HarborOne Bancorp, Inc.

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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 March 31, 2025

☐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 May 1, 2025 there were 43,090,980 shares of the Registrant’s common stock, par value $0.01 per share, outstanding.

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Index

		PAGE
	Glossary of Acronyms and Terms	1

PART I.	FINANCIAL INFORMATION

ITEM 1.	Financial Statements

	Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 (unaudited)	2
	Consolidated Statements of Income for the Three Months Ended March 31, 2025 and 2024 (unaudited)	3
	Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2025 and 2024 (unaudited)	4
	Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (unaudited)	5
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)
	Note 1. Summary of Significant Accounting Policies	8
	Note 2. Debt Securities	9
	Note 3. Loans Held for Sale	12
	Note 4. Loans and Allowance for Credit Losses	13
	Note 5. Mortgage Loan Servicing	19
	Note 6. Goodwill and Other Intangible Assets	19
	Note 7. Deposits	20
	Note 8. Borrowings	21
	Note 9. Other Commitments and Contingencies	22
	Note 10. Derivatives	23
	Note 11. Operating Lease ROU Assets and Liabilities	27
	Note 12. Minimum Regulatory Capital Requirements	28
	Note 13. Comprehensive (Loss) Income	30
	Note 14. Fair Value of Assets and Liabilities	30
	Note 15. Earnings Per Share	36
	Note 16. Revenue Recognition	36
	Note 17. Segment Reporting	37

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	58
ITEM 4.	Controls and Procedures	58

PART II.	OTHER INFORMATION

ITEM 1.	Legal Proceedings	59
ITEM 1A.	Risk Factors	59
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
ITEM 3.	Defaults Upon Senior Securities	62
ITEM 4.	Mine Safety Disclosures	62
ITEM 5.	Other Information	62
ITEM 6.	Exhibits	63

EXHIBIT INDEX		63

SIGNATURE		64

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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
BOLI	Bank-owned life insurance
Company	HarborOne Bancorp, Inc.
CRE	Commercial real estate
DCF	Discounted cash flow
EPS	Earnings Per Share
ESOP	Employee Stock Ownership Plan
Eastern	Eastern Bankshares, Inc., a Massachusetts corporation
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
Merger Agreement	Agreement and Plan of Merger, by and among Eastern Bankshares, Inc., Eastern Bank, HarborOne Bancorp, Inc., and HarborOne Bank
MSRs	Mortgage servicing rights
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)


	March 31,		December 31,
(in thousands, except share data)	2025		2024

Assets
Cash and due from banks	$	44,383	$	44,090
Short-term investments		186,109		186,981
Total cash and cash equivalents		230,492		231,071

Securities available for sale, at fair value		265,644		263,904
Securities held to maturity, at amortized cost (fair value of $19,067 at March 31, 2025 and $19,285 at December 31, 2024)		19,211		19,627
Federal Home Loan Bank stock, at cost		18,330		23,277
Loans held for sale, at fair value		19,304		36,768
Loans		4,821,033		4,852,499
Less: Allowance for credit losses on loans		(49,323)		(56,101)
Net loans		4,771,710		4,796,398
Accrued interest receivable		18,158		18,393
Mortgage servicing rights, at fair value		42,620		44,500
Property and equipment, net		45,510		46,253
Retirement plan annuities		15,817		15,698
Bank-owned life insurance		98,469		97,726
Goodwill		59,042		59,042
Intangible assets		568		757
Other assets		95,455		99,719
Total assets	$	5,700,330	$	5,753,133

Liabilities and Stockholders' Equity
Deposits:
Demand deposit accounts	$	703,736	$	690,647
NOW accounts		340,194		298,337
Regular savings and club accounts		908,136		895,232
Money market deposit accounts		1,200,600		1,195,209
Term certificate accounts		1,076,195		1,069,844
Brokered deposits		389,860		401,484
Total deposits		4,618,721		4,550,753
Borrowings		399,547		516,555
Mortgagors' escrow accounts		10,370		8,537
Accrued interest payable		7,027		6,575
Other liabilities and accrued expenses		88,698		95,702
Total liabilities		5,124,363		5,178,122

Commitments and contingencies (Notes 7, 12 and 13)

Common stock, $0.01 par value; 150,000,000 shares authorized; 60,754,801 and 60,517,573 shares issued; 43,408,480 and 43,723,278 shares outstanding at March 31, 2025 and December 31, 2024, respectively		598		598
Additional paid-in capital		490,327		489,532
Retained earnings		375,710		373,861
Treasury stock, at cost, 17,346,321 and 16,794,295 shares at March 31, 2025 and December 31, 2024, respectively		(221,516)		(215,138)
Accumulated other comprehensive loss		(45,664)		(49,895)
Unearned compensation - ESOP		(23,488)		(23,947)
Total stockholders' equity		575,967		575,011
Total liabilities and stockholders' equity	$	5,700,330	$	5,753,133

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 March 31,
(in thousands, except share data)	2025		2024


Interest and dividend income:
Interest and fees on loans	$	59,872	$	59,937
Interest on loans held for sale		296		243
Interest on securities		1,993		2,065
Other interest and dividend income		2,278		4,659
Total interest and dividend income		64,439		66,904


Interest expense:
Interest on deposits		27,643		26,899
Interest on borrowings		5,327		9,423
Total interest expense		32,970		36,322

Net interest and dividend income		31,469		30,582
Provision for credit (benefits) losses		1,385		(168)


Net interest and dividend income, after provision for credit (benefits) losses		30,084		30,750


Noninterest income:
Mortgage banking income:
Gain on sale of mortgage loans		2,716		2,013
Changes in mortgage servicing rights fair value		(1,372)		54
Other		2,108		2,276
Total mortgage banking income		3,452		4,343
Deposit account fees		5,153		4,983
Income on retirement plan annuities		119		145
Bank-owned life insurance income		743		746
Other income		424		524
Total noninterest income		9,891		10,741


Noninterest expense:
Compensation and benefits		18,785		17,636
Occupancy and equipment		4,627		4,781
Data processing		2,625		2,479
Loan expenses		431		371
Marketing		588		816
Deposit expenses		843		690
Postage and printing		353		438
Professional fees		1,382		1,457
Foreclosed and repossessed assets		5		4
Deposit insurance		1,050		1,164
Other expenses		2,161		1,914
Total noninterest expense		32,850		31,750


Income before income taxes		7,125		9,741

Income tax provision		1,625		2,441


Net income	$	5,500	$	7,300

Earnings per common share:
Basic	$	0.14	$	0.17
Diluted	$	0.14	$	0.17
Weighted average shares outstanding:
Basic		40,344,922		41,912,421
Diluted		40,605,799		42,127,037

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 March 31,
(in thousands)	2025		2024


Net income	$	5,500	$	7,300
Other comprehensive income:

Unrealized gain/loss on cashflow hedge:
Unrealized holding gains		23		718
Reclassification adjustment for net gains included in net income		(987)		(1,235)
Net change in unrealized losses on derivatives in cashflow hedging instruments		(964)		(517)
Related tax effect		256		148
Net-of-tax amount		(708)		(369)

Unrealized gain/loss on securities available for sale:
Unrealized holding gains (losses)		6,360		(4,940)
Related tax effect		(1,421)		348
Net-of-tax amount		4,939		(4,592)

Postretirement benefit:
Adjustment of accumulated obligation for postretirement benefits		3		(1)
Reclassification adjustment for gains recognized in net periodic benefit cost		(3)		(20)
Net gains		—		(21)

Total other comprehensive income (loss)		4,231		(4,982)


Comprehensive income	$	9,731	$	2,318

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

Comprehensive income (loss)	—		—		—		7,300		—		(4,982)		—		2,318
Dividends declared of $0.08 per share	—		—		—		(3,365)		—		—		—		(3,365)
ESOP shares committed to be released (57,681 shares)	—		—		162		—		—		—		459		621
Restricted stock awards granted, net of forfeitures	193,073		—		—		—		—		—		—		—
Performance stock units vested	63,860		—		—		—		—		—		—		—
Share-based compensation expense	—				613		—		—		—		—		613
Treasury stock purchased	(603,151)		—		—		—		(6,263)		—		—		(6,263)

Balance at March 31, 2024	45,055,006	$	598	$	487,277	$	363,591	$	(199,853)	$	(48,604)	$	(25,326)	$	577,683

Balance at December 31, 2024	43,723,278	$	598	$	489,532	$	373,861	$	(215,138)	$	(49,895)	$	(23,947)	$	575,011

Comprehensive income	—		—		—		5,500		—		4,231		—		9,731
Dividends declared of $0.09 per share	—		—		—		(3,651)		—		—		—		(3,651)
ESOP shares committed to be released (57,681 shares)	—		—		200		—		—		—		459		659
Restricted stock awards granted, net of forfeitures	228,195		—		—		—		—		—		—		—
Performance stock units vested	9,033		—		—		—		—		—		—		—
Share-based compensation expense	—		—		595		—		—		—		—		595
Treasury stock purchased	(552,026)		—		—		—		(6,378)		—		—		(6,378)

Balance at March 31, 2025	43,408,480	$	598	$	490,327	$	375,710	$	(221,516)	$	(45,664)	$	(23,488)	$	575,967

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)


	Three Months Ended March 31,
(in thousands)	2025		2024


Cash flows from operating activities:
Net income	$	5,500	$	7,300
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses (benefit)		1,385		(168)
Net amortization of securities premiums/discounts		74		88
Proceeds from sale of loans		125,945		92,798
Loans originated for sale		(105,861)		(87,755)
Accretion of net deferred loan costs/fees and premiums		(101)		(56)
Depreciation and amortization of premises and equipment		906		946
Change in mortgage servicing rights fair value		1,933		(275)
Mortgage servicing rights capitalized		(53)		(211)
Accretion of fair value adjustment on loans and deposits, net		(108)		(92)
Amortization of other intangible assets		189		189
Net gains on mortgage loan sales, including fair value adjustments		(2,620)		(1,790)
Bank-owned life insurance income		(743)		(746)
Income on retirement plan annuities		(119)		(145)
Net loss on disposal of premises and equipment		45		—
Net gain on sale and write-down of other real estate owned and repossessed assets		5		4
ESOP expense		659		621
Share-based compensation expense		595		613
Decrease in operating lease ROU assets		523		462
Decrease in operating lease liabilities		(540)		(443)
Change in other assets		1,842		(3,803)
Change in other liabilities		(6,094)		7,437
Net cash provided by operating activities		23,362		14,974


Cash flows from investing activities:
Activity in securities available for sale:
Maturities, prepayments and calls		4,543		4,801
Purchases		—		(10,689)
Activity in securities held to maturity:
Maturities, prepayment and calls		420		74
Net redemption of FHLB stock		4,947		533
Net loan repayments (originations)		23,487		(27,822)
Proceeds from sale of other real estate owned and repossessed assets		5		65
Additions to property and equipment		(208)		(110)
Net cash provided by (used in) investing activities		33,194		(33,148)

(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)


	Three Months Ended March 31,
(in thousands)	2025		2024

Cash flows from financing activities:
Net increase in deposits		67,968		6,615
Net change in short-term borrowed funds		(57,000)		(68,000)
Proceeds from borrowings		—		317,326
Repayment of borrowings		(60,008)		(63,408)
Net change in mortgagors' escrow accounts		1,833		1,492
Treasury stock purchased		(6,378)		(6,263)
Dividends paid		(3,550)		(3,497)
Net cash (used in) provided by financing activities		(57,135)		184,265

Net change in cash and cash equivalents		(579)		166,091

Cash and cash equivalents at beginning of period		231,071		227,350

Cash and cash equivalents at end of period	$	230,492	$	393,441

Supplemental cash flow information:
Interest paid on deposits	$	26,850	$	26,781
Interest paid on borrowed funds		5,635		7,501
Income taxes paid, net		4,666		2,103
Transfer of loans to other real estate owned and repossessed assets		6		41
Dividends declared		3,651		3,365

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, 2024 and 2023 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.

