HarborOne Bancorp, Inc. Announces 2020 Third Quarter Earnings

Rhea-AI Summary

HarborOne Bancorp reported a net income of $11.9 million ($0.22/share) for Q3 2020, up from $10.6 million ($0.19/share) in Q2 and $7.1 million ($0.13/share) in Q3 2019. Year-to-date net income increased to $27.2 million ($0.50/share) from $14.0 million ($0.25/share) last year. Key highlights include a 5.3% growth in commercial loans and a record $38.1 million in mortgage banking income amid low mortgage rates. Total assets decreased by 0.8% to $4.43 billion, while noninterest income rose by 15.1% to $44.5 million. The Bank maintains strong capital ratios, exceeding regulatory requirements.

Positive

• Net income increased by 12.3% quarter-over-quarter and 67.6% year-over-year.
• Commercial loan growth of $104.3 million, or 5.3% in Q3 2020.
• Recorded $38.1 million in mortgage banking income from historic mortgage originations.
• Net interest margin improved by 9 basis points to 3.09%.
• Share repurchase program received regulatory approval.

Negative

• Provisions for loan losses increased to $13.5 million amid COVID-19 impacts.
• Total nonperforming assets rose to $41.0 million, up from $38.6 million in the prior quarter.
• Net charge-offs increased to $338,000, reflecting rising credit quality concerns.

BROCKTON, Mass.--(BUSINESS WIRE)--HarborOne Bancorp, Inc. (the “Company” or “HarborOne”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced net income of $11.9 million, or $0.22 per basic and diluted share, for the third quarter of 2020, compared to $10.6 million, or $0.19 per basic and diluted share, for the preceding quarter and $7.1 million, or $0.13 per basic and diluted share, for the same period last year. For the nine months ended September 30, 2020, net income was $27.2 million, or $0.50 per basic and diluted share, compared to $14.0 million, or $0.25 per basic and diluted share, for the same period last year. The three and nine months ended September 30, 2020 reflect charges of $10.7 million and $17.9 million, respectively, to the provision for loan losses and $71,000 and $1.8 million, respectively, to non-interest expense related to the COVID-19 pandemic.

Selected Third Quarter Financial Highlights:

• Net income tops $11.8 million, while building the allowance for loan loss to 1.40% of loans
• Return on average assets was 1.09% and return on average equity was 6.90%
• Net interest margin expands 9 basis points to 3.09%
• Historic levels of residential real estate mortgage originations resulting in mortgage banking income of $38.1 million
• Commercial loan growth of $104.3 million, or 5.3%
• Cost of funds continue to decline with marked improvement in deposit mix
• Adopted and received regulatory approval for a share repurchase program

“We’re extremely proud to announce the best quarterly financial performance in our history,” said James Blake, CEO. “The responsiveness and extraordinary commitment of the entire team to remain ‘open for business’ despite the extreme challenges is something we’re particularly proud of. The outstanding performance of HarborOne Mortgage, continued commercial loan growth, and expanded margins are a result of that commitment.” Added Joe Casey, President and COO: “We remain focused on keeping customers and staff safe and healthy, which has quickly become a fundamental aspect of running the business. Through it all, we’re really excited about our newest branch opening in Quincy, Massachusetts on October 19, and we’re full steam ahead to open our new South Boston location in Q1’21.”

Net Interest Income
The Company’s net interest and dividend income was $31.2 million for the quarter ended September 30, 2020, up $1.7 million, or 5.8%, from $29.4 million for the quarter ended June 30, 2020 and up $3.2 million, or 11.4%, from $28.0 million for the quarter ended September 30, 2019. The tax equivalent interest rate spread and net interest margin were 2.87% and 3.09%, respectively, for the quarter ended September 30, 2020, compared to 2.75% and 3.00%, respectively, for the quarter ended June 30, 2020, and 2.73% and 3.11%, respectively, for the quarter ended September 30, 2019. Margin improvement has largely been driven by the decrease in deposit rates. It is expected that interest rates will remain low and that the economic environment will continue to be volatile as the impact of the COVID-19 pandemic is realized.

The components of the quarter over quarter increase in net interest and dividend income reflected a decrease of $1.3 million, or 18.1%, in total interest expense and an increase of $427,000, or 1.2%, in total interest and dividend income. The decrease in total interest expense primarily reflected a decrease in interest rates, resulting in a 23 basis point decrease in the cost of interest-bearing deposits. The mix of deposits continues to shift as customers move to more liquid options. The average balance of certificates of deposit accounts decreased quarter over quarter by $46.8 million, while the savings account average balance increased $55.2 million from the preceding quarter. Average FHLB advances decreased $108.9 million as the need for short-term borrowed funds diminished, and the cost of borrowed funds increased 90 basis points, resulting in a decrease of $10,000 in interest expense on FHLB borrowings. An interest rate swap agreement with a notional amount of $100.0 million, designated as a cash flow hedge of certain LIBOR-based liabilities, provided a $94,000 gain that was offset against brokered deposits for the quarter ended September 30, 2020 and a $149,000 gain that was offset against FHLB interest expense for the preceding quarter. The increase in total interest and dividend income primarily reflected an increase of $66.3 million in average earning assets offset by a decrease in rates. The yield on loans was 3.94% for the quarter ended September 30, 2020, down from 4.06% for the quarter ended June 30, 2020. As adjustable rate loans repriced and new loans came on at lower rates, the yield on commercial loans decreased 15 basis points and the yield on residential real estate loans decreased 8 basis points. Interest on loans in the third quarter included $1.6 million in accretion income from the fair value discount on loans acquired from Coastway Bancorp, Inc. (“Coastway”) and $140,000 in prepayment penalties on commercial loans. Accretion income and prepayment penalties in the previous quarter were $1.3 million and $18,000, respectively. The increase in accretion income reflects increased loan payoffs due to low mortgage loan rates.

