Summary of Significant Accounting Policies](index=14&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) - The company offers various financial services, including checking, money market, savings, and certificate of deposit accounts, with primary loan products covering commercial real estate, commercial, residential mortgage, home equity, and consumer loans[28](index=28&type=chunk) - In the first quarter of 2023, the banking industry experienced significant volatility, and the company assessed its liquidity sources, including FHLB advances, the BTFP program, investment securities, and loan sales, to address potential deposit outflows and funding needs[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - The company adopted ASU 2022-02 on January 1, 2023, which eliminated accounting guidance for troubled debt restructurings (TDRs) and enhanced disclosure requirements for certain loan refinancings and restructurings, with no material impact on its financial statements[35](index=35&type=chunk) [Note 2. Debt Securities](index=16&type=section&id=Note%202.%20Debt%20Securities) Debt Securities ($ thousands) | Security Type ($ thousands) | June 30, 2023 (Amortized Cost) | June 30, 2023 (Fair Value) | December 31, 2022 (Amortized Cost) | December 31, 2022 (Fair Value) | | :------------------------------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Total available-for-sale securities | 358,544 | 292,012 | 369,404 | 301,149 | | Total held-to-maturity securities | 19,839 | 19,005 | 19,949 | 19,274 | - As of June 30, 2023, the fair value of available-for-sale debt securities was **$292.0 million**, a **$9.1 million decrease** from $301.1 million on December 31, 2022, primarily due to unrealized losses[36](index=36&type=chunk)[37](index=37&type=chunk)[182](index=182&type=chunk) - As of June 30, 2023, **131** of the **132** debt securities in the company's portfolio were in an unrealized loss position, mainly related to mortgage-backed securities and other obligations issued by U.S. government-sponsored entities and agencies, with these losses primarily attributable to interest rate changes rather than credit quality deterioration[40](index=40&type=chunk)[41](index=41&type=chunk) [Note 3. Loans Held for Sale](index=21&type=section&id=Note%203.%20Loans%20Held%20for%20Sale) Loans Held for Sale ($ thousands) | Metric ($ thousands) | June 30, 2023 | December 31, 2022 | | :----------------------- | :------------- | :--------------- | | Loans held for sale (fair value) | 20,949 | 18,544 | | Loans held for sale (contractual principal balance) | 20,578 | 18,208 | | Fair value less outstanding principal balance | 371 | 336 | - As of June 30, 2023, the fair value of loans held for sale was **$20.9 million**, a **$2.4 million increase** from $18.5 million on December 31, 2022[45](index=45&type=chunk)[177](index=177&type=chunk) - The company elected the fair value option for mortgage loans to better match changes in the fair value of loans with changes in the fair value of forward sale commitment contracts used for economic hedging[45](index=45&type=chunk) [Note 4. Loans and Allowance for Credit Losses](index=23&type=section&id=Note%204.%20Loans%20and%20Allowance%20for%20Credit%20Losses) Loans ($ thousands) | Loan Type ($ thousands) | June 30, 2023 | December 31, 2022 | | :----------------------- | :------------- | :--------------- | | Total residential real estate loans | 1,702,210 | 1,634,319 | | Total commercial loans | 2,969,012 | 2,873,930 | | Total consumer loans | 27,425 | 41,421 | | Total loans (before adjustments) | 4,698,647 | 4,549,670 | | Allowance for credit losses | (47,821) | (45,236) | | Net loans | 4,650,382 | 4,504,434 | - As of June 30, 2023, net loans increased to **$4.65 billion**, a **3.2% increase** from $4.50 billion on December 31, 2022, primarily driven by growth in commercial real estate and residential real estate loans[47](index=47&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) Allowance for Credit Losses Activity ($ thousands) | Allowance for Credit Losses Activity ($ thousands) | June 30, 2023 (3 months) | June 30, 2022 (3 months) | June 30, 2023 (6 months) | June 30, 2022 (6 months) | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Beginning balance | 46,994 | 41,765 | 45,236 | 45,377 | | Charge-offs | (2,988) | (11) | (3,002) | (2,857) | | Recoveries | 317 | 516 | 342 | 632 | | Provision | 3,498 | 1,290 | 5,245 | 1,719 | | Ending balance | 47,821 | 43,560 | 47,821 | 43,560 | - As of June 30, 2023, the allowance for credit losses was **$47.8 million**, representing **1.02% of total loans**, an increase from $45.2 million (0.99% of total loans) on December 31, 2022[47](index=47&type=chunk)[181](index=181&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) Delinquent and Nonaccrual Loans ($ thousands) | Delinquent and Nonaccrual Loans ($ thousands) | June 30, 2023 | December 31, 2022 | | :-------------------------- | :------------- | :--------------- | | 30-59 days delinquent | 8,012 | 4,510 | | 60-89 days delinquent | 1,030 | 1,122 | | 90 days or more delinquent | 4,300 | 9,793 | | Total delinquent | 13,342 | 15,425 | | Nonaccrual loans | 20,210 | 14,786 | - As of June 30, 2023, total nonaccrual loans were **$20.2 million**, an increase from $14.8 million on December 31, 2022[54](index=54&type=chunk)[247](index=247&type=chunk) [Note 5. Mortgage Loan Servicing](index=30&type=section&id=Note%205.%20Mortgage%20Loan%20Servicing) - As of June 30, 2023, the total unpaid principal balance of mortgage loans serviced for others was **$3.60 billion**, slightly lower than $3.62 billion on December 31, 2022[66](index=66&type=chunk) Mortgage Servicing Rights (MSRs) Key Assumptions | Mortgage Servicing Rights (MSRs) Key Assumptions | June 30, 2023 | December 31, 2022 | | :--------------------------------- | :------------- | :--------------- | | Prepayment speed | 7.20 % | 7.10 % | | Discount rate | 9.90 % | 9.81 % | | Default rate | 1.41 % | 1.63 % | - As of June 30, 2023, total Mortgage Servicing Rights (MSRs) were **$48.2 million**, largely consistent with $48.1 million on December 31, 2022, reflecting the combined impact of new MSRs, loan repayment amortization, and negative fair value adjustments[67](index=67&type=chunk)[184](index=184&type=chunk) [Note 6. Goodwill and Other Intangible Assets](index=31&type=section&id=Note%206.%20Goodwill%20and%20Other%20Intangible%20Assets) - As of June 30, 2023, and December 31, 2022, the goodwill carrying value was **$69.8 million**, with $59.0 million attributed to HarborOne Bank and $10.8 million to HarborOne Mortgage[68](index=68&type=chunk) - The company performs its annual goodwill impairment test on October 31 or when a triggering event occurs, and no triggering events requiring an interim impairment assessment were identified as of June 30, 2023[69](index=69&type=chunk) [Note 7. Deposits](index=33&type=section&id=Note%207.%20Deposits) Deposits ($ thousands) | Deposit Type ($ thousands) | June 30, 2023 | December 31, 2022 | | :----------------------- | :------------- | :--------------- | | Demand and checking accounts | 1,004,528 | 1,060,268 | | Regular savings and club accounts | 1,390,906 | 1,468,172 | | Money market deposit accounts | 834,120 | 861,704 | | Total non-certificate accounts | 3,229,554 | 3,390,144 | | Total certificate of deposit accounts | 1,057,934 | 799,355 | | Brokered deposits | 315,003 | 301,380 | | Total deposits | 4,287,488 | 4,189,499 | - As of June 30, 2023, total deposits increased to **$4.29 billion**, a **2.3% increase** from $4.19 billion on December 31, 2022, primarily driven by increases in municipal and brokered deposits[73](index=73&type=chunk)[189](index=189&type=chunk) - As of June 30, 2023, municipal deposits were **$497.9 million**, a **20.4% increase** from $413.5 million on December 31, 2022[73](index=73&type=chunk)[189](index=189&type=chunk) - The company participates in reciprocal deposit programs, with total reciprocal deposits of **$149.2 million** as of June 30, 2023, a significant increase from $28.6 million on December 31, 2022[73](index=73&type=chunk)[189](index=189&type=chunk) [Note 8. Borrowings](index=35&type=section&id=Note%208.%20Borrowings) Borrowings ($ thousands) | Borrowing Type ($ thousands) | June 30, 2023 | December 31, 2022 | | :----------------------- | :------------- | :--------------- | | FHLB short-term advances | 414,000 | 385,000 | | FHLB long-term advances | 190,568 | 15,675 | | Total FHLB borrowings | 604,568 | 400,675 | | Subordinated debt | 34,348 | 34,285 | - As of June 30, 2023, FHLB borrowings increased to **$604.6 million**, a **$203.9 million increase** from $400.7 million on December 31, 2022, primarily to enhance liquidity[75](index=75&type=chunk)[191](index=191&type=chunk) - The company has an additional borrowing capacity of **$583.7 million** from FHLB, **$68.8 million** from FRBB, and **$366.8 million** through the FRB BTFP program[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[272](index=272&type=chunk) - The company issued **$35.0 million** in fixed-to-floating rate subordinated notes on August 30, 2018, with the interest rate resetting on September 1, 2023[82](index=82&type=chunk) [Note 9. Other Commitments and Contingencies](index=37&type=section&id=Note%209.%20Other%20Commitments%20and%20Contingencies) Allowance for Credit Losses (Unfunded Commitments) ($ thousands) | Allowance for Credit Losses (Unfunded Commitments) ($ thousands) | June 30, 2023 | June 30, 2022 | | :-------------------------------------- | :------------- | :------------- | | Beginning balance | 5,046 | 3,840 | | Provision | (215) | 1,256 | | Ending balance | 4,831 | 5,096 | - As of June 30, 2023, the allowance for credit losses on unfunded commitments was **$4.8 million**, slightly lower than $5.1 million in the prior year period[84](index=84&type=chunk)[256](index=256&type=chunk) Off-Balance Sheet Financial Instruments ($ thousands) | Off-Balance Sheet Financial Instruments ($ thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------- | :--------------- | | Commitments to originate residential real estate loans | 67,347 | 57,916 | | Commitments to originate other loans | 84,676 | 43,700 | | Unfunded home equity lines of credit | 256,957 | 251,759 | | Unfunded revolving lines of credit | 314,496 | 351,382 | | Unfunded construction loans | 287,523 | 262,945 | - As of June 30, 2023, the company had **$152.0 million** in loan origination commitments and **$859.0 million** in unfunded loan commitments[88](index=88&type=chunk)[276](index=276&type=chunk) [Note 10. Derivatives](index=38&type=section&id=Note%2010.