Merger

On April 24, 2025, the Company, the Bank, Eastern, and Eastern Bank entered into the Merger Agreement. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Eastern will acquire the Company and the Bank through the merger of the Company with and into Eastern, with Eastern as the surviving entity (the “Merger”). The Merger Agreement further provides that following the Merger, the Bank will merge with and into Eastern Bank, with Eastern Bank as the surviving entity. Under the terms of the Merger Agreement, the Company’s shareholders will receive for each share of Company common stock, at the holder’s election, either (i) 0.765 shares of Eastern common stock (the “Stock Consideration”) or (ii) $12.00 in cash (the “Cash Consideration”), subject to allocation procedures to ensure that the total number of shares of the Company’s common stock that receive the Stock Consideration represents between 75% and 85% of the total number of shares of the Company’s common stock outstanding immediately prior to the completion of the Merger.

Each outstanding and unexercised option to acquire a share of Company common stock will be converted into an option to purchase that number of whole shares of Company Common Stock (rounded down to the nearest whole share) equal to the product of (i) the number of shares of HarborOne Common Stock subject to such HarborOne Stock Option multiplied by (ii) 0.765 (the “Exchange Ratio”) with an exercise price per share of Company Common Stock (rounded up to the nearest whole cent) equal to the quotient of (x) the exercise price per share of HarborOne Common Stock of such HarborOne Stock Option divided by (y) the Exchange Ratio. Except as expressly provided in the immediately preceding sentence, each such Company Stock Option replacing a HarborOne Stock Option will be subject to the same terms and conditions (including vesting and exercisability terms) as applied to the corresponding HarborOne Stock Option. Each restricted stock award of the Company, whether or not vested, that is outstanding immediately prior to the effective time of the Merger will fully vest and be canceled and converted into the right to receive the per share Cash Consideration and/or Stock Consideration (the “Merger Consideration”). In addition, each HarborOne performance-based restricted stock unit that is outstanding and unvested will accelerate in full and fully vest, with any applicable performance-based vesting condition to be deemed achieved at the target level of performance, and shall be converted into the right to receive the Merger Consideration.

Completion of the Merger is subject to customary closing conditions, including receipt of regulatory approvals and approval by the Company’s shareholders. The Company anticipates that the Merger will close during the fourth quarter of 2025, although Eastern has the right under the Merger Agreement to defer the closing until February 20, 2026 if the closing conditions are satisfied after October 31, 2025 but before February 20, 2026.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

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.

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, 2024 remain substantially unchanged.

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)

March 31, 2025:
Securities available for sale
U.S. government and government-sponsored enterprise obligations	$	42,143	$	—	$	5,454	$	—	$	36,689
U.S. government agency and government-sponsored residential mortgage-backed securities		279,192		214		53,449		—		225,957
SBA asset-backed securities		1,157		—		38		—		1,119
Corporate bonds		2,000		30		151		—		1,879
Total securities available for sale	$	324,492	$	244	$	59,092	$	—	$	265,644

Securities held to maturity
U.S. government and government-sponsored enterprise obligations	$	15,000	$	—	$	137	$	—	$	14,863
SBA asset-backed securities		4,211		—		7		—		4,204
Total securities held to maturity	$	19,211	$	—	$	144	$	—	$	19,067


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

	(in thousands)

December 31, 2024:
Securities available for sale
U.S. government and government-sponsored enterprise obligations	$	42,143	$	—	$	6,480	$	—	$	35,663
U.S. government agency and government-sponsored residential mortgage-backed securities		283,523		43		58,569		—		224,997
SBA asset-backed securities		1,446		—		64		—		1,382
Corporate bonds		2,000		13		151		—		1,862
Total securities available for sale	$	329,112	$	56	$	65,264	$	—	$	263,904

Securities held to maturity
U.S. government and government-sponsored enterprise obligations	$	15,000	$	—	$	228	$	—	$	14,772
SBA asset-backed securities		4,627		—		114		—		4,513
Total securities held to maturity	$	19,627	$	—	$	342	$	—	$	19,285

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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 $958,000 as of March 31, 2025 and December 31, 2024, respectively. At March 31, 2025, available-for-sale debt securities with a fair value of $262.6 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 March 31, 2025 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	$	16,029	$	15,000	$	14,863
After 5 years through 10 years		26,500		22,539		—		—
Over 10 years		—		—		—		—
		44,143		38,568		15,000		14,863

U.S. government agency and government-sponsored residential mortgage-backed securities		279,192		225,957		—		—
SBA asset-backed securities		1,157		1,119		4,211		4,204

Total	$	324,492	$	265,644	$	19,211	$	19,067

U.S. government-sponsored residential mortgage-backed securities and securities whose underlying assets are loans from the SBA have stated maturities of two to 30 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 $53.4 million have a final maturity of two to seven years and a call feature of one month to two years. At March 31, 2025 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.

There were no sales or calls of securities in the three months ended March 31, 2025 and 2024.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Information pertaining to securities with gross unrealized losses at March 31, 2025 and December 31, 2024, 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)
March 31, 2025:
Securities available for sale

U.S. government and government-sponsored enterprise obligations	$	—	$	—	$	5,454	$	36,689
U.S. government agency and government-sponsored residential mortgage-backed securities		—		—		53,449		207,424
SBA asset-backed securities		—		—		38		1,119
Corporate bonds		—		—		151		849
	$	—	$	—	$	59,092	$	246,081

Securities held to maturity

U.S. government and government-sponsored enterprise obligations	$	—	$	—		137		14,863
SBA asset-backed securities		7		4,204		—		—
	$	7	$	4,204	$	137	$	14,863

December 31, 2024:
Securities available for sale

U.S. government and government-sponsored enterprise obligations	$	-	$	-	$	6,480	$	35,663
U.S. government agency and government-sponsored residential mortgage-backed securities		31		9,346		58,538		206,308
SBA asset-backed securities		-		-		64		1,382
Corporate bonds		-		-		151		849
	$	31	$	9,346	$	65,233	$	244,202

Securities held to maturity

U.S. government and government-sponsored enterprise obligations	$	-	$	-		228		14,772
SBA asset-backed securities		114		4,512		-		-
	$	114	$	4,512	$	228	$	14,772

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 March 31, 2025, the Company’s security portfolio consisted of 112 debt securities, 101 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 March 31, 2025 represent a credit loss impairment. As of March 31, 2025, and December 31, 2024, 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 March 31, 2025.

As of March 31, 2025, 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:


	March 31,		December 31,
	2025		2024

	(in thousands)

Loans held for sale, fair value	$	19,304	$	36,768
Loans held for sale, contractual principal outstanding		18,837		36,205
Fair value less unpaid principal balance	$	467	$	563

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 a decrease of $96,000 in the three months ended March 31, 2025 to $467,000, compared to a decrease of $222,000 in the three months ended March 31, 2024 to $309,000. 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 March 31, 2025 and December 31, 2024, 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:


	March 31,		December 31,
	2025		2024

	(in thousands)
Commercial:
Commercial real estate	$	2,272,480	$	2,280,309
Commercial construction		216,013		252,691
Commercial and industrial		627,480		594,453
Total commercial loans		3,115,973		3,127,453

Residential real estate:
One- to four-family		1,487,942		1,506,571
Second mortgages and equity lines of credit		190,621		189,598
Residential real estate construction		10,551		11,307
Total residential real estate loans		1,689,114		1,707,476

Consumer loans:
Auto		7,672		8,550
Personal		7,707		8,940
Total consumer loans		15,379		17,490

Total loans before basis adjustment		4,820,466		4,852,419
Basis adjustment associated with fair value hedge ⁽¹⁾		567		80
Total loans		4,821,033		4,852,499
Allowance for credit losses on loans		(49,323)		(56,101)
Loans, net	$	4,771,710	$	4,796,398

⁽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 fees and costs included in total loans and leases were $8.9 million and $8.8 million as of March 31, 2025 and December 31, 2024, 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 March 31, 2025 and December 31, 2024, the Company was servicing loans for participants in the aggregate amounts of $438.5 million and $431.4 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 months ended March 31, 2025 and 2024:


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

	(in thousands)

Balance at December 31, 2024	$	30,764	$	4,257	$	10,700	$	8,720	$	1,348	$	186	$	126	$	56,101

Charge-offs		(8,304)				(384)								(28)		(8,716)
Recoveries		4				22				10				11		47
Provision		2,360		(800)		628		(130)		(155)		(18)		6		1,891
Balance at March 31, 2025	$	24,824	$	3,457	$	10,966	$	8,590	$	1,203	$	168	$	115	$	49,323


									Second
									Mortgages
					Commercial				and		Residential
	Commercial		Commercial		and		One- to Four-		Equity Lines		Real Estate
	Real Estate		Construction		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		—		—		(228)		—		—		—		(49)		(277)
Recoveries		100		—		46		—		3		—		3		152
Provision		(125)		498		138		(66)		(25)		(87)		5		338
Balance at March 31, 2024	$	21,263	$	5,322	$	8,063	$	12,035	$	942	$	331	$	229	$	48,185

Individually analyzed loans include non-accrual loans and certain other loans based on the underlying risk characteristics and the discretion of Management to individually analyze such loans. As of March 31, 2025, the carrying value of individually analyzed loans amounted to $78.7 million, with a related allowance of $2.3 million, and $59.3 million of individually analyzed loans were considered collateral-dependent. As of December 31, 2024, the carrying value of individually analyzed loans amounted to $87.2 million, with a related allowance of $7.8 million, and $67.2 million of individually analyzed loans were considered collateral-dependent.

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 March 31, 2025 and December 31, 2024:


	March 31, 2025				December 31, 2024
	Carrying		Related		Carrying		Related
	Value		Allowance		Value		Allowance

	(in thousands)
Commercial:
Commercial real estate ⁽¹⁾	$	36,261	$	457	$	44,983	$	5,426
Commercial and industrial ⁽²⁾		11,378		87		11,935		560
Commercial construction		—		—		—		—
Total Commercial		47,639		544		56,918		5,986
Residential real estate ⁽¹⁾		11,704		90		10,321		—
Total	$	59,343	$	634	$	67,239	$	5,986

⁽¹⁾ The collateral type is real estate.

⁽²⁾ The collateral type is business enterprise value and business assets.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

The following is a summary of past due and non-accrual loans at March 31, 2025 and December 31, 2024:


					90 Days				Non-accrual Loans
	30-59 Days		60-89 Days		or More		Total		With		Without
	Past Due		Past Due		Past Due		Past Due		an ACL		an ACL

	(in thousands)
March 31, 2025
Commercial real estate	$	30	$	8,610	$	—	$	8,640	$	—	$	8,610
Commercial construction		—		—		—		—		—		—
Commercial and industrial		3,039		3		1,461		4,503		152		10,386
Residential real estate:
One- to four-family		8,688		1,131		5,937		15,756		306		10,458
Second mortgages and equity lines of credit		221		137		450		808		—		941
Consumer:
Auto		26		—		8		34		9		—
Personal		33		16		31		80		40		—
Total	$	12,037	$	9,897	$	7,887	$	29,821	$	507	$	30,395

December 31, 2024
Commercial real estate	$	3,803	$	40	$	—	$	3,843	$	16,836	$	—
Commercial construction		—		—		—		—		—		—
Commercial and industrial		8,273		684		1,269		10,226		665		1,539
Residential real estate:
One- to four-family		8,589		7,014		6,670		22,273		—		9,545
Second mortgages and equity lines of credit		466		312		183		961		89		775
Consumer:
Auto		52		10		—		62		—		—
Personal		42		16		4		62		14		—
Total	$	21,225	$	8,076	$	8,126	$	37,427	$	17,604	$	11,859

At March 31, 2025 and December 31, 2024, there were no loans past due 90 days or more and still accruing.

