UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-38955

HarborOne Bancorp, Inc.

(Exact name of registrant as specified in its charter)


Massachusetts		81-1607465
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

770 Oak Street, Brockton, Massachusetts	02301
(Address of principal executive offices)	(Zip Code)

(508) 895-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act


Title of each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	HONE	The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of November 7, 2024 there were 44,051,554 shares of the Registrant’s common stock, par value $0.01 per share, outstanding.

Table of Contents

Index

		PAGE
	Glossary of Acronyms and Terms	1

PART I.	FINANCIAL INFORMATION

ITEM 1.	Financial Statements

	Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 (unaudited)	2
	Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)	3
	Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)	4
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)	5
	Consolidated Statements of Cash Flows for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)
	Note 1. Summary of Significant Accounting Policies	9
	Note 2. Debt Securities	10
	Note 3. Loans Held for Sale	13
	Note 4. Loans and Allowance for Credit Losses	14
	Note 5. Mortgage Loan Servicing	21
	Note 6. Goodwill and Other Intangible Assets	21
	Note 7. Deposits	22
	Note 8. Borrowings	23
	Note 9. Other Commitments and Contingencies	24
	Note 10. Derivatives	25
	Note 11. Operating Lease ROU Assets and Liabilities	29
	Note 12. Minimum Regulatory Capital Requirements	30
	Note 13. Comprehensive (Loss) Income	32
	Note 14. Fair Value of Assets and Liabilities	33
	Note 15. Earnings Per Share	38
	Note 16. Revenue Recognition	39
	Note 17. Segment Reporting	39

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	65
ITEM 4.	Controls and Procedures	65

PART II.	OTHER INFORMATION

ITEM 1.	Legal Proceedings	66
ITEM 1A.	Risk Factors	66
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
ITEM 3.	Defaults Upon Senior Securities	67
ITEM 4.	Mine Safety Disclosures	67
ITEM 5.	Other Information	67
ITEM 6.	Exhibits	68

EXHIBIT INDEX		68

SIGNATURE		69

Table of Contents

Glossary of Acronyms and Terms

The following is a list of common acronyms and terms used regularly in our financial reporting:




ACL	Allowance for Credit Losses
ASU	Accounting Standards Update
Bank	HarborOne Bank
BIC	Borrower-in-custody
BOLI	Bank-owned life insurance
BTFP	Bank Term Funding Program
Company	HarborOne Bancorp, Inc.
CRE	Commercial real estate
DCF	Discounted cash flow
DIF	Massachusetts Depositors Insurance Fund
EPS	Earnings Per Share
ESOP	Employee Stock Ownership Plan
EVE	Equity at risk
Exchange Act	Securities Exchange Act of 1934, as amended
FASB	Federal Accounting Standards Board
FDIC	Federal Deposit Insurance Corporation
Federal Reserve	Board of Governors of the Federal Reserve System
FHLB	Federal Home Loan Bank
FRBB	Federal Reserve Bank of Boston
GAAP	Accounting principles generally accepted in the United States of America
HarborOne Mortgage	HarborOne Mortgage, LLC
Management	Company's management
MSRs	Mortgage servicing rights
PPP	Paycheck Protection Program
ROU	Right-of-use
SBA	U.S. Small Business Administration
SEC	U.S. Securities and Exchange Commission
SOFR	Secured Overnight Financing Rate
Treasury	U.S. Department of the Treasury

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HarborOne Bancorp, Inc.

Consolidated Balance Sheets (unaudited)


	September 30,		December 31,
(in thousands, except share data)	2024		2023

Assets
Cash and due from banks	$	39,668	$	38,876
Short-term investments		184,611		188,474
Total cash and cash equivalents		224,279		227,350

Securities available for sale, at fair value		276,817		290,151
Securities held to maturity, at amortized cost (fair value of $19,491 at September 30, 2024 and $19,262 at December 31, 2023)		19,625		19,796
Federal Home Loan Bank stock, at cost		17,476		27,098
Asset held for sale		—		348
Loans held for sale, at fair value		28,467		19,686
Loans		4,879,503		4,750,311
Less: Allowance for credit losses on loans		(54,004)		(47,972)
Net loans		4,825,499		4,702,339
Accrued interest receivable		19,382		18,169
Mortgage servicing rights, at fair value		43,067		46,111
Property and equipment, net		46,835		48,749
Retirement plan annuities		15,578		15,170
Bank-owned life insurance		96,956		94,675
Goodwill		59,042		59,042
Intangible assets		947		1,515
Other assets		101,997		97,697
Total assets	$	5,775,967	$	5,667,896

Liabilities and Stockholders' Equity
Deposits:
Demand deposit accounts	$	713,379	$	659,973
NOW accounts		296,322		305,825
Regular savings and club accounts		926,192		1,265,315
Money market deposit accounts		1,162,930		966,201
Term certificate accounts		1,063,672		863,457
Brokered deposits		373,682		326,638
Total deposits		4,536,177		4,387,409
Borrowings		539,364		568,462
Mortgagors' escrow accounts		9,172		8,872
Accrued interest payable		11,544		5,251
Other liabilities and accrued expenses		95,508		114,143
Total liabilities		5,191,765		5,084,137

Commitments and contingencies (Notes 7, 12 and 13)

Common stock, $0.01 par value; 150,000,000 shares authorized; 60,529,972 and 60,255,288 shares issued; 44,130,134 and 45,401,224 shares outstanding at September 30, 2024 and December 31, 2023, respectively		598		598
Additional paid-in capital		488,983		486,502
Retained earnings		368,222		359,656
Treasury stock, at cost, 16,399,838 and 14,854,064 shares at September 30, 2024 and December 31, 2023, respectively		(210,197)		(193,590)
Accumulated other comprehensive loss		(38,997)		(43,622)
Unearned compensation - ESOP		(24,407)		(25,785)
Total stockholders' equity		584,202		583,759
Total liabilities and stockholders' equity	$	5,775,967	$	5,667,896

The accompanying notes are an integral part of these unaudited interim Consolidated Financial Statements.

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HarborOne Bancorp, Inc.

Consolidated Statements of Income (unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except share data)	2024		2023		2024		2023


Interest and dividend income:
Interest and fees on loans	$	63,595	$	58,124	$	185,044	$	166,399
Interest on loans held for sale		546		370		1,136		982
Interest on taxable securities		1,965		2,003		6,151		6,117
Other interest and dividend income		2,928		2,667		11,558		6,405
Total interest and dividend income		69,034		63,164		203,889		179,903

Interest expense:
Interest on deposits		29,969		25,039		84,140		61,014
Interest on borrowings		7,172		6,439		25,924		19,658
Interest on subordinated debentures		—		606		—		1,653
Total interest expense		37,141		32,084		110,064		82,325

Net interest and dividend income		31,893		31,080		93,825		97,578
Provision for credit (benefits) losses		5,903		(113)		6,350		5,036

Net interest and dividend income, after provision for credit (benefits) losses		25,990		31,193		87,475		92,542

Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans		3,752		2,704		8,908		8,228
Changes in mortgage servicing rights fair value		(2,641)		125		(3,685)		(1,131)
Other		2,390		2,270		7,022		6,798
Total mortgage banking income		3,501		5,099		12,245		13,895
Deposit account fees		5,370		5,133		15,576		14,878
Income on retirement plan annuities		122		146		408		393
Gain on sale of asset held for sale		—		—		1,809		—
Loss on sale of securities		—		—		(1,041)		—
Bank-owned life insurance income		777		531		2,281		1,542
Other income		798		689		1,950		2,242
Total noninterest income		10,568		11,598		33,228		32,950

Noninterest expense:
Compensation and benefits		18,551		18,699		55,163		54,718
Occupancy and equipment		4,628		4,430		14,045		14,103
Data processing		2,711		2,548		7,565		7,297
Loan expenses		457		385		1,289		1,115
Marketing		549		794		2,733		2,900
Deposit expenses		722		534		2,151		1,394
Postage and printing		338		348		1,177		1,230
Professional fees		1,292		1,374		3,985		3,989
Foreclosed and repossessed assets		1		2		6		(10)
Deposit insurance		1,028		1,004		3,185		2,690
Other expenses		1,991		1,754		5,863		5,680
Total noninterest expense		32,268		31,872		97,162		95,106

Income before income taxes		4,290		10,919		23,541		30,386

Income tax provision		366		2,507		5,021		7,198

Net income	$	3,924	$	8,412	$	18,520	$	23,188

Earnings per common share:
Basic	$	0.10	$	0.20	$	0.45	$	0.53
Diluted	$	0.10	$	0.20	$	0.45	$	0.53
Weighted average shares outstanding:
Basic		40,984,857		42,876,893		41,395,517		43,591,954
Diluted		41,336,985		42,983,477		41,609,933		43,793,137

The accompanying notes are an integral part of these unaudited interim Consolidated Financial Statements.

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HarborOne Bancorp, Inc.

Consolidated Statements of Comprehensive Income (Loss) (unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023


Net income	$	3,924	$	8,412	$	18,520	$	23,188
Other comprehensive income:

Unrealized gain/loss on cashflow hedge:
Unrealized holding gains (losses)		(289)		598		697		2,005
Reclassification adjustment for net gains included in net income		(1,281)		(1,221)		(3,780)		(3,373)
Net change in unrealized losses on derivatives in cashflow hedging instruments		(1,570)		(623)		(3,083)		(1,368)
Related tax effect		449		175		882		385
Net-of-tax amount		(1,121)		(448)		(2,201)		(983)

Unrealized gain/loss on securities available for sale:
Unrealized holding gains (losses)		13,102		(14,718)		8,812		(12,995)
Reclassification adjustment for realized losses		—		—		1,041		—
Net unrealized gains (losses)		13,102		(14,718)		9,853		(12,995)
Related tax effect		(2,934)		4,487		(2,964)		4,129
Net-of-tax amount		10,168		(10,231)		6,889		(8,866)

Postretirement benefit:
Adjustment of accumulated obligation for postretirement benefits		1		—		1		1
Reclassification adjustment for gains recognized in net periodic benefit cost		(22)		(20)		(64)		(59)
Net gains		(21)		(20)		(63)		(58)

Total other comprehensive income (loss)		9,026		(10,699)		4,625		(9,907)

Comprehensive income (loss)	$	12,950	$	(2,287)	$	23,145	$	13,281

The accompanying notes are an integral part of these unaudited interim Consolidated Financial Statements.

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HarborOne Bancorp, Inc.

Consolidated Statements of Changes in Stockholders’ Equity (unaudited)


										Accumulated
	Common Stock			Additional				Treasury		Other		Unearned		Total
	Outstanding			Paid-in		Retained		Stock,		Comprehensive		Compensation		Stockholders'
(in thousands, except share data)	Shares	Amount		Capital		Earnings		at Cost		Income (Loss)		- ESOP		Equity

Balance at June 30, 2023	46,575,478	$	597	$	484,544	$	364,709	$	(181,324)	$	(46,290)	$	(26,704)	$	595,532

Comprehensive income (loss)	—		—		—		8,412		—		(10,699)		—		(2,287)
Dividends declared of $0.075 per share	—		—		—		(3,191)		—		—		—		(3,191)
ESOP shares committed to be released (57,681 shares)	—		—		104		—		—		—		459		563
Restricted stock awards granted, net of forfeitures	(7,591)		—		—		—		—		—		—		—
Share-based compensation expense	—		—		496		—		—		—		—		496
Treasury stock purchased	(652,523)		—		—		—		(6,479)		—		—		(6,479)

Balance at September 30, 2023	45,915,364	$	597	$	485,144	$	369,930	$	(187,803)	$	(56,989)	$	(26,245)	$	584,634


Balance at June 30, 2024	44,459,490	$	598	$	487,980	$	367,584	$	(205,944)	$	(48,023)	$	(24,866)	$	577,329

Comprehensive income (loss)	—		—		—		3,924		—		9,026		—		12,950
Dividends declared of $0.08 per share	—		—		—		(3,286)		—		—		—		(3,286)
ESOP shares committed to be released (57,681 shares)	—		—		260		—		—		—		459		719
Restricted stock awards granted, net of forfeitures	5,314		—		—		—		—		—		—		—
Share-based compensation expense	—		—		610		—		—		—		—		610
Stock options exercised	13,000		—		133		—		—		—		—		133
Treasury stock purchased	(347,670)		—		—		—		(4,253)		—		—		(4,253)

Balance at September 30, 2024	44,130,134	$	598	$	488,983	$	368,222	$	(210,197)	$	(38,997)	$	(24,407)	$	584,202

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HarborOne Bancorp, Inc.

Consolidated Statements of Changes in Stockholders’ Equity (unaudited)


										Accumulated
	Common Stock			Additional				Treasury		Other		Unearned		Total
	Outstanding			Paid-in		Retained		Stock,		Comprehensive		Compensation		Stockholders'
(in thousands, except share data)	Shares	Amount		Capital		Earnings		at Cost		Income (Loss)		- ESOP		Equity

Balance at December 31, 2022	48,961,452	$	596	$	483,031	$	356,438	$	(148,384)	$	(47,082)	$	(27,623)	$	616,976

Comprehensive income (loss)	—		—		—		23,188		—		(9,907)		—		13,281
Dividends declared of $0.225 per share	—		—		—		(9,696)		—		—		—		(9,696)
ESOP shares committed to be released (173,042 shares)	—		—		507		—		—		—		1,378		1,885
Restricted stock awards granted, net of forfeitures	134,341		—		—		—		—		—		—		—
Share-based compensation expense	—		1		1,606		—		—		—		—		1,607
Treasury stock purchased	(3,180,429)		—		—		—		(39,419)		—		—		(39,419)

Balance at September 30, 2023	45,915,364	$	597	$	485,144	$	369,930	$	(187,803)	$	(56,989)	$	(26,245)	$	584,634

Balance at December 31, 2023	45,401,224		598		486,502		359,656		(193,590)		(43,622)		(25,785)		583,759

Comprehensive income (loss)	—		—		—		18,520		—		4,625		—		23,145
Dividends declared of $0.24 per share	—		—		—		(9,954)		—		—		—		(9,954)
ESOP shares committed to be released (115,362 shares)	—		—		554		—		—		—		1,378		1,932
Restricted stock awards granted, net of forfeitures	197,824		—		—		—		—		—		—		—
Performance stock units vested	63,860		—		—		—		—		—		—		—
Share-based compensation expense	—		—		1,794		—		—		—		—		1,794
Stock options exercised	13,000		—		133		—		—		—		—		133
Treasury stock purchased	(1,545,774)		—		—		—		(16,607)		—		—		(16,607)

Balance at September 30, 2024	44,130,134	$	598	$	488,983	$	368,222	$	(210,197)	$	(38,997)	$	(24,407)	$	584,202

The accompanying notes are an integral part of these unaudited interim Consolidated Financial Statements.

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HarborOne Bancorp, Inc.

Consolidated Statements of Cash Flows (unaudited)


	Nine Months Ended September 30,
(in thousands)	2024		2023


Cash flows from operating activities:
Net income	$	18,520	$	23,188
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		6,350		5,036
Net amortization of securities premiums/discounts		287		338
Proceeds from sale of loans		400,620		331,775
Loans originated for sale		(400,392)		(322,929)
Accretion of net deferred loan costs/fees and premiums		(125)		(94)
Depreciation and amortization of premises and equipment		2,813		2,872
Change in mortgage servicing rights fair value		4,029		1,131
Mortgage servicing rights capitalized		(985)		(2,194)
Accretion of fair value adjustment on loans and deposits, net		(376)		(251)
Amortization of other intangible assets		568		568
Amortization of subordinated debt issuance costs		—		95
Loss on sale of securities		1,041		—
Net gains on mortgage loan sales, including fair value adjustments		(9,009)		(8,098)
Bank-owned life insurance income		(2,281)		(1,542)
Income on retirement plan annuities		(408)		(393)
Gain on sale of asset held for sale		(1,809)		—
Net loss on disposal of premises and equipment		—		17
Net gain on sale and write-down of other real estate owned and repossessed assets		(5)		(12)
Bargain purchase contribution		675		—
ESOP expense		1,932		1,885
Share-based compensation expense		1,794		1,607
Decrease in operating lease ROU assets		1,358		1,478
Decrease in operating lease liabilities		(1,260)		(1,473)
Change in other assets		(12,668)		(9,393)
Change in other liabilities		(10,316)		45,973
Net cash provided by operating activities		353		69,584

Cash flows from investing activities:
Activity in securities available for sale:
Maturities, prepayments and calls		15,958		16,731
Purchases		(10,689)		—
Sales		16,584		—
Activity in securities held to maturity:
Maturities, prepayment and calls		176		160
Net redemption (purchase) of FHLB stock		9,622		(3,307)
Proceeds on asset held for sale		1,482		—
Participation-in loan purchases		(9,633)		(31,443)
Net loan originations		(119,037)		(145,625)
Proceeds from sale of other real estate owned and repossessed assets		115		282
Additions to property and equipment		(899)		(3,565)
Net cash used by investing activities		(96,321)		(166,767)

(continued)

The accompanying notes are an integral part of these unaudited interim Consolidated Financial Statements.

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HarborOne Bancorp, Inc.

Consolidated Statements of Cash Flows (unaudited)


	Nine Months Ended September 30,
(in thousands)	2024		2023

Cash flows from financing activities:
Net increase in deposits		148,768		220,355
Net change in short-term borrowed funds		(243,000)		(135,000)
Proceeds from borrowings		427,326		255,000
Repayment of borrowings		(213,424)		(45,204)
Net change in mortgagors' escrow accounts		300		618
Proceeds from exercise of stock options		133		—
Treasury stock purchased		(16,607)		(39,419)
Dividends paid		(10,599)		(10,400)
Net cash provided by financing activities		92,897		245,950

Net change in cash and cash equivalents		(3,071)		148,767

Cash and cash equivalents at beginning of period		227,350		98,017

Cash and cash equivalents at end of period	$	224,279	$	246,784

Supplemental cash flow information:
Interest paid on deposits	$	83,446	$	59,691
Interest paid on borrowed funds		20,271		21,242
Income taxes paid, net		7,243		7,507
Transfer of loans to other real estate owned and repossessed assets		41		228
Dividends declared		9,954		9,696

The accompanying notes are an integral part of these unaudited interim Consolidated Financial Statements.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The unaudited interim Consolidated Financial Statements of HarborOne Bancorp, Inc. presented herein have been prepared pursuant to the rules of the SEC for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by GAAP. In the opinion of Management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying unaudited interim Consolidated Financial Statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the years ended December 31, 2023 and 2022 and notes thereto included in the Company’s Annual Report on Form 10-K.

The unaudited interim Consolidated Financial Statements include the accounts of the Company; the Company’s subsidiaries, Legion Parkway Company LLC (a security corporation) and HarborOne Bank; and the Bank’s wholly owned subsidiaries, which consist of HarborOne Mortgage, LLC, HarborOne Security Company, Inc., and a passive investment corporation. The passive investment corporation maintains and manages certain assets of the Bank. The security company was established for the purpose of buying, holding and selling securities on its own behalf. All significant intercompany balances and transactions have been eliminated in consolidation.

Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. These changes and reclassifications did not impact previously reported net income or comprehensive income.

