Exhibit 99.3
February 5, 2016
Board of Directors
HarborOne Mutual Bancshares
HarborOne Bancorp, Inc.
HarborOne Bank
770 Oak Street
Brockton, Massachusetts 02301
Members of the Board of Directors:
At your request, we have completed and hereby provide an independent appraisal (“Appraisal”) of the estimated pro forma market value of the common stock which is to be issued in connection with the stock issuance transaction described below.
This Appraisal is furnished pursuant to the requirements stipulated in the Code of Federal Regulations and has been prepared in accordance with the “Guidelines for Appraisal Reports for the Valuation of Savings and Loan Associations Converting from Mutual to Stock Form of Organization” (the “Valuation Guidelines”) of the Office of Thrift Supervision (“OTS”) and accepted by the Federal Reserve Board (“FRB”), the Office of the Comptroller of the Currency (“OCC”), the Federal Deposit Insurance Corporation (“FDIC”) and the Massachusetts Commissioner of Banks (the “Commissioner”), and applicable regulatory interpretations thereof.
Description of Plan of Reorganization and Minority Stock Issuance
On January 27, 2016, the Board of Directors of HarborOne Bank adopted the Plan of Reorganization and Minority Stock Issuance (the “Reorganization”). Pursuant to the Reorganization, HarborOne Bank will be a co-operative bank in stock form and its capital stock will be owned by HarborOne Bancorp, Inc. (“HarborOne Bancorp” or the “Company”), a Massachusetts corporation formed in 2016 as part of the Reorganization. HarborOne Bancorp will issue a majority of its common stock to HarborOne Mutual Bancshares (the “MHC”), a Massachusetts mutual holding company formed in 2016 as part of the Reorganization, and sell a minority of its common stock to the public. Concurrent with the completion of the public stock offering, the Bank will receive at least 50.0% of the net stock proceeds and the balance will be retained by HarborOne Bancorp. The MHC will own a controlling interest in the Company of at least 51%, and the Company will be the sole subsidiary of the MHC.
HarborOne Bancorp will offer its common stock in a subscription offering to Eligible Account Holders, Tax-Qualified Plans including HarborOne Bank’s employee stock ownership plan (the “ESOP”), and Employees, Officers and Directors of the Bank, as such terms are defined in the Bank’s Reorganization for purposes of applicable federal regulatory
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guidelines governing stock offerings by mutual institutions. To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, the shares may be offered for sale to members of the general public in a community offering and a syndicated community offering or a firm commitment underwritten offering. A portion of the net proceeds received from the sale of the common stock will be used to purchase all of the then to be issued and outstanding capital stock of HarborOne Bank and the balance of the net proceeds will be retained by the Company.
At this time, no other activities are contemplated for the Company other than the ownership of HarborOne Bank, a loan to the newly-formed ESOP and reinvestment of the proceeds that are retained by the Company. In the future, HarborOne Bancorp may acquire or organize other operating subsidiaries, diversify into other banking-related activities, pay dividends or repurchase its stock, although there are no specific plans to undertake such activities at the present time.
The Reorganization provides for the establishment of a new charitable foundation (the “Foundation”). The Foundation contribution will be funded with 1.2% of the number of shares of common stock issued in the stock issuance and cash equal to 0.3% of the Company’s pro forma market value. The purpose of the Foundation is to provide financial support to charitable organizations in the communities in which HarborOne Bank operates and to enable those communities to share in the Bank’s long-term growth. The Foundation will be dedicated completely to community activities and the promotion of charitable causes.
RP® Financial, LC.
RP® Financial, LC. (“RP Financial”) is a financial consulting firm serving the financial services industry nationwide that, among other things, specializes in financial valuations and analyses of business enterprises and securities, including the pro forma valuation for savings institutions converting from mutual-to-stock form. The background and experience of RP Financial is detailed in Exhibit V-1. We believe that, except for the fee we will receive for the Appraisal, we are independent of the Company, the Bank, the MHC and the other parties engaged by the Bank, the Company or the MHC to assist in the stock conversion process.
Valuation Methodology
In preparing our Appraisal, we have reviewed the regulatory applications of the Company, the Bank and the MHC, including the prospectus as filed with the FDIC, the Commissioner and the Securities and Exchange Commission (“SEC”). We have conducted a financial analysis of the Company, the Bank and the MHC that has included a review of audited financial information for the years ended December 31, 2011 through December 31, 2015, a review of various unaudited information and internal financial reports through December 31, 2015, and due diligence related discussions with the Bank’s management; Wolf & Company, P.C., the Company’s independent auditor; Goodwin Procter LLP, the Bank’s counsel for the Reorganization and Sandler O’Neill & Partners, L.P., the Bank’s marketing advisor in connection with the stock offering. All assumptions and conclusions set forth in the Appraisal were reached independently from such discussions. In addition, where appropriate, we have considered information based on other available published sources that we believe are reliable. While we
believe the information and data gathered from all these sources are reliable, we cannot guarantee the accuracy and completeness of such information.
We have investigated the competitive environment within which HarborOne Bank operates and have assessed HarborOne Bank’s relative strengths and weaknesses. We have kept abreast of the changing regulatory and legislative environment for financial institutions and analyzed the potential impact on HarborOne Bank and the industry as a whole. We have analyzed the potential effects of the stock offering on HarborOne Bank’s operating characteristics and financial performance as they relate to the pro forma market value of HarborOne Bancorp. We have reviewed the economic and demographic characteristics of the Bank’s primary market area. We have compared HarborOne Bank’s financial performance and condition with selected publicly-traded thrifts in accordance with the Valuation Guidelines, as well as all publicly-traded thrifts and thrift holding companies. We have reviewed the current conditions in the securities markets in general and the market for thrift stocks in particular, including the market for existing thrift issues and initial public offerings by thrifts and thrift holding companies. We have excluded from such analyses thrifts subject to announced or rumored acquisition, and/or institutions that exhibit other unusual characteristics.
The Appraisal is based on HarborOne Bank’s representation that the information contained in the regulatory applications and additional information furnished to us by HarborOne Bank and its independent auditor, legal counsel and other authorized agents are truthful, accurate and complete. We did not independently verify the financial statements and other information provided by HarborOne Bank, or its independent auditor, legal counsel and other authorized agents nor did we independently value the assets or liabilities of HarborOne Bank. The valuation considers HarborOne Bank only as a going concern and should not be considered as an indication of HarborOne Bank’s liquidation value.
Our appraised value is predicated on a continuation of the current operating environment for HarborOne Bank and for all thrifts and their holding companies. Changes in the local, state and national economy, the legislative and regulatory environment for financial institutions and mutual holding companies, the stock market, interest rates, and other external forces (such as natural disasters or significant world events) may occur from time to time, often with great unpredictability and may materially impact the value of thrift stocks as a whole or the value of HarborOne Bank’s stock alone. It is our understanding that there are no current plans for selling control of HarborOne Bank following completion of the stock offering. To the extent that such factors can be foreseen, they have been factored into our analysis.
The estimated pro forma market value is defined as the price at which HarborOne Bancorp’s common stock, immediately upon completion of the stock offering, would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.
Valuation Conclusion
It is our opinion that, as of February 5, 2016, the estimated aggregate pro forma market value of the shares to be issued immediately following the offering, both shares issued publicly as well as to the MHC, was $227,700,000 at the midpoint, equal to 22,700,000 shares issued at a per share value of $10.00. Pursuant to conversion guidelines, the 15% offering range
indicates a minimum value of $193,545,000 and a maximum value of $261,855,000. Based on the $10.00 per share offering price determined by the Board, this valuation range equates to total shares outstanding of 19,354,500 shares at the minimum of the valuation range and 26,185,500 total shares outstanding at the maximum of the valuation range. In the event that the appraised value is subject to an increase, the aggregate pro forma market value may be increased up to a super maximum value of $301,133,250 without a resolicitation. Based on the $10.00 per share offering price, the super maximum value would result in total shares outstanding of 30,113,325. The Board of Directors has established a public offering range such that the public ownership of the Company will constitute a 45.0% ownership interest of the Company prior to the issuance of the shares to the Foundation. Accordingly, the offering range to the public of the minority stock will be $87,095,250 at the minimum, $102,465,000 at the midpoint, $117,834,750 at the maximum and $135,509,960 at the super maximum. Based on the public offering range, and inclusive of the shares issued to the Foundation, the public ownership of the shares will represent 46.2% of the shares issued, with the MHC owning the majority of the shares.
Limiting Factors and Considerations
The valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing shares of the common stock. Moreover, because such valuation is determined in accordance with applicable regulatory guidelines and is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of common stock in the stock offering will thereafter be able to buy or sell such shares at prices related to the foregoing valuation of the estimated pro forma market value thereof. The appraisal reflects only a valuation range as of this date for the pro forma market value of HarborOne Bancorp immediately upon issuance of the stock and does not take into account any trading activity with respect to the purchase and sale of common stock in the secondary market on the date of issuance of such securities or at anytime thereafter following the completion of the stock offering.
RP Financial’s valuation was based on the financial condition and operations of HarborOne Bank as of December 31, 2015, the date of the financial data included in the prospectus.
RP Financial is not a seller of securities within the meaning of any federal and state securities laws and any report prepared by RP Financial shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. RP Financial maintains a policy which prohibits RP Financial, its principals or employees from purchasing stock of its client institutions.
This valuation will be updated as provided for in the conversion regulations and guidelines. These updates will consider, among other things, any developments or changes in the financial performance and condition of HarborOne Bank, management policies, and current conditions in the equity markets for thrift shares, both existing issues and new issues. These updates may also consider changes in other external factors which impact value including, but not limited to: various changes in the legislative and regulatory environment for financial institutions, the stock market and the market for thrift stocks, and interest rates. Should any
such new developments or changes be material, in our opinion, to the valuation of the shares, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained in the update at the date of the release of the update. The valuation will also be updated at the completion of HarborOne Bancorp’s stock offering.
| Respectfully submitted, |
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| RP® FINANCIAL, LC. |
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| /s/ Ronald S. Riggins |
| Ronald S. Riggins |
| Managing Director |
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| /s/ Gregory E. Dunn |
| Gregory E. Dunn |
| Director |
RP® Financial, LC.
TABLE OF CONTENTS
HARBORONE BANCORP, INC.
HARBORONE BANK
Brockton, Massachusetts
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DESCRIPTION |
| NUMBER | |
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CHAPTER ONE | OVERVIEW AND FINANCIAL ANALYSIS |
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Introduction |
| I.1 | |
Plan of Reorganization and Minority Stock Issuance |
| I.1 | |
Strategic Overview |
| I.2 | |
Balance Sheet Trends |
| I.5 | |
Income and Expense Trends |
| I.8 | |
Interest Rate Risk Management |
| I.11 | |
Lending Activities and Strategy |
| I.12 | |
Asset Quality |
| I.15 | |
Funding Composition and Strategy |
| I.16 | |
Subsidiary Activities |
| 1.17 | |
Legal Proceedings |
| I.17 | |
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CHAPTER TWO | MARKET AREA |
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Introduction |
| II.1 | |
National Economic Factors |
| II.1 | |
Market Area Demographics |
| II.5 | |
Regional Economy |
| II.7 | |
Unemployment Trends |
| II.8 | |
Market Area Deposit Characteristics and Competition |
| II.9 | |
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CHAPTER THREE | PEER GROUP ANALYSIS |
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Peer Group Selection |
| III.1 | |
Financial Condition |
| III.5 | |
Income and Expense Components |
| III.8 | |
Loan Composition |
| III.11 | |
Interest Rate Risk |
| III.11 | |
Credit Risk |
| III.14 | |
Summary |
| III.14 |
TABLE OF CONTENTS
HARBORONE BANCORP, INC.
HARBORONE BANK
Brockton, Massachusetts
(continued)
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CHAPTER FOUR | VALUATION ANALYSIS |
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Introduction | IV.1 | ||||||
Appraisal Guidelines | IV.1 | ||||||
RP Financial Approach to the Valuation | IV.1 | ||||||
Valuation Analysis | IV.2 | ||||||
| 1. | Financial Condition | IV.3 | ||||
| 2. | Profitability, Growth and Viability of Earnings | IV.4 | ||||
| 3. | Asset Growth | IV.6 | ||||
| 4. | Primary Market Area | IV.6 | ||||
| 5. | Dividends | IV.8 | ||||
| 6. | Liquidity of the Shares | IV.8 | ||||
| 7. | Marketing of the Issue | IV.9 | ||||
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| A. | The Public Market | IV.9 | |||
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| B. | The New Issue Market | IV.13 | |||
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| C. | The Acquisition Market | IV.14 | |||
| 8. | Management | IV.17 | ||||
| 9. | Effect of Government Regulation and Regulatory Reform | IV.18 | ||||
Summary of Adjustments | IV.18 | ||||||
Valuation Approaches: Fully-Converted Basis | IV.18 | ||||||
Basis of Valuation- Fully-Converted Pricing Ratios | IV.20 | ||||||
| 1. | Price-to-Earnings (“P/E”) | IV.20 | ||||
| 2. | Price-to-Book (“P/B”) | IV.22 | ||||
| 3. | Price-to-Assets (“P/A”) | IV.24 | ||||
Comparison to Publicly-Traded MHCs | IV.25 | ||||||
Comparison to Recent Offerings and Publicly-Traded Mortgage Banking Companies | IV.29 | ||||||
Valuation Conclusion | IV.29 | ||||||
LIST OF TABLES
HARBORONE BANCORP, INC.
HARBORONE BANK
Brockton, Massachusetts
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1.1 |
| Historical Balance Sheet Data | I.6 | ||
1.2 |
| Historical Income Statements | I.9 | ||
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2.1 |
| Summary Demographic Data | II.6 | ||
2.2 |
| Primary Market Area Employment Sectors | II.7 | ||
2.3 |
| Boston Market Area Largest Employers | II.8 | ||
2.4 |
| Unemployment Trends | II.9 | ||
2.5 |
| Deposit Summary | II.10 | ||
2.6 |
| Market Area Deposit Competitors | II.11 | ||
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3.1 |
| Peer Group of Publicly-Traded Thrifts | III.3 | ||
3.2 |
| Balance Sheet Composition and Growth Rates | III.6 | ||
3.3 |
| Income as a Pct. of Avg. Assets and Yields, Costs, Spreads | III.9 | ||
3.4 |
| Loan Portfolio Composition and Related Information | III.12 | ||
3.5 |
| Interest Rate Risk Measures and Net Interest Income Volatility | III.13 | ||
3.6
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| Credit Risk Measures and Related Information | III.15
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4.1 |
| Market Area Unemployment Rates | IV.7 | ||
4.2 |
| Pricing Characteristics and After-Market Trends | IV.15 | ||
4.3 |
| Market Pricing Comparatives | IV.16 | ||
4.4 |
| Fully-Converted Market Pricing Versus Peer Group | IV.21 | ||
4.5 |
| MHC Market Pricing Versus Peer Group | IV.23 | ||
4.6 |
| Calculation of Implied Per Share Data- Incorporating MHC Second Step Conversion | IV.26 | ||
4.7 |
| MHC Institutions Implied Pricing Ratios, Full Conversion Basis | IV.28 | ||
I. OVERVIEW AND FINANCIAL ANALYSIS
Introduction
HarborOne Bank or the “Bank” is a Massachusetts chartered co-operative bank headquartered in Brockton, Massachusetts. The Bank was established in 1917 as Brockton Credit Union and converted to a Massachusetts co-operative bank in 2013. HarborOne Bank serves the Boston metropolitan area through 14 full service branch offices, two limited service branches and 13 free standing ATMs. The Bank also maintains an ATM at every full service branch and a commercial loan office in Providence, Rhode Island. Additionally, through its wholly-owned subsidiary Merrimack Mortgage Company, Inc. or “Merrimack Mortgage”, the Bank conducts mortgage banking operations through 34 offices in Massachusetts, New Hampshire, Connecticut and Maine. Harbor One Bank acquired Merrimack Mortgage on July 1, 2015. A map of HarborOne Bank’s full serve branch office locations is provided in Exhibit I-1. HarborOne Bank is a member of the Federal Home Loan Bank (“FHLB”) system and its deposits are insured up to the maximum allowable amount by the Federal Deposit Insurance Corporation (“FDIC”). As of December 31, 2015, HarborOne Bank had total assets of $2.2 billion, total deposits of $1.7 billion and total equity of $190.7 million equal to 8.82% of total assets. The Bank’s audited financial statements are included by reference as Exhibit I-2.
Plan of Reorganization and Minority Stock Issuance
On January 27, 2016, the Board of Directors of HarborOne Bank adopted the Plan of Reorganization and Minority Stock Issuance (the “Reorganization”). Pursuant to the Reorganization, HarborOne Bank will be a co-operative bank in stock form and its capital stock will be owned by HarborOne Bancorp, Inc. (“HarborOne Bancorp” or the “Company”), a Massachusetts corporation formed in 2016 as part of the Reorganization. HarborOne Bancorp will issue a majority of its common stock to HarborOne Mutual Bancshares (the “MHC”), a Massachusetts mutual holding company formed in 2016 as part of the Reorganization, and sell a minority of its common stock to the public. Concurrent with the completion of the public stock offering, the Bank will receive at least 50% of the net stock proceeds and the balance will be retained by HarborOne Bancorp. The MHC will own a controlling interest in the Company of at least 51%, and the Company will be the sole subsidiary of the MHC.
HarborOne Bancorp will offer its common stock in a subscription offering to Eligible Account Holders, Tax-Qualified Plans including HarborOne Bank’s employee stock ownership plan (the “ESOP”), and Employees, Officers and Directors of the Bank, as such terms are defined in the Bank’s Reorganization for purposes of applicable federal regulatory guidelines governing stock offerings by mutual institutions. To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, the shares may be offered for sale to members of the general public in a community offering and a syndicated community offering or a firm commitment underwritten offering. A portion of the net proceeds received from the sale of the common stock will be used to purchase all of the then to be issued and outstanding capital stock of HarborOne Bank and the balance of the net proceeds will be retained by the Company.
At this time, no other activities are contemplated for the Company other than the ownership of the Bank, funding a loan to the newly-formed ESOP and reinvestment of the proceeds that are retained by the Company. In the future, HarborOne Bancorp may acquire or organize other operating subsidiaries, diversify into other banking-related activities, pay dividends or repurchase its stock, although there are no specific plans to undertake such activities at the present time.
The Reorganization provides for the establishment of a new charitable foundation (the “Foundation”). The Foundation contribution will be funded with 1.2% of the number of shares of common stock issued in the stock issuance and cash equal to 0.3% of the Company’s pro forma market value at the close of the offering. The purpose of the Foundation is to provide financial support to charitable organizations in the communities in which HarborOne Bank operates and to enable those communities to share in the Bank’s long-term growth. The Foundation will be dedicated completely to community activities and the promotion of charitable causes.
Strategic Overview
HarborOne Bank maintains a local community banking emphasis, with a primary strategic objective of meeting the borrowing and savings needs of its local customer base. Historically, as a credit union, the Bank’s lending activities were concentrated in origination of 1-4 family permanent mortgage loans and consumer loans that emphasized the origination of indirect auto loans and leases. Pursuant to HarborOne Bank’s conversion to co-operative bank, the Bank embarked on a new strategic direction designed to build a full service community banking franchise. In connection with the implementation of a full service community banking
strategy, the Bank invested in infrastructure and personnel to manage and facilitate growth strategies. Most notably, in support of implementation of a diversified lending strategy, the Bank has been building a team of commercial lenders experienced in developing full service commercial banking relationships in the local market. In 2014 and 2015, the Bank has started to realize some leveraging of its strategic investments, as evidenced by an acceleration of commercial loan growth. The Bank’s objective is to fund asset growth primarily through deposit growth, emphasizing growth of lower cost core deposits. Core deposit growth is expected to be in part facilitated by growth of commercial lending relationships, pursuant to which the Bank is seeking to establish a full service banking relationship with its commercial loan customers through offering a full range of commercial loan products that can be packaged with lower cost commercial deposit products.
In July 2015, the Bank acquired Merrimack Mortgage, an independent residential mortgage company headquartered in Manchester, New Hampshire. While the acquisition of Merrimack Mortgage had a relatively small impact on the Bank’s balance sheet, it has had a significant impact on the Bank’s earnings with respect to increasing non-interest operating revenues and operating expenses. Total non-interest income increased from $15.6 million during 2014 to $35.4 million during 2015 and operating expenses increased from $54.3 million during 2014 to $78.0 million during 2015, in which 2015 earnings includes only six months of Merrimack Mortgage’s revenues and operating expenses.
Investments serve as a supplement to the Bank’s lending activities and the investment portfolio is considered to be indicative of a low risk investment philosophy. Mortgage-backed securities guaranteed by government sponsored enterprises (“GSEs”) constitute the largest portion of the Bank’s investment portfolio, with other investments consisting of municipal bonds, U.S. Government and GSE obligations and Small Business Administration (“SBA”) asset-backed securities.
Deposits have consistently served as the primary funding source for the Bank, with supplemental funding provided by utilization of borrowings as an alternative funding source for purposes of managing funding costs and interest rate risk. Borrowings currently held by the Bank consist of FHLB advances.
HarborOne Bank’s earnings base is largely dependent upon net interest income and operating expense levels. The Bank experienced some net interest margin compression from 2011 through 2013, which was the result of a more significant decline in interest-earning assets
yields relative to interest-bearing funding costs. Comparatively, the Bank’s net interest margin has increased during the past two years, as commercial loan growth has facilitated a higher yield on interest-earning assets and the Bank’s funding costs have continued to trend lower.
Pursuant to the Bank’s acquisition of Merrimack Mortgage, non-interest operating income and operating expenses have become more significant earnings factors and, in light of the largely off—balance sheet operations of Merrimack Mortgage, non-interest operating income and operating expenses have increased significantly as a percent of average assets.
The post-offering business plan of the Bank is expected to continue to focus on implementing strategic initiatives to develop and grow a full service community banking franchise. Accordingly, HarborOne Bank will continue to be an independent full service community bank, with a commitment to meeting the retail and commercial banking needs of individuals and businesses in the Boston metropolitan area and nearby regional markets that are served by the Bank’s commercial loan office in Providence, Rhode Island and the offices maintained by Merrimack Mortgage in the states of Massachusetts, New Hampshire, Connecticut and Maine.
The Bank’s Board of Directors has elected to complete a public stock offering to sustain growth strategies and facilitate implementation of its strategic plan. The capital realized from the stock offering will increase the Bank’s operating flexibility and allow for additional growth of the balance sheet. The additional funds realized from the stock offering will provide an alternative funding source to deposits and borrowings in meeting the Bank’s future funding needs, which may facilitate a reduction in HarborOne Bank’s funding costs. Additionally, HarborOne Bank’s higher equity-to-assets ratio will enable the Bank to pursue expansion opportunities. Such expansion would most likely occur through the establishment of additional branches and opening additional offices maintained by Merrimack Mortgage. The Bank will also be in a better position to pursue growth through acquisition of other financial service providers following the stock offering, given its strengthened capital position. At this time, the Bank has no specific plans for expansion. The projected uses of proceeds are highlighted below.
· The Company. The Company is expected to retain up to 50% of the net offering proceeds. At present, funds at the Company level, net of the loan to the ESOP and the cash contribution to the Foundation, are expected to be primarily invested initially into liquid funds held as a deposit at the Bank. Over time, the funds may be utilized for various corporate purposes, possibly including acquisitions, infusing additional equity into the Bank, repurchases of common stock and the payment of cash dividends.
· The Bank. Approximately 50% of the net conversion proceeds will be infused into the Bank. Cash proceeds (i.e., net proceeds less deposits withdrawn to fund stock purchases) infused into the Bank are anticipated to become part of general operating funds and are expected to be primarily utilized to fund loan growth over time.
Overall, it is the Bank’s objective to pursue controlled growth that will serve to increase returns, while continuing to emphasize management of the overall risk associated with HarborOne Bank’s operations.
Balance Sheet Trends
Table 1.1 shows the Bank’s historical balance sheet data for the past five years. From yearend 2011 through yearend 2015, HarborOne Bank’s assets increased at a 3.71% annual rate. Asset growth was largely driven by loan growth and supplemented with growth of investment securities. Asset growth was funded by deposit growth, which funded a reduction in borrowings as well. A summary of HarborOne Bank’s key operating ratios for the past five years is presented in Exhibit I-3.
HarborOne Bank’s loans receivable portfolio increased at a 3.10% annual rate from yearend 2011 through yearend 2015, in which the loans receivable balance declined during 2012 and then trended higher through 2015. The most significant loan growth was realized during the past two years, which was primarily attributable to growth of commercial real estate loans and commercial business loans. The Bank’s slightly lower loan growth rate compared to its asset growth rate provided for a slight decrease in the loans-to-assets ratio from 81.86% at yearend 2011 to 79.95% at yearend 2015.
HarborOne Bank’s emphasis on growing commercial loans is evidenced by recent trends in its loan portfolio composition. Trends in the Bank’s loan portfolio composition since yearend 2011 show that the concentration of 1-4 family mortgage loans comprising total loans decreased from 50.59% of total loans receivable at yearend 2011 to 41.07% of total loans receivable at yearend 2015. Similarly, consumer loans decreased from 37.76% of total loans receivable at yearend 2011 to 31.71% of total loans receivable at yearend 2015. Comparatively, from yearend 2011 through yearend 2015, commercial real estate loans (including multi-family loans) increased from 1.73% of total loans receivable to 15.34% of total loans receivable and commercial business loans increased from 1.01% of total loans receivable to 4.07% of total loans receivable. Over the same time period, the relative concentrations of construction increased from 0.90% of total loans receivable to 2.07% of total loans and home
Table 1.1
HarborOne Bank
Historical Balance Sheet Data
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Assets |
| $ | 1,869,920 |
| 100.00 | % | $ | 1,871,335 |
| 100.00 | % | $ | 1,957,671 |
| 100.00 | % | $ | 2,041,879 |
| 100.00 | % | $ | 2,163,142 |
| 100.00 | % | 3.71 | % |
Cash and cash equivalents |
| 76,296 |
| 4.08 | % | 108,196 |
| 5.78 | % | 75,342 |
| 3.85 | % | 52,983 |
| 2.59 | % | 40,652 |
| 1.88 | % | -14.56 | % | |||||
Investment securities |
| 155,328 |
| 8.31 | % | 130,754 |
| 6.99 | % | 192,695 |
| 9.84 | % | 206,399 |
| 10.11 | % | 192,120 |
| 8.88 | % | 5.46 | % | |||||
Loans held for sale |
| 2,930 |
| 0.16 | % | 11,497 |
| 0.61 | % | 2,061 |
| 0.11 | % | 3,525 |
| 0.17 | % | 63,797 |
| 2.95 | % | 116.01 | % | |||||
Loans receivable, net |
| 1,530,668 |
| 81.86 | % | 1,518,021 |
| 81.12 | % | 1,591,814 |
| 81.31 | % | 1,651,894 |
| 80.90 | % | 1,729,388 |
| 79.95 | % | 3.10 | % | |||||
FHLB stock |
| 23,419 |
| 1.25 | % | 22,904 |
| 1.22 | % | 22,129 |
| 1.13 | % | 18,631 |
| 0.91 | % | 18,735 |
| 0.87 | % | -5.43 | % | |||||
Bank-owned life insurance |
| — |
| 0.00 | % | — |
| 0.00 | % | — |
| 0.00 | % | 35,378 |
| 1.73 | % | 38,333 |
| 1.77 | % | NM |
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Goodwill and other intangible assets |
| 3,879 |
| 0.21 | % | 3,694 |
| 0.20 | % | 3,509 |
| 0.18 | % | 3,324 |
| 0.16 | % | 13,674 |
| 0.63 | % | 37.02 | % | |||||
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Deposits |
| $ | 1,330,516 |
| 71.15 | % | $ | 1,328,720 |
| 71.00 | % | $ | 1,414,960 |
| 72.28 | % | $ | 1,500,115 |
| 73.47 | % | $ | 1,691,212 |
| 78.18 | % | 6.18 | % |
Borrowings |
| 351,112 |
| 18.78 | % | 344,609 |
| 18.42 | % | 339,606 |
| 17.35 | % | 329,602 |
| 16.14 | % | 249,598 |
| 11.54 | % | -8.18 | % | |||||
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Equity |
| $ | 167,751 |
| 8.97 | % | $ | 175,896 |
| 9.40 | % | $ | 180,803 |
| 9.24 | % | $ | 183,458 |
| 8.98 | % | $ | 190,688 |
| 8.82 | % | 3.26 | % |
Tangible equity |
| 163,872 |
| 8.76 | % | 172,202 |
| 9.20 | % | 177,294 |
| 9.06 | % | 180,134 |
| 8.82 | % | 177,014 |
| 8.18 | % | 1.95 | % | |||||
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Loans/Deposits |
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|
| 115.04 | % |
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| 114.25 | % |
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| 112.50 | % |
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| 110.12 | % |
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| 102.26 | % |
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(1) Ratios are as a percent of ending assets.
Sources: HarborOne Bank’s prospectus, audited and unaudited financial statements, SNL Financial and RP Financial calculations.
equity loans and lines of credit decreased from 8.01% of total loans receivable to 5.74% of total loans receivable. Additionally, loans held for sale, which currently consist of Merrimack Mortgage’s loan production, fluctuated from a low of $2.1 million or 0.11% of assets at yearend 2013 to a high of $63.8 million or 2.95% of assets at yearend 2015.