The increase in net interest and dividend income from the prior year quarter reflected a decrease of $5.9 million, or 49.9%, in total interest expense, partially offset by a $2.7 million, or 6.8%, decrease in total interest and dividend income. The decreases reflect offsetting rate and volume changes in both interest-bearing assets and liabilities. The cost of interest-bearing liabilities decreased 89 basis points while the average balance increased $170.6 million. The yield on interest-earning assets decreased 75 basis points while the average balance increased $447.5 million

Noninterest Income
Total noninterest income increased $5.9 million, or 15.1%, to $44.5 million for the quarter ended September 30, 2020, from $38.6 million for the quarter ended June 30, 2020. Record breaking mortgage demand spurred by low mortgage rates continued to provide higher than usual mortgage origination activity and other mortgage banking income for HarborOne Mortgage, LLC. The $789.1 million in mortgage loan closings resulted in a gain on loan sales of $34.1 million for the quarter ended September 30, 2020 as compared to $30.9 million for the preceding quarter. Other mortgage banking income increased $171,000. Residential mortgage loan payoffs resulted in accelerated amortization of mortgage servicing rights in the amount of $1.1 million for the three months ended September 30, 2020 unchanged from June 30, 2020. The 10-year Treasury Constant Maturity rate increased 3 basis points in the third quarter of 2020, resulting in an $890,000 increase in fair value of mortgage servicing rights, and has remained fairly flat since its first quarter 122 basis point drop from year-end 2019. The fair value of the mortgage servicing rights decreased $2.9 million for the nine months ended September 30, 2020. The low mortgage interest rate environment spurred increased purchase and refinance activity in the first nine months of the year, continuing into the fourth quarter of 2020 with a locked residential mortgage pipeline at September 30, 2020 of $623.6 million; however, seasonality, economic uncertainty and increased unemployment rates may have a negative impact on mortgage loan originations in the future. Other income for the quarter ended September 30, 2020 includes $1.6 million in income from the sale of VISA B shares held in the investment portfolio and was partially offset by a $612,000 decrease in swap fee income as compared to the preceding quarter.

Total noninterest income increased $27.2 million, or 157.4%, as compared to the quarter ended September 30, 2019, primarily due to a $26.6 million, or 231.5%, increase in mortgage banking income. Mortgage banking income increased compared to the same period last year, due to the increase in mortgage origination volume. Mortgage originations increased primarily as a result of lower residential mortgage interest rates and increased refinancing volume. The income from the sale of the VISA B shares noted above was offset by a $739,000 decrease in swap fee income as compared to the quarter ended September 30, 2019. Bank-owned life insurance income increased $304,000 due to a $41.4 million increase in bank-owned life insurance from September 30, 2019 to September 30, 2020.

Noninterest Expense
Total noninterest expenses were $45.7 million for the quarter ended September 30, 2020, an increase of $1.9 million, or 4.3%, from the quarter ended June 30, 2020, primarily driven by a $2.4 million increase in compensation and benefits, a $426,000 increase in loan expense, and a $429,000 increase in occupancy and equipment expenses. The increases were partially offset by a decrease of $914,000 in other expenses. The increase in compensation and benefits reflects timing of accruals for incentive programs and severance payments as a result of the staff realignment. The decrease in other expenses reflects a $1.3 million decrease in COVID-19 pandemic-related expenses. For the three months ended September 30, 2020, the expenses amounted to $71,000 compared to $1.4 million in the preceding quarter. Due to the uncertain nature of the COVID-19 pandemic, we may have elevated expenses in the future for personnel, cleaning and other initiatives to support our employees and customers.

Total noninterest expenses increased $9.5 million, or 26.3%, from the quarter ended September 30, 2019. Compensation and benefits increased $6.6 million, loan expenses increased $1.5 million professional fees increased $569,000, and deposit insurance expense increased $535,000. The increase in compensation and benefits and loan expense primarily reflected the increased volume of residential real estate mortgage originations. The increase in professional fees reflects fluctuations in services. The increase in deposit insurance as compared to the prior year reflects FDIC assessment credit awards that were recorded in the quarter ended September 30, 2019. No such awards have been recorded in 2020.

Income Tax Provision
The effective tax rate was 27.7% for the quarter ended September 30, 2020, compared to 25.8% for the quarter ended June 30, 2020 and 12.9% for the quarter ended September 30, 2019. The effective tax rate for the quarter ended September 30, 2019 included a 2015 federal tax refund of $1.3 million and a 2015 Massachusetts state tax refund of $39,700.

Provision for Loan Losses and Asset Quality
The Company recorded a provision for loan losses of $13.5 million for the quarter ended September 30, 2020, compared to $10.0 million for the quarter ended June 30, 2020 and $889,000 for the quarter ended September 30, 2019. The allowance for loan losses was $49.2 million, or 1.40%, of total loans at September 30, 2020, compared to $36.1 million, or 1.04%, of total loans at June 30, 2020 and $23.0 million, or 0.74%, of total loans at September 30, 2019. Changes in the provision for loan losses are based on management’s assessment of loan portfolio growth and composition changes, historical charge-off trends, and ongoing evaluation of credit quality and current economic conditions.

The provision for loan losses for the quarter ended September 30, 2020 included adjustments for our quarterly analysis of our historical and peer loss experience rates, commercial real estate loan growth, and a $10.7 million provision directly related to the estimate of inherent losses resulting from the impact of the COVID-19 pandemic. The provision for loan losses for the quarter ended June 30, 2020 included adjustments for our quarterly analysis of our historical and peer loss experience rates, commercial real estate loan growth, and a $5.7 million provision directly related to the estimate of inherent losses resulting from the impact of the COVID-19 pandemic. The provision for loan losses for the quarter ended September 30, 2019 primarily reflected commercial real estate loan growth.

In estimating the provision for the COVID-19 pandemic, management considered economic factors, including unemployment rates and the interest rate environment, the volume and dollar amount of requests for payment deferrals, the loan risk profile of each loan type, and whether the loans were purchased. The additional provisions provided to each category for the three months ended September 30, 2020 ranged from 26 to 55 basis points and amounted to allocations of $2.5 million to the residential real estate portfolio, $7.0 million to the commercial portfolio, and $1.2 million to the consumer portfolio.

Management continues to evaluate our loan portfolio, particularly the commercial loan portfolio, in light of the expected decrease in economic activity, the mitigating effects of government stimulus, and loan modification efforts designed to limit the long term impacts of the COVID-19 pandemic. Our commercial loan portfolio is diversified across many sectors and is largely secured by commercial real estate loans, which make up 66.6% of the total commercial loan portfolio. Initial assessments of the impact of the COVID-19 pandemic on the commercial loan portfolio have been focused on sectors that have experienced a direct impact. Management has identified six sectors as the most susceptible to immediate increased credit risk: retail, office space, hotels, health and social services, restaurants, and recreation. The total loan portfolio of the six commercial sectors identified as at risk totaled $945.2 million, which represents 45.6% of the commercial loan portfolio. The at risk sectors include $707.6 million in commercial real estate loans, $185.9 million in commercial and industrial loans, and $51.7 million in commercial construction loans.

As of September 30, 2020, the retail sector was $261.7 million, or 12.6% of total commercial loans and included $217.8 million in commercial real estate loans, $31.8 million in commercial and industrial loans, and $12.1 million in commercial construction loans. U.S. Small Business Administration’s Paycheck Protection Program loans included in the sector totaled $6.9 million. We have provided deferrals for loans in this sector with outstanding principal balances of $46.1 million. We originated $16.3 million loans during the third quarter that are within the retail sector. The new loans are supported by leases to retail space largely insulated from the pandemic, such as drug stores and grocery stores.