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 March 31, 2025 that were both experiencing financial difficulty and modified during the three months ended March 31, 2025 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 March 31, 2025
					Combination Term		Total Class
	Term		Interest Rate		Extension Interest Rate		of Financing
	Extension		Reduction		Reduction		Receivable

	(in thousands)

Residential real estate	$	—	$	—	$	429		0.03	%

Total	$	—	$	—	$	429

The financial effect of the modifications to the loan in the residential real estate category was a reduced weighted-average contractual rate from 6.63% to 5.0%, and an additional 11.4 years to the life of the loan. There were no material loan modifications based on borrower financial difficulty during the three months ended March 31, 2024.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

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 March 31, 2025, modified loans to borrowers experiencing financial difficulty had a current payment status. During the three months ended March 31, 2025 and 2024, 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.

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 March 31, 2025:


															Revolving
													Revolving		Loans
													Loans		Converted
	Term Loans at Amortized Cost by Origination Year												Amortized		to Term
	2025		2024		2023		2022		2021		Prior		Cost		Loans		Total

	(in thousands)
Balance at March 31, 2025

Commercial real estate
Pass	$	10,814	$	83,643	$	160,911	$	733,666	$	465,523	$	670,876	$	—	$	—	$	2,125,433
Special mention		—		—		7,064		49,623		10,967		24,136		—		—		91,790
Substandard		—		—		5,921		27,018		—		13,708		—		—		46,647
Doubtful		—		—		—		8,610		—		—		—		—		8,610
Total commercial real estate		10,814		83,643		173,896		818,917		476,490		708,720		—		—		2,272,480
YTD gross charge-offs		—		—		—		8,298		—		6		—		—		8,304

Commercial and industrial
Pass		28,905		85,922		71,157		78,126		80,540		150,752		107,456		—		602,858
Special mention		—		4		6,222		1,650		—		1,283		—		—		9,159
Substandard		—		—		61		2,798		3,767		3,593		3,750		—		13,969
Doubtful		—		—		—		—		—		1,320		174		—		1,494
Total commercial and industrial		28,905		85,926		77,440		82,574		84,307		156,948		111,380		—		627,480
YTD gross charge-offs		—		180		48		—		—		156		—		—		384

Commercial construction
Pass		860		33,898		49,671		78,517		35,835		—		1,827		—		200,608
Special mention		—		—		—		15,405		—		—		—		—		15,405
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial construction		860		33,898		49,671		93,922		35,835		—		1,827		—		216,013
YTD gross charge-offs		—		—		—		—		—		—		—		—		—

Residential real estate
Accrual		6,924		83,455		123,742		406,850		447,088		426,244		180,689		2,417		1,677,409
Non-accrual		—		—		—		852		664		9,601		570		18		11,705
Total residential real estate		6,924		83,455		123,742		407,702		447,752		435,845		181,259		2,435		1,689,114
YTD gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer
Accrual		2,174		4,306		3,521		2,772		900		744		913		—		15,330
Non-accrual		—		—		27		4		—		—		18		—		49
Total Consumer		2,174		4,306		3,548		2,776		900		744		931		—		15,379
YTD gross charge-offs		—		17		3		—		—		8		—		—		28

Total loans before basis adjustment	$	49,677	$	291,228	$	428,297	$	1,405,891	$	1,045,284	$	1,302,257	$	295,397	$	2,435	$	4,820,466
Total YTD gross charge-offs	$	—	$	197	$	51	$	8,298	$	—	$	170	$	—	$	—	$	8,716

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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, 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)
Balance at December 31, 2024

Commercial real estate
Pass	$	82,833	$	162,401	$	743,173	$	433,482	$	190,543	$	525,120	$	-	$	-	$	2,137,552
Special mention		-		6,872		39,614		7,539		12,077		12,149		-		-		78,251
Substandard		-		6,598		44,191		-		-		13,717		-		-		64,506
Doubtful		-		-		-		-		-		-		-		-		—
Total commercial real estate		82,833		175,871		826,978		441,021		202,620		550,986		-		-		2,280,309
YTD gross charge-offs		-		-		-		-		-		-		-		-		—

Commercial and industrial
Pass		80,926		78,767		72,636		82,638		63,043		93,493		104,897		-		576,400
Special mention		5		-		1,703		-		-		1,279		2,783		-		5,770
Substandard		-		178		2,874		3,844		-		3,841		260		-		10,997
Doubtful		-		-		-		-		-		1,237		49		-		1,286
Total commercial and industrial		80,931		78,945		77,213		86,482		63,043		99,850		107,989		-		594,453
YTD gross charge-offs		69		26		303		122		74		34		-		-		628

Commercial construction
Pass		31,074		45,739		82,447		73,657		-		-		1,972		-		234,889
Special mention		-		-		17,802		-		-		-		-		-		17,802
Substandard		-		-		-		-		-		-		-		-		—
Doubtful		-		-		-		-		-		-		-		-		—
Total commercial construction		31,074		45,739		100,249		73,657		-		-		1,972		-		252,691
YTD gross charge-offs		-		-		-		-		-		-		-		-		—

Residential real estate
Accrual		85,268		125,741		413,118		452,081		192,734		246,206		179,516		2,403		1,697,067
Non-accrual		-		-		469		673		113		8,572		577		5		10,409
Total residential real estate		85,268		125,741		413,587		452,754		192,847		254,778		180,093		2,408		1,707,476
YTD gross charge-offs		-		-		-		-		-		-		-		-		—

Consumer
Accrual		7,134		4,040		3,186		1,113		279		720		1,004		-		17,476
Non-accrual		3		-		11		-		-		-		-		-		14
Total Consumer		7,137		4,040		3,197		1,113		279		720		1,004		-		17,490
YTD gross charge-offs		-		63		35		25		10		21		-		-		154

Total loans before basis adjustment	$	287,243	$	430,336	$	1,421,224	$	1,055,027	$	458,789	$	906,334	$	291,058	$	2,408	$	4,852,419
Total YTD gross charge-offs	$	69	$	89	$	338	$	147	$	84	$	55	$	—	$	—	$	782

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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 $3.31 billion and $3.36 billion as of March 31, 2025 and December 31, 2024, 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 March 31, 2025 and December 31, 2024, the following weighted average assumptions were used in the calculation of fair value of MSRs:


	March 31,		December 31,
	2025		2024
Prepayment speed	7.90	%	7.67	%
Discount rate	9.92		9.97
Default rate	1.85		1.83

The following summarizes changes to MSRs for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024

	(in thousands)

Balance, beginning of period	$	44,500	$	46,111
Additions		53		211
Changes in fair value due to:
Reductions from loans paid off during the period		(782)		(769)
Changes in valuation inputs or assumptions		(1,151)		1,044
Balance, end of period	$	42,620	$	46,597

Contractually specified servicing fees, net of subservicing expense, included in other mortgage banking income amounted to $1.8 million and $2.0 million for the three ended March 31, 2025 and 2024, respectively.

6.GOODWILL AND OTHER INTANGIBLE ASSETS

At March 31, 2025 and December 31, 2024, the carrying value of the Bank’s goodwill was $59.0 million as of both dates.

Goodwill is tested for impairment annually on October 31 or on an interim basis if an event triggering impairment may have occurred. As of March 31, 2025, 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 amounts that would require an interim impairment assessment after October 31, 2024, including evaluating the reporting unit value as compared to the value implied by the merger agreement.

Management considered the merger agreement to be a triggering event under ASC 350. Accordingly, an interim qualitative assessment was performed. The qualitative assessment indicated that it was not more likely than not that impairment existed at March 31, 2025.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

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 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 $568,000 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 March 31, 2025.

7.DEPOSITS

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


	March 31,		December 31,
	2025		2024

	(in thousands)

NOW and demand deposit accounts	$	1,043,930	$	988,984
Regular savings and club accounts		908,136		895,232
Money market deposit accounts		1,200,600		1,195,209
Total non-certificate accounts		3,152,666		3,079,425

Term certificate accounts greater than $250,000		307,098		303,334
Term certificate accounts less than or equal to $250,000		769,097		766,510
Brokered deposits		389,860		401,484
Total certificate accounts		1,466,055		1,471,328
Total deposits	$	4,618,721	$	4,550,753

Total municipal deposits included in the table amounted to $478.9 million at March 31, 2025 and $519.5 million at December 31, 2024. 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 March 31, 2025 and December 31, 2024, total reciprocal deposits were $399.1 million and $376.3 million, respectively.

A summary of certificate accounts by maturity at March 31, 2025 is as follows:


			Weighted
			Average
	Amount		Rate

	(dollars in thousands)

Within 1 year	$	1,287,399	4.32	%
Over 1 year to 2 years		172,747	4.30
Over 2 years to 3 years		2,848	3.11
Over 3 years to 4 years		1,457	2.97
Over 4 years to 5 years		1,604	3.43
Total certificate deposits	$	1,466,055	4.31	%

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

8.BORROWINGS

Borrowed funds at March 31, 2025 and December 31, 2024 consisted of FHLB advances. Short-term advances were $155.0 million and $212.0 million with a weighted average rate of 4.53% and 4.50%, at March 31, 2025 and December 31, 2024, respectively. Long-term borrowings are summarized by maturity date below.


	March 31, 2025						December 31, 2024
	Amount by				Weighted		Amount by				Weighted
	Scheduled		Amount by		Average		Scheduled		Amount by		Average
	Maturity*		Call Date ⁽¹⁾		Rate ⁽²⁾		Maturity*		Call Date ⁽¹⁾		Rate ⁽²⁾

	(dollars in thousands)
Year ending December 31:
2025	$	987		170,987	—	%	$	60,987		230,987	4.32	%
2026		75,000		40,000	4.39			75,000		40,000	4.39
2027		85,000		—	4.17			85,000		—	4.17
2028		59,198		19,198	4.04			59,198		19,198	4.04
2029		23,128		13,128	4.06			23,128		13,128	4.06
2030		—		—	—			—		—	—
2031 and thereafter		1,234		1,234	1.68			1,242		1,242	1.68
	$	244,547		244,547	4.17	%	$	304,555	$	304,555	4.21	%

* 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 March 31, 2025.

⁽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 $2.10 billion at March 31, 2025 and $2.16 billion at December 31, 2024. As of March 31, 2025, the Company had $762.0 million of available borrowing capacity with the FHLB.

The Federal Reserve Discount Window extends credit based on eligible collateral. At March 31, 2025, the Bank had $629.4 million of borrowing capacity at the FRBB secured by pledged loans and securities whose collateral value was $362.1 million and $267.3 million, respectively. At March 31, 2025, 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.

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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 $3.0 million and $3.4 million at March 31, 2025 and 2024, respectively. The activity in the ACL on unfunded commitments for the three months ended March 31, 2025 and 2024 is presented below:


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

	(in thousands)

Balance at December 31, 2024	$	947	$	1,398	$	793	$	359	$	9	$	3,506
Provision		(40)		(354)		(103)		(9)		—		(506)
Balance at March 31, 2025	$	907	$	1,044	$	690	$	350	$	9	$	3,000

Balance at December 31, 2023	$	411	$	2,351	$	882	$	254	$	20	$	3,918
Provision		(51)		(421)		(37)		4		(1)		(506)
Balance at March 31, 2024	$	360	$	1,930	$	845	$	258	$	19	$	3,412

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 March 31, 2025 and December 31, 2024. The contract amounts represent credit risk.


	March 31,		December 31,
	2025		2024

	(in thousands)

Commitments to grant residential real estate loans-HarborOne Mortgage	$	50,920	$	38,929
Commitments to grant other loans		48,522		25,191
Unadvanced funds on home equity lines of credit		285,840		281,890
Unadvanced funds on revolving lines of credit		242,041		270,735
Unadvanced funds on construction loans		142,615		166,726

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.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

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 March 31, 2025, 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 March 31, 2025, and the Company expects the hedges to remain effective during the remaining terms of the swaps.

