BROCKTON, Mass. – HarborOne Bancorp Inc., the parent company for HarborOne Bank, reported a record quarterly $11.9 million profit in the third quarter, the best in its financial history, the company announced on Tuesday.
Third-quarter earnings represent a 67.5% increase over the $7.1 million in profits a year ago, driven by a historic high in residential real estate mortgage originations, the company stated.
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The record earnings also include a $13.5 million set-aside for credit losses, more than 15 times the $889,000 provision for credit losses in the third quarter of 2019. The company stated that $10.7 million of the loan loss provisions are directly related to anticipated bad loans amid the COVID-19 pandemic.
Diluted earnings per share were 22 cents, compared with 13 cents one year prior.
Total revenue spiked 42% to $82.5 million, driven by a 157% increase in non-interest income. Of the $44.5 million quarterly non-interest income, $38.1 million came from mortgage banking activities amid record-breaking demand which the bank attributed to the continued low interest rate environment and higher refinancing volume.
Net interest income, the difference between interest earned on assets like loans, mortgages and securities and interest paid out to customer deposits, increased 11.4% year over year to $31.2 million, with decreases in both interest expenses and interest and dividend income.
Non-interest expenses of $45.7 million represented a 26.3% year-over-year increase, including a $6.6 million bump in salaries and employee benefits to serve the higher volume of residential real estate mortgage originations, the company stated.
Total loans grew 13% to $3.5 billion, driven by $2 billion in commercial loans. While a majority of the companies commercial loan profile reflects real estate loans, $153 million also came from loans to small businesses through the Paycheck Protection Program.
Total assets stood at $4.4 billion, a 12.1% increase over a year ago. Total deposits were $3.4 billion, 15.1% higher than a year ago with increases in demand deposit accounts and regular savings and club accounts.
The net interest margin, the difference between interest income generated versus the amount of interest paid out to lenders, declined 16 basis points to 3.0%.
“We’re extremely proud to announce the best quarterly financial performance in our history,” James Blake, CEO, said in a statement. “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.”
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
