HarborOne Bancorp, Inc. Announces Second Quarter 2016 Earnings - HarborOne Bancorp (NASDAQ:HONE)

BROCKTON, Mass.--(BUSINESS WIRE)--

HarborOne Bancorp, Inc. (the "Company") HONE, the holding company for HarborOne Bank (the "Bank"), reported a net loss of $681,000 for the quarter ended June 30, 2016 compared to net income of $124,000 for the first quarter of 2016 and net income of $1.1 million for the second quarter of 2015. The Company reported a net loss of $557,000 for the six months ended June 30, 2016 compared to net income of $2.0 million for the same period in 2015. The Company's results for the quarter ended June 30, 2016 include a one-time pre-tax contribution of $4.8 million in connection with the funding of The HarborOne Foundation (the "Foundation"), a new charitable organization dedicated to providing financial support to charitable organizations in the communities in which we operate now and in the future. Excluding this non-recurring expense, net income would have been $2.2 million for the second quarter of 2016 and $2.3 million for the first six months of 2016. Merrimack Mortgage Company, LLC ("Merrimack"), the Bank's mortgage company subsidiary, was acquired on July 1, 2015.

James Blake, President and CEO, stated, "We are pleased with the affirmation of our business strategy demonstrated by our deposit customers through their oversubscription of our initial stock offering. Ensuring compliance with the FDIC's 8% de novo bank capital requirement during the second quarter of 2016 required that we actively manage our balance sheet, prepaying borrowings and reducing our participation in institutional fund deposits. However, our initial public offering, which was completed in late June 2016, and the termination of the de novo bank capital requirements as of July 1, 2016, have provided relief from these immediate capital constraints and allowed us to refocus on executing our growth strategy, including prudent commercial loan growth and expansion opportunities. In addition we were able to make a significant contribution to the Foundation to continue our commitment to strengthening and empowering the communities we serve."

Net Interest Income

The Company's net interest income was $14.7 million for the quarter ended June 30, 2016, up $766,000 or 5.5% from $13.9 million for the quarter ended March 31, 2016 and up $2.2 million, or 17.9%, from $12.4 million for the quarter ended June 30, 2015. The interest rate spread and net interest margin on a tax-equivalent basis were 2.68 % and 2.81%, respectively for the quarter ended June 30, 2016 compared to 2.60% and 2.72%, respectively, for the quarter ended March 31, 2016 and 2.42% and 2.53%, respectively, for the quarter ended June 30, 2015. The increases in spread and margin were due primarily to commercial real estate loan growth funded with growth in core deposits.

Total interest and dividend income was $18.1 million for the quarter ended June 30, 2016, up $667,000, or 3.8%, from the quarter ended March 31, 2016 and up $2.1 million, or 12.9%, from the quarter ended June 30, 2015, primarily due to growth in the Company's average loan balances to $1.881 billion and increases in the yield on loans to 3.61%. Total interest expense decreased to $3.5 million for the quarter ended June 30, 2016, down $99,000, or 2.8%, from the quarter ended March 31, 2016 and down $153,000, or 4.2%, from the quarter ended June 30, 2015, primarily due to a decrease in average Federal Home Loan Bank ("FHLB") borrowings to $239.2 million from $265.4 million for the first quarter of 2016 and $295.1 million from the second quarter of 2015. The Company's yield on interest-earning assets on a tax-equivalent basis increased to 3.47% for the quarter ended June 30, 2016 from 3.41% for the quarter ended March 31, 2016 and 3.26% for the quarter ended June 30, 2015, while the cost of funds was 0.79% for the quarter ended June 30, 2016 compared to 0.81% for the quarter ended March 31, 2016 and 0.84% for the quarter ended June 30, 2015.

Noninterest Income

Noninterest income increased to $15.9 million for the quarter ended June 30, 2016, up $4.8 million, or 43.6%, from the quarter ended March 31, 2016 and up $11.7 million, or 279.4% from the quarter ended June 30, 2015, primarily due to the Company's acquisition of Merrimack. During the three months ended June 30, 2016 and March 31, 2016 the fair value of mortgage servicing rights decreased $2.2 million and $2.3 million, respectively. Despite the negative impact of fair value adjustments on mortgage servicing rights, mortgage banking income increased $4.6 million as a result of increased mortgage loan origination and sales volume and the associated gain on the loan sales and origination fees. Mortgage servicing rights values continued to suffer in the second quarter of 2016 due to the continued low rate environment which drives up prepayment speed assumptions on the underlying mortgages and drives down the fair value of the servicing rights.

