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Why HarborOne Bancorp's Stock Is Rising This Week

By Bram Berkowitz – Oct 27, 2022 at 3:01PM

Key Points

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The small $5 billion asset bank recently reported earnings results for the third quarter of the year.

What happened

Shares of the Massachusetts community bank HarborOne Bancorp (HONE -0.54%) rose this week after the company reported its third-quarter earnings results for the year.

According to data provided by S&P Global Market Intelligence, shares traded 11.3% higher on the week as of 2:40 p.m. ET Thursday.

So what

The nearly $5 billion asset bank reported diluted earnings per share of $0.30 on total revenue of about $53.5 million. Both numbers beat analyst estimates for the quarter.

HarborOne's CEO Joseph Casey said in a statement:

The Company continues to drive revenue through expanded margin which was up 30 basis points (0.30 percentage points) year-over-year resulting in net interest income expansion of $12.4 million, or 12.7%.
Casey added:
Our mortgage segment remains profitable as the increasing value of our servicing rights, coupled with expense reductions, partially offset declining origination volume and gain-on-sale margins.
Still, mortgage-banking income has taken a hit in the rapidly rising interest rate environment, with total mortgage-banking income in the third quarter down 48% year over year, which of course is not uncommon.
But the bank has maintained strong credit quality and in September announced plans to launch another share-repurchase program to purchase as much as 5% of outstanding shares once its current repurchase program is completed.

Now what

HarborOne reported a solid quarter despite the headwinds to its mortgage-banking business, which were offset by rising net-interest income and increased value of the bank's mortgage-servicing rights.

The bank also continues to be a very healthy buyer of its own stock, so it looks to be managing the difficult environment well, with shares just slightly down this year.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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