Nature of Operations

The Company provides a variety of financial services to individuals and businesses through its 30 full-service branches in Massachusetts and Rhode Island, and a commercial lending office in each of Boston, Massachusetts and Providence, Rhode Island. HarborOne Mortgage maintains offices in Florida, Maine, Massachusetts, New Hampshire, New Jersey and Rhode Island and originates loans in five additional states.

The Company’s primary deposit products are checking, money market, savings, and term certificate of deposit accounts, while its primary lending products are commercial real estate, commercial, residential mortgages, home equity lines of credit, and consumer loans. The Company also originates, sells and services residential mortgage loans through HarborOne Mortgage.

Risks and Uncertainties

Macroeconomic trends are mixed as uncertainty remains about the economy and banking industry. Market conditions and external factors may unpredictably impact the Company causing adverse effects on its business, financial condition, results of operations and cash flows. If there is severe or prolonged inflation or a recession, the Company’s customers could experience similar adverse effects from these uncertainties that would impair their ability to fulfill their financial obligations to the Company resulting in deteriorating credit quality and loan charge-offs.

The competitive landscape for deposits in the banking industry and the interest rate environment has increased competition for liquidity and the premium at which liquidity is available to meet funding needs. An unexpected increase of withdrawals of deposits could adversely impact the Company’s ability to fund its operations, potentially requiring greater reliance on

sources of liquidity to meet withdrawal demands or to fund continuing operations. These sources may include proceeds from FRBB and FHLB advances, sales of investment securities and loans, federal funds lines of credit from correspondent banks, and brokered deposits.

Reliance on secondary funding sources could increase the Company’s overall cost of funds and thereby reduce net income. While the Company believes its current sources of liquidity are adequate to fund operations, there is no guarantee they will suffice to meet future liquidity demands. This may necessitate slowing or discontinuing loan growth, capital expenditures, or other investments, or liquidating assets.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Summary of Significant Accounting Policies and Recently Adopted Accounting Standards Updates

Significant accounting policies in effect and disclosed within the Company’s most recent audited Consolidated Financial Statements as of December 31, 2023 remain substantially unchanged.

In accordance with the Bank’s policies, Management annually assesses model inputs and assumptions for the ACL on loans and made changes to certain assumptions. Key model assumptions include loan segmentation, prepayment rates, the funding rates for unfunded commitments, and macro-economic drivers. Management selected multiple economic forecasts including the civilian unemployment rate, residential property price indices, commercial price indices, and real disposable income, generally applying two forecasts to each loan segment. The forecasts assume that economic variables revert to long-term average. Reversion periods generally begin eight quarters after the forecast start date and generally concludes within sixteen quarters of the forecast start date.

2.DEBT SECURITIES

The following is a summary of securities available for sale and held to maturity:


			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for Credit		Fair
	Cost		Gains		Losses		Losses		Value

	(in thousands)

September 30, 2024:
Securities available for sale
U.S. government and government-sponsored enterprise obligations	$	42,143	$	—	$	5,231	$	—	$	36,912
U.S. government agency and government-sponsored residential mortgage-backed securities		283,381		197		46,929		—		236,649
SBA asset-backed securities		1,446		—		63		—		1,383
Corporate bonds		2,000		24		151		—		1,873
Total securities available for sale	$	328,970	$	221	$	52,374	$	—	$	276,817


Securities held to maturity
U.S. government and government-sponsored enterprise obligations	$	15,000	$	—	$	148	$	—	$	14,852
SBA asset-backed securities		4,625		14		—		—		4,639
Total securities held to maturity	$	19,625	$	14	$	148	$	—	$	19,491


			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for Credit		Fair
	Cost		Gains		Losses		Losses		Value

	(in thousands)

December 31, 2023:
Securities available for sale
U.S. government and government-sponsored enterprise obligations	$	47,143	$	—	$	6,961	$	—	$	40,182
U.S. government agency and government-sponsored residential mortgage-backed securities		300,277		3		54,683		—		245,597
U.S. government-sponsored collateralized mortgage obligations		1,852		—		70		—		1,782
SBA asset-backed securities		1,885		—		107		—		1,778
Corporate bonds		1,000		—		188		—		812
Total securities available for sale	$	352,157	$	3	$	62,009	$	—	$	290,151


Securities held to maturity
U.S. government and government-sponsored enterprise obligations	$	15,000	$	—	$	438	$	—	$	14,562
SBA asset-backed securities		4,796		—		96		—		4,700
Total securities held to maturity	$	19,796	$	—	$	534	$	—	$	19,262

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Accrued interest receivable is excluded from the amortized cost basis of debt securities. Accrued interest receivable totaled $852,000 and $940,000 as of September 30, 2024 and December 31, 2023, respectively. At September 30, 2024, available-for-sale debt securities with a fair value of $149.4 million were pledged for the BTFP borrowing, and available-for-sale debt securities with a fair value of $124.2 million and held-to-maturity securities with a fair value of $14.9 million were pledged as collateral to provide borrowing capacity through the Federal Reserve’s Discount Window.

The amortized cost and fair value of debt securities by contractual maturity at September 30, 2024 is as follows:



	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value

	(in thousands)

After 1 year through 5 years	$	17,643	$	16,071	$	15,000	$	14,852
After 5 years through 10 years		26,500		22,714		—		—
Over 10 years		—		—		—		—
		44,143		38,785		15,000		14,852

U.S. government agency and government-sponsored residential mortgage-backed securities		283,381		236,649		—		—
SBA asset-backed securities		1,446		1,383		4,625		4,639

Total	$	328,970	$	276,817	$	19,625	$	19,491

U.S. government-sponsored residential mortgage-backed securities and securities whose underlying assets are loans from the SBA have stated maturities of two to 29 years; however, it is expected that such securities will have shorter actual lives due to prepayments. U.S. government and government-sponsored enterprise obligations and corporate bonds are callable at the discretion of the issuer. U.S. government and government-sponsored enterprise obligations and corporate bonds with a total fair value of $53.6 million have a final maturity of two to eight years and a call feature of one month to three years. At September 30, 2024, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholder equity.

The following table shows proceeds and gross realized gains and losses related to the sales of securities for the periods indicated:


		Three Months Ended September 30,				Nine Months Ended September 30,
		2024		2023		2024		2023

		(in thousands)				(in thousands)

Sales
Proceeds	$	—	$	—	$	16,584	$	—
Gross gains		—		—		—		—
Gross losses		—		—		1,041		—

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Information pertaining to securities with gross unrealized losses at September 30, 2024 and December 31, 2023, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:


	Less Than Twelve Months				Twelve Months and Over
	Gross				Gross
	Unrealized		Fair		Unrealized		Fair
	Losses		Value		Losses		Value

	(in thousands)

September 30, 2024:
Securities available for sale

U.S. government and government-sponsored enterprise obligations	$	—	$	—	$	5,231	$	36,912
U.S. government agency and government-sponsored residential mortgage-backed securities		—		—		46,929		222,177
SBA asset-backed securities		—		—		63		1,383
Corporate bonds		—		—		151		849
	$	—	$	—	$	52,374	$	261,321

Securities held to maturity

U.S. government and government-sponsored enterprise obligations	$	—	$	—		148		14,852
SBA asset-backed securities		—		—		—		—
	$	—	$	—	$	148	$	14,852

December 31, 2023:
Securities available for sale

U.S. government and government-sponsored enterprise obligations	$	—	$	—	$	6,961	$	40,182
U.S. government agency and government-sponsored residential mortgage-backed securities		—		—		54,683		240,955
U.S. government-sponsored collateralized mortgage obligations		—		—		70		1,782
SBA asset-backed securities		—		—		107		1,778
Corporate bonds		—		—		188		812
	$	—	$	—	$	62,009	$	285,509

Securities held to maturity

U.S. government and government-sponsored enterprise obligations	$	—	$	—	$	438	$	14,562
SBA asset-backed securities		96		4,700		—		—
	$	96	$	4,700	$	438	$	14,562

Management assesses the decline in fair value of investment securities on a regular basis. Unrealized losses on debt securities may occur from current market conditions, increases in interest rates since the time of purchase, a structural change in an investment, volatility of earnings of a specific issuer, or deterioration in credit quality of the issuer. Management evaluates both qualitative and quantitative factors to assess whether an impairment exists.

As of September 30, 2024, the Company’s security portfolio consisted of 111 debt securities, 102 of which were in an unrealized loss position. The unrealized losses are primarily related to the Company’s debt securities that were issued by U.S. government-sponsored enterprises and agencies. The Company does not believe that the debt securities that were in an unrealized loss position as of September 30, 2024 represent a credit loss impairment. As of September 30, 2024, and December 31, 2023, the gross unrealized loss positions were primarily related to mortgage-backed securities and other obligations issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government and have a long history of zero credit loss. Total gross unrealized losses were primarily attributable to changes in interest rates relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Management reviewed the collectability of the corporate bonds taking into consideration such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, credit ratings, including ratings in effect as of the reporting period date as well as credit rating changes between the reporting period date and the filing date of this report, and other information. Management believes the unrealized losses on the corporate bonds are primarily attributable to changes in the investment spreads and interest rates, and not changes in the credit quality of the issuers of the corporate bonds.

Management expects to recover the entire amortized cost basis of the available-for-sale debt securities with an unrealized loss. Furthermore, the Company does not intend to sell these securities, and it is unlikely that the Company will be required to sell these securities, before recovery of their cost basis, which may be at maturity. Therefore, no ACL was recorded at September 30, 2024.

As of September 30, 2024, the held-to-maturity securities were U.S. government-sponsored enterprise obligations. These securities are guaranteed by the government-sponsored enterprise with a long history of no credit losses, and Management has determined these securities to have a zero loss expectation and therefore does not estimate an ACL on these securities.

3.LOANS HELD FOR SALE

The following table provides the fair value and contractual principal balance outstanding of loans held for sale accounted for under the fair value option:


	September 30,		December 31,
	2024		2023

	(in thousands)

Loans held for sale, fair value	$	28,467	$	19,686
Loans held for sale, contractual principal outstanding		27,835		19,155
Fair value less unpaid principal balance	$	632	$	531

The Company has elected the fair value option for mortgage loans held for sale to better match changes in fair value of the loans with changes in the fair value of the forward sale commitment contracts used to economically hedge them. Changes in fair value of mortgage loans held for sale accounted for under the fair value option election amounted to an increase of $495,000 and $100,000 in the three and nine months ended September 30, 2024, respectively, to $632,000, compared to a decrease of $165,000 and $130,000 in the three and nine months ended September 30, 2023, respectively. These amounts are offset in earnings by the changes in fair value of forward sale commitments. The changes in fair value are reported as a component of gain on sale of mortgage loans in the unaudited Consolidated Statements of Income.

At September 30, 2024 and December 31, 2023, there were no loans held for sale that were greater than 90 days past due.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

4.LOANS AND ALLOWANCE FOR CREDIT LOSSES

A summary of the balances of loans follows:


	September 30,		December 31,
	2024		2023

	(in thousands)

Commercial:
Commercial real estate	$	2,321,148	$	2,343,675
Commercial construction		270,389		208,443
Commercial and industrial		549,908		466,443
Total commercial loans		3,141,445		3,018,561

Residential real estate:
One- to four-family		1,522,411		1,513,554
Second mortgages and equity lines of credit		182,807		177,135
Residential real estate construction		13,206		18,132
Total residential real estate loans		1,718,424		1,708,821

Consumer loans:
Auto		9,755		13,603
Personal		8,421		8,433
Total consumer loans		18,176		22,036

Total loans before basis adjustment		4,878,045		4,749,418
Basis adjustment associated with fair value hedge ⁽¹⁾		1,458		893
Total loans		4,879,503		4,750,311
Allowance for credit losses on loans		(54,004)		(47,972)
Loans, net	$	4,825,499	$	4,702,339

⁽¹⁾ Represents the basis adjustment associated with the application of hedge accounting on certain loans. Refer to Note 10 - Derivatives.

The net unamortized deferred loan origination costs included in total loans and leases were $8.7 million and $8.5 million as of September 30, 2024 and December 31, 2023, respectively.

The Company has transferred a portion of its originated commercial loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying unaudited interim Consolidated Balance Sheets. The Company and participating lenders share ratably in cash flows and any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders, and disburses required escrow funds to relevant parties. At September 30, 2024 and December 31, 2023, the Company was servicing commercial loans for participants in the aggregate amounts of $417.8 million and $413.0 million, respectively.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

The following table presents the activity in the ACL on loans for the three and nine months ended September 30, 2024 and 2023:


									Second
									Mortgages and		Residential
	Commercial		Commercial		Commercial		One- to Four-		Equity Lines		Real Estate
	Real Estate		Construction		and Industrial		Family		of Credit		Construction		Consumer		Total

	(in thousands)

Balance at June 30, 2024	$	24,364	$	3,733	$	8,523	$	10,703	$	1,474	$	204	$	138	$	49,139

Charge-offs		—		—		(147)		—		—		—		(45)		(192)
Recoveries		3		—		1		—		—		—		6		10
Provision		4,552		813		913		(1,184)		(98)		23		28		5,047
Balance at September 30, 2024	$	28,919	$	4,546	$	9,290	$	9,519	$	1,376	$	227	$	127	$	54,004


									Second
									Mortgages and		Residential
	Commercial		Commercial		Commercial		One- to Four-		Equity Lines		Real Estate
	Real Estate		Construction		and Industrial		Family		of Credit		Construction		Consumer		Total

	(in thousands)

Balance at December 31, 2023	$	21,288	$	4,824	$	8,107	$	12,101	$	964	$	418	$	270	$	47,972

Charge-offs		—		—		(559)		—		—		—		(111)		(670)
Recoveries		103		—		47		2		6		—		10		168
Provision		7,528		(278)		1,695		(2,584)		406		(191)		(42)		6,534
Balance at September 30, 2024	$	28,919	$	4,546	$	9,290	$	9,519	$	1,376	$	227	$	127	$	54,004


									Second
									Mortgages and		Residential
	Commercial		Commercial		Commercial		One- to Four-		Equity Lines		Real Estate
	Real Estate		Construction		and Industrial		Family		of Credit		Construction		Consumer		Total

	(in thousands)

Balance at June 30, 2023	$	20,599	$	5,373	$	7,750	$	12,185	$	1,012	$	630	$	272	$	47,821

Charge-offs		—		—		(16)		—		—		—		(21)		(37)
Recoveries		2		—		—		—		40		—		13		55
Provision		900		(937)		242		488		(28)		(164)		(28)		473
Balance at September 30, 2023	$	21,501	$	4,436	$	7,976	$	12,673	$	1,024	$	466	$	236	$	48,312


									Second
									Mortgages and		Residential
	Commercial		Commercial		Commercial		One- to Four-		Equity Lines		Real Estate
	Real Estate		Construction		and Industrial		Family		of Credit		Construction		Consumer		Total

	(in thousands)

Balance at December 31, 2022	$	20,357	$	4,645	$	7,236	$	11,532	$	924	$	280	$	262	$	45,236

Charge-offs		(2,918)		—		(51)		—		—		—		(70)		(3,039)
Recoveries		4		—		275		2		83		—		34		398
Provision		4,058		(209)		516		1,139		17		186		10		5,717
Balance at September 30, 2023	$	21,501	$	4,436	$	7,976	$	12,673	$	1,024	$	466	$	236	$	48,312

As of September 30, 2024, the carrying value of individually analyzed loans amounted to $67.1 million, with a related allowance of $5.3 million, and $65.7 million of individually analyzed loans were considered collateral-dependent. As of December 31, 2023, the carrying value of individually analyzed loans amounted to $17.5 million, with a related allowance of $108,000, and $17.3 million of individually analyzed loans were considered collateral-dependent.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

For collateral-dependent loans where Management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date.

The following table presents the carrying value of collateral-dependent individually analyzed loans as of September 30, 2024 and December 31, 2023:


	September 30, 2024				December 31, 2023
			Related				Related
	Carrying Value		Allowance		Carrying Value		Allowance

	(in thousands)

Commercial:
Commercial real estate	$	48,044	$	5,205	$	7,416	$	5
Commercial and industrial		1,300		130		1,793		101
Commercial construction		6,912		—		—		—
Total Commercial		56,256		5,335		9,209		106
Residential real estate		9,451		—		8,054		—
Total	$	65,707	$	5,335	$	17,263	$	106

The following is a summary of past due and non-accrual loans at September 30, 2024 and December 31, 2023:


					90 Days
	30-59 Days		60-89 Days		or More		Total		Loans on
	Past Due		Past Due		Past Due		Past Due		Non-accrual

	(in thousands)

September 30, 2024
Commercial real estate	$	—	$	2,848	$	—	$	2,848	$	17,171
Commercial construction		—		—		—		—		—
Commercial and industrial		706		560		1,366		2,632		1,743
Residential real estate:
One- to four-family		197		7,503		6,337		14,037		8,768
Construction		621		—		—		621		—
Second mortgages and equity lines of credit		549		376		171		1,096		683
Consumer:
Auto		34		—		15		49		15
Personal		14		6		22		42		28
Total	$	2,121	$	11,293	$	7,911	$	21,325	$	28,408

December 31, 2023
Commercial real estate	$	—	$	—	$	5,751	$	5,751	$	7,416
Commercial construction		—		—		—		—		—
Commercial and industrial		247		166		1,332		1,745		1,791
Residential real estate:
One- to four-family		4,704		2,413		4,418		11,535		7,785
Second mortgages and equity lines of credit		164		130		57		351		473
Consumer:
Auto		96		69		4		169		4
Personal		16		5		31		52		44
Total	$	5,227	$	2,783	$	11,593	$	19,603	$	17,513

At September 30, 2024 and December 31, 2023, there were no loans past due 90 days or more and still accruing.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Loan Modifications to Borrowers Experiencing Financial Difficulty

The Bank will modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss and to comply with regulations regarding bankruptcy and discharge situations. Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, forbearances, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral.

The following table presents the amortized cost basis of loans at September 30, 2024 that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2024, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below:


		Three Months Ended September 30, 2024							Nine Months Ended September 30, 2024
					Total Class							Total Class
	Term		Interest Rate		of Financing			Term		Interest Rate		of Financing
	Extension		Reduction		Receivable			Extension		Reduction		Receivable

	(in thousands)							(in thousands)


Commercial real estate	$	—	$	—		—	%	$	—	$	15,275		0.66	%
Commercial and industrial		—		—		—			51		—		0.01

Total	$	—	$	—				$	51	$	15,275

The financial effect of the modifications to loans in the commercial real estate category was a reduced weighted-average contractual rate from 5.6% to 4%, and the financial effect of the modification to the loan in the commercial and industrial category was an additional 7.7 years to the life of the loan. There were no material loan modifications based on borrower financial difficulty during the three and nine months ended September 30, 2023.

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. As of September 30, 2024, modified loans to borrowers experiencing financial difficulty had a current payment status. During the three and nine months ended September 30, 2024 and 2023, there were no loans to borrowers experiencing financial difficulty that had a payment default and were modified in the twelve months prior to that default. Default is determined at 90 or more days past due, upon charge-off, or upon foreclosure. Modified loans in default are individually evaluated for the allowance for credit losses or if the modified loan is deemed uncollectible, the loan, or a portion of the loan, is written off, and the allowance for credit losses is adjusted accordingly.

