HarborOne CEO to step down; company reports $59M 2021 profit

HARBORONE BANCORP INC. CEO and President James W. Blake on Thursday announced he will retire in May. The company also reported a $58.5 million profit for 2021. /COURTESY HARBORONE BANCORP INC.
HARBORONE BANCORP INC. CEO and President James W. Blake on Thursday announced he will retire in May. The company also reported a $58.5 million profit for 2021. /COURTESY HARBORONE BANCORP INC.

BROCKTON, Mass. – The leader of HarborOne Bank’s parent company is stepping down after more than 25 years at the helm.

HarborOne Bancorp Inc. on Thursday announced that CEO James W. Blake is retiring from the position in May. Joseph F. Casey, president and chief operating officer, will take over as CEO upon Blake’s departure, according to a press release. 

Blake joined the bank, then known as Brockton Credit Union, in 1993 and has served as its CEO since 1995, the release stated. Highlights from his 27-year tenure as company leader included its conversion from a credit union to a bank in 2013, several acquisitions and, more recently, expansion into Boston with several new branches added starting in 2019. 

HarborOne made a significant foray into the Rhode Island market in 2018 when it purchased Coastway Bancorp then based in Warwick  for $125.6 million, immediately picking up nine branches in Rhode Island.

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The bank now has eight Rhode Island branches and ranks ninth in terms of Rhode Island deposit market share with $656.1 million in deposits as of June 2021, according to the Federal Deposit Insurance Corp.

“Jim Blake has provided exceptional leadership throughout his twenty-five years as CEO, growing the bank’s assets from $458 million to over $4.5 billion,” Michael J. Sullivan, chairman of the board, said in a statement. “With Jim at the helm, we benefited from both organic growth and strategic acquisitions, increasing our branch network from 7 locations in 1995 to 30 this year.”

Casey will continue in his role as president while assuming the CEO title when Blake steps down in May. Casey joined the company in 2004, and has served as its president and chief operating officer since 2017. 

Both Blake and Casey will continue to serve on the boards of both the company and the bank. 

The upcoming leadership change comes as the company reported $58.5 million profit for 2021, also on Thursday. The annual earnings represent a 30.6% increase over the prior year’s profits, boosted by the release of millions from its loan loss reserves.

Earnings per diluted share also rose from 82 cents to $1.14.

Like financial institutions nationwide, the company took an aggressive approach to building its credit loss provisions in 2020 in anticipation of bad loans caused by the COVID-19 pandemic. Those anticipated defaults largely never materialized, so after adding $34.8 million to its reserves in 2020, the company then let go of $7.3 million in 2021.

Relief in loan loss provisions was offset by drops in interest and noninterest income.

Noninterest income fell 27.4% to $100.7 million, with major cuts to mortgage banking income amid fewer closings as demand slowed, the company stated. 

Interest income ticked down 3.1% to $143.9 million because of continued low interest rates, partially offset by income from deferred fees on forgivable Paycheck Protection Program loans, the company stated. 

However, interest expenses were also cut by more than half to $12.6 million, creating profitability as evidenced by a higher net interest income. Also reflecting increased profits, net interest margin, the difference between interest income generated versus the amount of interest paid, increased 6 basis points to 3.12%.

Noninterest expenses declined 4.3% to $158.9 million, with lower loan expenses due to fewer residential mortgage closings and a slight decline in employee compensation and benefit costs.

Annual average assets stood at $4.6 billion, up 7.1% year over year. This included a 2.1% bump in loans to $3.5 billion, driven by gains in commercial loans despite the end of the Paycheck Protection Program. 

As of Dec. 31, the company had $27 million on outstanding PPP loans.

Year-end deposits stood at $3.7 billion, a 5% increase year over year with increases in all deposit forms, thanks in part to three new branches acquired from East Boston Savings Bank that opened in the fourth quarter, the company stated.

The company also reported fourth-quarter earnings of $12.6 million, a 28.5% drop over the fourth quarter of 2020.

The decline in profits was in part the result of lower mortgage banking income, which was cut by more than half amid fewer mortgage closings. Total noninterest income also fell by 48.2% to $19.2 million despite increases in deposit account fee income.

The quarterly earnings also included the release of $1.4 million to its loan loss provisions, versus the $91,000 added in the fourth quarter of 2020.

Our vision for the business, our business strategy, and our execution all came together seamlessly in ’21, despite the challenges,” Blake said in a statement. “The results are a testament to our teamwork approach, unparalleled commitment to execution excellence, and the benefits of living our values while serving our customers.”

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.

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