Noninterest Expense

Noninterest expenses were $31.2 million for the quarter ended June 30, 2016 an increase of $6.6 million or 26.9% from the quarter ended March 31, 2016, primarily due to the one-time expense incurred in connection with the establishment of the Foundation of $4.8 million. Other elements of the increase in noninterest expense included increased compensation and benefits costs of $889,000 primarily due to increased commission expense of $1.7 million related to the increased mortgage origination volume, offset by a decrease of $900,000 in supplemental executive retirement plan expense as accelerated vesting on a plan amendment was expensed in the first quarter of 2016. Loan expenses increased $536,000 on increased mortgage loan origination volume. Additionally the Company incurred a prepayment penalty of $400,000 on the early repayment of a FHLB borrowing in the second quarter of 2016 that was not incurred in the first quarter. Occupancy and equipment expenses decreased $321,000 due to lower expenses related to landscaping and snow removal in the second quarter of 2016. Noninterest expenses increased $16.6 million, or 113.4% from the quarter ended June 30, 2015 primarily as a result of the acquisition of Merrimack.

The Company recorded an income tax benefit of $749,000 for the quarter ended June 30, 2016 compared to $62,000 income tax expense or a 33.3% effective tax rate, for the quarter ended March 31, 2016 and $290,000 or a 21.5% effective tax rate, for the quarter ended June 30, 2015. The second quarter 2016 benefit reflects the $1.9 million tax benefit for the Foundation expense offset by the taxable income at an effective rate of 34.6%. The increase in the effective tax rate in 2016 is due primarily to the effect of higher projected pre-tax income while maintaining the same level of tax-advantaged income such as BOLI and tax-exempt municipal bonds.

Asset Quality

The Company's provision for loan losses increased to $801,000 for the quarter ended June 30, 2016 from $205,000 for the quarter ended March 31, 2016 and $667,000 for the quarter ended June 30, 2015, primarily due to commercial loan growth. The increases in the provision for loan losses were also based on management's assessment of loan portfolio growth and composition changes, improving historical charge-off trends, and ongoing evaluation of credit quality and current economic conditions. The allowance for loan losses was $14.4 million or 0.79% of total loans at June 30, 2016, compared to $13.7 million or 0.78% of total loans at March 31, 2016 and $14.1 million or 0.81% of total loans at June 30, 2015. Net charge-offs totaled $59,000 for the quarter ended June 30, 2016, or 0.01% of average loans outstanding on an annualized basis compared to $209,000 for the quarter ended March 31, 2016, or 0.05% of average loans outstanding on an annualized basis and $329,000 for the quarter ended June 30, 2015, or 0.08% of average loans outstanding on an annualized basis.

Nonperforming assets were $27.8 million at June 30, 2016 compared to $29.7 million at March 31, 2016 and $34.2 million at June 30, 2015. Nonperforming assets as a percentage of total assets were 1.23% at June 30, 2016, 1.32% at March 31, 2016 and 1.58% at June 30, 2015. The reductions reflect the Company's continued efforts to minimize nonperforming assets through diligent collection efforts and prudent workout arrangements.

Balance Sheet

Total assets increased $22.0 million, or 1.0%, to $2.267 billion at June 30, 2016 from $2.245 billion at March 31, 2016. Net loans increased $81.4 million, or 4.7%, to $1.821 billion at June 30, 2016 from $1.740 billion at March 31, 2016. The net increase in loans for the three months ended June 30, 2016 was primarily due to increases of $76.5 million in commercial real estate loans, $3.7 million in commercial and industrial loans and $16.0 million in auto loans, partially offset by decreases of $9.8 million in construction loans and $3.9 million in residential real estate loans. Mortgage loans held for sale increased $32.1 million, or 47.5%, to $99.7 million at June 30, 2016 from $67.6 million at March 31, 2016 spurred by the continued low interest rate environment and seasonal home purchase activity. Cash and cash equivalents decreased $84.1 million, or 73.6%, to $30.1 million at June 30, 2016 from $114.3 million at March 31, 2016 with the funds primarily deployed to commercial real estate loan growth and FHLB borrowing prepayments.