The intent of the Bank’s investment policy is to provide adequate liquidity and to generate a favorable return within the context of supporting HarborOne Bank’s overall credit and interest rate risk objectives. It is anticipated that proceeds retained at the holding company level will be invested into liquid funds held as a deposit at the Bank. Since yearend 2011, the Bank’s level of cash and investment securities (inclusive of FHLB stock) ranged from a low of 11.63% of assets at yearend 2015 to a high of 14.82% of assets at yearend 2013. The decrease in the balance of cash and investments since yearend 2013 was largely related to redeployment of those funds for purposes of funding loan growth. Mortgage-backed securities totaling $120.7 million comprised the most significant component of the Bank’s investment portfolio at December 31, 2015. Other investments held by the Bank at December 31, 2015 consisted of municipal bonds ($26.0 million), SBA asset-backed securities ($30.5 million) and U.S. Government and GSE obligations ($14.9 million). As of December 31, 2015, investments maintained as held to maturity totaled $63.6 million and investments maintained as available-for sale totaled $128.5 million. As of December 31, 2015, the available for sale investment portfolioand had a net unrealized gain of $212,000. Exhibit I-4 provides historical detail of the Bank’s investment portfolio. As of December 31, 2015, the Bank also held $40.7 million of cash and cash equivalents and $18.7 million of FHLB stock.
The Bank also maintains an investment in bank-owned life insurance (“BOLI”) policies, which cover the lives of certain officers of the Bank. The purpose of the investment is to provide funding for employee benefit plans. The life insurance policies earn tax-exempt income through cash value accumulation and death proceeds. As of December 31, 2015, the cash surrender value of the Bank’s BOLI equaled $38.3 million.
Since yearend 2011, HarborOne Bank’s funding needs have been addressed through a combination of deposits, borrowings and internal cash flows. From yearend 2011 through yearend 2015, the Bank’s deposits increased at a 6.18% annual rate. Following a slight decline in deposits during 2012, deposit growth was sustained through yearend 2015. Deposit growth trends in recent years reflect that deposit growth primarily consisted of transaction and savings
account deposits. Transaction and savings account deposits comprised 69.57%% of average total deposits during 2015, versus 60.54% of average total deposits during 2013.
Borrowings serve as an alternative funding source for the Bank to address funding needs for growth and to support management of deposit costs and interest rate risk. From yearend 2011 through yearend 2015, borrowings decreased from $351.1 million or 18.78% of assets to $249.6 million or 11.54% of assets. Borrowing utilized by the Bank have generally been limited to FHLB advances.
The Bank’s equity increased at a 3.25% annual rate from yearend 2011 through yearend 2015, which was largely related to retention of earnings. A slightly stronger rate of asset growth relative to equity growth since yearend 2011 provided for a slight decline in the Bank’s equity-to-assets ratio from 8.97% at yearend 2011 to 8.82% at yearend 2015. Similarly, the Bank’s tangible equity-to-assets ratio decreased from 8.76% at yearend 2011 to 8.18% at yearend 2015. Goodwill and other intangibles totaled $13.9 million or 0.64% of assets at December 31, 2015. The Bank maintained capital surpluses relative to all of its regulatory capital requirements at December 31, 2015. The addition of stock proceeds will serve to strengthen the Bank’s capital position, as well as support growth opportunities. At the same time, the increase in HarborOne Bank’s pro forma capital position will initially depress its ROE.
Income and Expense Trends
Table 1.2 shows the Bank’s historical income statements for the past five years. The Bank’s reported earnings ranged from a low of $2.6 million or 0.13% of average assets during 2014 to a high of $8.7 million or 0.46% of average assets during 2012. The higher earnings reported by the Bank during 2011 and 2012 was in part attributable to that as a credit union the Bank did not pay federal and state income taxes. For 2015, the Bank reported net income of $5.8 million or 0.27% of average assets. Net interest income and operating expenses represent the primary components of the Bank’s recurring earnings, while non-operating income has become a more significant factor in the Bank’s earnings largely due to revenues generated by Merrimack Mortgage. Loan loss provisions have had a varied impact on the Bank’s earnings over the past five years, while non-operating gains have been a limited contributor to the Bank’s earnings over the past five years.
During the period covered in Table 1.2, the Bank’s net interest income to average assets ratio ranged from a low of 2.28% during 2014 to a high of 2.56% during 2011. For 2015, the
Table 1.2
HarborOne Bank
Historical Income Statements
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| For the Year Ended December 31, |
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| 2011 |
| 2012 |
| 2013 |
| 2014 |
| 2015 |
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| Amount |
| Pct(1) |
| Amount |
| Pct(1) |
| Amount |
| Pct(1) |
| Amount |
| Pct(1) |
| Amount |
| Pct(1) |
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| ($000) |
| (%) |
| ($000) |
| (%) |
| ($000) |
| (%) |
| ($000) |
| (%) |
| ($000) |
| (%) |
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| �� | |||||
Interest income |
| $ | 71,545 |
| 3.88 | % | $ | 66,702 |
| 3.52 | % | $ | 59,973 |
| 3.19 | % | $ | 61,079 |
| 3.08 | % | $ | 66,800 |
| 3.15 | % |
Interest expense |
| (24,273 | ) | -1.32 | % | (20,311 | ) | -1.07 | % | (16,381 | ) | -0.87 | % | (15,878 | ) | -0.80 | % | (14,575 | ) | -0.69 | % | |||||
Net interest income |
| $ | 47,272 |
| 2.56 | % | $ | 46,391 |
| 2.45 | % | $ | 43,592 |
| 2.32 | % | $ | 45,201 |
| 2.28 | % | $ | 52,225 |
| 2.46 | % |
Provision for loan losses |
| (4,024 | ) | -0.22 | % | (3,839 | ) | -0.20 | % | (2,235 | ) | -0.12 | % | (2,589 | ) | -0.13 | % | (1,257 | ) | -0.06 | % | |||||
Net interest income after provisions |
| $ | 43,248 |
| 2.34 | % | $ | 42,552 |
| 2.25 | % | $ | 41,357 |
| 2.20 | % | $ | 42,612 |
| 2.15 | % | $ | 50,968 |
| 2.40 | % |
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Mortgage banking income/Gain on sale of loans |
| $ | 1,296 |
| 0.07 | % | $ | 7,844 |
| 0.41 | % | $ | 1,617 |
| 0.09 | % | $ | 1,912 |
| 0.10 | % | $ | 20,228 |
| 0.95 | % |
Other non-interest operating income |
| 13,540 |
| 0.73 | % | 13,017 |
| 0.69 | % | 13,837 |
| 0.74 | % | 13,215 |
| 0.67 | % | 14,850 |
| 0.70 | % | |||||
Operating expense |
| (51,433 | ) | -2.79 | % | (54,900 | ) | -2.90 | % | (53,370 | ) | -2.83 | % | (54,302 | ) | -2.73 | % | (78,014 | ) | -3.68 | % | |||||
Net operating income |
| $ | 6,651 |
| 0.36 | % | $ | 8,513 |
| 0.45 | % | $ | 3,441 |
| 0.18 | % | $ | 3,437 |
| 0.17 | % | $ | 8,032 |
| 0.38 | % |
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Non-Operating Income/(Losses) |
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Gain (loss) on sale and call of securities, net |
| $ | 360 |
| 0.02 | % | $ | 204 |
| 0.01 | % | $ | 794 |
| 0.04 | % | $ | 483 |
| 0.02 | % | $ | 295 |
| 0.01 | % |
Net non-operating income(loss) |
| $ | 360 |
| 0.02 | % | $ | 204 |
| 0.01 | % | $ | 794 |
| 0.04 | % | $ | 483 |
| 0.02 | % | $ | 295 |
| 0.01 | % |
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Net income before tax |
| $ | 7,011 |
| 0.38 | % | $ | 8,717 |
| 0.46 | % | $ | 4,235 |
| 0.22 | % | $ | 3,920 |
| 0.20 | % | $ | 8,327 |
| 0.39 | % |
Income tax provision |
| 0 |
| 0.00 | % | — |
| 0.00 | % | 2,909 |
| 0.15 | % | (1,350 | ) | -0.07 | % | (2,559 | ) | -0.12 | % | |||||
Net income (loss) |
| $ | 7,011 |
| 0.38 | % | $ | 8,717 |
| 0.46 | % | $ | 7,144 |
| 0.38 | % | $ | 2,570 |
| 0.13 | % | $ | 5,768 |
| 0.27 | % |
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Adjusted Earnings |
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Net income |
| $ | 7,011 |
| 0.38 | % | $ | 8,717 |
| 0.46 | % | $ | 7,144 |
| 0.38 | % | $ | 2,570 |
| 0.13 | % | $ | 5,768 |
| 0.27 | % |
Add(Deduct): Non-operating income |
| (360 | ) | -0.02 | % | (204 | ) | -0.01 | % | (794 | ) | -0.04 | % | (483 | ) | -0.02 | % | (295 | ) | -0.01 | % | |||||
Tax effect (2) |
| 144 |
| 0.01 | % | 82 |
| 0.00 | % | 318 |
| 0.02 | % | 193 |
| 0.01 | % | 118 |
| 0.01 | % | |||||
Adjusted earnings |
| $ | 6,795 |
| 0.37 | % | $ | 8,595 |
| 0.45 | % | $ | 6,668 |
| 0.35 | % | $ | 2,280 |
| 0.11 | % | $ | 5,591 |
| 0.26 | % |
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Expense Coverage Ratio (3) |
| 0.92 | x |
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| 0.84 | x |
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| 0.82 | x |
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| 0.84 | x |
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| 0.67 | x |
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Efficiency Ratio (4) |
| 83.04 | % |
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| 81.69 | % |
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| 89.84 | % |
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| 89.51 | % |
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| 89.54 | % |
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(1) Ratios are as a percent of average assets.
(2) Assumes a 40.0% effective tax rate.
(3) Expense coverage ratio calculated as net interest income before provisions for loan losses divided by operating expenses.
(4) Efficiency ratio calculated as operating expenses divided by the sum of net interest income before provisions for loan losses plus non-interest operating income.
Sources: HarborOne Bank’s prospectus, audited & unaudited financial statements, SNL Financial and RP Financial calculations.
Bank’s net interest income to average assets ratio equaled 2.46%. The decline in the Bank’s net interest income ratio since 2011 has been largely attributable to interest rate spread compression that has resulted from a more significant decrease in the yield earned on interest-earnings assets relative to the cost of interest-bearing liabilities. As the result of the prolonged low interest rate environment, the decline in yield earned on less rate sensitive interest-earning assets became more significant relative to the decline in rate paid on more rate sensitive liabilities which had more significant downward repricing earlier in the prevailing interest rate environment. The increase in the Bank’s net interest income ratio during 2015 was facilitated by a wider yield-cost spread, as commercial loan growth served to increase the overall yield on interest-earning assets and funding costs for the Bank’s deposits and borrowings continued to trend lower. Overall, during the past five years, the Bank’s interest rate spread ranged from a low of 2.23% during 2013 to a high of 2.50% during 2015. The Bank’s net interest rate spreads and yields and costs for the past five years are set forth in Exhibit I-3 and Exhibit I-5.
With the acquisition of Merrimack Mortgage in 2015, non-interest operating income has become a significantly larger contributor to the Bank’s earnings. Most notably, mortgage banking income increased from $1.4 million during 2014 to $20.1 million during 2015. In addition to mortgage banking income, the Bank has also recorded modest gains on the sale of some its auto loan originations. Beyond mortgage banking income and gains on the sales of auto loans, deposit account fees constitute the major portion of the Bank’s non-interest operating income. Throughout the period shown in Table 1.2, non-interest operating income ranged from a low of $14.8 million or 0.80% of average assets during 2011 to a high of $35.1 million or 1.65% of average assets during 2015. Mortgage banking income and gains on sale of auto loans accounted for 57.7% of the Bank’s non-interest operating income during 2015.
Operating expenses represent the other major component of the Bank’s earnings, ranging from a low of $51.4 million or 2.79% of average assets during fiscal 2011 to a high of $78.0 million or 3.68% of average assets during 2015. Consistent with the sharp increase in the Bank’s non-interest operating revenues during 2015, the large increase in the Bank’s operating expenses during 2015 was mostly related to the operations of Merrimack Mortgage. To a lesser extent, the recent increase in operating expenses reflects additional resources devoted to building the Bank’s commercial lending platform.
Overall, during the past five years, the Bank’s expense coverage ratios (net interest income divided by operating expenses) ranged from a low of 0.67x during 2015 to a high of
0.92x during 2011. Comparatively, the Bank’s efficiency ratio (operating expenses as a percent of the sum of net interest income and other operating income) ranged from a high of 89.84% during 2013 to a low of 81.69% during 2012 and equaled 89.54% during 2015.
During the period covered in Table 1.2, the amount of loan loss provisions established ranged from high of $4.0 million or 0.22% of average assets during 2011 to a low of $1.3 million or 0.06% of average assets during 2015. The reduction in loan loss provisions established was facilitated by improving credit quality trends, including decreases in the amount of net charge-offs recorded. As of December 31, 2015 the Bank maintained loan loss allowances of $13.7 million, equal to 0.79% of total loans receivable and 46.56% of non-accruing loans. Exhibit I-6 sets forth the Bank’s loan loss allowance activity for the past five years.
Non-operating gains from the sale of investment securities have had a limited impact on the Bank’s earnings during the period covered in Table 1.2, ranging from a low of $204,000 or 0.01% of average assets during 2012 to a high $794,000 or 0.04% of average assets during 2013. For 2015, the Bank reported gains on the sale of investment securities equal to $295,000 or 0.01% of average assets.
As a former credit union, the Bank did not pay state and federal income taxes during 2011 and 2012. With its conversion to a state-charted co-operative bank, the Bank’s effective tax rate ranged from a low of 30.73% during 2015 to a high of 68.69% during 2013. As set forth in the prospectus, the Bank’s effective marginal tax rate is 40.0%.
Interest Rate Risk Management
The Bank’s balance sheet is liability-sensitive in the short-term (less than one year) and, thus, Economic Value of Equity (“EVE”) would decrease more significantly during periods of rising and higher interest rates. As of December 31, 2015, an analysis of the Bank’s EVE indicated that in the event of an instantaneous parallel 100 basis point decrease in interest rates EVE would decrease 3.7%. Comparatively, in the event of an instantaneous parallel 300 basis point increase in interest rates, the Bank would experience a 19.8% decrease in EVE (see Exhibit I-7).
The Bank pursues a number of strategies to manage interest rate risk, particularly with respect to seeking to limit the repricing mismatch between interest rate sensitive assets and liabilities. The Bank manages interest rate risk from the asset side of the balance sheet through investing in investment securities with adjustable interest rates, emphasizing origination of
adjustable rate and shorter term fixed rate loans for retention in the Bank’s loan portfolio and selling origination of longer term fixed rate 1-4 family permanent mortgage loans in the secondary market. The Bank also hedges a portion of its fixed rate commercial business loan portfolio with interest rate swap contracts. As of December 31, 2015, ARM loans comprised 21.18%% of total loans receivable (see Exhibit I-8). On the liability side of the balance sheet, management of interest rate risk has been pursued through emphasizing growth of lower costing and less interest rate sensitive transaction and savings accounts and utilizing fixed rate FHLB advances to fund commercial real estate loan growth. Transaction and savings accounts comprised 72.65% of the Bank’s total deposits at December 31, 2015.
The infusion of stock proceeds will serve to further limit the Bank’s interest rate risk exposure, as most of the net proceeds will be redeployed into interest-earning assets and the increase in the Bank’s capital position will lessen the proportion of interest rate sensitive liabilities funding assets.
Lending Activities and Strategy
Historically, HarborOne Bank’s lending activities have been concentrated in 1-4 family permanent mortgage loans and indirect auto loans and leases and those loan types continue to comprise the largest components of the Bank’s loan portfolio composition. Pursuant to the Bank’s strategic plan, the Bank is pursuing a diversified lending strategy emphasizing commercial real estate loans and commercial business loans as the primary areas of targeted loan growth. Other areas of lending diversification for the Bank include construction loans, home equity loans and lines of credit and other consumer loans. The origination of 1-4 family permanent mortgage loans is expected to remain a highly active area of lending for the Bank, particularly with respect to loan production generated through Merrimack Mortgage. However, growth of the 1-4 family loan portfolio will be constrained by the sale of loans originated by Merrimack Mortgage, as well as by the sale of most originations of longer term, fixed rate 1-4 family permanent mortgage loans that are originated by the Bank. Exhibit I-9 provides historical detail of HarborOne Bank’s loan portfolio composition for the past five years and Exhibit I-10 provides the contractual maturity of the Bank’s loan portfolio by loan type as of December 31, 2015.
1-4 Family Residential Loans. HarborOne Bank offers both fixed rate and adjustable rate 1-4 family permanent mortgage loans. Loans are underwritten to secondary market guidelines, as the Bank’s current philosophy has been to generally sell originations of
conforming 1-4 family fixed rate loans with terms of 15 years or more. Loans are generally sold on a servicing retained basis. ARM loans offered by the Bank have initial repricing terms of one to seven years and then reprice annually for the balance of the loan term. ARM loans are indexed to the 1-year Treasury rate or LIBOR. As of December 31, 2015, the Bank’s outstanding balance of 1-4 family loans equaled $711.0 million or 41.07% of total loans receivable.
Home Equity Loans and Lines of Credit. The Bank’s 1-4 family lending activities include home equity loans and lines of credit. Home equity loans are originated as fixed rate loans with amortization terms up 20 years. Home equity lines of credit are tied to the prime rate as published in The Wall Street Journal and are offered for terms of up to a ten year draw period followed by a 5, 10 or 15 year repayment period. The Bank will originate home equity loans and lines of credit up to a maximum loan-to value (“LTV”) ratio of 80.0%, inclusive of other liens on the property. As of December 31, 2015, the Bank’s outstanding balance of home equity loans and lines of credit totaled $99.4 million or 5.74% of total loans receivable.
Construction Loans. Construction loans originated by the Bank consist of loans to finance the construction of 1-4 family residences and commercial/multi-family properties. The Bank’s 1-4 family construction lending activities consist of originations to professional developers, contractors and builders, and, to a lesser extent, to individuals. Construction loans for commercial development include industrial buildings and retail and office buildings. Construction loans are generally offered as fixed rate interest only loans during the construction period, which is usually 12-24 months. Construction loans are generally offered up to a maximum LTV ratio of 80.0% of the appraised value of the completed property. As of December 31, 2015, the Bank’s outstanding balance of construction loans equaled $35.8 million or 2.07% of total loans receivable.
Commercial Real Estate Loans. The balance of the mortgage loan portfolio consists of commercial real estate loans, which are collateralized by properties in the Bank’s regional lending area. HarborOne Bank originates commercial real estate loans up to a maximum LTV ratio of 80.0% and requires a minimum debt-coverage ratio of 1.25 times. The Bank supplements originations of commercial real estate loans with purchases of loan participations, which are secured by properties in the Bank’s regional lending area and are subject to the Bank’s underwriting standards for commercial real estate loans. Commercial real estate loans are originated as either fixed rate or adjustable rate loans with for terms of up to 25 years.
Fixed rate loans are generally offered with a shorter term balloon provision. Most of the Bank’s adjustable rate commercial estate loans adjust every five years and are indexed to the 5-year FHLB Classic Advance borrowing rate. Properties securing the commercial real estate loan portfolio include office buildings, retail development properties, manufacturing facilities, warehouse distribution facilities, hotels and apartments. The Bank’s four largest commercial real estate loan relationship at December 31, 2015 ranged from $8.9 million to $16.0 million and all of those loans were performing in accordance with their original terms at December 31, 2015. As of December 31, 2015, the Bank’s outstanding balance of commercial real estate loans totaled $265.5 million equal to 15.34% of total loans receivable.
Consumer Loans. The Bank’s consumer lending activities have been concentrated in indirect auto loans and leases, which are originated through a network of approximately 250 auto dealers located in Massachusetts and Rhode Island. Auto loans and leases are underwritten by the Bank, which primarily takes into consideration the borrower’s ability to repay the loan or lease and the value of the underlying collateral. For purposes of managing the size of the auto loan and lease portfolio, the Bank will sell auto loans and leases in the secondary market with servicing retained by the Bank. The balance of the consumer loan portfolio consists of small balances of loans secured by deposit, personal lines of credit and miscellaneous installment loans. As of December 31, 2015, the consumer loan portfolio totaled $548.9 million or 31.71% of total loans receivable and consisted of $532.1 million of auto loans and leases and $16.9 million of other consumer loans.
Commercial Business Loans. The commercial business loan portfolio is generated through extending loans to businesses operating in the local market area. Expansion of commercial business lending activities is a desired area of loan growth for the Bank, pursuant to which the Bank is seeking to become a full service community bank to its commercial loan customers through offering a full range of commercial loan products that can be packaged with lower cost commercial deposit products. Commercial business loans offered by the Bank consist of floating lines of credit indexed to LIBOR or The Wall Street Journal prime rate and fixed rate term loans based on a corresponding FHLB rate, plus a margin. The commercial business loan portfolio consists substantially of loans secured by business assets such as accounts receivable, inventory, equipment and real estate. To supplement originations of commercial business loans, the Bank also purchases commercial business loan participations. Loan participations purchased by the Bank consist of loans acquired through the Bank’s membership in BancAlliance, a co-operative network of lending institutions that serves as a
conduit for institutional investors to participate in large commercial credits. As of December 31, 2015, the Bank’s outstanding balance of commercial business loans equaled $70.5 million or 4.07% of total loans receivable.
Exhibit I-11 provides a summary of the Bank’s lending activities over the past three. Total loans originated ranged from a low of $547.7 million during 2014 to a high of $1.2 billion during 2015. The significant increase in loans originated during 2015 was primarily due to increased originations of 1-4 family permanent mortgage loans resulting from the acquisition of Merrimack Mortgage. Originations of 1-4 family permanent mortgage loans increased from $105.3 million during 2014 to $704.2 million during 2015. Similarly, loan sales of 1-4 family permanent mortgage loans increased from $57.8 million during 2014 to $671.5 million during 2015. Originations of commercial real estate loans, commercial business loans and home equity loans and lines of credit increased as well during 2015, while originations of construction loans and consumer loans were lower in 2015. Loans purchased by the Bank increased from $30.1 million in 2014 to $127.4 million in 2015. Loans purchased by the Bank in 2015 consisted of $81.4 million of 1-4 family permanent mortgage loans, $33.0 million of commercial real estate loans and $13.0 million of commercial business loans. Total loans sold ranged from a low of $57.8 million during 2014 to a high of $707.8 million during 2015. Total principal repayments ranged from a low of $382.4 million during 2014 to a high of $428.5 million during 2013. Net loan growth was recorded during each of the past three years. Overall, net loans receivable increased from $1.5 billion at yearend 2012 to $1.7 billion at yearend 2015.
Asset Quality
Historically, the Bank’s lending emphasis on lending in local and familiar markets generally supported maintenance of relatively favorable credit quality measures. However, following the national recession and bursting of the housing bubble in 2008, the Bank experienced elevated levels of problems assets. Over the past five fiscal years, HarborOne Bank’s balance of non-performing assets ranged from a high of $46.0 million or 2.46% of assets at yearend 2011 to a low of $31.8 million or 1.47% of assets at fiscal yearend 2015. As shown in Exhibit I-12, non-performing assets at December 31, 2015 consisted of $29.4 million of non-accruing loans and $2.3 million of other real estate owned and other repossessed assets. Non-accruing loans held by the Bank at December 31, 2105 were concentrated in 1-4 family permanent mortgage loans ($25.8 million). The Bank also held $25.0 million of performing troubled debt restructurings at December 31, 2015.
To track the Bank’s asset quality and the adequacy of valuation allowances, HarborOne Bank has established detailed asset classification policies and procedures which are consistent with regulatory guidelines. Classified assets are reviewed monthly by senior management and the Board. The loan portfolio is also reviewed by an independent third party. Pursuant to these procedures, when needed, the Bank establishes additional valuation allowances to cover anticipated losses in classified or non-classified assets. As of December 31 2015, the Bank maintained loan loss allowances of $13.7 million, equal to 0.79% of total loans receivable and 46.56% of non-accruing loans.
Funding Composition and Strategy
Deposits have consistently served as the Bank’s primary funding source and at December 31, 2015 deposits accounted for 87.14% of HarborOne Bank’s combined balance of deposits and borrowings. Exhibit I-13 sets forth the Bank’s deposit composition for the past three years. Transaction and savings account deposits comprised 69.57% of average total deposits during 2015, as compared to 60.54% of average total deposits during 2013 The increase in the concentration of core deposits comprising total deposits since 2013 was due to growth of transaction and savings account deposits and a decline in certificates of deposit (“CDs”). Money market deposits comprised the largest concentration of the Banks core deposits during 2015, averaging $559.7 million or 49.84% of average core deposits during 2015.
The balance of the Bank’s deposits consists of CDs, which equaled 30.43% of average total deposits during 2015 compared to 39.46% of average total deposits during 2013. Jumbo CDs (CDs with balances of $100,000 or more) totaled $214.7 million or 46.40% of total CDs at December 31, 2015. Exhibit I-14 sets forth the maturity schedule of the Bank’s CDs, which shows that 50.0% of the Bank’s CDs at December 31, 2015 were scheduled to mature in less than one year.
Borrowings serve as an alternative funding source for the Bank to facilitate management of funding costs and interest rate risk Borrowings totaled $249.6 million at December 31, 2015 and consisted entirely of FHLB advances. At December 31, 2015, the FHLB advances had a weighted average interest rate of 2.08% with laddered maturities out to seven years. Exhibit I-15 provides further detail of the Bank’s borrowings activities during the past three years.
Subsidiary Activities
In addition to Merrimack Mortgage, HarborOne Bank has two wholly-owned subsidiaries, HarborOne Security Corporation, LLC and Oak Street Security Corporation, LLC, each a Massachusetts limited liability company, which are engaged in buying, selling, dealing in and holding securities.
Legal Proceedings
The Bank is not currently party to any pending legal proceedings that the Bank’s management believes would have a material adverse effect on the Bank’s financial condition, results of operations or cash flows.
II. MARKET AREA
Introduction
HarborOne Bank is headquartered in Brockton, Massachusetts and currently serves the Boston metropolitan area through 14 full-service banking offices and two limited service offices. The branches are located in the Massachusetts counties of Plymouth (eleven offices including the main office), Bristol (five offices) and Norfolk (two offices). The Bank also maintains a commercial loan office in Providence, Rhode Island. Details regarding the Company’s office properties are set forth in Exhibit II-1.
With operations in a major metropolitan area, the Bank’s competitive environment includes a significant number of thrifts, commercial banks and other financial services companies, some of which have a regional or national presence and are larger than the Bank in terms of deposits, loans, scope of operations, and number of branches. These institutions also have greater resources at their disposal than the Bank. The Boston MSA has a highly developed economy, with a relatively high concentration of skilled workers who are employed in a number of different industry clusters including healthcare, financial services and technology.
Future growth opportunities for HarborOne Bank depend on the future growth and stability of the local and regional economy, demographic growth trends and the nature and intensity of the competitive environment. These factors have been briefly examined to help determine the growth potential that exists for the Bank, the relative economic health of the Bank’s market area, and the resultant impact on value.
National Economic Factors
The future success of the Bank’s operations is partially dependent upon various national and local economic trends. In assessing national economic trends over the past few quarters, July 2015 manufacturing activity expanded at a slower rate, with an index reading of 52.7 compared to 53.5 for June. Comparatively, service sector activity for July accelerated to an index reading of 60.3, versus a June index reading of 56.0. The July employment report showed 215,000 jobs were added and the unemployment rate remained at 5.3%. Retail sales jumped 0.6% in July, providing an indication that the U.S. economy was gaining some traction. Housing data for July also reflected improving market conditions, as July housing starts reached their highest level since October 2007. July existing home sales were up 2.0%, which was the
strongest pace since February 2007, and July new home sales were up 5.4%. A 2.0% increase in July durable-goods orders also suggested that the U.S. remained healthy. Comparatively, August data reflected a less robust U.S. economy, as the slowing Chinese economy impacted the U.S. economy. August manufacturing activity grew at its slowest pace in more than two years, while August service sector activity expanded at a slightly lower rate compared to July. Employers slowed their pace of hiring in August, with a total of 173,000 jobs added and the August unemployment rate remained at 5.1%. Housing starts for August dropped 3.0% and August existing home sales fell 4.8%, but sales of new homes increased 5.7% in August. Durable-goods orders for August were down 2.0% compared to July. Job growth continued to slow in September, as employers added a modest 142,000 jobs in September and jobs gains for July and August were revised down. The September unemployment rate remained at 5.1%. Both manufacturing activity and service sector activity expanded at slower rates in September. September retail sales also pointed towards a slowing U.S. economy, as September retail sales showed a modest 0.1% increase compared to August. Housing data for September was mixed, as housing starts rose 6.5% in September and September existing home sales were up 4.7%. Comparatively, sales of new single-family homes dropped 16.5% compared to the prior month. September orders for durable goods declined 1.2%, as slow global growth restricted U.S. factories. Third quarter GDP increased at a 2.1% annual rate.
Manufacturing activity expanded at its slowest pace in more than two years in October 2015, which was attributable to economic weakness overseas and a strong dollar. Employers added 271,000 jobs in October and the October unemployment rate fell to 5.0%, while retail sales for October rose a meager 0.1%. Existing single-family home sales dropped 3.9% in October, as higher prices and low inventory challenged home buyers. Comparatively, October new single-family home sales rose 10.7% and pending home sales for October increased 0.2%. Manufacturing activity in November contracted for the first time since November 2012 with a reading of 48.6, while November service sector activity showed continued expansion with a reading of 55.9. Employers added 211,000 jobs in November and the November unemployment rate held steady at 5.0%. November retail sales showed a modest increase of 0.2%. Existing home sales plunged 10.5% in November, which was the sharpest drop in five years, while new home sales for November were up 4.3%. Manufacturing activity for December contracted with an index reading of 48.2, which was the lowest reading in more than six years. Service sector activity for December expanded at a slightly slower pace, with an index reading of 55.3. However, job growth surged in December as employers added 292,000 jobs and the December unemployment rate remained at a seven and one-half year low of 5.0%. December
retail sales and housing starts showed respective decreases of 0.1% and 2.5% compared to the November data. Comparatively, sales of existing homes in December climbed 14.7%, concluding a year that produced the highest annual sales of existing homes since 2006. Fourth quarter GDP increased at a relatively weak annual rate of 0.7%. Manufacturing activity for January 2016 shrank for a fourth straight month, with an index reading of 48.2. U.S. employers added 151,000 jobs in January, which was the weakest job growth since September 2015. However, the January employment rate fell to 4.9%.