Credit Quality Indicators

Commercial

The Company uses a ten-grade internal loan rating system for commercial real estate, commercial construction and commercial loans, as follows:

Loans rated 1 – 6 are considered “pass”-rated loans with low to average risk.

Loans rated 7 are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by Management.

Loans rated 8 are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Loans rated 9 are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

Loans rated 10 are considered “uncollectible” (loss), and of such little value that their continuance as loans is not warranted.

Loans not rated consist primarily of certain smaller balance commercial real estate and commercial loans that are managed by exception.

On an annual basis, or more often if needed, the Company formally reviews, on a risk-adjusted basis, the ratings on substantially all commercial real estate, construction and commercial loans. Semi-annually, the Company engages an independent third party to review a significant portion of loans within these segments. Management uses the results of these reviews as part of its annual review process.

Residential and Consumer

On a monthly basis, the Company reviews the residential construction, residential real estate, and consumer installment portfolios for credit quality primarily through the use of delinquency reports.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

The following table summarizes the Company’s loan portfolio by credit quality indicator and loan portfolio segment as of September 30, 2024:


															Revolving
													Revolving		Loans
													Loans		Converted
	Term Loans at Amortized Cost by Origination Year												Amortized		to Term
	2024		2023		2022		2021		2020		Prior		Cost		Loans		Total

	(in thousands)

As of September 30, 2024

Commercial real estate
Pass	$	81,965	$	156,438	$	770,829	$	453,034	$	197,742	$	555,260	$	—	$	—	$	2,215,268
Special mention		—		4,599		19,976		—		12,116		21,195		—		—		57,886
Substandard		—		1,602		32,717		—		—		13,675		—		—		47,994
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial real estate		81,965		162,639		823,522		453,034		209,858		590,130		—		—		2,321,148
YTD gross charge-offs		—		—		—		—		—		—		—		—		—

Commercial and industrial
Pass		64,597		71,302		52,476		88,474		65,587		101,277		102,450		—		546,163
Special mention		—		—		273		—		—		363		479		—		1,115
Substandard		—		107		2		—		—		1,219		10		—		1,338
Doubtful		—		—		—		—		—		1,243		49		—		1,292
Total commercial and industrial		64,597		71,409		52,751		88,474		65,587		104,102		102,988		—		549,908
YTD gross charge-offs		—		26		303		122		74		34		—		—		559

Commercial construction
Pass		15,966		53,277		102,515		72,347		—		—		1,560		—		245,665
Special mention		—		—		17,812		—		—		—		—		—		17,812
Substandard		—		6,912		—		—		—		—		—		—		6,912
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial construction		15,966		60,189		120,327		72,347		—		—		1,560		—		270,389
YTD gross charge-offs		—		—		—		—		—		—		—		—		—

Residential real estate
Accrual		78,800		127,935		419,603		458,612		195,160		253,948		173,341		1,572		1,708,971
Non-accrual		—		—		645		—		127		8,192		483		6		9,453
Total residential real estate		78,800		127,935		420,248		458,612		195,287		262,140		173,824		1,578		1,718,424
YTD gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer
Accrual		5,909		4,522		3,810		1,321		447		1,165		959		—		18,133
Non-accrual		—		—		21		—		—		15		7		—		43
Total Consumer		5,909		4,522		3,831		1,321		447		1,180		966		—		18,176
YTD gross charge-offs		—		63		6		19		8		15		—		—		111

Total loans before basis adjustment	$	247,237	$	426,694	$	1,420,679	$	1,073,788	$	471,179	$	957,552	$	279,338	$	1,578	$	4,878,045
Total YTD gross charge-offs	$	—	$	89	$	309	$	141	$	82	$	49	$	—	$	—	$	670

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

The following table summarizes the Company’s loan portfolio by credit quality indicator and loan portfolio segment as of December 31, 2023:


															Revolving
													Revolving		Loans
													Loans		Converted
	Term Loans at Amortized Cost by Origination Year												Amortized		to Term
	2023		2022		2021		2020		2019		Prior		Cost		Loans		Total

	(in thousands)

As of December 31, 2023

Commercial real estate
Pass	$	152,047	$	828,335	$	455,996	$	234,585	$	233,713	$	405,103	$	—	$	—	$	2,309,779
Special mention		—		10,971		—		4,300		8,977		2,232		—		—		26,480
Substandard		—		—		—		—		—		1,670		—		—		1,670
Doubtful		—		—		—		—		—		5,746		—		—		5,746
Total commercial real estate		152,047		839,306		455,996		238,885		242,690		414,751		—		—		2,343,675
YTD gross charge-offs		—		—		—		—		—		4,171		—		—		4,171

Commercial and industrial
Pass		73,240		52,190		94,570		70,565		22,988		75,493		74,125		—		463,171
Special mention		—		454		4		23		2		948		50		—		1,481
Substandard		—		52		8		—		—		367		18		—		445
Doubtful		—		—		—		—		—		1,297		49		—		1,346
Total commercial and industrial		73,240		52,696		94,582		70,588		22,990		78,105		74,242		—		466,443
YTD gross charge-offs		24		113		14		5		8		2		—		—		166

Commercial construction
Pass		35,181		109,291		60,113		843		—		—		425		—		205,853
Special mention		—		2,590		—		—		—		—		—		—		2,590
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial construction		35,181		111,881		60,113		843		—		—		425		—		208,443
YTD gross charge-offs		—		—		—		—		—		—		—		—		—

Residential real estate
Accrual		138,541		434,421		480,010		202,118		38,675		239,185		166,144		1,469		1,700,563
Non-accrual		—		—		—		127		956		6,959		216		—		8,258
Total residential real estate		138,541		434,421		480,010		202,245		39,631		246,144		166,360		1,469		1,708,821
YTD gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer
Accrual		8,218		5,366		2,254		1,021		3,135		963		1,031		—		21,988
Non-accrual		14		18		5		—		2		4		5		—		48
Total Consumer		8,232		5,384		2,259		1,021		3,137		967		1,036		—		22,036
YTD gross charge-offs		7		16		4		15		18		29		—		—		89

Total loans before basis adjustment	$	407,241	$	1,443,688	$	1,092,960	$	513,582	$	308,448	$	739,967	$	242,063	$	1,469	$	4,749,418
Total YTD gross charge-offs	$	31	$	129	$	18	$	20	$	26	$	4,202	$	—	$	—	$	4,426

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

5.MORTGAGE LOAN SERVICING

The Company sells residential mortgages to government-sponsored enterprises and other parties. The Company retains no beneficial interests in these loans, but it may retain the servicing rights of the loans sold. Mortgage loans serviced for others are not included in the accompanying unaudited interim Consolidated Balance Sheets. The risks inherent in MSRs relate primarily to changes in prepayments that generally result from shifts in mortgage interest rates. The unpaid principal balance of mortgage loans serviced for others was $3.43 billion and $3.56 billion as of September 30, 2024 and December 31, 2023, respectively.

The Company accounts for MSRs at fair value. The Company obtains and reviews valuations from an independent third party to determine the fair value of MSRs. Key assumptions used in the estimation of fair value include prepayment speeds, discount rates, and default rates. At September 30, 2024 and December 31, 2023, the following weighted average assumptions were used in the calculation of fair value of MSRs:


	September 30,		December 31,
	2024		2023
Prepayment speed	8.07	%	7.60	%
Discount rate	9.78		9.81
Default rate	1.74		2.27

The following summarizes changes to MSRs for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

	(in thousands)

Balance, beginning of period	$	46,209	$	48,176	$	46,111	$	48,138
Additions		344		900		985		2,194
Changes in fair value due to:
Reductions from loans paid off during the period		(690)		(644)		(1,588)		(1,494)
Changes in valuation inputs or assumptions		(2,796)		769		(2,441)		363
Balance, end of period	$	43,067	$	49,201	$	43,067	$	49,201

Contractually specified servicing fees, net of subservicing expense, included in other mortgage banking income amounted to $1.9 million and $5.8 million for the three and nine months ended September 30, 2024 and 2023, respectively.

6.GOODWILL AND OTHER INTANGIBLE ASSETS

At September 30, 2024 and December 31, 2023, the carrying value of the Bank’s goodwill was $59.0 million as of both dates. In connection with the annual goodwill impairment test as of October 31, 2023, it was determined that HarborOne Mortgage’s goodwill was 100% impaired, and a $10.8 million goodwill impairment charge was recorded for the period ended December 31, 2023.

Goodwill is tested for impairment annually on October 31 or on an interim basis if an event triggering impairment may have occurred. As of September 30, 2024, the Company assessed whether there were additional events or changes in circumstances since its annual goodwill impairment test that would indicate that it was more likely than not that the fair value of the reporting unit was less than the reporting unit’s carrying amount that would require an interim impairment assessment after October 31, 2023. The Company determined there had been no such indicators, therefore, no interim goodwill impairment assessment as of September 30, 2024 was performed.

The process of evaluating fair value is highly subjective and requires significant judgment and estimates. The goodwill at the Bank is at risk of future impairment in the event of a sustained decline in the value of its stock as well as

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

values of other financial institutions, declines in revenue for the Company beyond current forecasts, or significant adverse changes in the operating environment for the financial industry.

Other intangible assets were $947,000 and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company determined that there was no triggering event that warranted an interim impairment test at September 30, 2024.

7.DEPOSITS

A summary of deposit balances, by type, is as follows:


	September 30,		December 31,
	2024		2023

	(in thousands)

NOW and demand deposit accounts	$	1,009,701	$	965,798
Regular savings and club accounts		926,192		1,265,315
Money market deposit accounts		1,162,930		966,201
Total non-certificate accounts		3,098,823		3,197,314

Term certificate accounts greater than $250,000		305,368		240,702
Term certificate accounts less than or equal to $250,000		758,304		622,755
Brokered deposits		373,682		326,638
Total certificate accounts		1,437,354		1,190,095
Total deposits	$	4,536,177	$	4,387,409

Total municipal deposits included in the table amounted to $497.3 million at September 30, 2024 and $471.8 million at December 31, 2023. Municipal deposits are generally required to be fully insured. The Company provides supplemental insurance for municipal deposits through a reciprocal deposit program and letters of credit offered by the FHLB. The Company participates in a reciprocal deposit program with other financial institutions that provides access to FDIC-insured deposit products in aggregate amounts exceeding the current limits for depositors. At September 30, 2024 and December 31, 2023, total reciprocal deposits were $372.4 million and $209.4 million, respectively.

A summary of certificate accounts by maturity at September 30, 2024 is as follows:


			Weighted
			Average
	Amount		Rate

	(dollars in thousands)

Within 1 year	$	1,228,040	4.81	%
Over 1 year to 2 years		171,956	4.35
Over 2 years to 3 years		34,876	4.12
Over 3 years to 4 years		1,388	3.79
Over 4 years to 5 years		1,094	3.58
Total certificate deposits	$	1,437,354	4.74	%

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

8.BORROWINGS

Borrowed funds at September 30, 2024 consisted of FHLB advances and a BTFP advance, while at December 31, 2023 borrowed funds consisted only of FHLB advances. Short-term advances were $60.0 million and $303.0 million with a weighted average rate of 5.00% and 5.53%, at September 30, 2024 and December 31, 2023, respectively. Long-term borrowings are summarized by maturity date below.


	September 30, 2024						December 31, 2023
	Amount by				Weighted		Amount by		Weighted
	Scheduled		Amount by		Average		Scheduled		Average
	Maturity*		Call Date ⁽¹⁾		Rate ⁽²⁾		Maturity*		Rate ⁽²⁾

	(dollars in thousands)

Year ending December 31:
2024	$	—		150,000	—	%	$	13,400	1.39	%
2025		235,987		255,987	4.70			90,987	4.31
2026		75,000		40,000	4.39			110,000	4.20
2027		85,000		—	4.17			10,000	3.72
2028		59,198		19,198	4.04			40,000	3.86
2029		23,128		13,128	4.06			—	—
2030 and thereafter		1,051		1,051	2.00			1,075	2.00
	$	479,364		479,364	4.44	%	$	265,462	4.02	%

* Includes an amortizing advance requiring monthly principal and interest payments.

⁽¹⁾ Callable FHLB advances are shown in the respective periods assuming that the callable debt is redeemed at the call date, while all other advances are shown in the periods corresponding to their scheduled maturity date. There were 9 callable advances at September 30, 2024.

⁽²⁾Weighted average rates are based on scheduled maturity dates.

The FHLB advances are secured by a blanket security agreement which requires the Bank to maintain certain qualifying assets as collateral, principally residential mortgage loans and commercial real estate loans held in the Bank’s portfolio. The carrying value of the loans pledged as collateral for these borrowings totaled $2.16 billion at September 30, 2024 and $2.02 billion at December 31, 2023. As of September 30, 2024, the Company had $830.3 million of available borrowing capacity with the FHLB.

The BTFP advance is secured by available-for-sale securities with a par value of $181.9 million. The Federal Reserve Discount Window extends credit based on eligible collateral. At September 30, 2024, the Bank had $419.2 million of borrowing capacity at the FRBB secured by pledged loans and securities whose collateral value was $248.3 million and $134.8 million, respectively. At September 30, 2024, there was no balance outstanding. The Company also has additional borrowing capacity under a $25.0 million unsecured federal funds line with a correspondent bank.

On December 1, 2023, the Company fully redeemed its 5.625% Fixed-to-Floating Rate Subordinated Notes due September 1, 2028 and expensed the remaining unamortized issuance costs. Amortization of issuance costs was $32,000 and $95,000 for the three and nine months ended September 30, 2023, respectively.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

9.OTHER COMMITMENTS AND CONTINGENCIES

ACL on Unfunded Commitments

The ACL on unfunded commitments amounted to $3.7 million and $4.2 million at September 30, 2024 and 2023, respectively. The activity in the ACL on unfunded commitments for the three and nine months ended September 30, 2024 and 2023 is presented below:


	Commercial		Commercial		Commercial		Residential
	Real Estate		Construction		and Industrial		Real Estate		Consumer		Total

	(in thousands)

Balance at June 30, 2024	$	359	$	1,267	$	802	$	440	$	10	$	2,878
Provision		687		206		(3)		(33)		(1)		856
Balance at September 30, 2024	$	1,046	$	1,473	$	799	$	407	$	9	$	3,734

Balance at June 30, 2023	$	490	$	3,180	$	870	$	272	$	19	$	4,831
Provision		(17)		(603)		41		(4)		(3)		(586)
Balance at September 30, 2023	$	473	$	2,577	$	911	$	268	$	16	$	4,245


	Commercial		Commercial		Commercial		Residential
	Real Estate		Construction		and Industrial		Real Estate		Consumer		Total

	(in thousands)

Balance at December 31, 2023	$	411	$	2,351	$	882	$	254	$	20	$	3,918
Provision		635		(878)		(83)		153		(11)		(184)
Balance at September 30, 2024	$	1,046	$	1,473	$	799	$	407	$	9	$	3,734

Balance at December 31, 2022	$	628	$	3,079	$	870	$	336	$	14	$	4,927
Provision		(155)		(502)		41		(68)		2		(682)
Balance at September 30, 2023	$	473	$	2,577	$	911	$	268	$	16	$	4,245

Loan Commitments

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and advance funds on various lines of credit. Those commitments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the accompanying unaudited interim Consolidated Financial Statements.

The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments.

The following off-balance sheet financial instruments were outstanding at September 30, 2024 and December 31, 2023. The contract amounts represent credit risk.


	September 30,		December 31,
	2024		2023

	(in thousands)

Commitments to grant residential real estate loans-HarborOne Mortgage	$	69,478	$	35,029
Commitments to grant other loans		33,440		48,547
Unadvanced funds on home equity lines of credit		279,216		260,376
Unadvanced funds on revolving lines of credit		292,668		306,943
Unadvanced funds on construction loans		184,948		210,829

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Commitments to extend credit and unadvanced portions of construction loans are agreements to lend to a customer, as long as there is no violation of any condition established in the contract. Commitments to grant loans generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for unadvanced funds on construction loans and home equity and revolving lines of credit may expire without being drawn upon; therefore, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. Commitments to grant loans, and unadvanced construction loans and home equity lines of credit are collateralized by real estate, while revolving lines of credit are unsecured.

10.DERIVATIVES

The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally to manage the Company’s interest-rate risk. Additionally, the Company enters into interest rate derivatives to accommodate the business requirements of its customers. All derivatives are recognized as either assets or liabilities on the balance sheet and are measured at fair value. The accounting for changes in the fair value of a derivative instrument depends upon whether it qualifies as a hedge for accounting purposes, and further, by the type of hedging relationship.

Derivatives Designated as Hedging Instruments

Fair Value Hedge - The Company is exposed to changes in the fair value of fixed-rate assets due to changes in benchmark interest rates. In June 2023, to manage its exposure to changes in the fair value of a closed asset pool of fixed-rate residential mortgages, the Company entered into interest rate swaps with a total notional amount of $100.0 million, designated as fair value portfolio layer hedges. The Company receives variable-rate interest payments in exchange for making fixed-rate payments over the lives of the contracts without exchanging the notional amounts. The gain or loss on these derivatives, as well as the offsetting loss or gain on the hedged items attributable to the hedged risk, are recognized in interest income in the Company’s Consolidated Statements of Income.

As of September 30, 2024, the Company had two interest rate swap agreements with a notional amount of $100.0 million that were designated as a fair value hedge of fixed-rate residential mortgages. The hedges were determined to be effective during the three months ended September 30, 2024, and the Company expects the hedges to remain effective during the remaining terms of the swaps.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

The following amounts were recorded on the Consolidated Balance Sheets related to cumulative basis adjustment for fair value hedges as of the dates indicated:


					Cumulative Amount of Fair Value
					Hedging Adjustment Included in the
Line Item in the Consolidated Balance Sheets	Carrying Amount of the Hedged				Carrying Amount of the Hedged
in Which the Hedged Item is Included	Assets				Assets
	September 30,		September 30,		September 30,		September 30,
	2024		2023		2024		2023

	(in thousands)

Loans held for investment (1)	$	101,458	$	98,538	$	1,458	$	(1,462)
Total	$	101,458	$	98,538	$	1,458	$	(1,462)

⁽¹⁾These amounts were included in the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At September 30, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $1.16 billion; the cumulative basis adjustments associated with these hedging relationships was $1.5 million and the amount of the designated hedged items were $100.0 million.

Cashflow Hedge - As part of its interest-rate risk-management strategy, the Company utilizes interest rate swap agreements to help manage its interest-rate risk positions. The notional amount of the interest rate swaps does not represent the amount exchanged by the parties. The exchange of cash flows is determined by reference to the notional amounts and the other terms of the interest rate swap agreements. The changes in fair value of derivatives designated as cashflow hedges are recorded in other comprehensive income and subsequently reclassified to earnings when gains or losses are realized.

As of September 30, 2024, the Company had one interest rate swap agreement with a notional amount of $100.0 million that was designated as a cashflow hedge of brokered deposits. The interest rate swap agreement has an average maturity of 0.52 years, the current weighted average fixed rate paid is 0.67%, the weighted average 3-month SOFR swap receive rate is 5.56%, and the fair value is $2.0 million. The Company expects approximately $2.0 million related to the cashflow hedge to be reclassified to interest expense, from other comprehensive income, in the next twelve months.