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
	March 31,		December 31,		March 31,		December 31,
	2025		2024		2025		2024

	(in thousands)

Loans held for investment (1)	$	100,567	$	100,080	$	567	$	80
Total	$	100,567	$	100,080	$	567	$	80

⁽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 March 31, 2025, the amortized cost basis of the closed portfolios used in these hedging relationships was $1.12 billion; the cumulative basis adjustments associated with these hedging relationships was $567,000 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.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

As of March 31, 2025, 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 0.02 years, the current weighted average fixed rate paid is 0.67%, the weighted average three-month SOFR swap receive rate is 4.64%, and the fair value is $76,000. The Company expects approximately $76,000 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).

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.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

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)
March 31, 2025:
Derivatives designated as hedging instruments
Fair value hedge - interest rate swaps	$	100,000	$	—	$	455
Cashflow hedge - interest rate swaps		100,000		76		—
Total derivatives designated as hedging instruments			$	76	$	455
Derivatives not designated as hedging instruments
Derivative loan commitments	$	41,938	$	540	$	54
Forward loan sale commitments		28,500		9		63
Interest rate swaps		980,343		18,850		18,850
Risk participation agreements		215,355		—		—
Interest Rate Futures		31,600		595		—
Total derivatives not designated as hedging instruments			$	19,994	$	18,967
Total derivatives			$	20,070	$	19,422

December 31, 2024:
Derivatives designated as hedging instruments
Fair value hedge - interest rate swaps	$	100,000	$	112	$	84
Cashflow hedge - interest rate swaps	$	100,000	$	1,040	$	—
Total derivatives designated as hedging instruments			$	1,152	$	84
Derivatives not designated as hedging instruments
Derivative loan commitments	$	38,929	$	374	$	61
Forward loan sale commitments		50,500		382		4
Interest rate swaps		1,015,448		23,021		23,021
Risk participation agreements		216,245		—		—
Interest Rate Futures		35,400		—		376
Total derivatives not designated as hedging instruments			$	23,777	$	23,462
Total derivatives			$	24,929	$	23,546

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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 March 31,
	Income	2025		2024

		(in thousands)
Derivatives designated as fair value hedge
Hedged items - loans	Interest income	$	488	$	(1,429)
Interest rate swap contracts	Interest income		(483)		1,420
Total		$	5	$	(9)
Derivatives not designated as hedging instruments
Derivative loan commitments	Mortgage banking income	$	174	$	57
Forward loan sale commitments	Mortgage banking income		(431)		310
Interest rate futures	Mortgage banking income		561		(221)
Interest rate swaps	Other income		—		—
Total		$	304	$	146

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


	Three Months Ended March 31,
	2025		2024

	(in thousands)
Derivatives designated as hedging instruments
Loss in OCI on derivatives (effective portion), net of tax	$	(708)	$	(369)
Gain reclassified from OCI into interest income (effective portion)	$	987	$	1,235

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 March 31, 2025:


							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	$	76	$	—	$	76	$	—	$	(76)	$	—
Interest rate swap on residential real estate loans	$	(455)	$	—	$	(455)	$	—	$	510	$	55
Derivatives not designated as hedging instruments
Customer interest rate swaps	$	15,842	$	—	$	15,842	$	—	$	(14,524)	$	1,318

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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 $20.4 million and $20.9 million at March 31, 2025 and December 31, 2024, respectively.

Operating lease liabilities, included in other liabilities and accrued expenses, were $22.1 million and $22.7 million at March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025 and December 31, 2024, there were no leases that had not yet commenced. At March 31, 2025, lease expiration dates ranged from nine months to 32.9 years and had a weighted average remaining lease term of 15.8 years. At December 31, 2024, lease expiration dates ranged from two months to 33.2 years and had a weighted average remaining lease term of 15.9 years.

Future minimum lease payments under non-cancellable leases and a reconciliation to the amount recorded as operating lease liabilities as of March 31, 2025 were as follows:


	March 31,
	2025
	(in thousands)

2025	$	2,137
2026		2,679
2027		2,555
2028		2,296
2029		2,045
Thereafter		15,083
Total lease payments		26,795
Imputed interest		(4,652)
Total present value of operating lease liabilities	$	22,143

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



	March 31, 2025		December 31, 2024
Weighted-average discount rate	2.16	%	2.15	%
Weighted-average remaining lease term (years)	15.81		15.85

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
	March 31,
	2025		2024

	(in thousands)
Lease Expense:
Operating lease expense	$	690	$	747
Short-term lease expense		31		26
Variable lease expense		6		5
Total lease expense	$	727	$	778
Other Information
Cash paid for amounts included in the measurement of lease liabilities-
operating cash flows for operating leases		706		737
Operating Lease - Operating cash flows (Liability reduction)		591		615
ROU assets obtained in exchange for new operating lease liabilities		51		38

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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 March 31, 2025, 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 March 31, 2025 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 March 31, 2025 and December 31, 2024 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.
March 31, 2025
Common equity Tier 1 capital to risk-weighted assets	$	562,181	11.9	%	$	213,244	4.5	%		N/A	N/A
Tier 1 capital to risk-weighted assets		562,181	11.9			284,325	6.0			N/A	N/A
Total capital to risk-weighted assets		614,504	13.0			379,100	8.0			N/A	N/A
Tier 1 capital to average assets		562,181	9.8			228,390	4.0			N/A	N/A

December 31, 2024
Common equity Tier 1 capital to risk-weighted assets	$	565,319	11.8	%	$	215,789	4.5	%		N/A	N/A
Tier 1 capital to risk-weighted assets		565,319	11.8			287,718	6.0			N/A	N/A
Total capital to risk-weighted assets		624,926	13.0			383,624	8.0			N/A	N/A
Tier 1 capital to average assets		565,319	9.8			229,865	4.0			N/A	N/A

HarborOne Bank
March 31, 2025
Common equity Tier 1 capital to risk-weighted assets	$	525,104	11.1	%	$	213,251	4.5	%	$	308,030	6.5	%
Tier 1 capital to risk-weighted assets		525,104	11.1			284,335	6.0			379,113	8.0
Total capital to risk-weighted assets		577,427	12.2			379,113	8.0			473,892	10.0
Tier 1 capital to average assets		525,104	9.2			228,360	4.0			285,450	5.0

December 31, 2024
Common equity Tier 1 capital to risk-weighted assets	$	528,185	11.0	%	$	215,846	4.5	%	$	311,778	6.5	%
Tier 1 capital to risk-weighted assets		528,185	11.0			287,795	6.0			383,727	8.0
Total capital to risk-weighted assets		587,792	12.3			383,727	8.0			479,659	10.0
Tier 1 capital to average assets		528,185	9.2			229,836	4.0			287,295	5.0

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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 (loss) income.

The following table presents changes in accumulated other comprehensive (loss) income by component for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025								2024

	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	$	(46)	$	(50,620)	$	771	$	(49,895)	$	85	$	(47,373)	$	3,666	$	(43,622)

Other comprehensive (loss) income before reclassifications		3		6,360		23		6,386		(1)		(4,940)		718		(4,223)
Amounts reclassified from accumulated other comprehensive (loss) income		(3)		—		(987)		(990)		(20)		—		(1,235)		(1,255)
Net current-period other comprehensive (loss) income		—		6,360		(964)		5,396		(21)		(4,940)		(517)		(5,478)
Related tax effect		—		(1,421)		256		(1,165)		—		348		148		496
Balance at end of period	$	(46)	$	(45,681)	$	63	$	(45,664)	$	64	$	(51,965)	$	3,297	$	(48,604)

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 March 31, 2025 and December 31, 2024.

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.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

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 March 31, 2025 and December 31, 2024.

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 March 31, 2025 and December 31, 2024.

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.

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.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

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 91% at March 31, 2025 and December 31, 2024, 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 March 31, 2025 and December 31, 2024, 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.

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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)
March 31, 2025
Assets

Securities available for sale	$	—	$	265,644	$	—	$	265,644
Loans held for sale		—		19,304		—		19,304
Mortgage servicing rights		—		42,620		—		42,620
Derivatives		—		19,521		549		20,070
	$	—	$	347,089	$	549	$	347,638
Liabilities

Derivatives	$	—	$	19,305	$	117	$	19,422

December 31, 2024
Assets

Securities available for sale	$	—	$	263,904	$	—	$	263,904
Loans held for sale		—		36,768		—		36,768
Mortgage servicing rights		—		44,500		—		44,500
Derivatives		—		24,173		756		24,929
	$	—	$	369,345	$	756	$	370,101
Liabilities

Derivatives	$	—	$	23,481	$	65	$	23,546

The table below presents, for the three months ended March 31, 2025 and 2024, the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis.


	Three Months Ended March 31,
	2025		2024

	(in thousands)
Assets: Derivative and Forward Loan Sale Commitments:
Balance at beginning of period	$	756	$	484
Total losses included in net income ⁽¹⁾		(207)		(35)
Balance at end of period	$	549	$	449
Changes in unrealized gains relating to instruments at period end	$	549	$	449

Liabilities: Derivative and Forward Loan Sale Commitments:
Balance at beginning of period	$	(65)	$	(451)
Total (losses) gains included in net income ⁽¹⁾		(52)		401
Balance at end of period	$	(117)	$	(50)
Changes in unrealized losses relating to instruments at period end	$	(117)	$	(50)

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

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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 March 31, 2025 or December 31, 2024.


	March 31,						December 31,
	2025						2024
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3

	(in thousands)

Collateral-dependent individually analyzed loans	$	—	$	—	$	15,037	$	—	$	—	$	47,463

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

March 31,

December 31,

Valuation Technique

2025

2024

(in thousands)

Collateral-dependent individually analyzed loans

15,037

47,463

Appraisals of collateral ⁽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 properties. Appraisals are adjusted for estimated liquidation expenses of 6% when the loan is expected to be repaid through the sale of the collateral. 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 collateral.

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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.


	March 31, 2025
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total

	(in thousands)

Financial assets:
Cash and cash equivalents	$	230,492	$	230,492	$	—	$	—	$	230,492
Securities available for sale		265,644		—		265,644		—		265,644
Securities held to maturity		19,211		—		19,067		—		19,067
Federal Home Loan Bank stock		18,330		N/A		N/A		N/A		N/A
Loans held for sale		19,304		—		19,304		—		19,304
Loans, net		4,771,710		—		—		4,581,889		4,581,889
Retirement plan annuities		15,817		—		—		15,817		15,817
Accrued interest receivable		18,158		—		18,158		—		18,158
Derivatives		20,070		—		19,521		549		20,070

Financial liabilities:
Deposits		4,618,721		—		—		4,618,333		4,618,333
Borrowed funds		399,547		—		400,102		—		400,102
Mortgagors' escrow accounts		10,370		—		—		10,370		10,370
Accrued interest payable		7,027		—		7,027		—		7,027
Derivatives		19,422		—		19,305		117		19,422


	December 31, 2024
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total

	(in thousands)
Financial assets:
Cash and cash equivalents	$	231,071	$	231,071	$	—	$	—	$	231,071
Securities available for sale		263,904		—		263,904		—		263,904
Securities held to maturity		19,627		—		19,285		—		19,285
Federal Home Loan Bank stock		23,277		N/A		N/A		N/A		N/A
Loans held for sale		36,768		—		36,768		—		36,768
Loans, net		4,796,398		—		—		4,577,140		4,577,140
Retirement plan annuities		15,698		—		—		15,698		15,698
Accrued interest receivable		18,393		—		18,393		—		18,393
Derivatives		24,929		—		24,173		756		24,929

Financial liabilities:
Deposits		4,550,753		—		—		4,549,755		4,549,755
Borrowed funds		516,555		—		516,287		—		516,287
Mortgagors' escrow accounts		8,537		—		—		8,537		8,537
Accrued interest payable		6,575		—		6,575		—		6,575
Derivatives		23,546		—		23,481		65		23,546

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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 March 31, 2025 and 2024, respectively, potential common shares of 115,552 and 105,836 were considered to be anti-dilutive and excluded from EPS.

