HarborOne Bancorp, Inc. (the "Company" or "HarborOne") (NASDAQ:HONE), the holding company for HarborOne Bank (the "Bank"), announced net income of $13.8 million, or $0.30 per basic and diluted share, for the third quarter of 2022, compared to net income of $10.0 million, or $0.21 per basic and diluted share, for the preceding quarter and $12.3 million, or $0.24 per diluted share, for the same period last year.

Selected Third Quarter Financial Highlights:

Net income increased $3.8 million, or 37.8%.
Return on average assets was 1.14%, and return on average equity was 8.76%.
Loan growth of $285.4 million, or 7.3%.
Total deposit growth $35.2 million, or 0.91% and core deposit growth of $22.9 million, or 0.70%.
Continued share repurchase program.

"I am proud of our team's ability to manage the volatile interest rate environment," said Joseph F. Casey, President and Chief Executive Officer. He added: "The Company continues to drive revenue through expanded margin which was up 30 basis points year-over-year resulting in net interest income expansion of $12.4 million, or 12.7%. Our mortgage segment remains profitable as the increasing value of our servicing rights, coupled with expense reductions, partially offset declining origination volume and gain-on-sale margins."

Net Interest Income

The Company's net interest and dividend income was $39.3 million for the quarter ended September 30, 2022, up $2.1 million, or 5.7%, from $37.2 million for the quarter ended June 30, 2022, and up $6.5 million, or 19.9%, from $32.8 million for the quarter ended September 30, 2021. The interest rate spread and net interest margin were 3.30% and 3.47%, respectively, for the quarter ended September 30, 2022, compared to 3.39% and 3.48%, respectively, for the quarter ended June 30, 2022, and 2.97% and 3.08%, respectively, for the quarter ended September 30, 2021. On a linked-quarter basis, the increase in net interest and dividend income primarily reflects an increase in the average loan balance coupled with increased yields on loans and investments primarily due to rate increases, partially offset by decreases in fees recognized in connection with U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans and higher rates on deposits. The cost of funds was 51 basis points for the quarter ended September 30, 2022, compared to 27 basis points in the preceding quarter.

The $4.7 million increase in total interest and dividend income on a linked-quarter basis reflected a 20-basis-point increase in the yield on interest-earning assets. The yield on loans increased 15 basis points, from 3.96% to 4.11%. Interest on loans in the third quarter included $454,000 in prepayment penalties on commercial loans and $188,000 in accretion income from the fair value discount on loans acquired in connection with the merger with Coastway Bancorp, Inc. Prepayment penalties and accretion income in the preceding quarter were $1.1 million and $353,000, respectively. The three months ended September 30, 2022 and June 30, 2022 include the recognition of deferred fees on PPP loans in the amount of $24,000 and $368,000, respectively. The yield on investments increased 8 basis points, from 1.92% to 2.00%.

The increase in net interest and dividend income from the prior year quarter reflects an increase of $8.7 million, or 24.4%, in total interest and dividend income and an increase of $2.2 million, or 73.8%, in total interest expense. The changes reflect rate and volume changes in both interest-bearing assets and liabilities. The yield on interest-earning assets increased 57 basis points, while the average balance increased $272.3 million, and the cost of interest-bearing liabilities increased 24 basis points, while the average balance increased $271.6 million.

Noninterest Income

Total noninterest income increased $142,000, or 1.0%, to $14.2 million for the quarter ended September 30, 2022, from $14.1 million for the quarter ended June 30, 2022. Mortgage loan closings for the quarter ended September 30, 2022 were $250.5 million with a gain on loan sales of $3.8 million, compared to $297.5 million in mortgage closings and $4.5 million in gain on sales for the preceding quarter. Deposit account fees were $4.9 million for the quarter ended September 30, 2022, flat compared to the quarter ended June 30, 2022. Other income for the quarter ended September 30, 2022 increased $82,000.

Although declining mortgage demand and volume has negatively impacted mortgage banking income, the change in the fair value of mortgage servicing rights has provided a positive offset. The increase in the fair value of mortgage servicing rights for the three months ended September 30, 2022 was $2.6 million, as compared to an increase of $1.6 million in the fair value of mortgage servicing rights for the three months ended June 30, 2022. The 10-year Treasury Constant Maturity rate increased 85 basis points versus the second quarter of 2022. The impact of principal payments on the underlying mortgages on the mortgage servicing rights was consistent at $747,000 and $771,000 for the quarters ended September 30, 2022 and June 30, 2022, respectively. The change in the fair value of the mortgage servicing rights is generally consistent with the change in the 10-year Treasury Constant Maturity rate. As interest rates rise and prepayment speeds slow, mortgage servicing rights values tend to increase; conversely, as interest rates fall and prepayment speeds quicken, mortgage servicing rights values tend to decrease.