Derivatives Not Designated as Hedging Instruments

Derivative Loan Commitments - Mortgage loan commitments qualify as derivative loan commitments if the loan that will result from exercise of the commitment will be held for sale upon funding. The Company enters into commitments to fund residential mortgage loans at specified times in the future, with the intention that these loans will subsequently be sold in the secondary market. A mortgage loan commitment binds the Company to lend funds to a potential borrower at a specified interest rate and within a specified period of time, generally up to 60 days after inception of the rate lock.

Outstanding derivative loan commitments expose the Company to the risk that the price of the loans arising from exercise of the loan commitment might decline from inception of a rate lock to funding of the loan due to increases in mortgage interest rates. If interest rates increase, the value of these loan commitments decreases. Conversely, if interest rates decrease, the value of these loan commitments increases.

Forward Loan Sale Commitments -The Company utilizes both “mandatory delivery” and “best efforts” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments.

With a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the number of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay a “pair-off” fee, based on then-current market prices, to the investor to compensate the investor for the shortfall.

With a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. Generally, the price the investor will pay the seller for an individual loan is specified prior to the loan being funded (e.g., on the same day the lender commits to lend funds to a potential borrower).

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

The Company expects that these forward loan sale commitments will experience changes in fair value opposite to the change in fair value of derivative loan commitments.

Interest Rate Swaps -The Company enters into interest rate swap agreements that are transacted to meet the financing needs of its commercial customers. Offsetting interest rate swap agreements are simultaneously transacted with a third-party financial institution to effectively eliminate the Company’s interest-rate risk associated with the customer swaps. The primary risks associated with these transactions arise from exposure to the ability of the counterparties to meet the terms of the contract. The interest rate swap notional amount is the aggregate notional amount of the customer swap and the offsetting third-party swap. The Company also assesses the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determines whether the credit valuation adjustments are significant to the overall valuation of its derivatives.

Interest Rate Futures -The Company uses interest rate futures to mitigate the impact of fluctuations in interest rates and interest rate volatility on the fair value of the MSRs. Changes in their fair value are reflected in current period earnings in mortgage banking income.

Risk Participation Agreements -The Company has entered into risk participation agreements with correspondent institutions and shares in any interest rate swap losses incurred as a result of the commercial loan customers’ termination of a loan-level interest rate swap agreement prior to maturity. The Company records these risk participation agreements at fair value. The Company’s maximum credit exposure is based on its proportionate share of the settlement amount of the referenced interest rate swap. Settlement amounts are generally calculated based on the fair value of the swap plus outstanding accrued interest receivables from the customer.

The following table presents the outstanding notional balances and fair values of outstanding derivative instruments:


			Assets		Liabilities
	Notional		Fair		Fair
	Amount		Value		Value

	(in thousands)

September 30, 2024:
Derivatives designated as hedging instruments
Fair value hedge - interest rate swaps	$	100,000	$	—	$	1,357
Cashflow hedge - interest rate swaps		100,000		2,013		—
Total derivatives designated as hedging instruments			$	2,013	$	1,357
Derivatives not designated as hedging instruments
Derivative loan commitments	$	62,836	$	592	$	71
Forward loan sale commitments		53,500		108		126
Interest rate swaps		1,020,282		20,697		20,697
Risk participation agreements		212,294		—		—
Interest Rate Futures		35,400		108		—
Total derivatives not designated as hedging instruments			$	21,505	$	20,894
Total derivatives			$	23,518	$	22,251

December 31, 2023:
Derivatives designated as hedging instruments
Fair value hedge - interest rate swaps	$	100,000	$	—	$	855
Cashflow hedge - interest rate swaps	$	100,000	$	5,095	$	—
Total derivatives designated as hedging instruments			$	5,095	$	855
Derivatives not designated as hedging instruments
Derivative loan commitments	$	30,165	$	480	$	158
Forward loan sale commitments		30,000		4		293
Interest rate swaps		863,348		23,245		23,245
Risk participation agreements		189,275		—		—
Total derivatives not designated as hedging instruments			$	23,729	$	23,696
Total derivatives			$	28,824	$	24,551

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

The following table presents the recorded net gains and losses pertaining to the Company’s derivative instruments:


	Location of gain (loss)
	recognized in	Three Months Ended September 30,				Nine Months Ended September 30,
	Income	2024		2023		2024		2023

		(in thousands)


Derivatives designated as fair value hedge
Hedged items - loans	Interest income	$	2,191	$	(1,018)	$	565	$	(1,462)
Interest rate swap contracts	Interest income		(2,140)		1,026		(503)		1,463
Total		$	51	$	8	$	62	$	1
Derivatives not designated as hedging instruments
Derivative loan commitments	Mortgage banking income	$	206	$	(129)	$	199	$	137
Forward loan sale commitments	Mortgage banking income		(91)		45		271		94
Interest rate futures	Mortgage banking income		845		—		344		—
Interest rate swaps	Other income		—		—		—		—
Total		$	960	$	(84)	$	814	$	231

The effect of cashflow hedge accounting on accumulated other comprehensive income is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

	(in thousands)

Derivatives designated as hedging instruments
(Loss) gain in OCI on derivatives (effective portion), net of tax	$	(1,121)	$	(448)	$	(2,201)	$	(983)
Gain (loss) reclassified from OCI into interest income or interest expense (effective portion)	$	1,281	$	1,221	$	3,780	$	3,373

Master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral or cash funds, in the event of default on, or termination of, any one contract. Collateral is provided by cash or securities received or posted by the counterparty with net liability positions, respectively, in accordance with contract thresholds.

The following table presents the offsetting of derivatives and amounts subject to an enforceable master netting arrangement, not offset in the Consolidated Balance Sheets at September 30, 2024:


							Gross Amounts Not Offset in the Consolidated Balance Sheets
					Net Amounts
	Gross Amounts		Gross Amounts		Assets (Liabilities)				Cash
	of Recognized		Offset in the		presented in the				Collateral
	Assets		Consolidated		Consolidated		Financial		(Received)		Net
	(Liabilities)		Balance Sheets		Balance Sheets		Instruments		Posted		Amount

	(in thousands)
Derivatives designated as hedging instruments
Interest rate swap on deposits	$	2,013	$	—	$	2,013	$	—	$	(2,013)	$	—
Interest rate swap on residential real estate loans	$	(1,357)	$	—	$	(1,357)	$	—	$	1,410	$	53
Derivatives not designated as hedging instruments
Customer interest rate swaps	$	14,047	$	—	$	14,047	$	—	$	(5,587)	$	8,460

Table of Contents

HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

11.OPERATING LEASE ROU ASSETS AND LIABILITIES

Operating lease ROU assets, included in other assets, were $21.5 million and $22.9 million at September 30, 2024 and December 31, 2023, respectively.

Operating lease liabilities, included in other liabilities and accrued expenses, were $23.3 million and $24.5 million at September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, there were no additional operating leases that had not yet commenced. At September 30, 2024, lease expiration dates ranged from five months to 33.9 years and had a weighted average remaining lease term of 15.9 years. At December 31, 2023, lease expiration dates ranged from two months to 34.7 years and had a weighted average remaining lease term of 16.2 years.

Future minimum lease payments under non-cancellable leases and a reconciliation to the amount recorded as operating lease liabilities as of September 30, 2024 were as follows:


	September 30,
	2024
	(in thousands)

2024	$	702
2025		2,830
2026		2,661
2027		2,536
2028		2,293
Thereafter		17,128
Total lease payments		28,150
Imputed interest		(4,887)
Total present value of operating lease liabilities	$	23,263

The weighted-average discount rate and remaining lease term for operating leases were as follows:



	September 30, 2024		December 31, 2023
Weighted-average discount rate	2.15	%	2.08	%
Weighted-average remaining lease term (years)	15.88		16.24

Rental expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease components, such as fair-market value adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

The following table presents the components of total lease expense:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023

	(in thousands)

Lease Expense:
Operating lease expense	$	714	$	766	$	2,175	$	2,365
Short-term lease expense		30		40		85		105
Variable lease expense		6		5		16		10
Sublease income		—		(3)		—		(12)
Total lease expense	$	750	$	808	$	2,276	$	2,468
Other Information
Cash paid for amounts included in the measurement of lease liabilities-
operating cash flows for operating leases		727		768		2,193		2,382
Operating Lease - Operating cash flows (Liability reduction)		604		640		1,827		1,975
ROU assets obtained in exchange for new operating lease liabilities		188		—		488		596

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

12.MINIMUM REGULATORY CAPITAL REQUIREMENTS

The Company and the Bank are subject to various regulatory capital requirements administered by the Federal Reserve and the FDIC. Failure to meet minimum capital requirements can result in mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s unaudited Consolidated Financial Statements.

Under the capital rules, risk-based capital ratios are calculated by dividing Tier 1, common equity Tier 1, and total risk-based capital, respectively, by risk-weighted assets. Assets and off-balance sheet credit equivalents are assigned to one of several risk-weight categories, based primarily on relative risk. The rules require banks and bank holding companies to maintain a minimum common equity Tier 1 capital ratio of 4.5%, a minimum Tier 1 capital ratio of 6.0% and a total capital ratio of 8.0%. In addition, a Tier 1 leverage ratio of 4.0% is required. Additionally, the capital rules require a bank holding company to maintain a capital conservation buffer of common equity Tier 1 capital in an amount above the minimum risk-based capital requirements equal to 2.5% of total risk weighted assets, or face restrictions on the ability to pay dividends, pay discretionary bonuses, and to engage in share repurchases.

Under the FDIC’s prompt corrective action rules, an insured state nonmember bank is considered “well capitalized” if its capital ratios meet or exceed the ratios as set forth in the following table and is not subject to any written agreement, order, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. The Bank must meet well capitalized requirements under prompt corrective action provisions. Prompt corrective action provisions are not applicable to bank holding companies.

A bank holding company is considered “well capitalized” if the bank holding company (i) has a total risk-based capital ratio of at least 10.0%, (ii) has a Tier 1 risk-based capital ratio of at least 6.0%, and (iii) is not subject to any written agreement order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital measure.

At September 30, 2024, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements, and their regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The capital levels of both the Company and the Bank at September 30, 2024 also exceeded the minimum capital requirements, including the currently applicable capital conservation buffer of 2.5%.

Table of Contents

HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

The Company’s and the Bank’s actual regulatory capital ratios as of September 30, 2024 and December 31, 2023 are presented in the table below.


									Minimum Required to be
									Considered "Well Capitalized"
					Minimum Required for				Under Prompt Corrective
	Actual				Capital Adequacy Purposes				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio

	(dollars in thousands)

HarborOne Bancorp, Inc.
September 30, 2024
Common equity Tier 1 capital to risk-weighted assets	$	563,481	11.7	%	$	217,216	4.5	%		N/A	N/A
Tier 1 capital to risk-weighted assets		563,481	11.7			289,621	6.0			N/A	N/A
Total capital to risk-weighted assets		621,220	12.9			386,162	8.0			N/A	N/A
Tier 1 capital to average assets		563,481	9.8			230,175	4.0			N/A	N/A

December 31, 2023
Common equity Tier 1 capital to risk-weighted assets	$	567,248	12.0	%	$	212,816	4.5	%		N/A	N/A
Tier 1 capital to risk-weighted assets		567,248	12.0			283,755	6.0			N/A	N/A
Total capital to risk-weighted assets		619,138	13.1			378,340	8.0			N/A	N/A
Tier 1 capital to average assets		567,248	10.0			226,690	4.0			N/A	N/A

HarborOne Bank
September 30, 2024
Common equity Tier 1 capital to risk-weighted assets	$	521,660	10.8	%	$	217,126	4.5	%	$	313,627	6.5	%
Tier 1 capital to risk-weighted assets		521,660	10.8			289,502	6.0			386,002	8.0
Total capital to risk-weighted assets		579,398	12.0			386,002	8.0			482,503	10.0
Tier 1 capital to average assets		521,660	9.1			230,149	4.0			287,686	5.0

December 31, 2023
Common equity Tier 1 capital to risk-weighted assets	$	509,791	10.8	%	$	212,724	4.5	%	$	307,267	6.5	%
Tier 1 capital to risk-weighted assets		509,791	10.8			283,632	6.0			378,175	8.0
Total capital to risk-weighted assets		561,682	11.9			378,175	8.0			472,719	10.0
Tier 1 capital to average assets		509,791	9.0			226,666	4.0			283,333	5.0

Table of Contents

HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

13.COMPREHENSIVE (LOSS) INCOME

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities are reported as a separate component of the stockholders’ equity section of the unaudited Consolidated Balance Sheets, such items, along with net income, are components of comprehensive income (loss).

The following table presents changes in accumulated other comprehensive (loss) income by component for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,
	2024								2023

	Post-		Available-		Cash				Post-		Available-		Cash
	retirement		for-Sale		Flow				retirement		for-Sale		Flow
	Benefit		Securities		Hedge		Total		Benefit		Securities		Hedge		Total

	(in thousands)

Balance at beginning of period	$	43	$	(50,652)	$	2,586	$	(48,023)	$	112	$	(51,847)	$	5,445	$	(46,290)

Other comprehensive income (loss) before reclassifications		1		13,102		(289)		12,814		—		(14,718)		598		(14,120)
Amounts reclassified from accumulated other comprehensive income (loss)		(22)		—		(1,281)		(1,303)		(20)		—		(1,221)		(1,241)
Net current period other comprehensive (loss) income		(21)		13,102		(1,570)		11,511		(20)		(14,718)		(623)		(15,361)
Related tax effect		—		(2,934)		449		(2,485)		—		4,487		175		4,662
Balance at end of period	$	22	$	(40,484)	$	1,465	$	(38,997)	$	92	$	(62,078)	$	4,997	$	(56,989)


	Nine Months Ended September 30,
	2024								2023

	Post-		Available-		Cash				Post-		Available-		Cash
	retirement		for-Sale		Flow				retirement		for-Sale		Flow
	Benefit		Securities		Hedge		Total		Benefit		Securities		Hedge		Total

	(in thousands)

Balance at beginning of period	$	85	$	(47,373)	$	3,666	$	(43,622)	$	150	$	(53,212)	$	5,980	$	(47,082)

Other comprehensive income (loss) before reclassifications		1		8,812		697		9,510		1		(12,995)		2,005		(10,989)
Amounts reclassified from accumulated other comprehensive income (loss)		(64)		1,041		(3,780)		(2,803)		(59)		—		(3,373)		(3,432)
Net current period other comprehensive (loss) income		(63)		9,853		(3,083)		6,707		(58)		(12,995)		(1,368)		(14,421)
Related tax effect		—		(2,964)		882		(2,082)		—		4,129		385		4,514
Balance at end of period	$	22	$	(40,484)	$	1,465	$	(38,997)	$	92	$	(62,078)	$	4,997	$	(56,989)

Table of Contents

HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

14.FAIR VALUE OF ASSETS AND LIABILITIES

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

•Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

•Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The following methods and assumptions were used by the Company in estimating fair value disclosures:

Debt Securities – Available-for-sale debt securities are recorded at fair value on a recurring basis. When available, the Company uses quoted market prices to determine the fair value of debt securities; such items are classified as Level 1. There were no Level 1 securities held at September 30, 2024 and December 31, 2023.

Level 2 debt securities are traded less frequently than exchange-traded instruments. The fair value of these securities is determined using matrix pricing with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category includes obligations of U.S. government-sponsored enterprises, including mortgage-backed securities, and corporate bonds.

Debt securities not actively traded whose fair value is determined through the use of cash flows utilizing inputs that are unobservable are classified as Level 3. There were no Level 3 securities held at September 30, 2024 and December 31, 2023.

Loans held for sale - The fair value of mortgage loans held for sale is estimated based on current market prices for similar loans in the secondary market and therefore are classified as Level 2 assets. There were no mortgage loans held for sale 90 days or more past due as of September 30, 2024 and December 31, 2023.

Collateral-Dependent Impaired Loans - The fair value of collateral-dependent loans that are deemed to be impaired is determined based upon the fair value of the underlying collateral. Such collateral primarily consists of real estate and, to a lesser extent, other business assets. For collateral-dependent loans for which repayment is dependent on the sale of the collateral, Management adjusts the fair value for estimated costs to sell. For collateral-dependent loans for which repayment is dependent on the operation of the collateral, estimated costs to sell are not incorporated into the measurement. Management may also adjust appraised values to reflect estimated market value declines or apply other discounts to appraised values resulting from its knowledge of the property. Internal valuations are utilized to determine the fair value of other business assets. Collateral-dependent impaired loans are categorized as Level 3.

Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, the Company reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics.

Retirement plan annuities - The carrying value of the annuities are based on their contract values which approximate fair value.

Table of Contents

HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

MSRs - Fair value is based on a third-party valuation model that calculates the present value of estimated future net servicing income and includes observable market data such as prepayment speeds and default and loss rates.

Deposits and mortgagors’ escrow accounts - The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) and mortgagors’ escrow accounts are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for certificates of deposit are estimated using a DCF calculation that applies market interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Borrowed funds - The fair values of borrowed funds are estimated using DCF analyses based on the current incremental borrowing rates in the market for similar types of borrowing arrangements.

Accrued interest - The carrying amounts of accrued interest approximate fair value.

Derivatives

Derivatives designated as hedging instrument - The Company works directly with a third-party vendor to provide periodic valuations for its interest-rate risk-management agreements to determine fair value of its interest rate swaps executed for interest-rate risk management. The vendor utilizes standard valuation methodologies applicable to interest rate derivatives based on readily observable market data and are therefore considered Level 2 valuations.

Forward loan sale commitments and derivative loan commitments - Forward loan sale commitments and derivative loan commitments are based on fair values of the underlying mortgage loans and the probability of such commitments being exercised. The assumptions for pull-through rates are derived from internal data and adjusted using Management judgment. Derivative loan commitments include the value of servicing rights and non-refundable costs of originating the loan based on the Company’s internal cost analysis that is not observable. The weighted average pull-through rate for derivative loan commitments was approximately 92% and 89% at September 30, 2024 and December 31, 2023, respectively.

Interest rate swaps and risk participation agreements - The Company’s interest rate swaps are traded in over-the-counter markets where quoted market prices are not readily available. For these interest rate derivatives, fair value is determined by a third party utilizing models that use primarily market observable inputs, such as swap rates and yield curves. The pricing models used to value interest rate swaps calculate the sum of each instrument’s fixed and variable cash flows, which are then discounted using an appropriate yield curve to arrive at the fair value of each swap. The pricing models do not contain a high level of subjectivity as the methodologies used do not require significant judgment.

Although the Company has determined that the majority of the inputs used to value its interest rate swaps and risk participation agreements fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with interest rate contracts and risk participation agreements utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of September 30, 2024 and December 31, 2023, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Company classified its derivative valuations in their entirety as Level 2.

Interest rate futures – The Company’s interest rate futures are valued based on quoted prices for similar assets in an active market with inputs that are observable and as a result, the Company has classified these derivatives as Level 2.

Off-balance sheet credit-related instruments - Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of off-balance sheet instruments is immaterial.

Transfers between levels are recognized at the end of the reporting period, if applicable. There were no transfers during the periods presented.