In terms of interest rates trends over the past few quarters, Treasury bonds rallied in early-July 2015 as job growth slowed in June and investors moved into safe haven investments after Greeks voted to reject its creditors for further financial aid. The 10-year Treasury yield stabilized around 2.35% in mid-July, as the Federal Reserve signaled that recent turbulence in Greece and China was not threatening the U.S. economy enough to divert the central bank from plans to raise short-term interest rates later in 2015. Long-term Treasury yields eased lower heading into late-July, as investors reacted to a sell-off in China’s stock market. Comparatively, short-term Treasury yields edged higher in late-July, reflecting expectations that the Federal Reserve would increase its target interest rate as early as September. Long-term Treasury yields stabilized through the first half of August, as investors took into consideration mixed economic reports on the U.S. economy and China’s unexpected devaluation of its currency. Treasury bonds rallied heading into the second half of August, as investors moved into safe haven investments amid a sell-off in the stock market. A round of economic reports indicating a healthy U.S. economy pushed long-term Treasury yields slightly higher at the end of August. Long-term Treasury yields stabilized during the first half of September, as investors awaited the outcome of the Federal Reserve’s mid-September policy meeting. The Federal Reserve concluded its mid-September meeting leaving short-term interest rates unchanged, which took into consideration weak economic growth abroad. Volatility in the stock market and worries that weak economies abroad could be spilling over into a cooling U.S. economy contributed to long-term Treasury yields declining in late-September.
The 10-year Treasury yield hovered around 2.0% during the first half of October 2015, as lackluster readings for the U.S. economy diminished expectations that the Federal Reserve would raise interest rates in 2015. Interest rates edged higher at the conclusion of the Federal Reserve’s late-October policy meeting, as Federal Reserve officials stated they might raise short-term interest rates in December. The upward trend in interest rates continued in early-November, as the strong jobs report for October increased expectations that the Federal
Reserve would increase its target rate in December. Interest rates remained stable through mid-November, as minutes from the Federal Reserve’s October meeting sent new signals that the Federal Reserve would raise rates in December as long as job growth and inflation trends did not take a turn for the worse. Some soft readings for the U.S. economy provided a slight decline in long term Treasury yields during the second half of November, which was followed by an uptick in rates in early-December on the sturdy job growth numbers for November. A disappointing retail sales report for November contributed to interest rates edging lower ahead of the Federal Reserve’s mid-December meeting, which was followed by a spike up in interest rates as the Federal Reserve raised its target rate 25 basis points as expected. Following the rate hike by the Federal Reserve, long-term Treasury yields stabilized through the second half of December.
Long-term Treasury yields trended lower through the first three weeks of January 2016, with the yield on the 10-Treasury note approaching 2.0%. Data showing a slowing U.S. economy, falling commodity prices and investors moving into safe haven investment amid stock market volatility were factors contributing to long-term Treasury yields declining. The Federal Reserve held interest rates steady at its late-January meeting, expressing concerns about financial market turmoil and slow economic growth abroad. The decline in long-term Treasury yields accelerated in early-February, as investors moved into safe haven investments amid a sell-off in global stock markets. As of February 5, 2016, the bond equivalent yields for U.S. Treasury bonds with terms of one and ten years equaled 0.55% and 1.86%, respectively, versus comparable year ago yields of 0.20% and 1.83%. Exhibit II-2 provides historical interest rate trends.
Based on the consensus outlook of economists surveyed by The Wall Street Journal in January 2016, GDP growth was projected to increase to 2.5% in 2016. The unemployment rate was forecasted to decline to 4.8% in June 2016 and to 4.7% in December 2016. An average of 195,000 jobs were projected to be added per month during 2016. On average, the economists forecasted an increase in federal funds rate to 0.73% in June 2016 and to 1.14% in December 2016. On average, the economists forecasted that the 10-year Treasury yield would increase to 2.54% in June 2016 and increase to 2.79% by the end of 2016. The surveyed economists also forecasted home prices would rise 4.5% in 2016 and housing starts were forecasted to continue to trend slightly higher in 2016.
The January 2016 mortgage finance forecast from the Mortgage Bankers Association (the “MBA”) was for 2016 existing home sales to increase by 5.1% from 2015 sales and new
home sales were forecasted to increase by 17.5% in 2016 from sales in 2015. The MBA forecast showed slight increases in the median sale prices for new and existing homes in 2016. Total mortgage production is forecasted to decline in 2016 to $1.380 trillion, compared to $1.486 trillion in 2015. The forecasted decrease in 2016 originations was based on a 12.8% increase in purchase volume and a 31.7% decrease in refinancing volume. Purchase mortgage originations are forecasted to total $926 billion in 2016, versus refinancing volume totaling $454 billion. Housing starts for 2016 were projected to increase by 11.3% to total $1.230 billion.
Market Area Demographics
Demographic and economic growth trends, measured by changes in population, number of households, age distribution and median household income, provide key insight into the health of the market area served by HarborOne Bank. Demographic data for Bristol, Norfolk and Plymouth Counties, as well as for Massachusetts, and the U.S., is provided in Table 2.1.
Population and household data indicate that the market area served by the Company’s branches is a mix of urban and suburban markets. Bristol County, where the city of Taunton is located, and the adjacent Plymouth County, are two of the three original counties created in the Plymouth Colony, each with populations of approximately 0.5 million. Norfolk County is the most populous county in the Bank’s market area, with a total population of 0.7 million. Norfolk County, which is the wealthiest county in Massachusetts, experienced relatively strong population growth from 2010 to 2015 at 0.7% annually, which exceeded the comparable growth rates for Bristol and Plymouth Counties equal to 0.3% and 0.4%, respectively, as well as the Massachusetts growth rate equal to 0.6%.
Household growth rates for the primary market area counties paralleled population growth trends, with Norfolk County displaying the highest household growth rate and Bristol County exhibiting the lowest household growth rate during the 2010 to 2015 period. Over the next five years, population and household growth rates for Bristol County and Plymouth County are projected to increase and remain the same for Norfolk County.
Income measures show that Norfolk County is a relatively affluent market, with household and per capita income measures well above the comparable Massachusetts and U.S. measures. Comparatively, household and per capita income measures for Plymouth County exceeded the U.S. measures and were fairly consistent with the state measures, while Bristol County reported household and per capita income measures that were more in line with the U.S. measures. Over the next five years, all three market area counties are projected to
Table 2.1
HarborOne Bank
Summary Demographic Data
|
| Year |
| Growth Rate |
| ||||||
|
| 2010 |
| 2015 |
| 2021 |
| 2010-2015 |
| 2015-2021 |
|
|
|
|
|
|
|
|
| (%) |
| (%) |
|
Population (000) |
|
|
|
|
|
|
|
|
|
|
|
USA |
| 308,746 |
| 319,460 |
| 334,342 |
| 0.7 | % | 0.8 | % |
Massachusetts |
| 6,548 |
| 6,759 |
| 7,045 |
| 0.6 | % | 0.7 | % |
Bristol, MA |
| 548 |
| 555 |
| 569 |
| 0.3 | % | 0.4 | % |
Norfolk, MA |
| 671 |
| 696 |
| 724 |
| 0.7 | % | 0.7 | % |
Plymouth, MA |
| 495 |
| 506 |
| 529 |
| 0.4 | % | 0.8 | % |
|
|
|
|
|
|
|
|
|
|
|
|
Households (000) |
|
|
|
|
|
|
|
|
|
|
|
USA |
| 116,716 |
| 121,099 |
| 127,049 |
| 0.7 | % | 0.8 | % |
Massachusetts |
| 2,547 |
| 2,639 |
| 2,763 |
| 0.7 | % | 0.8 | % |
Bristol, MA |
| 213 |
| 216 |
| 223 |
| 0.3 | % | 0.5 | % |
Norfolk, MA |
| 258 |
| 268 |
| 279 |
| 0.7 | % | 0.7 | % |
Plymouth, MA |
| 181 |
| 187 |
| 197 |
| 0.6 | % | 0.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
Median Household Income ($) |
|
|
|
|
|
|
|
|
|
|
|
USA |
| NA |
| 53,706 |
| 59,865 |
| NA |
| 1.8 | % |
Massachusetts |
| NA |
| 67,928 |
| 74,828 |
| NA |
| 1.6 | % |
Bristol, MA |
| NA |
| 57,590 |
| 62,000 |
| NA |
| 1.2 | % |
Norfolk, MA |
| NA |
| 85,104 |
| 96,220 |
| NA |
| 2.1 | % |
Plymouth, MA |
| NA |
| 74,950 |
| 86,322 |
| NA |
| 2.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
Per Capita Income ($) |
|
|
|
|
|
|
|
|
|
|
|
USA |
| NA |
| 28,840 |
| 32,569 |
| NA |
| 2.0 | % |
Massachusetts |
| NA |
| 37,604 |
| 42,186 |
| NA |
| 1.9 | % |
Bristol, MA |
| NA |
| 30,137 |
| 33,748 |
| NA |
| 1.9 | % |
Norfolk, MA |
| NA |
| 45,771 |
| 51,601 |
| NA |
| 2.0 | % |
Plymouth, MA |
| NA |
| 36,479 |
| 42,415 |
| NA |
| 2.5 | % |
|
| 0-14 Yrs. |
| 15-34 Yrs. |
| 35-54 Yrs. |
| 55-69 Yrs. |
| 70+ Yrs. |
|
2015 Age Distribution (%) |
|
|
|
|
|
|
|
|
|
|
|
USA |
| 19.1 |
| 27.2 |
| 26.3 |
| 17.6 |
| 9.8 |
|
Massachusetts |
| 16.8 |
| 27.4 |
| 27.0 |
| 18.4 |
| 10.4 |
|
Bristol, MA |
| 17.1 |
| 25.7 |
| 27.8 |
| 18.6 |
| 10.8 |
|
Norfolk, MA |
| 17.2 |
| 24.7 |
| 28.0 |
| 18.9 |
| 11.1 |
|
Plymouth, MA |
| 18.0 |
| 23.6 |
| 27.6 |
| 20.3 |
| 10.6 |
|
|
| Less Than |
| $25,000 to |
| $50,000 to |
|
|
|
|
|
|
| 25,000 |
| 50,000 |
| 100,000 |
| $100,000+ |
|
|
|
2015 HH Income Dist. (%) |
|
|
|
|
|
|
|
|
|
|
|
USA |
| 23.5 |
| 23.9 |
| 29.8 |
| 22.8 |
|
|
|
Massachusetts |
| 20.3 |
| 18.3 |
| 28.4 |
| 33.0 |
|
|
|
Bristol, MA |
| 24.2 |
| 20.6 |
| 29.6 |
| 25.6 |
|
|
|
Norfolk, MA |
| 14.9 |
| 15.4 |
| 26.9 |
| 42.7 |
|
|
|
Plymouth, MA |
| 15.5 |
| 17.8 |
| 30.9 |
| 35.9 |
|
|
|
Source: SNL Financial, LC.
sustain moderate growth in income levels that are generally in line with the comparable projected growth rates for Massachusetts and the U.S.
A comparison of household income distribution measures provides another indication of the relative affluence of the primary market area counties. Bristol County maintained a higher percentage of households with incomes below $50,000, relative to the other two primary market area counties. Comparatively, Norfolk County maintained the highest percentage of households with incomes above $100,000. Age distribution measures for the primary market area counties were fairly similar to the comparable U.S. and Massachusetts measures.
Regional Economy
Comparative employment data shown in Table 2.2 shows that employment in services followed by wholesale/retail employment were the largest and second largest employment sectors in Bristol, Norfolk and Plymouth Counties, as well as Massachusetts. Norfolk County maintained a comparatively higher level of employment in the finance/insurance/real estate sector, while construction jobs accounted for a relatively high concentration of employment in all three counties. Overall, the distribution of employment exhibited in the primary market area is indicative of a diverse economic environment.
Table 2.2
HarborOne Bank
Primary Market Area Employment Sectors
(Percent of Labor Force)
|
|
|
| Bristol |
| Norfolk |
| Plymouth |
|
Employment Sector |
| Massachusetts |
| County |
| County |
| County |
|
|
|
|
|
|
|
|
|
|
|
Services |
| 35.4 | % | 33.3 | % | 35.1 | % | 33.0 | % |
Wholesale/Retail Trade |
| 25.7 | % | 29.3 | % | 25.1 | % | 26.6 | % |
Finance/Insurance/Real Estate |
| 10.6 | % | 9.5 | % | 11.6 | % | 10.4 | % |
Construction |
| 8.1 | % | 8.4 | % | 8.6 | % | 9.7 | % |
Healthcare |
| 4.8 | % | 4.7 | % | 5.5 | % | 4.3 | % |
Manufacturing |
| 3.6 | % | 4.1 | % | 3.3 | % | 3.5 | % |
Government |
| 3.4 | % | 3.7 | % | 2.4 | % | 3.9 | % |
Transportation/Utility |
| 3.0 | % | 3.0 | % | 2.7 | % | 3.1 | % |
Agriculture |
| 2.2 | % | 2.2 | % | 2.3 | % | 2.8 | % |
Communications |
| 0.8 | % | 0.7 | % | 0.9 | % | 0.7 | % |
Other |
| 2.4 | % | 1.2 | % | 2.6 | % | 2.0 | % |
|
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
|
|
|
|
|
|
|
|
|
|
Source: SNL Financial, LC. |
|
|
|
|
|
|
|
|
|
The market area served by the Company, characterized primarily as the Boston MSA, has a highly developed and diverse economy, with the regions’ many colleges and universities serving to attract industries in need of a highly skilled and educated workforce. Healthcare, high-tech and financial services companies constitute major sources of employment in the Company’s regional market area, as well as the colleges and universities that populate the Boston MSA. Tourism also is a prominent component of market area’s economy, as Boston annually ranks as one of the nation’s top tourist destinations. Table 2.3 lists in detail the major employers in the Company’s market area.
Table 2.3
HarborOne Bank
Boston Market Area Largest Employers
Company/Institution |
| Industry |
| Employees |
|
|
|
|
|
|
|
Massachusetts General Hospital |
| Health Care |
| 14,752 |
|
Brigham and Women’s Hospital |
| Health Care |
| 11,229 |
|
Boston University |
| Higher Education |
| 9,783 |
|
Children’s Hospital, Boston |
| Health Care |
| 7,903 |
|
State Street Bank & Trust Co |
| Finance and Insurance |
| 7,800 |
|
Beth Israel Deaconess Med. Center |
| Health Care |
| 6,695 |
|
Fidelity |
| Finance and Insurance |
| 5,500 |
|
Harvard University |
| Higher Education |
| 5,132 |
|
Northeastern University |
| Higher Education |
| 4,484 |
|
Boston Medical Center |
| Health Care |
| 4,217 |
|
Boston College |
| Higher Education |
| 4,122 |
|
Tufts Medical Center |
| Health Care |
| 3,692 |
|
Dana-Farber Cancer Institute |
| Health Care |
| 3,607 |
|
John Hancock |
| Finance and Insurance |
| 3,430 |
|
|
|
|
|
|
|
Source: Boston Redevelopment Authority, 2013. |
|
|
|
Unemployment Trends
Comparative unemployment rates for Bristol, Norfolk and Plymouth Counties, as well as for the U.S. and Massachusetts, are shown in Table 2.4. November 2015 unemployment rates for primary market area counties ranged from a low of 4.0% for Norfolk County to a high of 5.5% for Bristol County. Comparative unemployment rates for the U.S. and Massachusetts were 4.8% and 4.5%, respectively. Consistent with national and statewide trends, Bristol, Norfolk and
Plymouth Counties reported lower unemployment rates for November 2015 compared to a year ago.
Table 2.4
HarborOne Bank
Unemployment Trends
|
| November 2014 |
| November 2015 |
|
Region |
| Unemployment |
| Unemployment |
|
USA |
| 5.5 | % | 4.8 | % |
Massachusetts |
| 5.0 | % | 4.5 | % |
Bristol, MA |
| 6.1 | % | 5.5 | % |
Norfolk, MA |
| 4.4 | % | 4.0 | % |
Plymouth, MA |
| 5.2 | % | 4.7 | % |
|
|
|
|
|
|
Source: SNL Financial, LC. |
|
|
|
|
|
Market Area Deposit Characteristics and Competition
The Bank’s deposit base is closely tied to the economic fortunes of Bristol, Norfolk and Plymouth Counties and, in particular, the areas that are nearby to one of HarborOne Bank’s branches. Table 2.5 displays deposit market trends from June 30, 2010 through June 30, 2015 for all commercial bank and savings institution branches located in the market area counties and the state of Massachusetts. Consistent with the state of Massachusetts, commercial banks maintained a larger market share of deposits than savings institutions in all three counties. Overall, from June 30, 2010 to June 30, 2015, bank and thrift deposits increased across all market area counties, ranging from an annual growth rate of 2.5% in Bristol County to 7.4% in Plymouth County.
The Bank maintains its largest balance of deposits in Plymouth County, where the Bank maintains its main office and largest branch presence. Based June 30, 2015 deposit data, HarborOne’s $1.2 billion of deposits provided for an 11.3% market share of bank and thrift deposits in Plymouth County. The Company also held $268.9 million of deposits in Bristol County with a 2.9% market share, and $239.2 million of deposits in Norfolk County with a 1.0% market share. HarborOne Bank converted from a credit union to a bank in July 2013 and, therefore, FDIC deposit data for the Bank was not available as of June 30, 2010.
Table 2.5
HarborOne Bank
Deposit Summary
|
| As of June 30, |
|
|
| ||||||||||||
|
| 2010 |
| 2015 |
| Deposit |
| ||||||||||
|
|
|
| Market |
| No. of |
|
|
| Market |
| No. of |
| Growth Rate |
| ||
|
| Deposits |
| Share |
| Branches |
| Deposits |
| Share |
| Branches |
| 2010-2015 |
| ||
|
| (Dollars in Thousands) |
| (%) |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Massachusetts |
| $ | 205,201,264 |
| 100.0 | % | 2,217 |
| $ | 371,438,781 |
| 100.0 | % | 2,191 |
| 12.6 | % |
Commercial Banks |
| 128,910,606 |
| 62.8 | % | 1,005 |
| 311,660,304 |
| 83.9 | % | 1,439 |
| 19.3 | % | ||
Savings Institutions |
| 76,290,658 |
| 37.2 | % | 1,212 |
| 59,778,477 |
| 16.1 | % | 752 |
| -4.8 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Bristol County |
| $ | 8,089,693 |
| 100.0 | % | 157 |
| $ | 9,167,961 |
| 100.0 | % | 156 |
| 2.5 | % |
Commercial Banks |
| 5,662,599 |
| 70.0 | % | 114 |
| 6,502,477 |
| 70.9 | % | 112 |
| 2.8 | % | ||
Savings Institutions |
| 2,427,094 |
| 30.0 | % | 43 |
| 2,665,484 |
| 29.1 | % | 44 |
| 1.9 | % | ||
HarborOne Bank (1) |
|
|
|
|
|
|
| 268,923 |
| 2.9 | % | 5 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Norfolk County |
| $ | 17,794,472 |
| 100.0 | % | 244 |
| $ | 23,347,761 |
| 100.0 | % | 245 |
| 5.6 | % |
Commercial Banks |
| 12,865,902 |
| 72.3 | % | 169 |
| 17,526,581 |
| 75.1 | % | 170 |
| 6.4 | % | ||
Savings Institutions |
| 4,928,570 |
| 27.7 | % | 75 |
| 5,821,180 |
| 24.9 | % | 75 |
| 3.4 | % | ||
HarborOne Bank (1) |
|
|
|
|
|
|
| 239,182 |
| 1.0 | % | 2 |
|
|
| ||
|
|
|
|
|
|
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|
|
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|
|
|
|
|
| ||
Plymouth County |
| $ | 7,155,524 |
| 100.0 | % | 160 |
| $ | 10,231,123 |
| 100.0 | % | 157 |
| 7.4 | % |
Commercial Banks |
| 4,367,586 |
| 61.0 | % | 93 |
| 7,044,151 |
| 68.9 | % | 111 |
| 10.0 | % | ||
Savings Institutions |
| 2,787,938 |
| 39.0 | % | 67 |
| 3,186,972 |
| 31.1 | % | 46 |
| 2.7 | % | ||
HarborOne Bank (1) |
|
|
|
|
|
|
| 1,158,645 |
| 11.3 | % | 7 |
|
|
|
(1) HarborOne Bank was a credit union in 2010.
Source: FDIC.
Competition among financial institutions in the Bank’s market area is significant. Among the Bank’s competitors are much larger and more diversified institutions, which have greater resources than maintained by HarborOne Bank. Financial institution competitors in the Bank’s primary market area include other locally based thrifts and banks, as well as regional, super regional and money center banks. From a competitive standpoint, HarborOne has sought to emphasize its community orientation in the markets served by its branches. Table 2.6 lists the Bank’s largest competitors in the market area counties, based on deposit market share as noted parenthetically.
Table 2.6
HarborOne Bank
Market Area Deposit Competitors
Location |
| Name |
| Market Share |
| Rank |
|
Bristol County, MA |
| Bank of America Corp. (NC) |
| 16.20 | % |
|
|
|
| Banco Santander |
| 12.87 | % |
|
|
|
| Beacon Bancorp (MA) |
| 12.82 | % |
|
|
|
| Narragansett Financial Corp. (MA) |
| 9.08 | % |
|
|
|
| Citizens Financial Group Inc. (RI) |
| 8.42 | % |
|
|
|
| BankFive MHC (MA) |
| 7.56 | % |
|
|
|
| Independent Bank Corp. (MA) |
| 7.56 | % |
|
|
|
| Webster Financial Corp. (CT) |
| 6.80 | % |
|
|
|
| North Easton Savings Bank (MA) |
| 4.96 | % |
|
|
|
| HarborOne Bank (MA) |
| 2.93 | % | 12 out of 16 |
|
|
|
|
|
|
|
|
|
Norfolk County, MA |
| Bank of America Corp. (NC) |
| 21.05 | % |
|
|
|
| Citizens Financial Group Inc. (RI) |
| 16.01 | % |
|
|
|
| Banco Santander |
| 5.86 | % |
|
|
|
| Needham Bank (MA) |
| 5.31 | % |
|
|
|
| Brookline Bancorp Inc. (MA) |
| 5.31 | % |
|
|
|
| Independent Bank Corp. (MA) |
| 5.02 | % |
|
|
|
| Dedham Institution for Savings (MA) |
| 4.26 | % |
|
|
|
| Toronto-Dominion Bank |
| 3.24 | % |
|
|
|
| Eastern Bank Corp. (MA) |
| 2.98 | % |
|
|
|
| HarborOne Bank (MA) |
| 1.01 | % | 20 out of 46 |
|
|
|
|
|
|
|
|
|
Plymouth County, MA |
| Independent Bank Corp. (MA) |
| 24.60 | % |
|
|
|
| Citizens Financial Group Inc. (RI) |
| 12.21 | % |
|
|
|
| HarborOne Bank (MA) |
| 11.39 | % | 3 out of 22 |
|
|
| Eastern Bank Corp. (MA) |
| 9.52 | % |
|
|
|
| Hingham Instit. For Savings (MA) |
| 8.19 | % |
|
|
|
| Banco Santander |
| 7.64 | % |
|
|
|
| Bank of America Corp. (NC) |
| 7.33 | % |
|
|
|
| Bridgewater Financial MHC (MA) |
| 3.28 | % |
|
|
|
| Mutual Bank (MA) |
| 3.01 | % |
|
|
|
| South Shore MHC (MA) |
| 2.76 | % |
|
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|
|
Source: SNL Financial LC. |
|
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|
|
III. PEER GROUP ANALYSIS
This chapter presents an analysis of HarborOne Bank’s operations versus a group of comparable savings institutions (the “Peer Group”) selected from the universe of all publicly-traded savings institutions in a manner consistent with the regulatory valuation guidelines. The basis of the pro forma market valuation of HarborOne Bank is derived from the pricing ratios of the Peer Group institutions, incorporating valuation adjustments for key differences in relation to the Peer Group. Since no Peer Group can be exactly comparable to HarborOne Bank, key areas examined for differences are: financial condition; profitability, growth and viability of earnings; asset growth; primary market area; dividends; liquidity of the shares; marketing of the issue; management; and effect of government regulations and regulatory reform.
Peer Group Selection
The Peer Group selection process is governed by the general parameters set forth in the regulatory valuation guidelines. Accordingly, the Peer Group is comprised of only those publicly-traded savings institutions whose common stock is either listed on the NYSE or NASDAQ, since their stock trading activity is regularly reported and generally more frequent than non-publicly traded and closely-held institutions. Institutions that are not listed on the NYSE or NASDAQ are inappropriate, since the trading activity for thinly-traded or closely-held stocks are typically highly irregular in terms of frequency and price and thus may not be a reliable indicator of market value. We have also excluded from the Peer Group those companies under acquisition or subject to rumored acquisition and recent conversions, since their pricing ratios are subject to unusual distortion and/or have limited trading history. A recent listing of the universe of all publicly-traded savings institutions is included as Exhibit III-1.
Ideally, the Peer Group, which must have at least 10 members to comply with the regulatory valuation guidelines, should be comprised of publicly-traded MHCs with comparable resources, strategies and financial characteristics as HarborOne Bank. However, there are currently only seven publicly-traded MHCs. Accordingly, in deriving a Peer Group comprised of institutions with relatively comparable characteristics as HarborOne Bank, the companies selected for HarborOne Bank’s Peer Group are all fully-converted companies. The valuation adjustments applied in the Chapter IV analysis will take into consideration differences between the Bank’s MHC form of ownership relative to the fully-converted Peer Group companies. Also
included in Chapter IV is a pricing analysis of the publicly-traded MHCs on a fully-converted basis.
From the universe of publicly-traded thrifts, we selected ten institutions with characteristics similar to those of HarborOne Bank. In the selection process, we applied two “screens” to the universe of all public companies that were eligible for consideration:
· Screen #1 Northeast institutions with assets between $1 billion and $5 billion, tangible equity-to-assets ratios of greater than 8.0% and positive core earnings. Six companies met the criteria for Screen #1 and all six were included in the Peer Group: Blue Hills Bancorp, Inc. of Massachusetts, BSB Bancorp, Inc. of Massachusetts, First Connecticut Bancorp, Inc. of Connecticut, Meridian Bancorp, Inc. of Massachusetts, SI Financial Group, Inc. of Connecticut and Westfield Financial Inc. of Massachusetts. Exhibit III-2 provides financial and public market pricing characteristics of all publicly-traded Northeast thrifts.
· Screen #2 Mid-Atlantic institutions with assets between $1 billion and $3 billion, tangible equity-to-assets ratios of greater than 8.0% and positive core earnings. Six companies met the criteria for Screen #2 and four were included in the Peer Group: Clifton Bancorp Inc. of New Jersey, ESSA Bancorp, Inc. of Pennsylvania, OceanFirst Financial Corp. of New Jersey and Ocean Shore Holding Co. of New Jersey. Cape Bancorp, Inc. of New Jersey and Fox Chase Bancorp, Inc. of Pennsylvania were excluded from consideration for the Peer Group as the result of being the targets of announced acquisitions. Exhibit III-3 provides financial and public market pricing characteristics of all publicly-traded Mid-Atlantic thrifts.
Table 3.1 shows the general characteristics of each of the ten Peer Group companies and Exhibit III-4 provides summary demographic and deposit market share data for the primary market areas served by each of the Peer Group companies. While there are expectedly some differences between the Peer Group companies and HarborOne Bank, we believe that the Peer Group companies, on average, provide a good basis for valuation subject to valuation adjustments. The following sections present a comparison of HarborOne Bank’s financial condition, income and expense trends, loan composition, interest rate risk and credit risk versus the Peer Group as of the most recent publicly available date. Comparative data for all publicly-traded thrifts, publicly-traded Massachusetts thrifts and Provident Bancorp, Inc. of Massachusetts, which was the most recent MHC offering completed by a publicly-traded institution, have been included in the Chapter III tables as well.
In addition to the selection criteria used to identify the Peer Group companies, a summary description of the key comparable characteristics of each of the Peer Group companies relative to HarborOne Bank’s characteristics is detailed below.
