Breaking Down HarborOne Bancorp, Inc. (HONE) Financial Health: Key Insights for Investors

You're looking at HarborOne Bancorp, Inc. (HONE) and trying to filter the noise from the signal, which is smart because this is a bank in a major transition. The headline for the first half of 2025 is a mixed bag of operational wins and strategic shifts: net income for the six months ended June 30, 2025, hit $13.6 million, driven by a solid second quarter where net income was $8.1 million, or $0.20 per diluted share, and net interest margin (NIM) expanded to 2.52%. But honestly, the bigger story is the definitive merger agreement with Eastern Bankshares, Inc. announced in April 2025; that merger is the primary lens through which you must view their $5.70 billion in total assets and the recent $125.1 million decrease in total deposits to $4.49 billion in Q2 2025. Wall Street sees a moderate buy consensus with an average 12-month target price of $13.00, just above the recent $12.10 opening price, so the market is pricing in a successful closing, but you need to understand what the merger means for the combined entity's risk profile and your capital structure.

Revenue Analysis

You need a clear picture of where HarborOne Bancorp, Inc. (HONE) actually makes its money, and the 2025 data shows a bank heavily reliant on traditional lending, but with a volatile, high-impact mortgage arm. The core revenue engine is Net Interest Income (NII), which is the profit made from lending money out at a higher rate than the cost of deposits and borrowings.

For the second quarter of 2025 (Q2 2025), HarborOne Bancorp, Inc. reported total revenue of roughly $45.44 million. Here's the quick math on where that came from:

• Net Interest Income (NII): This was the dominant stream, contributing $33.2 million in Q2 2025.
• Noninterest Income: This secondary stream, which includes fees and mortgage-related revenue, brought in $12.2 million in Q2 2025.

That means approximately 73.1% of the Q2 2025 revenue came from the core banking function of NII, with the remaining 26.9% from non-interest sources. That's a standard, healthy mix for a regional bank, but the volatility is in that smaller segment.

Segment Contribution and Volatility

The revenue breakdown maps directly to the company's two primary operating segments: HarborOne Bank and HarborOne Mortgage. The bank segment drives the vast majority of the predictable Net Interest Income, while the mortgage segment is the main driver of the Noninterest Income, specifically through gains on loan sales.

The near-term trend is a story of sharp quarter-over-quarter swings. In Q1 2025, Noninterest Income was only $9.9 million, a figure that jumped by 23.6% to $12.2 million in Q2 2025. This rebound was 'defintely' driven by higher mortgage banking income-a $3.4 million gain on loan sales in Q2 2025, up from $2.7 million in Q1 2025. That's a 25.9% jump in mortgage gains, showing how sensitive the overall top-line revenue is to the housing and rate environment. Mission Statement, Vision, & Core Values of HarborOne Bancorp, Inc. (HONE).

Year-over-Year Revenue Trajectory

Looking at the bigger picture, the revenue growth rate has been essentially flat, which is a key risk. The last twelve months (LTM) revenue ending June 30, 2025, stood at $164.82 million, reflecting a negligible year-over-year decline of just -0.04%.

This flat performance is a signal of two forces canceling each other out: the core bank is managing to expand its Net Interest Margin (NIM) slightly-it improved from 2.39% in Q1 2025 to 2.52% in Q2 2025-but this modest gain is being offset by the unpredictable nature of mortgage originations and sales, especially with elevated rates constraining loan demand. The bank is grinding out small wins on the margin side, but the mortgage business is a wild card. The trend is clear: small, incremental NII growth is the reliable floor; the Noninterest Income is the volatile ceiling.

Profitability Metrics

You need to know if HarborOne Bancorp, Inc. (HONE) is making money efficiently, especially with the industry's rate volatility. The direct takeaway is that HONE's core profitability is improving quarter-over-quarter in 2025, driven by better Net Interest Margin (NIM), but its overall margins remain significantly lower than a large regional bank comparable.

For a bank, we look at Net Interest Income (NII) and Noninterest Income as the top line, which is the closest equivalent to Gross Profit. In the second quarter of 2025, HarborOne Bancorp, Inc.'s total revenue was approximately $45.4 million, a solid jump from the $41.4 million reported in the first quarter of 2025. This growth was largely due to a 23.6% increase in noninterest income, primarily from higher mortgage banking and swap fee income.