%20Derivatives) - The company uses derivative financial instruments to manage interest rate risk, including interest rate swap agreements designated as fair value and cash flow hedges, as well as derivative loan commitments and forward loan sale commitments not designated as hedging instruments[89](index=89&type=chunk)[90](index=90&type=chunk)[93](index=93&type=chunk)[95](index=95&type=chunk)[97](index=97&type=chunk) Derivative Instruments ($ thousands) | Derivative Instruments ($ thousands) | June 30, 2023 (Notional Amount) | June 30, 2023 (Fair Value of Assets) | June 30, 2023 (Fair Value of Liabilities) | | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Total designated as hedging instruments | 200,000 | 8,006 | — | | Total not designated as hedging instruments | 1,016,466 | 28,910 | 28,212 | | Total derivative instruments | — | 36,916 | 28,212 | - As of June 30, 2023, the company had two interest rate swap agreements with a notional amount of **$100.0 million** each, designated as fair value hedges of fixed-rate residential mortgage loans[91](index=91&type=chunk) - As of June 30, 2023, the company had one interest rate swap agreement with a notional amount of **$100.0 million**, designated as a cash flow hedge of brokered deposits, with a fair value of **$7.6 million**[94](index=94&type=chunk) [Note 11. Operating Lease ROU Assets and Liabilities](index=45&type=section&id=Note%2011.%20Operating%20Lease%20ROU%20Assets%20and%20Liabilities) Operating Lease ROU Assets and Liabilities ($ thousands) | Metric ($ thousands) | June 30, 2023 | December 31, 2022 | | :----------------------- | :------------- | :--------------- | | Operating lease right-of-use assets | 24,100 | 26,900 | | Operating lease liabilities | 25,800 | 28,600 | - As of June 30, 2023, operating lease right-of-use assets were **$24.1 million** and operating lease liabilities were **$25.8 million**, both decreasing from December 31, 2022[108](index=108&type=chunk)[109](index=109&type=chunk) - As of June 30, 2023, lease maturities ranged from **2 months to 35.2 years**, with a weighted-average remaining lease term of **16.3 years**[109](index=109&type=chunk) [Note 12. Minimum Regulatory Capital Requirements](index=47&type=section&id=Note%2012.%20Minimum%20Regulatory%20Capital%20Requirements) - As of June 30, 2023, the capital levels for both the company and the bank exceeded all regulatory capital requirements and were above the minimum levels to be considered "well capitalized," including the **2.5% capital conservation buffer**[116](index=116&type=chunk)[196](index=196&type=chunk) Regulatory Capital Ratios | Regulatory Capital Ratios | HarborOne Bancorp, Inc. (June 30, 2023) | HarborOne Bank (June 30, 2023) | | :--------------------------------- | :------------------------------------- | :----------------------------- | | Common Equity Tier 1 Capital Ratio to Risk-Weighted Assets | 12.0 % | 11.3 % | | Tier 1 Capital Ratio to Risk-Weighted Assets | 12.0 % | 11.3 % | | Total Capital Ratio to Risk-Weighted Assets | 13.9 % | 12.4 % | | Tier 1 Capital Ratio to Average Assets | 10.2 % | 9.6 % | [Note 13. Comprehensive (Loss) Income](index=49&type=section&id=Note%2013.%20Comprehensive%20%28Loss%29%20Income) Components of Comprehensive (Loss) Income ($ thousands) | Components of Comprehensive (Loss) Income ($ thousands) | June 30, 2023 (3 months) | June 30, 2022 (3 months) | June 30, 2023 (6 months) | June 30, 2022 (6 months) | | :---------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Beginning balance | (42,410) | (19,047) | (47,082) | (1,637) | | Net other comprehensive (loss) income | (4,961) | (19,455) | 940 | (41,484) | | Related tax impact | 1,081 | 4,235 | (148) | 8,854 | | Ending balance | (46,290) | (34,267) | (46,290) | (34,267) | - As of June 30, 2023, accumulated other comprehensive loss was **$46.3 million**, an improvement from $47.1 million on December 31, 2022, primarily reflecting changes in unrealized gains and losses on available-for-sale securities[121](index=121&type=chunk) [Note 14. Fair Value of Assets and Liabilities](index=50&type=section&id=Note%2014.%20Fair%20Value%20of%20Assets%20and%20Liabilities) - The company uses a three-level input hierarchy to measure fair value: Level 1 for quoted prices in active markets for identical assets or liabilities; Level 2 for observable quoted prices for similar assets or liabilities; and Level 3 for unobservable inputs reflecting the company's own assumptions[122](index=122&type=chunk)[123](index=123&type=chunk) Fair Value of Assets and Liabilities ($ thousands) | Assets and Liabilities ($ thousands) | June 30, 2023 (Total Fair Value) | December 31, 2022 (Total Fair Value) | | :----------------------- | :----------------------- | :----------------------- | | **Assets** | | | | Available-for-sale securities | 292,012 | 301,149 | | Loans held for sale | 20,949 | 18,544 | | Mortgage servicing rights | 48,176 | 48,138 | | Derivative instruments | 36,916 | 37,326 | | **Liabilities** | | | | Derivative instruments | 28,212 | 28,629 | - As of June 30, 2023, the company assessed that credit valuation adjustments for its interest rate swaps and risk participation agreements were not significant to the overall valuation, thus categorizing its derivative valuations generally as Level 2[139](index=139&type=chunk) [Note 15. Earnings Per Share](index=57&type=section&id=Note%2015.%20Earnings%20Per%20Share) Earnings Per Share ($) | Earnings Per Share ($) | June 30, 2023 (3 months) | June 30, 2022 (3 months) | June 30, 2023 (6 months) | June 30, 2022 (6 months) | | :----------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Basic earnings per share | 0.17 | 0.21 | 0.34 | 0.47 | | Diluted earnings per share | 0.17 | 0.21 | 0.33 | 0.46 | - For the three months ended June 30, 2023, basic and diluted earnings per share were both **$0.17**, lower than $0.21 in the prior year period[153](index=153&type=chunk) - For the six months ended June 30, 2023, basic earnings per share were **$0.34** and diluted earnings per share were **$0.33**, both lower than $0.47 and $0.46, respectively, in the prior year period[153](index=153&type=chunk) [Note 16. Revenue Recognition](index=58&type=section&id=Note%2016.%20Revenue%20Recognition) - The company recognizes revenue based on the consideration specified in contracts with customers, and revenue is recognized when performance obligations are satisfied, typically at the time services are provided or transactions occur[154](index=154&type=chunk)[155](index=155&type=chunk) - Transactional revenue includes bank card interchange fees, ATM fees, wire transfer fees, overdraft fees, and stop payment and returned item fees, as well as loan fees such as letter of credit, line renewal, and application fees[157](index=157&type=chunk) [Note 17. Segment Reporting](index=58&type=section&id=Note%2017.%20Segment%20Reporting) - The company has two reportable segments: HarborOne Bank and HarborOne Mortgage, with HarborOne Bank's revenue primarily from interest on loans and investment securities and service charges on deposit accounts, while HarborOne Mortgage's revenue is mainly from loan interest and fees from residential mortgage origination, sale, and servicing[158](index=158&type=chunk) Segment Net Income ($ thousands) | Segment Net Income ($ thousands) | June 30, 2023 (3 months) | June 30, 2022 (3 months) | June 30, 2023 (6 months) | June 30, 2022 (6 months) | | :----------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | HarborOne Bank | 7,301 | 9,354 | 16,351 | 18,160 | | HarborOne Mortgage | 309 | 1,390 | (984) | 5,626 | | Consolidated Net Income | 7,479 | 9,987 | 14,776 | 22,254 | [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=61&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses the company's financial condition as of June 30, 2023, and operating results for the three and six months ended June 30, 2023 and 2022 [Forward-Looking Statements](index=61&type=section&id=Forward-Looking%20Statements) - The company states that this report contains forward-looking statements subject to various risks and uncertainties, including changes in economic conditions, customer behavior, market volatility, interest rate fluctuations, rising loan defaults, declining security values, real estate value volatility, allowance for credit losses adequacy, deposit level changes, competitive pressures, cybersecurity incidents, regulatory changes, and goodwill impairment risks[166](index=166&type=chunk) [Critical Accounting Policies and Estimates](index=61&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The company's critical accounting policies include the allowance for credit losses, goodwill, and deferred tax assets, which involve complex judgments and estimates by management regarding changes in interest rates, economic performance, and borrower financial condition[171](index=171&type=chunk) [Recent Developments](index=63&type=section&id=Recent%20Developments) - Given recent banking industry events, the company has implemented cost-saving measures and operational efficiencies, expecting annual savings of approximately **$4.1 million**[173](index=173&type=chunk) - As of June 30, 2023, cash and available-for-sale securities represented **9.6% of assets**, and the company had **$1.0 billion** in additional borrowing capacity from FHLB and FRBB, with management deeming current liquidity sufficient[174](index=174&type=chunk) [Comparison of Financial Condition at June 30, 2023 and December 31, 2022](index=63&type=section&id=Comparison%20of%20Financial%20Condition%20at%20June%2030%2C%202023%20and%20December%2031%2C%202022) - Total assets increased by **$299.7 million**, or **5.6%**, to **$5.66 billion**, primarily reflecting increases in short-term investments and loans[176](index=176&type=chunk) - Cash and cash equivalents increased by **$154.8 million** to **$252.9 million**, mainly due to an increase in short-term investments[177](index=177&type=chunk) - Net loans increased by **$145.9 million**, or **3.2%**, to **$4.65 billion**, primarily driven by growth in commercial real estate and residential real estate loans[180](index=180&type=chunk)[181](index=181&type=chunk) - Deposits increased by **$98.0 million**, or **2.3%**, to **$4.29 billion**, primarily driven by growth in municipal and brokered deposits[189](index=189&type=chunk) - FHLB borrowings increased by **$203.9 million** to **$604.6 million**, primarily utilized to enhance liquidity[191](index=191&type=chunk) - Total stockholders' equity was **$595.5 million**, a **3.5% decrease** from December 31, 2022, primarily due to earnings being offset by stock repurchases[192](index=192&type=chunk) [Comparison of Results of Operations for the Three and Six Months Ended June 30, 2023 and 2022](index=69&type=section&id=Comparison%20of%20Results%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) - For the three and six months ended June 30, 2023, consolidated net income was **$7.5 million** and **$14.8 