Table 3.1
Peer Group of Publicly-Traded Thrifts
As of September 30, 2015 or the Most Recent Date Available
|
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| As of |
| ||
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|
|
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|
|
|
| February 5, 2016 |
| ||
|
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|
|
|
|
| Total |
|
|
| Fiscal |
| Conv. |
| Stock |
| Market |
|
Ticker |
| Financial Institution |
| Exchange |
| City |
| State |
| Assets |
| Offices |
| Year End |
| Date |
| Price |
| Value |
|
|
|
|
|
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|
| ($Mil) |
|
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| ($) |
| ($Mil) |
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|
BLMT |
| BSB Bancorp, Inc. |
| NASDAQ |
| Belmont |
| MA |
| 1,692 |
| 7 |
| Dec |
| 10/5/2011 |
| 21.38 |
| 194.30 |
|
BHBK |
| Blue Hills Bancorp, Inc. |
| NASDAQ |
| Norwood |
| MA |
| 1,934 |
| 11 |
| Dec |
| 7/22/2014 |
| 13.82 |
| 404.60 |
|
CSBK |
| Clifton Bancorp Inc. |
| NASDAQ |
| Clifton |
| NJ |
| 1,154 |
| 11 |
| Mar |
| 4/2/2014 |
| 13.88 |
| 352.47 |
|
EBSB |
| Meridian Bancorp, Inc. |
| NASDAQ |
| Peabody |
| MA |
| 3,376 |
| 30 |
| Dec |
| 7/29/2014 |
| 13.72 |
| 752.89 |
|
ESSA |
| ESSA Bancorp, Inc. |
| NASDAQ |
| Stroudsburg |
| PA |
| 1,607 |
| 31 |
| Sep |
| 4/4/2007 |
| 13.34 |
| 151.15 |
|
FBNK |
| First Connecticut Bancorp, Inc. |
| NASDAQ |
| Farmington |
| CT |
| 2,708 |
| 26 |
| Dec |
| 6/30/2011 |
| 16.21 |
| 257.44 |
|
OCFC |
| OceanFirst Financial Corp. |
| NASDAQ |
| Toms River |
| NJ |
| 2,558 |
| 27 |
| Dec |
| 7/3/1996 |
| 16.30 |
| 281.77 |
|
OSHC |
| Ocean Shore Holding Co. |
| NASDAQ |
| Ocean City |
| NJ |
| 1,067 |
| 11 |
| Dec |
| 12/21/2009 |
| 17.75 |
| 113.65 |
|
SIFI |
| SI Financial Group, Inc. |
| NASDAQ |
| Willimantic |
| CT |
| 1,454 |
| 25 |
| Dec |
| 1/13/2011 |
| 13.91 |
| 169.96 |
|
WFD |
| Westfield Financial, Inc. |
| NASDAQ |
| Westfield |
| MA |
| 1,357 |
| 14 |
| Dec |
| 1/4/2007 |
| 7.84 |
| 143.30 |
|
Source: SNL Financial, LC.
· BSB Bancorp, Inc. of Massachusetts. Comparable due to Boston market area, similar asset size, similar interest-earning asset composition, similar net interest income to average assets ratio and similar impact of loan loss provisions on earnings.
· Blue Hills Bancorp, Inc. of Massachusetts. Comparable due to Boston market area, similar asset size and similar combined concentration of mortgage-backed securities and 1-4 family permanent loans as a percent of assets.
· Clifton Bancorp Inc. of New Jersey. Comparable due to similar concentration of borrowings funding assets and similar impact of loan loss provisions on earnings.
· ESSA Bancorp, Inc. of Pennsylvania. Comparable due to similar asset size.
· First Connecticut Bancorp, Inc. of Connecticut. Comparable due to similar asset size, similar interest-earning asset composition, similar interest-bearing funding composition, similar impact of loan loss provisions on earnings and similar combined concentration of mortgage-backed securities and 1-4 family permanent mortgage loans as a percent of assets.
· Meridian Bancorp, Inc. of Massachusetts. Comparable due to Boston market area, similar interest-earning asset composition and similar concentration of deposits funding assets.
· �� OceanFirst Financial Corp. of New Jersey. Comparable due to similar asset size, similar interest-bearing funding composition and similar credit quality measures.
· Ocean Shore Holding Co. of New Jersey. Comparable due to similar interest-bearing funding composition and similar impact of loan loss provisions on earnings.
· SI Financial Group, Inc. of Connecticut. Comparable due to similar interest-earning asset composition, similar interest-bearing funding composition, similar return on average assets and similar combined concentration of mortgage-backed securities and 1-4 family permanent mortgage loans as a percent of assets.
· Westfield Financial Inc. of Massachusetts. Comparable due to same size of branch network, similar net interest income to average assets ratio and similar impact of loan loss provisions on earnings.
In aggregate, the Peer Group companies maintained a slightly higher level of tangible equity than the industry average (13.26% of assets versus 12.83% for all public companies), generated lower earnings as a percent of average assets (0.55% core ROAA versus 0.77% for all public companies), and earned a lower ROE (4.46% core ROE versus 6.24% for all public companies). Overall, the Peer Group’s average P/TB ratio and average core P/E multiple were approximately the same and above the respective averages for all publicly-traded thrifts.
|
| All |
|
|
| ||
|
| Publicly-Traded |
| Peer Group |
| ||
|
|
|
|
|
| ||
Financial Characteristics (Averages) |
|
|
|
|
| ||
Assets ($Mil) |
| $ | 3,109 |
| $ | 1,891 |
|
Market capitalization ($Mil) |
| $ | 436 |
| $ | 280 |
|
Tangible equity/assets (%) |
| 12.83 | % | 13.26 | % | ||
Core return on average assets (%) |
| 0.77 |
| 0.55 |
| ||
Core return on average equity (%) |
| 6.24 |
| 4.46 |
| ||
|
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| ||
Pricing Ratios (Averages)(1) |
|
|
|
|
| ||
Core price/earnings (x) |
| 18.53 | x | 21.03 | x | ||
Price/tangible book (%) |
| 113.19 | % | 113.20 | % | ||
Price/assets (%) |
| 13.38 |
| 14.39 |
|
(1) Based on market prices as of February 5, 2016.
Ideally, the Peer Group companies would be comparable to HarborOne Bank in terms of all of the selection criteria, but the universe of publicly-traded thrifts does not provide for an appropriate number of such companies. However, in general, the companies selected for the Peer Group were fairly comparable to HarborOne Bank, as will be highlighted in the following comparative analysis. Comparative data for all publicly-traded thrifts, publicly-traded Massachusetts thrifts and Provident Bancorp, Inc., which is the most recently MHC offering completed by a publicly-traded institution, have been included in the Chapter III tables as well.
Financial Condition
Table 3.2 shows comparative balance sheet measures for HarborOne Bank and the Peer Group, reflecting the expected similarities and some differences given the selection procedures outlined above. The Bank’s and the Peer Group’s ratios reflect balances as of December 31, 2015 and September 30, 2015, respectively. HarborOne Bank’s equity-to-assets ratio of 8.82% was lower than the Peer Group’s average net worth ratio of 13.62%. With the infusion of the net proceeds, the Bank’s pro forma equity-to-assets ratio will be more comparable to the Peer Group’s equity-to-assets ratio. Tangible equity-to-assets ratios for the Bank and the Peer Group equaled 8.18% and 13.26%, respectively. The increase in HarborOne Bank’s pro forma capital position will be favorable from a risk perspective and in terms of future earnings potential that could be realized through leverage and lower funding costs. At the same time, the Bank’s higher pro forma capitalization will initially depress return on equity. Both HarborOne Bank’s and the Peer Group’s capital ratios reflected capital surpluses with respect to the regulatory capital requirements. The interest-earning asset
Table 3.2
Balance Sheet Composition and Growth Rates
Comparable Institution Analysis
As of September 30, 2015 or the Most Recent Date Available
|
|
|
| Balance Sheet as a Percent of Assets |
| Balance Sheet Annual Growth Rates |
| Regulatory Capital |
| |||||||||||||||||||||||||||||||||||
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| Cash & |
| MBS & |
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| Net |
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| Borrowed |
| Sub. |
| Total |
| Goodwill |
| Tangible |
|
|
| MBS, Cash & |
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| Borrows. |
| Total |
| Tangible |
| Tier 1 |
| Tier 1 |
| Risk-Based |
| |
|
|
|
| Equivalents |
| Invest |
| BOLI |
| Loans (1) |
| Deposits |
| Funds |
| Debt |
| Equity |
| & Intang |
| Equity |
| Assets |
| Investments |
| Loans |
| Deposits |
| &Subdebt |
| Equity |
| Equity |
| Leverage |
| Risk-Based |
| Capital |
| |
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HarborOne Bank |
| MA |
| 1.88 | % | 9.75 | % | 1.77 | % | 82.90 | % | 78.18 | % | 11.54 | % | 0.00 | % | 8.82 | % | 0.63 | % | 8.18 | % | 5.94 | % | -9.53 | % | 8.32 | % | 12.74 | % | -24.27 | % | 3.94 | % | -1.73 | % | 8.30 | % | 10.84 | % | 11.68 | % | |
December 31, 2015 |
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All Public Companies |
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Averages |
|
|
| 4.85 | % | 17.86 | % | 1.92 | % | 71.55 | % | 73.03 | % | 11.81 | % | 0.35 | % | 13.63 | % | 0.73 | % | 12.83 | % | 10.05 | % | 4.56 | % | 15.24 | % | 9.48 | % | 17.98 | % | 12.46 | % | 11.15 | % | 12.86 | % | 19.26 | % | 20.29 | % | |
Medians |
|
|
| 3.29 | % | 16.34 | % | 1.91 | % | 71.88 | % | 74.37 | % | 10.94 | % | 0.00 | % | 12.38 | % | 0.04 | % | 11.92 | % | 6.52 | % | -2.20 | % | 9.69 | % | 4.78 | % | 8.28 | % | 3.56 | % | 3.65 | % | 11.65 | % | 17.44 | % | 18.63 | % | |
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State of MA |
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Averages |
|
|
| 5.04 | % | 13.56 | % | 1.78 | % | 77.58 | % | 73.34 | % | 12.40 | % | 0.00 | % | 13.47 | % | 0.10 | % | 13.37 | % | 11.46 | % | -0.66 | % | 15.39 | % | 11.41 | % | 15.92 | % | 19.62 | % | 19.67 | % | 12.56 | % | 15.82 | % | 16.79 | % | |
Medians |
|
|
| 3.24 | % | 9.84 | % | 1.68 | % | 81.14 | % | 72.93 | % | 13.39 | % | 0.00 | % | 11.85 | % | 0.00 | % | 11.85 | % | 11.12 | % | -0.33 | % | 13.54 | % | 10.01 | % | 20.59 | % | 5.21 | % | 5.21 | % | 10.97 | % | 15.40 | % | 16.40 | % | |
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Comparable Recent MHC Offerings(2) |
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Provident Bancorp, Inc. |
| MA |
| 1.45 | % | 19.01 | % | 1.84 | % | 75.03 | % | 81.53 | % | 5.96 | % | 0.00 | % | 11.51 | % | 0.00 | % | 11.51 | % | 5.43 | % | -13.07 | % | 12.39 | % | 5.64 | % | -4.27 | % | 8.54 | % | 8.54 | % | 11.31 | % | 13.87 | % | 15.37 | % | |
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Averages |
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| 3.08 | % | 17.88 | % | 2.28 | % | 74.12 | % | 71.24 | % | 13.76 | % | 0.16 | % | 13.62 | % | 0.36 | % | 13.26 | % | 8.37 | % | -6.75 | % | 14.04 | % | 8.76 | % | 13.89 | % | 1.68 | % | 1.75 | % | 13.56 | % | 20.75 | % | 21.44 | % | |
Medians |
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| 1.86 | % | 15.23 | % | 1.89 | % | 74.74 | % | 71.59 | % | 13.80 | % | 0.00 | % | 10.48 | % | 0.24 | % | 9.90 | % | 7.50 | % | -3.06 | % | 13.19 | % | 9.57 | % | 12.87 | % | 2.24 | % | 2.57 | % | 10.26 | % | 16.14 | % | 17.03 | % | |
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BLMT | BSB Bancorp, Inc. |
| MA |
| 2.52 | % | 10.29 | % | 1.74 | % | 84.36 | % | 71.41 | % | 19.09 | % | 0.00 | % | 8.48 | % | 0.00 | % | 8.48 | % | 26.70 | % | 7.01 | % | 30.54 | % | 29.59 | % | 27.35 | % | 6.25 | % | 6.25 | % | 8.94 | % | 10.94 | % | 11.74 | % |
BHBK | Blue Hills Bancorp, Inc. |
| MA |
| 1.08 | % | 22.80 | % | 1.62 | % | 71.00 | % | 69.53 | % | 8.27 | % | 0.00 | % | 21.07 | % | 0.63 | % | 20.44 | % | 14.69 | % | -4.29 | % | 23.16 | % | 16.70 | % | 45.45 | % | -0.60 | % | -0.19 | % | 21.25 | % | 25.90 | % | 26.89 | % |
CSBK | Clifton Bancorp Inc. |
| NJ |
| 1.55 | % | 33.49 | % | 4.86 | % | 58.70 | % | 58.81 | % | 10.75 | % | 0.00 | % | 29.32 | % | 0.00 | % | 29.32 | % | -4.76 | % | -24.55 | % | 9.77 | % | -7.17 | % | 10.22 | % | -5.43 | % | -5.43 | % | 29.17 | % | 60.97 | % | 61.63 | % |
EBSB | Meridian Bancorp, Inc. |
| MA |
| 5.72 | % | 4.85 | % | 1.16 | % | 85.73 | % | 77.93 | % | 4.15 | % | 0.00 | % | 17.27 | % | 0.41 | % | 16.87 | % | 6.54 | % | -37.31 | % | 16.53 | % | 9.46 | % | -18.92 | % | 2.11 | % | 2.16 | % | 16.93 | % | 17.44 | % | 18.44 | % |
ESSA | ESSA Bancorp, Inc. |
| PA |
| 1.28 | % | 24.48 | % | 1.91 | % | 68.60 | % | 68.27 | % | 19.95 | % | 0.00 | % | 10.66 | % | 0.75 | % | 9.91 | % | 2.01 | % | -1.82 | % | 4.14 | % | -3.28 | % | 23.57 | % | 2.37 | % | 2.98 | % | 10.28 | % | 15.85 | % | 16.72 | % |
FBNK | First Connecticut Bancorp, Inc. |
| CT |
| 1.75 | % | 8.12 | % | 1.87 | % | 85.90 | % | 72.86 | % | 16.33 | % | 0.00 | % | 8.98 | % | 0.00 | % | 8.98 | % | 13.06 | % | -0.53 | % | 14.20 | % | 14.20 | % | 10.67 | % | 4.09 | % | 4.09 | % | 9.24 | % | 11.76 | % | 12.72 | % |
OCFC | OceanFirst Financial Corp. |
| NJ |
| 1.98 | % | 17.22 | % | 2.24 | % | 75.89 | % | 76.93 | % | 12.16 | % | 1.08 | % | 9.18 | % | 0.08 | % | 9.09 | % | 10.79 | % | -10.86 | % | 18.72 | % | 10.47 | % | 15.08 | % | 7.34 | % | 6.37 | % | 8.91 | % | 13.60 | % | 12.67 | % |
OSHC | Ocean Shore Holding Co. |
| NJ |
| 10.82 | % | 10.70 | % | 2.28 | % | 73.59 | % | 77.94 | % | 10.30 | % | 0.00 | % | 10.37 | % | 0.48 | % | 9.89 | % | 2.64 | % | 7.32 | % | 1.52 | % | 3.41 | % | -6.16 | % | 5.28 | % | 5.66 | % | 10.24 | % | 19.21 | % | 19.77 | % |
SIFI | SI Financial Group, Inc. |
| CT |
| 2.52 | % | 13.24 | % | 1.50 | % | 78.64 | % | 71.76 | % | 15.44 | % | 0.57 | % | 10.59 | % | 1.26 | % | 9.34 | % | 8.47 | % | 6.54 | % | 9.69 | % | 4.54 | % | 43.30 | % | -1.36 | % | -1.11 | % | 9.68 | % | 15.40 | % | 16.48 | % |
WFD | Westfield Financial, Inc. |
| MA |
| 1.62 | % | 33.59 | % | 3.67 | % | 58.84 | % | 66.98 | % | 21.19 | % | 0.00 | % | 10.29 | % | 0.00 | % | 10.29 | % | 3.51 | % | -9.02 | % | 12.17 | % | 9.68 | % | -11.63 | % | -3.26 | % | -3.26 | % | 10.97 | % | 16.42 | % | 17.34 | % |
(1) Includes loans held for sale.
(2) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.
Source: SNL Financial, LC. and RP® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2016 by RP® Financial, LC.
compositions for the Bank and the Peer Group were somewhat similar, with loans constituting the bulk of interest-earning assets for both HarborOne Bank and the Peer Group. The Bank’s loans-to-assets ratio of 82.90% was higher than the comparable Peer Group ratio of 74.12%. Comparatively, the Bank’s cash and investments-to-assets ratio of 11.63% was lower than the comparable Peer Group ratio of 20.96%. Overall, HarborOne Bank’s interest-earning assets amounted to 94.53% of assets, which was slightly lower than the comparable Peer Group ratio of 95.08%. The Bank’s non-interest earning assets included bank-owned life insurance (“BOLI”) equal to 1.77% of assets and goodwill/intangibles equal to 0.64% of assets, while the Peer Group’s non-interest assets included BOLI equal to 2.28% of assets and goodwill/intangibles equal to 0.36% of assets.
HarborOne Bank’s funding liabilities reflected a funding strategy that was somewhat similar to that of the Peer Group’s funding composition. The Bank’s deposits equaled 78.18% of assets, which was above the Peer Group’s ratio of 71.24%. Comparatively, the Bank and the Peer Group maintained similar levels of borrowings to fund assets, as indicated by borrowings-to-assets ratios of 11.54% and 13.92% for HarborOne Bank and the Peer Group, respectively. Total interest-bearing liabilities maintained by the Bank and the Peer Group, as a percent of assets, equaled 89.72% and 85.16%, respectively.
A key measure of balance sheet strength for a thrift institution is its interest-earnings assets/interest-bearing liabilities (“IEA/IBL”) ratio. Presently, the Bank’s IEA/IBL ratio is lower than the Peer Group’s ratio, based on IEA/IBL ratios of 105.36% and 111.65%, respectively. The additional capital realized from stock proceeds should serve to provide HarborOne Bank with an IEA/IBL ratio that is more comparable to the Peer Group’s ratio, as the increase in capital provided by the infusion of stock proceeds will serve to lower the level of interest-bearing liabilities funding assets and will be primarily deployed into interest-earning assets.
The growth rate section of Table 3.2 shows annual growth rates for key balance sheet items. HarborOne Bank’s and the Peer Group’s growth rates are based on annual growth for the twelve months ended December 31, 2015 and September 30, 2015, respectively. HarborOne Bank recorded a 5.94% increase in assets, versus asset growth of 8.37% recorded by the Peer Group. Asset growth for HarborOne Bank was driven by an 8.32% increase in loans, which was in part funded by a 9.53% reduction in cash and investments. Similarly, asset growth for the Peer Group was driven by a 14.04% increase in loans, which was in part funded by a 6.75% reduction in cash and investments.
Asset growth for HarborOne Bank was funded by a 12.74% increase in deposits, which also funded a 24.27% decrease in borrowings. Asset growth for the Peer Group was funded through deposit growth of 8.76% and a 13.89% increase in borrowings as well. The Bank’s tangible capital decreased 1.88%, as retention of earnings was offset by the goodwill and intangibles created by the acquisition of Merrimack Mortgage. Comparatively, the Peer Group’s tangible capital increased 1.75%, as retention of earnings for the Peer Group was somewhat offset by capital management strategies such as dividend payments and stock repurchases. The Bank’s post-conversion capital growth rate will initially be constrained by maintenance of a higher pro forma capital position. Additionally, implementation of any stock repurchases and dividend payments, pursuant to regulatory limitations and guidelines, could also slow the Bank’s capital growth rate in the longer term following the stock offering.
Income and Expense Components
Table 3.3 displays statements of operations for the Bank and the Peer Group. The Bank’s and the Peer Group’s ratios are based on earnings for the twelve months ended December 31, 2015 and September 30, 2015, respectively. HarborOne Bank and the Peer Group reported net income to average assets ratios of 0.27% and 0.57%, respectively. The Peer Group’s higher return was realized through higher ratios for net interest income and non-operating gains and a lower operating expense ratio, which were partially offset by the Bank’s higher ratio for non-interest operating income and lower ratio for loan loss provisions.
The Peer Group’s higher net interest income to average assets ratio was realized through both a higher interest income ratio and a lower interest expense ratio. The Peer Group’s higher interest income ratio was supported by maintaining a higher overall yield earned on interest-earning assets (3.52% versus 3.34% for the Bank). Likewise, the Peer Group’s lower interest expense ratio was supported by a lower cost of funds (0.78% versus 0.84% for the Bank), as well as maintaining a lower ratio of interest-bearing liabilities funding assets. Overall, HarborOne Bank and the Peer Group reported net interest income to average assets ratios of 2.46% and 2.67%, respectively.
In another key area of core earnings strength, the Bank maintained a significantly higher level of operating expenses than the Peer Group. For the period covered in Table 3.3, the Bank and the Peer Group reported operating expense to average assets ratios of 3.68% and 2.20%, respectively. The Bank’s higher operating expense ratio was consistent with the comparatively higher number of employees maintained relative to its asset size, which is largely attributable to
Table 3.3
Income as Percent of Average Assets and Yields, Costs, Spreads
Comparable Institution Analysis
For the 12 Months Ended September 30 , 2015 or the Most Recent Date Available
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HarborOne Bank |
| MA |
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| 0.27 | % | 3.15 | % | 0.69 | % | 2.46 | % | 0.06 | % | 2.40 | % | 0.95 | % | 0.70 | % | 3.68 | % | 0.01 | % | 0.00 | % | 0.12 | % | 3.34 | % | 0.84 | % | 2.50 | % | $ | 3,749 |
| 30.73 | % | |
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| 0.80 | % | 3.55 | % | 0.59 | % | 2.96 | % | 0.04 | % | 2.93 | % | 0.32 | % | 0.52 | % | 2.83 | % | 0.00 | % | 0.00 | % | 0.13 | % | 3.80 | % | 0.77 | % | 3.04 | % | $ | 6,511 |
| 16.42 | % | |
Medians |
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| 0.70 | % | 3.51 | % | 0.58 | % | 2.99 | % | 0.07 | % | 2.88 | % | 0.04 | % | 0.41 | % | 2.68 | % | 0.00 | % | 0.00 | % | 0.24 | % | 3.80 | % | 0.77 | % | 3.09 | % | $ | 5,794 |
| 31.45 | % | |
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| 0.49 | % | 3.48 | % | 0.62 | % | 2.86 | % | 0.10 | % | 2.76 | % | 0.02 | % | 0.24 | % | 2.29 | % | 0.03 | % | 0.00 | % | 0.27 | % | 3.65 | % | 0.79 | % | 2.83 | % | $ | 8,940 |
| 33.69 | % | |
Medians |
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| 0.42 | % | 3.63 | % | 0.62 | % | 3.01 | % | 0.09 | % | 2.77 | % | 0.02 | % | 0.23 | % | 2.23 | % | 0.00 | % | 0.00 | % | 0.24 | % | 3.87 | % | 0.81 | % | 3.09 | % | $ | 8,045 |
| 34.59 | % | |
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Provident Bancorp, Inc. |
| MA |
| 0.71 | % | 3.65 | % | 0.36 | % | 3.29 | % | 0.23 | % | 3.06 | % | 0.00 | % | 0.54 | % | 2.72 | % | 0.07 | % | 0.00 | % | 0.23 | % | 3.84 | % | 0.52 | % | 3.32 | % | $ | 6,098 |
| 24.16 | % | |
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| 0.57 | % | 3.28 | % | 0.60 | % | 2.67 | % | 0.11 | % | 2.56 | % | 0.02 | % | 0.37 | % | 2.20 | % | 0.08 | % | 0.00 | % | 0.26 | % | 3.52 | % | 0.78 | % | 2.75 | % | $ | 8,174 |
| 30.91 | % | |
Medians |
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| 0.57 | % | 3.26 | % | 0.63 | % | 2.69 | % | 0.11 | % | 2.59 | % | 0.02 | % | 0.33 | % | 2.23 | % | 0.06 | % | 0.00 | % | 0.23 | % | 3.49 | % | 0.79 | % | 2.83 | % | $ | 7,494 |
| 31.73 | % | |
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BLMT | BSB Bancorp, Inc. |
| MA |
| 0.42 | % | 3.07 | % | 0.63 | % | 2.44 | % | 0.13 | % | 2.30 | % | 0.04 | % | 0.19 | % | 1.84 | % | NA |
| 0.00 | % | 0.26 | % | 3.17 | % | 0.85 | % | 2.32 | % | $ | 13,222 |
| 38.65 | % |
BHBK | Blue Hills Bancorp, Inc. |
| MA |
| 0.42 | % | 3.13 | % | 0.46 | % | 2.67 | % | 0.14 | % | 2.53 | % | 0.03 | % | 0.32 | % | 2.41 | % | 0.14 | % | 0.00 | % | 0.19 | % | 3.32 | % | 0.68 | % | 2.64 | % | $ | 9,485 |
| 30.73 | % |
CSBK | Clifton Bancorp Inc. |
| NJ |
| 0.73 | % | 2.97 | % | 0.74 | % | 2.23 | % | 0.04 | % | 2.19 | % | 0.00 | % | 0.15 | % | 1.49 | % | 0.23 | % | 0.00 | % | 0.35 | % | 3.19 | % | 1.09 | % | 2.10 | % | $ | 11,541 |
| 32.07 | % |
EBSB | Meridian Bancorp, Inc. |
| MA |
| 0.72 | % | 3.63 | % | 0.62 | % | 3.01 | % | 0.24 | % | 2.77 | % | 0.02 | % | 0.30 | % | 2.14 | % | 0.13 | % | 0.00 | % | 0.35 | % | 3.89 | % | 0.78 | % | 3.11 | % | $ | 7,691 |
| 32.84 | % |
ESSA | ESSA Bancorp, Inc. |
| PA |
| 0.62 | % | 3.43 | % | 0.66 | % | 2.77 | % | 0.13 | % | 2.64 | % | 0.00 | % | 0.45 | % | 2.31 | % | 0.03 | % | 0.00 | % | 0.19 | % | 3.69 | % | 0.80 | % | 2.89 | % | $ | 5,842 |
| 23.18 | % |
FBNK | First Connecticut Bancorp, Inc. |
| CT |
| 0.52 | % | 3.14 | % | 0.50 | % | 2.64 | % | 0.09 | % | 2.55 | % | 0.09 | % | 0.34 | % | 2.34 | % | 0.06 | % | 0.00 | % | 0.18 | % | 3.34 | % | 0.57 | % | 2.77 | % | $ | 8,038 |
| 25.26 | % |
OCFC | OceanFirst Financial Corp. |
| NJ |
| 0.83 | % | 3.45 | % | 0.36 | % | 3.09 | % | 0.07 | % | 3.01 | % | 0.04 | % | 0.65 | % | 2.40 | % | -0.03 | % | 0.00 | % | 0.44 | % | 3.60 | % | 0.41 | % | 3.19 | % | $ | 6,872 |
| 34.60 | % |
OSHC | Ocean Shore Holding Co. |
| NJ |
| 0.64 | % | 3.37 | % | 0.67 | % | 2.71 | % | 0.07 | % | 2.64 | % | 0.00 | % | 0.42 | % | 2.07 | % | 0.00 | % | 0.00 | % | 0.33 | % | 3.95 | % | 0.92 | % | 3.03 | % | $ | 6,392 |
| 34.19 | % |
SIFI | SI Financial Group, Inc. |
| CT |
| 0.31 | % | 3.43 | % | 0.62 | % | 2.81 | % | 0.15 | % | 2.67 | % | 0.02 | % | 0.70 | % | 2.95 | % | 0.01 | % | 0.00 | % | 0.14 | % | 3.68 | % | 0.72 | % | 2.96 | % | $ | 5,363 |
| 31.38 | % |
WFD | Westfield Financial, Inc. |
| MA |
| 0.45 | % | 3.15 | % | 0.80 | % | 2.35 | % | 0.08 | % | 2.27 | % | 0.00 | % | 0.23 | % | 2.01 | % | 0.13 | % | 0.00 | % | 0.16 | % | 3.38 | % | 0.93 | % | 2.45 | % | $ | 7,297 |
| 26.17 | % |
(1) Net gains/losses includes gain/loss on sale of securities and nonrecurring income and expense.
(2) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.
Source: SNL Financial, LC. and RP® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2016 by RP® Financial, LC.
the significance of the Bank’s mortgage banking operations relative to its asset size. Assets per full time equivalent employee equaled $3.749 million for the Bank, versus $8.174 million for the Peer Group.
When viewed together, net interest income and operating expenses provide considerable insight into a thrift’s earnings strength, since those sources of income and expenses are typically the most prominent components of earnings and are generally more predictable than losses and gains realized from the sale of assets or other non-recurring activities. In this regard, as measured by their expense coverage ratios (net interest income divided by operating expenses), the Bank’s earnings were less favorable than the Peer Group’s. Expense coverage ratios for HarborOne Bank and the Peer Group equaled 0.67x and 1.21x, respectively.
The Bank’s mortgage banking activities also contributed to a higher level of non-interest operating income compared to the Peer Group, with such income amounting to 1.65% and 0.39% of HarborOne Bank’s and the Peer Group’s average assets, respectively. Taking non-interest operating income into account in comparing the Bank’s and the Peer Group’s earnings, HarborOne Bank’s efficiency ratio (operating expenses, as a percent of the sum of non-interest operating income and net interest income) of 89.54% was less favorable than the Peer Group’s efficiency ratio of 71.90%.
Loan loss provisions had a slightly larger impact on the Peer Group’s earnings, with loan loss provisions established by the Bank and the Peer Group equaling 0.06% and 0.011% of average assets, respectively.
Net non-operating gains equaled 0.01% of average assets for the Bank, versus net non-operating gains equal to 0.08% of average assets for the Peer Group. Typically, gains and losses generated from the sale of assets and other non-operating activities are viewed as earnings with a relatively high degree of volatility, particularly to the extent that such gains and losses result from the sale of investments or other assets that are not considered to be part of an institution’s core operations. Extraordinary items were not a factor in either the Bank’s or the Peer Group’s earnings.
Taxes had a similar impact on the Bank’s and the Peer Group’s earnings, as the Bank and the Peer Group posted effective tax rates of 30.73% and 30.91%, respectively. As indicated in the prospectus, the Bank’s effective marginal tax rate is equal to 40.0%.
