INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

INCOME TAXES

Schedule of allocation of federal and state income taxes between current and deferred portions

	2019		2018		2017
	(in thousands)
Current tax provision:
Federal	$	3,757	$	2,576	$	6,000
State		1,207		1,377		1,371
		4,964		3,953		7,371
Deferred tax benefit:
Federal		(445)		(740)		(442)
State		(111)		(400)		(256)
		(556)		(1,140)		(698)
Income tax provision	$	4,408	$	2,813	$	6,673

Schedule of difference between the statutory federal income tax and the actual income tax provision (benefit)

	2019		2018		2017
	(dollars in thousands)
Statutory federal tax rate		21%		21%		35%
Statutory federal tax provision	$	4,762	$	2,983	$	5,968
Increase (decrease) resulting from:
State taxes, net of federal tax benefit		866		772		694
Bank-owned life insurance		(232)		(358)		(359)
Non-deductible merger expenses		—		196		—
Employee Stock Ownership Plan expenses		172		106		195
Tax exempt income		(104)		(180)		(303)
Effect of tax rate change		—		—		243
Reduction in uncertain federal tax positions		(1,586)		(801)		—
Other, net		530		95		235
Income tax provision	$	4,408	$	2,813	$	6,673

Schedule of tax effects give rise to deferred taxes

	2019		2018
	(in thousands)
Deferred tax assets:
Allowance for loan losses	$	6,651	$	5,776
Employee benefit plans		5,036		5,288
Mark-to-market loans		3,687		4,728
Accrued expenses not deducted for tax purposes		1,093		976
HarborOne Mortgage loan repurchase reserve		231		212
Charitable contribution and other carryforwards		15		380
Net unrealized loss on securities available for sale		—		665
Other		—		661
		16,713		18,686
Deferred tax liabilities:
Net unrealized gain on securities available for sale		(419)		—
Deferred income annuities		(1,447)		(1,352)
Depreciation and amortization		(370)		(294)
Deferred loan fees		(1,995)		(1,742)
Mortgage servicing rights		(4,759)		(6,241)
Core deposit intangible		(1,668)		(2,330)
Other		(21)		—
		(10,679)		(11,959)
Net deferred tax asset	$	6,034	$	6,727

Schedule of change in net deferred tax asset (liability)

	2019		2018		2017
	(in thousands)
Balance at beginning of year	$	6,727	$	843	$	610
Deferred tax benefit		556		1,140		698
Coastway deferred tax accounting / measurement period adjustment		(165)		4,258		—
Change in directors' retirement plan		—		—		(391)
Change in securities available for sale		(1,084)		486		(74)
Balance at end of year	$	6,034	$	6,727	$	843

Schedule of changes in unrecognized tax benefits

	December 31,
	2019		2018		2017
	(in thousands)
Balance at beginning of year	$	3,769	$	1,898	$	—
Additions based on tax positions related to current year		—		—		—
Additions for tax positions for prior years		1,471		2,672		1,898
Reductions for tax positions for prior years		(153)		—		—
Settlements		(2,035)		(801)		—
Balance at end of year	$	3,052	$	3,769	$	1,898

Schedule of unrecognized tax benefits, the amount of interest accrued and range of reasonably possible changes

Unrecognized tax benefits	$	2,811
Accrued interest on unrecognized tax benefits		241
Portion that, if recognized, would reduce tax expense and effective tax rate		3,052
Reasonably possible reduction to the balance of unrecognized tax in subsequent year		2,058
Portion that, if recognized, would reduce tax expense and effective tax rate in subsequent year		2,058