million**, respectively, lower than $10.0 million and $22.3 million in the prior year periods[197](index=197&type=chunk) - Net interest and dividend income decreased by **13.1% to $32.3 million** for the three months ended June 30, 2023, primarily due to the growth in interest rates on interest-bearing liabilities exceeding the growth in yields on interest-earning assets[217](index=217&type=chunk) - For the three months ended June 30, 2023, interest expense increased by **$26.0 million**, or **978.1%**, to **$28.7 million**, primarily due to increases in the average balance and rates of deposits and FHLB borrowings[215](index=215&type=chunk)[220](index=220&type=chunk) [HarborOne Bank Segment](index=77&type=section&id=HarborOne%20Bank%20Segment) - For the three months ended June 30, 2023, HarborOne Bank's net income decreased by **$2.1 million** to **$7.3 million**, primarily impacted by a decrease in net interest and dividend income and an increase in the provision for credit losses[224](index=224&type=chunk) - For the three months ended June 30, 2023, the provision for credit losses was **$3.3 million**, primarily reflecting **$2.9 million** in charge-offs and loan growth[226](index=226&type=chunk) - As of June 30, 2023, nonaccrual assets were **$20.2 million**, representing **0.36% of total assets**, lower than $24.4 million and 0.52% on June 30, 2022[227](index=227&type=chunk)[248](index=248&type=chunk) - For the three months ended June 30, 2023, total non-interest expense was **$26.2 million**, a **3.5% decrease** from the prior year period, primarily due to reduced compensation and benefits expense[234](index=234&type=chunk)[235](index=235&type=chunk) [HarborOne Mortgage Segment](index=81&type=section&id=HarborOne%20Mortgage%20Segment) - For the three months ended June 30, 2023, HarborOne Mortgage recorded net income of **$309 thousand**, compared to $1.4 million in the prior year period, primarily impacted by rising interest rates, reduced refinancing activity, and slower home sales[237](index=237&type=chunk) - For the three months ended June 30, 2023, total non-interest income was **$5.9 million**, a **32.5% decrease** from $8.8 million in the prior year period, primarily due to reduced gains on mortgage loan sales and processing fees[238](index=238&type=chunk)[241](index=241&type=chunk) - For the three months ended June 30, 2023, total non-interest expense was **$5.5 million**, a **24.2% decrease** from the prior year period, primarily due to reduced compensation and benefits expense resulting from lower mortgage origination volume[243](index=243&type=chunk)[244](index=244&type=chunk) [Asset Quality](index=85&type=section&id=Asset%20Quality) Asset Quality Metrics ($ thousands) | Asset Quality Metrics ($ thousands) | June 30, 2023 | December 31, 2022 | | :----------------------- | :------------- | :--------------- | | Total nonaccrual loans | 20,210 | 14,786 | | Total nonaccrual assets | 20,234 | 14,840 | | Allowance for credit losses balance | 47,821 | 45,236 | | Allowance for credit losses to total loans | 1.02 % | 0.99 % | | Allowance for credit losses to nonaccrual loans | 236.62 % | 305.94 % | | Nonaccrual loans to total loans | 0.43 % | 0.32 % | | Nonaccrual assets to total assets | 0.36 % | 0.28 % | - As of June 30, 2023, total nonaccrual assets were **$20.2 million**, an increase from $14.8 million on December 31, 2022, yet credit quality performance remained strong[247](index=247&type=chunk)[248](index=248&type=chunk) - Management closely monitors its commercial real estate loan portfolio, particularly sectors such as hospitality, unanchored retail space, and urban office space, which may be susceptible to economic conditions[249](index=249&type=chunk) - As of June 30, 2023, the allowance for credit losses was **$47.8 million**, representing **1.02% of total loans**, an increase from $45.2 million on December 31, 2022[256](index=256&type=chunk)[257](index=257&type=chunk) Net Charge-offs (Recoveries) ($ thousands) | Net Charge-offs (Recoveries) ($ thousands) | June 30, 2023 (3 months) | June 30, 2022 (3 months) | June 30, 2023 (6 months) | June 30, 2022 (6 months) | | :------------------------ | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Residential real estate loans | (37) | (81) | (45) | (93) | | Commercial loans | 2,670 | (412) | 2,676 | 2,347 | | Consumer loans | 38 | (12) | 29 | (29) | | Total loans | 2,671 | (505) | 2,660 | 2,225 | - For the three and six months ended June 30, 2023, net charge-offs were **$2.7 million**, primarily including a **$2.9 million** charge-off on an urban office space commercial real estate loan[259](index=259&type=chunk) [Management of Market Risk](index=90&type=section&id=Management%20of%20Market%20Risk) - The company's primary market risk is interest rate risk, managed through exposure limits set by the Asset/Liability Committee, utilizing income simulation models and economic value of equity analysis as key measurement tools[262](index=262&type=chunk) Net Interest Income Sensitivity to Interest Rate Changes | Interest Rate Changes (Basis Points) | Net Interest Income Change (% change from Year 1 Baseline) | | :---------------- | :--------------------------------------------- | | | June 30, 2023 | June 30, 2022 | | | Year 1 | Year 2 | Year 1 | Year 2 | | +300 | (11.4)% | (10.9)% | (0.7)% | 3.7 % | | +200 | (7.3)% | (6.5)% | (0.3)% | 3.0 % | | +100 | (3.5)% | (2.9)% | (0.2)% | 1.6 % | | -100 | 3.6 % | 3.6 % | (2.1)% | (5.3)% | - As of June 30, 2023, a **300 basis point** increase in interest rates would result in an **11.4% decrease** in net interest income for the first year and a **10.9% decrease** for the second year, indicating increased sensitivity to rising rates[264](index=264&type=chunk) Economic Value of Equity (EVE) Sensitivity to Interest Rate Changes | Interest Rate Changes (Basis Points) | Economic Value of Equity (EVE) ($ thousands) | EVE Change ($ thousands) | EVE Change (%) | | :---------------- | :-------------------------- | :--------------- | :---------- | | +300 | 472,635 | (187,586) | (28.4)% | | +200 | 551,271 | (108,950) | (16.5)% | | +100 | 614,813 | (45,408) | (6.9)% | | 0 | 660,221 | — | — | | -100 | 682,127 | 21,906 | 3.3 % | - As of June 30, 2023, a **300 basis point** increase in interest rates would result in a **28.4% decrease** in Economic Value of Equity (EVE), indicating the company's exposure to significant interest rate increases[268](index=268&type=chunk) [Liquidity Management and Capital Resources](index=91&type=section&id=Liquidity%20Management%20and%20Capital%20Resources) - The company meets its short-term and long-term financial obligations through deposit inflows, loan repayments, securities maturities and sales, and FHLB borrowings[270](index=270&type=chunk) - As of June 30, 2023, the company had **$252.9 million** in cash and cash equivalents, along with a total of **$1.0 billion** in additional borrowing capacity from FHLB, FRBB, and the FRB BTFP program[272](index=272&type=chunk) - As of June 30, 2023, the company had **$152.0 million** in loan origination commitments and **$859.0 million** in unfunded loan commitments[276](index=276&type=chunk) - Both the company and the bank's capital levels exceeded all regulatory capital requirements and were considered "well capitalized"[278](index=278&type=chunk) [Non-GAAP Financial Measures and Reconciliation to GAAP](index=93&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliation%20to%20GAAP) - The company uses the tangible common equity to tangible assets ratio as a non-GAAP financial measure to assess its financial condition, believing it provides useful information to investors[279](index=279&type=chunk) Tangible Common Equity to Tangible Assets Reconciliation ($ thousands) | Metric ($ thousands) | June 30, 2023 | June 30, 2022 | | :----------------------- | :------------- | :------------- | | Tangible common equity | 523,837 | 551,981 | | Tangible assets | 5,587,559 | 4,631,547 | | Tangible common equity/tangible assets | 9.38 % | 11.92 % | - As of June 30, 2023, the tangible common equity to tangible assets ratio was **9.38%**, lower than **11.92%** on June 30, 2022[280](index=280&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=64&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details the company's interest rate risk and management strategies, referencing the "Management of Market Risk" discussion [ITEM 4. Controls and Procedures](index=64&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management assessed disclosure controls and procedures as effective for timely information reporting, with no significant changes in internal controls this quarter - As of June 30, 2023, the company's disclosure controls and procedures were effective, ensuring timely recording, processing, summarization, and reporting of information[283](index=283&type=chunk) - There were no significant changes in the company's internal control over financial reporting during the quarter ended June 30, 2023[284](index=284&type=chunk) [PART II. OTHER INFORMATION](index=65&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1. Legal Proceedings](index=65&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is not involved in any other material pending legal proceedings beyond those disclosed in its Form 10-K, with a class action lawsuit settlement preliminarily approved - The company is not involved in any other material pending legal proceedings, aside from routine legal matters disclosed in its Form 10-K as of December 31, 2022[287](index=287&type=chunk) - The class action lawsuit of Rita Meaden v. HarborOne Bank received preliminary settlement approval on May 18, 2023, with a final approval hearing scheduled for October 11, 2023[288](index=288&type=chunk) [ITEM 1A. Risk Factors](index=65&type=section&id=ITEM%201A.