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Image courtesy of HarborOne Bank.
HarborOne saw fourth quarter earnings drop about 28 percent year-over-year as mortgage demand declined, but the Brockton-based bank still saw full-year earnings increase by 30 percent.
HarborOne had fourth quarter net income of $12.6 million, or $0.25 per diluted share, compared to $12.3 million, or $0.24 per diluted share, in the third quarter and $17.6 million, or $0.33 per diluted share, in the fourth quarter of 2020.
The bank’s full-year 2021 net income was $58.5 million, or $1.14 per diluted share, a 30.6 percent increase compared to 2020, when net income was $44.8 million, or $0.82 per diluted share.
“Our vision for the business, our business strategy, and our execution all came together seamlessly in ’21, despite the challenges,” James Blake, HarborOne’s CEO, said in the bank’s fourth quarter earnings statement last week. “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. Our performance over the last two years is something we’re all extremely proud of.”
HarborOne announced Blake’s retirement last week. President and Chief Operating Officer Joseph Casey will become the bank’s president and CEO in May.
“We’re battle tested and resilient, and we look forward to continuing our progress against our strategic plan and bringing our truly unique value proposition to our customers and the communities that we serve in the years ahead,” Casey said in the earnings statement.
Softening mortgage loan demand resulted in mortgage loan closings of $451.4 million and a gain on loan sales of $10.1 million in the fourth quarter, the bank said in the statement. During the third quarter, the bank had $604.9 million in mortgage closings and $12.8 million in gain on sales. The locked residential mortgage pipeline has decreased by $100.8 million, the bank said.
Total noninterest expenses did decrease by $3.1 million, or 7.5 percent, compared to the fourth quarter of 2020, in part because compensation and benefits decreased by $2.6 million and loan expenses decreased by $2 million, “consistent with the decrease in residential mortgage loan closings,” the bank said.
The bank had total deposits at the end of 2021 of $3.68 billion, net loans of $3.56 billion and total assets of $4.55 billion.
HarborOne saw growth in its commercial loan portfolio, excluding Paycheck Protection Program loans, of $240.9 million, up 12.1 percent compared to the fourth quarter of 2020.
Despite challenges that the hospitality industry and other sectors have faced during the pandemic, HarborOne in 2021 originated loans totaling $214.6 million loans to at-risk sectors, including $101.9 million in the hotel sector.
The bank said the hotel loans typically involved existing customers with “a track record of performance with the bank.”
“Although we have identified certain sectors that have the potential to be more susceptible to negative impacts of the COVID-19 pandemic, as trends largely continue to improve, we continue to make prudent lending decisions that include these sectors,” the bank said.
HarborOne continued to expand its branch footprint in the Greater Boston area in the fourth quarter after acquiring from Rockland Trust three East Boston Savings Bank branches in Brighton, Cambridge and Brookline that closed as part of the merger. The opening of another branch in Brighton acquired in that deal has been delayed because of a permitting issue, the bank said.