Total deposits decreased $41.5 million, or 2.4%, to $1.710 billion at June 30, 2016 from $1.752 billion at March 31, 2016 reflecting a $30.5 million decrease in non-certificate accounts, primarily municipal money market deposits and a $22.5 million decrease in term certificate accounts, primarily institutional certificates. Proceeds from the Company's stock offering were used to pay down debt during the second quarter of 2016. As a result borrowings decreased $74.5 million, or 27.6%, to $195.1 million at June 30, 2016 from $270.0 million at March 31, 2016.

Total stockholders' equity was $324.2 million at June 30, 2016 compared to $191.9 million at March 31, 2016 and $187.2 million at June 30, 2015. The increases from both prior periods reflect the Company's mutual to stock conversion that was completed on June 29, 2016. As part of the conversion, the Company established an employee stock ownership plan ("ESOP") which acquired 8% of the shares issued in the conversion, including shares contributed to the Foundation. The $11.9 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 increased to 13.79% at June 30, 2016 from 7.99% at March 31, 2016 as a result of the additional capital received from the Company's conversion. At June 30, 2016, 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, Connecticut and Maine, and also does business in five 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 Company's Registration Statement on Form S-1 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.


HarborOne Bancorp, Inc. Consolidated Balance Sheet Trend (Unaudited)

(Dollars in thousands)	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015

Assets

Cash and due from banks	$	18,773		$	15,268		$	18,153		$	14,384		$	12,192
Short-term investments		11,365			98,991			22,499			1,552			56,647
Total cash and cash equivalents		30,138			114,259			40,652			15,936			68,839

Securities available for sale, at fair value		121,957			120,905			128,541			134,709			167,924
Securities held to maturity, at amortized cost		50,504			62,461			63,579			64,818			65,934
Federal Home Loan Bank stock, at cost		13,078			17,480			18,735			19,635			19,321
Mortgage loans held for sale, at fair value		99,697			67,592			63,797			79,734			5,041
Loans:
Residential real estate		773,169			777,034			810,343			840,259			847,899
Commercial real estate		377,386			300,880			265,482			243,085			210,233
Construction		31,414			41,227			35,830			33,524			34,568
Total mortgage loans on real estate		1,181,969			1,119,141			1,111,655			1,116,868			1,092,700
Commercial		82,333			78,666			70,472			66,477			59,984
Consumer		560,144			544,078			548,944			544,131			575,031
Loans		1,824,446			1,741,885			1,731,071			1,727,476			1,727,715
Less: Allowance for loan losses		(14,439	)		(13,696	)		(13,700	)		(14,003	)		(14,118	)
Net deferred loan costs		10,893			11,357			12,017			12,415			13,540
Net Loans		1,820,900			1,739,546			1,729,388			1,725,888			1,727,137
Mortgage servicing rights, at fair value		12,688			12,330			12,958			10,748			4,795
Goodwill and other intangible assets		13,630			13,651			13,674			11,345			3,232
Other assets		104,166			96,544			91,818			122,673			102,947
Total assets	$	2,266,758		$	2,244,768		$	2,163,142		$	2,185,486		$	2,165,172

Liabilities and Stockholders' Equity

Deposits:
NOW and demand deposit accounts	$	339,379		$	331,709		$	320,717		$	291,337		$	277,895
Regular savings and club accounts		316,195			312,362			295,533			286,004			286,580
Money market deposit accounts		620,974			651,503			612,370			613,804			601,537
Term certificate accounts		433,685			456,136			462,592			475,755			496,634
Total deposits		1,710,234			1,751,711			1,691,212			1,666,900			1,662,646
Short-term borrowed funds		-			-			-			21,800			20,000
Long-term borrowed funds		195,096			269,597			249,598			279,599			279,600
Other liabilities and accrued expenses		37,137			31,578			31,644			26,997			15,761
Total liabilities		1,942,467			2,052,887			1,972,454			1,995,296			1,978,007