%20Risk%20Factors) The risk factors disclosed in this quarterly report remain consistent with those described in the company's previous annual and quarterly reports - There are no material changes to the risk factors described in the company's previously filed annual report on Form 10-K as of December 31, 2022, and quarterly report on Form 10-Q as of March 31, 2023[289](index=289&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company completed its fifth stock repurchase program in Q2 2023, repurchasing 2,450,208 shares, and announced a sixth program to repurchase up to 2,325,489 common shares Stock Repurchase Program Summary | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs | | :------------------- | :--------------------------- | :--------------------------- | :----------------------------------------------------------- | :--------------------------------------------------------------------- | | April 1 to April 30, 2023 | 472,308 | $12.30 | 472,308 | — | | May 1 to May 31, 2023 | — | — | — | — | | June 1 to June 30, 2023 | — | — | — | — | | Total | 472,308 | $12.30 | 472,308 | 2,450,208 | - The company completed its fifth stock repurchase program in the second quarter of 2023, repurchasing **2,450,208 shares** at an average price of **$13.01 per share**[291](index=291&type=chunk) - The company announced its sixth stock repurchase program on July 5, 2023, authorizing the repurchase of up to **2,325,489 shares** of common stock, representing approximately **5%** of its outstanding shares, with the program expiring on June 30, 2024[292](index=292&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=66&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during this quarter - There were no defaults upon senior securities during this quarter[293](index=293&type=chunk) [ITEM 4. Mine Safety Disclosures](index=66&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[294](index=294&type=chunk) [ITEM 5. Other Information](index=66&type=section&id=ITEM%205.%20Other%20Information) No directors or senior officers adopted, modified, or terminated any Rule 10b5-1(c) compliant securities trading plans during the quarter ended June 30, 2023 - During the quarter ended June 30, 2023, no contracts, instructions, or written plans for buying or selling securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) were adopted, modified, or terminated by any director or officer[295](index=295&type=chunk) [ITEM 6. Exhibits](index=67&type=section&id=ITEM%206.%20Exhibits) This quarterly report includes or incorporates by reference the exhibits listed in the Exhibit Index, such as CEO and CFO certifications and interactive data files - This quarterly report includes or incorporates by reference the exhibits listed in the Exhibit Index, including certifications from the Chief Executive Officer and Chief Financial Officer, and interactive data files[296](index=296&type=chunk)[298](index=298&type=chunk) [SIGNATURE](index=68&type=section&id=SIGNATURE)

or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38955 HarborOne Bancorp, Inc. (Exact name of registrant as specified in its charter) Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 Massachusetts 81-1607465 (State or other jurisdiction of in ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38955 HarborOne Bancorp, Inc. (Exact name of registrant as specified in its charter) Massachusetts 81-1607465 (State or other jurisdiction of incorporation or o ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38955 HarborOne Bancorp, Inc. (Exact name of registrant as specified in its charter) Massachusetts 81-1607465 (State or other jurisdiction o ...

PART I. FINANCIAL INFORMATION [ITEM 1. Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) Presents unaudited consolidated financial statements for Q2 and H1 2022, detailing balance sheets, income statements, and key accounting policies [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202022%20and%20December%2031%2C%202021) Total assets increased by 3.3% to $4.70 billion, driven by loan growth, while stockholders' equity decreased by 8.1% due to repurchases and unrealized losses | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total assets | $4,704,044 | $4,553,405 | $150,639 | 3.3% | | Total liabilities | $4,079,566 | $3,874,144 | $205,422 | 5.3% | | Total deposits | $3,847,933 | $3,682,649 | $165,284 | 4.5% | | Total stockholders' equity | $624,478 | $679,261 | $(54,783) | (8.1)% | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) Net income decreased for both Q2 and H1 2022, primarily due to increased provision for credit losses and lower noninterest income | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :--------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total interest and dividend income | $39,857 | $35,887 | $75,459 | $71,734 | | Total interest expense | $2,662 | $3,357 | $4,994 | $7,152 | | Net interest and dividend income | $37,195 | $32,530 | $70,465 | $64,582 | | Provision (benefit) for credit losses | $2,546 | $(4,286) | $2,884 | $(4,195) | | Total noninterest income | $14,103 | $21,703 | $33,164 | $59,512 | | Total noninterest expense | $34,954 | $38,598 | $69,789 | $81,400 | | Net income | $9,987 | $14,276 | $22,254 | $33,668 | | Basic EPS | $0.21 | $0.28 | $0.47 | $0.65 | | Diluted EPS | $0.21 | $0.27 | $0.46 | $0.64 | [Consolidated Statements of Comprehensive (Loss) Income](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) The company reported a comprehensive loss for Q2 and H1 2022, primarily due to significant unrealized losses on available-for-sale securities | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net income | $9,987 | $14,276 | $22,254 | $33,668 | | Total other comprehensive (loss) income | $(15,220) | $989 | $(32,630) | $(1,356) | | Comprehensive (loss) income | $(5,233) | $15,265 | $(10,376) | $32,312 | - The significant unrealized losses on securities available for sale (net of tax) were **$(15,844) thousand** for the three months ended June 30, 2022, and **$(36,058) thousand** for the six months ended June 30, 2022, largely contributing to the comprehensive loss[12](index=12&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) Stockholders' equity decreased from $679.3 million to $624.5 million, primarily due to comprehensive loss and treasury stock repurchases, partially offset by net income | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Stockholders' Equity | $624,478 | $679,261 | | Accumulated other comprehensive loss | $(34,267) | $(1,637) | | Treasury stock, at cost | $(132,296) | $(85,859) | - The decrease in stockholders' equity was significantly impacted by a cumulative effect adjustment of **$(1.9) million** to retained earnings upon adoption of ASC 326 (CECL) on January 1, 2022[16](index=16&type=chunk)[36](index=36&type=chunk) - The company repurchased **1,358,367 shares** of treasury stock at a cost of **$(18,783) thousand** during the three months ended June 30, 2022, and **3,239,588 shares** at a cost of **$(46,437) thousand** during the six months ended June 30, 2022[14](index=14&type=chunk)[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) Net cash from operating activities significantly decreased, while investing activities shifted to a net cash use, primarily due to increased loan originations | Cash Flow Activity | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $21,060 | $122,244 | | Net cash used by investing activities | $(302,108) | $(7,071) | | Net cash provided by financing activities | $170,667 | $94,604 | | Net change in cash and cash equivalents | $(110,381) | $209,777 | | Cash and cash equivalents at end of period | $84,338 | $415,647 | - The significant increase in cash used by investing activities was driven by net loan originations/payments of **$(178.8) million** (vs. $94.5 million provided in 2021) and loan pool purchases of **$(58.3) million**[18](index=18&type=chunk) - Financing activities saw a net increase in deposits of **$165.2 million** and a net change in short-term borrowed funds of **$90.0 million**[22](index=22&type=chunk) [Notes to Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(unaudited)) Provides detailed disclosures on accounting policies, financial instruments, and other significant financial information, including the adoption of CECL and breakdowns of key financial items [Note 1. Summary of Significant Accounting Policies](index=14&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the basis of presentation and significant accounting policies, highlighting the adoption of CECL, which impacted the allowance for credit losses and retained earnings - The Company adopted ASU 2016-13 (CECL) on January 1, 2022, requiring the measurement of expected lifetime credit losses for financial assets at amortized cost and unfunded commitments[33](index=33&type=chunk) | Metric | Impact on January 1, 2022 (in millions) | | :------------------------------------ | :-------------------------------------- | | Decrease in ACL for loans | $(1.3) | | Increase in ACL for unfunded commitments | $3.9 | | Net increase in ACL | $2.6 | | Decrease in retained earnings (net of tax) | $(1.9) | - The Company provides financial services through **31 full-service branches** in Massachusetts and Rhode Island, and HarborOne Mortgage operates **27 offices** across Massachusetts, Rhode Island, and New Hampshire[27](index=27&type=chunk) [Note 2. Debt Securities](index=17&type=section&id=Note%202.%20Debt%20Securities) Details debt securities, including the adoption of Topic 326, with total available-for-sale securities at $334.4 million and significant unrealized losses due to rising interest rates - Effective January 1, 2022, the Company adopted Topic 326 for debt securities; no ACL was recognized on available-for-sale debt securities upon adoption[39](index=39&type=chunk) | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Securities available for sale (fair value) | $334,398 | $394,036 | | Securities held to maturity (amortized cost) | $10,000 | $0 | | Gross unrealized losses (available for sale) | $49,891 | $4,753 | - The majority of unrealized losses on debt securities are attributed to changes in interest rates, not credit quality, as most securities are issued by U.S. government-sponsored entities with a history of zero credit loss[53](index=53&type=chunk) [Note 3. Loans Held for Sale](index=24&type=section&id=Note%203.%20Loans%20Held%20for%20Sale) Loans held for sale decreased by $13.9 million to $31.7 million, reflecting dampened residential mortgage demand due to rising interest rates | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Loans held for sale, fair value | $31,679 | $45,642 | $(13,963) | (30.6)% | | Loans held for sale, contractual principal outstanding | $31,073 | $44,245 | $(13,172) | (29.8)% | - The decrease in loans held for sale is primarily due to rising interest rates on residential mortgage loans, which dampened loan demand[206](index=206&type=chunk) [Note 4. Loans and Allowance for Credit Losses](index=25&type=section&id=Note%204.%20Loans%20and%20Allowance%20for%20Credit%20Losses) Total loans increased by 8.4% to $3.91 billion, driven by real estate loans, while the allowance for credit losses decreased, and nonaccrual loans significantly declined | Loan Category | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Residential real estate loans | $1,423,074 | $1,217,980 | $205,094 | 16.8% | | Commercial loans | $2,413,563 | $2,258,048 | $155,515 | 6.9% | | Consumer loans | $75,312 | $131,705 | $(56,393) | (42.8)% | | Total loans | $3,911,949 | $3,607,733 | $304,216 | 8.4% | | Allowance for credit losses on loans | $(43,560) | $(45,377) | $1,817 | 4.0% | | Net loans | $3,868,389 | $3,562,356 | $306,033 | 8.6% | - Nonaccrual loans decreased to **$24.4 million** at June 30, 2022, from $36.1 million at December 31, 2021, primarily due to the resolution of an **$8.8 million** credit in the office at-risk sector[83](index=83&type=chunk)[264](index=264&type=chunk)[266](index=266&type=chunk) | Metric | June 30, 2022 | December 31, 2021 | | :------------------------------------ | :------------ | :---------------- | | Allowance for credit losses to total loans | 1.11% | 1.26% | | Allowance for credit losses to nonaccrual loans | 178.41% | 125.58% | | Total nonperforming loans to total loans | 0.62% | 1.00% | [Note 5. Mortgage Loan Servicing](index=38&type=section&id=Note%205.