Loan Composition
Table 3.4 presents data related to the Bank’s and the Peer Group’s loan portfolio compositions (including the investment in mortgage-backed securities). The Bank’s loan portfolio composition reflected a lower concentration of 1-4 family permanent mortgage loans and mortgage-backed securities combined in comparison to the Peer Group (38.45% of assets versus 49.48% for the Peer Group), as the Peer Group maintained higher concentrations of both mortgage-backed securities and 1-4 family permanent mortgage loans. Loans serviced for others equaled 57.54% and 5.89% of the Bank’s and the Peer Group’s assets, respectively, thereby indicating that loan servicing income and expenses were a significantly larger factor in the Bank’s earnings. Likewise, loan servicing intangibles constituted a more significant balance sheet item for the Bank, with loan servicing intangibles equal to 0.60% of the Bank’s assets compared to 0.04% of the Peer Group’s assets.
Overall, diversification into higher risk and higher yielding types of lending was more significant for the Bank, which was attributable to the Bank’s higher concentration of consumer loans (29.97% of assets versus 1.96% for the Peer Group). Commercial real estate loans constituted the most significant type of lending diversification for the Peer Group (18.89% of assets versus 11.54% for the Bank). The Peer Group also maintained higher concentrations of construction/land loans, multi-family loans and commercial business loans relative to the comparable ratios for HarborOne Bank. In total, construction/land, commercial real estate, multi-family, commercial business and consumer loans comprised 47.16% and 35.55% of the Bank’s and the Peer Group’s assets, respectively. Overall, the Bank’s asset composition provided for a higher risk weighted assets-to-assets ratio of 75.77%, versus a comparable Peer Group ratio of 71.44%.
Interest Rate Risk
Table 3.5 reflects various key ratios highlighting the relative interest rate risk exposure of the Bank versus the Peer Group. In terms of balance sheet composition, HarborOne Bank’s interest rate risk characteristics were considered to be less favorable relative to the comparable measures for the Peer Group. Most notably, the Bank’s tangible equity-to-assets ratio and IEA/IBL ratio were below the comparable Peer Group ratios. Additionally, the Peer Group maintained an advantage with respect to its slightly lower ratio of non-interest earning assets as a percent of assets. On a pro forma basis, the infusion of stock proceeds should serve to provide the Bank with more comparable balance sheet interest rate risk characteristics as
Table 3.4
Loan Portfolio Composition and Related Information
Comparable Institution Analysis
As of September 30, 2015 or the Most Recent Date Available
|
| Portfolio Composition as a Percent of Assets |
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| 1-4 |
| Constr. |
| Multi- |
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| Commerc. |
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| RWA/ |
| Serviced |
| Servicing |
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| MBS |
| Family |
| & Land |
| Family |
| Comm RE |
| Business |
| Consumer |
| Assets |
| For Others |
| Assets |
| |||
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| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| ($000) |
| ($000) |
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HarborOne Bank |
| MA |
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December 31, 2015 |
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| 5.58 | % | 32.87 | % | 1.66 | % | 0.73 | % | 11.54 | % | 3.26 | % | 29.97 | % | 75.77 | % | $ | 1,244,856 |
| $ | 12,958 |
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All Public Companies |
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Averages |
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| 10.18 | % | 33.91 | % | 3.55 | % | 8.66 | % | 18.18 | % | 6.29 | % | 1.45 | % | 68.19 | % | $ | 1,813,237 |
| $ | 12,929 |
| |
Medians |
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| 8.79 | % | 32.97 | % | 2.61 | % | 3.90 | % | 17.42 | % | 4.78 | % | 0.32 | % | 67.69 | % | $ | 56,320 |
| $ | 391 |
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State of MA |
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Averages |
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| 5.62 | % | 36.58 | % | 6.46 | % | 5.82 | % | 21.60 | % | 6.84 | % | 1.03 | % | 74.42 | % | $ | 43,551 |
| $ | 183 |
| |
Medians |
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| 4.49 | % | 36.41 | % | 6.13 | % | 5.08 | % | 19.50 | % | 7.89 | % | 0.20 | % | 77.54 | % | $ | 22,138 |
| $ | 84 |
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Comparable Recent MHC Offerings(1) |
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Provident Bancorp, Inc. |
| MA |
| 8.33 | % | 12.28 | % | 7.15 | % | 3.98 | % | 33.93 | % | 14.82 | % | 4.03 | % | 80.21 | % | $ | 10,207 |
| $ | 0 |
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Comparable Group |
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Averages |
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| 10.26 | % | 39.22 | % | 2.85 | % | 4.28 | % | 18.89 | % | 7.57 | % | 1.96 | % | 71.44 | % | $ | 111,414 |
| $ | 697 |
| |
Medians |
|
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| 8.14 | % | 39.70 | % | 2.05 | % | 3.96 | % | 19.50 | % | 7.80 | % | 0.19 | % | 72.51 | % | $ | 63,430 |
| $ | 345 |
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Comparable Group |
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BLMT | BSB Bancorp, Inc. |
| MA |
| 6.96 | % | 48.53 | % | 3.72 | % | 5.99 | % | 19.36 | % | 0.32 | % | 7.05 | % | 77.54 | % | $ | 67,606 |
| $ | 480 |
|
BHBK | Blue Hills Bancorp, Inc. |
| MA |
| 8.56 | % | 33.06 | % | 2.64 | % | 5.33 | % | 19.63 | % | 9.24 | % | 1.90 | % | 78.77 | % | $ | 40,740 |
| $ | 167 |
|
CSBK | Clifton Bancorp Inc. |
| NJ |
| 23.33 | % | 52.37 | % | 0.03 | % | 3.31 | % | 3.25 | % | 0.01 | % | 0.06 | % | 48.15 | % | $ | 0 |
| $ | 0 |
|
EBSB | Meridian Bancorp, Inc. |
| MA |
| 0.27 | % | 15.01 | % | 11.39 | % | 11.44 | % | 39.02 | % | 9.56 | % | 0.29 | % | 96.73 | % | $ | 135,749 |
| $ | 386 |
|
ESSA | ESSA Bancorp, Inc. |
| PA |
| 14.60 | % | 41.88 | % | 1.05 | % | 1.56 | % | 8.57 | % | 6.36 | % | 9.73 | % | 63.89 | % | $ | 59,254 |
| $ | 303 |
|
FBNK | First Connecticut Bancorp, Inc. |
| CT |
| 0.52 | % | 38.48 | % | 1.11 | % | 6.45 | % | 25.37 | % | 15.17 | % | 0.07 | % | 78.52 | % | $ | 436,902 |
| $ | 4,231 |
|
OCFC | OceanFirst Financial Corp. |
| NJ |
| 11.06 | % | 40.93 | % | 3.02 | % | 1.73 | % | 27.18 | % | 3.68 | % | 0.04 | % | 88.80 | % | $ | 164,488 |
| $ | 433 |
|
OSHC | Ocean Shore Holding Co. |
| NJ |
| 7.73 | % | 62.24 | % | 2.72 | % | 0.28 | % | 7.79 | % | 0.81 | % | 0.04 | % | 52.18 | % | $ | 0 |
| $ | 1 |
|
SIFI | SI Financial Group, Inc. |
| CT |
| 4.82 | % | 34.44 | % | 1.46 | % | 4.60 | % | 20.51 | % | 18.00 | % | 0.27 | % | 62.36 | % | $ | 208,366 |
| $ | 966 |
|
WFD | Westfield Financial, Inc. |
| MA |
| 24.78 | % | 25.21 | % | 1.31 | % | 2.07 | % | 18.25 | % | 12.51 | % | 0.11 | % | 67.49 | % | $ | 1,034 |
| $ | 0 |
|
(1) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.
Source: SNL Financial LC. and RP® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2016 by RP® Financial, LC.
Table 3.5
Interest Rate Risk Measures and Net Interest Income Volatility
Comparable Institution Analysis
As of September��30, 2015 or the Most Recent Date Available
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| Balance Sheet Measures |
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| Tangible |
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| Non-Earn. |
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| Equity/ |
| IEA/ |
| Assets/ |
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| Assets |
| IBL |
| Assets |
| 9/30/2015 |
| 6/30/2015 |
| 3/31/2015 |
| 12/31/2014 |
| 9/30/2014 |
| 6/30/2014 |
| |
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| (%) |
| (%) |
| (%) |
| (change in net interest income is annualized in basis points) |
| |||||||||||
HarborOne Bank |
| MA |
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December 31, 2015 |
|
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| 8.2 | % | 105.4 | % | 5.5 | % | 16 |
| 4 |
| 1 |
| -4 |
| 12 |
| 5 |
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All Public Companies |
|
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| 12.9 | % | 109.5 | % | 6.5 | % | 2 |
| 1 |
| -6 |
| 2 |
| 0 |
| 2 |
| |
State of MA |
|
|
| 13.4 | % | 130.3 | % | 5.4 | % | 5 |
| 3 |
| -9 |
| -1 |
| 1 |
| 3 |
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Comparable Recent MHC Offerings(1) |
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Provident Bancorp, Inc. |
| MA |
| 11.5 | % | 109.1 | % | 0.0 | % | 12 |
| 6 |
| 7 |
| -7 |
| 4 |
| 13 |
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Comparable Group |
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Average |
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| 13.3 | % | 112.3 | % | 4.9 | % | 3 |
| 2 |
| -9 |
| 4 |
| -1 |
| 0 |
| |
Median |
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| 10.0 | % | 107.5 | % | 5.0 | % | 2 |
| 0 |
| -6 |
| 3 |
| 0 |
| -1 |
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Comparable Group |
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BLMT | BSB Bancorp, Inc. |
| MA |
| 8.5 | % | 107.4 | % | 2.8 | % | 4 |
| -2 |
| -4 |
| -10 |
| 0 |
| -10 |
|
BHBK | Blue Hills Bancorp, Inc. |
| MA |
| 20.6 | % | 122.0 | % | 5.1 | % | 34 |
| 5 |
| -47 |
| 23 |
| 17 |
| 14 |
|
CSBK | Clifton Bancorp Inc. |
| NJ |
| 29.3 | % | 134.8 | % | 6.3 | % | 2 |
| 10 |
| -9 |
| 10 |
| 9 |
| -15 |
|
EBSB | Meridian Bancorp, Inc. |
| MA |
| 16.9 | % | 117.3 | % | 3.7 | % | 7 |
| 9 |
| 4 |
| 4 |
| -13 |
| 0 |
|
ESSA | ESSA Bancorp, Inc. |
| PA |
| 10.0 | % | 107.0 | % | 5.6 | % | -8 |
| -3 |
| -1 |
| 8 |
| -14 |
| 23 |
|
FBNK | First Connecticut Bancorp, Inc. |
| CT |
| 9.0 | % | 107.4 | % | 4.2 | % | -3 |
| 5 |
| -7 |
| -7 |
| -7 |
| 6 |
|
OCFC | OceanFirst Financial Corp. |
| NJ |
| 9.1 | % | 105.5 | % | 4.9 | % | 3 |
| 0 |
| 0 |
| -2 |
| -8 |
| -1 |
|
OSHC | Ocean Shore Holding Co. |
| NJ |
| 9.9 | % | 107.8 | % | 4.9 | % | -8 |
| 0 |
| 2 |
| 3 |
| 0 |
| -3 |
|
SIFI | SI Financial Group, Inc. |
| CT |
| 9.5 | % | 107.6 | % | 5.6 | % | -3 |
| -1 |
| -19 |
| 10 |
| 5 |
| -12 |
|
WFD | Westfield Financial, Inc. |
| MA |
| 10.3 | % | 106.7 | % | 6.0 | % | 7 |
| 0 |
| -10 |
| -2 |
| 0 |
| 1 |
|
(1) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.
Source: SNL Financial LC. and RP® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2016 by RP® Financial, LC.
maintained by the Peer Group, with respect to the increases that will be realized in Bank’s equity-to-assets and IEA/IBL ratios.
To analyze interest rate risk associated with the net interest margin, we reviewed quarterly changes in net interest income as a percent of average assets for HarborOne Bank and the Peer Group. In general, the comparative fluctuations in the Bank’s and the Peer Group’s net interest income ratios implied that the interest rate risk associated with their respective net interest margins was fairly similar, based on the interest rate environment that prevailed during the period covered in Table 3.5. The stability of the Bank’s net interest margin should be enhanced by the infusion of stock proceeds, as interest rate sensitive liabilities will be funding a lower portion of HarborOne Bank’s assets and the proceeds will be substantially deployed into interest-earning assets.
Credit Risk
Overall, based on a comparison of credit risk measures, the Bank’s implied credit risk exposure was viewed to be greater relative to the Peer Group’s credit risk exposure. As shown in Table 3.6, the Bank’s ratios for non-performing/assets and non-performing loans/loans equaled 2.62% and 3.14%, respectively, versus comparable measures of 1.02% and 1.25% for the Peer Group. It should be noted that the measures for non-performing assets and non-performing loans in Table 3.6 include accruing loans that are classified as troubled debt restructurings. The Bank’s and Peer Group’s loss reserves as a percent of non-performing loans equaled 25.19% and 90.88%, respectively. Loss reserves maintained as percent of loans receivable equaled 0.79% for the Bank, versus 0.82% for the Peer Group. Net loan charge-offs were a slightly larger factor for the Bank, as net loan charge-offs for the Bank and the Peer Group equaled 0.09% and 0.07% of loans, respectively.
Summary
Based on the above analysis, RP Financial concluded that the Peer Group forms a reasonable basis for determining the pro forma market value of the Bank. Such general characteristics as asset size, capital position, interest-earning asset composition, funding composition, core earnings measures, loan composition, credit quality and exposure to interest rate risk all tend to support the reasonability of the Peer Group from a financial standpoint.
Table 3.6
Credit Risk Measures and Related Information
Comparable Institution Analysis
As of September 30, 2015 or the Most Recent Date Available
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| NPAs & |
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| Rsrves/ |
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| REO/ |
| 90+Del/ |
| NPLs/ |
| Rsrves/ |
| Rsrves/ |
| NPAs & |
| Net Loan |
| NLCs/ |
| |||
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| Assets |
| Assets (1) |
| Loans (1) |
| Loans HFI |
| NPLs (1) |
| 90+Del (1) |
| Chargeoffs (2) |
| Loans |
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| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| ($000) |
| (%) |
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HarborOne Bank |
| MA |
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December 31, 2015 |
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| 0.11 | % | 2.62 | % | 3.14 | % | 0.79 | % | 25.19 | % | 24.15 | % | $ | 1,491 |
| 0.09 | % | ||
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All Public Companies |
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Averages |
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| 0.22 | % | 1.53 | % | 1.81 | % | 1.10 | % | 93.61 | % | 93.11 | % | $ | 2,077 |
| 0.09 | % | ||
Medians |
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| 0.11 | % | 1.11 | % | 1.31 | % | 0.96 | % | 70.82 | % | 66.05 | % | $ | 346 |
| 0.06 | % | ||
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State of MA |
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Averages |
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| 0.03 | % | 0.66 | % | 0.78 | % | 0.94 | % | 142.19 | % | 139.12 | % | $ | 294 |
| 0.02 | % | ||
Medians |
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| 0.00 | % | 0.57 | % | 0.67 | % | 0.96 | % | 127.38 | % | 108.46 | % | $ | 63 |
| 0.01 | % | ||
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Comparable Recent MHC Offerings(3) |
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Provident Bancorp, Inc. |
| MA |
| 0.00 | % | 0.86 | % | 1.13 | % | 1.44 | % | 127.75 | % | 127.75 | % | $ | 305 |
| 0.06 | % | ||
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Comparable Group |
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Averages |
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| 0.07 | % | 1.02 | % | 1.25 | % | 0.82 | % | 90.88 | % | 86.72 | % | $ | 869 |
| 0.07 | % | ||
Medians |
|
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| 0.05 | % | 0.95 | % | 1.07 | % | 0.83 | % | 68.71 | % | 68.31 | % | $ | 635 |
| 0.05 | % | ||
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Comparable Group |
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BLMT |
| BSB Bancorp, Inc. |
| MA |
| 0.09 | % | 0.58 | % | 0.58 | % | 0.72 | % | 124.66 | % | 105.50 | % | $ | (77 | ) | -0.01 | % |
BHBK |
| Blue Hills Bancorp, Inc. |
| MA |
| 0.00 | % | 0.27 | % | 0.38 | % | 1.10 | % | 288.04 | % | 288.04 | % | $ | 50 |
| 0.00 | % |
CSBK |
| Clifton Bancorp Inc. |
| NJ |
| 0.00 | % | 0.44 | % | 0.75 | % | 0.53 | % | 71.02 | % | 71.02 | % | $ | 76 |
| 0.01 | % |
EBSB |
| Meridian Bancorp, Inc. |
| MA |
| 0.02 | % | 1.47 | % | 1.68 | % | 1.11 | % | 66.40 | % | 65.60 | % | $ | 2,106 |
| 0.08 | % |
ESSA |
| ESSA Bancorp, Inc. |
| PA |
| 0.16 | % | 1.53 | % | 1.99 | % | 0.80 | % | 40.35 | % | 36.18 | % | $ | 1,790 |
| 0.17 | % |
FBNK |
| First Connecticut Bancorp, Inc. |
| CT |
| 0.01 | % | 1.26 | % | 1.44 | % | 0.86 | % | 59.41 | % | 58.82 | % | $ | 842 |
| 0.04 | % |
OCFC |
| OceanFirst Financial Corp. |
| NJ |
| 0.13 | % | 2.13 | % | 2.62 | % | 0.85 | % | 32.41 | % | 30.48 | % | $ | 1,472 |
| 0.08 | % |
OSHC |
| Ocean Shore Holding Co. |
| NJ |
| 0.18 | % | 1.05 | % | 1.18 | % | 0.40 | % | 33.52 | % | 27.82 | % | $ | 1,608 |
| 0.21 | % |
SIFI |
| SI Financial Group, Inc. |
| CT |
| 0.09 | % | 0.85 | % | 0.95 | % | 0.80 | % | 84.49 | % | 75.27 | % | $ | 428 |
| 0.04 | % |
WFD |
| Westfield Financial, Inc. |
| MA |
| 0.00 | % | 0.57 | % | 0.96 | % | 1.04 | % | 108.46 | % | 108.46 | % | $ | 398 |
| 0.05 | % |
(1) Includes TDRs for the Company and the Peer Group.
(2) Net loan chargeoffs are shown on a last twelve month basis.
(3) Ratios are based on the date of the most recent financial statements disclosed in the offering prospectus.
Source: SNL Financial, LC and RP® Financial, LC. calculations. The information provided in this table has been obrained from sources we believe are reliable,but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2016 by RP® Financial, LC.
Those areas where differences exist will be addressed in the form of valuation adjustments to the extent necessary.
IV. VALUATION ANALYSIS
Introduction
This chapter presents the valuation analysis and methodology prepared pursuant to the regulatory guidelines, and valuation adjustments and assumptions used to determine the estimated pro forma market value of the common stock to be issued in conjunction with the Bank’s minority stock offering.
Appraisal Guidelines
The federal regulatory appraisal guidelines required by the FRB, the FDIC and state banking agencies specify the pro forma market value methodology for estimating the pro forma market value of an institution. Pursuant to this methodology: (1) a peer group of comparable publicly-traded institutions is selected; (2) a financial and operational comparison of the subject company to the peer group is conducted to discern key differences; and (3) a valuation analysis in which the pro forma market value of the subject company is determined based on the market pricing of the peer group as of the date of valuation, incorporating valuation adjustments for key differences. In addition, the pricing characteristics of recent conversions, both at conversion and in the aftermarket, must be considered. Given the unique differences in the pricing characteristics of publicly-traded MHCs relative to fully-converted thrift stocks, we have also reviewed the pricing characteristics of publicly-traded MHCs on a fully-converted basis.
RP Financial Approach to the Valuation
The valuation analysis herein complies with such regulatory approval guidelines. Accordingly, the valuation incorporates a detailed analysis based on the Peer Group, discussed in Chapter III, which constitutes “fundamental analysis” techniques. Additionally, the valuation incorporates a “technical analysis” of recently completed conversions, including closing pricing and aftermarket trading of such offerings. It should be noted that these valuation analyses cannot possibly fully account for all the market forces which impact trading activity and pricing characteristics of a stock on a given day.
The pro forma market value determined herein is a preliminary value for the Company’s to-be-issued stock. Throughout the stock issuance process, RP Financial will: (1) review
changes in the Bank’s operations and financial condition; (2) monitor the Bank’s operations and financial condition relative to the Peer Group to identify any fundamental changes; (3) monitor the external factors affecting value including, but not limited to, local and national economic conditions, interest rates, and the stock market environment, including the market for thrift stocks; and (4) monitor pending conversion offerings, both regionally and nationally. If material changes should occur prior to the close of the offering, RP Financial will evaluate if updated valuation reports should be prepared reflecting such changes and their related impact on value, if any. RP Financial will also prepare a final valuation update at the closing of the offering to determine if the prepared valuation analysis and resulting range of value continues to be appropriate.
The appraised value determined herein is based on the current market and operating environment for the Bank and for all thrifts. Subsequent changes in the local and national economy, the legislative and regulatory environment, the stock market, interest rates, and other external forces (such as natural disasters or major world events), which may occur from time to time (often with great unpredictability) may materially impact the market value of all thrift stocks, including HarborOne Bank’s value, the market value of the stocks of public MHC institutions, or HarborOne Bank’s value alone. To the extent a change in factors impacting the Bank’s value can be reasonably anticipated and/or quantified, RP Financial has incorporated the estimated impact into its analysis.
Valuation Analysis
A fundamental analysis discussing similarities and differences relative to the Peer Group was presented in Chapter III. The following sections summarize the key differences between the Bank and the Peer Group and how those differences affect the pro forma valuation. Emphasis is placed on the specific strengths and weaknesses of the Bank relative to the Peer Group in such key areas as financial condition, profitability, growth and viability of earnings, asset growth, primary market area, dividends, liquidity of the shares, marketing of the issue, management, and the effect of government regulations and/or regulatory reform. We have also considered the market for thrift stocks, in particular new issues, to assess the impact on value of HarborOne Bank coming to market at this time.
1. Financial Condition
The financial condition of an institution is an important determinant in pro forma market value because investors typically look to such factors as liquidity, capital, asset composition and quality, and funding sources in assessing investment attractiveness. The similarities and differences in the Bank’s and the Peer Group’s financial strengths are noted as follows:
· Overall A/L Composition. Loans funded by retail deposits were the primary components of both HarborOne Bank’s and the Peer Group’s balance sheets. The Bank’s interest-earning asset composition exhibited a higher concentration of loans and a greater degree of diversification into higher risk types of loans. Overall, the Bank’s asset composition provided for a lower yield earned on interest-earning assets and a higher risk weighted assets-to-assets ratio in comparison to the Peer Group’s ratios. HarborOne Bank’s funding composition reflected a higher level of deposits and a slightly lower level of borrowings in comparison to the Peer Group’s ratios, which provided the Bank with a slightly higher cost of funds than maintained by the Peer Group. Overall, as a percent of assets, the Bank maintained slightly lower level of interest-earning assets and a higher level of interest-bearing liabilities relative to the comparable ratios for the Peer Group, which translated into a lower IEA/IBL ratio for the Bank. After factoring in the impact of the net stock proceeds, the Bank’s IEA/IBL ratio will be more comparable to or exceed the Peer Group’s ratio. On balance, RP Financial concluded that asset/liability composition was a neutral factor in our adjustment for financial condition.
· Credit Quality. The Bank’s ratios for non-performing assets as a percent of assets and non-performing loans as a percent of loans were higher than the comparable ratios for the Peer Group. In comparison to the Peer Group, the Bank maintained lower loss reserves as a percent of non-performing loans and similar reserves as a percent of loans. Net loan charge-offs as a percent of loans were similar for the Bank and the Peer Group. The Bank’s risk weighted assets-to-assets ratio was higher than the Peer Group’s ratio. Overall, RP Financial concluded that credit quality was a slightly negative factor in our adjustment for financial condition.
· Balance Sheet Liquidity. The Peer Group operated with a higher level of cash and investment securities relative to the Bank (20.96% of assets versus 11.63% for the Bank). Following the infusion of stock proceeds, the Bank’s cash and investments ratio is expected to increase as a portion of the proceeds retained at the holding company level will initially be held in short-term liquid funds. The Bank’s future borrowing capacity was considered to be similar to the Peer Group’s borrowing capacity, given the fairly comparable borrowings-to-assets ratios currently maintained by the Bank and the Peer Group. Overall, RP Financial concluded that balance sheet liquidity was a neutral factor in our adjustment for financial condition.
· Funding Liabilities. The Bank’s interest-bearing funding composition reflected a higher concentration of deposits and a slightly lower level of borrowings relative to the comparable Peer Group ratios, which translated into a slightly higher cost
of funds for the Bank. The Bank’s ratio of total interest-bearing liabilities as a percent of assets was above the Peer Group’s ratio. Following the stock offering, the increase in the Bank’s capital position will reduce the level of interest-bearing liabilities funding the Bank’s assets to a level that is more comparable to the Peer Group’s ratio of interest-bearing liabilities as a percent of assets. Overall, RP Financial concluded that funding liabilities were a neutral factor in our adjustment for financial condition.
· Capital. The Peer Group currently operates with a higher equity-to-assets ratio than the Bank. Following the stock offering, HarborOne Bank’s pro forma capital position will be more comparable to the Peer Group’s equity-to-assets ratio. On balance, RP Financial concluded that capital strength was a neutral factor in our adjustment for financial condition.
On balance, HarborOne Bank’s balance sheet strength was considered to be less favorable than the Peer Group’s balance sheet strength and, thus, a slight downward adjustment was applied for the Bank’s financial condition.
2. Profitability, Growth and Viability of Earnings
Earnings are a key factor in determining pro forma market value, as the level and risk characteristics of an institution’s earnings stream and prospects to generate future earnings heavily influence the multiple that the investment community will pay for earnings. The major factors considered in the valuation are described below.
· Reported Earnings. The Bank’s reported earnings were lower than the Peer Group’s on a ROAA basis (0.27% of average assets versus 0.57% for the Peer Group). The Peer Group maintained more favorable ratios for net interest income, operating expenses and net gains, which were partially offset by the Bank’s more favorable ratios for loan loss provisions and non-interest operating income. Notably, the Bank’s earnings advantage with respect to non-interest operating income was primarily attributable to revenues derived from its mortgage banking operations, which tend to subject to greater volatility relative to revenues derived from other sources of non-interest operating income such as customer service charges and fees. Reinvestment of stock proceeds into interest-earning assets will serve to increase the Bank’s earnings, with the benefit of reinvesting proceeds expected to be somewhat offset by higher operating expenses associated with operating as a publicly-traded company and the implementation of stock benefit plans. Overall, the Bank’s reported earnings were considered to be less favorable than the Peer Group’s reported earnings and, thus, RP Financial concluded that this was a moderately negative factor in our adjustment for profitability, growth and viability of earnings.
· Core Earnings. Net interest income, operating expenses, non-interest operating income and loan loss provisions were reviewed in assessing the relative strengths and weaknesses of the Bank’s and the Peer Group’s core earnings. In these measures, the Bank operated with a lower net interest income ratio, a higher operating expense ratio and a higher level of non-interest operating
income. The Bank’s lower net interest income ratio and higher operating expense ratio translated into a lower expense coverage ratio in comparison to the Peer Group’s ratio (equal to 0.67x versus 1.21x for the Peer Group). Similarly, the Bank’s efficiency ratio of 89.53% was less favorable than the Peer Group’s efficiency ratio of 71.90%. Loan loss provisions had a slightly larger impact on the Peer Group’s earnings. Overall, these measures, as well as the expected earnings benefits the Bank should realize from the redeployment of stock proceeds into interest-earning assets and leveraging of post-conversion capital, which will be somewhat negated by expenses associated with the stock benefit plans and operating as a publicly-traded company, indicate that the Bank’s pro forma core earnings will remain less favorable than the Peer Group’s core earnings. Therefore, RP Financial concluded that this was a moderately negative factor in our adjustment for profitability, growth and viability of earnings.
· Interest Rate Risk. Quarterly changes in the Bank’s and the Peer Group’s net interest income to average assets ratios indicated that a similar degree of volatility was associated with their respective net interest margins. Other measures of interest rate risk, such as capital levels, IEA/IBL ratios and levels of non-interest earning assets were more favorable for the Peer Group. On a pro forma basis, the infusion of stock proceeds can be expected to provide the Bank with equity-to-assets and IEA/ILB ratios that are comparable to the Peer Group ratios, as well as enhance the stability of the Bank’s net interest margin. Accordingly, on balance, this was a neutral factor in our adjustment for profitability, growth and viability of earnings.
· Credit Risk. Loan loss provisions were a slightly larger factor in the Peer Group’s earnings (0.11% of average assets versus 0.06% of average assets for the Bank). In terms of future exposure to credit quality related losses, the Bank maintained a higher concentration of assets in loans and greater diversification into higher risk types of loans. Recent loan growth by the Bank’s was largely sustained by originations of commercial real estate loans, which significantly increased the concentration of commercial real estate loans held in the Bank’s loan portfolio. Accordingly, the relatively high concentration of unseasoned commercial real estate loans held in the Bank’s loan portfolio represented an additional area of credit risk exposure for the Bank. The Bank’s credit quality measures generally implied a higher degree of credit risk exposure relative to the comparable credit quality measures indicated for the Peer Group. Overall, RP Financial concluded that credit risk was a slightly negative factor in our adjustment for profitability, growth and viability of earnings.
