HarborOne Bancorp, Inc. Announces First Quarter 2017 Earnings

BROCKTON, Mass.--(BUSINESS WIRE)--HarborOne Bancorp, Inc. (the “Company”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced first quarter 2017 net income of $2.7 million or $0.09 per share as compared to $2.9 million, or $0.09 per share in the prior quarter and net income of $124,000 in the same quarter last year.

James W. Blake, President and CEO stated, “We are pleased with our strong start in 2017. Continuing the momentum from 2016, commercial real estate loans grew 12% from the prior quarter and 85% from the same quarter in 2016 providing improved margins quarter over quarter and year over year. We expect to continue the execution of our strategic commercial loan growth and look forward to the opportunities that lie ahead in 2017.”

Net Interest Income
The Company’s net interest income was $17.4 million for the quarter ended March 31, 2017, up $877,000, or 5.3%, from $16.6 million for the quarter ended December 31, 2016 and up $3.5 million, or 25.5%, from $13.9 million for the quarter ended March 31, 2016. The interest rate spread and net interest margin on a tax-equivalent basis were 2.83% and 2.99%, respectively, for the quarter ended March 31, 2017 compared to 2.77% and 2.92%, respectively, for the quarter ended December 31, 2016 and 2.60% and 2.72%, respectively, for the quarter ended March 31, 2016.

The increase in net interest income from the previous quarter reflects a $1.1 million, or 5.5% increase in total interest and dividend income offset by an increase of $223,000, or 6.4% in total interest expense. The increase in interest and dividend income is primarily due to the commercial loan growth that provided an increase in average outstanding loans of $56.3 million combined with a 13 basis point increase in yield on loans. The offsetting increase in interest expense is primarily a result of a $68.9 million increase in average interest-bearing deposits and a $34.3 million increase in average FHLB advances coupled with a 2 basis point increase in total cost of funds.

The increase in net interest income over the prior year quarter is primarily due to growth in the Company’s average loan balances to $2.11 billion from $1.80 billion and increases in the yield on loans to 3.78% from 3.59% again primarily driven by commercial loan growth. Total interest and dividend income increased $3.7 million, or 21.3%, and total interest expense increased $164,000, or 4.6%.

Noninterest Income
Noninterest income decreased to $11.5 million for the quarter ended March 31, 2017, down $7.8 million, or 40.6%, from the quarter ended December 31, 2016. This decrease is primarily due to 49.6% lower mortgage loan originations at Merrimack Mortgage Company, LLC(“Merrimack”) due to rising mortgage interest rates and seasonal fluctuations resulting in an $8.0 million, or 51.8% decrease in mortgage banking income. Mortgage banking income was also impacted by servicing rights fair value adjustments in the amount of a $442,000 decrease in the first quarter of 2017 compared to $3.0 million increase in the fourth quarter of 2016. Noninterest income increased $392,000, or 3.5% and mortgage banking income increased $316,000, or 4.5%, as compared to the quarter ended March 31, 2016. Compared to the same quarter prior year, Merrimack’s mortgage originations decreased 16.2% in 2017 however mortgage banking income increased due to a negative servicing rights fair vale adjustment of $2.3 million in the first quarter of 2016.

Noninterest Expense
Noninterest expenses were $24.4 million for the quarter ended March 31, 2017, a decrease of $5.0 million, or 16.9%, from the quarter ended December 31, 2016. The decrease was primarily due to the decrease in mortgage loan originations which contributed to a decrease of $3.6 million, or 19.3% in compensation and benefits and $1.3 million or 49.7% decrease in loan expense primarily from a decrease in loan closing expense. Noninterest expense decreased $152,000, or 0.6%, from the quarter ended March 31, 2016 due in part to a decrease in mortgage banking activity.

Asset Quality
The Company recorded a $265,000 provision for loan losses for the quarter ended March 31, 2017, $1.5 million for the quarter ended December 31, 2016 and $205,000 for the quarter ended March 31, 2016. Annually, in the first quarter, the Company adjusts general reserve allocations for commercial real estate and commercial loans based on updated peer data. The updated peer data resulted in lower general reserve rates and reserves on these loan types however, the decrease was partially offset by commercial loan growth. The provision in the previous quarter was primarily due to commercial loan growth. Changes in the provision for loan losses are also based on management’s assessment of loan portfolio growth and composition changes, historical charge-off trends, and ongoing evaluation of credit quality and current economic conditions. The allowance for loan losses was $16.9 million, or 0.82%, of total loans at March 31, 2017, compared to $17.0 million, or 0.85%, of total loans, at December 31, 2016 and $13.7 million, or 0.78%, of total loans, at March 31, 2016. Net charge-offs totaled $349,000 for the quarter ended March 31, 2017, or 0.07%, of average loans outstanding on an annualized basis, compared to $320,000 and 0.06% for the quarter ended December 31, 2016 and $209,000 and 0.05% for the quarter ended March 31, 2016.