%20Mortgage%20Loan%20Servicing) Mortgage servicing rights (MSRs) increased to $47.1 million, positively impacted by rising interest rates reducing prepayment speeds, with the unpaid principal balance remaining stable | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Mortgage servicing rights, at fair value | $47,130 | $38,268 | | Unpaid principal balance of mortgage loans serviced for others | $3,650,000 | $3,650,000 | - Key assumptions for MSR fair value at June 30, 2022, included a prepayment speed of **7.20%** (down from 9.40% at Dec 31, 2021), a discount rate of **9.24%** (up from 9.20%), and a default rate of **1.49%** (down from 1.64%)[98](index=98&type=chunk) - The increase in MSR fair value is consistent with the rise in the 10-year Treasury Constant Maturity rate, as higher rates generally lead to lower prepayment speeds and increased MSR value[212](index=212&type=chunk)[258](index=258&type=chunk) [Note 6. Goodwill and Other Intangible Assets](index=39&type=section&id=Note%206.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill remained stable at $69.8 million, allocated between segments, with other intangible assets at $2.7 million, and no interim impairment test warranted | Metric | June 30, 2022 (in thousands) | | :------------------------------------ | :----------------------------- | | Goodwill | $69,802 | | Other intangible assets | $2,695 | | Goodwill allocated to HarborOne Bank | $59,042 | | Goodwill allocated to HarborOne Mortgage | $10,760 | [Note 7. Deposits](index=39&type=section&id=Note%207.%20Deposits) Total deposits increased by 4.5% to $3.85 billion, driven by consumer, business, and municipal deposits, offsetting decreases in money market and term certificate accounts | Deposit Type | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | % Change | | :------------------------------------ | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Noninterest-bearing deposits | $775,154 | $743,051 | $32,103 | 4.3% | | NOW accounts | $316,771 | $313,684 | $3,087 | 1.0% | | Regular savings | $1,282,913 | $1,138,980 | $143,933 | 12.6% | | Money market accounts | $507,746 | $548,830 | $(41,084) | (7.5)% | | Term certificate accounts | $485,985 | $527,548 | $(41,563) | (7.9)% | | Total deposits | $3,847,933 | $3,682,649 | $165,284 | 4.5% | - The growth in consumer and business deposits reflects marketing efforts and customers maintaining liquidity due to market uncertainty[213](index=213&type=chunk) - Reciprocal deposits, part of a program providing access to FDIC-insured products exceeding limits, totaled **$36.5 million** at June 30, 2022[101](index=101&type=chunk)[213](index=213&type=chunk) [Note 8. Borrowings](index=41&type=section&id=Note%208.%20Borrowings) Total borrowed funds significantly increased to $105.7 million, primarily due to $90.0 million in new short-term FHLB advances, with available borrowing capacity remaining strong | Borrowing Type | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Short-term borrowed funds (FHLB) | $90,000 | $0 | | Long-term borrowed funds (FHLB) | $15,693 | $55,711 | | Subordinated debt | $34,222 | $34,159 | | Total borrowed funds | $105,693 | $55,711 | - The Company had **$829.5 million** of available borrowing capacity with the FHLB and **$66.9 million** with the Federal Reserve Bank of Boston at June 30, 2022[107](index=107&type=chunk)[292](index=292&type=chunk) [Note 9. Other Commitments and Contingencies](index=42&type=section&id=Note%209.%20Other%20Commitments%20and%20Contingencies) The allowance for credit losses on unfunded commitments increased to $5.1 million, with significant off-balance sheet commitments for loans and unadvanced funds - The ACL on unfunded commitments increased by **$3.9 million** upon adoption of Topic 326 on January 1, 2022, and totaled **$5.1 million** at June 30, 2022[110](index=110&type=chunk)[113](index=113&type=chunk)[244](index=244&type=chunk) | Commitment Type | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Commitments to grant residential real estate loans | $153,938 | $142,781 | | Commitments to grant other loans | $103,802 | $27,029 | | Unadvanced funds on home equity lines of credit | $229,509 | $211,120 | | Unadvanced funds on revolving lines of credit | $251,995 | $223,110 | | Unadvanced funds on construction loans | $294,452 | $194,101 | [Note 10. Derivatives](index=44&type=section&id=Note%2010.%20Derivatives) The Company uses derivatives, including interest rate swaps and loan commitments, to manage interest rate risk, with varying fair values for hedging and non-hedging instruments | Derivative Type | Notional Amount (in thousands) | Fair Value Asset (in thousands) | Fair Value Liability (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------ | :-------------------------------- | | Interest rate swaps (cashflow hedge) | $100,000 | $6,431 | $0 | | Derivative loan commitments | $66,802 | $1,187 | $23 | | Forward loan sale commitments | $64,500 | $158 | $216 | | Interest rate swaps (non-hedge) | $656,743 | $15,894 | $15,894 | - The Company expects approximately **$2.5 million** related to the cashflow hedge to be reclassified to interest expense from other comprehensive income in the next twelve months[120](index=120&type=chunk) - Changes in fair value of derivative loan commitments and forward loan sale commitments are reported in mortgage banking income[130](index=130&type=chunk) [Note 11. Operating Lease Right-of-Use Assets and Liabilities](index=47&type=section&id=Note%2011.%20Operating%20Lease%20Right-of-Use%20Assets%20and%20Liabilities) Operating lease ROU assets were $26.5 million and liabilities $28.1 million, with a weighted-average remaining lease term of 16.4 years and total lease expense of $1.7 million | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Operating lease ROU assets | $26,500 | $26,800 | | Operating lease liabilities | $28,100 | $28,400 | | Weighted-average remaining lease term | 16.41 years | 16.77 years | | Weighted-average discount rate | 1.96% | 1.94% | | Lease Expense Component | Six Months Ended June 30, 2022 (in thousands) | | :------------------------------------ | :-------------------------------------------- | | Operating lease expense | $1,636 | | Short-term lease expense | $68 | | Variable lease expense | $0 | | Sublease income | $(5) | | Total lease expense | $1,699 | [Note 12. Minimum Regulatory Capital Requirements](index=48&type=section&id=Note%2012.%20Minimum%20Regulatory%20Capital%20Requirements) Both the Company and the Bank exceeded all minimum regulatory capital requirements, including the capital conservation buffer, and were considered 'well capitalized' at June 30, 2022 - The Company and the Bank exceeded all regulatory capital requirements and were considered **'well capitalized'** at June 30, 2022[140](index=140&type=chunk) | Capital Ratio | HarborOne Bancorp, Inc. (June 30, 2022) | HarborOne Bank (June 30, 2022) | Minimum Required for Capital Adequacy | Minimum for 'Well Capitalized' | | :------------------------------------ | :-------------------------------------- | :----------------------------- | :------------------------------------ | :---------------------------- | | Common equity Tier 1 capital to risk-weighted assets | 14.5% | 12.4% | 4.5% | 6.5% (Bank only) | | Tier 1 capital to risk-weighted assets | 14.5% | 12.4% | 6.0% | 8.0% (Bank only) | | Total capital to risk-weighted assets | 16.5% | 13.6% | 8.0% | 10.0% (Bank only) | | Tier 1 capital to average assets | 12.8% | 11.0% | 4.0% | 5.0% (Bank only) | [Note 13. Comprehensive (Loss) Income](index=51&type=section&id=Note%2013.%20Comprehensive%20(Loss)%20Income) Accumulated other comprehensive loss significantly increased to $(34.3) million, primarily due to a substantial increase in net unrealized losses on available-for-sale securities | Component | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Total accumulated other comprehensive income (cash flow hedge) | $4,625 | $1,197 | | Total accumulated other comprehensive loss (securities available for sale) | $(38,892) | $(2,834) | | Total accumulated other comprehensive loss | $(34,267) | $(1,637) | - The net unrealized loss on securities available for sale increased from **$(2,834) thousand** at December 31, 2021, to **$(38,892) thousand** at June 30, 2022, reflecting a significant negative impact from market conditions[145](index=145&type=chunk)[146](index=146&type=chunk) [Note 14. Fair Value of Assets and Liabilities](index=52&type=section&id=Note%2014.%20Fair%20Value%20of%20Assets%20and%20Liabilities) The Company measures various assets and liabilities at fair value, primarily using Level 2 inputs, with collateral-dependent impaired loans measured on a non-recurring basis using Level 3 inputs | Asset/Liability (Recurring Fair Value) | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Securities available for sale | $334,398 | $394,036 | | Loans held for sale | $31,679 | $45,642 | | Mortgage servicing rights | $47,130 | $38,268 | | Total Assets Measured at Fair Value (Recurring) | $436,877 | $500,066 | | Asset (Non-recurring Fair Value) | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Collateral-dependent impaired loans | $8,850 | $21,615 | | Other real estate owned and repossessed assets | $0 | $53 | | Total Assets Measured at Fair Value (Non-recurring) | $8,850 | $21,668 | - The fair value of collateral-dependent impaired loans is determined based on the fair value of the underlying collateral, often adjusted for estimated costs to sell, and is classified as Level 3[155](index=155&type=chunk) [Note 15. Earnings Per Share ("EPS")](index=61&type=section&id=Note%2015.%20Earnings%20Per%20Share%20(%22EPS%22)) Basic EPS for Q2 2022 was $0.21 (down from $0.28), and diluted EPS was $0.21 (down from $0.27), reflecting the decrease in net income | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.21 | $0.28 | $0.47 | $0.65 | | Diluted EPS | $0.21 | $0.27 | $0.46 | $0.64 | | Weighted average basic shares outstanding | 46,980,830 | 51,778,293 | 47,406,257 | 52,155,754 | | Weighted average diluted shares outstanding | 47,536,033 | 52,650,071 | 48,110,863 | 52,823,354 | [Note 16. Revenue Recognition](index=62&type=section&id=Note%2016.