· Earnings Growth Potential. Several factors were considered in assessing earnings growth potential. First, the Peer Group currently maintains a higher interest rate spread than the Bank, which would tend to facilitate a continuation of a higher net interest margin for the Peer Group goring forward. Second, the infusion of stock proceeds will provide the Bank with similar growth potential through leverage as currently maintained by the Peer Group. Third, the Bank’s higher ratios of non-interest operating income and operating expenses were viewed as a respective advantage and disadvantage to sustain earnings growth during periods when net interest margins come under pressure as the result of adverse changes in interest rates. Overall, earnings growth potential was
considered to be a neutral factor in our adjustment for profitability, growth and viability of earnings.
· Return on Equity. Currently, the Bank’s core ROE is lower than the Peer Group’s core ROE. As the result of the increase in capital that will be realized from the infusion of net stock proceeds into the Bank’s equity, the Bank’s pro forma return equity on a core earnings basis will remain lower than the Peer Group’s core ROE. Accordingly, this was a moderately negative factor in the adjustment for profitability, growth and viability of earnings.
On balance, HarborOne Bank’s pro forma earnings strength was considered to be less favorable than the Peer Group’s and, thus, a moderate downward adjustment was applied for profitability, growth and viability of earnings.
3. Asset Growth
Comparative asset growth rates for the Bank and the Peer Group showed a 5.94% increase in the Bank’s assets, versus an 8.37% increase in the Peer Group’s assets. Asset growth for the Bank was sustained by an 8.32% increase in loans, which was partially funded with cash and investments. Similarly, the Peer Group’s asset growth was sustained by a 14.04% increase in loans, which was partially funded with cash and investments. Overall, the Bank’s recent asset growth trends would tend to be viewed fairly comparable to the Peer Group’s asset growth trends in terms of supporting future earnings growth. On a pro forma basis, the Bank’s tangible equity-to-assets ratio will be comparable to the Peer Group’s tangible equity-to-assets ratio, providing the Bank with similar leverage capacity as maintained by the Peer Group. On balance, no adjustment was applied for asset growth.
4. Primary Market Area
The general condition of an institution’s market area has an impact on value, as future success is in part dependent upon opportunities for profitable activities in the local market served. HarborOne Bank serves the Boston metropolitan area through 14 full service branch offices. Operating in a densely populated market area provides the Bank with growth opportunities, but such growth must be achieved in a highly competitive market environment. The Bank competes against significantly larger institutions that provide a larger array of services and have significantly larger branch networks than maintained by HarborOne Bank.
The Peer Group companies generally operate in markets with similarly sized population as Plymouth County. Population growth for the primary market area counties served by the
Peer Group companies reflected a range of growth rates, but, overall, population growth rates in the markets served by the Peer Group companies were less than Plymouth County’s recent historical and projected population growth rates. Plymouth County has a higher per capita income compared to the Peer Group’s average per capita income and, on average, the Peer Group’s primary market area counties were slightly less affluent markets within their respective states compared to Plymouth County’s per capita income as a percent of Massachusetts’ per capita income (89.6% for the Peer Group versus 97.0% for Plymouth County). The average and median deposit market shares maintained by the Peer Group companies were lower than the Bank’s market share of deposits in Plymouth County. Overall, the degree of competition faced by the Peer Group companies was viewed as similar to the Bank’s competitive environment in Plymouth County, while the growth potential in the markets served by the Peer Group companies was for the most part viewed to be slightly less favorable than provided by the Bank’s primary market area. Summary demographic and deposit market share data for the Bank and the Peer Group companies is provided in Exhibit III-4. As shown in Table 4.1, the average unemployment rate for the primary market area counties served by the Peer Group companies was above the unemployment rate reflected for Plymouth County. On balance, we concluded that a slight upward adjustment was appropriate for the Bank’s market area.
Table 4.1
Market Area Unemployment Rates
HarborOne Bank and the Peer Group Companies (1)
|
|
|
| November 2015 |
|
|
| County |
| Unemployment |
|
|
|
|
|
|
|
HarborOne Bank - MA |
| Plymouth |
| 4.7 | % |
|
|
|
|
|
|
Peer Group Average |
|
|
| 5.8 |
|
|
|
|
|
|
|
The Peer Group |
|
|
|
|
|
|
|
|
|
|
|
BSB Bancorp, Inc. — MA |
| Middlesex |
| 3.8 |
|
Blue Hills Bancorp, Inc. - MA |
| Suffolk |
| 4.3 |
|
Clifton Bancorp, Inc. - NJ |
| Passaic |
| 6.0 |
|
ESSA Bancorp, Inc. — PA |
| Monroe |
| 5.4 |
|
First Connecticut Bancorp, Inc. — CT |
| Hartford |
| 5.0 |
|
Meridian Bancorp, Inc. - MA |
| Essex |
| 4.8 |
|
OceanFirst Financial Corp. — NJ |
| Ocean |
| 5.4 |
|
Ocean Shore Holding Co. — NJ |
| Cape May |
| 12.5 |
|
SI Financial Group, Inc. — CT |
| Windham |
| 5.2 |
|
Westfield Financial Inc. — MA |
| Hampden |
| 6.0 |
|
(1) Unemployment rates are not seasonally adjusted.
Source: SNL Financial, LC; Department of Labor.
5. Dividends
At this time the Bank has not established a dividend policy. Future declarations of dividends by the Board of Directors will depend upon a number of factors, including investment opportunities, growth objectives, financial condition, profitability, tax considerations, minimum capital requirements, regulatory limitations, stock market characteristics and general economic conditions.
Nine out of the ten Peer Group companies pay regular cash dividends, with implied dividend yields ranging from 0.58% to 3.19%. The average dividend yield on the stocks of the Peer Group institutions equaled 1.46% as of February 5, 2016. Comparatively, as of February 5, 2016, the average dividend yield on the stocks of all fully-converted publicly-traded thrifts equaled 1.79%.
Our valuation adjustment for dividends for HarborOne Bank also considered the regulatory policy with regard to payment of dividends to the MHC. Under current FRB policy, any dividends declared by HarborOne Bancorp would be required to be paid to all shareholders. Accordingly, dividends paid by HarborOne Bancorp would increase the amount of assets held by the MHC, after adjusting for applicable income taxes, and, thereby, increase the implied dilution incurred by the minority shareholders in a second-step conversion pursuant to the calculation to account for net assets held by the MHC in a second-step offering.
Overall, while the Bank has not established a definitive dividend policy prior to its stock offering, the Bank will have the capacity to pay a dividend comparable to the Peer Group’s average dividend yield based on pro forma earnings and capitalization. At the same time, dividend payments retained by the MHC would increase the implied dilution to minority shareholders in a second-step offering. On balance, we concluded that a slight downward adjustment was warranted for purposes of the Bank’s dividend policy.
6. Liquidity of the Shares
The Peer Group is by definition composed of companies that are traded in the public markets. All ten of the Peer Group members trade on the NASDAQ system. Typically, the number of shares outstanding and market capitalization provides an indication of how much liquidity there will be in a particular stock. The market capitalization of the Peer Group companies ranged from $113.7 million to $393.8 million as of February 5, 2016, with average
and median market values of $280.3 million and $225.9 million, respectively. The shares issued and outstanding of the Peer Group companies ranged from 6.4 million to 54.9 million, with average and median shares outstanding of 19.9 million and 16.6 million, respectively. The Bank’s stock offering is expected to have a pro forma public market value and shares outstanding of public shareholders that will be in the lower end of the ranges of market values and shares outstanding indicated for the Peer Group companies. Like all of the Peer Group companies, the Bank’s stock will be quoted on the NASDAQ following the stock offering. Overall, we anticipate that the Bank’s public stock will have a comparable trading market as the Peer Group companies on average and, therefore, concluded no adjustment was necessary for this factor.
7. Marketing of the Issue
Three separate markets exist for thrift stocks: (1) the after-market for public companies, both fully-converted stock companies and MHCs, in which trading activity is regular and investment decisions are made based upon financial condition, earnings, capital, ROE, dividends and future prospects; (2) the new issue market in which converting thrifts are evaluated on the basis of the same factors but on a pro forma basis without the benefit of prior operations as a publicly-held company and stock trading history; and (3) the thrift acquisition market. All three of these markets were considered in the valuation of the Bank’s to-be-issued stock.
A. The Public Market
The value of publicly-traded thrift stocks is easily measurable, and is tracked by most investment houses and related organizations. Exhibit IV-1 provides pricing and financial data on all publicly-traded thrifts. In general, thrift stock values react to market stimuli such as interest rates, inflation, perceived industry health, projected rates of economic growth, regulatory issues and stock market conditions in general. Exhibit IV-2 displays historical stock market trends for various indices and includes historical stock price index values for thrifts and commercial banks. Exhibit IV-3 displays various stock price indices as of February 5, 2016.
In terms of assessing general stock market conditions, the performance of the overall stock market has been mixed in recent quarters. A more favorable outlook on Greece’s
financial crisis helped stocks to advance at the start of the third quarter of 2015, which was followed by the Dow Jones Industrial Average (“DJIA”) declining to a five-month low in the second week of July as the sell-off in China’s stock market rippled through markets globally. News of a bailout deal secured by Greece supported a stock market rally in mid-July, while some favorable second quarter earnings reports coming out of the technology sector lifted the NASDAQ to three consecutive record high closes heading into the second half of July. Comparatively, the DJIA approached a six-month low in late-July, as disappointing earnings by some of the Dow components and a continued sell-off in China’s stock market weighed on the broader stock market. A measured Federal Reserve policy statement that reaffirmed it would move cautiously on raising interest rates and an easing of the sell-off in China’s stock market boosted stocks at the end of July. The DJIA recorded seven consecutive losses through the first week of trading in August, which was driven by weak earnings reports posted by some media and oil stocks. A rebound in beaten down energy shares and 2015’s largest merger announcement fueled stock market gains heading into mid-August, which was followed by a sharp sell-off as China’s surprising decision to devalue its currency rattled global markets. Stocks closed out the second week of August on a slight upswing. Volatility prevailed in the stock market during the second half of August 2015 and for most of September 2015. Worries about the pace of global growth jolted stock markets worldwide in the second half of August, with the DJIA plunging over 1,800 points during six consecutive trading sessions. Renewed optimism about the strength of the U.S. economy and comments from a Federal Reserve official stating the case for a September rate increase had become less compelling snapped the six-day losing streak, as the DJIA rebounded 988 points in consecutive trading sessions during late-August. Overall, the DJIA declined 6.6% in August, its largest one month percentage decline since May 2010. Volatility continued to prevail in the broader stock market in early-September, as investors considered fresh evidence that China’s economic slowdown was hurting the global economy, the possibility of China’s central bank would take more steps to stabilize its economy and disappointing job growth reflected in the August employment report. Stocks rallied ahead of the Federal Reserve’s mid-September meeting, which was followed by a downturn in the broader stock market after the Federal Reserve concluded to hold short-term interest rates steady. Declines in the auto, biotech and energy sectors led the market lower heading into late-September, which was followed by a rebound as the Federal Reserve Chairwoman added clarity that she expected interest rates would go up in 2015. Biotech and healthcare shares led the market lower in late-September, which was followed by a two day rebound in the stock market to close out the third quarter. For the third quarter overall, all three major U.S. stock indexes posted their biggest quarterly losses in four years.
The broader stock market soared higher at the start of the fourth quarter of 2015, with the DJIA trading up for seven consecutive sessions for a total gain of 860 points between October 2nd and October 12th. Factors contributing to the rally included a rebound in energy shares supported by an increase in oil prices, raised expectations that the Federal Reserve would not raise interest rates in the near term following the weak employment report for September and a rebound in oversold healthcare stocks. A gloomy earnings forecast by Wal-Mart pulled stocks lower in mid-October, which was followed by a broader stock market rebound heading into the second half of October. Lackluster U.S. economic data reducing expectations of a near term rate increase by the Federal Reserve, indications from the European Central Bank that is was prepared to do more to stimulate growth and a rate cut by China’s central bank were factors contributing to gains in the broader stock market. Stocks continued to surge higher in late-October, after the Federal Reserve concluded its two-day meeting leaving interest rates unchanged and toned down its concerns about global financial markets. The DJIA closed up 8.5% for the month of October, which was the biggest monthly percentage gain in four years. Led by a rally in energy stocks, the DJIA moved back into positive territory for 2015 in early-November. Concerns about the health of the global economy and lower oil prices weighed on stocks going into mid-November. Indications from the Federal Reserve that the U.S. economy was strong enough for a rate increase and a rebound in energy, healthcare and technology stocks helped stocks to rally during the second half of November. A strong jobs report for November added to stock market gains in the first week of December. A sell-off in energy shares led the market lower going into mid-December, as oil prices fell to their lowest level in seven years. Stocks rallied on the Federal Reserve’s mid-December rate hike, as investors responded to the Federal Reserve’s upbeat message on the U.S. economy. Grim news from the energy and mining sectors, along with worries about slowing economies overseas, sent the DJIA to its lowest close in two months heading into the final two weeks of 2015. A rebound in energy stocks contributed to stock market gains in late-December, which was followed by a mild pullback in the final trading week of 2015. Overall, 2015 was the worst year for U.S. stocks since 2008.
The DJIA tumbled more than 1,000 points or 6.2% during the first week of trading 2016, as fresh concerns about China’s economy and a steep decline in oil prices rattled stock markets worldwide. Investor anxiety over the global economy and further declines in oil prices continued to weigh on stocks through most of January, although stocks rebounded at the end of January with higher oil prices and the Bank of Japan’s surprise decision to shift to negative
interest rates contributing to gains in the broader stock market. Overall, the DJIA was down 5.5% for the month of January. Stocks closed lower during the first week of February, as investors reacted to oil falling below $30 a barrel and January employment data showing a slowdown in job growth. On February 5, 2016, the DJIA closed at 16204.97, a decrease of 9.1% from one year ago and a decrease of 7.0% year-to-date, and the NASDAQ closed at 4363.14, a decrease of 8.0% from one year ago and a decrease of 12.9% year-to-date. The Standard & Poor’s 500 Index closed at 1880.05 on February 5, 2016, a decrease of 8.5% from one year ago and a decrease of 8.0% year-to-date.
The market for thrift stocks has also experienced varied trends in recent quarters, but, in general, thrift stocks outperformed the broader stock market. Thrift shares paralleled trends in the broader stock market during the first half of July 2015, as investors focused on Greece’s debt problems and the sell-off in China’s stock market. Second quarter earnings reports for the financial sector were generally in line with expectations, which translated into a relatively flat market for thrift stocks during the second half of July. The Federal Reserve’s cautious outlook on raising interest rates and a favorable employment report for July contributed to thrift shares trading higher at the close of July, with the positive trend continuing through the first half of August. Lower interest rates and oil prices weighed on financial shares during the second half of August 2015, although generally favorable housing data somewhat negated the downturn in thrift stocks. For the entire month of August, the SNL Index for all publicly-traded thrifts showed a comparatively modest decline of 2.8%. A sell-off in the broader stock market and a disappointing reading for manufacturing activity pressured thrift stocks lower at the start of September. Following the one-day sell-off, thrift shares generally trended higher into mid-September in advance of the Federal Reserve’s policy meeting. Financial shares led the market lower after the Federal Reserve elected to hold short-term interest rates steady at the conclusion of its mid-September meeting. Worries about slower economic growth provided for a slight pull back in thrift shares during the second half of September.
Thrift stocks traded higher in early-October 2015, as investors bet that low interest rates would stay around for longer following the weaker-than-expected job growth reflected in the September employment report. Third quarter earnings reports posted by the thrift sector translated into a narrow trading range for thrift stocks during the second half of October, as the majority of thrifts reported third quarter earnings that were in line with analyst estimates and continued to reflect additional net interest margin compression. Thrift stocks
participated in the broader stock market rally at the conclusion of the Federal Reserve’s policy meeting in late-October, but reversed course at the end of October as shares of New York Community Bancorp and Astoria Financial Corp. declined following the announcement of their $2.0 billion strategic merger. Thrift stocks recovered in early-November, as financial shares led the market higher on the strong jobs report for October. A disappointing report for October retail sales pressured thrift shares lower in mid-November, while merger activity in the thrift sector helped thrift stocks outperform the broader stock market during the second half of November. Thrift stocks rallied on the sturdy job growth reflected in the November employment data and then declined going into mid-December, as concerns about the global economy translated into a sell-off in the broader stock market. Thrift stocks participated in the broader stock market rally following the Federal Reserve’s mid-December rate hike and then settled into a narrow trading during the closing weeks of 2015.
Thrift shares participated in the broader stock market sell-off during the first week of 2016. A weak retail sales report for December and other signs of a slowing U.S. economy furthered the downward trend in thrift prices into the second half of January. The sell-off in financial shares tended to more significant among institutions with lending exposure to the energy sector and international markets. Thrift stocks rebounded with the broader stock market at the close of January, which was followed by a pullback during first week of February amid disappointing economic reports for January manufacturing activity and January job growth. On February 5, 2016, the SNL Index for all publicly-traded thrifts closed at 738.0, an increase of 1.5% from one year ago and a decrease of 8.8% year-to-date.
B. The New Issue Market
In addition to thrift stock market conditions in general, the new issue market for converting thrifts is also an important consideration in determining the Bank’s pro forma market value. The new issue market is separate and distinct from the market for seasoned thrift stocks in that the pricing ratios for converting issues are computed on a pro forma basis, specifically: (1) the numerator and denominator are both impacted by the conversion offering amount, unlike existing stock issues in which price change affects only the numerator; and (2) the pro forma pricing ratio incorporates assumptions regarding source and use of proceeds, effective tax rates, stock plan purchases, etc. which impact pro forma financials, whereas pricing for existing issues are based on reported financials. The distinction between pricing of converting and existing issues is perhaps no clearer than in the case of the price/book (“P/B”) ratio in that the
P/B ratio of a converting thrift will typically result in a discount to book value whereas in the current market for existing thrifts the P/B ratio often reflects a premium to book value. Therefore, it is appropriate to also consider the market for new issues, both at the time of the conversion and in the aftermarket.
As shown in Table 4.2, one standard conversion offering and one second-step conversion were completed during the past three months. No first-step MHC offerings were completed during the past three months. The most recent first-step MHC offering was completed Cincinnati Bancorp of Ohio, which completed its mutual holding company offering on October 15, 2015. Cincinnati Bancorp’s offering was closed at the top of its offering range equal to gross proceeds of $7.7 million and a pro forma fully-converted price/tangible book ratio of 66.7%. After the first week of trading, Cincinnati Bancorp’s stock price was down 5.0% from its IPO price. As of February 5, 2016, Cincinnati Bancorp’s stock price was down 9.8% from its IPO price.
Shown in Table 4.3 is the current pricing ratios for PB Bancorp, Inc., which was the only fully-converted offering completed during the past three months that trades on NASDAQ. PB Bancorp’s current P/TB ratio is 88.58%, based on its closing stock price as of February 5, 2016.
C. The Acquisition Market
Also considered in the valuation was the potential impact on HarborOne Bank’s stock price of recently completed and pending acquisitions of other savings institutions operating in Massachusetts. As shown in Exhibit IV-4, there were fifteen Massachusetts thrift acquisitions completed from the beginning of 2011 through year-to-date 2016, and there are currently two acquisition pending for a Massachusetts savings institution. To the extent that speculation of a re-mutualization may impact the Bank’s valuation, we have largely taken this into account in selecting companies for the Peer Group which operate in markets that have experienced a comparable level of acquisition activity as the Bank’s market and, thus, are subject to the same type of acquisition speculation that may influence HarborOne Bancorp’s stock. However, since converting thrifts are subject to a three-year regulatory moratorium from being acquired, acquisition speculation in HarborOne Bancorp’s stock would tend to be less compared to the
Table 4.2 |
Pricing Characteristics and After-Market Trends |
Conversions Completed in the Last Three Months |
Institutional Information
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| Pre-Conversion Data |
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| Contribution to |
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| Financial Info. |
| Asset Quality |
| Offering Information |
| Char. Found. |
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| Excluding Foundation |
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| % Of |
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| Equity/ |
| NPAs/ |
| Res. |
| Gross |
| % |
| % of |
| Exp./ |
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| Public Off. |
| |||
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| Conversion |
| Ticker |
| Assets |
| Assets |
| Assets |
| Cov. |
| Proc. |
| Offer |
| Mid. |
| Proc. |
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| Inc. Fdn. |
| |||
Institution |
| Date |
| (%) |
| ($Mil) |
| (%) |
| (%) |
| (%) |
| ($Mil.) |
| (%) |
| (%) |
| (%) |
| Form |
| (%) |
| |||
Standard Conversions |
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Central Federal Bancshares, Inc. - MO |
| 1/13/16 |
| MFDB-OTC Pink |
| $ | 62 |
| 22.08 | % | 1.50 | % | 89 | % | $ | 17.2 |
| 96 | % | 132 | % | 7.0 | % | C/S |
| $ | 100K/3.85% |
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Averages - Second Step Conversions: |
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| $ | 62 |
| 22.08 | % | 1.50 | % | 89 | % | $ | 17.2 |
| 96 | % | 132 | % | 7.0 | % | N.A. |
| N.A. |
| |
Medians - Second Step Conversions: |
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| $ | 62 |
| 22.08 | % | 1.50 | % | 89 | % | $ | 17.2 |
| 96 | % | 132 | % | 7.0 | % | N.A. |
| N.A. |
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Second-Step Conversions |
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PB Bancorp, Inc. - CT* |
| 1/8/16 |
| PBBI-NASDAQ |
| $ | 469 |
| 11.23 | % | 1.63 | % | 38 | % | $ | 36.3 |
| 100 | % | 132 | % | 3.8 | % | N.A. |
| N.A. |
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Averages - MHC Conversions: |
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| $ | 469 |
| 11.23 | % | 1.63 | % | 38 | % | $ | 36.3 |
| 100 | % | 132 | % | 3.8 | % | N.A. |
| N.A. |
| |
Medians - MHC Conversions: |
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| $ | 469 |
| 11.23 | % | 1.63 | % | 38 | % | $ | 36.3 |
| 100 | % | 132 | % | 3.8 | % | N.A. |
| N.A. |
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Averages - All Conversions: |
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| $ | 266 |
| 16.66 | % | 1.57 | % | 63 | % | $ | 26.7 |
| 98 | % | 132 | % | 5.4 | % | N.A. |
| N.A. |
| |
Medians - All Conversions: |
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| $ | 266 |
| 16.66 | % | 1.57 | % | 63 | % | $ | 26.7 |
| 98 | % | 132 | % | 5.4 | % | N.A. |
| N.A. |
| |
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| Insider Purchases |
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| Pro Forma Data |
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| Post-IPO Pricing Trends |
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| % Off Incl. Fdn.+Merger Shares |
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| Pricing Ratios(2)(5) |
| Financial Charac. |
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| Closing Price: |
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| Benefit Plans |
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| Initial |
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| After |
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| Recog. |
| Stk |
| Mgmt.& |
| Div. |
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| Core |
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| Core |
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| Core |
| IPO |
| Trading |
| % |
| First |
| % |
| First |
| % |
| Thru |
| % |
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| ESOP |
| Plans |
| Option |
| Dirs. |
| Yield |
| P/TB |
| P/E |
| P/A |
| ROA |
| TE/A |
| ROE |
| Price |
| Day |
| Chge |
| Week(3) |
| Chge |
| Month(4) |
| Chge |
| 2/5/2016 |
| Chge |
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Institution |
| (%) |
| (%) |
| (%) |
| (%)(1) |
| (%) |
| (%) |
| (x) |
| (%) |
| (%) |
| (%) |
| (%) |
| ($) |
| ($) |
| (%) |
| ($) |
| (%) |
| ($) |
| (%) |
| ($) |
| (%) |
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Standard Conversions |
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Central Federal Bancshares, Inc. - MO |
| 8.0 | % | 4.0 | % | 10.0 | % | 0.8 | % | 0.00 | % | 64.6 | % | NM |
| 23.6 | % | -0.1 | % | 36.5 | % | -0.2 | % | $ | 10.00 |
| $ | 10.45 |
| 4.5 | % | $ | 10.54 |
| 5.4 | % | $ | 10.71 |
| 16.0 | % | $ | 10.71 |
| 25.6 | % |
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Averages - Second Step Conversions: |
| 8.0 | % | 4.0 | % | 10.0 | % | 0.8 | % | 0.00 | % | 64.6 | % | NM |
| 23.6 | % | -0.1 | % | 36.5 | % | -0.2 | % | $ | 10.00 |
| $ | 10.45 |
| 4.5 | % | $ | 10.54 |
| 5.4 | % | $ | 10.71 |
| 16.0 | % | $ | 10.71 |
| 25.6 | % |
Medians - Second Step Conversions: |
| 8.0 | % | 4.0 | % | 10.0 | % | 0.8 | % | 0.00 | % | 64.6 | % | NM |
| 23.6 | % | -0.1 | % | 36.5 | % | -0.2 | % | $ | 10.00 |
| $ | 10.45 |
| 4.5 | % | $ | 10.54 |
| 5.4 | % | $ | 10.71 |
| 16.0 | % | $ | 10.71 |
| 25.6 | % |
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Second-Step Conversions |
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PB Bancorp, Inc. - CT* |
| 7.0 | % | 4.0 | % | 10.0 | % | 1.9 | % | 0.00 | % | 75.4 | % | 94.5x |
| 12.6 | % | 0.1 | % | 15.5 | % | 0.8 | % | $ | 8.00 |
| $ | 9.00 |
| 12.5 | % | $ | 8.77 |
| 9.6 | % | $ | 8.62 |
| 7.7 | % | $ | 8.62 |
| 7.7 | % |
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Averages - MHC Conversions: |
| 7.0 | % | 4.0 | % | 10.0 | % | 1.9 | % | 0.00 | % | 75.4 | % | 94.5x |
| 12.6 | % | 0.1 | % | 15.5 | % | 0.8 | % | $ | 8.00 |
| $ | 9.00 |
| 12.5 | % | $ | 8.77 |
| 9.6 | % | $ | 8.62 |
| 7.7 | % | $ | 8.62 |
| 7.7 | % |
Medians - MHC Conversions: |
| 7.0 | % | 4.0 | % | 10.0 | % | 1.9 | % | 0.00 | % | 75.4 | % | 94.5x |
| 12.6 | % | 0.1 | % | 15.5 | % | 0.8 | % | $ | 8.00 |
| $ | 9.00 |
| 12.5 | % | $ | 8.77 |
| 9.6 | % | $ | 8.62 |
| 7.7 | % | $ | 8.62 |
| 7.7 | % |
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Averages - All Conversions: |
| 7.5 | % | 4.0 | % | 10.0 | % | 1.4 | % | 0.00 | % | 70.0 | % | 94.5x |
| 18.1 | % | 0.0 | % | 26.0 | % | 0.3 | % | $ | 9.00 |
| $ | 9.73 |
| 8.5 | % | $ | 9.66 |
| 7.5 | % | $ | 9.67 |
| 11.9 | % | $ | 9.67 |
| 16.7 | % |
Medians - All Conversions: |
| 7.5 | % | 4.0 | % | 10.0 | % | 1.4 | % | 0.00 | % | 70.0 | % | 94.5x |
| 18.1 | % | 0.0 | % | 26.0 | % | 0.3 | % | $ | 9.00 |
| $ | 9.73 |
| 8.5 | % | $ | 9.66 |
| 7.5 | % | $ | 9.67 |
| 11.9 | % | $ | 9.67 |
| 16.7 | % |
Note: * - Appraisal performed by RP Financial; BOLD = RP Fin. Did the business plan, “NT” - Not Traded; “NA” - Not Applicable, Not Available; C/S-Cash/Stock.
(1) As a percent of MHC offering for MHC transactions. |
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(2) Does not take into account the adoption of SOP 93-6. |
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(3) Latest price if offering is less than one week old. |
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(4) Latest price if offering is more than one week but less than one month old. |
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(5) Mutual holding company pro forma data on full conversion basis. |
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(6) Simultaneously completed acquisition of another financial institution. |
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(7) Simultaneously converted to a commercial bank charter. |
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(8) Former credit union. |
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2/5/2016
Table 4.3
Market Pricing Comparatives
Prices As of February 5, 2016
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| Market |
| Per Share Data |
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| Capitalization |
| Core |
| Book |
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| Dividends(3) |
| Financial Characteristics(5) |
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| Price/ |
| Market |
| 12 Month |
| Value/ |
| Pricing Ratios(2) |
| Amount/ |
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| Payout |
| Total |
| Equity/ |
| Tang Eq/ |
| NPAs/ |
| Reported |
| Core |
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Financial Institution |
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| Share |
| Value |
| EPS(1) |
| Share |
| P/E |
| P/B |
| P/A |
| P/TB |
| P/Core |
| Share |
| Yield |
| Ratio(4) |
| Assets |
| Assets |
| Assets |
| Assets |
| ROA |
| ROE |
| ROA |
| ROE |
| ||||||
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| ($) |
| ($Mil) |
| ($) |
| ($) |
| (x) |
| (%) |
| (%) |
| (%) |
| (x) |
| ($) |
| (%) |
| (%) |
| ($Mil) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
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All Non-MHC Public Companies |
|
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| $ | 16.39 |
| $ | 435.84 |
| $ | 1.06 |
| $ | 15.16 |
| 17.93x |
| 104.85 | % | 13.38 | % | 113.19 | % | 18.53x |
| $ | 0.29 |
| 1.79 | % | 44.94 | % | $ | 3,109 |
| 13.51 | % | 12.79 | % | 1.46 | % | 0.74 | % | 6.05 | % | 0.77 | % | 6.24 | % |
Converted Last 3 Months (no MHC) |
|
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| $ | 8.62 |
| $ | 67.93 |
| $ | 0.08 |
| $ | 10.61 |
| NM |
| 81.24 | % | 13.58 | % | 88.58 | % | NM |
| $ | 0.10 |
| 1.16 | % | NM |
| $ | 500 |
| 16.71 | % | 15.33 | % | NA |
| 0.12 | % | 0.73 | % | 0.13 | % | 0.80 | % |
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Converted Last 3 Months (no MHC) |
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PBBI PB Bancorp, Inc. |
| CT |
| $ | 8.62 |
| $ | 67.93 |
| $ | 0.08 |
| $ | 10.61 |
| NM |
| 81.24 | % | 13.58 | % | 88.58 | % | NM |
| $ | 0.10 |
| 1.16 | % | 139.77 | % | $ | 500 |
| 16.71 | % | 15.33 | % | 1.70 | % | 0.12 | % | 0.73 | % | 0.13 | % | 0.80 | % |
(1) Core income, on a diluted per-share basis. Core income is net income after taxes and before extraordinary items, less net income attributable to noncontrolling interest, gain on the sale of securities, amortization of intangibles, goodwill and nonrecurring items.
