Banker & Tradesman photo / File
HarborOne reduced staff in its mortgage division during the first quarter and plans to make other cost saving moves this year.
The bank said in its first quarter earnings statement that it had reduced staff at HarborOne Mortgage for an expected annual cost savings of $1.2 million. The bank said it had severance expenses during the quarter of $249,000.
HarborOne said it has taken further steps already in the second quarter toward cost savings and organizational efficiencies, leading to an estimated annual savings of $2.9 million. Severance expenses for these moves total $452,000.
The staff reduction affected an equivalent of 37 full-time employees, according to the bank’s investor presentation. The bank had 609 full-time equivalent employees as of Dec. 31.
“While significant challenges presented themselves in Q1, I have tremendous confidence in our ability to manage through the current environment. Our excellent credit quality, strong capital position, and deposit growth provide the foundation for that confidence,” Joseph F. Casey, HarborOne’s president and CEO, said in the statement. “Our team remains highly focused on ensuring stability in our deposit base. The Company has been proactive in reducing expenses at both HarborOne Mortgage and the Bank and will continue to look for additional opportunities. Our resilience and strategic discipline position us well to drive long-term value for our shareholders.”
HarborOne had first quarter net income of $7.3 million, or $0.16 per diluted share, compared to net income of $12.3 million, or $0.25 per diluted share, in the first quarter of 2022. Net income for fourth quarter 2022 was $9.6 million, or $0.21 per diluted share.
The bank said it would see additional long-term savings by relocating its Randolph branch to a smaller location and closing one of its four Brockton branches.
HarborOne’s first quarter noninterest expenses were $31.5 million, a decrease of $3.1 million, or 9 percent, from the fourth quarter and down $3.3 million, or 9.5 percent, year-over-year.
Total assets increased in the first quarter by 4 percent to $5.57 billion compared to $5.36 billion at the end of 2022. The bank said the asset growth primarily reflected an increase of $152.5 million in short-term investments and a $73 million increase in loans.
“The increase in short-term investments reflects management’s pro-active liquidity-enhancing measures in response to financial industry concerns,” the bank said.
Loans increased 1.6 percent to $4.62 billion, up from $4.55 billion at the end of 2022. The bank attributed the loan growth to increases of $36.4 million in commercial real estate loans, $13.4 million in commercial construction loans and $33.6 million in residential real estate loans. These increases were partially offset by decreases in commercial and industrial loans of $1.2 million and consumer loans of $9.2 million.
The bank also saw deposits grow during the quarter. Deposits totaled $4.24 billion at the end of the first quarter compared to $4.19 billion at the end of 2022. The bank said noncertificate accounts decreased $124.9 million during the quarter, while term certificate accounts increased by $155.6 million and brokered deposits increased by $21.5 million.
More than 70 percent of HarborOne’s first quarter deposits had FDIC insurance. Because of its size, the bank withdrew on Feb. 24 from the Massachusetts Depositors Insurance Fund, the state’s private insurance fund for deposits that exceed FDIC coverage at member banks. DIF coverage does remain in place at HarborOne until Feb. 24, 2024, and longer for certificates of deposit that have not yet matured.