Nonperforming assets were $23.5 million at March 31, 2017 compared to $22.9 million at December 31, 2016 and $29.7 million at March 31, 2016. Nonperforming assets as a percentage of total assets were 0.91% at March 31, 2017, 0.94% at December 31, 2016 and 1.32% at March 31, 2016. The increase in the first quarter of 2017 is due to a downgrade of a $1.7 million commercial relationship partially offset by decreases in other loan categories. The reduction from the first quarter of 2016 reflects the Company’s continued efforts to minimize nonperforming assets through diligent collection efforts and prudent workout arrangements.

Balance Sheet
Total assets increased $117.8 million, or 4.8%, to $2.57 billion at March 31, 2017 from $2.45 billion at December 31, 2016. Net loans increased $65.5 million, or 3.3%, to $2.05 billion at March 31, 2017 from $1.98 billion at December 31, 2016. The net increase in loans for the three months ended March 31, 2017 was primarily due to increases of $61.4 million in commercial real estate loans, $10.7 million in construction loans and $11.3 million in commercial and industrial loans, partially offset by a decrease of $5.6 million in residential real estate loans and $11.5 million in consumer loans. Loans held for sale decreased $34.5 million, or 39.9%, to $51.9 million at March 31, 2017 from $86.4 million at December 31, 2016 due to the seasonal decrease in residential mortgage originations. Cash and cash equivalents increased $52.2 million, or 103.9%, to $102.4 million at March 31, 2017 from $50.2 million at December 31, 2016 due to a $44.0 million commercial loan payoff that occurred on the last day of the month.

Total deposits increased $120.0 million, or 6.6%, to $1.93 billion at March 31, 2017 from $1.81 billion at December 31, 2016. Compared to the prior quarter non-certificate accounts increased $98.5 million, brokered deposits increased $23.7 million and term certificate accounts decreased $2.2 million. Borrowings were $275.1 million at March 31, 2017 and December 31, 2016.

Total stockholders’ equity was $332.7 million at March 31, 2017 compared to $329.4 million at December 31, 2016 and $191.9 million at March 31, 2016. The increase from the prior year same quarter reflects the Company’s mutual to stock conversion that was completed on June 29, 2016. As part of the conversion, the Company established an ESOP which acquired 8% of the shares issued in the conversion, including shares contributed to the Foundation. The $11.1 million related to the ESOP is shown as a reduction to stockholders’ equity on the consolidated balance sheet. The tangible common equity to tangible assets ratio decreased to 12.50% at March 31, 2017 from 12.97% at December 31, 2016. At March 31, 2017, the Company and the Bank exceed all regulatory capital requirements.

About HarborOne Bancorp, Inc.
HarborOne Bancorp, Inc. is the holding company for HarborOne Bank, the largest co-operative bank in New England. HarborOne Bank serves the financial needs of consumers, businesses, and municipalities throughout Southeastern Massachusetts through a network of 14 full-service branches, two limited service branches, a commercial loan office in Providence, Rhode Island, a residential lending office in Westford, Massachusetts, and 13 free-standing ATMs. The Bank also provides a range of educational services through “HarborOne U,” with classes on small business, financial literacy and personal enrichment at two campuses located adjacent to our Brockton and Mansfield locations. Merrimack Mortgage Company, LLC, a subsidiary of HarborOne Bank, is a full-service mortgage lender with 34 offices in Massachusetts, New Hampshire and Maine, and also does business in seven additional states.

Forward Looking Statements
Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on the Company’s business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which the Company operates, including changes that adversely affect borrowers’ ability to service and repay the Company’s loans; changes in the value of securities in the Company’s investment portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; changes in government regulation; changes in accounting standards and practices; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; demand for loans in the Company’s market area; the Company’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that the Company may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, HarborOne Bancorp, Inc.’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.