As of September 30, 2020, the office sector was $214.0 million, or 10.3% of total commercial loans, and included $197.1 million in commercial real estate loans, $16.2 million in commercial and industrial loans, and $768,000 in commercial construction loans. We provided deferrals for loans in the sector with outstanding principal balances of $13.3 million. No Paycheck Protection Program loans were originated in this sector. We originated $619,000 loans during the third quarter that are within the office sector.

As of September 30, 2020, the hotel sector was $193.8 million, or 9.4% of total commercial loans, and included $171.0 million in commercial real estate loans, $2.7 million in commercial and industrial loans, and $20.1 million in commercial construction loans. Paycheck Protection Program loans included in the sector totaled $548,000. We have provided deferrals for loans in this sector with outstanding principal balances of $112.2 million, $61.3 million that have expired deferral periods and are paying as agreed, and $4.9 million that have expired deferral periods and are greater than 30 days delinquent. In addition, we have provided other short-term relief for loans in this sector with outstanding principal balances of $7.7 million. At September 30, 2020, nonperforming loans included in the hotel sector amount to $4.8 million. The increase from the second quarter reflects one loan that amounted to $1.4 million that is on nonaccrual and subsequently executed a deferral agreement.

The health and social services sector amounted to $188.0 million, or 9.1% of total commercial loans, as of September 30, 2020 and included $96.6 million in commercial real estate loans, $91.3 million in commercial and industrial loans, and $107,000 in commercial construction loans. Paycheck Protection Program loans included in the sector totaled $41.5 million, and we have provided deferrals for loans in this sector with outstanding principal balances of $13.8 million. We originated $12.7 million loans during the third quarter that are within this sector.

As of September 30, 2020, the restaurant sector amounted to $56.1 million, or 2.7% of total commercial loans, including $9.0 million in Paycheck Protection Program loans. We provided deferrals for loans in this sector with outstanding principal balances of $13.4 million. The recreation sector amounted to $31.6 million, or 1.5% of total commercial loans, including $2.7 million in Paycheck Protection Program loans. We provided deferrals for loans in this sector with outstanding principal balances of $15.6 million. Included in the recreation sector is a $9.2 million nonaccrual loan with an allocated reserve of $254,000 secured by a recreational facility for which credit deterioration began prior to the COVID-19 pandemic.

We provided access to the Paycheck Protection Program to both our existing customers and new customers, to ensure small businesses in our communities have access to this important lifeline for their businesses. As of September 30, 2020, Paycheck Protection Program loans amounted to $153.0 million. As of September 30, 2020, there was $4.0 million in deferred processing fee income that will be recognized over the life of the loans.

We are also working with commercial loan customers that may need payment deferrals or other accommodations to keep their loans out of default through the COVID-19 pandemic. As of September 30, 2020, we have provided 162 payment deferrals on commercial loans with a total principal balance of $289.2 million, or 14.0%, of total commercial loans, of which $214.4 million are loans included in an at risk sector. As of September 30, 2020, 68.7% of the commercial deferrals have expired and the borrower is making payments as agreed, 1.7% of the commercial deferrals have expired and the borrower is delinquent, and 29.6% are in active deferral period. The majority of active commercial deferrals expire during the fourth quarter. Requests for additional deferrals or new deferrals are immaterial at September 30, 2020.

The residential loan and consumer loan portfolios have not experienced significant credit quality deterioration as of September 30, 2020; however, the continuing impact and uncertain nature of the COVID-19 pandemic may result in increases in delinquencies, charge-offs and loan modifications in these portfolios through the remainder of the year. As of September 30, 2020, we had provided 186 payment deferrals on residential mortgage loans with a total principal balance of $56.7 million, or 5.0% of total residential loans, of which 74.9% of the deferrals have expired and are paying as agreed and 24.2% are in active deferral periods. We had 561 payment deferrals on consumer loans with a total principal balance of $13.3 million, or 4.2%, of total consumer loans, of which 91.4% of the deferrals have expired and are paying as agreed. Requests for additional extensions on residential mortgage loans and consumer loans were not significant as of September 30, 2020.

Net charge offs totaled $338,000 for the quarter ended September 30, 2020, or 0.04% of average loans outstanding on an annualized basis, compared to $286,000, or 0.03% of average loans outstanding on an annualized basis, for the quarter ended June 30, 2020 and $106,000, or 0.01% of average loans outstanding on an annualized basis, for the quarter ended September 30, 2019.

Total nonperforming assets were $41.0 million at September 30, 2020, compared to $38.6 million at June 30, 2020 and $27.9 million at September 30, 2019. Nonperforming assets as a percentage of total assets were 0.93% at September 30, 2020, 0.86% at June 30, 2020, and 0.71% at September 30, 2019. The increase from the preceding quarter is primarily due to a commercial loan that amounted to $1.4 million and a net increase in nonperforming residential real estate loans of $1.4 million. The increase in nonperforming assets from the prior year quarter was primarily in the commercial loan portfolio.

Balance Sheet
Total assets decreased $36.6 million, or 0.8%, to $4.43 billion at September 30, 2020 from $4.46 billion at June 30, 2020. The decrease primarily reflects a decrease of $110.3 million in short-term investments partially offset by a $28.7 million increase in net loans and $31.5 million increase in loans held for sale. Additionally, an asset held for sale at June 30, 2020 of $8.5 million closed in the third quarter.

Net loans increased $28.7 million, or 0.8%, to $3.47 billion at September 30, 2020 from $3.44 billion at June 30, 2020. The net increase in loans for the three months ended September 30, 2020 was primarily due to increases in commercial real estate loans of $62.9 million, commercial and industrial loans of $23.9 million, and commercial construction loans of $17.4 million, partially offset by a decrease in consumer loans of $41.8 million and a $20.7 million decrease in residential real estate loans. Loans held for sale increased $31.5 million, or 19.8%, to $190.4 million at September 30, 2020, from $158.9 million at June 30, 2020.

Total deposits increased $57.2 million, or 1.7%, to $3.37 billion at September 30, 2020 from $3.31 billion at June 30, 2020. Compared to the prior quarter, non-certificate accounts increased $29.2 million and term certificate accounts increased $28.0 million. FHLB borrowings decreased $105.0 million, or 52.5%, to $236.1 million at September 30, 2020 from $341.1 million at June 30, 2020.