Common stock		321			-			-			-			-
Additional paid-in capital		144,107			-			-			-			-
Unearned compensation-ESOP		(11,872	)		-			-			-			-
Retained earnings		190,723			191,404			191,280			189,737			187,493
Accumulated other comprehensive income (loss)		1,011			477			(592	)		453			(328	)
Total stockholders' equity		324,290			191,881			190,688			190,190			187,165

Total liabilities and stockholders' equity	$	2,266,758		$	2,244,768		$	2,163,142		$	2,185,486		$	2,165,172


HarborOne Bancorp, Inc. Consolidated Statements of Net Income-Trend (Unaudited)
	Quarters Ended
	June 30, 2016			March 31, 2016			December 31, 2015		September 30, 2015			June 30, 2015
(Dollars in thousands)

Interest and dividend income:
Interest and fees on loans	$	16,293		$	15,643		$	15,460	$	15,553		$	14,608
Interest on loans held for sale		581			460			615		740			43
Interest on securities		1,023			1,099			1,179		1,230			1,271
Other interest and dividend income		209			237			186		167			117
Total interest and dividend income		18,106			17,439			17,440		17,690			16,039

Interest expense:
Interest on deposits		2,165			2,170			2,201		2,220			2,141
Interest on borrowed funds		1,289			1,383			1,350		1,583			1,466
Total interest expense		3,454			3,553			3,551		3,803			3,607

Net interest and dividend income		14,652			13,886			13,889		13,887			12,432

Provision for loan losses		801			205			15		325			667

Net interest income, after provision for loan losses		13,851			13,681			13,874		13,562			11,765

Noninterest income:
Mortgage banking income:
Changes in mortgage servicing rights fair value		(2,163	)		(2,288	)		536		(677	)		(165	)
Other		13,770			9,321			8,643		10,664			688
Total mortgage banking income		11,607			7,033			9,179		9,987			523

Deposit account fees		2,928			2,747			2,934		2,886			2,820
Income on retirement plan annuities		108			106			108		106			173
Gain on sale of consumer loans		29			50			-		136			-
Gain on sale and call of securities, net		41			242			-		1			-
Bank-owned life insurance income		274			276			264		295			302
Other income		901			608			485		542			370
Total noninterest income		15,888			11,062			12,970		13,953			4,188

Noninterest expenses:
Compensation and benefits		16,407			15,518			15,332		14,875			8,050
Occupancy and equipment		2,463			2,784			2,315		2,280			1,932
Data processing expenses		1,446			1,414			1,362		1,328			1,342
Loan expense		2,128			1,592			1,502		1,821			380
Marketing		607			565			575		544			441
Professional fees		602			577			653		633			468
Deposit insurance		418			403			430		438			424
Prepayment penalties on Federal Home Loan Bank		400			-			280		355			-
Charitable foundation contributions		4,820			-			-		-			-
Other expenses		1,878			1,704			1,992		1,832			1,566
Total noninterest expenses		31,169			24,557			24,441		24,106			14,603

Income (loss) before income taxes		(1,430	)		186			2,403		3,409			1,350

Income tax provision (benefit)		(749	)		62			860		1,165			290

Net income (loss)	$	(681	)	$	124		$	1,543	$	2,244		$	1,060

Earnings (loss) per share is not presented herein as common stock has not been outstanding during the entire three months ended June 30, 2016.


HarborOne Bancorp, Inc. Consolidated Statements of Net Income (Unaudited)

	For The Six Months Ended						$ Change			% Change
	2016			2015
(Dollars in thousands)

Interest and dividend income:
Interest and fees on loans	$	31,936		$	28,975		$	2,961		10.2	%
Interest on loans held for sale		1,041			70			971		1387.1	%
Interest on securities		2,122			2,393			(271	)	(11.3	%)
Other interest and dividend income		446			232			214		92.2	%
Total interest and dividend income		35,545			31,670			3,875		12.2	%

Interest expense:
Interest on deposits		4,335			4,279			56		1.3	%
Interest on borrowed funds		2,672			2,942			(270	)	(9.2	%)
Total interest expense		7,007			7,221			(214	)	(3.0	%)

