Brockton-based HarborOne Bank saw year-over-year earnings drop 30 percent as mortgage banking income fell by almost 50 percent in the second quarter.
HarborOne had second quarter net income of $9.99 million, or $0.21 per basic and diluted share, compared to $14.28 million, or $0.27 per diluted share, in the second quarter of 2021. Net income in the first quarter of 2022 was $12.27 million, or $0.25 per diluted share.
“HarborOne had a solid quarter of growth in loans, deposits, and margin, with a continued focus on strong credit quality in the first half of the year,” Joseph Casey, HarborOne’s president and CEO, said in the bank’s second quarter earnings statement. “While mortgage banking saw a significant decline in origination volume and gain on sale margin, our mortgage banking team has identified over $1.0 million in expense savings to commence during the third quarter.”
HarborOne saw its mortgage banking income decrease by 49.2 percent, or $7.8 million, compared to the second quarter of 2021. Decreases in loan closings and narrowing gain-on-sale margins drove the decline, the bank said. Total noninterest income fell by $7.6 million, or 35 percent, compared to the same quarter last year. The declines in mortgage banking income were partially offset by a $346,000 increase in deposit account fees, the bank said.
Total noninterest income for the second quarter was $14.1 million, which was also down from the first quarter of 2022 when noninterest income was $19.1 million. Mortgage loan closings for the second quarter were $297.5 million with a gain on loan sales of $4.5 million compared to $253.8 million in mortgage closings and $5.3 million in gain on sales during the first quarter.
Total mortgage banking income was $8.01 million in the second quarter compared to $13.16 million in the first quarter and $15.78 million in the second quarter of 2021.
HarborOne did not specify its residential mortgage pipeline but noted that rising rates and low inventory of homes for sale continued to have negative effects on the pipeline.
The decline in mortgage closings did lead to lower expenses year-over-year. HarborOne’s total noninterest expenses in the second quarter decreased by $3.6 million, or 9.4 percent, compared to the same quarter last year. Compensation and benefits dropped by $3.7 million and loan expenses fell by $865,000, decreases which the bank said were consistent with the decline in residential mortgage loan closings and corresponding decrease in mortgage origination commissions.
HarborOne’s total assets were $4.7 billion as of June 30, up from $4.59 billion at the end of the first quarter. Loans increased by 4.7 percent to $3.91 billion in the second quarter compared to $3.74 billion in the first quarter. Total deposits were $3.85 billion on June 30 compared to $3.76 billion on March 31.