Total noninterest income decreased $7.8 million, or 35.3%, compared to the quarter ended September 30, 2021, primarily due to a $7.6 million, or 48.4%, decrease in mortgage banking income, driven by the decrease in loan closings and narrowing gain-on-sale margins.

Noninterest Expense

Total noninterest expenses were $34.5 million for the quarter ended September 30, 2022, a decrease of $481,000, or 1.4%, from the quarter ended June 30, 2022. Compensation and benefits decreased $464,000, or 2.2%, and professional fees decreased $223,000, or 13.3%, partially offset by a $254,000 increase in occupancy and equipment expenses. The decrease in compensation expense reflects a $477,000 decrease in commission expense consistent with the decrease in mortgage originations. The increase in occupancy and equipment expense reflects an increase in expenses for utilities and software licenses.

Total noninterest expenses decreased $4.8 million, or 12.2%, from the quarter ended September 30, 2021. Compensation and benefits decreased $3.8 million and loan expenses decreased $968,000, consistent with the decrease in residential mortgage loan closings and corresponding decrease in mortgage origination commissions. The decrease in compensation and benefits also reflects proactive cost reduction measures taken at HarborOne Mortgage beginning in the second quarter of 2021.

Income Tax Provision

The effective tax rate was 25.4% for the quarter ended September 30, 2022, compared to 27.6% for the quarter ended June 30, 2022 and 28.6% for the quarter ended September 30, 2021. The third quarter 2022 effective rate was impacted by a tax benefit recorded for Industrial Revenue Bonds. The 2022 effective tax rate is expected to be approximately 27%.

Asset Quality and Allowance for Credit Losses

Effective January 1, 2022, the Company adopted Accounting Standards Update No. 2016-13, commonly referred to as CECL, which requires the measurement of expected lifetime credit losses for financial assets measured at amortized cost, as well as unfunded commitments that are considered off-balance sheet credit exposures. CECL requires that the allowance for credit losses ("ACL") be calculated based on current expected credit losses over the full remaining expected life of the financial assets and also consider expected future changes in macroeconomic conditions. Upon adoption of CECL on January 1, 2022, the Company's ACL on loans decreased by $1.3 million, and the ACL on unfunded commitments increased by $3.9 million, for a net increase of $2.6 million. The after-tax impact of $1.9 million was recognized as a one-time, cumulative-effect adjustment that decreased retained earnings.

Credit quality performance continued to be strong with total nonperforming assets of $23.4 million at September 30, 2022, compared to $24.4 million at June 30, 2022 and $36.5 million at September 30, 2021. Nonperforming assets as a percentage of total assets were 0.47% at September 30, 2022, 0.52% at June 30, 2022, and 0.80% at September 30, 2021.

The funded loan provision for credit losses for the three and nine months ended September 30, 2022 was $262,000 and $2.0 million, respectively, and reflects provisioning for loan growth partially offset by a reduction in pandemic related uncertainty. Net recoveries totaled $799,000, or 0.08% of average loans outstanding on an annualized basis, for the quarter ended September 30, 2022. Net recoveries totaled $504,000, or 0.05% of average loans outstanding on an annualized basis, for the quarter ended June 30, 2022, and net charge-offs totaled $1.7 million, or 0.19% of average loans outstanding on an annualized basis, for the quarter ended September 30, 2021. The third quarter 2022 recovery reflects the disposition of assets from a SBA guaranteed credit.

The ACL was $44.6 million, or 1.06% of total loans, at September 30, 2022, compared to $43.6 million, or 1.11% of total loans, at June 30, 2022 and an allowance for loss under the incurred loss model of $48.0 million, or 1.39% of total loans, at September 30, 2021. The ACL on unfunded commitments, included in other liabilities on the unaudited Consolidated Balance Sheets, amounted to $5.5 million at September 30, 2022 as compared to $5.1 million at June 30, 2022 and the associated provision was $406,000 and $1.6 million for the three and nine months ended September 30, 2022. There was no ACL on unfunded commitments at December 31, 2021 or September 30, 2021. The increase from the prior quarter reflects $95.3 million in new construction originations in the third quarter, with $72.4 million in unfunded balances as of September 30, 2022.