%20Revenue%20Recognition) Revenue is recognized when performance obligations are satisfied, either at a point in time or over time, with transactional revenues recognized immediately upon service completion - Revenue is recognized when performance obligations are satisfied, which can be at a point in time (e.g., transactional fees) or over time[184](index=184&type=chunk)[186](index=186&type=chunk) - The Company acts as a principal when providing services directly or through a third party, reporting gross consideration, and as an agent when referring services, reporting net fees or commissions[185](index=185&type=chunk) [Note 17. Segment Reporting](index=62&type=section&id=Note%2017.%20Segment%20Reporting) The Company operates through HarborOne Bank and HarborOne Mortgage segments, with both experiencing decreased net income due to increased credit loss provision and reduced mortgage banking income - The Company has two reportable segments: HarborOne Bank (interest on loans/securities, deposit service charges) and HarborOne Mortgage (interest on loans, residential mortgage origination/sale/servicing fees)[187](index=187&type=chunk) | Segment Net Income (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | HarborOne Bank | $9,354 | $12,274 | $18,160 | $20,548 | | HarborOne Mortgage | $1,390 | $2,599 | $5,626 | $14,253 | [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=65&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on financial performance and condition, discussing changes in assets, liabilities, equity, results of operations, critical accounting policies, and market risk [Forward-Looking Statements](index=65&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to significant risks and uncertainties, including economic conditions, interest rate changes, and credit losses - Forward-looking statements are identified by words like 'may,' 'will,' 'should,' 'could,' 'would,' 'plan,' 'potential,' 'estimate,' 'project,' 'believe,' 'intend,' 'anticipate,' 'expect,' 'target' and similar expressions[195](index=195&type=chunk) - Key risks include the impact of the COVID-19 pandemic, changes in economic conditions, interest rate fluctuations, credit losses, market turbulence, and operational risks[196](index=196&type=chunk) [Critical Accounting Policies and Estimates](index=65&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Identifies Allowance for Credit Losses, Income Taxes, and Goodwill as critical accounting policies requiring significant judgment and estimates susceptible to material changes - The most critical accounting policies are Allowance for Credit Losses, Income Taxes, and Goodwill and Identifiable Intangible Assets[201](index=201&type=chunk) - Estimates are subject to changes based on interest rates, economic performance, and borrower financial condition[200](index=200&type=chunk) [COVID-19 Update](index=67&type=section&id=COVID-19%20Update) Ongoing uncertainty from the pandemic and inflation could affect credit quality, with management monitoring specific sectors for increased credit risk - Management continues to monitor five sectors for increased credit risk: retail, office space, hotels, restaurants, and recreation[202](index=202&type=chunk) | Sector | Loans (in millions) | Nonaccrual Loans (in millions) | | :------------------------------------ | :------------------ | :----------------------------- | | Business-oriented hotels | $123.3 | $10.6 | | Non-anchored retail space | $58.8 | $0 | | Metro office space | $14.9 | $0 | [Comparison of Financial Condition](index=68&type=section&id=Comparison%20of%20Financial%20Condition%20at%20June%2030%2C%202022%20and%20December%2031%2C%202021) Total assets increased by 3.3% to $4.70 billion due to loan growth, while stockholders' equity decreased by 8.1% from share repurchases and unrealized losses [Total Assets](index=68&type=section&id=Total%20Assets) Total assets increased by $150.6 million, or 3.3%, to $4.70 billion, primarily due to a $304.2 million increase in loans | Metric | June 30, 2022 (in billions) | December 31, 2021 (in billions) | Change (in millions) | % Change | | :------------------------------------ | :-------------------------- | :------------------------------ | :------------------- | :------- | | Total assets | $4.70 | $4.55 | $150.6 | 3.3% | [Cash and Cash Equivalents](index=68&type=section&id=Cash%20and%20Cash%20Equivalents) Cash and cash equivalents decreased by $110.4 million to $84.3 million, primarily used to fund loan growth | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | Change (in millions) | % Change | | :------------------------------------ | :-------------------------- | :------------------------------ | :------------------- | :------- | | Cash and cash equivalents | $84.3 | $194.7 | $(110.4) | (56.7)% | [Loans Held for Sale](index=68&type=section&id=Loans%20Held%20for%20Sale) Loans held for sale decreased by $13.9 million to $31.7 million due to reduced residential mortgage loan demand from rising interest rates | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | Change (in millions) | % Change | | :------------------------------------ | :-------------------------- | :------------------------------ | :------------------- | :------- | | Loans held for sale | $31.7 | $45.6 | $(13.9) | (30.5)% | [Loans, net](index=68&type=section&id=Loans%2C%20net) Net loans increased by 8.6% to $3.87 billion, driven by commercial and residential real estate loans, while the allowance for loan losses decreased | Loan Category | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | % Change | | :------------------------------------ | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Residential real estate loans | $1,423,074 | $1,217,980 | $205,094 | 16.8% | | Commercial real estate | $1,847,619 | $1,699,877 | $147,742 | 8.7% | | Commercial and industrial | $407,182 | $421,608 | $(14,426) | (3.4)% | | Consumer loans | $75,312 | $131,705 | $(56,393) | (42.8)% | | Total loans | $3,911,949 | $3,607,733 | $304,216 | 8.4% | | Allowance for loan losses | $(43,560) | $(45,377) | $1,817 | 4.0% | | Loans, net | $3,868,389 | $3,562,356 | $306,033 | 8.6% | - The increase in one- to four-family loans includes a purchased pool of **$58.1 million**[207](index=207&type=chunk) [Securities](index=68&type=section&id=Securities) Total investment securities decreased by 12.6% to $344.4 million, with available-for-sale securities significantly impacted by $49.9 million in unrealized losses | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | Change (in millions) | % Change | | :------------------------------------ | :-------------------------- | :------------------------------ | :------------------- | :------- | | Total investment securities | $344.4 | $394.0 | $(49.6) | (12.6)% | | Securities available for sale (unrealized losses) | $(49.9) | $(3.6) | $(46.3) | 1286.1% | | Securities held to maturity | $10.0 | $0 | $10.0 | N/A | [Mortgage servicing rights](index=68&type=section&id=Mortgage%20servicing%20rights) Mortgage servicing rights (MSRs) increased to $47.1 million, positively influenced by rising interest rates reducing prepayment speeds, with no hedging strategy | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | Change (in millions) | % Change | | :------------------------------------ | :-------------------------- | :------------------------------ | :------------------- | :------- | | Total MSRs | $47.1 | $38.3 | $8.8 | 23.0% | | Unpaid principal balance of mortgage loans serviced for others | $3,650 | $3,650 | $0 | 0.0% | - Management has made the strategic decision not to hedge mortgage servicing assets, meaning future declines in interest rates would likely decrease MSR fair value and earnings, while increases would have the opposite effect[212](index=212&type=chunk) [Deposits](index=70&type=section&id=Deposits) Deposits increased by 4.5% to $3.85 billion, driven by consumer, business, and municipal deposits, offsetting decreases in money market and term certificate accounts | Deposit Type | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | % Change | | :------------------------------------ | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Noninterest-bearing deposits | $775,154 | $743,051 | $32,103 | 4.3% | | Regular savings | $1,282,913 | $1,138,980 | $143,933 | 12.6% | | Money market accounts | $507,746 | $548,830 | $(41,084) | (7.5)% | | Term certificate accounts | $485,985 | $527,548 | $(41,563) | (7.9)% | | Total deposits | $3,847,933 | $3,682,649 | $165,284 | 4.5% | [Stockholders' equity](index=70&type=section&id=Stockholders'%20equity) Total stockholders' equity decreased by 8.1% to $624.5 million, primarily due to share repurchases and elevated unrealized losses on available-for-sale securities | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | Change (in millions) | % Change | | :------------------------------------ | :-------------------------- | :------------------------------ | :------------------- | :------- | | Total stockholders' equity | $624.5 | $679.3 | $(54.8) | (8.1)% | | Tangible common equity to tangible assets ratio | 11.92% | 13.53% | (1.61)% | (11.9)% | - The Company commenced its fourth share repurchase program on April 12, 2022, repurchasing **1,337,602 shares** at an average price of **$13.83** through June 30, 2022[214](index=214&type=chunk)[308](index=308&type=chunk) [Comparison of Results of Operations](index=71&type=section&id=Comparison%20of%20Results%20of%20Operations%20for%20the%20Three%20Months%20and%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) Consolidated net income decreased due to higher credit loss provision and lower noninterest income, despite increased net interest and dividend income and improved net interest margin [Overview](index=71&type=section&id=Overview) Consolidated net income for Q2 2022 was $10.0 million (down from $14.3 million), and for H1 2022, it was $22.3 million (down from $33.7 million) | Metric | Three Months Ended June 30, 2022 (in millions) | Three Months Ended June 30, 2021 (in millions) | Six Months Ended June 30, 2022 (in millions) | Six Months Ended June 30, 2021 (in millions) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Consolidated net income | $10.0 | $14.3 | $22.3 | $33.7 | [Average Balances and Yields](index=71&type=section&id=Average%20Balances%20and%20Yields) Average interest-earning assets and liabilities increased, with improved yield on assets and decreased cost of liabilities, leading to better net interest spread and margin | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Average interest-earning assets (in millions) | $4,289,945 | $4,260,866 | $4,247,242 | $4,202,602 | | Yield on interest-earning assets | 3.73% | 3.38% | 3.58% | 3.44% | | Average interest-bearing liabilities (in millions) | $3,116,912 | $3,024,022 | $3,077,596 | $3,000,711 | | Cost of interest-bearing liabilities | 0.34% | 0.45% | 0.33% | 0.48% | | Net interest spread | 3.39% | 2.93% | 3.25% | 2.96% | | Net interest margin | 3.48% | 3.06% | 3.35% | 3.10% | [Rate/Volume Analysis](index=75&type=section&id=Rate%2FVolume%20Analysis) Net interest income increased by $4.7 million for Q2 and $5.9 million for H1, driven by volume increases in loans and securities, and favorable rate changes | Change in Net Interest Income (in thousands) | Three Months Ended June 30, 2022 v. 2021 | Six Months Ended June 30, 2022 v. 2021 | | :------------------------------------------- | :--------------------------------------- | :------------------------------------- | | Total increase (decrease) due to volume | $3,704 | $4,333 | | Total increase (decrease) due to rate | $961 | $1,550 | | Total change in net interest income | $4,665 | $5,883 | [Interest and Dividend Income](index=76&type=section&id=Interest%20and%20Dividend%20Income) Interest and dividend income increased by 11.1% for Q2 and 5.2% for H1, primarily due to higher average balances and yields on loans and securities | Metric | Three Months Ended June 30, 2022 (in millions) | Three Months Ended June 30, 2021 (in millions) | Six Months Ended June 30, 2022 (in millions) | Six Months Ended June 30, 2021 (in millions) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total interest and dividend income | $39.9 | $35.9 | $75.5 | $71.7 | - Loan interest and fees increased by **$3.4 million (10.0%)** for the three months, driven by loan growth and including **$1.1 million** in prepayment penalties and **$368,000** from PPP loan fees[235](index=235&type=chunk) - Interest income on securities increased by **$1.1 million (136.2%)** for the three months due to higher average balance and rate[235](index=235&type=chunk) [Interest Expense](index=76&type=section&id=Interest%20Expense) Interest expense decreased by 20.7% for Q2 and 30.2% for H1, primarily due to lower interest expense on FHLB borrowings and deposits, reflecting decreased average costs | Metric | Three Months Ended June 30, 2022 (in millions) | Three Months Ended June 30, 2021 (in millions) | Six Months Ended June 30, 2022 (in millions) | Six Months Ended June 30, 2021 (in millions) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total interest expense | $2.7 | $3.4 | $5.0 | $7.2 | - Interest expense on FHLB borrowings decreased by **$412,000** for the three months, reflecting a decrease in both average balance and cost[230](index=230&type=chunk) - Interest expense on deposits decreased by **$283,000** for the three months, driven by a decrease in the cost of interest-bearing deposits[230](index=230&type=chunk) [Net Interest and Dividend Income](index=76&type=section&id=Net%20Interest%20and%20Dividend%20Income) Net interest and dividend income increased by 14.3% for Q2 and 9.1% for H1, driven by higher average balances of loans and investments, with improved net interest spread and margin | Metric | Three Months Ended June 30, 2022 (in millions) | Three Months Ended June 30, 2021 (in millions) | Six Months Ended June 30, 2022 (in millions) | Six Months Ended June 30, 2021 (in millions) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net interest and dividend income | $37.2 | $32.5 | $70.5 | $64.6 | | Net interest spread | 3.39% | 2.93% | 3.25% | 2.96% | | Net interest margin | 3.48% | 3.06% | 3.35% | 3.10% | [Income Tax Provision](index=76&type=section&id=Income%20Tax%20Provision) The income tax provision decreased for both Q2 and H1 2022, with the effective tax rate remaining relatively stable around 28% | Metric | Three Months Ended June 30, 2022 (in millions) | Three Months Ended June 30, 2021 (in millions) | Six Months Ended June 30, 2022 (in millions) | Six Months Ended June 30, 2021 (in millions) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Income tax provision | $3.8 | $5.6 | $8.7 | $13.2 | | Effective tax rate | 27.6% | 28.3% | 28.1% | 28.2% | [Segments](index=78&type=section&id=Segments) HarborOne Bank and HarborOne Mortgage segments showed divergent performance, with both experiencing decreased net income due to increased credit loss provision and reduced mortgage banking income [HarborOne Bank Segment](index=80&type=section&id=HarborOne%20Bank%20Segment) HarborOne Bank's net income decreased by 23.8% for Q2 and 11.6% for H1, primarily due to increased provision for credit losses and higher noninterest expenses [Net Income](index=80&type=section&id=Net%20Income) The Bank's net income decreased for Q2 and H1 2022, primarily due to increased provision for credit losses and noninterest expense, partially offset by higher net interest income | Metric | Three Months Ended June 30, 2022 (in millions) | Three Months Ended June 30, 2021 (in millions) | Six Months Ended June 30, 2022 (in millions) | Six Months Ended June 30, 2021 (in millions) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net income | $9.4 | $12.3 | $18.2 | $20.5 | | Pre-tax income | $12.9 | $17.1 | $25.3 | $28.8 | [Allowance for Credit Losses](index=80&type=section&id=Allowance%20for%20Credit%20Losses) The Bank recorded a provision for credit losses of $2.5 million for Q2 and $2.8 million for H1, a significant increase from prior year reversals, reflecting CECL adoption | Metric | Three Months Ended June 30, 2022 (in millions) | Three Months Ended June 30, 2021 (in millions) | Six Months Ended June 30, 2022 (in millions) | Six Months Ended June 30, 2021 (in millions) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Provision (benefit) for credit losses | $2.5 | $(4.3) | $2.8 | $(4.2) | | Net recoveries (charge-offs) | $0.5 | $0.2 | $(2.2) | $0.1 | - Nonperforming assets were **$24.4 million** at June 30, 2022, down from $32.7 million at June 30, 2021, with nonperforming assets to total assets at **0.52%**[246](index=246&type=chunk) [Noninterest Income](index=80&type=section&id=Noninterest%20Income) Total noninterest income for HarborOne Bank increased, driven by a positive change in MSR fair value and higher deposit account fees, partially offset by intersegment losses | Noninterest Income (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total mortgage banking loss | $(749) | $(1,053) | $(534) | $(1,129) | | Other noninterest income | $6,084 | $5,898 | $11,971 | $10,989 | | Total noninterest income | $5,335 | $4,845 | $11,437 | $9,860 | | Changes in MSR fair value | $127 | $(419) | $717 | $(133) | | Other deposit account fees | $2,173 | $1,805 | $4,184 | $3,247 | - The positive change in MSR fair value was consistent with the increase in the 10-year Treasury Constant Maturity rate, which positively impacts MSR valuations[252](index=252&type=chunk) [Noninterest Expense](index=83&type=section&id=Noninterest%20Expense) Total noninterest expense for HarborOne Bank increased, primarily due to higher compensation and benefits from increased staffing and salary increases, as well as marketing and deposit expenses | Noninterest Expense (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Compensation and benefits | $16,269 | $13,765 | $31,487 | $26,928 | | Marketing | $914 | $782 | $2,048 | $1,539 | | Deposit expenses | $513 | $338 | $1,059 | $778 | | Total noninterest expense | $27,131 | $24,128 | $53,956 | $48,591 | - The increase in compensation and benefits reflects increased staffing, annual salary increases, and expenses related to the former CEO's retirement[253](index=253&type=chunk) [HarborOne Mortgage Segment](index=84&type=section&id=HarborOne%20Mortgage%20Segment) HarborOne Mortgage's net income significantly decreased due to a substantial drop in mortgage banking income, as rising interest rates dampened origination volumes [Net Income](index=84&type=section&id=Net%20Income) HarborOne Mortgage's net income decreased for Q2 and H1 2022, heavily impacted by prevailing interest rates and reduced refinancing activity | Metric | Three Months Ended June 30, 2022 (in millions) | Three Months Ended June 30, 2021 (in millions) | Six Months Ended June 30, 2022 (in millions) | Six Months Ended June 30, 2021 (in millions) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net income | $1.4 | $2.6 | $5.6 | $14.3 | [Noninterest Income](index=84&type=section&id=Noninterest%20Income) Total noninterest income for HarborOne Mortgage decreased significantly due to a sharp decline in gain on sale of mortgage loans and processing fees from reduced loan closings | Noninterest Income (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gain on sale of mortgage loans | $4,538 | $14,262 | $9,860 | $39,064 | | Processing, underwriting and closing fees | $571 | $2,281 | $1,257 | $5,173 | | Changes in MSR fair value | $735 | $(2,133) | $5,430 | $990 | | Total mortgage banking income | $8,763 | $16,838 | $21,942 | $49,640 | - Loan production decreased significantly, with total loan amounts of **$297.5 million** for the three months (down from $638.8 million in 2021) and **$551.4 million** for the six months (down from $1,399.0 million in 2021)[258](index=258&type=chunk) - Purchase money mortgages constituted a larger share of originations (**79.8%** for Q2 2022 vs. 46.7% for Q2 2021), while refinance activity declined (**16.8%** for Q2 2022 vs. 51.8% for Q2 2021)[258](index=258&type=chunk) [Noninterest Expense](index=87&type=section&id=Noninterest%20Expense) Total noninterest expense for HarborOne Mortgage decreased significantly due to lower compensation and benefits and reduced loan expenses, consistent with lower origination volumes | Noninterest Expense (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Compensation and benefits | $5,435 | $11,376 | $11,186 | $25,638 | | Loan expenses | $249 | $1,075 | $633 | $3,080 | | Professional fees | $166 | $452 | $376 | $1,061 | | Total noninterest expense | $7,242 | $14,101 | $15,003 | $32,158 | - The decrease in compensation and benefits primarily reflects reduced commission expense and staffing levels, consistent with lower mortgage origination volumes[261](index=261&type=chunk) [Asset Quality](index=88&type=section&id=Asset%20Quality) Asset quality remained strong, with total nonperforming assets decreasing to $24.4 million and the allowance for credit losses on loans at 1.11% of total loans [Nonperforming Assets](index=88&type=section&id=Nonperforming%20Assets) Total nonperforming assets decreased to $24.4 million, primarily due to the resolution of an $8.8 million credit in the office at-risk sector | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Total nonaccrual loans | $24,415 | $36,133 | | Total nonperforming assets | $24,441 | $36,186 | | Nonperforming assets to total assets | 0.52% | 0.79% | | Performing troubled debt restructurings | $8,935 | $10,003 | - The decrease in nonperforming assets was primarily due