Table of Contents

HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:


							Total
	Level 1		Level 2		Level 3		Fair Value

	(in thousands)

September 30, 2024
Assets

Securities available for sale	$	—	$	276,817	$	—	$	276,817
Loans held for sale		—		28,467		—		28,467
Mortgage servicing rights		—		43,067		—		43,067
Derivatives		—		22,818		700		23,518
	$	—	$	371,169	$	700	$	371,869
Liabilities

Derivatives	$	—	$	22,054	$	197	$	22,251

December 31, 2023
Assets

Securities available for sale	$	—	$	290,151	$	—	$	290,151
Loans held for sale		—		19,686		—		19,686
Mortgage servicing rights		—		46,111		—		46,111
Derivatives		—		28,340		484		28,824
	$	—	$	384,288	$	484	$	384,772
Liabilities

Derivatives	$	—	$	24,100	$	451	$	24,551

The table below presents, for the three and nine months ended September 30, 2024 and 2023, the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

	(in thousands)

Assets: Derivative and Forward Loan Sale Commitments:

Balance at beginning of period	$	638	$	783	$	484	$	487

Total gains (losses) included in net income ⁽¹⁾		62		(59)		216		237
Balance at end of period	$	700	$	724	$	700	$	724

Changes in unrealized gains relating to instruments at period end	$	700	$	724	$	700	$	724

Liabilities: Derivative and Forward Loan Sale Commitments:

Balance at beginning of period	$	(250)	$	(85)	$	(451)	$	(104)

Total gains (losses) included in net income ⁽¹⁾		53		(26)		254		(7)
Balance at end of period	$	(197)	$	(111)	$	(197)	$	(111)

Changes in unrealized losses relating to instruments at period end	$	(197)	$	(111)	$	(197)	$	(111)

⁽¹⁾ Included in mortgage banking income on the Consolidated Statements of Income.

Table of Contents

HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Assets Measured at Fair Value on a Non-recurring Basis

The Company is required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with GAAP. The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis at September 30, 2024 or December 31, 2023.


	September 30,						December 31,
	2024						2023
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3

	(in thousands)


Collateral-dependent impaired loans	$	—	$	—	$	38,980	$	—	$	—	$	5,746

Losses in the following table represent the amount of the fair value adjustments recorded during the period on the carrying value of the assets held at September 30, 2024 and December 31, 2023, respectively. Losses on fully charged off loans are not included in the table.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

	(in thousands)


Collateral-dependent impaired loans	$	5,209	$	178	$	5,209	$	3,116

The table below presents quantitative information about significant unobservable inputs (Level 3) for assets measured at fair value on a non-recurring basis at the dates indicated.

Fair Value

September 30,

December 31,

Valuation Technique

2024

2023

(in thousands)

Collateral-dependent impaired loans

38,599

5,908

Sales Comparison Approach ⁽¹⁾

⁽¹⁾ Fair value is generally determined through independent appraisals of the underlying collateral, which includes unobservable inputs such as adjustments for differences between the comparable sales. The Company may also use another source of collateral assessment to determine a reasonable estimate of the fair value of the collateral. Appraisals may be adjusted by Management for qualitative factors and estimated liquidation expenses. Generally, appraisals for residential real estate loans are discounted 15% while commercial real estate loan appraisals are discounted 0%-20%. Commercial and industrial appraisals are generally discounted 25%-50%. Management may take larger discounts to reflect market liquidity for certain types of assets not addressed in the appraisals.

Table of Contents

HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Summary of Fair Values of Financial Instruments

The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments are as follows. Certain financial instruments and all nonfinancial instruments are exempt from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company.


	September 30, 2024
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total

	(in thousands)

Financial assets:
Cash and cash equivalents	$	224,279	$	224,279	$	—	$	—	$	224,279
Securities available for sale		276,817		—		276,817		—		276,817
Securities held to maturity		19,625		—		19,491		—		19,491
Federal Home Loan Bank stock		17,476		N/A		N/A		N/A		N/A
Loans held for sale		28,467		—		28,467		—		28,467
Loans, net		4,825,499		—		—		4,643,836		4,643,836
Retirement plan annuities		15,578		—		—		15,578		15,578
Accrued interest receivable		19,382		—		19,382		—		19,382
Derivatives		23,518		—		22,818		700		23,518

Financial liabilities:
Deposits		4,536,177		—		—		4,537,160		4,537,160
Borrowed funds		539,364		—		541,279		—		541,279
Mortgagors' escrow accounts		9,172		—		—		9,172		9,172
Accrued interest payable		11,544		—		11,544		—		11,544
Derivatives		22,251		—		22,054		197		22,251


	December 31, 2023
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total

	(in thousands)

Financial assets:
Cash and cash equivalents	$	227,350	$	227,350	$	—	$	—	$	227,350
Securities available for sale		290,151		—		290,151		—		290,151
Securities held to maturity		19,796		—		19,262		—		19,262
Federal Home Loan Bank stock		27,098		N/A		N/A		N/A		N/A
Loans held for sale		19,686		—		19,686		—		19,686
Loans, net		4,702,339		—		—		4,482,448		4,482,448
Retirement plan annuities		15,170		—		—		15,170		15,170
Accrued interest receivable		18,169		—		18,169		—		18,169
Derivatives		28,824		—		28,340		484		28,824

Financial liabilities:
Deposits		4,387,409		—		—		4,376,269		4,376,269
Borrowed funds		568,462		—		567,158		—		567,158
Mortgagors' escrow accounts		8,872		—		—		8,872		8,872
Accrued interest payable		5,251		—		5,251		—		5,251
Derivatives		24,551		—		24,100		451		24,551

Table of Contents

HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

15.EARNINGS PER SHARE

Basic EPS represents net income attributable to common shareholders divided by the weighted-average number of common shares outstanding during the period. Non-vested restricted shares that are participating securities are included in the computation of basic EPS. Diluted EPS is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding, plus the effect of potential dilutive common stock equivalents outstanding during the period. At September 30, 2024 there were no common shares considered anti-dilutive that were excluded from EPS. At September 30, 2023, there were 1,193,036 potential common shares considered to be anti-dilutive and excluded from EPS.

The following table presents earnings per common share.


	Three Months Ended September 30,
	2024		2023

Net income available to common stockholders (in thousands)	$	3,924	$	8,412

Average number of common shares outstanding		44,287,541		46,369,111
Less: Average unallocated ESOP shares and non-vested restricted shares		(3,302,684)		(3,492,218)
Weighted average number of common shares outstanding used to calculate basic earnings per common share		40,984,857		42,876,893
Dilutive effect of share-based compensation		352,128		106,584
Weighted average number of common shares outstanding used to calculate diluted earnings per common share		41,336,985		42,983,477

Earnings per common share:
Basic	$	0.10	$	0.20
Diluted	$	0.10	$	0.20


	Nine Months Ended September 30,
	2024		2023

Net income available to common stockholders (in thousands)	$	18,520	$	23,188

Average number of common shares outstanding		44,738,871		47,133,894
Less: Average unallocated ESOP shares and non-vested restricted shares		(3,343,354)		(3,541,940)
Weighted average number of common shares outstanding used to calculate basic earnings per common share		41,395,517		43,591,954
Dilutive effect of share-based compensation		214,416		201,183
Weighted average number of common shares outstanding used to calculate diluted earnings per common share		41,609,933		43,793,137

Earnings per common share:
Basic	$	0.45	$	0.53
Diluted	$	0.45	$	0.53

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

16. REVENUE RECOGNITION

Revenue from contracts with customers in the scope of ASC Topic 606 is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. The Company recognizes revenue from contracts with customers when it satisfies its performance obligations.

The Company’s performance obligations are generally satisfied as services are rendered and can either be satisfied at a point in time or over time. Unsatisfied performance obligations at the report date are not material to our Consolidated Financial Statements.

In certain cases, other parties are involved with providing services to our customers. If the Company is a principal in the transaction (providing services itself or through a third party on its behalf), revenues are reported based on the gross consideration received from the customer and any related expenses are reported gross in noninterest expense. If the Company is an agent in the transaction (referring to another party to provide services), the Company reports its net fee or commission retained as revenue.

The Company recognizes revenue that is transactional in nature and such revenue is earned at a point in time. Revenue that is recognized at a point in time includes card interchange fees (fee income related to debit card transactions), ATM fees, wire transfer fees, overdraft charge fees, and stop-payment and returned check fees. Additionally, revenue is collected from loan fees, such as letters of credit, line renewal fees and application fees. Such revenue is derived from transactional information and is recognized as revenue immediately as the transactions occur or upon providing the service to complete the customer’s transaction.

17.SEGMENT REPORTING

The Company has two reportable segments: HarborOne Bank and HarborOne Mortgage. Revenue from HarborOne Bank consists primarily of interest earned on loans and investment securities and service charges on deposit accounts. Revenue from HarborOne Mortgage comprises interest earned on loans and fees received as a result of the residential mortgage origination, sale and servicing process.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Segment profit and loss is measured by net income on a legal entity basis. Intercompany transactions are eliminated in consolidation.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Information about the reportable segments and reconciliation to the unaudited interim Consolidated Financial Statements at September 30, 2024 and 2023 and for the three and nine months ended September 30, 2024 and 2023 is presented in the tables below.


	Three Months Ended September 30, 2024
	HarborOne		HarborOne
	Bank		Mortgage		Consolidated

	(in thousands)


Net interest and dividend income	$	31,780	$	105	$	31,893
Provision for credit losses		5,903		—		5,903
Net interest and dividend income, after provision for credit losses		25,877		105		25,990
Mortgage banking income:
Gain on sale of mortgage loans		—		3,752		3,752
Intersegment gain (loss)		(357)		277		—
Changes in mortgage servicing rights fair value		(220)		(2,421)		(2,641)
Other		175		2,215		2,390
Total mortgage banking income		(402)		3,823		3,501
Other noninterest income		7,067		—		7,067
Total noninterest income		6,665		3,823		10,568
Noninterest expense		26,752		5,600		32,268
Income (loss) before income taxes		5,790		(1,672)		4,290
Provision (benefit) for income taxes		875		(535)		366
Net income (loss)	$	4,915	$	(1,137)	$	3,924


	Nine Months Ended September 30, 2024
	HarborOne		HarborOne
	Bank		Mortgage		Consolidated

	(in thousands)


Net interest and dividend income	$	93,364	$	425	$	93,825
Provision for credit losses		6,350		—		6,350
Net interest and dividend income, after provision for credit losses		87,014		425		87,475
Mortgage banking income:
Gain on sale of mortgage loans		—		8,908		8,908
Intersegment gain (loss)		(1,057)		1,049		—
Changes in mortgage servicing rights fair value		(326)		(3,359)		(3,685)
Other		534		6,488		7,022
Total mortgage banking income (loss)		(849)		13,086		12,245
Other noninterest income		20,971		14		20,983
Total noninterest income		20,122		13,100		33,228
Noninterest expense		81,950		15,180		97,162
Income (loss) before income taxes		25,186		(1,655)		23,541
Provision (benefit) for income taxes		5,571		(551)		5,021
Net income (loss)	$	19,615	$	(1,104)	$	18,520

Total assets at period end	$	5,786,212		103,452		5,775,967
Goodwill at period end	$	59,042		—		59,042

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)


	Three Months Ended September 30, 2023

	HarborOne		HarborOne
	Bank		Mortgage		Consolidated

	(in thousands)


Net interest and dividend income	$	31,468	$	199	$	31,080
Benefit for credit losses		(113)		—		(113)
Net interest and dividend income, after benefit for credit losses		31,581		199		31,193
Mortgage banking income:
Gain on sale of mortgage loans		—		2,704		2,704
Intersegment gain (loss)		(198)		249		—
Changes in mortgage servicing rights fair value		18		107		125
Other		188		2,082		2,270
Total mortgage banking income		8		5,142		5,099
Other noninterest income (loss)		6,503		(4)		6,499
Total noninterest income		6,511		5,138		11,598
Noninterest expense		26,272		5,490		31,872
Income (loss) before income taxes		11,820		(153)		10,919
Provision (benefit) for income taxes		2,716		(15)		2,507
Net income (loss)	$	9,104	$	(138)	$	8,412


	Nine Months Ended September 30, 2023

	HarborOne		HarborOne
	Bank		Mortgage		Consolidated

	(in thousands)

Net interest and dividend income	$	98,520	$	646	$	97,578
Provision for credit losses		5,036		—		5,036
Net interest and dividend income, after provision for credit losses		93,484		646		92,542
Mortgage banking income:
Gain on sale of mortgage loans		—		8,228		8,228
Intersegment gain (loss)		(904)		793		—
Changes in mortgage servicing rights fair value		(89)		(1,042)		(1,131)
Other		584		6,214		6,798
Total mortgage banking income (loss)		(409)		14,193		13,895
Other noninterest income (loss)		19,059		(4)		19,055
Total noninterest income		18,650		14,189		32,950
Noninterest expense		78,655		16,305		95,106
Income (loss) before income taxes		33,479		(1,470)		30,386
Provision (benefit) for income taxes		8,024		(348)		7,198
Net income (loss)	$	25,455	$	(1,122)	$	23,188

Total assets at period end	$	5,672,956	$	113,619	$	5,664,387
Goodwill at period end	$	59,042	$	10,760	$	69,802

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section is intended to assist in the understanding of the financial performance of the Company and its subsidiaries through a discussion of our financial condition at September 30, 2024, and our results of operations for the three and nine months ended September 30, 2024 and 2023. This section should be read in conjunction with the unaudited interim Consolidated Financial Statements and Notes thereto of the Company appearing in Part I, Item 1 of this Form 10-Q.

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 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 and concerns about liquidity) 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; 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; cybersecurity incidents, fraud, natural disasters, war, terrorism, civil unrest, 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.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Critical Accounting Policies and Estimates

The Company’s significant accounting policies are described in Note 1 to the Consolidated Financial Statements included in its most recent Annual Report on Form 10-K. Modifications to significant accounting policies made during the year are described in Note 1 to the Consolidated Financial Statements included in Item 1 of this report. The preparation of the Consolidated Financial Statements in accordance with GAAP and practices generally applicable to the financial services industry requires Management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and to disclose contingent assets and liabilities. Actual results could differ from those estimates.

Certain of our accounting policies, which are important to the portrayal of our financial condition, require Management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances. Facts and circumstances which could affect these judgments include, but are not limited to, changes in interest rates, changes in the performance of the economy and changes in the financial condition of borrowers.

Management has identified the Company’s most critical accounting policies as related to:

•Allowance for Credit Losses

•Goodwill

•Deferred Tax Assets

The accounting policies and estimates, including the nature of the estimates and types of assumptions used, are described in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s most recent Form 10-K and pertain to discussion in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report.

Comparison of Financial Condition at September 30, 2024 and December 31, 2023

Total Assets. Total assets increased $108.1 million, or 1.9%, to $5.78 billion at September 30, 2024 from $5.67 billion at December 31, 2023. The increase primarily reflects an increase of $129.2 million in loans, partially offset by a $13.4 million decrease in securities available for sale and a $3.9 million decrease in short-term investments.

Cash and Cash Equivalents. Cash and cash equivalents decreased $3.1 million to $224.3 million at September 30, 2024 from $227.4 million at December 31, 2023, primarily due to a decrease in short-term investments.

Assets Held for Sale. The decrease in assets held for sale of $348,000 reflects the sale-leaseback of the building that currently houses HarborOne’s Legion Parkway banking center in downtown Brockton. This second quarter 2024 transaction resulted in a gain of $1.8 million recorded in noninterest income, partially offset by the $675,000 bargain purchase element of the property sale included in marketing expense as a contribution.

Loans Held for Sale. Loans held for sale at September 30, 2024 were $28.5 million, an increase of $8.8 million from $19.7 million at December 31, 2023, reflecting increased loan production at HarborOne Mortgage.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Loans, net. Net loans increased $123.2 million, or 2.6%, to $4.83 billion at September 30, 2024 from $4.70 billion at December 31, 2023. The following table sets forth information concerning the composition of loans:


	September 30,		December 31,		Increase (Decrease)
	2024		2023		Dollars		Percent

	(dollars in thousands)

Commercial:
Commercial real estate	$	2,321,148	$	2,343,675	$	(22,527)		(1.0)	%
Commercial construction		270,389		208,443		61,946		29.7
Commercial and industrial		549,908		466,443		83,465		17.9
Total commercial loans		3,141,445		3,018,561		122,884		4.1
Residential real estate:
One- to four-family		1,522,411		1,513,554		8,857		0.6
Second mortgages and equity lines of credit		182,807		177,135		5,672		3.2
Residential construction		13,206		18,132		(4,926)		(27.2)
Total residential real estate loans		1,718,424		1,708,821		9,603		0.6

Consumer loans		18,176		22,036		(3,860)		(17.5)
Total loans before basis adjustment		4,878,045		4,749,418		128,627		2.7	`
Basis adjustment associated with fair value hedge ⁽¹⁾		1,458		893		565		63.3
Total loans		4,879,503		4,750,311		129,192		2.7
Allowance for credit losses on loans		(54,004)		(47,972)		(6,032)		12.6
Loans, net	$	4,825,499	$	4,702,339	$	123,160		2.6	%


⁽¹⁾ Represents the basis adjustment associated with the application of hedge accounting on certain residential real estate loans. Refer to Note 10 - Derivatives.

The growth in net loans primarily reflects commercial loan growth. Management continues to seek prudent commercial lending opportunities to deepen relationships with existing customers and develop new relationships with strong borrowers.

Securities. Investment securities available for sale at September 30, 2024 were $276.8 million, a decrease of $13.4 million, or 4.6%, from $290.2 million at December 31, 2023. The decrease primarily reflects the sale of $17.5 million of low-yield securities with a loss on sale of $1.0 million that occurred in the second quarter of 2024. Securities available for sale were negatively impacted by unrealized losses of $52.2 million and $62.0 million as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024 and December 31, 2023, the gross unrealized loss positions were primarily related to mortgage-backed securities and other obligations issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government and have a long history of zero credit loss. Total gross unrealized losses were primarily attributable to changes in interest rates relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.

Securities held to maturity amounted to $19.6 million at September 30, 2024 and $19.8 million at December 31, 2023, with a fair value of $19.5 million and $19.3 million, respectively.

Mortgage servicing rights. MSRs are created as a result of our mortgage banking origination activities and accounted for at fair value. At September 30, 2024, we serviced mortgage loans for others with an aggregate outstanding principal balance of $3.43 billion. Total MSRs were $43.1 million at September 30, 2024 and $46.1 million at December 31, 2023. The change in total MSRs for the nine months ended September 30, 2024 reflects additions of $985,000 from new mortgage originations, amortization from loan repayments of $1.6 million and a negative fair value mark of $2.4 million.

Quarterly, we utilize a third-party provider to assist in the determination of the fair value of our MSRs. They provide the appropriate prepayment speed, and discount and default rate assumptions based on our portfolio and key benchmark mortgage rates. Management reviews the assumptions and calculation. Any measurement of fair value is

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

limited by the conditions existing and assumptions made at a particular point in time. Those assumptions may not be appropriate if they are applied at a different point in time.

The assumptions used in the MSR fair value calculation are significantly impacted by the residential mortgage benchmark indices. Decreasing mortgage rates normally encourages increased mortgage refinancing activity, which reduces the life of the loans underlying the MSRs, thereby reducing the value of MSRs, whereas increasing interest rates would result in increases in fair value, and a corresponding increase in earnings. MSRs recorded during periods of historically low interest rates may be less sensitive to falling rates in the future as they were originated in a low mortgage rate environment.