The following table presents earnings per common share.


	Three Months Ended March 31,
	2025		2024

Net income available to common stockholders (in thousands)	$	5,500	$	7,300

Average number of common shares outstanding		43,544,104		45,285,471
Less: Average unallocated ESOP shares and non-vested restricted shares		(3,199,182)		(3,373,050)
Weighted average number of common shares outstanding used to calculate basic earnings per common share		40,344,922		41,912,421
Dilutive effect of share-based compensation		260,877		214,616
Weighted average number of common shares outstanding used to calculate diluted earnings per common share		40,605,799		42,127,037

Earnings per common share:
Basic	$	0.14	$	0.17
Diluted	$	0.14	$	0.17

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.

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

17.SEGMENT REPORTING

The Company’s reportable segments are determined by the Chief Financial Officer, who is the designated CODM based upon the products and services offered, primarily distinguished between banking and mortgage banking operations. They are also distinguished by the level of information provided to the CODM, who uses such information to review performance of various components of the business. The CODM assesses the performance of the Company’s segments by evaluating revenue streams, significant expenses, and comparing actual results to budgeted amounts. Segment pretax profit or loss is used to assess the performance of the banking segment by monitoring net interest and dividend income. Segment pretax profit or loss is used to assess the performance of the mortgage banking segment by monitoring mortgage banking income.

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.

Information about the reportable segments and reconciliation to the unaudited interim Consolidated Financial Statements at March 31, 2025 and 2024 and for the three months ended March 31, 2025 and 2024 is presented in the tables below.


	Three Months Ended March 31, 2025
	HarborOne		HarborOne
	Bank		Mortgage		Other		Eliminations		Consolidated

	(in thousands)
Interest and dividend income	$	64,205	$	470	$	10,005	$	(10,241)	$	64,439
Interest expense		(32,890)		(321)		-		241		(32,970)
Net interest and dividend income		31,315		149		10,005		(10,000)		31,469
Provision for credit losses		1,385		-		-		-		1,385
Net interest and dividend income, after provision for credit losses		29,930		149		10,005		(10,000)		30,084
Mortgage banking income:
Gain on sale of mortgage loans		-		2,716		-		-		2,716
Intersegment (loss) gain		(81)		209		-		(128)		-
Changes in mortgage servicing rights fair value		(134)		(1,238)		-		-		(1,372)
Other		167		1,941		-		-		2,108
Total mortgage banking (loss) income		(48)		3,628		-		(128)		3,452
Other noninterest income		6,440		-		-		(1)		6,439
Total noninterest income		6,392		3,628		-		(129)		9,891
Compensation and benefits		16,117		3,167		(499)		-		18,785
Other noninterest expense		12,068		1,337		660		-		14,065
Total noninterest expense		28,185		4,504		161		-		32,850
Income (loss) before income taxes		8,137		(727)		9,844		(10,129)		7,125
Provision (benefit) for income taxes		1,903		(236)		(42)		-		1,625
Net income (loss)	$	6,234	$	(491)	$	9,886	$	(10,129)	$	5,500

Total assets at period end	$	5,704,033	$	92,729	$	580,866	$	(677,298)	$	5,700,330
Total liabilities at period end	$	5,164,508	$	36,237	$	4,899	$	(81,281)	$	5,124,363
Goodwill at period end	$	59,042	$	-	$	-	$	-	$	59,042

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HarborOne Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)


	Three Months Ended March 31, 2024
	HarborOne		HarborOne
	Bank		Mortgage		Other		Eliminations		Consolidated

	(in thousands)
Interest and dividend income	$	66,743		443		3,517		(3,799)	$	66,904
Interest expense		(36,258)		(363)		-		299		(36,322)
Net interest and dividend income		30,485		80		3,517		(3,500)		30,582
Provision for credit losses		(168)		-		-		-		(168)
Net interest and dividend income, after provision for credit losses		30,653		80		3,517		(3,500)		30,750
Mortgage banking income:
Gain on sale of mortgage loans		-		2,013		-		-		2,013
Intersegment (loss) gain		(236)		308		-		(72)		-
Changes in mortgage servicing rights fair value		(32)		86		-		-		54
Other		180		2,097		-		(1)		2,276
Total mortgage banking (loss) income		(88)		4,504		-		(73)		4,343
Other noninterest income		6,391		10		(3)		-		6,398
Total noninterest income		6,303		4,514		(3)		(73)		10,741
Compensation and benefits		15,307		2,919		(590)		-		17,636
Other noninterest expense		12,100		1,392		622		-		14,114
Total noninterest expense		27,407		4,311		32		-		31,750
Income (loss) before income taxes		9,549		283		3,482		(3,573)		9,741
Provision (benefit) for income taxes		2,386		60		(5)		-		2,441
Net income (loss)	$	7,163	$	223	$	3,487	$	(3,573)	$	7,300

Total assets at period end	$	5,867,715	$	92,719	$	578,808	$	(677,020)	$	5,862,222
Total liabilities at period end	$	5,341,467	$	35,541	$	5,665	$	(98,134)	$	5,284,539
Goodwill at period end	$	59,042	$	-	$	-	$	-	$	59,042

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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 March 31, 2025, and our results of operations for the three months ended March 31, 2025 and 2024. 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 the impact of recently imposed tariffs by the U.S. Administration and foreign governments, 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; failure to complete the Merger or unexpected delays related to the Merger or either party’s inability to satisfy closing conditions required to complete the Merger; failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect Eastern or the expected benefits of the Merger); certain restrictions during the pendency of the Merger that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; the diversion of Management’s attention from ongoing business operations and opportunities; 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.

Recent Events

On April 24, 2025, the Company, the Bank, Eastern, and Eastern Bank, entered into the Merger Agreement. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Eastern will acquire the Company and the Bank through the merger of HarborOne with and into Eastern, with Eastern as the surviving entity. The Merger Agreement further provides that following the Merger, HarborOne Bank will merge with and into Eastern Bank, with Eastern Bank as the surviving entity. Under the terms of the Merger Agreement, the Company’s shareholders will receive for each share of Company common stock, at the holder’s election, either (i) the Stock Consideration or (ii) the Cash Consideration, subject to allocation procedures to ensure that the total number of shares of the Company’s common stock that receive the Stock Consideration represents between 75% and 85% of the total number of shares of the Company’s common stock outstanding immediately prior to the completion of the Merger.

Comparison of Financial Condition at March 31, 2025 and December 31, 2024

Total Assets. Total assets decreased $52.8 million, or 0.9%, to $5.70 billion at March 31, 2025 from $5.75 billion at December 31, 2024. The decrease primarily reflects a decrease of $31.5 million in loans and a $17.5 million decrease in loans held for sale.

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Cash and Cash Equivalents. Cash and cash equivalents decreased $579,000 to $230.5 million at March 31, 2025 from $231.1 million at December 31, 2024.

Loans Held for Sale. Loans held for sale at March 31, 2025 were $19.3 million, a decrease of $17.5 million from $36.8 million at December 31, 2024, reflecting decreased loan production at HarborOne Mortgage due to constrained loan demand from an uptick in mortgage rates and low for-sale inventory.

Loans, net. Net loans decreased $24.7 million, or 0.5%, to $4.77 billion at March 31, 2025 from $4.80 billion at December 31, 2024. The following table sets forth information concerning the composition of loans:


	March 31,		December 31,		Increase (Decrease)
	2025		2024		Dollars		Percent

	(dollars in thousands)
Commercial:
Commercial real estate	$	2,272,480	$	2,280,309	$	(7,829)		(0.3)	%
Commercial construction		216,013		252,691		(36,678)		(14.5)
Commercial and industrial		627,480		594,453		33,027		5.6
Total commercial loans		3,115,973		3,127,453		(11,480)		(0.4)
Residential real estate:
One- to four-family		1,487,942		1,506,571		(18,629)		(1.2)
Second mortgages and equity lines of credit		190,621		189,598		1,023		0.5
Residential construction		10,551		11,307		(756)		(6.7)
Total residential real estate loans		1,689,114		1,707,476		(18,362)		(1.1)
Consumer loans		15,379		17,490		(2,111)		(12.1)
Total loans before basis adjustment		4,820,466		4,852,419		(31,953)		(0.7)	`
Basis adjustment associated with fair value hedge ⁽¹⁾		567		80		487		608.8
Total loans		4,821,033		4,852,499		(31,466)		(0.6)
Allowance for credit losses on loans		(49,323)		(56,101)		6,778		(12.1)
Loans, net	$	4,771,710	$	4,796,398	$	(24,688)		(0.5)	%


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

Commercial real estate and construction loans decreased $44.5 million, as lending activity was subdued and Management favored payoffs over renewals for maturing loans secured by commercial real estate. Commercial and industrial loans increased $33.0 million. Residential real estate and consumer loans decreased $20.0 million, partly reflecting minimal loan purchases from HarborOne Mortgage during the quarter. Management continues to seek prudent commercial lending opportunities that deepen relationships with existing customers and that develop new relationships with strong borrowers.

Securities. Investment securities available for sale at March 31, 2025 were $265.6 million, an increase of $1.7 million, or 0.7%, from $263.9 million at December 31, 2024. The fair value of securities available for sale improved during the first quarter of 2025 but remain negatively impacted by unrealized losses of $58.8 million and $65.2 million as of March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025 and December 31, 2024, 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 $19.2 million at March 31, 2025 and $19.6 million at December 31, 2024, with a fair value of $19.1 million and $19.3 million, respectively.

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Mortgage servicing rights. MSRs are created as a result of our mortgage banking origination activities and accounted for at fair value. At March 31, 2025 we serviced mortgage loans for others with an aggregate outstanding principal balance of $3.31 billion. Total MSRs were $42.6 million at March 31, 2025 and $44.5 million at December 31, 2024. The change in total MSRs for the three months ended March 31, 2025 reflects additions of $53,000 from new mortgage originations, amortization from loan repayments of $782,000 and a negative fair value mark of $1.2 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 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 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 $4.62 billion and $4.55 billion at March 31, 2025 and December 31, 2024, respectively. The following table sets forth information concerning the composition of deposits:


	March 31,		December 31,		Increase (Decrease)
	2025		2024		Dollars		Percent

	(dollars in thousands)

Noninterest-bearing deposits	$	703,736	$	690,647	$	13,089		1.9	%
NOW accounts		340,185		298,329		41,856		14.0
Regular savings		908,136		895,232		12,904		1.4
Money market accounts		722,298		676,377		45,921		6.8
Term certificate accounts		1,075,565		1,069,222		6,343		0.6
Consumer and business deposits		3,749,920		3,629,807		120,113		3.3
Municipal deposits		478,941		519,462		(40,521)		(7.8)
Brokered deposits		389,860		401,484		(11,624)		(2.9)
Total deposits	$	4,618,721	$	4,550,753	$	67,968		1.5	%

Reciprocal deposits	$	399,117	$	376,268	$	22,849		6.1	%

Total deposits increased $68.0 million reflecting an increase of $120.1 million in consumer and business deposits partially offset by decreases in municipal deposits of $40.5 million and brokered deposits of $11.6 million. Brokered deposits provide a channel for the Company to seek additional funding outside the Company’s core market. We also 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 $399.1 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 March 31, 2025 and December 31, 2024.

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

The following table summarizes uninsured deposits at the date indicated:


	March 31,		December 31,
	2025		2024

	(in thousands)

Uninsured deposits, per regulatory reporting requirements	$	1,383,958	$	1,394,783
Less: Subsidiary deposits		440,385		428,632
Collateralized deposits		189,217		218,988
Uninsured deposits, after exclusions	$	754,356	$	747,163

Uninsured deposits, after excluding subsidiary deposits and collateralized deposits, represented 16% of total deposits at March 31, 2025. Management believes that this provides a more informative view of uninsured deposits, as subsidiary deposits are eliminated in consolidation and collateralized deposits are secured.