Use of Non-GAAP Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. The Company’s management believes that the supplemental non-GAAP information, which consists of tangible common equity to tangible assets ratio and tangible book value per share is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

HarborOne Bancorp, Inc.
Consolidated Balance Sheet Trend
(Unaudited)
	March 31,		December 31,		September 30,		June 30,		March 31,
(Dollars in thousands)	2017		2016		2016		2016		2016
Assets
Cash and due from banks	$	18,621	$	16,464	$	15,706	$	18,773	$	15,268
Short-term investments		83,778		33,751		3,549		11,365		98,991
Total cash and cash equivalents		102,399		50,215		19,255		30,138		114,259
Securities available for sale, at fair value		165,348		136,469		115,397		121,957		120,905
Securities held to maturity, at amortized cost		46,531		47,877		49,213		50,504		62,461
Federal Home Loan Bank stock, at cost		17,863		15,749		15,255		13,078		17,480
Loans held for sale, at fair value		51,932		86,443		114,054		99,697		67,592
Loans:
Residential real estate		765,368		770,935		774,404		773,169		777,034
Commercial real estate		557,174		495,801		450,945		377,386		300,880
Construction		69,134		58,443		40,438		31,414		41,227
Total mortgage loans on real estate		1,391,676		1,325,179		1,265,787		1,181,969		1,119,141
Commercial		111,849		100,501		88,718		82,333		78,666
Consumer		551,603		563,104		555,874		560,144		544,078
Loans		2,055,128		1,988,784		1,910,379		1,824,446		1,741,885
Less: Allowance for loan losses		(16,884)		(16,968)		(15,832)		(14,439)		(13,696)
Net deferred loan costs		9,041		9,931		10,336		10,893		11,357
Net loans		2,047,285		1,981,747		1,904,883		1,820,900		1,739,546
Mortgage servicing rights, at fair value		20,839		20,333		15,534		12,688		12,330
Goodwill and other intangible assets		13,563		13,585		13,607		13,630		13,651
Other assets		100,384		95,892		99,935		104,166		96,544
Total assets	$	2,566,144	$	2,448,310	$	2,347,133	$	2,266,758	$	2,244,768
Liabilities and Stockholders' Equity
Deposits:
NOW and demand deposit accounts	$	392,012	$	365,869	$	358,628	$	339,379	$	331,709
Regular savings and club accounts		338,338		316,947		317,198		316,195		312,362
Money market deposit accounts		646,123		595,211		596,377		620,975		651,504
Brokered deposits		77,774		54,045		20,236		—		—
Term certificate accounts		470,490		472,681		442,472		433,685		456,136
Total deposits		1,924,737		1,804,753		1,734,911		1,710,234		1,751,711
Short-term borrowed funds		75,000		80,000		50,000		—		—
Long-term borrowed funds		200,118		195,119		195,120		195,096		269,597
Other liabilities and accrued expenses		33,554		39,054		39,188		37,138		31,579
Total liabilities		2,233,409		2,118,926		2,019,219		1,942,468		2,052,887
Common stock		321		321		321		321		—
Additional paid-in capital		144,555		144,420		144,175		144,107		—
Unearned compensation - ESOP		(11,130)		(11,278)		(11,575)		(11,872)		—
Retained earnings		199,946		197,211		194,275		190,723		191,404
Accumulated other comprehensive income (loss)		(957)		(1,290)		718		1,011		477
Total stockholders' equity		332,735		329,384		327,914		324,290		191,881
Total liabilities and stockholders' equity	$	2,566,144	$	2,448,310	$	2,347,133	$	2,266,758	$	2,244,768