Total stockholders’ equity was $694.1 million at September 30, 2020 compared to $684.4 million at June 30, 2020 and $659.6 million at September 30, 2019. The tangible common equity to tangible assets ratio was 14.23% at September 30, 2020, 13.88% at June 30, 2020, and 15.06% at September 30, 2019. At September 30, 2020, the Company and the Bank had strong capital positions and exceeded all regulatory capital requirements.

About HarborOne Bancorp, Inc.
HarborOne Bancorp, Inc. is the holding company for HarborOne Bank, a Massachusetts-chartered savings bank. HarborOne Bank serves the financial needs of consumers, businesses, and municipalities throughout Eastern Massachusetts and Rhode Island through a network of 26 full-service branches located in Massachusetts and Rhode Island, one limited service branch and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. The Bank also provides a range of educational services through “HarborOne U,” with classes on small business, financial literacy and personal enrichment at two campuses located adjacent to our Brockton and Mansfield locations. HarborOne Mortgage, LLC, a subsidiary of HarborOne Bank, is a full-service mortgage lender with more than 30 offices in Massachusetts, Rhode Island, New Hampshire, Maine, New Jersey and Florida and is licensed to lend in four additional states.

Forward Looking Statements
Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, the negative impacts and disruptions of the COVID-19 pandemic and the measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; the length and extent of economic contraction as a result of the COVID-19 pandemic; the effects of continued deterioration in employment levels, general business and economic conditions on a national basis and in the local markets in which the Company operates, including changes that adversely affect borrowers’ ability to service and repay the Company’s loans; changes in customer behavior; turbulence in the capital and debt markets and the impact of such conditions on the Company’s business activities; changes in interest rates; increases in loan default and charge-off rates; decreases in the value of securities in the Company’s investment portfolio; fluctuations in real estate values; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior or adverse economic developments; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; competitive pressures from other financial institutions; acquisitions may not produce results at levels or within time frames originally anticipated; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, and future pandemics; changes in regulation; reputational risk relating to the Company’s participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; changes in accounting standards and practices; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; demand for loans in the Company’s market area; the Company’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that the Company may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in the Annual Report on Form 10‑K and Quarterly Reports on Form 10‑Q as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, HarborOne Bancorp, Inc.’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.

Use of Non-GAAP Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. The Company’s management believes that the supplemental non-GAAP information, which consists of the tax equivalent basis for yields, the efficiency ratio, tangible common equity to tangible assets ratio and tangible book value per share is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

HarborOne Bancorp, Inc. Consolidated Balance Sheet Trend (Unaudited)
		September 30,				June 30,				March 31,				December 31,				September 30,
(in thousands)		2020				2020				2020				2019				2019
Assets
Cash and due from banks		$	29,180			$	30,355			$	35,264			$	24,464			$	27,758
Short-term investments			108,338				218,617				200,156				187,152				210,873
Total cash and cash equivalents			137,518				248,972				235,420				211,616				238,631
Securities available for sale, at fair value			280,308				262,710				249,789				239,473				204,133
Securities held to maturity, at amortized cost			—				—				—				26,372				27,099
Federal Home Loan Bank stock, at cost			11,631				15,786				13,530				17,121				13,466
Asset held for sale			—				8,536				8,536				8,536				—
Loans held for sale, at fair value			190,373				158,898				118,316				110,552				102,121
Loans:
Commercial real estate			1,380,071				1,317,145				1,211,435				1,168,412				1,083,997
Commercial construction			211,953				194,549				160,993				153,907				160,549
Commercial and industrial			480,129				456,192				317,559				306,282				298,652
Total commercial loans			2,072,153				1,967,886				1,689,987				1,628,601				1,543,198
Residential real estate			1,130,935				1,151,606				1,102,639				1,107,076				1,120,185
Consumer			312,743				354,530				391,244				435,881				448,881
Loans			3,515,831				3,474,022				3,183,870				3,171,558				3,112,264
Less: Allowance for loan losses			(49,223	)			(36,107	)			(26,389	)			(24,060	)			(23,044	)
Net loans			3,466,608				3,437,915				3,157,481				3,147,498				3,089,220
Mortgage servicing rights, at fair value			20,159				16,127				13,207				17,150				16,067
Goodwill			69,802				69,802				69,802				69,802				69,635
Other intangible assets			4,694				5,141				5,588				6,035				6,482
Other assets			247,226				241,019				229,537				204,766				182,166
Total assets		$	4,428,319			$	4,464,906			$	4,101,206			$	4,058,921			$	3,949,020
Liabilities and Stockholders' Equity
Deposits:
Demand deposit accounts		$	650,336			$	642,971			$	439,793			$	406,403			$	446,433
NOW accounts			202,020				199,400				174,971				165,877				143,547
Regular savings and club accounts			912,017				876,753				744,564				626,685				585,327
Money market deposit accounts			815,644				831,653				809,622				856,830				875,804
Term certificate accounts			785,871				757,897				852,274				887,078				873,397
Total deposits			3,365,888				3,308,674				3,021,224				2,942,873				2,924,508
Short-term borrowed funds			95,000				200,000				104,000				183,000				60,000
Long-term borrowed funds			141,106				141,114				181,123				171,132				211,140
Subordinated debt			34,002				33,970				33,938				33,907				33,875
Other liabilities and accrued expenses			98,220				96,693				85,782				62,215				59,943
Total liabilities			3,734,216				3,780,451				3,426,067				3,393,127				3,289,466
Common stock			584				584				584				584				584
Additional paid-in capital			463,531				462,881				461,616				460,232				458,599
Unearned compensation - ESOP			(31,759	)			(32,218	)			(32,678	)			(33,137	)			(33,838	)
Retained earnings			261,304				251,032				242,080				237,356				233,049
Treasury stock			(1,333	)			(721	)			(721	)			(721	)			(721	)
Accumulated other comprehensive income			1,776				2,897				4,258				1,480				1,881
Total stockholders' equity			694,103				684,455				675,139				665,794				659,554
Total liabilities and stockholders' equity		$	4,428,319			$	4,464,906			$	4,101,206			$	4,058,921			$	3,949,020