Borrowed Funds. Borrowings decreased $117.0 million to $399.5 million at March 31, 2025 from $516.6 million at December 31, 2024. At March 31, 2025, FHLB short-term borrowings were $155.0 million and long-term borrowings were $244.5 million. As of March 31, 2025, the Bank had $1.4 billion in available borrowing capacity across multiple relationships.

Stockholders’ equity. Total stockholders’ equity was $576.0 million at March 31, 2025, compared to $575.0 million at December 31, 2024 and $577.7 million at March 31, 2024. Stockholders’ equity increased 0.2% 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 three months ended March 31, 2025 were 513,855 shares totaling $5.9 million.

The tangible-common-equity-to-tangible-assets ratio (non-GAAP) was 9.15% at March 31, 2025, 9.05% at December 31, 2024, and 8.92% at March 31, 2024. See reconciliation in section entitled “Non-GAAP Financial Measures and Reconciliation to GAAP” below. At March 31, 2025, 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 March 31, 2025, 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 Months Ended March 31, 2025 and 2024

HarborOne Bancorp, Inc. Consolidated

Overview. Consolidated net income for the three months ended March 31, 2025 and 2024 was $5.5 million and $7.3 million, respectively.

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 March 31,
	2025							2024
	Average							Average
	Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost ⁽⁸⁾		Balance			Interest		Cost ⁽⁸⁾

	(dollars in thousands)
Interest-earning assets:
Investment securities ⁽¹⁾	$	346,902		$	1,993	2.33	%	$	372,787		$	2,065	2.23	%
Other interest-earning assets		213,400			2,278	4.33			356,470			4,659	5.26
Loans held for sale		17,237			296	6.96			14,260			243	6.85
Loans
Commercial loans ⁽²⁾⁽³⁾		3,125,369			41,796	5.42			3,040,835			41,653	5.51
Residential real estate loans⁽³⁾⁽⁴⁾		1,696,444			18,243	4.36			1,700,694			18,175	4.30
Consumer loans ⁽³⁾		16,601			294	7.18			20,539			358	7.01
Total loans		4,838,414			60,333	5.06			4,762,068			60,186	5.08
Total interest-earning assets		5,415,953			64,900	4.86			5,505,585			67,153	4.91
Noninterest-earning assets		290,734							299,153
Total assets	$	5,706,687						$	5,804,738
Interest-bearing liabilities:
Savings accounts	$	908,434			3,050	1.36		$	1,186,201			5,523	1.87
NOW accounts		303,719			127	0.17			289,902			75	0.10
Money market accounts		1,190,811			9,648	3.29			994,353			9,313	3.77
Certificates of deposit		1,060,313			11,343	4.34			855,070			8,554	4.02
Brokered deposits		387,294			3,475	3.64			356,459			3,434	3.87
Total interest-bearing deposits		3,850,571			27,643	2.91			3,681,985			26,899	2.94
Total borrowings		493,206			5,327	4.38			764,623			9,423	4.96
Total interest-bearing liabilities		4,343,777			32,970	3.08			4,446,608			36,322	3.29
Noninterest-bearing liabilities:
Noninterest-bearing deposits		677,314							654,436
Other noninterest-bearing liabilities		105,747							119,289
Total liabilities		5,126,838							5,220,333
Total equity		579,849							584,405
Total liabilities and equity	$	5,706,687						$	5,804,738
Tax equivalent net interest income					31,930							30,831
Tax equivalent interest rate spread ⁽⁵⁾						1.78	%						1.62	%
Less: tax equivalent adjustment					461							249
Net interest income as reported				$	31,469						$	30,582
Net interest-earning assets ⁽⁶⁾	$	1,072,176						$	1,058,977
Net interest margin ⁽⁷⁾						2.36	%						2.23	%
Tax equivalent effect						0.03							0.02
Net interest margin on a fully tax equivalent basis						2.39	%						2.25	%
Ratio of interest-earning assets to interest-bearing liabilities		124.68	%						123.82	%

Supplemental information:
Total deposits, including demand deposits	$	4,527,885		$	27,643			$	4,336,421		$	26,899
Cost of total deposits						2.48	%						2.49	%
Total funding liabilities, including demand deposits	$	5,021,091		$	32,970			$	5,101,044		$	36,322
Cost of total funding liabilities						2.66	%						2.86	%

⁽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

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 March 31,
	2025 v. 2024
	Increase (Decrease)				Total
	Due to Changes in				Increase
	Volume		Rate		(Decrease)

	(in thousands)
Interest-earning assets:
Investment securities	$	(158)	$	86	$	(72)
Other interest-earning assets		(1,654)		(727)		(2,381)
Loans held for sale		49		4		53
Loans
Commercial loans		927		(784)		143
Residential real estate loans		(69)		137		68
Consumer loans		(72)		8		(64)
Total loans		786		(639)		147
Total interest-earning assets		(977)		(1,276)		(2,253)
Interest-bearing liabilities:
Savings accounts		(1,142)		(1,331)		(2,473)
NOW accounts		4		48		52
Money market accounts		1,656		(1,321)		335
Certificates of deposit		2,103		686		2,789
Brokered deposit		271		(230)		41
Total interest-bearing deposits		2,892		(2,148)		744
Borrowings		(3,085)		(1,011)		(4,096)
Total interest-bearing liabilities		(193)		(3,159)		(3,352)
Change in net interest income	$	(784)	$	1,883	$	1,099

Interest and Dividend Income. Interest and dividend income on a tax equivalent basis decreased $2.3 million, or 3.4%, to $64.9 million for the three months ended March 31, 2025, compared to $67.2 million for the three months ended March 31, 2024. The significant components of the decrease were:

●

Interest on other earning assets decreased $2.4 million, or 51.1%, primarily reflecting a decrease in the average cash held at the FRB.

●

Interest on loans increased $147,000 primarily reflecting an increase in the average balance of loans.

Interest Expense. Interest expense decreased $3.4 million, or 9.2%, to $33.0 million for the three months ended March 31, 2025 from $36.3 million for the three months ended March 31, 2024. The significant components of the decrease were:

●

Interest expense on borrowings decreased $4.1 million or 43.5%, reflecting a decrease in the average balance and a 58-basis-point decrease in the cost of borrowings.

●

Interest expense on deposits increased $744,000, reflecting a $168.6 million increase in the average balance of interest-bearing deposits and a 3-basis-point decrease in the cost of deposits.

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Net Interest and Dividend Income. Net interest and dividend income on a tax equivalent basis increased $1.1 million, or 3.6%, to $31.9 million for the three months ended March 31, 2025 from $30.8 million for the three months ended March 31, 2024. The average balance of interest-earning assets and liabilities decreased $89.6 million and $102.8 million, respectively, and rate decreases on interest-bearing liabilities outpaced the decrease in the yield on interest-earning assets by 16 basis points. The net interest margin on a fully tax equivalent basis increased 14 basis points to 2.39% for the three months ended March 31, 2025 from 2.25% for three months ended March 31, 2024.

Income Tax Provision. The provision for income taxes was $1.6 million and $2.4 million for the three months ended March 31, 2025 and 2024, respectively. The effective tax rate for three months ended March 31, 2025 and 2024 was 22.8% and 25.1%, respectively.

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.

The tables below show the results of operations for the Company’s segments, HarborOne Bank and HarborOne Mortgage, for the three months ended March 31, 2025 and 2024, and the increase or decrease in those results:


	HarborOne Bank								HarborOne Mortgage
	Three Months Ended								Three Months Ended
	March 31,				Increase (Decrease)				March 31,				Increase (Decrease)
	2025		2024		Dollars		Percent		2025		2024		Dollars		Percent

	(dollars in thousands)

Net interest and dividend income	$	31,315	$	30,485	$	830	2.7	%	$	149	$	80	$	69	86.3	%
Provision (benefit) for credit losses		1,385		(168)		1,553	(924.4)			—		—		—	—
Net interest and dividend income, after provision (benefit) for credit losses		29,930		30,653		(723)	(2.4)			149		80		69	86.3
Mortgage banking income:
Gain on sale of mortgage loans		—		—		—	—			2,716		2,013		703	34.9
Intersegment gain (loss)		(81)		(236)		155	(65.7)			209		308		(99)	(32.1)
Changes in mortgage servicing rights fair value		(134)		(32)		(102)	318.8			(1,238)		86		(1,324)	(1,539.5)
Other		167		180		(13)	(7.2)			1,941		2,097		(156)	(7.4)
Total mortgage banking income (loss)		(48)		(88)		40	(45.5)			3,628		4,504		(876)	(19.4)
Other noninterest income		6,440		6,391		49	0.8			—		10		(10)	(100.0)
Total noninterest income		6,392		6,303		89	1.4			3,628		4,514		(886)	(19.6)
Noninterest expense		28,185		27,407		778	2.8			4,504		4,311		193	4.5
Income (loss) before income taxes		8,137		9,549		(1,412)	(14.8)			(727)		283		(1,010)	(356.9)
Provision (benefit) for income taxes		1,903		2,386		(483)	(20.2)			(236)		60		(296)	(493.3)
Net income (loss)	$	6,234	$	7,163	$	(929)	(13.0)	%	$	(491)	$	223	$	(714)	(320.2)	%

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

HarborOne Bank Segment

Results of Operations for the Three Months Ended March 31, 2025 and 2024

Net Income. The Bank’s net income decreased $929,000, or 13.0% to $6.2 million for the three months ended March 31, 2025 compared to $7.2 million for the three months ended March 31, 2024. The decrease in net income reflects a $1.6 million increase in provision for credit losses and a $778,000 increase in noninterest expense, partially offset by an $830,000 increase in net interest and dividend income and an $89,000 increase in noninterest income.

Provision for Credit Losses. The Bank recorded a provision for credit losses of $1.4 million for the three months ended March 31, 2025. The provision for loan credit losses was $1.9 million and the provision for unfunded commitments was a negative $506,000. The provision for loan credit losses was primarily due to a further specific reserve allocation for a previously identified classified commercial real estate loan, partially offset by a decrease in loan balances and qualitative factor adjustments.

Noninterest Income. Total noninterest income was $6.4 million for the three months ended March 31, 2025 compared to $6.3 million for the respective prior year period. The following table sets forth the components of noninterest income:


	Three Months Ended March 31,				Increase (Decrease)
	2025		2024		Dollars		Percent

	(dollars in thousands)

Intersegment loss	$	(81)	$	(236)	$	155		(65.7)	%
Secondary market loan servicing fees, net of guarantee fees		167		180		(13)		(7.2)
Changes in mortgage servicing rights fair value		(134)		(32)		(102)		318.8
Total mortgage banking (loss)		(48)		(88)		40		(45.5)	%
Interchange fees		2,701		2,566		135		5.3
Other deposit account fees		2,452		2,417		35		1.4
Income on retirement plan annuities		119		145		(26)		(17.9)
Bank-owned life insurance income		743		746		(3)		(0.4)
Swap fee income		3		73		(70)		(95.9)
Other		422		444		(22)		(5.0)
Total noninterest income	$	6,392	$	6,303	$	89		1.4	%

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

●

The interchange fees increased $135,000 due to accrued annual VISA incentives.

●

The Bank records an intersegment loss on loans purchased from HarborOne Mortgage that is offset in consolidation. The Bank purchased $7.5 million of residential mortgage loans from HarborOne Mortgage during the three months ended March 31, 2025 as compared to $16.8 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.