HarborOne Bancorp, Inc.
Consolidated Statements of Net Income - Trend
(Unaudited)
	Quarters Ended
	March 31,		December 31,		September 30,		June 30,		March 31,
(Dollars in thousands, except per share amounts)	2017		2016		2016		2016		2016
Interest and dividend income:
Interest and fees on loans	$	19,135	$	18,092	$	17,144	$	16,293	$	15,643
Interest on loans held for sale		546		788		866		581		460
Interest on securities		1,216		1,002		988		1,023		1,099
Other interest and dividend income		252		167		164		209		237
Total interest and dividend income		21,149		20,049		19,162		18,106		17,439
Interest expense:
Interest on deposits		2,432		2,283		2,092		2,165		2,170
Interest on borrowed funds		1,285		1,211		1,168		1,289		1,383
Total interest expense		3,717		3,494		3,260		3,454		3,553
Net interest and dividend income		17,432		16,555		15,902		14,652		13,886
Provision for loan losses		265		1,456		1,710		801		205
Net interest income, after provision for loan losses		17,167		15,099		14,192		13,851		13,681
Noninterest income:
Mortgage banking income:
Changes in mortgage servicing rights fair value		(442)		2,970		351		(2,163)		(2,288)
Other		7,846		12,404		16,513		13,837		9,376
Total mortgage banking income		7,404		15,374		16,864		11,674		7,088
Deposit account fees		2,845		2,979		3,010		2,928		2,747
Income on retirement plan annuities		110		111		111		108		106
Gain on sale of consumer loans		78		—		—		29		50
Gain on sale and call of securities, net		—		—		—		41		242
Bank-owned life insurance income		257		263		275		274		276
Other income		760		557		609		834		553
Total noninterest income		11,454		19,284		20,869		15,888		11,062
Noninterest expenses:
Compensation and benefits		15,019		18,616		18,902		16,407		15,518
Occupancy and equipment		2,986		2,516		2,458		2,463		2,784
Data processing expenses		1,522		1,557		1,450		1,446		1,414
Loan expense		1,363		2,710		3,316		2,128		1,592
Marketing		482		835		592		607		565
Professional fees		930		822		709		602		577
Deposit insurance		462		208		437		418		403
Prepayment penalties on Federal Home Loan Bank		—		—		—		400		—
Charitable foundation contributions		—		—		—		4,820		—
Other expenses		1,641		2,099		1,745		1,878		1,704
Total noninterest expenses		24,405		29,363		29,609		31,169		24,557
Income (loss) before income taxes		4,216		5,020		5,452		(1,430)		186
Income tax provision (benefit)		1,481		2,084		1,900		(749)		62
Net income (loss)	$	2,735	$	2,936	$	3,552	$	(681)	$	124
Earnings per common share:
Basic and diluted	$	0.09	$	0.09	$	0.11		N/A		N/A
Weighted average shares outstanding:
Basic and diluted		30,998,163		30,973,588		30,943,808		N/A		N/A

HarborOne Bancorp, Inc.
Consolidated Statements of Net Income
(Unaudited)
	Three Months Ended March 31,
(Dollars in thousands, except per share amounts)	2017		2016		$ Change		% Change
Interest and dividend income:
Interest and fees on loans	$	19,135	$	15,643	$	3,492	22.3	%
Interest on loans held for sale		546		460		86	18.7
Interest on securities		1,216		1,099		117	10.6
Other interest and dividend income		252		237		15	6.3
Total interest and dividend income		21,149		17,439		3,710	21.3
Interest expense:
Interest on deposits		2,432		2,170		262	12.1
Interest on borrowed funds		1,285		1,383		(98)	(7.1)
Total interest expense		3,717		3,553		164	4.6
Net interest and dividend income		17,432		13,886		3,546	25.5
Provision for loan losses		265		205		60	29.3
Net interest income, after provision for loan losses		17,167		13,681		3,486	25.5
Noninterest income:
Mortgage banking income:
Changes in mortgage servicing rights fair value		(442)		(2,288)		1,846	80.7
Other		7,846		9,376		(1,530)	(16.3)
Total mortgage banking income		7,404		7,088		316	4.5
Deposit account fees		2,845		2,747		98	3.6
Income on retirement plan annuities		110		106		4	3.8
Gain on sale of consumer loans		78		50		28	56.0
Gain on sale and call of securities, net		—		242		(242)	(100.0)
Bank-owned life insurance income		257		276		(19)	(6.9)
Other income		760		553		207	37.4
Total noninterest income		11,454		11,062		392	3.5
Noninterest expenses:
Compensation and benefits		15,019		15,518		(499)	(3.2)
Occupancy and equipment		2,986		2,784		202	7.3
Data processing expenses		1,522		1,414		108	7.6
Loan expense		1,363		1,592		(229)	(14.4)
Marketing		482		565		(83)	(14.7)
Professional fees		930		577		353	61.2
Deposit insurance		462		403		59	14.6
Other expenses		1,641		1,704		(63)	(3.7)
Total noninterest expenses		24,405		24,557		(152)	(0.6)
Income before income taxes		4,216		186		4,030	2166.7
Income tax provision		1,481		62		1,419	2288.7
Net income	$	2,735	$	124	$	2,611	2105.6	%
Earnings per common share:
Basic and diluted	$	0.09		N/A		N/A
Weighted average shares outstanding:
Basic and diluted		30,998,163		N/A		N/A