HarborOne Bancorp, Inc. Consolidated Statements of Net Income - Trend (Unaudited)
		Quarters Ended
		September 30,				June 30,				March 31,				December 31,				September 30,
(in thousands, except share data)		2020				2020				2020				2019				2019
Interest and dividend income:
Interest and fees on loans		$	34,496			$	33,970			$	34,025			$	36,195			$	36,230
Interest on loans held for sale			1,060				988				577				1,120				747
Interest on securities			1,317				1,424				1,808				1,580				1,542
Other interest and dividend income			175				239				759				828				1,211
Total interest and dividend income			37,048				36,621				37,169				39,723				39,730
Interest expense:
Interest on deposits			4,520				5,805				8,693				9,480				9,972
Interest on FHLB borrowings			835				845				1,253				1,385				1,249
Interest on subordinated debentures			524				524				523				524				524
Total interest expense			5,879				7,174				10,469				11,389				11,745
Net interest and dividend income			31,169				29,447				26,700				28,334				27,985
Provision for loan losses			13,454				10,004				3,749				1,251				889
Net interest and dividend income, after provision for loan losses			17,715				19,443				22,951				27,083				27,096
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans			34,055				30,862				12,278				9,471				11,015
Changes in mortgage servicing rights fair value			(193	)			(1,111	)			(4,387	)			625				(2,474	)
Other			4,281				4,110				2,571				2,894				2,964
Total mortgage banking income			38,143				33,861				10,462				12,990				11,505
Deposit account fees			3,451				2,969				3,931				4,274				4,186
Income on retirement plan annuities			104				103				101				102				104
Loss on asset held for sale			—				—				—				(482	)			—
Gain on sale and call of securities, net			—				8				2,525				—				77
Bank-owned life insurance income			560				554				551				343				256
Other income			2,203				1,143				1,296				912				1,145
Total noninterest income			44,461				38,638				18,866				18,139				17,273
Noninterest expenses:
Compensation and benefits			29,839				27,469				21,185				23,719				23,238
Occupancy and equipment			4,581				4,152				4,563				4,366				4,171
Data processing			2,119				2,277				2,180				2,251				2,196
Loan expense			3,189				2,763				1,481				1,893				1,704
Marketing			817				1,057				876				771				799
Professional fees			1,458				1,518				1,228				2,470				889
Deposit insurance			310				279				271				5				(225	)
Other expenses			3,409				4,323				3,604				3,260				3,431
Total noninterest expenses			45,722				43,838				35,388				38,735				36,203
Income before income taxes			16,454				14,243				6,429				6,487				8,166
Income tax provision			4,561				3,668				1,705				2,180				1,053
Net income		$	11,893			$	10,575			$	4,724			$	4,307			$	7,113
Earnings per common share:
Basic		$	0.22			$	0.19			$	0.09			$	0.08			$	0.13
Diluted		$	0.22			$	0.19			$	0.09			$	0.08			$	0.13
Weighted average shares outstanding:
Basic			54,465,339				54,450,146				54,392,465				54,208,629				55,638,734
Diluted			54,465,339				54,450,146				54,392,465				54,209,182				55,638,734

HarborOne Bancorp, Inc. Consolidated Statements of Net Income (Unaudited)
		For the Nine Months Ended September 30,
(dollars in thousands, except share data)		2020				2019				$ Change				% Change
Interest and dividend income:
Interest and fees on loans		$	102,491			$	106,033			$	(3,542	)		(3.3	)%
Interest on loans held for sale			2,625				1,647				978			59.4
Interest on securities			4,549				5,239				(690	)		(13.2	)
Other interest and dividend income			1,173				2,142				(969	)		(45.2	)
Total interest and dividend income			110,838				115,061				(4,223	)		(3.7	)
Interest expense:
Interest on deposits			19,018				27,577				(8,559	)		(31.0	)
Interest on FHLB borrowings			2,933				5,203				(2,270	)		(43.6	)
Interest on subordinated debentures			1,571				1,553				18			1.2
Total interest expense			23,522				34,333				(10,811	)		(31.5	)
Net interest and dividend income			87,316				80,728				6,588			8.2
Provision for loan losses			27,207				3,496				23,711			678.2
Net interest and dividend income, after provision for loan losses			60,109				77,232				(17,123	)		(22.2	)
Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans			77,195				24,086				53,109			220.5
Changes in mortgage servicing rights fair value			(5,691	)			(6,866	)			1,175			17.1
Other			10,962				7,442				3,520			47.3
Total mortgage banking income			82,466				24,662				57,804			234.4
Deposit account fees			10,351				12,020				(1,669	)		(13.9	)
Income on retirement plan annuities			308				300				8			2.7
Gain on sale and call of securities, net			2,533				1,344				1,189			100.0
Bank-owned life insurance income			1,665				762				903			118.5
Other income			4,642				3,745				897			24.0
Total noninterest income			101,965				42,833				59,132			138.1
Noninterest expenses:
Compensation and benefits			78,493				63,068				15,425			24.5
Occupancy and equipment			13,296				13,030				266			2.0
Data processing			6,576				6,441				135			2.1
Loan expense			7,433				4,309				3,124			72.5
Marketing			2,750				2,934				(184	)		(6.3	)
Professional fees			4,204				3,219				985			30.6
Deposit insurance			860				1,030				(170	)		(16.5	)
Other expenses			11,336				9,845				1,491			15.1
Total noninterest expenses			124,948				103,876				21,072			20.3
Income before income taxes			37,126				16,189				20,937			129.3
Income tax provision			9,934				2,228				7,706			345.9
Net income		$	27,192			$	13,961			$	13,231			94.8	%
Earnings per common share:
Basic		$	0.50			$	0.25
Diluted		$	0.50			$	0.25
Weighted average shares outstanding:
Basic			54,436,090				56,855,930
Diluted			54,436,090				56,855,930