Assumed tax rate is 35%.
(2) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB = Price to tangible book value; and P/Core = Price to core earnings. P/E and P/Core =NM if the ratio is negative or above 35x.
(3) Indicated 12 month dividend, based on last quarterly dividend declared.
(4) Indicated 12 month dividend as a percent of trailing 12 month earnings.
(5) ROAA (return on average assets) and ROAE (return on average equity) are indicated ratios based on trailing 12 month earnings and average equity and assets balances.
(6) Excludes from averages and medians those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.
Source: SNL Financial, LC. and RP® Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2016 by RP® Financial, LC.
stocks of the Peer Group companies. Furthermore, in comparison to the stocks of the fully-converted Peer Group companies, the degree of acquisition speculation in HarborOne Bancorp’s stock is also viewed to be relatively more limited since there will be fewer potential acquirers for the Company’s stock as a re-mutualization transaction can only be completed by a mutual institution or an institution in the MHC form of ownership. Additionally, there tends to be less acquisition speculation in the stocks of publicly-traded MHCs in general, given the majority of the shares are held by the MHC rather than public shareholders which own 100% of the stocks of the fully-converted Peer Group companies. Accordingly, the Peer Group companies are considered to be subject to a greater degree of acquisition speculation relative to the acquisition speculation that may influence HarborOne Bancorp’s trading price.
* * * * * * * * * * *
In determining our valuation adjustment for marketing of the issue, we considered trends in both the overall thrift market, the new issue market including the new issue market for MHC shares and the local acquisition market for thrift stocks. Taking these factors and trends into account, RP Financial concluded that a slight downward adjustment was appropriate in the valuation analysis for purposes of marketing of the issue.
8. Management
HarborOne Bank’s management team appears to have experience and expertise in all of the key areas of the Bank’s operations. Exhibit IV-5 provides summary resumes of HarborOne Bank’s Board of Directors and senior management. The financial characteristics of the Bank suggest that the Board and senior management have been effective in implementing an operating strategy that can be well managed by the Bank’s present organizational structure. The Bank currently does not have any senior management positions that are vacant.
Similarly, the returns, capital positions and other operating measures of the Peer Group companies are indicative of well-managed financial institutions, which have Boards and management teams that have been effective in implementing competitive operating strategies. Therefore, on balance, we concluded no valuation adjustment relative to the Peer Group was appropriate for this factor.
9. Effect of Government Regulation and Regulatory Reform
In summary, as a federally-insured savings institution operating in the MHC form of ownership, HarborOne Bank will be operating in substantially the same regulatory environment as the Peer Group members — all of whom are adequately capitalized institutions and the substantial majority are operating with no apparent restrictions. Exhibit IV-6 reflects the Bank’s pro forma regulatory capital ratios. Accordingly, no adjustment has been applied for the effect of government regulation and regulatory reform.
Summary of Adjustments
Overall, based on the factors discussed above, we concluded that the Bank’s pro forma market value should reflect the following valuation adjustments relative to the Peer Group:
Key Valuation Parameters: |
| Valuation Adjustment |
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|
|
Financial Condition |
| Slight Downward |
Profitability, Growth and Viability of Earnings |
| Moderate Downward |
Asset Growth |
| No Adjustment |
Primary Market Area |
| Slight Upward |
Dividends |
| Slight Downward |
Liquidity of the Shares |
| No Adjustment |
Marketing of the Issue |
| Slight Downward |
Management |
| No Adjustment |
Effect of Government Regulations and Regulatory Reform |
| No Adjustment |
Valuation Approaches: Fully-Converted Basis
In applying the accepted valuation methodology promulgated by the FDIC, FRB and the Commissioner, i.e., the pro forma market value approach, we considered the three key pricing ratios in valuing HarborOne Bancorp’s to-be-issued stock — price/earnings (“P/E”), price/book (“P/B”), and price/assets (“P/A”) approaches — all performed on a pro forma basis including the effects of the stock proceeds. In computing the pro forma impact of the conversion and the related pricing ratios, we have incorporated the valuation parameters disclosed in HarborOne Bancorp’s prospectus for reinvestment rate, effective tax rate, stock benefit plan assumptions, the Foundation and offering expenses (summarized in Exhibits IV-9 and IV-10). The assumptions utilized in the pro forma analysis in calculating the Bank’s full conversion value
were consistent with the assumptions utilized for the minority stock offering, except expenses were assumed to equal 3.0% of gross proceeds (summarized in Exhibits IV-7 and IV-8).
In our estimate of value, we assessed the relationship of the pro forma pricing ratios relative to the Peer Group, recent conversions and publicly-traded MHCs on a fully-converted basis.
RP Financial’s valuation placed an emphasis on the following:
· P/E Approach. The P/E approach is generally the best indicator of long-term value for a stock. At the same time, recognizing that (1) the earnings multiples will be evaluated on a pro forma fully-converted basis for the Bank; and (2) the Peer Group on average has had the opportunity to realize the benefit of reinvesting net conversion proceeds, we also gave weight to the other valuation approaches.
· P/B Approach. P/B ratios have generally served as a useful benchmark in the valuation of thrift stocks, particularly in the context of an initial public offering, as the earnings approach involves assumptions regarding the use of proceeds. RP Financial considered the P/B approach to be a valuable indicator of pro forma value taking into account the pricing ratios under the P/E and P/A approaches. We have also modified the P/B approach to exclude the impact of intangible assets (i.e., price/tangible book value or “P/TB”), in that the investment community frequently makes this adjustment in its evaluation of this pricing approach.
· P/A Approach. P/A ratios are generally a less reliable indicator of market value, as investors typically assign less weight to assets and attribute greater weight to book value and earnings. Furthermore, this approach as set forth in the regulatory valuation guidelines does not take into account the amount of stock purchases funded by deposit withdrawals, thus understating the pro forma P/A ratio. At the same time, the P/A ratio is an indicator of franchise value, and, in the case of highly capitalized institutions, high P/A ratios may limit the investment community’s willingness to pay market multiples for earnings or book value when ROE is expected to be low.
The Bank will adopt “Employers’ Accounting for Employee Stock Ownership Plans” (“ASC 718-40”), which will cause earnings per share computations to be based on shares issued and outstanding excluding unreleased ESOP shares. For purposes of preparing the pro forma pricing analyses, we have reflected all shares issued in the offering, including all ESOP shares, to capture the full dilutive impact, particularly since the ESOP shares are economically dilutive, receive dividends and can be voted. However, we did consider the impact of ASC 718-40 in the valuation.
Based on the application of the three valuation approaches, taking into consideration the valuation adjustments discussed above and the dilutive impact of the stock contribution to the Foundation, RP Financial concluded that as of February 5, 2016, the pro forma market value of HarborOne Bank’s full conversion offering equaled $227,700,000 at the midpoint, equal to 22,770,000 shares at $10.00 per share.
Basis of Valuation - Fully-Converted Pricing Ratios
1. Price-to-Earnings (“P/E”). The application of the P/E valuation method requires calculating the Bank’s pro forma market value by applying a valuation P/E multiple (fully-converted basis) to the pro forma earnings base. In applying this technique, we considered both reported earnings and a recurring earnings base, that is, earnings adjusted to exclude any one-time non-operating items, plus the estimated after-tax earnings benefit of the reinvestment of the net proceeds. The Bank’s reported earnings equaled $5.768 million for the twelve months ended December 31, 2015. In deriving HarborOne Bank’s core earnings, the only adjustment made to reported earnings was to eliminate the gain on sale of securities equal to $295,000. As shown below, on a tax effected basis, assuming an effective marginal tax rate of 40.0% for the adjustment, the Bank’s core earnings were determined to equal $5.591 million for the twelve months ended December 31, 2015.
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| Amount |
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| ($000) |
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Net income |
| $ | 5,768 |
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Less: Gain on sale of securities(1) |
| (177 | ) | |
Core earnings estimate |
| $ | 5,591 |
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(1) Tax effected at 40.0%.
Based on HarborOne Bank’s reported and estimated core earnings and incorporating the impact of the pro forma assumptions discussed previously, the Bank’s pro forma reported and core P/E multiples (fully-converted basis) at the $227.7 million midpoint value equaled 45.63 times and 47.31 times, respectively, which provided for premiums of 115.94% and 124.96% relative to the Peer Group’s average reported and core P/E multiples of 21.13 times and 21.03 times, respectively (see Table 4.4). In comparison to the Peer Group’s median reported and core earnings multiples which equaled 19.53 times and 18.76 times, respectively, the Banks pro forma reported and core P/E multiples (fully-converted basis) at the midpoint
Table 4.4
Fully-Converted Market Pricing Versus Peer Group
HarborOne Bank
As of Febraury 5, 2016
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| Market |
| Per Share Data |
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| Core |
| Book |
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| Dividends(3) |
| Financial Characteristics(5) |
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| 12 Month |
| Value/ |
| Pricing Ratios(2) |
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| Total |
| Comm Eq./ |
| Comm T. Eq./ |
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| Reported |
| Core |
| Offering |
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| Value |
| EPS(1) |
| Share |
| P/E |
| P/B |
| P/A |
| P/TB |
| P/Core |
| Share |
| Yield |
| Ratio(4) |
| Assets |
| Assets |
| Assets |
| Assets |
| ROAA |
| ROAE |
| ROAA |
| ROAE |
| Range |
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| ($) |
| (%) |
| (%) |
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HarborOne Bank |
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Supermaximum |
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| $ | 10.00 |
| $ | 301.13 |
| $ | 0.15 |
| $ | 14.75 |
| 63.54 | x | 67.80 | % | 12.46 | % | 69.98 | % | 66.01 | x | $ | 0.00 |
| 0.00 | % | 0.00 | % | $ | 2,417 |
| 18.38 | % | 17.81 | % | 2.35 | % | 0.20 | % | 1.07 | % | 0.19 | % | 1.03 | % | $ | 297.60 |
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Maximum |
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| $ | 10.00 |
| $ | 261.86 |
| $ | 0.18 |
| $ | 15.70 |
| 53.73 | x | 63.69 | % | 10.99 | % | 65.92 | % | 55.76 | x | $ | 0.00 |
| 0.00 | % | 0.00 | % | $ | 2,383 |
| 17.24 | % | 16.67 | % | 2.38 | % | 0.20 | % | 1.19 | % | 0.20 | % | 1.14 | % | $ | 258.80 |
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Midpoint |
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| $ | 10.00 |
| $ | 227.70 |
| $ | 0.21 |
| $ | 16.79 |
| 45.63 | x | 59.56 | % | 9.67 | % | 61.77 | % | 47.31 | x | $ | 0.00 |
| 0.00 | % | 0.00 | % | $ | 2,355 |
| 16.23 | % | 15.65 | % | 2.41 | % | 0.21 | % | 1.31 | % | 0.20 | % | 1.26 | % | $ | 225.00 |
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Minimum |
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| $ | 10.00 |
| $ | 193.55 |
| $ | 0.25 |
| $ | 18.27 |
| 37.90 | x | 54.73 | % | 8.32 | % | 56.95 | % | 39.26 | x | $ | 0.00 |
| 0.00 | % | 0.00 | % | $ | 2,326 |
| 15.20 | % | 14.61 | % | 2.44 | % | 0.22 | % | 1.44 | % | 0.21 | % | 1.39 | % | $ | 191.30 |
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All Non-MHC Public Companies(6) |
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Averages |
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| $ | 16.39 |
| $ | 435.84 |
| $ | 1.06 |
| $ | 15.16 |
| 17.93 | x | 104.85 | % | 13.38 | % | 113.19 | % | 18.53 | x | $ | 0.29 |
| 1.79 | % | 44.94 | % | $ | 3,109 |
| 13.51 | % | 12.79 | % | 1.46 | % | 0.74 | % | 6.05 | % | 0.77 | % | 6.24 | % |
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Median |
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| $ | 14.01 |
| $ | 122.65 |
| $ | 0.74 |
| $ | 14.38 |
| 16.55 | x | 102.61 | % | 12.65 | % | 107.14 | % | 17.41 | x | $ | 0.24 |
| 1.53 | % | 41.38 | % | $ | 984 |
| 12.29 | % | 11.79 | % | 1.10 | % | 0.70 | % | 5.40 | % | 0.68 | % | 5.22 | % |
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All Non-MHC State of MA(6) |
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Averages |
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| $ | 29.22 |
| $ | 195.37 |
| $ | 1.93 |
| $ | 21.05 |
| 23.67 | x | 118.34 | % | 13.76 | % | 118.72 | % | 25.38 | x | $ | 0.35 |
| 1.17 | % | 25.18 | % | $ | 1,239 |
| 12.11 | % | 12.07 | % | 0.72 | % | 0.50 | % | 4.86 | % | 0.49 | % | 4.80 | % |
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Medians |
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| $ | 18.20 |
| $ | 118.50 |
| $ | 0.65 |
| $ | 16.60 |
| 23.76 | x | 108.07 | % | 12.89 | % | 108.07 | % | 29.19 | x | $ | 0.16 |
| 0.99 | % | 19.14 | % | $ | 1,026 |
| 10.63 | % | 10.63 | % | 0.58 | % | 0.43 | % | 4.31 | % | 0.40 | % | 3.59 | % |
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State of MA(6) |
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BLMT | BSB Bancorp, Inc. |
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| MA |
| $ | 21.38 |
| $ | 194.30 |
| NA |
| $ | 15.80 |
| 30.11 | x | 135.31 | % | 11.48 | % | 135.31 | % | NM |
| NA |
| NA |
| NM |
| $ | 1,692 |
| 8.48 | % | 8.48 | % | 0.58 | % | 0.42 | % | 4.45 | % | NA |
| NA |
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CBNK | Chicopee Bancorp, Inc. |
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| MA |
| $ | 17.98 |
| $ | 93.69 |
| $ | 0.46 |
| $ | 16.98 |
| 29.97 | x | 104.95 | % | 13.81 | % | 104.95 | % | 29.97 | x | $ | 0.36 |
| 2.00 | % | 53.33 | % | $ | 695 |
| 12.73 | % | 12.73 | % | 1.18 | % | 0.36 | % | 2.61 | % | 0.36 | % | 2.61 | % |
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GTWN | Georgetown Bancorp, Inc. |
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| MA |
| $ | 19.40 |
| $ | 35.47 |
| $ | 0.84 |
| $ | 17.24 |
| 22.56 | x | 111.19 | % | 11.98 | % | 111.19 | % | 22.56 | x | $ | 0.19 |
| 0.98 | % | 22.09 | % | $ | 287 |
| 10.97 | % | 10.97 | % | NA |
| 0.54 | % | 4.88 | % | 0.54 | % | 4.88 | % |
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HIFS | Hingham Institution for Savings |
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| MA |
| $ | 120.02 |
| $ | 255.49 |
| $ | 8.69 |
| $ | 62.94 |
| 13.31 | x | 185.12 | % | 14.45 | % | 185.12 | % | 13.32 | x | $ | 1.20 |
| 1.00 | % | 16.19 | % | $ | 1,691 |
| 7.92 | % | 7.92 | % | 0.40 | % | 1.17 | % | 14.72 | % | 1.17 | % | 14.71 | % |
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MELR | Melrose Bancorp, Inc. |
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| MA |
| $ | 15.00 |
| $ | 42.44 |
| NA |
| $ | 16.23 |
| NM |
| 92.45 | % | 18.98 | % | 92.45 | % | NM |
| NA |
| NA |
| NM |
| $ | 224 |
| 20.53 | % | 20.53 | % | 0.13 | % | -0.09 | % | -0.44 | % | 0.00 | % | -0.02 | % |
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EBSB | Meridian Bancorp, Inc. |
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| MA |
| $ | 13.72 |
| $ | 752.89 |
| $ | 0.40 |
| $ | 10.71 |
| 29.83 | x | 128.01 | % | 21.36 | % | 131.06 | % | 31.87 | x | $ | 0.12 |
| 0.87 | % | 13.04 | % | $ | 3,376 |
| 17.27 | % | 16.94 | % | 1.47 | % | 0.72 | % | 4.07 | % | 0.64 | % | 3.59 | % |
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WEBK | Wellesley Bancorp, Inc. |
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| MA |
| $ | 18.42 |
| $ | 45.36 |
| $ | 0.93 |
| $ | 20.90 |
| 16.16 | x | 86.93 | % | 7.30 | % | 86.93 | % | NM |
| $ | 0.12 |
| 0.65 | % | 10.09 | % | $ | 590 |
| 8.72 | % | 8.72 | % | NA |
| 0.40 | % | 4.37 | % | 0.40 | % | 4.33 | % |
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WFD | Westfield Financial, Inc. |
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| MA |
| $ | 7.84 |
| $ | 143.30 |
| $ | 0.28 |
| $ | 7.59 |
| 23.76 | x | 102.75 | % | 10.69 | % | 102.75 | % | 29.19 | x | $ | 0.12 |
| 1.53 | % | 36.36 | % | $ | 1,357 |
| 10.29 | % | 10.29 | % | 0.57 | % | 0.45 | % | 4.25 | % | 0.36 | % | 3.47 | % |
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Comparable Group |
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Averages |
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| $ | 14.82 |
| $ | 280.30 |
| $ | 0.63 |
| $ | 13.56 |
| 21.13 | x | 109.43 | % | 14.39 | % | 113.20 | % | 21.03 | x | $ | 0.21 |
| 1.46 | % | 32.05 | % | $ | 1,891 |
| 13.62 | % | 13.31 | % | 1.02 | % | 0.57 | % | 4.63 | % | 0.55 | % | 4.46 | % |
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Medians |
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| $ | 13.90 |
| $ | 225.87 |
| $ | 0.40 |
| $ | 14.03 |
| 19.53 | x | 105.16 | % | 11.19 | % | 106.58 | % | 18.76 | x | $ | 0.20 |
| 1.42 | % | 31.43 | % | $ | 1,649 |
| 10.48 | % | 9.96 | % | 0.95 | % | 0.57 | % | 4.35 | % | 0.58 | % | 3.59 | % |
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Comparable Group |
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BLMT | BSB Bancorp, Inc. |
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| MA |
| $ | 21.38 |
| $ | 194.30 |
| NA |
| $ | 15.80 |
| 30.11 | x | 135.31 | % | 11.48 | % | 135.31 | % | NM |
| $ | 0.00 |
| 0.00 | % | 0.00 | % | $ | 1,692 |
| 8.48 | % | 8.48 | % | 0.58 | % | 0.42 | % | 4.45 | % | NA |
| NA |
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BHBK | Blue Hills Bancorp, Inc. |
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| MA |
| $ | 13.82 |
| $ | 393.77 |
| $ | 0.26 |
| $ | 14.48 |
| NM |
| 98.73 | % | 18.62 | % | 101.74 | % | NM |
| $ | 0.08 |
| 0.58 | % | 14.29 | % | $ | 1,934 |
| 21.07 | % | 20.57 | % | 0.27 | % | 0.42 | % | 1.83 | % | 0.40 | % | 1.71 | % |
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CSBK | Clifton Bancorp Inc. |
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| NJ |
| $ | 13.88 |
| $ | 344.76 |
| $ | 0.27 |
| $ | 13.14 |
| NM |
| 105.54 | % | 30.18 | % | 105.54 | % | NM |
| $ | 0.24 |
| 1.73 | % | 77.42 | % | $ | 1,154 |
| 29.32 | % | 29.32 | % | 0.44 | % | 0.73 | % | 2.42 | % | 0.58 | % | 1.92 | % |
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EBSB | Meridian Bancorp, Inc. |
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| MA |
| $ | 13.72 |
| $ | 752.89 |
| $ | 0.40 |
| $ | 10.71 |
| 29.83 | x | 128.01 | % | 21.36 | % | 131.06 | % | 31.87 | x | $ | 0.12 |
| 0.87 | % | 13.04 | % | $ | 3,376 |
| 17.27 | % | 16.94 | % | 1.47 | % | 0.72 | % | 4.07 | % | 0.64 | % | 3.59 | % |
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ESSA | ESSA Bancorp, Inc. |
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| PA |
| $ | 13.34 |
| $ | 151.15 |
| $ | 0.94 |
| $ | 15.09 |
| 15.33 | x | 88.90 | % | 8.57 | % | 98.69 | % | 14.92 | x | $ | 0.36 |
| 2.70 | % | 41.38 | % | $ | 1,607 |
| 10.66 | % | 9.99 | % | 1.53 | % | 0.62 | % | 5.68 | % | 0.62 | % | 5.73 | % |
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FBNK | First Connecticut Bancorp, Inc. |
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| CT |
| $ | 16.21 |
| $ | 257.44 |
| $ | 0.82 |
| $ | 15.30 |
| 19.53 | x | 104.77 | % | 9.50 | % | 104.77 | % | 21.66 | x | $ | 0.24 |
| 1.48 | % | 26.51 | % | $ | 2,708 |
| 8.98 | % | 8.98 | % | 1.26 | % | 0.52 | % | 5.57 | % | 0.48 | % | 5.16 | % |
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OCFC | OceanFirst Financial Corp. |
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| NJ |
| $ | 16.30 |
| $ | 281.77 |
| $ | 1.24 |
| $ | 13.58 |
| 13.47 | x | 118.17 | % | 10.87 | % | 119.21 | % | 12.70 | x | $ | 0.52 |
| 3.19 | % | 42.98 | % | $ | 2,558 |
| 9.18 | % | 9.10 | % | 2.13 | % | 0.83 | % | 8.97 | % | 0.86 | % | 9.22 | % |
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OSHC | Ocean Shore Holding Co. |
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| NJ |
| $ | 17.75 |
| $ | 113.65 |
| $ | 1.12 |
| $ | 17.29 |
| 15.85 | x | 101.67 | % | 10.89 | % | 107.62 | % | 15.85 | x | $ | 0.24 |
| 1.35 | % | 21.43 | % | $ | 1,067 |
| 10.37 | % | 9.94 | % | 1.05 | % | 0.64 | % | 6.28 | % | 0.65 | % | 6.36 | % |
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SIFI | SI Financial Group, Inc. |
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| CT |
| $ | 13.91 |
| $ | 169.96 |
| $ | 0.36 |
| $ | 12.60 |
| NM |
| 110.43 | % | 11.70 | % | 125.27 | % | NM |
| $ | 0.16 |
| 1.15 | % | 47.06 | % | $ | 1,454 |
| 10.59 | % | 9.46 | % | 0.85 | % | 0.31 | % | 2.75 | % | 0.33 | % | 2.94 | % |
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WFD | Westfield Financial, Inc. |
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| MA |
| $ | 7.84 |
| $ | 143.30 |
| $ | 0.28 |
| $ | 7.59 |
| 23.76 | x | 102.75 | % | 10.69 | % | 102.75 | % | 29.19 | x | $ | 0.12 |
| 1.53 | % | 36.36 | % | $ | 1,357 |
| 10.29 | % | 10.29 | % | 0.57 | % | 0.45 | % | 4.25 | % | 0.36 | % | 3.47 | % |
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(1) Core income, on a diluted per-share basis. Core income is net income after taxes and before extraordinary items, less net income attributable to noncontrolling interest, gain on the sale of securities, amortization of intangibles, goodwill and nonrecurring items. Assumed tax rate is 35%.
(2) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB = Price to tangible book value; and P/Core = Price to core earnings. P/E and P/Core =NM if the ratio is negative or above 35x.
(3) Indicated 12 month dividend, based on last quarterly dividend declared.
(4) Indicated 12 month dividend as a percent of trailing 12 month earnings.
(5) Equity and tangible equity equal common equity and tangible common equity, respectively. ROAA (return on average assets) and ROAE (return on average equity) are indicated ratios based on trailing 12 month earnings and average equity and assets balances.
(6) Excludes from averages and medians those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.
Source: SNL Financial, LC. and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2016 by RP® Financial, LC.
value indicated premiums of 133.64% and 152.19%, respectively. The Bank’s pro forma reported P/E ratios (fully-converted basis) at the minimum and the super maximum equaled 37.90 times and 63.54 times, respectively. The Bank’s pro forma core P/E ratios (fully-converted basis) at the minimum and the super maximum equaled 39.26 times and 66.01 times, respectively.
On an MHC reported basis, the Bank’s reported and core P/E multiples at the midpoint value of $227.7 million equaled 42.34 times and 43.78 times, respectively (see Table 4.5). The Bank’s reported and core P/E multiples provided for premiums of 100.38% and 108.18% relative to the Peer Group’s average reported and core P/E multiples of 21.13 times and 21.03 times, respectively. In comparison to the Peer Group’s median reported and core earnings multiples which equaled 19.53 times and 18.76 times, respectively, the Bank’s pro forma reported and core P/E multiples (MHC basis) at the midpoint value indicated premiums of 116.79% and 133.37%, respectively. The Bank’s pro forma reported P/E ratios (MHC basis) at the minimum and the super maximum equaled 35.63 times and 57.24 times, respectively. The Bank’s pro forma core P/E ratios (MHC basis) at the minimum and the super maximum equaled 36.83 times and 59.23 times, respectively.