Operating and Net Profit Margins

The real story is in the margins. We can calculate the Pre-Tax, Pre-Provision Income (PTPPI), a strong proxy for operating profit in banking, by subtracting noninterest expense from total revenue. In Q2 2025, the company reported a net income of $8.1 million, which means its Net Profit Margin for the quarter was about 17.84% (calculated as $8.1M Net Income / $45.4M Revenue). That's a marked improvement from the Q1 2025 net income of $5.5 million.

Here's the quick math on the core profitability trends for the first half of 2025:

• Net Interest Margin (NIM): Improved from 2.39% in Q1 2025 to 2.52% in Q2 2025. This is defintely a positive trend, showing better management of funding costs against asset yields.
• Q2 2025 Operating Profit Margin (PTPPI Margin): Approximately 24.89% (calculated as $11.3M PTPPI / $45.4M Revenue).
• Q2 2025 Net Profit Margin: Approximately 17.84% (calculated as $8.1M Net Income / $45.4M Revenue).

The operational efficiency side is mixed. Noninterest expense was up $1.2 million in Q2 2025, but a significant portion of that was $1.7 million in merger-related expenses, which are non-core. Excluding those one-time costs, core operating expenses were actually down slightly, showing management is focused on cost control while navigating the merger with Eastern Bankshares, Inc..

Comparing Profitability to the Industry

When you stack HarborOne Bancorp, Inc.'s profitability against the broader regional bank industry, the margins look thin. For context, a comparable regional financial institution, Regions Financial Corp., reported a pre-tax profit margin of 40.5% and a profit margin on total operations of 28.67% as of Q3 2025.

What this comparison tells you is that while HONE is making solid internal progress-its NIM is expanding and its net income is up 46.5% quarter-over-quarter-it operates at a smaller scale and lower margin than larger regional peers. The six-month net income for HONE in 2025 was $13.6 million, slightly below the $14.6 million for the same period in 2024, which highlights the continued pressure on profitability in a high-rate environment before the Q2 rebound.

The company's focus on cost management and NIM expansion is the right action, but the overall profitability profile is that of a smaller, community-focused bank with less operating leverage. You can dive deeper into the strategic implications of this financial health in our full analysis: Breaking Down HarborOne Bancorp, Inc. (HONE) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

You're looking at HarborOne Bancorp, Inc. (HONE)'s balance sheet to understand how they finance their operations, and honestly, you have to look past the raw numbers because a bank's structure is different. The core takeaway is that before the November 2025 merger with Eastern Bankshares, Inc., HarborOne was strategically managing its non-deposit funding, prioritizing shareholder returns, and maintaining a solid capital base.

As of June 30, 2025, HarborOne Bancorp, Inc.'s primary non-deposit liabilities-what we'd call their borrowed funds or debt-stood at about $439.7 million, an increase from the prior quarter. This debt is mostly used to fund loan growth and manage liquidity, and it's a small fraction of their total assets, which were approximately $5.64 billion at the same time. They also had significant cushion, with an available borrowing capacity of $1.28 billion across multiple relationships. That's a healthy safety net.

Here's the quick math on their capital: The bank's tangible common equity (TCE) to tangible assets ratio-a key measure of capital strength for banks-was 9.38% at the end of the second quarter of 2025. This is a strong indicator of their ability to absorb potential losses. Contrast this with the typical regional bank industry average debt-to-equity (D/E) ratio, which is often around 0.09 when excluding deposits, or much higher (like Bank of America's 1.169 in Q1 2025) when including all liabilities. Since a bank's core business is taking deposits (a liability) and lending it out, a high total D/E ratio is normal, but HarborOne's focus on a strong TCE ratio tells the real story about their capital management.

The company has been actively balancing its funding mix, using equity funding to reward shareholders and manage debt. For instance, in the first quarter of 2025, they executed share repurchases and increased their quarterly dividend by 12.5%. This is a clear signal of confidence in their equity position and a commitment to return capital to investors. They're not just hoarding cash; they're using capital efficiently.