HarborOne Bancorp, Inc.
Average Balances / Yields
(Unaudited)
	Quarters Ended
	March 31, 2017							December 31, 2016							March 31, 2016
	Average							Average							Average
	Outstanding					Yield/		Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost ^(6)		Balance			Interest		Cost ^(6)		Balance			Interest		Cost ^(6)
	(Dollars in thousands)
Interest-earning assets:
Loans^(1)	$	2,111,768		$	19,681	3.78	%	$	2,055,444		$	18,880	3.65	%	$	1,803,000		$	16,103	3.59	%
Investment securities ^(2)		197,525			1,292	2.65			168,485			1,079	2.55			183,615			1,178	2.58
Other interest-earning assets		67,428			252	1.52			38,912			167	1.71			77,984			237	1.22
Total interest-earning assets		2,376,721			21,225	3.62			2,262,841			20,126	3.54			2,064,599			17,518	3.41
Noninterest-earning assets		124,148							126,899							122,326
Total assets	$	2,500,869						$	2,389,740						$	2,186,925
Interest-bearing liabilities:
Savings accounts	$	326,731			151	0.19		$	319,166			142	0.18		$	301,557			130	0.17
NOW accounts		123,340			19	0.06			124,134			19	0.06			116,866			18	0.06
Money market accounts		627,073			753	0.49			602,263			692	0.46			630,664			704	0.45
Certificates of deposit		469,774			1,350	1.17			458,491			1,339	1.16			458,636			1,318	1.16
Brokered deposit		65,698			159	0.98			39,689			91	0.92			—			—	—
Total interest-bearing deposits		1,612,616			2,432	0.61			1,543,743			2,283	0.59			1,507,723			2,170	0.58
FHLB advances		291,896			1,285	1.79			257,568			1,211	1.87			265,392			1,383	2.10
Total interest-bearing liabilities		1,904,512			3,717	0.79			1,801,311			3,494	0.77			1,773,115			3,553	0.81
Noninterest-bearing liabilities:
Noninterest-bearing deposits		237,056							227,918							191,942
Other noninterest-bearing liabilities		28,981							31,055							29,114
Total liabilities		2,170,549							2,060,284							1,994,171
Total equity		330,320							329,456							192,754
Total liabilities and equity	$	2,500,869						$	2,389,740						$	2,186,925
Tax equivalent net interest income					17,508							16,632							13,965
Tax equivalent interest rate spread ^(3)						2.83	%						2.77	%						2.60	%
Less: tax equivalent adjustment					76							77							79
Net interest income as reported				$	17,432						$	16,555						$	13,886
Net interest-earning assets ^(4)	$	472,209						$	461,530						$	291,484
Net interest margin ^(5)						2.97	%						2.91	%						2.71	%
Tax equivalent effect						0.02							0.01							0.01
Net interest margin on a fully tax equivalent basis						2.99	%						2.92	%						2.72	%
Average interest-earning assets to average interest-bearing liabilities		124.79	%						126.62	%						116.44	%

⁽¹⁾ Includes loans held for sale, nonaccruing loan balances and interest received on such loans.
⁽²⁾ Includes securities available for sale and securities held to maturity. Interest income from tax exempt securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented. The yield on investments before tax equivalent adjustments for the quarters presented were 2.50%, 2.37%, and 2.41%, respectively.
⁽³⁾ Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
⁽⁴⁾ Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
⁽⁵⁾ Net interest margin represents net interest income divided by average total interest-earning assets.
⁽⁶⁾ Annualized