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Noninterest Expense. Total noninterest expense was $28.2 million for the three months ended March 31, 2025 compared to $27.4 million in the prior year period. The following table sets forth the components of noninterest expense:


	Three Months Ended March 31,				Increase (Decrease)
	2025		2024		Dollars		Percent

	(dollars in thousands)

Compensation and benefits	$	16,117	$	15,307	$	810		5.3	%
Occupancy and equipment		4,035		4,150		(115)		(2.8)
Data processing expenses		2,614		2,470		144		5.8
Loan expenses		106		71		35		49.3
Marketing		555		783		(228)		(29.1)
Deposit expenses		843		690		153		22.2
Postage and printing		339		424		(85)		(20.0)
Professional fees		916		1,056		(140)		(13.3)
Foreclosed and repossessed assets		5		4		1		25.0
Deposit insurance		1,050		1,164		(114)		(9.8)
Other expenses		1,605		1,288		317		24.6
Total noninterest expense	$	28,185	$	27,407	$	778		2.8	%

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

●

The increase in compensation expense primarily reflects annual salary increases.

●

The decrease in marketing expense reflects changes in timing of corporate contributions.

●

The increase in deposit expense primarily reflects increased expenses for alternative deposit insurance programs used by municipal depositors through reciprocal deposits and FHLB letter of credit fees and debit card losses.

●

The increase in other expenses reflects an increase of $309,000 in cloud computing expenses.

HarborOne Mortgage Segment

Results of Operations for the Three Months ended March 31, 2025 and 2024

Net Income. HarborOne Mortgage recorded a net loss of $491,000 for the three months ended March 31, 2025, compared to a net income of $223,000 for the respective prior year period. The HarborOne Mortgage segment’s results are heavily impacted by prevailing interest rates, refinancing activity, and home sales.

Table of Contents

HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Noninterest Income. Total noninterest income was $3.6 million for the three months ended March 31, 2025 as compared to $4.5 million for the prior year period. Noninterest income is primarily from mortgage banking income, for which the following table provides further detail:


	Three Months Ended March 31,				Increase (Decrease)
	2025		2024		Dollars		Percent

	(dollars in thousands)

Gain on sale of mortgage loans	$	2,716	$	2,013	$	703		34.9	%
Intersegment gain		209		308		(99)		(32.1)
Processing, underwriting and closing fees		366		319		47		14.7
Secondary market loan servicing fees net of guarantee fees		1,575		1,778		(203)		(11.4)
Changes in mortgage servicing rights fair value		(1,238)		86		(1,324)		(1,539.5)
Other		—		10		(10)		(100.0)
Total noninterest income	$	3,628	$	4,514	$	(886)		(19.6)	%

Originated mortgage servicing rights included in gain on sale of mortgage loans	$	53	$	210	$	(157)		(74.8)	%
Change in 10-year Treasury Constant Maturity rate in basis points		(35)		32

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. Conversely, when interest rates fall and prepayment speeds increase, MSR fair value tends to decrease. For the three months ended March 31, 2025, the MSR fair value declined $1.1 million compared to an increase of $1.0 million for the prior year period. Principal payments for the three months ended March 31, 2025 and 2024 were $712,000 and $696,000, respectively. MSR fair value change also includes an economic hedge to partially mitigate potential MSR valuation losses in a declining rate environment. For the three months ended March 31, 2025, hedging gains were $561,000 compared to a hedging loss of $221,000 for the three months ended March 31, 2024.

●

Loan production and gain on sale of mortgages for three months ended March 31, 2025 increased versus the comparable prior year periods as mortgage demand picked up slightly but continues to be hampered by low for-sale inventory.

The following tables provide additional loan production detail:


	Three Months Ended March 31,
	2025				2024
	Loan					Loan
	Amount		% of Total			Amount		% of Total

	(dollars in thousands)
Product Type
Conventional	$	81,937	71.8	%		$	74,582	73.0	%
Government		15,481	13.6				12,226	12.0
State Housing Agency		5,360	4.7				4,542	4.4
Jumbo		11,332	9.9				10,703	10.6
Seconds		25	-				49	0.0
Total	$	114,135	100.0	%		$	102,102	100.0	%

Purpose
Purchase	$	96,828	84.9	%		$	84,002	82.3	%
Refinance		15,555	13.6				14,523	14.2
Construction		1,752	1.5				3,577	3.5
Total	$	114,135	100.0	%		$	102,102	100.0	%

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Noninterest Expense. Total noninterest expense was $4.5 million for the three months ended March 31, 2025 compared to $4.3 million for the respective prior year period. The following table sets forth the components of noninterest expense:


	Three Months Ended March 31,				Increase (Decrease)
	2025		2024		Dollars		Percent

	(dollars in thousands)

Compensation and benefits	$	3,167	$	2,919	$	248		8.5	%
Occupancy and equipment		553		604		(51)		(8.4)
Data processing expenses		11		9		2		22.2
Loan expenses		325		304		21		6.9
Marketing		33		33		—		—
Postage and printing		12		12		—		—
Professional fees		127		132		(5)		(3.8)
Other expenses		276		298		(22)		(7.4)
Total noninterest expense	$	4,504	$	4,311	$	193		4.5	%

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

●

The increase in compensation and benefits primarily reflects increased commission expense consistent with the changes in mortgage origination volumes.

●

The decrease in occupancy and equipment reflects lower rent expense on fewer offices.

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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.


	March 31,			December 31,
	2025			2024

	(dollars in thousands)
Non-accrual loans:
Commercial real estate	$	8,610		$	16,836
Commercial construction		—			—
Commercial and industrial		10,538			2,204
Residential real estate:
One- to four-family		10,764			9,545
Second mortgages and equity lines of credit		941			864
Consumer		49			14
Total non-accrual loans		30,902			29,463
Other real estate owned and repossessed assets:
One- to four-family residential real estate owned		—			—
Other repossessed assets		6			10
Total nonperforming assets	$	30,908		$	29,473

Period end allowance for credit losses balance	$	49,323		$	56,101
Period end total loan balance	$	4,821,033		$	4,852,499
Allowance for credit losses to total loans⁽¹⁾		1.02	%		1.16	%
Allowance for credit losses to non-accrual loans		159.61	%		190.41	%
Total nonperforming loans to total loans ⁽¹⁾		0.64	%		0.61	%
Total nonperforming assets to total assets		0.54	%		0.51	%

⁽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 $30.9 million at March 31, 2025, compared to $29.5 million at December 31, 2024. Nonperforming assets as a percentage of total assets were 0.54% at March 31, 2025 and 0.51% at December 31, 2024. As of March 31, 2025, classified CRE and CRE construction loans amounted to $55.3 million, and includes:

●

An $8.6 million nonaccrual loan classified as doubtful, collateralized by a property included in the office sector. An additional specific reserve allocation of $3.6 million was recorded in the first quarter of 2025 based on the re-evaluation of collateral due to a revised exit strategy, adding to an existing specific reserve allocation of $4.7 million. The aggregate allowance of $8.3 million was charged off in the first quarter of 2025. This is a participation loan originated by another institution within our market.

●

A $15.3 million credit, modified during the second quarter of 2024, due to the borrower experiencing financial difficulty with a specific reserve of $1.7 million. 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. A workout is currently in progress that includes the assumption of a modified loan by a new borrower.

●

An $11.8 million loan, adequately collateralized by multifamily properties. The loan is current and the property underlying the loan is 98% occupied. The sponsor continues to cooperate with the bank in addressing the remaining credit weakness.

●

A $6.2 million loan, collateralized by office space, with a $457,000 specific reserve. The loan is current and 46% occupied.

The commercial and industrial loan category has an $8.6 million credit to a healthcare practice, is classified as substandard with no specific reserve, and is currently being modified.

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

Loans to borrowers experiencing financial difficulty and modified during the three months ended March 31, 2025 was $429,000 representing one residential real estate credit that was provided a rate reduction and term extension modifications. As of March 31, 2025, modified loans to borrowers experiencing financial difficulty had a current payment status. During the three months ended March 31, 2025 there were no loans to borrowers experiencing financial difficulty that had a payment default and were modified in the twelve months prior to the default.

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 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 March 31, 2025
						Risk Rating
			Percent			Special
	Balance		to Total			Mention		Substandard		Doubtful		Nonaccrual

	(dollars in thousands)

Flex/Industrial	$	561,523	22.6	%	$	13,270	$	4,508	$	—	$	—
Multifamily		459,656	18.5	%		5,584		16,101		—		—
Hotels		312,042	12.5	%		12,144		4,500		—		—
Retail		295,138	11.9	%		6,817		—		—		—
Healthcare		217,010	8.7	%		35,658		—		—		—
Office		211,538	8.5	%		—		19,907		8,610		8,610
All Other		431,586	17.3	%		33,722		1,631		—		—
Total CRE and CRE construction	$	2,488,493	100.0	%	$	107,195	$	46,647	$	8,610	$	8,610

Management performs comprehensive reviews and works proactively with 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 March 31, 2025, the potential impact of changes to Management’s judgements on total commercial qualitative risk factors ranged between a $17.6 million reduction and $26.2 million

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

increase in the ACL. This sensitivity analysis does not represent a change to Management’s judgement but rather provides a hypothetical result to assess the sensitivity of the ACL to a key input.

The ACL was $49.3 million, or 1.02% of total loans, at March 31, 2025, compared to $56.1 million, or 1.16% of total loans, at December 31, 2024. The ACL on individually analyzed loans amounted to $2.4 million, or 2.9% 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 $3.0 million at March 31, 2025, compared to $3.5 million at December 31, 2024.

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



	March 31, 2025						December 31, 2024
			% 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	$	24,824	50.33	%	47.14	%	$	30,764	54.84	%	46.99	%
Commercial construction		3,457	7.01		4.48			4,257	7.59		5.21
Commercial and industrial		10,966	22.23		13.02			10,700	19.07		12.25
Residential real estate:
One- to four-family		8,590	17.42		30.87			8,720	15.55		31.05
Second mortgages and equity lines of credit		1,203	2.44		3.95			1,348	2.40		3.91
Residential construction		168	0.34		0.22			186	0.33		0.23
Consumer		115	0.23		0.32			126	0.22		0.36
Total allowance for credit losses on loans	$	49,323	100.00	%	100.00	%	$	56,101	100.00	%	100.00	%

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HarborOne Bancorp, Inc.

Management’s Discussion and Analysis

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 March 31,
	2025						2024
			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	$	2,275,868	$	8,300	1.46	%	$	2,457,496	$	(100)	(0.02)	%
Commercial construction		243,146		—	—	%		221,460		—	—	%
Commercial and industrial		606,355		362	0.24	%		361,879		182	0.20	%
Total commercial loans	$	3,125,369	$	8,662	1.11	%	$	3,040,835	$	82	0.01	%

Residential real estate:
One- to four-family	$	1,496,249	$	—	—	%	$	1,509,433	$	—	—	%
Second mortgages and equity lines of credit		189,700		(10)	(0.02)	%		175,084		(3)	(0.01)	%
Residential real estate construction		10,495		—	—	%		16,177		—	—	%
Total residential real estate loans	$	1,696,444	$	(10)	(0.00)	%	$	1,700,694	$	(3)	(0.00)	%

Total Consumer loans	$	16,601	$	17	0.41	%	$	20,539	$	46	0.90	%

Total loans	$	4,838,414	$	8,669	0.72	%	$	4,762,068	$	125	0.01	%

The Company recorded a $1.4 million provision for credit losses for the quarter ended March 31, 2025. The provision for loan credit losses was $1.9 million and the provision for unfunded commitments was a negative $506,000. The provision for loan credit losses was primarily due to a further specific reserve allocation for a previously identified classified commercial real estate loan, partially offset by a decrease in loan balances and qualitative factor adjustments. The specific reserve allocation recorded on the commercial real estate loan was $3.6 million based on the re-evaluation of collateral due to a revised exit strategy, adding to a specific reserve allocation of $4.7 million. The aggregate allowance of $8.3 million was charged off in the first quarter of 2025. Net charge-offs totaled $8.7 million, or 0.72% of average loans outstanding on an annualized basis for the quarter ended March 31, 2025.