We have not experienced any significant negative trends in the at-risk sectors identified in response to conditions that developed during the COVID-19 pandemic; however management continues to monitor certain credit types within those sectors that may be susceptible to increased credit risk as a result of trends that were precipitated by the COVID-19 pandemic and may be exacerbated by current economic conditions. Management is focused on business-oriented hotels, non-anchored retail space and metro office space. As of September 30, 2022, business-oriented hotels included 13 loans with a total outstanding balance of $93.9 million, non-anchored retail space included 31 loans with a total outstanding balance of $56.3 million and metro office space included 2 loans with a total outstanding balance of $14.9 million. As of September 30, 2022 there were two business-oriented hotel credits with a carrying value of $10.3 million that were rated substandard and on nonaccrual. One of those credits in the amount of $2.0 million was provided a principal deferral that resulted in a troubled-debt restructuring designation in the third quarter. One business-oriented hotel credit in the amount of $9.5 million was downgraded to a watch risk rating during the third quarter of 2022. The other loans in these groups were performing in accordance with their terms.

Balance Sheet

Total assets increased $283.6 million, or 6.0%, to $4.99 billion at September 30, 2022, from $4.70 billion at June 30, 2022. The increase primarily reflects an increase of $285.4 million in loans. Securities available for sale were negatively impacted by unrealized losses of $70.4 million as of September 30, 2022, as compared to $49.9 million of unrealized losses as of June 30, 2022, and $3.6 million of unrealized losses as of December 31, 2021.

Loans increased $285.4 million, or 7.3%, to $4.20 billion at September 30, 2022, from $3.91 billion at June 30, 2022. The increase in loans for the three months ended September 30, 2022 was primarily due to increases in commercial real estate loans of $194.3 million, commercial construction loans of $26.3 million and residential real estate loans of $97.7 million, partially offset by decreases in commercial and industrial loans of $10.1 million and consumer loans of $22.8 million. As of September 30, 2022, outstanding PPP loans amounted to $2.0 million, and there was $24,000 in deferred processing fee income. We expect to complete the forgiveness process for the remaining PPP loans by year-end.

Total deposits were $3.88 billion at September 30, 2022 and $3.85 billion at June 30, 2022. Compared to the prior quarter, non-certificate accounts increased $22.9 million, and term certificate accounts increased $12.3 million. FHLB borrowings increased $240.0 million to $345.7 million at September 30, 2022 from $105.7 million at June 30, 2022. At September 30, 2022, FHLB borrowings were primarily short-term borrowings.

Total stockholders' equity was $611.4 million at September 30, 2022, compared to $624.5 million at June 30, 2022 and $680.0 million at September 30, 2021. Stockholders' equity decreased 2.1% when compared to the prior quarter, as earnings were offset by share repurchases and elevated levels of unrealized losses on available-for-sale investment securities included in other comprehensive income. The Company repurchased 783,502 shares at an average price of $13.82 during the three months ended September 30, 2022 and announced a fifth share repurchase program on September 21, 2022 to commence at the completion of the share repurchase program announced on April 12, 2022. The tangible-common-equity-to-tangible-assets ratio was 10.97% at September 30, 2022, 11.92% at June 30, 2022, and 13.50% at September 30, 2021. At September 30, 2022, 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 31 full-service branches located in Massachusetts and Rhode Island, 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 26 offices in Maine, Massachusetts, Rhode Island, and New Hampshire, and is licensed to lend in six 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. We may also make forward-looking statements in other documents we file with the Securities and Exchange Commission ("SEC"), in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. 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, changes in general business and economic conditions (including inflation) 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; ongoing 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; changes related to the discontinuation and replacement of LIBOR; 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; cybersecurity incidents, fraud, natural disasters, war, terrorism, civil unrest, the ongoing COVID-19 pandemic, and future pandemics; changes in regulation; 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 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'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 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)	2022		2022		2022		2021		2021

Assets

Cash and due from banks	$	39,910	$	35,843	$	41,862	$	35,549	$	42,589
Short-term investments		46,044		48,495		97,870		159,170		277,050
Total cash and cash equivalents		85,954		84,338		139,732		194,719		319,639