Net interest and dividend income		28,538			24,449			4,089		16.7	%

Provision for loan losses		1,006			917			89		9.7	%

Net interest income, after provision for loan losses		27,532			23,532			4,000		17.0	%

Noninterest income:
Mortgage banking income:
Changes in mortgage servicing rights fair value		(4,451	)		(339	)		(4,112	)	1213.0	%
Other		23,091			1,265			21,826		1725.4	%
Total mortgage banking income		18,640			926			17,714		1913.0	%

Deposit account fees		5,675			5,374			301		5.6	%
Income on retirement plan annuities		214			381			(167	)	(43.8	%)
Gain on sale of consumer loans		79			-			79		-
Gain on sale and call of securities, net		283			294			(11	)	(3.7	%)
Bank-owned life insurance income		550			597			(47	)	(7.9	%)
Other income		1,509			878			631		71.9	%
Total noninterest income		26,950			8,450			18,500		218.9	%

Noninterest expenses:
Compensation and benefits		31,925			15,539			16,386		105.5	%
Occupancy and equipment		5,247			4,651			596		12.8	%
Data processing expenses		2,860			2,702			158		5.8	%
Loan expense		3,720			583			3,137		538.1	%
Marketing		1,172			805			367		45.6	%
Professional fees		1,179			895			284		31.7	%
Deposit insurance		821			848			(27	)	(3.2	%)
Prepayment penalties on Federal Home Loan Bank		400			345			55		15.9	%
Charitable foundation contributions		4,820			-			4,820		-
Other expenses		3,582			3,099			483		15.6	%
Total noninterest expenses		55,726			29,467			26,259		89.1	%

Income (loss) before income taxes		(1,244	)		2,515			(3,759	)	(149.5	%)

Income tax provision (benefit)		(687	)		534			(1,221	)	(228.7	%)

Net income (loss)	$	(557	)	$	1,981		$	(2,538	)	(128.1	%)

Earnings (loss) per share is not presented herein as common stock has not been outstanding during the entire three months ended June 30, 2016.


HarborOne Bancorp, Inc. Average Balances/Yields (Unaudited)
	Quarters Ended
	June 30, 2016							March 31, 2016							June 30, 2015
	Average Outstanding Balance			Interest		Yield/ Cost		Average Outstanding Balance			Interest		Yield/ Cost		Average Outstanding Balance			Interest		Yield/ Cost
	(Dollars in thousands)
Interest-earning assets:
Loans⁽¹⁾	$	1,881,488		$	16,874	3.61	%	$	1,803,000		$	16,103	3.59	%	$	1,686,558		$	14,651	3.48	%
Investment securities⁽²⁾		191,162			1,267	2.67			201,950			1,339	2.67			245,416			1,434	2.34
Other interest-earning assets		33,826			43	0.51			59,649			76	0.51			52,432			33	0.25
Total interest-earning assets		2,106,476			18,184	3.47			2,064,599			17,518	3.41			1,984,406			16,118	3.26
Noninterest-earning assets		131,104							122,326							103,836
Total assets	$	2,237,580						$	2,186,925						$	2,088,242
Interest-bearing liabilities:
Savings accounts	$	317,180		$	137	0.17		$	301,557		$	130	0.17		$	290,077		$	123	0.17
NOW accounts		120,702			19	0.06			116,866			18	0.06			108,219			18	0.07
Money market accounts		642,758			724	0.45			630,664			704	0.45			524,066			545	0.42
Certificates of deposit		446,848			1,285	1.16			458,636			1,318	1.16			500,180			1,455	1.17
Total interest-bearing deposits		1,527,488			2,165	0.57			1,507,723			2,170	0.58			1,422,542			2,141	0.60
FHLB advances		239,245			1,289	2.17			265,392			1,383	2.10			295,095			1,466	1.99
Total interest-bearing liabilities		1,766,733			3,454	0.79			1,773,115			3,553	0.81			1,717,637			3,607	0.84
Noninterest-bearing liabilities:
Noninterest-bearing deposits		244,651							191,942							168,214
Other noninterest-bearing liabilities		28,887							29,114							14,260
Total liabilities		2,040,271							1,994,171							1,900,111
Total equity		197,309							192,754							188,131
Total liabilities and equity	$	2,237,580						$	2,186,925						$	2,088,242
Tax equivalent net interest income					14,730							13,965							12,511
Tax equivalent interest spread⁽³⁾						2.68	%						2.60	%						2.42	%
Less:tax equivalent adjustment					78							79							79
Net interest income as reported				$	14,652						$	13,886						$	12,432
Net interest-earning assets⁽⁴⁾	$	339,743						$	291,484						$	266,769
Net interest margin⁽⁵⁾						2.80	%						2.71	%						2.51	%
Tax equivalent effect						0.01	%						0.01	%						0.02	%
Net interest margin on a fully tax equivalent basis						2.81	%						2.72	%						2.53	%
Average interest-earning assets to average interest-bearing liabilities		119.23	%						116.44	%						115.53	%