The most important near-term factor, however, is the acquisition. The definitive merger with Eastern Bankshares, Inc. became effective on November 1, 2025. This deal is set to be financially compelling, with an expected 16% earnings accretion and a tangible book value earnback of 2.8 years. Post-merger, HarborOne Bancorp, Inc.'s debt and equity structure will be fully integrated into the larger, $25.5 billion asset base of Eastern Bankshares, Inc. This move is less about a standalone debt strategy and more about a strategic exit that maximizes shareholder value through a larger, more diversified entity.

The financing strategy was about efficiency and a clean balance sheet for the merger.

• Borrowed funds were $439.7 million in Q2 2025.
• Tangible Common Equity to Assets was a strong 9.38%.
• Shareholder value was prioritized via a 12.5% dividend increase.
• The merger with Eastern Bankshares, Inc. is effective November 1, 2025.

For a deeper dive into the valuation and strategic context of this shift, you can read the full analysis at Breaking Down HarborOne Bancorp, Inc. (HONE) Financial Health: Key Insights for Investors.

Liquidity and Solvency

When you look at a bank like HarborOne Bancorp, Inc. (HONE), you have to adjust your lens. Standard liquidity ratios like Current and Quick Ratios, which work for a manufacturing company, are defintely misleading here. For a bank, the 'current liabilities' are mostly customer deposits, which are the core of their business, not bills due in 90 days.

The reported Quick Ratio for HarborOne Bancorp, Inc. is often near 0.00, which would be a crisis for a non-financial company, but for a bank, it simply reflects that customer deposits-the largest liability-are not typically considered 'current' in the same way. The real measure of liquidity is how easily they can access cash and how well their loans are covered by deposits. The bank's liquidity position is anchored by its available borrowing capacity and a healthier Loans-to-Deposits ratio.

Working Capital & Funding Trends

We see a clear trend in 2025 toward strengthening the core funding base, which is the bank's version of managing working capital. In the first quarter of 2025 (Q1 2025), HarborOne Bancorp, Inc. successfully increased total deposits by $68.0 million to a total of $4.62 billion. This growth was primarily in non-certificate accounts, which are generally cheaper and more stable funding sources. Simultaneously, they actively reduced their reliance on expensive short-term financing.

• Deposits Increased: Total deposits grew by $68.0 million in Q1 2025.
• Borrowed Funds Decreased: Borrowed funds dropped by $117.0 million to $399.5 million as of March 31, 2025.
• Loans-to-Deposits Improved: The ratio improved from 106.63% to 104.38% in Q1 2025.

This is a solid, actionable move: they are swapping expensive debt for cheaper, stickier customer deposits. This improvement in the Loans-to-Deposits ratio by 225 basis points in Q1 2025 is a key indicator of better funding stability.

Cash Flow Statement Overview

The cash flow picture for HarborOne Bancorp, Inc. in the first half of 2025 shows a mixed, but generally managed, flow of funds, especially as they prepare for a merger with Eastern Bankshares, Inc.. Operating cash flow remains positive, but the investing activities reflect the nature of banking-lending money is a cash outflow.

Here's the quick math on their recent performance:

The jump in Net Income in Q2 2025 to $8.1 million, up from $5.5 million in Q1 2025, reflects improved core profitability, notably a 13 basis point improvement in the Net Interest Margin (NIM) to 2.52%. The drop in Free Cash Flow (FCF) in Q2 is not a major concern for a bank, as FCF is highly volatile based on loan originations and investment purchases, which are core investing activities.

Near-Term Liquidity Strengths

The most important strength for HarborOne Bancorp, Inc.'s liquidity is its access to capital. As of March 31, 2025, the bank had a substantial $1.42 billion in available borrowing capacity across multiple relationships. This massive cushion means they can easily meet unexpected deposit withdrawals or fund new loan demand without stress. Plus, the tangible-common-equity-to-tangible-assets ratio, a key measure of bank solvency, improved modestly to 9.15% at March 31, 2025.