Securities available for sale, at fair value		304,852		334,398		361,529		394,036		390,552
Securities held to maturity, at amortized cost		15,000		10,000		—		—		—
Federal Home Loan Bank stock, at cost		15,973		5,625		5,931		5,931		6,828
Asset held for sale		—		—		678		881		881
Loans held for sale, at fair value		18,805		31,679		25,690		45,642		77,052
Loans:
Commercial real estate		2,041,905		1,847,619		1,816,484		1,699,877		1,573,284
Commercial construction		185,062		158,762		154,059		136,563		152,685
Commercial and industrial		397,112		407,182		410,787		421,608		414,814
Total commercial loans		2,624,079		2,413,563		2,381,330		2,258,048		2,140,783
Residential real estate		1,520,809		1,423,074		1,252,920		1,217,980		1,160,689
Consumer		52,466		75,312		103,100		131,705		156,272
Loans		4,197,354		3,911,949		3,737,350		3,607,733		3,457,744
Less: Allowance for credit losses on loans		(44,621)		(43,560)		(41,765)		(45,377)		(47,988)
Net loans		4,152,733		3,868,389		3,695,585		3,562,356		3,409,756
Mortgage servicing rights, at fair value		49,861		47,130		45,043		38,268		36,540
Goodwill		69,802		69,802		69,802		69,802		69,802
Other intangible assets		2,461		2,695		2,930		3,164		3,399
Other assets		272,202		249,988		244,405		238,606		252,645
Total assets	$	4,987,643	$	4,704,044	$	4,591,325	$	4,553,405	$	4,567,094

Liabilities and Stockholders' Equity

Deposits:
Demand deposit accounts	$	795,945	$	775,154	$	771,172	$	743,051	$	756,917
NOW accounts		308,191		316,839		310,090		313,733		300,577
Regular savings and club accounts		1,289,825		1,282,913		1,218,656		1,138,979		1,144,595
Money market deposit accounts		889,517		885,673		864,316		858,970		832,441
Term certificate accounts		599,632		587,354		597,746		627,916		659,850
Total deposits		3,883,110		3,847,933		3,761,980		3,682,649		3,694,380
Short-term borrowed funds		330,000		90,000		—		—		—
Long-term borrowed funds		15,684		15,693		55,702		55,711		55,720
Subordinated debt		34,254		34,222		34,191		34,159		34,128
Other liabilities and accrued expenses		113,225		91,718		90,387		101,625		102,834
Total liabilities		4,376,273		4,079,566		3,942,260		3,874,144		3,887,062

Common stock		593		593		591		585		585
Additional paid-in capital		480,617		479,519		477,302		469,934		468,526
Unearned compensation - ESOP		(28,083)		(28,542)		(29,002)		(29,461)		(29,921)
Retained earnings		350,049		339,471		332,734		325,699		315,683
Treasury stock		(143,125)		(132,296)		(113,513)		(85,859)		(73,723)
Accumulated other comprehensive loss		(48,681)		(34,267)		(19,047)		(1,637)		(1,118)
Total stockholders' equity		611,370		624,478		649,065		679,261		680,032

Total liabilities and stockholders' equity	$	4,987,643	$	4,704,044	$	4,591,325	$	4,553,405	$	4,567,094


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)	2022		2022		2022		2021		2021

Interest and dividend income:
Interest and fees on loans	$	42,065	$	37,522	$	33,576	$	34,177	$	33,680
Interest on loans held for sale		377		331		264		501		665
Interest on securities		1,971		1,873		1,701		1,541		1,293
Other interest and dividend income		143		131		61		134		170
Total interest and dividend income		44,556		39,857		35,602		36,353		35,808

Interest expense:
Interest on deposits		3,491		2,019		1,621		1,651		2,050
Interest on FHLB borrowings		1,209		119		188		193		431
Interest on subordinated debentures		524		524		523		524		524
Total interest expense		5,224		2,662		2,332		2,368		3,005

Net interest and dividend income		39,332		37,195		33,270		33,985		32,803

Provision (benefit) for credit losses		668		2,546		338		(1,436)		(1,627)

Net interest and dividend income, after provision (benefit) for credit losses		38,664		34,649		32,932		35,421		34,430

Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans		3,809		4,538		5,322		10,063		12,756
Changes in mortgage servicing rights fair value		1,816		862		5,285		(245)		(992)
Other		2,453		2,612		2,558		3,359		3,882
Total mortgage banking income		8,078		8,012		13,165		13,177		15,646