Deposits. Deposits were $4.54 billion and $4.39 billion at September 30, 2024 and December 31, 2023, respectively. The following table sets forth information concerning the composition of deposits:


	September 30,		December 31,		Increase (Decrease)
	2024		2023		Dollars		Percent

	(dollars in thousands)

Noninterest-bearing deposits	$	713,379	$	659,973	$	53,406		8.1	%
NOW accounts		296,315		305,774		(9,459)		(3.1)
Regular savings		926,192		1,265,315		(339,123)		(26.8)
Money market accounts		666,132		499,651		166,481		33.3
Term certificate accounts		1,063,164		858,241		204,923		23.9
Consumer and business deposits		3,665,182		3,588,954		76,228		2.1
Municipal deposits		497,313		471,817		25,496		5.4
Brokered deposits		373,682		326,638		47,044		14.4
Total deposits	$	4,536,177	$	4,387,409	$	148,768		3.4	%

Reciprocal deposits	$	372,372	$	209,401	$	162,971		77.8	%

Total deposits increased $148.8 million reflecting increases of $47.1 million in brokered deposits, $25.5 million in municipal deposits, and $76.2 million in consumer and business deposits. Brokered deposits provide a channel for the Company to seek additional funding outside the Company’s core market. We participate in a reciprocal deposit program that provides access to FDIC-insured deposit products in aggregate amounts exceeding the current limits for depositors. Total deposits included $372.4 million in reciprocal deposits. The increase in reciprocal deposits primarily reflects municipal depositors increased utilization of the reciprocal deposit program, as municipal deposits are generally required to be insured or secured by FHLB letters of credit.

The total of estimated deposits in excess of the FDIC insurance limits amounted to $1.4 billion as of September 30, 2024 and December 31, 2023. Until February 24, 2023, insurance for deposits in excess of FDIC limits was provided through the DIF. On February 24, 2023, at 5 p.m. local time, the Bank exited DIF. All customer non-certificate deposits as of that date and time were covered by DIF insurance until February 24, 2024. Certificates of deposit as of 5 p.m. local time on February 24, 2023 remain covered by DIF insurance until their maturity date.

The following table summarizes uninsured deposits at the date indicated:


	September 30,		December 31,
	2024		2023

	(in thousands)

Uninsured deposits, per regulatory reporting requirements	$	1,418,454	$	1,420,431
Less: Subsidiary deposits		415,809		349,748
Collateralized deposits		211,135		17,892
Uninsured deposits, after exclusions	$	791,510	$	1,052,791

Uninsured deposits, after excluding subsidiary deposits and collateralized deposits, represented 17% of total deposits at September 30, 2024. Management believes that this provides a more informative view of uninsured deposits, as subsidiary deposits are eliminated in consolidation and collateralized deposits are secured.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Borrowed Funds. Borrowings decreased $29.1 million to $539.4 million at September 30, 2024 from $568.5 million at December 31, 2023. At September 30, 2024, FHLB short-term borrowings were $60.0 million and long-term borrowings were $479.4 million. The Company borrowed $175 million for a one-year term under the BTFP during the first quarter of 2024. As of September 30, 2024, the Bank had $1.4 billion in available borrowing capacity across multiple relationships.

Stockholders’ equity. Total stockholders’ equity was $584.2 million at September 30, 2024, compared to $583.8 million at December 31, 2023 and $584.6 million at September 30, 2023. Stockholders’ equity increased 0.1% when compared to the year end, as earnings and a decrease in unrealized loss on available-for-sale securities were partially offset by share repurchases and dividends. Share repurchases for the nine months ended September 30, 2024 were 1,501,523 shares at an average price of $10.76, including $0.10 per share of excise tax.

The tangible-common-equity-to-tangible-assets ratio (non-GAAP) was 9.17% at September 30, 2024, 9.33% at December 31, 2023, and 9.17% at September 30, 2023. At September 30, 2024, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements, and their regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The capital levels of both the Company and the Bank at September 30, 2024, also exceeded the minimum capital requirements, including the currently applicable capital conservation buffer of 2.5%. Regulatory capital ratios are not impacted by the decline in other comprehensive income as a result of the unrealized losses on available-for-sale investment securities.

Comparison of Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

HarborOne Bancorp, Inc. Consolidated

Overview. Consolidated net income for the three and nine months ended September 30, 2024 was $3.9 million and $18.5 million, respectively, compared to net income of $8.4 million and $23.2 million for the three and nine months ended September 30, 2023.

Average Balances and Yields. The following tables set forth average balance sheets, annualized average yields and costs, and certain other information for the periods indicated, on a consolidated basis. Interest income on tax-exempt loans and securities has been adjusted to a fully taxable-equivalent basis using a federal tax rate of 21%. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or expense.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis


	Three Months Ended September 30,
	2024							2023
	Average							Average
	Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost ⁽⁸⁾		Balance			Interest		Cost ⁽⁸⁾

	(dollars in thousands)

Interest-earning assets:
Investment securities ⁽¹⁾	$	351,897		$	1,965	2.22	%	$	375,779		$	2,003	2.11	%
Other interest-earning assets		207,096			2,928	5.62			207,234			2,667	5.11
Loans held for sale		30,897			546	7.03			20,919			370	7.02
Loans
Commercial loans ⁽²⁾⁽³⁾		3,129,428			44,859	5.70			2,980,817			40,438	5.38
Residential real estate loans⁽³⁾⁽⁴⁾		1,712,295			18,837	4.38			1,700,383			17,525	4.09
Consumer loans ⁽³⁾		18,445			351	7.57			25,126			412	6.51
Total loans		4,860,168			64,047	5.24			4,706,326			58,375	4.92
Total interest-earning assets		5,450,058			69,486	5.07			5,310,258			63,415	4.74
Noninterest-earning assets		303,765							314,030
Total assets	$	5,753,823						$	5,624,288
Interest-bearing liabilities:
Savings accounts	$	963,570			3,807	1.57		$	1,360,728			6,787	1.98
NOW accounts		292,620			104	0.14			274,329			75	0.11
Money market accounts		1,130,148			10,953	3.86			910,694			8,355	3.64
Certificates of deposit		1,028,509			11,819	4.57			818,182			7,212	3.50
Brokered deposits		340,301			3,286	3.84			287,428			2,610	3.60
Total interest-bearing deposits		3,755,148			29,969	3.17			3,651,361			25,039	2.72
Borrowings		608,736			7,172	4.69			508,001			6,439	5.03
Subordinated debentures		—			—	-			34,364			606	7.00
Total borrowings		608,736			7,172	4.69			542,365			7,045	5.15
Total interest-bearing liabilities		4,363,884			37,141	3.39			4,193,726			32,084	3.04
Noninterest-bearing liabilities:
Noninterest-bearing deposits		696,094							705,009
Other noninterest-bearing liabilities		109,796							126,742
Total liabilities		5,169,774							5,025,477
Total equity		584,049							598,811
Total liabilities and equity	$	5,753,823						$	5,624,288
Tax equivalent net interest income					32,345							31,331
Tax equivalent interest rate spread ⁽⁵⁾						1.68	%						1.70	%
Less: tax equivalent adjustment					452							251
Net interest income as reported				$	31,893						$	31,080
Net interest-earning assets ⁽⁶⁾	$	1,086,174						$	1,116,532
Net interest margin ⁽⁷⁾						2.33	%						2.32	%
Tax equivalent effect						0.03							0.02
Net interest margin on a fully tax equivalent basis						2.36	%						2.34	%
Ratio of interest-earning assets to interest-bearing liabilities		124.89	%						126.62	%

Supplemental information:
Total deposits, including demand deposits	$	4,451,242		$	29,969			$	4,356,370		$	25,039
Cost of total deposits						2.68	%						2.28	%
Total funding liabilities, including demand deposits	$	5,059,978		$	37,141			$	4,898,735		$	32,084
Cost of total funding liabilities						2.92	%						2.60	%

⁽¹⁾ Includes securities available for sale and securities held to maturity.
⁽²⁾ Includes industrial revenue bonds. Interest income from tax exempt loans is computed on a taxable equivalent basis using a rate of 21% for the quarters presented.
⁽³⁾ Includes non-accruing loan balances and interest received on such loans.
⁽⁴⁾ Includes the basis adjustments of certain loans included in fair value hedging relationships.
⁽⁵⁾ Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
⁽⁶⁾ Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
⁽⁷⁾Net interest margin represents net interest income divided by average total interest-earning assets.
⁽⁸⁾ Annualized.

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis


	Nine Months Ended September 30,
	2024							2023
	Average							Average
	Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost ⁽⁸⁾		Balance			Interest		Cost ⁽⁸⁾

	(dollars in thousands)

Interest-earning assets:
Investment securities ⁽¹⁾	$	366,418		$	6,151	2.24	%	$	381,572		$	6,117	2.14	%
Other interest-earning assets		289,673			11,558	5.33			170,377			6,405	5.03
Loans held for sale		22,010			1,136	6.89			19,557			982	6.71
Loans
Commercial loans ⁽²⁾⁽³⁾		3,087,245			129,825	5.62			2,940,483			116,116	5.28
Residential real estate loans⁽³⁾⁽⁴⁾		1,702,718			55,405	4.35			1,676,979			49,598	3.95
Consumer loans ⁽³⁾		19,397			1,062	7.31			30,112			1,350	5.99
Total loans		4,809,360			186,292	5.17			4,647,574			167,064	4.81
Total interest-earning assets		5,487,461			205,137	4.99			5,219,080			180,568	4.63
Noninterest-earning assets		301,264							310,826
Total assets	$	5,788,725						$	5,529,906
Interest-bearing liabilities:
Savings accounts	$	1,069,045			13,635	1.70		$	1,413,553			18,397	1.74
NOW accounts		294,014			267	0.12			276,872			170	0.08
Money market accounts		1,064,791			30,452	3.82			846,235			19,849	3.14
Certificates of deposit		938,608			30,320	4.31			693,941			15,170	2.92
Brokered deposits		332,410			9,466	3.80			299,665			7,428	3.31
Total interest-bearing deposits		3,698,868			84,140	3.04			3,530,266			61,014	2.31
Borrowings		716,343			25,924	4.83			541,034			19,658	4.86
Subordinated debentures		—			—	—			34,331			1,653	6.44
Total borrowings		716,343			25,924	4.83			575,365			21,311	4.95
Total interest-bearing liabilities		4,415,211			110,064	3.33			4,105,631			82,325	2.68
Noninterest-bearing liabilities:
Noninterest-bearing deposits		673,757							712,815
Other noninterest-bearing liabilities		118,488							105,732
Total liabilities		5,207,456							4,924,178
Total equity		581,269							605,728
Total liabilities and equity	$	5,788,725						$	5,529,906
Tax equivalent net interest income					95,073							98,243
Tax equivalent interest rate spread ⁽⁵⁾						1.66	%						1.95	%
Less: tax equivalent adjustment					1,248							665
Net interest income as reported				$	93,825						$	97,578
Net interest-earning assets ⁽⁶⁾	$	1,072,250						$	1,113,449
Net interest margin ⁽⁷⁾						2.28	%						2.50	%
Tax equivalent effect						0.03							0.02
Net interest margin on a fully tax equivalent basis						2.31	%						2.52	%
Ratio of interest-earning assets to interest-bearing liabilities		124.29	%						127.12	%

Supplemental information:
Total deposits, including demand deposits	$	4,372,625		$	84,140			$	4,243,081		$	61,014
Cost of total deposits						2.57	%						1.92	%
Total funding liabilities, including demand deposits	$	5,088,968		$	110,064			$	4,818,446		$	82,325
Cost of total funding liabilities						2.89	%						2.28	%

⁽¹⁾ Includes securities available for sale and securities held to maturity.
⁽²⁾ Includes industrial revenue bonds. Interest income from tax exempt loans is computed on a taxable equivalent basis using a rate of 21% for the periods presented.
⁽³⁾ Includes non-accruing loan balances and interest received on such loans.
⁽⁴⁾ Includes the basis adjustments of certain loans included in fair value hedging relationships.
⁽⁵⁾ Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
⁽⁶⁾ Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
⁽⁷⁾ Net interest margin represents net interest income divided by average total interest-earning assets.
⁽⁸⁾ Annualized.

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Rate/Volume Analysis. The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated, on a consolidated basis. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024 v. 2023						2024 v. 2023
	Increase (Decrease)				Total		Increase (Decrease)				Total
	Due to Changes in				Increase		Due to Changes in				Increase
	Volume		Rate		(Decrease)		Volume		Rate		(Decrease)

	(in thousands)

Interest-earning assets:
Investment securities	$	(133)		95	$	(38)	$	(159)	$	193	$	34
Other interest-earning assets		(2)		263		261		4,743		410		5,153
Loans held for sale		175		1		176		126		28		154
Loans
Commercial loans		2,349		2,072		4,421		6,448		7,261		13,709
Residential real estate loans		121		1,191		1,312		900		4,907		5,807
Consumer loans		(97)		36		(61)		(377)		89		(288)
Total loans		2,373		3,299		5,672		6,971		12,257		19,228
Total interest-earning assets		2,413		3,658		6,071		11,681		12,888		24,569
Interest-bearing liabilities:
Savings accounts		(1,748)		(1,232)		(2,980)		(4,386)		(376)		(4,762)
NOW accounts		5		24		29		11		86		97
Money market accounts		2,085		513		2,598		5,766		4,837		10,603
Certificates of deposit		2,099		2,508		4,607		6,433		8,717		15,150
Brokered deposit		497		179		676		861		1,177		2,038
Total interest-bearing deposits		2,938		1,992		4,930		8,685		14,441		23,126
Borrowings		1,192		(459)		733		6,302		(36)		6,266
Subordinated debentures		(303)		(303)		(606)		(826)		(827)		(1,653)
Total borrowings		889		(762)		127		5,476		(863)		4,613
Total interest-bearing liabilities		3,827		1,230		5,057		14,161		13,578		27,739
Change in net interest income	$	(1,414)	$	2,428	$	1,014	$	(2,480)	$	(690)	$	(3,170)

Interest and Dividend Income. Interest and dividend income on a tax equivalent basis increased $6.1 million, or 9.6%, to $69.5 million for the three months ended September 30, 2024, compared to $63.4 million for the three months ended September 30, 2023. The significant components of the increase were:

●

Interest and fees on loans on a tax equivalent basis increased $5.7 million, or 9.7%, reflecting loan growth and a 32-basis-point increase in the yield.

Compared to the first nine months of 2023, interest and dividend income on a tax equivalent basis increased $24.6 million, or 13.6%. The significant components of the increase were:

●

Interest and fees on loans on a tax equivalent basis increased $19.2 million, or 11.5%, reflecting loan growth and a 36-basis-point increase in the yield.

●

Interest on other interest-earning assets increased $5.2 million, or 80.5%, reflecting higher fed fund balances in 2024.

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Interest Expense. Interest expense increased $5.0 million, or 15.8%, to $37.1 million for the three months ended September 30, 2024 from $32.1 million for the three months ended September 30, 2023. The significant components of the increase were:

●Interest expense on deposits increased $4.9 million, or 19.7%, reflecting deposit growth and a 45 basis-point increase in rates paid.

●Interest expense on borrowings increased $127,000 or 1.8%, reflecting an increase in the average balance partially offset by a 46 basis-point decrease in the cost of borrowings.

Compared to the first nine months of 2023, interest expense increased $27.7 million, or 33.7%, reflecting similar

trends to the quarter-over-quarter results.

Net Interest and Dividend Income. Net interest and dividend income on a tax equivalent basis increased $1.0 million, or 3.2%, to $32.3 million for the three months ended September 30, 2024 from $31.3 million for the three months ended September 30, 2023. The average balance of interest-bearing assets and liabilities increased $139.8 million and $170.2 million, respectively, and rate increases on interest-bearing liabilities outpaced the increase in the yield on interest-earning assets by 2 basis points. The net interest margin on a full tax equivalent basis increased 2 basis points to 2.36% for the three months ended September 30, 2024 from 2.34% for three months ended September 30, 2023.

Compared to the first nine months of 2023, net interest and dividend income on a tax equivalent basis decreased

$3.1 million, or 3.2%, to $95.1 million from $98.2 million. The net interest margin on a tax equivalent basis decreased by 21 basis points to 2.31% for the nine months ended September 30, 2024 from 2.52% for the nine months ended September 30, 2023.

Income Tax Provision. The provision for income taxes was $366,000 and $5.0 million for the three and nine months ended September 30, 2024 compared to $2.5 million and $7.2 million, for the three and nine months ended September 30, 2023. The effective tax rate for three months ended September 30, 2024 and 2023 was 8.5% and 23.0%, respectively. The effective tax rate for the nine months ended September 30, 2024 and 2023 was 21.3% and 23.7%, respectively. The quarter-over-quarter decrease reflects a discrete tax benefit as a result of the filing of amended tax returns to properly reflect tax exempt interest.

Segments. The Company has two reportable segments: HarborOne Bank and HarborOne Mortgage. Revenue from HarborOne Bank consists primarily of interest earned on loans and investment securities and service charges on deposit accounts. Revenue from HarborOne Mortgage is comprised of interest earned on loans and fees received as a result of the residential mortgage origination, sale and servicing process. Residential real estate portfolio loans are originated by HarborOne Mortgage and purchased by the Bank.

