HarborOne reports $2.1M profit in Q1

PROVIDENCE – HarborOne Bancorp Inc. reported net income of $2.1 million in the first quarter of 2019, or 7 cents per diluted share, a decline from $2.3 million, also 7 cents per diluted share, one year prior, according to a filing with the Securities and Exchange Commission this week.

The Brockton, Mass.-headquartered parent company of HarborOne Bank recently completed the purchase of Coastway Bank. In addition, the holding company has announced that it is seeking up to $300 million in a stock offering that will make it fully public.

The company reported total interest and non-interest revenue of $46.9 million, an increase of 30.1% from one year prior. Total interest and dividend income was responsible for the revenue growth, increasing 50.1% the first quarter of 2019 when compared with the same 2018 period primarily due to an increase in the interest and fees on loans. Total noninterest revenue declined 13.5% to $9.8 million in the first quarter of 2019, attributable to a decline in mortgage fees. Specifically, the company experienced a $2.2 million loss due to changes in mortgage servicing rights’ fair value, as opposed to a $1 million in the first three months of 2018.

Total assets at the end of the quarter were $3.7 billion, an 33.6% increase over the year.

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Total deposits at the end of the quarter were $2.8 billion, representing growth of 33.4%.

Total loans were $3 billion at the end of the first quarter, a 34.5% increase from the first quarter of 2018. The bank saw a 39.6% increase on residential and commercial mortgage loans to $2.2 billion from $1.6 billion at the end of the first quarter of 2019.

Net interest margin fell to 3.19% from 3.26% a year earlier. Total nonperforming assets grew 12.2% to $19.3 million on March 31.

“Our continued commitment to commercial assets drove core earnings with an increase of interest and fees on loans, along with other income from fees generated by the commercial business,” said James W. Blake, CEO of HarborOne, in prepared remarks. “Volatility in the capital markets resulted in a negative mark to market of $2.2 million on mortgage servicing rights and first-quarter earnings were also negatively impacted by the operating loss at HarborOne Mortgage. The residential mortgage business as a whole has experienced lower income and spreads, and we are actively managing the expense side of the business with $1.2 million in annual savings on a recent additional layoff. Although HarborOne Mortgage got off to a slow start this year, recent mortgage application volume spurred by the spring housing market and lower mortgage rates indicates an improved outlook in the second quarter of 2019.”

Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com.