Deposit account fees		4,870		4,892		4,472		4,783		4,658
Income on retirement plan annuities		119		112		107		109		108
Gain on sale and call of securities, net		—		—		—		—		241
Bank-owned life insurance income		503		494		483		506		515
Other income		675		593		834		589		842
Total noninterest income		14,245		14,103		19,061		19,164		22,010

Noninterest expenses:
Compensation and benefits		20,991		21,455		20,723		24,564		24,760
Occupancy and equipment		4,829		4,575		5,428		4,923		4,765
Data processing		2,311		2,259		2,241		2,244		2,205
Loan expense		355		385		478		732		1,323
Marketing		850		986		1,218		1,120		880
Professional fees		1,457		1,680		1,539		1,443		1,362
Deposit insurance		357		354		349		345		341
Prepayment penalties on Federal Home Loan Bank advances		—		—		—		—		1,095
Other expenses		3,323		3,260		2,859		2,817		2,543
Total noninterest expenses		34,473		34,954		34,835		38,188		39,274

Income before income taxes		18,436		13,798		17,158		16,397		17,166

Income tax provision		4,678		3,811		4,891		3,807		4,907

Net income	$	13,758	$	9,987	$	12,267	$	12,590	$	12,259

Earnings per common share:
Basic	$	0.30	$	0.21	$	0.26	$	0.26	$	0.25
Diluted	$	0.30	$	0.21	$	0.25	$	0.25	$	0.24
Weighted average shares outstanding:
Basic		45,830,737		46,980,830		47,836,410		48,918,539		49,801,123
Diluted		46,420,527		47,536,033		48,690,420		49,828,379		50,663,415

HarborOne Bancorp, Inc.
Consolidated Statements of Net Income
(Unaudited)

	For the Nine Months Ended September 30,
(dollars in thousands, except share data)	2022		2021		$ Change		% Change

Interest and dividend income:
Interest and fees on loans	$	113,163	$	101,646	$	11,517	11.3	%
Interest on loans held for sale		972		2,841		(1,869)	(65.8)
Interest on securities		5,545		2,671		2,874	107.6
Other interest and dividend income		335		384		(49)	(12.8)
Total interest and dividend income		120,015		107,542		12,473	11.6

Interest expense:
Interest on deposits		7,131		7,072		59	0.8
Interest on FHLB borrowings		1,516		1,514		2	0.1
Interest on subordinated debentures		1,571		1,571		—	0.0
Total interest expense		10,218		10,157		61	0.6

Net interest and dividend income		109,797		97,385		12,412	12.7

Provision (benefit) for credit losses		3,552		(5,822)		9,374	161.0

Net interest and dividend income, after provision (benefit) for credit losses		106,245		103,207		3,038	2.9

Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans		13,669		51,820		(38,151)	(73.6)
Changes in mortgage servicing rights fair value		7,963		(135)		8,098	NM
Other		7,623		12,472		(4,849)	(38.9)
Total mortgage banking income		29,255		64,157		(34,902)	(54.4)

Deposit account fees		14,234		13,056		1,178	9.0
Income on retirement plan annuities		338		318		20	6.3
Gain on sale and call of securities, net		—		241		(241)	(100.0)
Bank-owned life insurance income		1,480		1,516		(36)	(2.4)
Other income		2,102		2,234		(132)	(5.9)
Total noninterest income		47,409		81,522		(34,113)	(41.8)

Noninterest expenses:
Compensation and benefits		63,169		77,360		(14,191)	(18.3)
Occupancy and equipment		14,832		14,723		109	0.7
Data processing		6,811		6,910		(99)	(1.4)
Loan expense		1,218		5,008		(3,790)	(75.7)
Marketing		3,054		2,524		530	21.0
Professional fees		4,676		4,432		244	5.5
Deposit insurance		1,060		993		67	6.7
Prepayment penalties on Federal Home Loan Bank advances		—		1,095		(1,095)	(100.0)
Other expenses		9,442		7,629		1,813	23.8
Total noninterest expenses		104,262		120,674		(16,412)	(13.6)

Income before income taxes		49,392		64,055		(14,663)	(22.9)

Income tax provision		13,380		18,128		(4,748)	(26.2)