HarborOne Bancorp, Inc. Average Balances / Yields (Unaudited)
		Quarters Ended
		September 30, 2020								June 30, 2020								September 30, 2019
		Average Outstanding Balance			Interest			Yield/ Cost (6)		Average Outstanding Balance			Interest			Yield/ Cost (6)		Average Outstanding Balance			Interest			Yield/ Cost (6)
		(dollars in thousands)
Interest-earning assets:
Investment securities (1)		$	269,477		$	1,319		1.95	%	$	240,025		$	1,430		2.40	%	$	224,379		$	1,562		2.76	%
Other interest-earning assets			121,384			175		0.57			222,840			239		0.43			185,063			1,211		2.59
Loans held for sale			139,418			1,060		3.02			119,047			988		3.34			74,327			747		3.99
Loans
Commercial loans (2)			2,017,492			19,066		3.76			1,872,349			18,196		3.91			1,511,487			18,797		4.93
Residential real estate loans (2)			1,135,947			11,833		4.14			1,123,896			11,811		4.23			1,119,742			12,704		4.50
Consumer loans (2)			333,623			3,597		4.29			372,929			3,963		4.27			454,837			4,729		4.13
Total loans			3,487,062			34,496		3.94			3,369,174			33,970		4.06			3,086,066			36,230		4.66
Total interest-earning assets			4,017,341			37,050		3.67			3,951,086			36,627		3.73			3,569,835			39,750		4.42
Noninterest-earning assets			333,444								334,452								278,976
Total assets		$	4,350,785							$	4,285,538							$	3,848,811
Interest-bearing liabilities:
Savings accounts		$	897,751			589		0.26		$	842,560			834		0.40		$	564,040			902		0.63
NOW accounts			199,982			39		0.08			187,560			33		0.07			139,773			26		0.07
Money market accounts			825,732			745		0.36			826,939			1,207		0.59			879,694			3,417		1.54
Certificates of deposit			684,002			2,895		1.68			730,756			3,472		1.91			831,262			5,016		2.39
Brokered deposits			139,887			252		0.72			66,701			259		1.56			98,278			611		2.47
Total interest-bearing deposits			2,747,354			4,520		0.65			2,654,516			5,805		0.88			2,513,047			9,972		1.57
FHLB advances			149,750			835		2.22			258,679			845		1.31			213,578			1,249		2.32
Subordinated debentures			33,983			524		6.13			33,951			524		6.21			33,858			524		6.14
Total borrowings			183,733			1,359		2.94			292,630			1,369		1.88			247,436			1,773		2.84
Total interest-bearing liabilities			2,931,087			5,879		0.80			2,947,146			7,174		0.98			2,760,483			11,745		1.69
Noninterest-bearing liabilities:
Noninterest-bearing deposits			641,353								585,715								515,612
Other noninterest-bearing liabilities			89,319								72,808								52,357
Total liabilities			3,661,759								3,605,669								3,328,452
Total equity			689,026								679,869								520,359
Total liabilities and equity		$	4,350,785							$	4,285,538							$	3,848,811
Tax equivalent net interest income						31,171								29,453								28,005
Tax equivalent interest rate spread (3)								2.87	%							2.75	%							2.73	%
Less: tax equivalent adjustment						2								6								20
Net interest income as reported					$	31,169							$	29,447							$	27,985
Net interest-earning assets (4)		$	1,086,254							$	1,003,940							$	809,352
Net interest margin (5)								3.09	%							3.00	%							3.11	%
Tax equivalent effect								—								—								—
Net interest margin on a fully tax equivalent basis								3.09	%							3.00	%							3.11	%
Average interest-earning assets to average interest-bearing liabilities			137.06	%							134.06	%							129.32	%
Supplemental information:
Total deposits, including demand deposits		$	3,388,707		$	4,520				$	3,240,231		$	5,805				$	3,028,659		$	9,972
Cost of total deposits								0.53	%							0.72	%							1.31	%
Total funding liabilities, including demand deposits		$	3,572,440		$	5,879				$	3,532,861		$	7,174				$	3,276,095		$	11,745
Cost of total funding liabilities								0.65	%							0.82	%							1.42	%

(1) Includes securities available for sale and securities held to maturity. Interest income from tax exempt securities is computed on a taxable equivalent basis using a tax rate of 21% for the quarters presented. The yield on investments before tax equivalent adjustments for the quarters presented were 1.95%, 2.40%, and 2.73%, respectively.

(2) Includes nonaccruing loan balances and interest received on such loans.

(3) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(4) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(5) Net interest margin represents net interest income divided by average total interest-earning assets.

(6) Annualized.

HarborOne Bancorp, Inc. Average Balances / Yields (Unaudited)
		Years Ended
		September 30, 2020								September 30, 2019
		Average								Average
		Outstanding						Yield/		Outstanding						Yield/
		Balance			Interest			Cost		Balance			Interest			Cost
		(dollars in thousands)
Interest-earning assets:
Investment securities (1)		$	261,740		$	4,571		2.33	%	$	247,782		$	5,328		2.87	%
Other interest-earning assets			176,745			1,173		0.89			83,803			2,142		3.42
Loans held for sale			106,790			2,625		3.28			50,771			1,647		4.34
Loans
Commercial loans (2)			1,846,462			55,385		4.01			1,447,128			54,855		5.07
Residential real estate loans (2)			1,120,065			35,188		4.20			1,119,185			37,175		4.44
Consumer loans (2)			373,809			11,918		4.26			466,669			14,003		4.01
Total loans			3,340,336			102,491		4.10			3,032,982			106,033		4.67
Total interest-earning assets			3,885,611			110,860		3.81			3,415,338			115,150		4.51
Noninterest-earning assets			327,385								264,336
Total assets		$	4,212,996							$	3,679,674
Interest-bearing liabilities:
Savings accounts		$	809,106			2,721		0.45		$	526,078			1,830		0.47
NOW accounts			182,146			103		0.08			138,957			76		0.07
Money market accounts			829,263			4,535		0.73			849,254			9,561		1.51
Certificates of deposit			736,355			10,724		1.95			811,052			14,155		2.33
Brokered deposits			99,739			935		1.25			107,243			1,955		2.44
Total interest-bearing deposits			2,656,609			19,018		0.96			2,432,584			27,577		1.52
FHLB advances			216,333			2,933		1.81			298,643			5,203		2.33
Subordinated debentures			33,951			1,571		6.18			33,835			1,553		6.14
Total borrowings			250,284			4,504		2.40			332,478			6,756		2.72
Total interest-bearing liabilities			2,906,893			23,522		1.08			2,765,062			34,333		1.66
Noninterest-bearing liabilities:
Noninterest-bearing deposits			549,233								446,970
Other noninterest-bearing liabilities			76,660								51,252
Total liabilities			3,532,786								3,263,284
Total equity			680,210								416,390
Total liabilities and equity		$	4,212,996							$	3,679,674
Tax equivalent net interest income						87,338								80,817
Tax equivalent interest rate spread (3)								2.73	%							2.85	%
Less: tax equivalent adjustment						22								89
Net interest income as reported					$	87,316							$	80,728
Net interest-earning assets (4)		$	978,718							$	650,276
Net interest margin (5)								3.00	%							3.16	%
Tax equivalent effect								—								—
Net interest margin on a fully tax equivalent basis								3.00	%							3.16	%
Average interest-earning assets to average interest-bearing liabilities			133.67	%							123.52	%
Supplemental information:
Total deposits, including demand deposits		$	3,205,842		$	19,018				$	2,879,554		$	27,577
Cost of total deposits								0.79	%							1.28	%
Total funding liabilities, including demand deposits		$	3,456,126		$	23,522				$	3,212,032		$	34,333
Cost of total funding liabilities								0.91	%							1.43	%

(1) Includes securities available for sale and securities held to maturity. Interest income from tax exempt securities is computed on a tax equivalent basis using a tax rate of 21%. The yield on investments before tax equivalent adjustments was 2.32% and 2.83% for the nine months ended September 30, 2020 and 2019, respectively.

(2) Includes nonaccruing loan balances and interest received on such loans.

(3) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(4) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(5) Net interest margin represents net interest income divided by average total interest-earning assets.