⁽¹⁾Includes loans held for sale, nonaccruing loan balances and interest received on such loans.
⁽²⁾Includes securities available for sale, securities held to maturity and FHLB stock. 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%, 2.51%, and 2.21%, 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.


HarborOne Bancorp, Inc. Average Balances/Yields (Unaudited)
	Year to Date
	June 30, 2016							June 30, 2015
	Average Outstanding Balance			Interest		Yield/ Cost		Average Outstanding Balance			Interest		Yield/ Cost
	(Dollars in thousands)
Interest-earning assets:
Loans⁽¹⁾	$	1,842,228		$	32,977	3.60	%	$	1,677,373		$	29,045	3.49	%
Investment securities ⁽²⁾		196,556			2,606	2.67			236,080			2,716	2.32
Other interest-earning assets		46,738			119	0.51			51,962			67	0.26
Total interest-earning assets		2,085,522			35,702	3.44			1,965,415			31,828	3.27
Noninterest-earning assets		126,731							104,990
Total assets	$	2,212,253						$	2,070,405
Interest-bearing liabilities:
Savings accounts	$	309,368		$	267	0.17		$	282,735		$	241	0.17
NOW accounts		118,785			37	0.06			106,521			35	0.07
Money market accounts		636,711			1,428	0.45			502,874			1,044	0.42
Certificates of deposit		452,742			2,603	1.16			505,252			2,959	1.18
Total interest-bearing deposits		1,517,606			4,335	0.57			1,397,382			4,279	0.62
FHLB advances		252,318			2,672	2.13			308,248			2,942	1.92
Total interest-bearing liabilities		1,769,924			7,007	0.80			1,705,630			7,221	0.85
Noninterest-bearing liabilities:
Noninterest-bearing deposits		219,315							161,271
Other noninterest-bearing liabilities		27,983							15,998
Total liabilities		2,017,222							1,882,899
Total equity		195,031							187,506
Total liabilities and equity	$	2,212,253						$	2,070,405
Tax equivalent net interest income					28,695							24,607
Tax equivalent interest rate spread ⁽³⁾						2.65	%						2.41	%
Less:tax equivalent adjustment					157							158
Net interest income as reported				$	28,538						$	24,449
Net interest-earning assets ⁽⁴⁾	$	315,598						$	259,785
Net interest margin ⁽⁵⁾						2.75	%						2.51	%
Tax equivalent effect						0.02	%						0.01	%
Net interest margin on a fully tax equivalent basis						2.77	%						2.52	%
Average interest-earning assets to average interest-bearing liabilities		117.83	%						115.23	%

⁽¹⁾Includes loans held for sale, nonaccruing loan balances and interest received on such loans.
⁽²⁾Includes securities available for sale, securities held to maturity and FHLB stock. 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 were 2.50% and 2.18% for the six months ended June 30, 2016 and 2015, 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.