HarborOne Bancorp, Inc.
Average Balances and Yield Trend
(Unaudited)
	Average Balances - Trend - Quarters Ended
	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
	(In thousands)
Interest-earning assets:
Loans^(1)	$	2,111,768		$	2,055,444		$	1,983,249		$	1,881,488		$	1,803,000
Investment securities ^(2)		197,525			168,485			166,816			173,731			183,615
Other interest-earning assets		67,428			38,912			18,030			51,257			77,984
Total interest-earning assets		2,376,721			2,262,841			2,168,095			2,106,476			2,064,599
Noninterest-earning assets		124,148			126,899			130,498			131,104			122,326
Total assets	$	2,500,869		$	2,389,740		$	2,298,593		$	2,237,580		$	2,186,925
Interest-bearing liabilities:
Savings accounts	$	326,731		$	319,166		$	319,202		$	317,180		$	301,557
NOW accounts		123,340			124,134			120,704			120,702			116,866
Money market accounts		627,073			602,263			612,761			642,758			630,664
Certificates of deposit		469,774			458,491			434,519			446,848			458,636
Brokered deposit		65,698			39,689			549			—			—
Total interest-bearing deposits		1,612,616			1,543,743			1,487,735			1,527,488			1,507,723
FHLB advances		291,896			257,568			232,587			239,245			265,392
Total interest-bearing liabilities		1,904,512			1,801,311			1,720,322			1,766,733			1,773,115
Noninterest-bearing liabilities:
Noninterest-bearing deposits		237,056			227,918			217,930			244,651			191,942
Other noninterest-bearing liabilities		28,981			31,055			32,888			28,887			29,114
Total liabilities		2,170,549			2,060,284			1,971,140			2,040,271			1,994,171
Total equity		330,320			329,456			327,453			197,309			192,754
Total liabilities and equity	$	2,500,869		$	2,389,740		$	2,298,593		$	2,237,580		$	2,186,925
	Annualized Yield Trend - Quarters Ended
	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Interest-earning assets:
Loans^(1)		3.78	%		3.65	%		3.61	%		3.61	%		3.59	%
Investment securities ^(2)		2.65	%		2.55	%		2.54	%		2.55	%		2.58	%
Other interest-earning assets		1.52	%		1.71	%		3.62	%		1.63	%		1.22	%
Total interest-earning assets		3.62	%		3.54	%		3.53	%		3.47	%		3.41	%
Interest-bearing liabilities:
Savings accounts		0.19	%		0.18	%		0.17	%		0.17	%		0.17	%
NOW accounts		0.06	%		0.06	%		0.06	%		0.06	%		0.06	%
Money market accounts		0.49	%		0.46	%		0.44	%		0.45	%		0.45	%
Certificates of deposit		1.17	%		1.16	%		1.14	%		1.16	%		1.16	%
Brokered deposit		0.98	%		0.92	%		2.17	%		—	%		—	%
Total interest-bearing deposits		0.61	%		0.59	%		0.56	%		0.57	%		0.58	%
FHLB advances		1.79	%		1.87	%		2.00	%		2.17	%		2.10	%
Total interest-bearing liabilities		0.79	%		0.77	%		0.75	%		0.79	%		0.81	%

⁽¹⁾ Includes loans held for sale, nonaccruing loan balances and interest received on such loans.
⁽²⁾ Includes securities available for sale and securities held to maturity.

HarborOne Bancorp, Inc.
Selected Financial Highlights
(Unaudited)
	Quarters Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Performance Ratios (annualized):	2017			2016			2016			2016			2016
Return (loss) on average assets (ROAA)		0.44	%		0.49	%		0.62	%		(0.12)	%		0.02	%
Return (loss) on average equity (ROAE)		3.31	%		3.56	%		4.34	%		(1.38)	%		0.26	%
Efficiency ratio ^(1)		84.41	%		81.87	%		80.46	%		101.99	%		98.34	%

⁽¹⁾ Represents noninterest expense divided by the sum of net interest income and noninterest income

	At or for the Quarters Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Asset Quality	2017			2016			2016			2016			2016
(Dollars in thousands)
Total nonperforming assets	$	23,471		$	22,946		$	25,992		$	27,770		$	29,661
Nonperforming assets to total assets		0.91	%		0.94	%		1.11	%		1.23	%		1.32	%
Allowance for loan losses to total loans		0.82	%		0.85	%		0.82	%		0.79	%		0.78	%
Net charge offs	$	349		$	320		$	317		$	58		$	209
Annualized net charge offs/average loans		0.07	%		0.06	%		0.07	%		0.01	%		0.05	%
Allowance for loan losses to nonperforming loans		78.17	%		80.12	%		65.92	%		55.52	%		49.56	%

	March 31,			December 31,			September 30,			June 30,			March 31,
Capital and Share Related	2017			2016			2016			2016			2016
Common stock outstanding		32,120,880			32,120,880			32,120,880			32,120,880			N/A
Book value per share	$	10.36		$	10.25		$	10.21		$	10.10			N/A
Tangible book value per share ^(1)	$	9.94		$	9.83		$	9.79		$	9.67			N/A
Tangible common equity / tangible assets ^(2)		12.50	%		12.97	%		13.47	%		13.79	%		7.99	%

⁽¹⁾ This non-GAAP ratio is total stockholders' equity less goodwill and other intangible assets divided by common stock outstanding.
⁽²⁾ This non-GAAP ratio is total stockholders' equity less goodwill and other intangible assets to total assets less goodwill and other intangible assets.