Net income	$	36,012	$	45,927	$	(9,915)	(21.6)	%

Earnings per common share:
Basic	$	0.77	$	0.89
Diluted	$	0.76	$	0.88
Weighted average shares outstanding:
Basic		46,875,312		51,362,252
Diluted		47,541,647		52,094,749

HarborOne Bancorp, Inc.
Average Balances / Yields
(Unaudited)

	Quarters Ended
	September 30, 2022							June 30, 2022							September 30, 2021
	Average							Average							Average
	Outstanding					Yield/		Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost⁽⁶⁾		Balance			Interest		Cost⁽⁶⁾		Balance			Interest		Cost⁽⁶⁾
	(dollars in thousands)
Interest-earning assets:
Investment securities ⁽¹⁾	$	390,577		$	1,971	2.00	%	$	391,448		$	1,873	1.92	%	$	358,927		$	1,293	1.43	%
Other interest-earning assets		27,723			143	2.05			64,678			131	0.81			372,892			170	0.18
Loans held for sale		28,046			377	5.33			29,474			331	4.51			84,399			665	3.13
Loans
Commercial loans⁽²⁾		2,522,359			28,298	4.45			2,384,630			25,295	4.25			2,121,432			22,394	4.19
Residential real estate loans⁽²⁾		1,470,305			12,972	3.50			1,330,772			11,182	3.37			1,121,898			9,352	3.31
Consumer loans ⁽²⁾		63,220			795	4.99			88,943			1,045	4.71			170,366			1,934	4.50
Total loans		4,055,884			42,065	4.11			3,804,345			37,522	3.96			3,413,696			33,680	3.91
Total interest-earning assets		4,502,230			44,556	3.93			4,289,945			39,857	3.73			4,229,914			35,808	3.36
Noninterest-earning assets		308,734							311,998							347,060
Total assets	$	4,810,964						$	4,601,943						$	4,576,974
Interest-bearing liabilities:
Savings accounts	$	1,293,598			1,211	0.37		$	1,266,912			626	0.20		$	1,136,131			365	0.13
NOW accounts		305,777			42	0.05			311,241			38	0.05			283,725			45	0.06
Money market accounts		893,452			1,382	0.61			885,305			635	0.30			832,340			392	0.19
Certificates of deposit		486,923			787	0.64			484,484			670	0.55			570,570			1,087	0.76
Brokered deposits		102,875			69	0.27			100,000			50	0.20			100,000			161	0.64
Total interest-bearing deposits		3,082,625			3,491	0.45			3,047,942			2,019	0.27			2,922,766			2,050	0.28
FHLB advances		196,036			1,209	2.45			34,763			119	1.36			84,438			431	2.03
Subordinated debentures		34,237			524	6.07			34,207			524	6.14			34,111			524	6.09
Total borrowings		230,273			1,733	2.99			68,970			643	3.74			118,549			955	3.20
Total interest-bearing liabilities		3,312,898			5,224	0.63			3,116,912			2,662	0.34			3,041,315			3,005	0.39
Noninterest-bearing liabilities:
Noninterest-bearing deposits		789,214							768,088							756,927
Other noninterest-bearing liabilities		80,304							75,186							90,366
Total liabilities		4,182,416							3,960,186							3,888,608
Total stockholders' equity		628,548							641,757							688,366
Total liabilities and stockholders' equity	$	4,810,964						$	4,601,943						$	4,576,974
Net interest income as reported					39,332							37,195							32,803
Interest rate spread⁽³⁾						3.30	%						3.39	%						2.97	%
Net interest-earning assets ⁽⁴⁾	$	1,189,332						$	1,173,033						$	1,188,599
Net interest margin⁽⁵⁾						3.47	%						3.48	%						3.08	%
Ratio of interest-earning assets to interest-bearing liabilities		135.90	%						137.63	%						139.08	%

Supplemental information:
Total deposits, including demand deposits	$	3,871,839		$	3,491			$	3,816,030		$	2,019			$	3,679,693		$	2,050
Cost of total deposits						0.36	%						0.21	%						0.22	%
Total funding liabilities, including demand deposits	$	4,102,112		$	5,224			$	3,885,000		$	2,662			$	3,798,242		$	3,005
Cost of total funding liabilities						0.51	%						0.27	%						0.31	%

⁽¹⁾ Includes securities available for sale and securities held to maturity.
⁽²⁾ Includes nonaccruing loan balances and interest received on such loans.
⁽³⁾ 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.

HarborOne Bancorp, Inc. Announces 2022 Third Quarter Earnings