The primary risk to watch is the slight increase in nonperforming assets (NPAs), which rose to $32.7 million, or 0.58% of total assets, by June 30, 2025, up from $30.9 million in the prior quarter. This is a small, but notable, uptick in credit quality concerns tied to commercial real estate loans.

For a deeper dive into who is betting on these trends, you should check out Exploring HarborOne Bancorp, Inc. (HONE) Investor Profile: Who's Buying and Why?

Valuation Analysis

The short answer, looking back at its final trading days in late 2025, is that HarborOne Bancorp, Inc. (HONE) appeared to be undervalued based on core banking metrics, trading at a discount to its book value and carrying a consensus analyst rating of 'Moderate Buy.' The stock's last price before its acquisition and subsequent delisting on November 1, 2025, was $12.10 per share.

For a regional bank like HarborOne Bancorp, Inc., the most telling metric is often the Price-to-Tangible Book Value (P/TBV), which tells you what the market is willing to pay for the underlying hard assets. As of March 31, 2025, the tangible book value per share was $11.90. Here's the quick math: at the final price of $12.10, the P/TBV was approximately 1.02x. This P/TBV, just slightly over 1.0x, suggests the stock was trading near its liquidation value, a common sign of undervaluation in the banking sector, especially when paired with a decent dividend yield.

The Price-to-Earnings (P/E) ratio also painted a picture of a reasonably priced stock. The trailing P/E ratio, based on the last twelve months' earnings, was around 18.62x. More importantly, the forward P/E, which uses estimated 2025 earnings, was lower at approximately 14.58x. This forward multiple indicated analysts expected earnings growth, making the stock look defintely cheaper on a future earnings basis than its historical average.

Stock Trends, Dividends, and Analyst View

Looking at the stock's movement over the year, HarborOne Bancorp, Inc.'s price was volatile, trading in a 52-week range of $8.89 to $14.29. The stock's year-to-date performance as of April 2025 was down -15.10%, reflecting broader pressures on regional bank valuations and a decline in Q1 2025 net income to $5.5 million. Still, the stock's total return was supported by a solid dividend.

The dividend profile was a key part of the investment thesis. The annual dividend was $0.36 per share, resulting in a dividend yield of approximately 2.98% in late 2025. The payout ratio was a sustainable 53.89%, meaning the company was retaining nearly half of its earnings to reinvest in the bank's growth and maintain capital buffers. That's a good balance of income and stability.

• 52-Week Price Range: $8.89 to $14.29
• Annual Dividend Yield: 2.98%
• Dividend Payout Ratio: 53.89%

The Wall Street consensus was generally positive, which is a strong signal. The analyst consensus rating was a Moderate Buy, with an average 12-month price target of $13.00. This target suggested a modest upside of over 7% from the final $12.10 price. To be fair, this valuation analysis was ultimately superseded by the acquisition by Eastern Bankshares, which is the ultimate payoff for a stock trading below its intrinsic value. You can read more about the company's long-term focus here: Mission Statement, Vision, & Core Values of HarborOne Bancorp, Inc. (HONE).

Risk Factors

You need to understand that for HarborOne Bancorp, Inc. (HONE), the near-term risk landscape is entirely dominated by one massive strategic move: the merger with Eastern Bankshares, Inc. The core risks of a standalone regional bank-like interest rate exposure-have been replaced by the execution risk of this integration, which was effective on November 1, 2025.

Before the merger closed, the company faced the same pressures as many other regional banks. Specifically, the financial health in the first half of 2025 showed strain, with Q1 2025 net income dropping to $5.5 million, a significant 38.1% decrease from the prior quarter. That drop was defintely tied to a $2.9 million decrease in mortgage banking income, a clear sign of the volatile rate environment hitting non-interest revenue.