to the resolution of one **$8.8 million** credit, which also resulted in a **$2.8 million** charge-off in Q1 2022[266](index=266&type=chunk) [Allowance for Credit Losses (ACL) Methodology](index=88&type=section&id=Allowance%20for%20Credit%20Losses%20(ACL)%20Methodology) The ACL methodology, updated with CECL adoption, evaluates quantitative and qualitative factors, pooling loans by risk characteristics and individually analyzing others using various valuation methods - The ACL methodology combines quantitative (pooled loans by risk characteristics, DCF with econometric factors like unemployment rate) and qualitative factors[267](index=267&type=chunk)[271](index=271&type=chunk) - Individually analyzed loans (nonaccrual, TDRs, high-risk commercial) are measured using DCF, market price, or collateral fair value[268](index=268&type=chunk)[271](index=271&type=chunk) [Allowance for Loan Losses Breakdown](index=90&type=section&id=Allowance%20for%20Loan%20Losses%20Breakdown) The ACL on loans was $43.6 million, or 1.11% of total loans, with commercial real estate loans accounting for the largest portion at 46.9% | Loan Category | June 30, 2022 ACL (in thousands) | % of Total Allowance | December 31, 2021 ACL (in thousands) | % of Total Allowance | | :------------------------------------ | :------------------------------- | :------------------- | :------------------------------- | :------------------- | | Residential real estate: One- to four-family | $10,082 | 23.15% | $3,631 | 8.00% | | Commercial real estate | $20,431 | 46.90% | $33,242 | 73.26% | | Commercial and industrial | $7,174 | 16.47% | $4,638 | 10.22% | | Total ACL | $43,560 | 100.00% | $45,377 | 100.00% | - The ACL on individually analyzed loans amounted to **$3.6 million**, representing **10.9%** of their carrying value[272](index=272&type=chunk) [Net Charge-offs (Recoveries)](index=90&type=section&id=Net%20Charge-offs%20(Recoveries)) Net recoveries were $505,000 for Q2, while net charge-offs were $2.2 million for H1, including a $2.8 million charge-off from a single commercial credit resolution | Metric | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | | :------------------------------------ | :------------------------------- | :----------------------------- | | Net Charge-offs (Recoveries) (in thousands) | $(505) | $2,225 | | Annualized Net Charge-off (Recovery) Rate | (0.05)% | 0.12% | - The six-month period included a **$2.8 million** charge-off upon the resolution of one commercial credit[246](index=246&type=chunk) [Management of Market Risk](index=91&type=section&id=Management%20of%20Market%20Risk) The Company uses income simulation and Economic Value of Equity (EVE) analysis to measure interest rate risk, indicating sensitivity to rising rates with a projected (18.0)% decrease in EVE for a +300 bps shift [Net Interest Income Analysis](index=91&type=section&id=Net%20Interest%20Income%20Analysis) Income simulation projects a (0.7)% decrease in net interest income over one year for a +300 basis point shift in the yield curve | Change in Interest Rates (basis points) | Change in Net Interest Income (Year One) | | :-------------------------------------- | :--------------------------------------- | | +300 | (0.7)% | | +200 | (0.3)% | | +100 | (0.2)% | | -100 | (2.1)% | [Economic Value of Equity Analysis](index=93&type=section&id=Economic%20Value%20of%20Equity%20Analysis) EVE analysis estimates an (18.0)% decrease in EVE for a +300 basis point instantaneous parallel shift in interest rates | Change in Interest Rates (basis points) | Estimated Change in EVE (Percent) | | :-------------------------------------- | :-------------------------------- | | +300 | (18.0)% | | +200 | (10.4)% | | +100 | (4.8)% | | -100 | (1.7)% | [Liquidity Management and Capital Resources](index=93&type=section&id=Liquidity%20Management%20and%20Capital%20Resources) The Company maintains strong liquidity through deposit inflows, loan repayments, and FHLB borrowings, with both the Company and Bank exceeding all regulatory capital requirements - Primary sources of funds include deposit inflows, loan repayments, maturities and sales of securities, and FHLB borrowings[286](index=286&type=chunk) | Metric | June 30, 2022 (in millions) | | :------------------------------------ | :-------------------------- | | Cash and cash equivalents | $84.3 | | Available-for-sale investment securities | $334.4 | | Total deposits | $3,850 | | Available borrowing capacity from FHLB | $829.5 | | Available borrowing capacity from FRBB | $66.9 | - The Company and the Bank were considered **'well capitalized'** under regulatory guidelines at June 30, 2022[294](index=294&type=chunk) [Off-Balance Sheet Arrangements, Credit Commitments, and Contractual Obligations](index=95&type=section&id=Off-Balance%20Sheet%20Arrangements%2C%20Credit%20Commitments%2C%20and%20Contractual%20Obligations) The Company had $257.7 million in loan origination commitments and $776.0 million in unadvanced funds, with no other material off-balance sheet arrangements identified | Commitment Type | June 30, 2022 (in millions) | | :------------------------------------ | :-------------------------- | | Outstanding commitments to originate loans | $257.7 | | Unadvanced funds on loans | $776.0 | | Certificates of deposit maturing within one year | $421.6 | - Management expects a substantial portion of maturing certificates of deposit to be renewed, but may use FHLB advances or brokered deposits if not, potentially increasing interest expense[295](index=295&type=chunk) [Non-GAAP Financial Measures and Reconciliation to GAAP](index=95&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliation%20to%20GAAP) The Company uses the non-GAAP tangible common equity to tangible assets ratio, which was 11.92% at June 30, 2022, for evaluating financial condition - The tangible common equity to tangible assets ratio is a non-GAAP measure used by regulators and market analysts[297](index=297&type=chunk) | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Total stockholders' equity | $624,478 | $679,261 | | Less: Goodwill | $69,802 | $69,802 | | Less: Other intangible assets | $2,695 | $3,164 | | Tangible common equity | $551,981 | $606,295 | | Total assets | $4,704,044 | $4,553,405 | | Less: Goodwill | $69,802 | $69,802 | | Less: Other intangible assets | $2,695 | $3,164 | | Tangible assets | $4,631,547 | $4,480,439 | | Tangible common equity / tangible assets | 11.92% | 13.53% | [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=98&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to market risk disclosures in Item 2, detailing strategies and analyses for managing interest rate risk through income simulation and EVE analysis - Market risk disclosures are incorporated by reference from the 'Management of Market Risk' section in Item 2[302](index=302&type=chunk) [ITEM 4. Controls and Procedures](index=98&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective, with changes to internal control over financial reporting implemented due to CECL adoption, including new model validation controls - Disclosure controls and procedures were evaluated and concluded to be effective as of June 30, 2022[302](index=302&type=chunk) - Changes to internal controls over financial reporting were implemented to support the adoption of Topic 326 (CECL), including new controls for model validation and input review[303](index=303&type=chunk) PART II. OTHER INFORMATION [ITEM 1. Legal Proceedings](index=99&type=section&id=ITEM%201.%20Legal%20Proceedings) The Company is not involved in any material pending legal proceedings beyond routine matters, with no expected material impact on financial condition or results of operations - No material pending legal proceedings are currently affecting the Company[306](index=306&type=chunk) [ITEM 1A. Risk Factors](index=99&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to the Company's risk factors have occurred since those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2021 - No material changes in risk factors since the December 31, 2021 Annual Report on Form 10-K[307](index=307&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=99&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred, but the Company repurchased 1,337,602 shares of common stock under its fourth share repurchase program - No unregistered sales of equity securities or use of proceeds[308](index=308&type=chunk) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :------------------------------------ | :------------------------------- | :--------------------------- | | May 1 to May 31, 2022 | 673,141 | $13.78 | | June 1 to June 30, 2022 | 664,461 | $13.87 | | Total (April 1 to June 30, 2022) | 1,337,602 | $13.83 | - The fourth share repurchase program, authorized on April 12, 2022, allows for the repurchase of up to **2,526,134 shares** (approximately 5% of outstanding shares)[308](index=308&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=99&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities[309](index=309&type=chunk) [ITEM 4. Mine Safety Disclosures](index=99&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Not applicable[310](index=310&type=chunk) [ITEM 5. Other Information](index=99&type=section&id=ITEM%205.%20Other%20Information) No other information is required to be disclosed under this item - No other information[311](index=311&type=chunk) [ITEM 6. Exhibits](index=101&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits included in or incorporated by reference into the Quarterly Report on Form 10-Q, including certifications from the CEO and CFO, and interactive data files - Exhibits include CEO and CFO certifications (31.1, 31.2, 32.1) and interactive data files (101, 104)[314](index=314&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38955 HarborOne Bancorp, Inc. (Exact name of registrant as specified in its charter) Massachusetts 81-1607465 (State or other jurisdiction of in ...

Table of Contents For the Fiscal Year Ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38955 HarborOne Bancorp, Inc. (Exact name of registrant as specified in its charter) Massachusetts 81-1607465 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 1 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38955 HarborOne Bancorp, Inc. (Exact name of registrant as specified in its charter) Massachusetts 81-1607465 (State or other jurisdiction o ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38955 HarborOne Bancorp, Inc. (Exact name of registrant as specified in its charter) Massachusetts 81-1607465 (State or other jurisdiction of inc ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38955 HarborOne Bancorp, Inc. (Exact name of registrant as specified in its charter) Massachusetts 81-1607465 (State or other jurisdiction of in ...