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 March 31, 2025 and 2024, 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	March 31, 2025				March 31, 2024
(basis points) ⁽¹⁾	Year One		Year Two		Year One		Year Two
+300	(11.5)	%	(8.9)	%	(9.7)	%	(14.5)	%
+200	(7.6)	%	(5.7)	%	(6.4)	%	(9.4)	%
+100	(3.7)	%	(2.5)	%	(3.1)	%	(4.3)	%
-100	2.9	%	2.3	%	3.6	%	5.5	%
-200	4.2	%	1.6	%	3.9	%	5.5	%
-300	5.2	%	(0.1)	%	3.7	%	4.1	%
-400	6.0	%	(2.6)	%	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, 300 and 400 basis points and down 100, 200, 300 and 400 basis points.

The table below sets forth, as of March 31, 2025, 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 March 31, 2025
							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)

+ 400	$	393,763	$	(224,775)	(36.3)	%	8.1	%	(3.4)	%
+ 300		461,796		(156,742)	(25.3)		9.2		(2.3)
+ 200		521,906		(96,632)	(15.6)		10.2		(1.3)
+ 100		578,887		(39,651)	(6.4)		11.0		(0.5)
0		618,538		—	—		11.5		—
- 100		643,030		24,492	4.0		11.6		0.1
- 200		607,917		(10,621)	(1.7)		10.7		(0.8)
- 300		557,598		(60,940)	(9.9)		9.6		(1.9)
-400		482,483		(136,055)	(22.0)		8.2		(3.3)

⁽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 $230.5 million at March 31, 2025, 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 March 31, 2025, we had additional borrowing capacity of $762.0 million from the FHLB and $629.4 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 $3.0 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 March 31, 2025, the Company had $389.9 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 March 31, 2025, we had outstanding commitments to originate loans of $99.4 million and unadvanced funds on loans of $670.5 million. Certificates of deposit that are scheduled to mature within one year from March 31, 2025 totaled $1.29 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, 2024.

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 March 31, 2025, 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:



	March 31,
	2025			2024

	(dollars on thousands)
Tangible common equity:
Total stockholders' equity	$	575,967		$	577,683
Less: Goodwill		59,042			59,042
Less: Other intangible assets⁽¹⁾		568			1,326
Tangible common equity	$	516,357		$	517,315

Tangible assets:
Total assets	$	5,700,330		$	5,862,222
Less: Goodwill		59,042			59,042
Less: Other intangible assets⁽¹⁾		568			1,326
Tangible assets	$	5,640,720		$	5,801,854

Tangible common equity / tangible assets ⁽²⁾		9.15	%		8.92	%

⁽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 March 31, 2025. 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 March 31, 2025 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

This section supplements and updates certain of the information found under Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 6, 2025 (“Annual Report”), based on information currently known to us and recent developments since the date of the Annual Report filing. The matters discussed below should be read in conjunction with the risks described in Part I. Item 1A. “Risk Factors” of our Annual Report. However, the risks and uncertainties that we face are not limited to those described below and those set forth in the Annual Report. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business and the trading price of our common stock.

Risks Related to the Merger

The pendency of the Merger could adversely affect the Company’s business, results of operations and financial condition.

The pendency of the Merger could cause disruptions in and create uncertainty surrounding the Company’s business, including affecting the Company’s relationships with the Company’s existing and future customers, suppliers and employees, which could have an adverse effect on the Company’s business, results of operations and financial condition, regardless of whether the Merger is completed. In particular, we could potentially lose additional important personnel as a result of the departure of employees who decide to pursue other opportunities in light of the Merger. We could also potentially lose additional customers or suppliers, and new customer or supplier contracts could be delayed or decreased. In addition, we have allocated, and will continue to allocate, significant Management resources towards the completion of the transaction, which could adversely affect the Company’s business and results of operations.

We are subject to restrictions on the conduct of the Company’s business prior to the consummation of the Merger as provided in the Merger Agreement, including, among other things, certain restrictions on the Company’s ability to acquire other businesses, sell or transfer the Company’s assets, and amend the Company’s organizational documents. These restrictions could result in the Company’s inability to respond effectively to competitive pressures, industry developments and future opportunities, retain key employees and may otherwise harm the Company’s business, results of operations and financial condition.

Because the price of Eastern common stock will fluctuate, the Company’s shareholders cannot be certain of the market value of the Stock Consideration.

Upon completion of the Merger, the shares of the Company’s common stock outstanding immediately prior to the effective time of the Merger will be converted into the right to receive, at each shareholder’s election, either the Stock Consideration or the Cash Consideration, subject to allocation procedures to ensure the total number of shares of the Company’s common stock that receive the Stock Consideration represents between 75% and 85% of the total number of shares of the Company’s common stock outstanding immediately prior to the effective time of the Merger. The exchange ratio for the Stock Consideration is fixed. As a result, the dollar value of the Stock Consideration that the Company’s shareholders may receive upon completion of the Merger will depend upon the market value of Eastern common stock at the time of completion of the Merger, which may be lower or higher than the closing price of Eastern common stock on the last full trading day preceding the date the Merger Agreement was executed. The market values of Eastern common stock and the Company’s common stock have varied since the Merger Agreement was executed and will continue to vary in the future due to changes in the business, operations or prospects of the Company and Eastern, market assessments of

the Merger, regulatory considerations, market and economic considerations, and other factors, most of which are beyond the Company’s control.

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The Merger is subject to the receipt of consents and approvals from governmental authorities that may delay the date of completion of the Merger or impose conditions that could have an adverse effect on the Company.

Before the Merger may be completed, various consents, approvals, waiver or non-objections must be obtained from state and federal governmental authorities, including the Federal Reserve, the FDIC, the Massachusetts Commissioner of Banks, and the Massachusetts Housing Partnership Fund. Satisfying the requirements of these governmental authorities may delay the date of completion of the Merger. In addition, these governmental authorities may include conditions on the completion of the Merger, or require changes to the terms of the Merger. Eastern is not obligated to complete the Merger should any regulatory approval prohibit or materially limit the ownership or operation by Eastern or any of its subsidiaries, of all or any material portion of the business or assets of the Company or any of its subsidiaries or Eastern or its subsidiaries, or compel Eastern or any of its subsidiaries to dispose of or hold separate all or any material portion of the business or assets of the Company or any of its subsidiaries or Eastern or any of its subsidiaries.

The Merger and related transactions are subject to approval by the Company’s shareholders.

The Merger cannot be completed unless the Company’s shareholders approve the Merger Agreement by the affirmative vote of the holders of at least two-thirds of the outstanding shares of the Company’s common stock. If shareholder approval is not obtained by the Company’s shareholders, the Merger cannot be completed.

Failure to complete the Merger could negatively impact the stock price of the Company and future businesses and financial results of the Company.

If the Merger is not completed, the ongoing businesses, financial condition and results of operation of the Company may be adversely affected and market prices of the Company’s common stock may decline significantly, particularly to the extent that the current market prices reflect a market assumption that the Merger will be consummated. If the consummation of the Merger is delayed, including by the receipt of a competing acquisition proposal, the Company’s business, financial condition and results of operations may be materially adversely affected.

In addition, the Company has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the Merger Agreement, as well as the costs and expenses of filing, printing and mailing the proxy statement/prospectus and all filing and other fees paid to the SEC and other regulatory agencies in connection with the Merger. If the Merger is not completed, the Company would have to recognize these expenses without realizing the expected benefits of the Merger. Any of the foregoing, or other risks arising in connection with the failure of or delay in consummating the Merger, including the diversion of Management attention from pursuing other opportunities and the constraints in the Merger Agreement on the ability to make significant changes to the Company’s ongoing business during the pendency of the Merger, could have a material adverse effect on the Company’s businesses, financial conditions and results of operations.

Additionally, the Company’s business may have been adversely impacted by the failure to pursue other beneficial opportunities due to the focus of Management on the Merger, without realizing any of the anticipated benefits of completing the Merger. If the Merger Agreement is terminated and the Company’s board of directors seeks another merger or business combination, the Company’s shareholders cannot be certain that the Company will be able to find a party willing to engage in a transaction on more attractive terms than the Merger.

Eastern may be unable to successfully integrate the Company’s operations or otherwise realize the expected benefits from the Merger, which could adversely affect Eastern’s results of operations and financial condition.

The Merger involves the integration of two companies that have previously operated independently. The difficulties of combining the operations of the two companies include:

●

Integrating personnel with diverse business backgrounds;

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Converting customers to new systems;

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Combining different corporate cultures; and

●

Retaining key employees.

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The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of the business and the loss of key personnel. The integration of the two companies will require the experience and expertise of certain of the Company’s key employees who are expected to be retained by Eastern. Eastern may not be successful in retaining these employees for the time period necessary to successfully integrate the Company’s operations with those of Eastern. The diversion of Management’s attention and any delay or difficulty encountered in connection with the Merger and the integration of the two companies’ operations could have an adverse effect on the business and results of operations of Eastern following the Merger.

The success of the Merger will depend, in part, on Eastern’s ability to realize the anticipated benefits and cost savings from combining the Company’s business with Eastern’s. If Eastern is unable to successfully integrate the Company, the anticipated benefits and cost savings of the Merger may not be realized fully or may take longer to realize than expected. For example, Eastern may fail to realize the anticipated increase in earnings and cost savings anticipated to be derived from the Merger. In addition, as with regard to any merger, a significant decline in asset valuations or cash flows may also cause Eastern not to realize expected benefits.

The termination fee and the restrictions on solicitation contained in the Merger Agreement may discourage other companies from trying to acquire the Company.

Until the completion of the Merger, with some exceptions, the Company is prohibited from soliciting, initiating, knowingly encouraging or participating in any discussion of or otherwise considering any inquiry or proposal that may lead to an acquisition proposal, such as a merger or other business combination transaction, with any person other than Eastern. In addition, the Company has agreed to pay an $18.9 million termination fee to Eastern in specified circumstances. These provisions could discourage other companies that may have an interest in acquiring the Company from considering or proposing such an acquisition even though those other companies might be willing to offer greater value to the Company’s shareholders than Eastern has offered in the Merger. The payment of the termination fee could also have a material adverse effect on the Company’s financial condition.

The Company’s shareholders will not be entitled to dissenters' or appraisal rights in the Merger.

Dissenters’ or appraisal rights are statutory rights that, if applicable under law, enable shareholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction. Under the Massachusetts Business Corporation Act, holders of Company common stock will not be entitled to dissenters’ or appraisal rights in the Merger with respect to their shares of Company common stock.

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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
January 1 to January 31, 2025		162,130	$	11.97		162,130		1,266,897
February 1 to February 28, 2025		165,500		11.88		327,630		1,101,397
March 1 to March 31, 2025		186,225		10.92		513,855		915,172
		513,855	$	11.56		513,855		915,172

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 first quarter of 2025, the Company repurchased 513,855 shares at an average cost of $11.56 per share in open market transactions under the share repurchase program. On April 24, 2025, the Company suspended the repurchase program following its entry into the Merger Agreement.

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 March 31, 2025, 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 March 31, 2025 (and are numbered in accordance with Item 601 of Regulation S-K):

Exhibit No.		Description

2.1		Agreement and Plan of Merger by and among Eastern Bankshares, Inc., Eastern Bank, HarborOne Bancorp, Inc. and HarborOne Bank, dated as of April 24, 2025 (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 24, 2025)
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 March 31, 2025 and December 31, 2024, (ii) the Consolidated Statements of Income for the three months ended March 31, 2025 and 2024 (iii) the Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2025 and 2024, (iv) the Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2025 and 2024, (v) the Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024, 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: May 6, 2025	By:	/s/ Joseph F. Casey
		Joseph F. Casey
		President and Chief Executive Officer (Principal Executive Officer)

Date: May 6, 2025	By:	/s/ Stephen W. Finocchio
		Stephen W. Finocchio
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)