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

The tables below show the results of operations for the Company’s segments, HarborOne Bank and HarborOne Mortgage, for the three and nine months ended September 30, 2024 and 2023, and the increase or decrease in those results:


	HarborOne Bank								HarborOne Mortgage
	Three Months Ended								Three Months Ended
	September 30,				Increase (Decrease)				September 30,				Increase (Decrease)
	2024		2023		Dollars		Percent		2024		2023		Dollars		Percent

	(dollars in thousands)

Net interest and dividend income	$	31,780	$	31,468	$	312	1.0	%	$	105	$	199	$	(94)	(47.2)	%
Provision (benefit) for credit losses		5,903		(113)		6,016	(5,323.9)			—		—		—	—
Net interest and dividend income, after provision (benefit) for credit losses		25,877		31,581		(5,704)	(18.1)			105		199		(94)	(47.2)
Mortgage banking income:
Gain on sale of mortgage loans		—		—		—	—			3,752		2,704		1,048	38.8
Intersegment gain (loss)		(357)		(198)		(159)	80.3			277		249		28	11.2
Changes in mortgage servicing rights fair value		(220)		18		(238)	(1,322.2)			(2,421)		107		(2,528)	(2,362.6)
Other		175		188		(13)	(6.9)			2,215		2,082		133	6.4
Total mortgage banking income (loss)		(402)		8		(410)	(5,125.0)			3,823		5,142		(1,319)	(25.7)
Other noninterest income (loss)		7,067		6,503		564	8.7			—		(4)		4	(100.0)
Total noninterest income		6,665		6,511		154	2.4			3,823		5,138		(1,315)	(25.6)
Noninterest expense		26,752		26,272		480	1.8			5,600		5,490		110	2.0
Income (loss) before income taxes		5,790		11,820		(6,030)	(51.0)			(1,672)		(153)		(1,519)	992.8
Provision (benefit) for income taxes		875		2,716		(1,841)	(67.8)			(535)		(15)		(520)	3,466.7
Net income (loss)	$	4,915	$	9,104	$	(4,189)	(46.0)	%	$	(1,137)	$	(138)	$	(999)	723.9	%


	HarborOne Bank								HarborOne Mortgage
	Nine Months Ended								Nine Months Ended
	September 30,				Increase (Decrease)				September 30,				Increase (Decrease)
	2024		2023		Dollars		Percent		2024		2023		Dollars		Percent

	(dollars in thousands)


Net interest and dividend income	$	93,364	$	98,520	$	(5,156)	(5.2)	%	$	425	$	646	$	(221)	(34.2)	%
Provision for credit losses		6,350		5,036		1,314	26.1			—		—		—	—
Net interest and dividend income, after provision for credit losses		87,014		93,484		(6,470)	(6.9)			425		646		(221)	(34.2)
Mortgage banking income:
Gain on sale of mortgage loans		—		—		—	—			8,908		8,228		680	8.3
Intersegment gain (loss)		(1,057)		(904)		(153)	16.9			1,049		793		256	32.3
Changes in mortgage servicing rights fair value		(326)		(89)		(237)	266.3			(3,359)		(1,042)		(2,317)	222.4
Other		534		584		(50)	(8.6)			6,488		6,214		274	4.4
Total mortgage banking income (loss)		(849)		(409)		(440)	107.6			13,086		14,193		(1,107)	(7.8)
Other noninterest income (loss)		20,971		19,059		1,912	10.0			14		(4)		18	(450.0)
Total noninterest income		20,122		18,650		1,472	7.9			13,100		14,189		(1,089)	(7.7)
Noninterest expense		81,950		78,655		3,295	4.2			15,180		16,305		(1,125)	(6.9)
Income (loss) before income taxes		25,186		33,479		(8,293)	(24.8)			(1,655)		(1,470)		(185)	12.6
Provision (benefit) for income taxes		5,571		8,024		(2,453)	(30.6)			(551)		(348)		(203)	58.3
Net income (loss)	$	19,615	$	25,455	$	(5,840)	(22.9)	%	$	(1,104)	$	(1,122)	$	18	(1.6)	%

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

HarborOne Bank Segment

Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

Net Income. The Bank’s net income decreased $4.2 million, or 46.0% to $4.9 million for the three months ended September 30, 2024 compared to $9.1 million for the three months ended September 30, 2023. The decrease in net income reflects a $6.0 million increase in provision for credit losses and a $480,000 increase in noninterest expense, partially offset by a $312,000 increase in net interest and dividend income and a $154,000 increase in noninterest income.

Compared to the first nine months of 2023, the Bank’s net income for the nine months ended September 30, 2024 decreased $5.8 million, or 22.9% to $19.6 million from $25.5 million. The decrease in net income reflects a decrease of $5.2 million, or 5.2%, in net interest and dividend income, an increase in noninterest expense of $3.3 million, or 4.2%, and a $1.3 million, or 26.1%, increase in the provision for credit losses, partially offset by a $1.5 million, or 7.9% increase in noninterest income.

Provision for Credit Losses. The Bank recorded a provision for credit losses of $5.9 million and $6.4 million for the three and nine months ended September 30, 2024, respectively. The provision for credit losses in 2024 primarily reflects the specific reserve allocation for a single credit in the amount of $4.7 million and provisioning for commercial loan growth, partially offset by improved qualitative factor adjustments for residential real estate mortgages as consumer metrics considered in the model improved. The Bank recorded a reversal of provision for credit losses of $113,000 for the three months ended September 30, 2023, and for the nine months ended September 30, 2023, a provision for credit losses of $5.0 million reflecting a $5.7 million provision for loan credit losses, primarily for loan growth and charge off replenishment, partially offset by a $682,000 reversal of provision for unfunded commitments.

Net charge-offs totaled $182,000, or 0.02%, of average loans outstanding on an annualized basis, for the quarter ended September 30, 2024 compared to net recoveries of $18,000 for the same period in 2023. For the nine months ended September 30, 2024 and 2023, net charge-offs were $502,000 and $2.6 million, respectively.

Noninterest Income. Total noninterest income was $6.7 million and $20.1 million for the three and nine months ended September 30, 2024 compared to $6.5 million and $18.7 million for the respective prior year periods. The following table sets forth the components of noninterest income:


	Three Months Ended September 30,				Increase (Decrease)
	2024		2023		Dollars		Percent

	(dollars in thousands)

Intersegment loss	$	(357)	$	(198)	$	(159)		80.3	%
Secondary market loan servicing fees, net of guarantee fees		175		188		(13)		(6.9)
Changes in mortgage servicing rights fair value		(220)		18		(238)		(1,322.2)
Total mortgage banking income (loss)		(402)		8		(410)		(5,125.0)	%
Interchange fees		2,719		2,685		34		1.3
Other deposit account fees		2,651		2,447		204		8.3
Income on retirement plan annuities		122		146		(24)		(16.4)
Bank-owned life insurance income		777		531		246		46.3
Swap fee income		529		233		296		127.0
Other		269		461		(192)		(41.6)
Total noninterest income	$	6,665	$	6,511	$	154		2.4	%

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis


	Nine Months Ended September 30,				Increase (Decrease)
	2024		2023		Dollars		Percent

	(dollars in thousands)

Intersegment loss	$	(1,057)	$	(904)	$	(153)		16.9	%
Secondary market loan servicing fees, net of guarantee fees		534		584		(50)		(8.6)
Changes in mortgage servicing rights fair value		(326)		(89)		(237)		266.3
Total mortgage banking loss		(849)		(409)		(440)		107.6	%
Interchange fees		8,039		7,877		162		2.1
Other deposit account fees		7,537		7,001		536		7.7
Income on retirement plan annuities		408		393		15		3.8
Gain on sale of asset held for sale		1,809		—		1,809		—
Loss on sale of securities		(1,041)		—		(1,041)		—
Bank-owned life insurance income		2,281		1,542		739		47.9
Swap fee income		715		688		27		3.9
Other		1,223		1,558		(335)		(21.5)
Total noninterest income	$	20,122	$	18,650	$	1,472		7.9	%

The primary reasons for the variances within the noninterest income categories shown in the preceding table are noted below:

●The increase in other deposit account fees for the three and nine months ended September 30, 2024 reflects:

o

an increase in business account fees of $80,000 and $259,000, respectively; and

o

an increase in overdraft protection fees of $130,000 and $240,000, respectively.

●BOLI income increase is due to updated crediting rates for 2024.

●The Bank records an intersegment loss on loans purchased from HarborOne Mortgage that is offset in consolidation. The Bank purchased $86.8 million of residential mortgage loans from HarborOne Mortgage during the nine months ended September 30, 2024 as compared to $132.4 million for the prior year period.

●Swap fee income is collected and recorded at the time the swap contract is entered into, and therefore income fluctuates as a function of the swap agreements entered into in a period.

●The gain on sale of assets held for sale is from the sale-leaseback of the building that currently houses HarborOne’s Legion Parkway banking center in downtown Brockton.

●The loss on sale of securities was realized on the sale of $17.5 million of available-for-sale securities with a weighted average book yield of 2.84%

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Noninterest Expense. Total noninterest expense was $26.8 million and $82.0 million for the three and nine months ended September 30, 2024 compared to $26.3 million and $78.7 million prior year periods. The following table sets forth the components of noninterest expense:


	Three Months Ended September 30,				Increase (Decrease)
	2024		2023		Dollars		Percent

	(dollars in thousands)

Compensation and benefits	$	14,939	$	15,238	$	(299)		(2.0)	%
Occupancy and equipment		4,029		3,828		201		5.3
Data processing expenses		2,686		2,527		159		6.3
Loan expenses		143		128		15		11.7
Marketing		524		709		(185)		(26.1)
Deposit expenses		722		534		188		35.2
Postage and printing		324		330		(6)		(1.8)
Professional fees		942		914		28		3.1
Foreclosed and repossessed assets		1		2		(1)		(50.0)
Deposit insurance		1,028		1,004		24		2.4
Other expenses		1,414		1,058		356		33.6
Total noninterest expense	$	26,752	$	26,272	$	480		1.8	%


	Nine Months Ended September 30,				Increase (Decrease)
	2024		2023		Dollars		Percent

	(dollars in thousands)

Compensation and benefits	$	45,873	$	45,069	$	804		1.8	%
Occupancy and equipment		12,231		12,033		198		1.6
Data processing expenses		7,519		7,187		332		4.6
Loan expenses		397		311		86		27.7
Marketing		2,638		2,559		79		3.1
Deposit expenses		2,151		1,394		757		54.3
Postage and printing		1,126		1,170		(44)		(3.8)
Professional fees		2,769		2,609		160		6.1
Foreclosed and repossessed assets		6		(10)		16		(160.0)
Deposit insurance		3,184		2,690		494		18.4
Other expenses		4,056		3,643		413		11.3
Total noninterest expense	$	81,950	$	78,655	$	3,295		4.2	%

The primary reasons for the significant variances within the noninterest expense categories shown in the preceding table are noted below:

●The quarter-over-quarter decrease in compensation expense primarily reflects incentive accrual adjustments. The year-over-year increase reflects higher incentive and ESOP expense.

●The increase in deposit expense for the three and nine months ended September 30, 2024 reflects:

o

An increase in reciprocal deposit fees of $49,000 and $185,000, respectively; and

o

An increase in FHLB letter of credit fees of $80,000 and $212,000, respectively.

●The year-over-year increase in deposit insurance reflects a two-basis-point increase in the insurance rate and base increase.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

●The increase in other expense for the three and nine months ended September 30, 2024 reflects increases of $247,000 and $748,000, respectively, in cloud computing expenses.

HarborOne Mortgage Segment

Results of Operations for the Three and Nine Months September 30, 2024 and 2023

Net Income. HarborOne Mortgage recorded a net loss of $1.1 million for both the three and nine months ended September 30, 2024, compared to a net loss of $138,000 and $1.1 million for the respective prior year periods. The HarborOne Mortgage segment’s results are heavily impacted by prevailing interest rates, refinancing activity, and home sales.

Noninterest Income. Total noninterest income was $3.8 million and $13.1 million for the three and nine months ended September 30, 2024 as compared to $5.1 million and $14.2 million for the respective prior year periods. Noninterest income is primarily from mortgage banking income, for which the following table provides further detail:


	Three Months Ended September 30,				Increase (Decrease)
	2024		2023		Dollars		Percent

	(dollars in thousands)

Gain on sale of mortgage loans	$	3,752	$	2,704	$	1,048		38.8	%
Intersegment gain		277		249		28		11.2
Processing, underwriting and closing fees		555		453		102		22.5
Secondary market loan servicing fees net of guarantee fees		1,660		1,629		31		1.9
Changes in mortgage servicing rights fair value		(2,421)		107		(2,528)		(2,362.6)
Other		—		(4)		4		(100.0)
Total noninterest income	$	3,823	$	5,138	$	(1,315)		(25.6)	%

Originated mortgage servicing rights included in gain on sale of mortgage loans	$	344	$	900	$	(556)		(61.8)	%
Change in 10-year Treasury Constant Maturity rate in basis points		(55)		78


	Nine Months Ended September 30,				Increase (Decrease)
	2024		2023		Dollars		Percent

	(dollars in thousands)

Gain on sale of mortgage loans	$	8,908	$	8,228	$	680		8.3	%
Intersegment gain		1,049		793		256		32.3
Processing, underwriting and closing fees		1,341		1,155		186		16.1
Secondary market loan servicing fees net of guarantee fees		5,147		5,059		88		1.7
Changes in mortgage servicing rights fair value		(3,359)		(1,042)		(2,317)		222.4
Other		14		(4)		18		(450.0)
Total noninterest income	$	13,100	$	14,189	$	(1,089)		(7.7)	%

Originated mortgage servicing rights included in gain on sale of mortgage loans	$	985	$	2,193	$	(1,208)		(55.1)	%
Change in 10-year Treasury Constant Maturity rate in basis points		(7)		71

The primary reasons for the significant variances in the noninterest income category shown in the preceding table are noted below:

●

The change in the MSR fair value is generally consistent with the change in key benchmark residential mortgage rates. As interest rates rise and prepayment speeds decrease, MSR fair value tends to increase.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Conversely, when interest rates fall and prepayment speeds increase, MSR fair value tends to decrease. For the three and nine months ended September 30, 2024, the MSR fair value declined $3.3 million and $3.7 million, respectively. These changes reflect the decrease of benchmark residential rates at September 30, 2024 and amortization related to principal payments, muted by MSR assumption caps used in the valuation model. MSR fair value change also includes an economic hedge to partially mitigate potential MSR valuation losses in a declining rate environment. For the three and nine months ended September 30, 2024, hedging gains were $845,000 and $344,000, respectively.

●

Loan production and gain on sale of mortgages for three and nine months ended September 30, 2024 increased versus the comparable prior year periods as mortgage demand picked up slightly on lower interest rates but continues to be hampered by low for-sale inventory.

The following tables provide additional loan production detail:


	Three Months Ended September 30,
	2024				2023
	Loan					Loan
	Amount		% of Total			Amount		% of Total

	(dollars in thousands)

Product Type
Conventional	$	138,468	66.1	%		$	99,038	62.9	%
Government		18,310	8.8				9,009	5.7
State Housing Agency		8,019	3.8				9,397	6.0
Jumbo		44,687	21.3				40,109	25.4
Seconds		41	—				20	—
Total	$	209,525	100.0	%		$	157,573	100.0	%

Purpose
Purchase	$	187,262	89.4	%		$	143,205	90.9	%
Refinance		20,593	9.8				11,841	7.5
Construction		1,670	0.8				2,527	1.6
Total	$	209,525	100.0	%		$	157,573	100.0	%


	Nine Months Ended September 30,
	2024				2023
	Loan				Loan
	Amount		% of Total		Amount		% of Total

	(dollars in thousands)

Product Type
Conventional	$	330,418	68.2	%	$	253,219	55.6	%
Government		42,862	8.9			32,935	7.2
State Housing Agency		17,174	3.5			27,296	6.0
Jumbo		94,076	19.4			141,802	31.2
Seconds		89	—			71	—
Total	$	484,619	100.0	%	$	455,323	100.0	%

Purpose
Purchase	$	429,030	88.5	%	$	418,701	92.0	%
Refinance		46,540	9.6			30,153	6.6
Construction		9,049	1.9			6,469	1.4
Total	$	484,619	100.0	%	$	455,323	100.0	%

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Noninterest Expense. Total noninterest expense was $5.6 million and $15.2 million for the three and nine months ended September 30, 2024 compared to $5.5 million and $16.3 million for the respective prior year periods. The following table sets forth the components of noninterest expense:


	Three Months Ended September 30,				Increase (Decrease)
	2024		2023		Dollars		Percent

	(dollars in thousands)

Compensation and benefits	$	4,215	$	4,014	$	201		5.0	%
Occupancy and equipment		562		567		(5)		(0.9)
Data processing expenses		25		21		4		19.0
Loan expenses		314		258		56		21.7
Marketing		25		85		(60)		(70.6)
Postage and printing		9		12		(3)		(25.0)
Professional fees		162		155		7		4.5
Other expenses		288		378		(90)		(23.8)
Total noninterest expense	$	5,600	$	5,490	$	110		2.0	%


	Nine Months Ended September 30,				Increase (Decrease)
	2024		2023		Dollars		Percent

	(dollars in thousands)

Compensation and benefits	$	11,078	$	11,289	$	(211)		(1.9)	%
Occupancy and equipment		1,713		1,956		(243)		(12.4)
Data processing expenses		45		110		(65)		(59.1)
Loan expenses		892		805		87		10.8
Marketing		94		341		(247)		(72.4)
Postage and printing		29		35		(6)		(17.1)
Professional fees		425		592		(167)		(28.2)
Other expenses		904		1,177		(273)		(23.2)
Total noninterest expense	$	15,180	$	16,305	$	(1,125)		(6.9)	%

The primary reasons for the significant variances within the noninterest expense categories shown in the preceding table are noted below:

●The quarter-over-quarter increase in compensation and benefits primarily reflects increased commission expense consistent with the changes in mortgage origination volumes. The decrease for the nine months ended September 30, 2024 reflects lower staffing levels for the period.

●The decreases in the other noninterest expense categories for the three and nine months ended September 30, 2024 reflect the cost saving actions taken throughout 2023 and continuing into 2024.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Asset Quality

The following table provides information with respect to our nonperforming assets at the dates indicated. We did not have any accruing loans past due 90 days or more at the dates presented.


	September 30,			December 31,
	2024			2023

	(dollars in thousands)

Non-accrual loans:
Commercial real estate	$	17,171		$	7,416
Commercial construction		—			—
Commercial and industrial		1,743			1,791
Residential real estate:
One- to four-family		8,768			7,785
Second mortgages and equity lines of credit		683			473
Consumer		43			48
Total non-accrual loans		28,408			17,513
Other real estate owned and repossessed assets:
One- to four-family residential real estate owned		—			—
Other repossessed assets		—			69
Total nonperforming assets	$	28,408		$	17,582

Period end allowance for credit losses balance	$	54,004		$	47,972
Period end total loan balance	$	4,879,503		$	4,750,311
Allowance for credit losses to total loans⁽¹⁾		1.11	%		1.01	%
Allowance for credit losses to non-accrual loans		190.10	%		273.92	%
Total nonperforming loans to total loans ⁽¹⁾		0.58	%		0.37	%
Total nonperforming assets to total assets		0.49	%		0.31	%

⁽¹⁾ Total loans are presented before allowance for credit losses, but include deferred loan origination costs (fees), net, and the basis adjustment associated with the application of hedge accounting on certain residential real estate loans. Refer to Note 10 - Derivatives.

Credit quality has remained strong, with total nonperforming assets of $28.4 million at September 30, 2024, compared to $17.6 million at December 31, 2023 and $18.8 million at September 30, 2023. Nonperforming assets as a percentage of total assets were 0.49% at September 30, 2024, 0.31% at December 31, 2023, and 0.33% at September 30, 2023. As of September 30, 2024, CRE and CRE construction loans rated “substandard” amounted to $54.9 million, and includes:

• A $17.2 million nonaccrual loan collateralized by a property included in the office sector with a specific reserve of $4.7 million. This is a participation loan originated by another institution within our market and is current as of September 30, 2024.

• A $13.7 million loan, modified during the second quarter of 2024, due to the borrower experiencing financial difficulty with a specific reserve of $128,000. This loan is collateralized by a property included in the office sector. The borrower was provided a rate reduction modification and is performing in accordance with the modified terms.

• Four additional credits totaling $24.0 million with specific reserves of $394,000. The loans are current and the sponsors continue to cooperate with the bank in addressing credit weakness.

Loans to borrowers experiencing financial difficulty was $15.3 million as of September 30, 2024, representing two credits, including the loan noted above, that were provided rate reduction and term extension modifications. As of September 30, 2024, the loans were performing in accordance with the modified terms and were current.