HarborOne Bancorp, Inc. Average Balances and Yield Trend (Unaudited)
		Average Balances - Trend - Quarters Ended
		September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
		(in thousands)
Interest-earning assets:
Investment securities (1)		$	269,477		$	240,025		$	275,632		$	236,828		$	224,379
Other interest-earning assets			121,384			222,840			186,619			159,211			185,063
Loans held for sale			139,418			119,047			61,548			115,699			74,327
Loans
Commercial loans (2)			2,017,492			1,872,349			1,647,667			1,591,188			1,511,487
Residential real estate loans (2)			1,135,947			1,123,896			1,100,177			1,105,025			1,119,742
Consumer loans (2)			333,623			372,929			415,317			442,689			454,837
Total loans			3,487,062			3,369,174			3,163,161			3,138,902			3,086,066
Total interest-earning assets			4,017,341			3,951,086			3,686,960			3,650,640			3,569,835
Noninterest-earning assets			333,444			334,452			314,193			288,558			278,976
Total assets		$	4,350,785		$	4,285,538		$	4,001,153		$	3,939,198		$	3,848,811
Interest-bearing liabilities:
Savings accounts		$	897,751		$	842,560		$	686,031		$	616,008		$	564,040
NOW accounts			199,982			187,560			158,702			142,505			139,773
Money market accounts			825,732			826,939			835,154			867,066			879,694
Certificates of deposit			684,002			730,756			794,883			811,199			831,262
Brokered deposits			139,887			66,701			92,189			69,035			98,278
Total interest-bearing deposits			2,747,354			2,654,516			2,566,959			2,505,813			2,513,047
FHLB advances			149,750			258,679			241,302			249,102			213,578
Subordinated debentures			33,983			33,951			33,919			33,887			33,858
Total borrowings			183,733			292,630			275,221			282,989			247,436
Total interest-bearing liabilities			2,931,087			2,947,146			2,842,180			2,788,802			2,760,483
Noninterest-bearing liabilities:
Noninterest-bearing deposits			641,353			585,715			419,620			433,478			515,612
Other noninterest-bearing liabilities			89,319			72,808			67,714			54,022			52,357
Total liabilities			3,661,759			3,605,669			3,329,514			3,276,302			3,328,452
Total equity			689,026			679,869			671,639			662,896			520,359
Total liabilities and equity		$	4,350,785		$	4,285,538		$	4,001,153		$	3,939,198		$	3,848,811
		Annualized Yield Trend - Quarters Ended
		September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
Interest-earning assets:
Investment securities (1)			1.95	%		2.40	%		2.66	%		2.67	%		2.76	%
Other interest-earning assets			0.57	%		0.43	%		1.64	%		2.06	%		2.59	%
Loans held for sale			3.02	%		3.34	%		3.77	%		3.84	%		3.99	%
Commercial loans (2)			3.76	%		3.91	%		4.42	%		4.79	%		4.93	%
Residential real estate loans (2)			4.14	%		4.23	%		4.22	%		4.41	%		4.50	%
Consumer loans (2)			4.29	%		4.27	%		4.22	%		4.20	%		4.13	%
Total loans			3.94	%		4.06	%		4.33	%		4.58	%		4.66	%
Total interest-earning assets			3.67	%		3.73	%		4.06	%		4.32	%		4.42	%
Interest-bearing liabilities:
Savings accounts			0.26	%		0.40	%		0.76	%		0.77	%		0.63	%
NOW accounts			0.08	%		0.07	%		0.08	%		0.08	%		0.07	%
Money market accounts			0.36	%		0.59	%		1.24	%		1.42	%		1.54	%
Certificates of deposit			1.68	%		1.91	%		2.20	%		2.31	%		2.39	%
Brokered deposits			0.72	%		1.56	%		1.85	%		2.39	%		2.47	%
Total interest-bearing deposits			0.65	%		0.88	%		1.36	%		1.50	%		1.57	%
FHLB advances			2.22	%		1.31	%		2.09	%		2.21	%		2.32	%
Subordinated debentures			6.13	%		6.21	%		6.20	%		6.13	%		6.14	%
Total borrowings			2.94	%		1.88	%		2.60	%		2.68	%		2.84	%
Total interest-bearing liabilities			0.80	%		0.98	%		1.48	%		1.62	%		1.69	%

(1) Includes securities available for sale and securities held to maturity.

(2) Includes nonaccruing loan balances and interest received on such loans.

HarborOne Bancorp, Inc. Selected Financial Highlights (Unaudited)
		Quarters Ended
		September 30,			June 30,			March 31,			December 31,			September 30,
Performance Ratios (annualized):		2020			2020			2020			2019			2019
(dollars in thousands)
Return on average assets (ROAA)			1.09	%		0.99	%		0.47	%		0.44	%		0.74	%
Return on average equity (ROAE)			6.90	%		6.22	%		2.81	%		2.60	%		5.47	%
Total noninterest expense		$	45,722		$	43,838		$	35,388		$	38,735		$	36,203
Less: Amortization of other intangible assets			447			447			447			448			617
Total adjusted noninterest expense		$	45,275		$	43,391		$	34,941		$	38,287		$	35,586
Net interest and dividend income		$	31,169		$	29,447		$	26,700		$	28,334		$	27,985
Total noninterest income			44,461			38,638			18,866			18,139			17,273
Total revenue		$	75,630		$	68,085		$	45,566		$	46,473		$	45,258
Efficiency ratio (1)			59.86	%		63.73	%		76.68	%		82.39	%		78.63	%
(1) This non-GAAP measure represents adjusted noninterest expense divided by total revenue

		At or for the Quarters Ended
		September 30,			June 30,			March 31,			December 31,			September 30,
Asset Quality		2020			2020			2020			2019			2019
(dollars in thousands)
Total nonperforming assets		$	40,925		$	38,599		$	32,134		$	31,040		$	27,947
Nonperforming assets to total assets			0.93	%		0.86	%		0.78	%		0.76	%		0.71	%
Allowance for loan losses to total loans			1.40	%		1.04	%		0.83	%		0.76	%		0.74	%
Net charge offs		$	338		$	286		$	1,420		$	235		$	106
Annualized net charge offs/average loans			0.04	%		0.03	%		0.18	%		0.03	%		0.01	%
Allowance for loan losses to nonperforming loans			122.86	%		94.86	%		83.52	%		79.35	%		83.58	%

