HarborOne Bancorp(HONE) - 2024 Q2 - Quarterly Report

Financial Position - Total assets increased by $119.1 million, or 2.1%, to $5.79 billion at June 30, 2024, from $5.67 billion at December 31, 2023[151] - Total deposits increased by $70.9 million, or 1.6%, to $4.46 billion at June 30, 2024, from $4.39 billion at December 31, 2023[158] - Total stockholders' equity decreased by 1.1% to $577.3 million at June 30, 2024, compared to $583.8 million at December 31, 2023[161] - Total assets increased to $5,806,368 thousand as of June 30, 2024, compared to $5,481,934 thousand as of June 30, 2023[168] - Total equity decreased to $579,863 thousand as of June 30, 2024, from $609,245 thousand as of June 30, 2023[168] Loan and Deposit Activity - Net loans increased by $87.8 million, or 1.9%, to $4.79 billion at June 30, 2024, from $4.70 billion at December 31, 2023[153] - Loans held for sale increased by $22.1 million to $41.8 million at June 30, 2024, reflecting increased loan production[152] - Noninterest-bearing deposits increased by $29.8 million, or 4.5%, to $689.8 million at June 30, 2024[158] - Brokered deposits increased by $58.6 million, or 17.9%, to $385.3 million at June 30, 2024[158] - The total loan balance as of June 30, 2024, was $4.84 billion, up from $4.75 billion at December 31, 2023, indicating growth in the loan portfolio[201] Income and Expenses - Consolidated net income for the three months ended June 30, 2024, was $7.3 million, slightly down from $7.5 million for the same period in 2023[163] - Interest and dividend income on a tax equivalent basis increased by $7.2 million, or 11.8%, to $68.2 million for the three months ended June 30, 2024, compared to $61.0 million for the same period in 2023[171] - Interest expense increased by $7.9 million, or 27.5%, to $36.6 million for the three months ended June 30, 2024, from $28.7 million for the same period in 2023[172] - Net interest and dividend income decreased by $707,000, or 2.2%, to $31.6 million for the three months ended June 30, 2024, compared to $32.3 million for the same period in 2023[174] - Noninterest expense increased by $1.6 million, or 6.1%, for the three months ended June 30, 2024, compared to the same period in 2023[181] Credit Quality - The allowance for credit losses on loans increased by $1.2 million, or 2.4%, to $49.1 million at June 30, 2024[153] - The provision for credit losses was $615,000 for the three months ended June 30, 2024, a decrease of $2.7 million, or 81.3%, compared to $3.3 million for the same period in 2023[181] - Net charge-offs totaled $195,000, or 0.02%, of average loans outstanding for the quarter ended June 30, 2024, compared to $2.7 million, or 0.23%, for the same period in 2023[183] - Nonperforming assets totaled $9.8 million at June 30, 2024, a significant decrease from $17.6 million at December 31, 2023, reflecting improved asset quality[202] - The allowance for credit losses to total loans was 1.02% as of June 30, 2024, compared to 1.01% at the end of 2023, indicating stable credit quality management[201] Interest Rate Risk and Liquidity - The Company’s primary market risk is interest-rate risk, managed through an Asset/Liability Committee that establishes exposure limits[210] - The Company’s liquidity sources include deposit inflows, loan repayments, and borrowings from the FHLB[217] - As of June 30, 2024, the company has immediate liquid resources in cash and cash equivalents totaling $235.1 million, primarily on deposit with FRBB[219] - The company had $385.3 million in brokered deposits as of June 30, 2024, to supplement core deposit fluctuations and loan growth[221] - The company believes it can meet its contractual obligations through adequate cash levels and liquidity management[222] Market and Economic Conditions - The estimated Economic Value of Equity (EVE) decreased by $182,118, or 32.2%, under a +300 basis points interest rate scenario as of June 30, 2024[215] - The Company’s net interest income simulation results indicate a potential decrease of 12.0% in Year One and 14.7% in Year Two under a +300 basis points interest rate scenario as of June 30, 2024[212] - Management continues to monitor the loan portfolio closely for signs of deterioration, particularly in the commercial real estate sector, amid rising vacancies and interest rates[203] - Management identified business-oriented hotels, non-anchored retail space, and metro office space as sectors potentially more susceptible to weakness, with total outstanding balances of $119.7 million, $48.6 million, and $6.2 million respectively[204] - The commercial real estate portfolio is primarily located in New England, with 75% secured by properties in Massachusetts and Rhode Island, highlighting regional concentration[203]