Management continues to closely monitor the CRE loan portfolio for signs of deterioration given analysts’ projections of market softness over the near term due to higher vacancies and interest rates. The New England focused

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

portfolio has limited near-term maturity risk with 75% of the loans maturing in 2027 or later. The CRE and CRE construction portfolio composition includes:


	As of September 30, 2024
						Risk Rating
			Percent			Special
	Balance		to Total			Mention		Substandard		Nonaccrual

	(dollars in thousands)


Flex/Industrial	$	557,898	21.5	%	$	5,628	$	4,560	$	-
Multifamily		469,318	18.1	%		5,597		6,912		-
Hotels		334,208	12.9	%		21,145		4,835		-
Retail		301,285	11.6	%		14,385		-		-
Office		227,001	8.8	%		-		38,599		17,171
Healthcare		223,971	8.6	%		-		-		-
All Other		477,856	18.4	%		28,943		-		-
Total CRE and CRE construction	$	2,591,537	100.0	%	$	75,698	$	54,906	$	17,171

Management performs comprehensive reviews and works proactively with creditworthy borrowers facing financial stress and implements prudent accommodations to improve the Bank’s prospects of contractual repayment.

Management employs a process and methodology to estimate the ACL on loans that evaluates both quantitative and qualitative factors. The methodology for evaluating quantitative factors consists of two basic components. The first component involves pooling loans into portfolio segments for loans that share similar risk characteristics. A DCF methodology is used to estimate credit losses for each pooled portfolio segment. The methodology incorporates the probability of default and loss given default forecasted based on economic variable loss drivers. Management utilizes multiple economic projections and assumes these variables revert to the long-term average. Reversion towards long-term average generally begins eight quarters after the forecast start date and generally concludes within sixteen quarters of the forecast start date. The DCF methodology combines the probability of default, the loss given default, maturity date and prepayment speeds to estimate a reserve for each loan. The sum of all the loan level reserves is aggregated for each portfolio segment and a loss rate factor is derived. Quantitative loss factors for pooled loans are also supplemented by certain qualitative risk factors reflecting Management’s view of how losses may vary from those represented by quantitative loss rates.

The second component involves individually analyzed loans that do not share similar risk characteristics with loans that are pooled into portfolio segments. For loans that are individually analyzed, the ACL is measured using a DCF methodology based upon the loan’s contractual effective interest rate, or at the loan’s observable market price, or, if the loan is collateral-dependent, at the fair value of the collateral.

In estimating the ACL on loans, Management considers the sensitivity of the model and significant judgments and assumptions that could result in an amount that is materially different from Management’s estimate. Management performed a sensitivity analysis to understand the impact of hypothetical changes in qualitative loss factors on the ACL. Due to the concentration of the Bank’s ACL allocation in the total commercial portfolio, the sensitivity analysis evaluated the impact of changes to commercial loan segments. At September 30, 2024, the potential impact of changes to Management’s judgements on total commercial qualitative risk factors ranged between a $17.2 million reduction and $26.2 million increase in the ACL. This sensitivity analysis does not represent a change to Management’s judgment, but rather provides a hypothetical result to assess the sensitivity of the ACL to a key input.

The ACL was $54.0 million, or 1.11% of total loans, at September 30, 2024, compared to $48.0 million, or 1.01% of total loans, at December 31, 2023. The ACL on individually analyzed loans amounted to $5.3 million, or 8.12% of the carrying value of individually analyzed loans. The ACL on unfunded commitments, included in other liabilities on the unaudited Consolidated Balance Sheets, amounted to $3.7 million at September 30, 2024, compared to $3.9 million at December 31, 2023 and $4.2 million at September 30, 2023.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

The following table sets forth the breakdown of the ACL by loan category at the dates indicated:



	September 30, 2024						December 31, 2023
			% of						% of
			Allowance						Allowance
			Amount to		% of Loans				Amount to		% of Loans
			Total		in Category				Total		in Category
	Amount		Allowance		to Total Loans			Amount	Allowance		to Total Loans

	(dollars in thousands)

Commercial real estate	$	28,919	53.55	%	47.57	%	$	21,288	44.38	%	49.35	%
Commercial construction		4,546	8.42		5.54			4,824	10.06		4.39
Commercial and industrial		9,290	17.20		11.27			8,107	16.90		9.82
Residential real estate:
One- to four-family		9,519	17.63		31.23			12,101	25.22		31.87
Second mortgages and equity lines of credit		1,375	2.54		3.75			964	2.01		3.73
Residential construction		227	0.42		0.27			418	0.87		0.38
Consumer		128	0.24		0.37			270	0.56		0.46
Total allowance for credit losses on loans	$	54,004	100.00	%	100.00	%	$	47,972	100.00	%	100.00	%

The following table sets forth net charge-offs (recoveries) and the ratio of annualized net charge-offs (recoveries) to average loans for the periods indicated:


	Three Months Ended September 30,
	2024						2023
			Net		Net Charge-				Net		Net Charge-
	Average		Charge-offs		off (Recovery)		Average		Charge-offs		off (Recovery)
	Balance		(Recoveries)		Rate		Balance		(Recoveries)		Rate

	(dollars in thousands)

Commercial:
Commercial real estate	$	2,460,351	$	(3)	(0.00)	%	$	2,426,224	$	(2)	(0.00)	%
Commercial construction		262,788		—	—	%		201,387		—	—	%
Commercial and industrial		406,289		146	0.14	%		353,206		16	0.02	%
Total commercial loans	$	3,129,428	$	143	0.02	%	$	2,980,817	$	14	0.00	%

Residential real estate:
One- to four-family	$	1,520,800	$	—	—	%	$	1,503,563	$	—	—	%
Second mortgages and equity lines of credit		179,079		—	—	%		174,104		(40)	(0.09)	%
Residential real estate construction		12,416		—	—	%		22,716		—	—	%
Total residential real estate loans	$	1,712,295	$	—	—	%	$	1,700,383	$	(40)	(0.01)	%

Total Consumer loans	$	18,445	$	39	0.86	%	$	25,126	$	8	0.13	%

Total loans	$	4,860,168	$	182	0.02	%	$	4,706,326	$	(18)	(0.00)	%

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis


	Nine Months Ended September 30,
	2024						2023
			Net		Net Charge-				Net		Net Charge-
	Average		Charge-offs		off (Recovery)		Average		Charge-offs		off (Recovery)
	Balance		(Recoveries)		Rate		Balance		(Recoveries)		Rate

	(dollars in thousands)

Commercial:
Commercial real estate	$	2,465,157	$	(103)	(0.01)	%	$	2,394,343	$	2,914	0.16	%
Commercial construction		238,712		—	—	%		210,885		—	—	%
Commercial and industrial		383,376		512	0.18	%		335,255		(224)	(0.09)	%
Total commercial loans	$	3,087,245	$	409	0.02	%	$	2,940,483	$	2,690	0.12	%

Residential real estate:
One- to four-family	$	1,512,003	$	(2)	(0.00)	%	$	1,479,012	$	(2)	(0.00)	%
Second mortgages and equity lines of credit		176,173		(6)	(0.00)	%		169,385		(83)	(0.07)	%
Residential real estate construction		14,542		—	—	%		28,582		—	—	%
Total residential real estate loans	$	1,702,718	$	(8)	(0.00)	%	$	1,676,979	$	(85)	(0.01)	%

Total Consumer loans	$	19,397	$	101	0.69	%	$	30,112	$	36	0.16	%

Total loans	$	4,809,360	$	502	0.01	%	$	4,647,574	$	2,641	0.08	%

Net charge-offs were $182,000 and $502,000 for the three and nine months ended September 30, 2024. Net recoveries were $18,000 and net charge-offs were $2.6 million for the three and nine months ended September 30, 2023, respectively.

Management of Market Risk

The principal market risk facing the Company is interest-rate risk. The Company’s Asset/Liability Committee establishes exposure limits that govern the Company’s tolerance for interest-rate risk. The policy limits and guidelines serve as benchmarks for measuring interest-rate risk and for providing a framework for evaluation and interest-rate risk-management decision making. The Company’s primary measure of its interest-rate risk is an income simulation model and an economic value of equity analysis.

Net Interest Income Analysis. The Company uses income simulation as the primary tool for measuring interest-rate risk inherent in our balance sheet at a given point in time by showing the effect on net interest income, over specified time frames, of instantaneous parallel shifts in market rates. For simulation purposes, the Company’s balance sheet is assumed to remain static over the simulation horizon. The model results are dependent on material assumptions. These assumptions include, but are not limited to, Management’s best assessment of the effect of changing interest rates on the prepayment speeds of certain assets and liabilities, projections for account balances in each of the product lines offered and the historical behavior of deposit rates and balances in relation to changes in interest rates (deposit betas). These assumptions are inherently changeable, and as a result, the model is not expected to precisely measure net interest income or precisely predict the impact of fluctuations in interest rates on net interest income. Actual results will differ from the simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in the balance sheet composition and market conditions. Assumptions are supported with quarterly back-testing of the model to actual market rate shifts.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

The table below sets forth, as of September 30, 2024 and 2023, the net interest income simulation results that estimate the impact of interest rate changes on the Company’s estimated net interest income over two years:



	Change in Net Interest Income
	(% change from year one base)
Changes in Interest Rates	September 30, 2024				September 30, 2023
(basis points) ⁽¹⁾	Year One		Year Two		Year One		Year Two
+300	(11.2)	%	(13.3)	%	(13.1)	%	(11.8)	%
+200	(7.6)	%	(8.8)	%	(8.6)	%	(7.7)	%
+100	(4.0)	%	(4.4)	%	(4.2)	%	(3.5)	%
-100	2.0	%	2.5	%	4.6	%	4.7	%
-200	2.5	%	1.9	%	6.4	%	4.5	%
-300	2.8	%	0.3	%	N/A		N/A
-400	2.4	%	(2.7)	%	N/A		N/A

⁽¹⁾ The calculated change in net interest income assumes an instantaneous parallel shift of the yield curve.

Economic Value of Equity Analysis. The Company also uses the net present value of EVE methodology. This methodology calculates the difference between the present value of expected cash flows from assets and liabilities. The comparative scenarios assume an immediate parallel shift in the yield curve up 100, 200, and 300 basis points and down 100, 200, 300 and 400 basis points.

The table below sets forth, as of September 30, 2024 the estimated changes in the EVE that would result from an instantaneous parallel shift in interest rates. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results.


At September 30, 2024
							EVE as a Percentage of Economic
			Estimated Increase (Decrease)				Value of Assets
Changes in Interest Rates		Estimated	in EVE						Changes in
(basis points) ⁽¹⁾		EVE	Amount		Percent		EVE Ratio ⁽²⁾		Percent
(dollars in thousands)

+ 300	$	415,652	$	(161,772)	(28.0)	%	8.2	%	(2.3)	%
+ 200		479,473		(97,951)	(17.0)		9.2		(1.3)
+ 100		538,420		(39,004)	(6.8)		10.1		(0.4)
0		577,424		—	—		10.5		—
- 100		594,552		17,128	3.0		10.5		—
- 200		553,509		(23,915)	(4.1)		9.6		(0.9)
- 300		501,855		(75,569)	(13.1)		8.5		(2.0)
-400		424,349		(153,075)	(26.5)		7.1		(3.4)

⁽¹⁾ Assumes instantaneous parallel changes in interest rates.
⁽²⁾ EVE Ratio represents EVE divided by the economic value of assets.

The board of directors and Management review the methodology’s measurements for both net interest income and EVE on a quarterly basis to determine whether the exposure resulting from the changes in interest rates remains within established tolerance levels and develop appropriate strategies to manage this exposure.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Liquidity Management and Capital Resources

Liquidity measures the Company’s ability to meet both current and future financial obligations of a short- and long-term nature. Our primary sources of funds consist of deposit inflows, loan repayments, maturities and amortization of securities, and borrowings from the FHLB. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows, calls of investment securities and borrowed funds, and prepayments on loans are greatly influenced by general interest rates, economic conditions, and competition.

The objective of our liquidity risk management process is to manage cash flow and liquidity in an effort to provide continuous access to sufficient, reasonably priced funds. Funding requirements are impacted by loan originations and refinancings, deposit balance changes, liability issuances and settlements, and off-balance sheet funding commitments. We consider and comply with various regulatory guidelines regarding required liquidity levels and periodically monitor our liquidity position in light of the changing economic environment and customer activity. Based on periodic liquidity assessments, we may alter our asset, liability, and off-balance sheet positions. Management regularly adjusts our investments in liquid assets based upon an assessment of (i) expected loan demand, (ii) expected deposit flows, (iii) yields available on interest-earning deposits and securities, and (iv) the objectives of our interest-rate risk and investment policies.

We continue to focus on maintaining a strong liquidity position. We have access to immediate liquid resources in cash and cash equivalents of $224.3 million at September 30, 2024, which are primarily on deposit with the FRBB. Maturities and payments on outstanding loans and investment securities also provide a steady flow of funds. Liquidity is further enhanced by our ability to pledge loans and securities to access secured borrowings from the FHLB and FRBB. As of September 30, 2024, we had additional borrowing capacity of $830.3 million from the FHLB and $419.2 million from the FRBB based on the amount of collateral pledged. We also have additional borrowing capacity under a $25.0 million unsecured federal funds line with a correspondent bank. Potential sources of liquidity also include unpledged investment securities in our available-for-sale securities portfolio with a carrying value of $3.4 million and our ability to sell loans in the secondary market.

Our core deposits (which we define as deposits other than certificates of deposits) have historically provided us with a long-term source of stable and relatively lower cost source of funding. However, deposit inflows and outflows can vary widely and are influenced by prevailing market interest rates, competition, local and national economic conditions and fluctuations in our business customers’ own liquidity needs and may be negatively impacted by unexpected deposit withdrawals from weakness in the financial markets and industry-wide reductions in liquidity. The Company utilizes third- party brokers to obtain brokered deposits to supplement core deposit fluctuations and loan growth. At September 30, 2024, the Company had $373.7 million in brokered deposits. Additional funding is available through the issuance of long-term debt or equity.

In the ordinary course of the Company’s operations, the Company has entered into certain contractual obligations and has made other commitments to make future payments. At September 30, 2024, we had outstanding commitments to originate loans of $102.9 million and unadvanced funds on loans of $756.8 million. Certificates of deposit that are scheduled to mature within one year from September 30, 2024 totaled $1.23 billion.

The Company believes that it will be able to meet its contractual obligations as they come due through the maintenance of adequate cash levels and liquidity. Other than normal changes in the ordinary course of business, there have been no significant changes in the types of contractual obligations or amounts due since December 31, 2023.

Our ability to maintain adequate levels of liquidity is dependent on our ability to continue to maintain a strong risk profile and capital base. The Company and the Bank are subject to various regulatory capital requirements. At September 30, 2024, the Company and the Bank exceeded all regulatory capital requirements and were considered “well capitalized” under regulatory guidelines. See Note 12 of the Notes to Consolidated Financial Statements.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Non-GAAP Financial Measures and Reconciliation to GAAP

In addition to results presented in accordance with generally accepted accounting principles, this Form 10-Q contains certain non-GAAP financial measures. The Company believes that the supplemental non-GAAP information, which consists of the tangible-common-equity-to-tangible-assets ratio, 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.

The following table reconciles the Company’s tangible-common-equity-to-tangible-assets ratio for the periods indicated:



	September 30,
	2024			2023
(dollars on thousands)

Tangible common equity:
Total stockholders' equity	$	584,202		$	584,634
Less: Goodwill		59,042			69,802
Less: Other intangible assets⁽¹⁾		947			1,704
Tangible common equity	$	524,213		$	513,128

Tangible assets:
Total assets	$	5,775,967		$	5,664,387
Less: Goodwill		59,042			69,802
Less: Other intangible assets⁽¹⁾		947			1,704
Tangible assets	$	5,715,978		$	5,592,881

Tangible common equity / tangible assets ⁽²⁾		9.17	%		9.17	%

⁽¹⁾ Other intangible assets are core deposit intangibles.
⁽²⁾ This non-GAAP ratio is total stockholders' equity less goodwill and intangible assets to total assets less goodwill and intangible assets.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this Item is included in Part I, Item 2 of this Quarterly Report on Form 10-Q under the heading “Management of Market Risk.”

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, the Company carried out an evaluation under the supervision and with the participation of the Company’s Management, including the Company’s principal executive officer and principal financial officer, of the Company’s disclosure controls and procedures as of the period ended September 30, 2024. Based upon that evaluation, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective and designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s Management including its Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosures. The Company will continue to review and document its disclosure controls and procedures and consider such changes in future evaluations of the effectiveness of such controls and procedures, as it deems appropriate.

Internal Control Over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not involved in any material pending legal proceedings as a plaintiff or a defendant other than routine

legal proceedings occurring in the ordinary course of business. We are not involved in any legal proceedings the outcome

of which we believe would be material to our financial condition or results of operations.

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 7, 2024.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

a)Unregistered Sales of Equity Securities. None.

b)Use of Proceeds. None.

c)Repurchase of Equity Securities.


					Total number of		Maximum number (or
					shares (or units)		approximate dollar
					purchased as part		value) of shares (or
	Total number of				of publicly		units) that may yet be
	shares (or units)		Average price paid		announced plans or		purchased under the
Period	purchased		per share (or unit)		programs		plans or programs
July 1 to July 31, 2024		100,709	$	11.49		100,709		2,070,445
August 1 to August 31, 2024		131,761		12.39		232,470		1,938,684
September 1 to September 30, 2024		115,200		12.70		347,670		1,823,484
		347,670	$	12.23		347,670		1,823,484

On May 29, 2024, the Company announced a share repurchase program to repurchase up to 2,222,568 shares of its common stock, or approximately 5% of its outstanding shares. During the third quarter of 2024, the Company repurchased 347,670 shares at an average cost of $12.23 per share in open market transactions under the share repurchase program. The share repurchase program will expire on May 28, 2025.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

a)None.

b)None.

c) During the quarter ended September 30, 2024, none of the Company’s directors or executive officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) had in place, or adopted, modified, or terminated any contract, instruction, or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” (as such term is defined in the Item 408 of Regulation S-K).

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ITEM 6. EXHIBITS

The exhibits listed in the Exhibit Index are included in, or incorporated by reference into, this Quarterly Report on Form 10-Q.

EXHIBIT INDEX

The following exhibits are included in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (and are numbered in accordance with Item 601 of Regulation S-K):

Exhibit No.		Description

31.1*		Certification of Chief Executive Officer Required by Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act
31.2*		Certification of Chief Financial Officer Required by Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act
32.1**		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101		Interactive data files (formatted in Inline XBRL) pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023, (ii) the Consolidated Statements of Income for the three months and nine months ended September 30, 2024 and 2023 (iii) the Consolidated Statements of Comprehensive (Loss) Income for the three months and nine months ended September 30, 2024 and 2023, (iv) the Consolidated Statements of Changes in Stockholders’ Equity for the three months and nine months ended September 30, 2024 and 2023, (v) the Consolidated Statements of Cash Flows for the three months and nine months ended September 30, 2024 and 2023, and (vi) the Notes to the unaudited Consolidated Financial Statements.
104		Cover Page Interactive Data File (formatted in Inline XBRL and included in Exhibit 101)

*Filed herewith

**Furnished herewith

† Management contract or compensation plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	HarborOne Bancorp, Inc.

Date: November 12, 2024	By:	/s/ Joseph F. Casey
		Joseph F. Casey
		President and Chief Executive Officer (Principal Executive Officer)

Date: November 12, 2024	By:	/s/ Stephen W. Finocchio
		Stephen W. Finocchio
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)