HarborOne Bancorp (HONE +0.00%), a Massachusetts-based community-oriented bank holding company, released its second quarter results on July 24, 2025. The bank reported diluted earnings per share of $0.20 (GAAP), topping consensus forecasts of $0.19 GAAP EPS. Total revenue (GAAP) reached $45.44 million. The quarter showed steady improvement in profitability and margin, even as the bank manages funding mix and asset quality amid preparation for its merger with Eastern Bankshares. Overall, the period reflected incremental progress, with key profitability measures rising despite pockets of deposit and credit-related pressure.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS, Diluted (GAAP) | $0.20 | $0.19 | $0.18 | 11.1% |
| Revenue (GAAP) | $45.44 million | $45.34 million | $43.27 million | 5.0% |
| Net Interest Margin | 2.52% | 2.31% | 0.21 pp | |
| Noninterest Expense | $34.07 million | $33.14 million | 2.8% | |
| Return on Average Assets | 0.57% | 0.50% | 0.07 pp |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Key Success Factors
HarborOne Bancorp is community-based and It serves customers throughout Eastern Massachusetts and Rhode Island. Its core business includes providing consumer and commercial banking services, with commercial real estate lending representing its largest loan product category. It supports customers through a network of 30 full-service branches, online services, and commercial lending offices in Massachusetts and Rhode Island.
The company’s current focus areas center around navigating a highly competitive regional banking market, strong risk management in its commercial loan portfolio, and controlling costs to protect earnings. Its digital platform, HarborOne U, provides free digital content, webinars, and recordings for small business and personal financial education.
Quarter Review: Core Results and Notable Developments
Net income (GAAP) rose 46.5% from the prior quarter to $8.1 million. The increase came as noninterest income jumped 23.6% from the previous period, driven by a rebound in mortgage banking activities. Volumes at HarborOne Mortgage, LLC, the bank’s residential mortgage subsidiary, totaled $176.2 million in closed loans. However, the gain on sale margin for those loans compressed to 1.92% from 2.38%.
Net interest and dividend income (GAAP) increased compared to earlier periods due to higher prepayment fees and improved deposit cost management. The net interest margin was 2.52% for the quarter ended June 30, 2025. The yield on loans rose, but average loan balances declined as commercial real estate and construction loans decreased by $118.4 million, favoring payoffs over renewals for loans secured by commercial real estate.
Noninterest expense (GAAP) rose to $34.07 million, but this included $1.7 million in merger costs tied to the anticipated merger with Eastern Bankshares. Excluding these costs, core expense edged down as compensation remained unchanged and occupancy costs fell. Marketing expense went up, reflecting a targeted customer campaign. The core efficiency ratio, a non-GAAP measure of expenses as a percentage of revenue, improved significantly, dropping from 78.97% in Q1 2025 to 71.68%.
Asset quality was a mixed story. Net charge-offs fell sharply to $1.7 million from $8.7 million in Q1 2025, as earlier losses related to a single commercial real estate loan did not repeat. Still, Criticized and classified commercial loans increased by $6.6 million, mostly in construction. HarborOne’s total allowance for credit losses was 1.01% of total loans as of June 30, 2025, compared to 1.02% as of March 31, 2025. Nonperforming assets rose to $32.7 million, making up 0.58% of total assets.
Funding, Deposits, and Technology Initiatives
Deposit pressure remains a concern. Total deposits fell $125.1 million to $4.49 billion as customers shifted funds and some left for rate-competitive alternatives. Non-certificate (typically checking and savings) deposits dropped $66.5 million, while brokered deposits—funds sourced through outside brokers, usually at a higher rate—decreased $51.1 million. The cost of deposits declined slightly to 2.45%. Borrowings increased by $40.1 million. HarborOne’s loan-to-deposit ratio, a measure of lending activity versus available funding, stood at 105.2%.
The HarborOne U digital portal is designed for customer financial education, webinars, and digital content.
Strategic Outlook and Dividend Policy
Looking ahead, HarborOne’s management did not provide standalone financial guidance for future periods, as attention is now focused on the planned merger with Eastern Bankshares. The bank suspended its share buyback program and reported $1.7 million in merger-related expenses.
There was no announcement of a change to the dividend in this quarter. The bank’s near-term outlook will depend on successful execution of the merger and the ability to maintain credit quality while funding costs remain under pressure. Investors should watch for developments in deposit flows, shifts in criticized and nonperforming loan balances, and additional communications regarding the merger process in upcoming quarters.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