Here are the key risks that were, and in some ways still are, central to the company's profile:

• Merger Execution Risk: The biggest near-term risk is whether Eastern Bankshares, Inc. can successfully realize the projected annual run-rate cost savings of about $55 million, which represents roughly 40% of HarborOne Bancorp, Inc.'s operating non-interest expenses. Failure to hit those savings targets would dilute the merger's value proposition.
• Geographic Concentration: The loan portfolio is heavily concentrated in the greater Boston and Providence metropolitan areas. This means a localized economic downturn in New England could disproportionately impact loan repayments and asset values, a risk that the combined entity still carries.
• Interest Rate and Margin Pressure: The core banking business is exposed to interest rate risk, which affects the net interest margin (NIM). While NIM improved slightly to 2.52% in Q2 2025, competition for deposits remains high, pressuring funding costs.
• Commercial Real Estate (CRE) Exposure: At the end of Q1 2025, CRE loans represented a substantial 47% of the bank's total loan portfolio of $4.8 billion. Given the current commercial property market volatility, this concentration is a material credit risk.

The merger is the mitigation strategy itself, aiming for scale and cost synergies to offset these industry headwinds. The management team's focus pre-merger was on managing credit quality and driving commercial loan growth, with commercial and industrial (C&I) loans growing by $33 million in Q1 2025. That was a smart, targeted move to balance the CRE exposure.

To be fair, the market has already priced in the merger, which is why the stock delisted. Still, the success of your investment now hinges on the integration's speed and efficiency. For a deeper dive into who was buying the stock before this major shift, you should check out Exploring HarborOne Bancorp, Inc. (HONE) Investor Profile: Who's Buying and Why?

Here's the quick math on the synergy goal:

What this estimate hides is the one-time cost of integration, which can often be substantial and temporarily depress earnings. Finance: track the realization of the $55 million in savings against the integration costs in the combined entity's first two post-merger earnings reports.

Growth Opportunities

The most significant-and frankly, the only-future growth prospect for HarborOne Bancorp, Inc. (HONE) shareholders is the definitive merger with Eastern Bankshares, Inc. (EBC). This isn't a minor product innovation; it's a complete strategic pivot that fundamentally changes the investment thesis, as the merger was effective on November 1, 2025. You need to think about the combined entity's potential, not the old HarborOne Bancorp, Inc.

Honestly, the merger is the ultimate strategic initiative. The deal, valued at approximately $490 million based on Eastern Bankshares, Inc.'s stock price on April 23, 2025, immediately creates a larger, more scaled institution. This move is all about scale and efficiency, especially in the competitive New England banking market.

• Strategic Initiative: Merger with Eastern Bankshares, Inc. (EBC).
• Transaction Value: Approximately $490 million.
• Closing Date: Effective November 1, 2025.

Future Revenue and Earnings Estimates

For the combined company, the growth story is rooted in synergy and market expansion. The key number you should focus on is the expected earnings per share (EPS) accretion. The merger is projected to be 16% EPS accretive to Eastern Bankshares, Inc., which is a strong financial benefit that helps justify the deal's structure. Here's the quick math: the combined balance sheet is designed for robust capital and liquidity, which should translate to better operating profitability, placing the new entity in the top quartile of its peer group.

To be fair, HarborOne Bancorp, Inc. was already showing positive momentum right before the merger. In the second quarter of 2025, the company reported revenue of $45.44 million, which surpassed analyst consensus estimates. Plus, the reported EPS of $0.23 for Q2 2025 also beat the consensus estimate of $0.19. This performance shows the bank was entering the merger from a position of strength, not weakness.

Competitive Advantages and Market Expansion

The core growth driver is a classic banking play: acquiring scale and expanding the footprint. The merger creates the largest mid-sized bank in the Boston area, instantly boosting its competitive position against larger regional and national players. This scale gives the combined bank a better ability to invest in technology (product innovations) and manage regulatory costs, which are huge advantages.

The expansion into Rhode Island, where HarborOne Bancorp, Inc. had an established presence, solidifies Eastern Bankshares, Inc.'s leading position in Greater Boston while giving it a new market to grow loans and deposits. HarborOne Bancorp, Inc.'s existing network of 30 full-service branches across Massachusetts and Rhode Island, along with its commercial lending offices in Boston and Providence, are now integrated assets. This physical presence, combined with the educational outreach of HarborOne U (digital content and webinars), provides a defintely strong foundation for cross-selling and deepening customer relationships in the expanded territory.

For a deeper dive into the former company's financial health, you can read our full analysis here: Breaking Down HarborOne Bancorp, Inc. (HONE) Financial Health: Key Insights for Investors.