HarborOne Bancorp, Inc. Selected Financial Highlights (Unaudited)
		September 30,			June 30,			March 31,			December 31,			September 30,
Capital and Share Related		2020			2020			2020			2019			2019
(dollars in thousands, except share data)
Common stock outstanding (1)			58,342,464			58,418,021			58,418,021			58,418,021			58,429,584
Book value per share (1)		$	11.90		$	11.72		$	11.56		$	11.40		$	11.29
Tangible common equity:
Total stockholders' equity		$	694,103		$	684,455		$	675,139		$	665,794		$	659,554
Less: Goodwill			69,802			69,802			69,802			69,802			69,635
Less: Other intangible assets (2)			4,694			5,141			5,588			6,035			6,482
Tangible common equity		$	619,607		$	609,512		$	599,749		$	589,957		$	583,437
Tangible book value per share (1) (3)		$	10.62		$	10.43		$	10.27		$	10.10		$	9.99
Tangible assets:
Total assets		$	4,428,319		$	4,464,906		$	4,101,206		$	4,058,921		$	3,949,020
Less: Goodwill			69,802			69,802			69,802			69,802			69,635
Less: Other intangible assets (2)			4,694			5,141			5,588			6,035			6,482
Tangible assets		$	4,353,823		$	4,389,963		$	4,025,816		$	3,983,084		$	3,872,903
Tangible common equity / tangible assets (4)			14.23	%		13.88	%		14.90	%		14.81	%		15.06	%

(1) Share amounts related to periods prior to the date of the completion of the stock offering (August 14, 2019) have been restated to give retroactive recognition to the exchange ratio applied in the stock offering (1.795431-to-one)

(2) Other intangible assets includes core deposit intangible and noncompete intangible.

(3) This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets divided by common stock outstanding.

(4) This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets to total assets less goodwill and intangible assets.

HarborOne Bancorp, Inc. Segments Statements of Net Income (Unaudited)
		HarborOne Mortgage												HarborOne Bank
		For the Quarter Ended												For the Quarter Ended
		September 30,				June 30,				September 30,				September 30,				June 30,				September 30,
		2020				2020				2019				2020				2020				2019
		(in thousands)
Net interest and dividend income		$	1,000			$	739			$	285			$	30,599			$	29,139			$	27,855
Provision for loan losses			—				—				—				13,454				10,004				889
Net interest and dividend income, after provision for loan losses			1,000				739				285				17,145				19,135				26,966
Mortgage banking income:
Gain on sale of mortgage loans			34,055				30,862				11,015				—				—				—
Intersegment gain (loss)			645				1,399				393				(645	)			(1,399	)			(393	)
Changes in mortgage servicing rights fair value			161				(621	)			(1,883	)			(354	)			(490	)			(591	)
Other			3,947				3,764				2,595				334				346				369
Total mortgage banking income (loss)			38,808				35,404				12,120				(665	)			(1,543	)			(615	)
Other noninterest income (loss)			(8	)			(11	)			(4	)			6,326				4,788				5,772
Total noninterest income			38,800				35,393				12,116				5,661				3,245				5,157
Noninterest expense			19,156				18,273				11,227				26,300				25,218				24,405
Income (loss) before income taxes			20,644				17,859				1,174				(3,494	)			(2,838	)			7,718
Provision for income taxes			4,550				3,878				171				571				27				1,019
Net income (loss)		$	16,094			$	13,981			$	1,003			$	(4,065	)		$	(2,865	)		$	6,699

		HarborOne Mortgage								HarborOne Bank
		For the Nine Months Ended								For the Nine Months Ended
		September 30,				September 30,				September 30,				September 30,
		2020				2019				2020				2019
		(in thousands)
Net interest and dividend income		$	2,020			$	604			$	86,248			$	81,296
Provision for loan losses			—				—				27,207				3,496
Net interest and dividend income, after provision for loan losses			2,020				604				59,041				77,800
Mortgage banking income:
Gain on sale of mortgage loans			77,195				24,085				—				1
Intersegment gain (loss)			2,444				866				(2,444	)			(866	)
Changes in mortgage servicing rights fair value			(3,677	)			(5,267	)			(2,014	)			(1,599	)
Other			9,931				6,315				1,031				1,127
Total mortgage banking income (loss)			85,893				25,999				(3,427	)			(1,337	)
Other noninterest income (loss)			(141	)			(20	)			19,640				18,191
Total noninterest income			85,752				25,979				16,213				16,854
Noninterest expense			48,235				27,496				75,806				74,527
Income (loss) before income taxes			39,537				(913	)			(552	)			20,127
Provision (benefit) for income taxes			8,667				(256	)			2,199				3,267
Net income (loss)		$	30,870			$	(657	)		$	(2,751	)		$	16,860

HarborOne Bancorp, Inc. COVID Loans at Risk (Unaudited)
	At Risk Sectors
																									Percent
										Health									Total						at risk
										and Social									at risk			Total			sector
	Retail			Office			Hotel			Services			Restaurants			Recreation			sectors			loans			to total
	(dollars in thousands)
Commercial real estate	$	217,768		$	197,087		$	171,009		$	96,586		$	10,161		$	15,015		$	707,626		$	1,380,071		51.3	%
Commercial and industrial		31,806			16,162			2,683			91,277			36,414			7,521			185,863			480,129		38.7
Commercial construction		12,116			768			20,106			107			9,566			9,044			51,707			211,953		24.4
Total	$	261,690		$	214,017		$	193,798		$	187,970		$	56,141		$	31,580		$	945,196		$	2,072,153		45.6	%
Outstanding principal, commercial deferrals	$	46,121		$	13,320		$	112,242		$	13,761		$	13,424		$	15,623		$	214,491		$	289,187		74.2	%
PPP loans, net of fees	$	6,891		$	—		$	548		$	41,475		$	8,983		$	2,715		$	60,612		$	148,979		40.7	%
Nonaccrual loans	$	520		$	—		$	4,815		$	395		$	16		$	9,162		$	14,908		$	25,960		57.4	%

(dollars in thousands)		Deferrals expired and paying						Deferrals expired & delinquent						Active deferrals					Total deferrals			Total outstanding loans			% Active deferrals to Total outstanding loans
		#			$			#			$			#			$
Commercial real estate		50		$	146,926			4		$	4,679			14		$	80,153		$	231,758		$	1,380,071		5.8	%
Commercial and industrial		80			39,123			1			254			12			5,341			44,718			480,129		1.1
Commercial construction		1			12,711			—			—			—			—			12,711			211,953		—
1-4 Family		129			41,389			1			452			36			13,567			55,408			954,198		1.4
Home Equity		16			1,038			1			50			3			156			1,244			150,315		0.1
Residential construction		—			—			—			—			—			—			—			26,422		—
Consumer		504			12,127			23			361			34			772			13,260			312,743		0.2
		780		$	253,314			30		$	5,796			99			99,989		$	359,099		$	3,515,831		2.8	%