HarborOne Bancorp, Inc. Average Balance and Yield Trend (Unaudited)
	Average Balances - Trend -Quarters Ended
	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
	(In thousands)
Interest-earning assets:
Loans⁽¹⁾	$	1,881,488		$	1,803,000		$	1,796,749		$	1,831,438		$	1,686,558
Investment securities ⁽²⁾		191,162			201,950			213,540			231,705			245,416
Other interest-earning assets		33,826			59,649			23,478			15,050			52,432
Total interest-earning assets		2,106,476			2,064,599			2,033,767			2,078,193			1,984,406
Noninterest-earning assets		131,104			122,326			117,676			113,506			103,836
Total assets	$	2,237,580		$	2,186,925		$	2,151,443		$	2,191,699		$	2,088,242
Interest-bearing liabilities:
Savings accounts	$	317,180		$	301,557		$	292,203		$	288,707		$	290,077
NOW accounts		120,702			116,866			113,971			111,581			108,219
Money market accounts		642,758			630,664			622,937			608,440			524,066
Certificates of deposit		446,848			458,636			468,762			486,132			500,180
Total interest-bearing deposits		1,527,488			1,507,723			1,497,873			1,494,860			1,422,542
FHLB advances		239,245			265,392			254,497			313,470			295,095
Total interest-bearing liabilities		1,766,733			1,773,115			1,752,370			1,808,330			1,717,637
Noninterest-bearing liabilities:
Noninterest-bearing deposits		244,651			191,942			182,813			172,097			168,214
Other noninterest-bearing liabilities		28,887			29,114			23,174			21,606			14,260
Total liabilities		2,040,271			1,994,171			1,958,357			2,002,033			1,900,111
Total equity		197,309			192,754			193,086			189,666			188,131
Total liabilities and equity	$	2,237,580		$	2,186,925		$	2,151,443		$	2,191,699		$	2,088,242

	Yield Trend-Quarters Ended
	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015

Interest-earning assets:
Loans		3.61	%		3.59	%		3.55	%		3.53	%		3.48	%
Investment securities		2.67	%		2.67	%		2.64	%		2.51	%		2.34	%
Other interest-earning assets		0.51	%		0.51	%		0.37	%		0.25	%		0.25	%
Total interest-earning assets		3.47	%		3.41	%		3.42	%		3.39	%		3.26	%

Interest-bearing liabilities:
Savings accounts		0.17	%		0.17	%		0.17	%		0.17	%		0.17	%
NOW accounts		0.06	%		0.06	%		0.06	%		0.06	%		0.07	%
Money market accounts		0.45	%		0.45	%		0.44	%		0.44	%		0.42	%
Certificates of deposit		1.16	%		1.16	%		1.15	%		1.15	%		1.17	%
Total interest-bearing deposits		0.57	%		0.58	%		0.58	%		0.59	%		0.60	%
FHLB advances		2.17	%		2.10	%		2.10	%		2.00	%		1.99	%
Total interest-bearing liabilities		0.79	%		0.81	%		0.80	%		0.83	%		0.84	%

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


HarborOne Bancorp, Inc. Selected Financial Highlights (Unaudited)
	Quarters Ended
Performance Ratios (annualized):	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015

Return on average assets (ROAA)		(0.12	%)		0.02	%		0.29	%		0.41	%		0.20	%

Return on average equity (ROAE)		(1.38	%)		0.26	%		3.20	%		4.73	%		2.25	%

Efficiency ratio		101.99	%		98.34	%		90.91	%		86.34	%		87.59	%

	At or for the Quarters Ended
(Dollars in thousands)	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
Asset Quality
Total Nonperforming assets	$	27,770		$	29,661		$	31,774		$	32,804		$	34,242
Nonperforming assets to total assets		1.23	%		1.32	%		1.47	%		1.50	%		1.58	%
Allowance for loan losses to total loans		0.79	%		0.78	%		0.79	%		0.80	%		0.81	%
Net charge offs	$	59		$	209		$	318		$	440		$	329
Annualized net charge offs /average loans		0.01	%		0.05	%		0.07	%		0.10	%		0.08	%
Allowance for loan losses to nonperforming loans		51.00	%		49.56	%		46.46	%		46.35	%		45.22	%

	Quarters Ended
Capital and Share Related	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015

Common stock outstanding		32,120,880			N/A			N/A			N/A			N/A

Book value per share		10.10			N/A			N/A			N/A			N/A

Tangible book value per share		9.67			N/A			N/A			N/A			N/A

Tangible common equity/tangible assets		13.79	%		7.99	%		8.24	%		8.23	%		8.51	%

View source version on businesswire.com: http://www.businesswire.com/news/home/20160722005764/en/

HarborOne Bancorp
Joseph F. Casey, 508-895-1312
EVP, COO, CFO

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