2. Price-to-Book (“P/B”). The application of the P/B valuation method requires calculating the Bank’s pro forma market value by applying a valuation P/B ratio, as derived from the Peer Group’s P/B ratio, to HarborOne Bank’s pro forma book value (fully-converted basis). Based on the $227.7 million midpoint valuation, HarborOne Bank’s pro forma P/B and P/TB ratios (fully-converted basis) equaled 59.56% and 61.77%, respectively. In comparison to the average P/B and P/TB ratios for the Peer Group of 109.43% and 113.20%, respectively, the Bank’s ratios reflected a discount of 45.57% on a P/B basis and a discount of 45.43% on a P/TB basis. In comparison to the Peer Group’s median P/B and P/TB ratios of 105.16% and 106.58%, respectively, the Bank’s pro forma P/B and P/TB ratios (fully-converted basis) at the midpoint value reflected discounts of 43.36% and 42.04%, respectively. At the top of the super range, the Bank’s P/B and P/TB ratios (fully-converted basis) equaled 67.80% and 69.98%, respectively. In comparison to the Peer Group’s average P/B and P/TB ratios, the Bank’s P/B and P/TB ratios at the top of the super range reflected discounts of 38.04% and 38.18%, respectively. In comparison to the Peer Group’s median P/B and P/TB ratios, the Bank’s P/B and P/TB ratios at the top of the super range reflected discounts of 35.53% and 34.34%, respectively. RP Financial considered the discounts under the P/B approach to be reasonable,
Table 4.5
MHC Market Pricing Versus Peer Group
HarborOne Bank
As of Febraury 5, 2016
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| Market |
| Per Share Data |
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| Capitalization |
| Core |
| Book |
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| Dividends(3) |
| Financial Characteristics(5) |
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| Price/ |
| Market |
| 12 Month |
| Value/ |
| Pricing Ratios(2) |
| Amount/ |
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| Total |
| Comm Eq./ |
| Comm T. Eq./ |
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| Reported |
| Core |
| Offering |
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| Share |
| Value |
| EPS(1) |
| Share |
| P/E |
| P/B |
| P/A |
| P/TB |
| P/Core |
| Share |
| Yield |
| Ratio(4) |
| Assets |
| Assets |
| Assets |
| Assets |
| ROAA |
| ROAE |
| ROAA |
| ROAE |
| Range |
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| ($Mil) |
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| ($) |
| (%) |
| (%) |
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| (%) |
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HarborOne Bank |
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Supermaximum |
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| $ | 10.00 |
| $ | 301.13 |
| $ | 0.17 |
| $ | 10.18 |
| 57.24 | x | 98.23 | % | 13.21 | % | 102.77 | % | 59.23 | x | $ | 0.00 |
| 0.00 | % | 0.00 | % | $ | 2,279 |
| 13.45 | % | 12.85 | % | 2.49 | % | 0.23 | % | 1.72 | % | 0.22 | % | 1.66 | % | $ | 135.50 |
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Maximum |
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| $ | 10.00 |
| $ | 261.86 |
| $ | 0.20 |
| $ | 11.11 |
| 49.19 | x | 90.01 | % | 11.57 | % | 94.43 | % | 50.88 | x | $ | 0.00 |
| 0.00 | % | 0.00 | % | $ | 2,264 |
| 12.86 | % | 12.25 | % | 2.51 | % | 0.24 | % | 1.83 | % | 0.23 | % | 1.77 | % | $ | 117.80 |
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Midpoint |
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| $ | 10.00 |
| $ | 227.70 |
| $ | 0.23 |
| $ | 12.19 |
| 42.34 | x | 82.03 | % | 10.12 | % | 86.28 | % | 43.78 | x | $ | 0.00 |
| 0.00 | % | 0.00 | % | $ | 2,250 |
| 12.33 | % | 11.73 | % | 2.52 | % | 0.24 | % | 1.94 | % | 0.23 | % | 1.87 | % | $ | 102.50 |
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Minimum |
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| $ | 10.00 |
| $ | 193.55 |
| $ | 0.27 |
| $ | 13.64 |
| 35.63 | x | 73.31 | % | 8.65 | % | 77.28 | % | 36.83 | x | $ | 0.00 |
| 0.00 | % | 0.00 | % | $ | 2,237 |
| 11.81 | % | 11.20 | % | 2.54 | % | 0.24 | % | 2.06 | % | 0.23 | % | 1.99 | % | $ | 87.10 |
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All Non-MHC Public Companies(6) |
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Averages |
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| $ | 16.39 |
| $ | 435.84 |
| $ | 1.06 |
| $ | 15.16 |
| 17.93 | x | 104.85 | % | 13.38 | % | 113.19 | % | 18.53 | x | $ | 0.29 |
| 1.79 | % | 44.94 | % | $ | 3,109 |
| 13.51 | % | 12.79 | % | 1.46 | % | 0.74 | % | 6.05 | % | 0.77 | % | 6.24 | % |
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Median |
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| $ | 14.01 |
| $ | 122.65 |
| $ | 0.74 |
| $ | 14.38 |
| 16.55 | x | 102.61 | % | 12.65 | % | 107.14 | % | 17.41 | x | $ | 0.24 |
| 1.53 | % | 41.38 | % | $ | 984 |
| 12.29 | % | 11.79 | % | 1.10 | % | 0.70 | % | 5.40 | % | 0.68 | % | 5.22 | % |
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All Non-MHC State of MA(6) |
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Averages |
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| $ | 29.22 |
| $ | 195.37 |
| $ | 1.93 |
| $ | 21.05 |
| 23.67 | x | 118.34 | % | 13.76 | % | 118.72 | % | 25.38 | x | $ | 0.35 |
| 1.17 | % | 25.18 | % | $ | 1,239 |
| 12.11 | % | 12.07 | % | 0.72 | % | 0.50 | % | 4.86 | % | 0.49 | % | 4.80 | % |
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Medians |
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| $ | 18.20 |
| $ | 118.50 |
| $ | 0.65 |
| $ | 16.60 |
| 23.76 | x | 108.07 | % | 12.89 | % | 108.07 | % | 29.19 | x | $ | 0.16 |
| 0.99 | % | 19.14 | % | $ | 1,026 |
| 10.63 | % | 10.63 | % | 0.58 | % | 0.43 | % | 4.31 | % | 0.40 | % | 3.59 | % |
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State of MA(6) |
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BLMT | BSB Bancorp, Inc. |
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| MA |
| $ | 21.38 |
| $ | 194.30 |
| NA |
| $ | 15.80 |
| 30.11 | x | 135.31 | % | 11.48 | % | 135.31 | % | NM |
| NA |
| NA |
| NM |
| $ | 1,692 |
| 8.48 | % | 8.48 | % | 0.58 | % | 0.42 | % | 4.45 | % | NA |
| NA |
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CBNK | Chicopee Bancorp, Inc. |
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| MA |
| $ | 17.98 |
| $ | 93.69 |
| $ | 0.46 |
| $ | 16.98 |
| 29.97 | x | 104.95 | % | 13.81 | % | 104.95 | % | 29.97 | x | $ | 0.36 |
| 2.00 | % | 53.33 | % | $ | 695 |
| 12.73 | % | 12.73 | % | 1.18 | % | 0.36 | % | 2.61 | % | 0.36 | % | 2.61 | % |
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GTWN | Georgetown Bancorp, Inc. |
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| MA |
| $ | 19.40 |
| $ | 35.47 |
| $ | 0.84 |
| $ | 17.24 |
| 22.56 | x | 111.19 | % | 11.98 | % | 111.19 | % | 22.56 | x | $ | 0.19 |
| 0.98 | % | 22.09 | % | $ | 287 |
| 10.97 | % | 10.97 | % | NA |
| 0.54 | % | 4.88 | % | 0.54 | % | 4.88 | % |
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HIFS | Hingham Institution for Savings |
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| MA |
| $ | 120.02 |
| $ | 255.49 |
| $ | 8.69 |
| $ | 62.94 |
| 13.31 | x | 185.12 | % | 14.45 | % | 185.12 | % | 13.32 | x | $ | 1.20 |
| 1.00 | % | 16.19 | % | $ | 1,691 |
| 7.92 | % | 7.92 | % | 0.40 | % | 1.17 | % | 14.72 | % | 1.17 | % | 14.71 | % |
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MELR | Melrose Bancorp, Inc. |
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| MA |
| $ | 15.00 |
| $ | 42.44 |
| NA |
| $ | 16.23 |
| NM |
| 92.45 | % | 18.98 | % | 92.45 | % | NM |
| NA |
| NA |
| NM |
| $ | 224 |
| 20.53 | % | 20.53 | % | 0.13 | % | -0.09 | % | -0.44 | % | 0.00 | % | -0.02 | % |
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EBSB | Meridian Bancorp, Inc. |
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| MA |
| $ | 13.72 |
| $ | 752.89 |
| $ | 0.40 |
| $ | 10.71 |
| 29.83 | x | 128.01 | % | 21.36 | % | 131.06 | % | 31.87 | x | $ | 0.12 |
| 0.87 | % | 13.04 | % | $ | 3,376 |
| 17.27 | % | 16.94 | % | 1.47 | % | 0.72 | % | 4.07 | % | 0.64 | % | 3.59 | % |
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WEBK | Wellesley Bancorp, Inc. |
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| MA |
| $ | 18.42 |
| $ | 45.36 |
| $ | 0.93 |
| $ | 20.90 |
| 16.16 | x | 86.93 | % | 7.30 | % | 86.93 | % | NM |
| $ | 0.12 |
| 0.65 | % | 10.09 | % | $ | 590 |
| 8.72 | % | 8.72 | % | NA |
| 0.40 | % | 4.37 | % | 0.40 | % | 4.33 | % |
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WFD | Westfield Financial, Inc. |
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| MA |
| $ | 7.84 |
| $ | 143.30 |
| $ | 0.28 |
| $ | 7.59 |
| 23.76 | x | 102.75 | % | 10.69 | % | 102.75 | % | 29.19 | x | $ | 0.12 |
| 1.53 | % | 36.36 | % | $ | 1,357 |
| 10.29 | % | 10.29 | % | 0.57 | % | 0.45 | % | 4.25 | % | 0.36 | % | 3.47 | % |
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Comparable Group |
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Averages |
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| $ | 14.82 |
| $ | 280.30 |
| $ | 0.63 |
| $ | 13.56 |
| 21.13 | x | 109.43 | % | 14.39 | % | 113.20 | % | 21.03 | x | $ | 0.21 |
| 1.46 | % | 32.05 | % | $ | 1,891 |
| 13.62 | % | 13.31 | % | 1.02 | % | 0.57 | % | 4.63 | % | 0.55 | % | 4.46 | % |
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Medians |
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| $ | 13.90 |
| $ | 225.87 |
| $ | 0.40 |
| $ | 14.03 |
| 19.53 | x | 105.16 | % | 11.19 | % | 106.58 | % | 18.76 | x | $ | 0.20 |
| 1.42 | % | 31.43 | % | $ | 1,649 |
| 10.48 | % | 9.96 | % | 0.95 | % | 0.57 | % | 4.35 | % | 0.58 | % | 3.59 | % |
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Comparable Group |
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BLMT | BSB Bancorp, Inc. |
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| MA |
| $ | 21.38 |
| $ | 194.30 |
| NA |
| $ | 15.80 |
| 30.11 | x | 135.31 | % | 11.48 | % | 135.31 | % | NM |
| $ | 0.00 |
| 0.00 | % | 0.00 | % | $ | 1,692 |
| 8.48 | % | 8.48 | % | 0.58 | % | 0.42 | % | 4.45 | % | NA |
| NA |
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BHBK | Blue Hills Bancorp, Inc. |
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| MA |
| $ | 13.82 |
| $ | 393.77 |
| $ | 0.26 |
| $ | 14.48 |
| NM |
| 98.73 | % | 18.62 | % | 101.74 | % | NM |
| $ | 0.08 |
| 0.58 | % | 14.29 | % | $ | 1,934 |
| 21.07 | % | 20.57 | % | 0.27 | % | 0.42 | % | 1.83 | % | 0.40 | % | 1.71 | % |
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CSBK | Clifton Bancorp Inc. |
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| NJ |
| $ | 13.88 |
| $ | 344.76 |
| $ | 0.27 |
| $ | 13.14 |
| NM |
| 105.54 | % | 30.18 | % | 105.54 | % | NM |
| $ | 0.24 |
| 1.73 | % | 77.42 | % | $ | 1,154 |
| 29.32 | % | 29.32 | % | 0.44 | % | 0.73 | % | 2.42 | % | 0.58 | % | 1.92 | % |
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EBSB | Meridian Bancorp, Inc. |
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| MA |
| $ | 13.72 |
| $ | 752.89 |
| $ | 0.40 |
| $ | 10.71 |
| 29.83 | x | 128.01 | % | 21.36 | % | 131.06 | % | 31.87 | x | $ | 0.12 |
| 0.87 | % | 13.04 | % | $ | 3,376 |
| 17.27 | % | 16.94 | % | 1.47 | % | 0.72 | % | 4.07 | % | 0.64 | % | 3.59 | % |
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ESSA | ESSA Bancorp, Inc. |
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| PA |
| $ | 13.34 |
| $ | 151.15 |
| $ | 0.94 |
| $ | 15.09 |
| 15.33 | x | 88.90 | % | 8.57 | % | 98.69 | % | 14.92 | x | $ | 0.36 |
| 2.70 | % | 41.38 | % | $ | 1,607 |
| 10.66 | % | 9.99 | % | 1.53 | % | 0.62 | % | 5.68 | % | 0.62 | % | 5.73 | % |
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FBNK | First Connecticut Bancorp, Inc. |
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| CT |
| $ | 16.21 |
| $ | 257.44 |
| $ | 0.82 |
| $ | 15.30 |
| 19.53 | x | 104.77 | % | 9.50 | % | 104.77 | % | 21.66 | x | $ | 0.24 |
| 1.48 | % | 26.51 | % | $ | 2,708 |
| 8.98 | % | 8.98 | % | 1.26 | % | 0.52 | % | 5.57 | % | 0.48 | % | 5.16 | % |
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OCFC | OceanFirst Financial Corp. |
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| NJ |
| $ | 16.30 |
| $ | 281.77 |
| $ | 1.24 |
| $ | 13.58 |
| 13.47 | x | 118.17 | % | 10.87 | % | 119.21 | % | 12.70 | x | $ | 0.52 |
| 3.19 | % | 42.98 | % | $ | 2,558 |
| 9.18 | % | 9.10 | % | 2.13 | % | 0.83 | % | 8.97 | % | 0.86 | % | 9.22 | % |
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OSHC | Ocean Shore Holding Co. |
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| NJ |
| $ | 17.75 |
| $ | 113.65 |
| $ | 1.12 |
| $ | 17.29 |
| 15.85 | x | 101.67 | % | 10.89 | % | 107.62 | % | 15.85 | x | $ | 0.24 |
| 1.35 | % | 21.43 | % | $ | 1,067 |
| 10.37 | % | 9.94 | % | 1.05 | % | 0.64 | % | 6.28 | % | 0.65 | % | 6.36 | % |
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SIFI | SI Financial Group, Inc. |
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| CT |
| $ | 13.91 |
| $ | 169.96 |
| $ | 0.36 |
| $ | 12.60 |
| NM |
| 110.43 | % | 11.70 | % | 125.27 | % | NM |
| $ | 0.16 |
| 1.15 | % | 47.06 | % | $ | 1,454 |
| 10.59 | % | 9.46 | % | 0.85 | % | 0.31 | % | 2.75 | % | 0.33 | % | 2.94 | % |
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WFD | Westfield Financial, Inc. |
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| MA |
| $ | 7.84 |
| $ | 143.30 |
| $ | 0.28 |
| $ | 7.59 |
| 23.76 | x | 102.75 | % | 10.69 | % | 102.75 | % | 29.19 | x | $ | 0.12 |
| 1.53 | % | 36.36 | % | $ | 1,357 |
| 10.29 | % | 10.29 | % | 0.57 | % | 0.45 | % | 4.25 | % | 0.36 | % | 3.47 | % |
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(1) Core income, on a diluted per-share basis. Core income is net income after taxes and before extraordinary items, less net income attributable to noncontrolling interest, gain on the sale of securities, amortization of intangibles, goodwill and nonrecurring items. Assumed tax rate is 35%.
(2) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB = Price to tangible book value; and P/Core = Price to core earnings. P/E and P/Core =NM if the ratio is negative or above 35x.
(3) Indicated 12 month dividend, based on last quarterly dividend declared.
(4) Indicated 12 month dividend as a percent of trailing 12 month earnings.
(5) Equity and tangible equity equal common equity and tangible common equity, respectively. ROAA (return on average assets) and ROAE (return on average equity) are indicated ratios based on trailing 12 month earnings and average equity and assets balances.
(6) Excludes from averages and medians those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.
Source: SNL Financial, LC. and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2016 by RP® Financial, LC.
given the nature of the calculation of the P/B ratio which mathematically results in a ratio discounted to book value. The discounts reflected under the P/B approach were also supported by the significant premiums reflected in the Bank’s P/E multiples.
On an MHC reported basis, the Bank’s P/B and P/TB ratios at the $227.7 million midpoint value equaled 82.03% and 86.28%, respectively. In comparison to the average P/B and P/TB ratios indicated for the Peer Group of 109.43% and 113.20%, respectively, HarborOne Bank’s ratios were discounted by 25.04% on a P/B basis and 23.78% on a P/TB basis. In comparison to the Peer Group’s median P/B and P/TB ratios of 105.16% and 106.58%, respectively, the Bank’s pro forma P/B and P/TB ratios (MHC basis) at the midpoint value reflected discounts of 22.00% and 19.05%, respectively. At the top of the super range, the Bank’s P/B and P/TB ratios (MHC basis) equaled 98.23% and 102.77%, respectively. In comparison to the Peer Group’s average P/B and P/TB ratios, the Bank’s P/B and P/TB ratios at the top of the super range reflected discounts of 10.23% and 9.21%, respectively. In comparison to the Peer Group’s median P/B and P/TB ratios, the Bank’s P/B and P/TB ratios at the top of the super range reflected discounts of 6.59% and 3.57%, respectively.
3. Price-to-Assets (“P/A”). The P/A valuation methodology determines market value by applying a valuation P/A ratio (fully-converted basis) to the Bank’s pro forma asset base, conservatively assuming no deposit withdrawals are made to fund stock purchases. In all likelihood there will be deposit withdrawals, which results in understating the pro forma P/A ratio which is computed herein. At the $227.7 million midpoint of the valuation range, HarborOne Bank’s pro forma P/A ratio (fully-converted basis) equaled 9.67% of pro forma assets. Comparatively, the Peer Group companies exhibited an average P/A ratio of 14.39%, which implies a discount of 32.80% has been applied to the Bank’s pro forma P/A ratio. In comparison to the Peer Group’s median P/A ratio of 11.19%, the Bank’s pro forma P/A ratio (fully-converted basis) at the midpoint value reflects a discount of 13.58%.
On an MHC reported basis, HarborOne Bank’s pro forma P/A ratio at the $227.7 million midpoint value equaled 10.12%. In comparison to the Peer Group’s average P/A ratio of 14.39%, HarborOne Bank’s P/A ratio (MHC basis) indicated a discount of 29.67%. In comparison to the Peer Group’s median P/A ratio of 11.19%, the Bank’s pro forma P/A ratio (MHC basis) at the midpoint value reflects a discount of 9.56%.
Comparison to Publicly-Traded MHCs
As indicated in Chapter III, we believe there are a number of characteristics of MHC shares that make them different from the shares of fully-converted companies. These factors include: (1) lower aftermarket liquidity in the MHC shares since less than 50% of the shares are available for trading; (2) no opportunity for public shareholders to exercise voting control; (3) the potential pro forma impact of second-step conversions on the pricing of MHC institutions; and (4) the regulatory policies regarding the accounting for net assets held by the MHC in a second-step conversion and, thereby, lessening the attractiveness of paying cash dividends. The above characteristics of MHC shares have provided MHC stocks with different trading characteristics versus fully-converted companies. To account for the unique trading characteristics of MHC shares, RP Financial has placed the financial data and pricing ratios of the publicly-traded MHCs on a fully-converted basis to make them comparable for valuation purposes. Using the per share and pricing information of the publicly-traded MHCs on a fully-converted basis accomplishes a number of objectives. First, such figures eliminate distortions that result when trying to compare institutions that have different public ownership interests outstanding. Secondly, such an analysis provides ratios that are comparable to the pricing information of fully-converted public companies and are directly applicable to determining the pro forma market value range of the 100% ownership interest in HarborOne Bank as an MHC. This technique is validated by the investment community’s evaluation of MHC pricing, which also incorporates the pro forma impact of a second-step conversion based on the current market price.
To calculate the fully-converted pricing information for MHCs, the reported financial information for the public MHCs incorporate the following assumptions: (1) all shares owned by the MHC are assumed to be sold at the current trading price in a second step-conversion; (2) the gross proceeds from such a sale are adjusted to reflect reasonable offering expenses and standard stock based benefit plan parameters that would be factored into a second-step conversion of an MHC institution; and (3) net proceeds are assumed to be reinvested at market rates on a tax effected basis. Book value per share and earnings per share figures for the public MHCs were adjusted by the impact of the assumed second step-conversion, resulting in an estimation of book value per share and earnings per share figures on a fully-converted basis. Table 4.6 on the following page shows the calculation of per share financial data (fully-
Table 4.6
Calculation of Implied Per Share Data - Incorporating MHC Second Step Conversion
Publicly Traded MHC Institutions
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| Net |
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| TTM Net Income |
| Book |
| Tang. |
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| Gross |
| Capital |
| Income |
| Net Inc./ |
| Core Net Inc./ |
| Bk Value/ |
| Tang. Bk. |
| Assets/ |
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Ticker |
| Name |
| City |
| State |
| Exhange |
| Public |
| MHC Shares |
| Total Shares |
| Reported |
| Core |
| Value |
| Bk Value |
| Assets |
| Price |
| Proceeds(1) |
| Increase(2) |
| Increase(3) |
| Share |
| Share |
| Share |
| Value/Share |
| Share |
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GCBC |
| Greene County Bncp Inc. (MHC) |
| Catskill |
| NY |
| NASDAQ |
| 1,919,825 |
| 2,304,632 |
| 4,224,457 |
| $ | 1.79 |
| $ | 1.81 |
| $ | 16.28 |
| $ | 16.28 |
| $ | 181.74 |
| $ | 31.00 |
| $ | 71,443,592 |
| $ | 60,727,053 |
| $ | (96,899 | ) | $ | 1.77 |
| $ | 1.79 |
| $ | 30.66 |
| $ | 30.66 |
| $ | 196.11 |
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KFFB |
| Kentucky First Federal (MHC) |
| Frankfort |
| KY |
| NASDAQ |
| 3,755,563 |
| 4,727,938 |
| 8,483,501 |
| $ | 0.26 |
| $ | 0.26 |
| $ | 7.96 |
| $ | 6.25 |
| $ | 34.88 |
| $ | 9.17 |
| $ | 43,355,664 |
| $ | 36,852,315 |
| $ | (58,803 | ) | $ | 0.25 |
| $ | 0.25 |
| $ | 12.30 |
| $ | 10.59 |
| $ | 39.23 |
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LSBK |
| Lake Shore Bancorp Inc. (MHC) |
| Dunkirk |
| NY |
| NASDAQ |
| 2,340,497 |
| 3,636,875 |
| 5,977,372 |
| $ | 0.55 |
| $ | 0.49 |
| $ | 12.27 |
| $ | 12.27 |
| $ | 79.01 |
| $ | 13.40 |
| $ | 48,734,125 |
| $ | 41,424,006 |
| $ | (66,098 | ) | $ | 0.54 |
| $ | 0.48 |
| $ | 19.20 |
| $ | 19.20 |
| $ | 85.94 |
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MGYR |
| Magyar Bancorp Inc. (MHC) |
| New Brunswick |
| NJ |
| NASDAQ |
| 2,619,044 |
| 3,200,450 |
| 5,819,494 |
| $ | 0.15 |
| $ | 0.16 |
| $ | 8.02 |
| $ | 8.02 |
| $ | 94.61 |
| $ | 9.75 |
| $ | 31,204,388 |
| $ | 26,523,729 |
| $ | (42,323 | ) | $ | 0.15 |
| $ | 0.16 |
| $ | 12.58 |
| $ | 12.58 |
| $ | 99.16 |
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OFED |
| Oconee Federal Financial Corp. |
| Seneca |
| SC |
| NASDAQ |
| 1,717,585 |
| 4,164,555 |
| 5,882,140 |
| $ | 0.84 |
| $ | 0.86 |
| $ | 13.99 |
| $ | 13.41 |
| $ | 79.65 |
| $ | 19.40 |
| $ | 80,792,367 |
| $ | 68,673,512 |
| $ | (109,579 | ) | $ | 0.82 |
| $ | 0.84 |
| $ | 25.67 |
| $ | 25.08 |
| $ | 91.33 |
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PVBC |
| Provident Bancorp Inc (MHC) |
| Amesbury |
| MA |
| NASDAQ |
| 4,464,399 |
| 5,034,323 |
| 9,498,722 |
| $ | 0.36 |
| $ | 0.48 |
| $ | 12.32 |
| $ | 12.32 |
| $ | 73.60 |
| $ | 13.01 |
| $ | 65,496,542 |
| $ | 55,672,061 |
| $ | (88,833 | ) | $ | 0.35 |
| $ | 0.47 |
| $ | 18.18 |
| $ | 18.18 |
| $ | 79.46 |
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TFSL |
| TFS Financial Corp (MHC) |
| Cleveland |
| OH |
| NASDAQ |
| 63,763,247 |
| 227,119,132 |
| 290,882,379 |
| $ | 0.25 |
| $ | 0.25 |
| $ | 5.95 |
| $ | 5.91 |
| $ | 42.52 |
| $ | 16.33 |
| $ | 3,708,855,426 |
| $ | 3,152,527,112 |
| $ | (5,030,321 | ) | $ | 0.23 |
| $ | 0.23 |
| $ | 16.78 |
| $ | 16.75 |
| $ | 53.36 |
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(1) Gross proceeds calculated as stock price multiplied by the number of shares owned by the MHC (i.e. non-public shares). | |||
(2) Net increase in capital reflects gross proceeds less offering expenses, contra-equity account for leveraged ESOP and Restricted Stock Plan. For MHC’s with assets at the MHC level, the net increase in capital also includes consolidation of MHC assets with the capital of the institution concurrent with hypothetical second step. | |||
Offering Expense Percent: |
| 3.00% |
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ESOP Percent Purchase: |
| 8.00% |
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RRP Percent Purchase: |
| 4.00% |
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(3) Net increase in earnings reflects after-tax reinvestment income (assumes ESOP and RRP do not generate reinvestment income), less after-tax ESOP amortization and RRP vesting. | |||
After-Tax Reinvestment Rate: |
| 1.17% |
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ESOP Loan Term (Yrs.): |
| 20 |
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Recognition Plan Vesting (Yrs.): |
| 5 |
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Effective Tax Rate: |
| 34.00% |
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Source: SNL Financial, LC and RP Financial, LC. calculations.
converted basis) for each of the seven publicly-traded MHC institutions.
The table below shows a comparative pricing analysis of the publicly-traded MHCs on a fully-converted basis versus the Bank’s Peer Group. In comparison to the Peer Group’s P/TB ratio, the P/TB ratio of the publicly-traded MHCs reflected a discount of 26.63%. In comparison to the Peer Group’s core P/E multiple, the core P/E multiple of the publicly-traded MHCs reflected a premium of 80.03%. Detailed pricing characteristics of the fully-converted MHCs is shown in Table 4.7.
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Pricing Ratios (Averages)(1) |
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Core price/earnings (x) |
| 37.86 | x | 21.03 | x |
Price/tangible book (%) |
| 83.06 | % | 113.20 | % |
Price/assets (%) |
| 18.98 |
| 14.39 |
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(1) Based on market prices as of February 5, 2016.
In comparison to the publicly-traded MHCs, the Bank’s pro forma P/TB ratio (fully-converted basis) of 61.77% at the midpoint of the valuation range reflected a discount of 25.63%. At the top of the super range, the Bank’s P/TB ratio (fully-converted basis) of 69.98% reflected a discount of 15.75%. In comparison to the publicly-traded MHCs, the Bank’s pro forma core P/E multiple (fully-converted basis) of 44.90 times at the midpoint of the valuation range reflected a premium of 18.59%. At the top of the super range, the Bank’s core P/E multiple (fully-converted basis) of 61.41 times reflected a premium of 62.20%.
It should be noted that in a comparison of the publicly-traded MHCs to HarborOne Bank, the publicly-traded MHCs maintain certain inherit characteristics in support of increasing the attractiveness of their stocks relative to HarborOne Bank’s stock as an MHC that will just be completing an IPO: (1) the seasoned publicly-traded MHCs are viewed as potential candidates to complete a second-step offering; (2) some of the publicly-traded MHCs have been grandfathered to waive dividend payments to the MHC pursuant to receiving an annual majority vote by the depositors to approve the waiver of dividends; and (3) as there have been only two MHC offerings completed in recent years, there is a degree of uncertainty on how well an MHC offering will be received in the prevailing regulatory environment.
Table 4.7
MHC Institutions, Implied Pricing Ratios, Full Conversion Basis
Financial Data as of the Most Recent Quarter or Twelve Month Period Available
Prices as of February 5, 2016
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| Per Share Data |
| Pricing Ratios |
| Dividends |
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| LTM |
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| BV/ |
| Tang. |
| P/E |
| P/E Cre |
| Price/ |
| Price/ |
| Price/ |
| Ann Div |
| Div. |
| Div Pay |
| Total |
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| Reported |
| Core |
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Ticker |
| Company Name |
| City |
| State |
| Exchange |
| Price |
| Value |
| EPS |
| Cr EPS |
| Shr |
| BV/Sh |
| LTM |
| LTM |
| Book |
| TBk |
| Assts |
| Rate |
| Yield |
| Ratio |
| Assets |
| E/A |
| E/A |
| ROAA |
| ROAE |
| ROAA |
| ROAE |
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| ($) |
| ($M) |
| ($) |
| ($) |
| ($) |
| ($) |
| (x) |
| (x) |
| (%) |
| (%) |
| (%) |
| ($) |
| (%) |
| (%) |
| ($000) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
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Publicly Traded MHCs, Full Conversion Basis - Averages |
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| 16.01 |
| 761.9 |
| 0.59 |
| 0.60 |
| 19.34 |
| 19.01 |
| 39.52 |
| 37.86 |
| 81.06 |
| 83.06 |
| 18.98 |
| 0.32 |
| 1.91 |
| 67.69 |
| 2,723,636 |
| 23.49 |
| 22.77 |
| 0.58 |
| 2.61 |
| 0.60 |
| 2.69 |
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Publicly Traded MHCs, Full Conversion Basis - Medians |
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| 13.40 |
| 114.1 |
| 0.35 |
| 0.47 |
| 18.18 |
| 18.18 |
| 36.49 |
| 28.17 |
| 75.58 |
| 77.52 |
| 16.37 |
| 0.40 |
| 2.09 |
| 48.81 |
| 577,089 |
| 22.88 |
| 22.88 |
| 0.63 |
| 2.04 |
| 0.59 |
| 2.48 |
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Publicly Traded MHCs, Full Conversion Basis |
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GCBC |
| Greene County Bncp Inc. (MHC) |
| Catskill |
| NY |
| NASDAQ |
| 31.00 |
| 131.0 |
| 1.77 |
| 1.79 |
| 30.66 |
| 30.66 |
| 17.54 |
| 17.30 |
| 101.12 |
| 101.12 |
| 15.81 |
| 0.74 |
| 2.39 |
| 41.9 |
| 828,472 |
| 15.63 |
| 15.63 |
| 0.90 |
| 5.77 |
| 0.91 |
| 5.84 |
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KFFB |
| Kentucky First Federal (MHC) |
| Frankfort |
| KY |
| NASDAQ |
| 9.17 |
| 77.8 |
| 0.25 |
| 0.25 |
| 12.30 |
| 10.59 |
| 36.49 |
| 36.49 |
| 74.54 |
| 86.57 |
| 23.38 |
| 0.40 |
| 4.36 |
| 159.2 |
| 332,770 |
| 31.36 |
| 27.00 |
| 0.64 |
| 2.04 |
| 0.64 |
| 2.04 |
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LSBK |
| Lake Shore Bancorp Inc. (MHC) |
| Dunkirk |
| NY |
| NASDAQ |
| 13.40 |
| 80.1 |
| 0.54 |
| 0.48 |
| 19.20 |
| 19.20 |
| 24.77 |
| 28.17 |
| 69.79 |
| 69.79 |
| 15.59 |
| 0.28 |
| 2.09 |
| 51.8 |
| 513,721 |
| 22.34 |
| 22.34 |
| 0.63 |
| 2.82 |
| 0.55 |
| 2.48 |
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MGYR |
| Magyar Bancorp Inc. (MHC) |
| New Brunswick |
| NJ |
| NASDAQ |
| 9.75 |
| 56.7 |
| 0.15 |
| 0.16 |
| 12.58 |
| 12.58 |
| 66.39 |
| 62.03 |
| 77.52 |
| 77.52 |
| 9.83 |
| 0.00 |
| 0.00 |
| 0.0 |
| 577,089 |
| 12.68 |
| 12.68 |
| 0.15 |
| 1.17 |
| 0.16 |
| 1.25 |
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OFED |
| Oconee Federal Financial Corp. |
| Seneca |
| SC |
| NASDAQ |
| 19.40 |
| 114.1 |
| 0.82 |
| 0.84 |
| 25.67 |
| 25.08 |
| 23.67 |
| 23.14 |
| 75.58 |
| 77.34 |
| 21.24 |
| 0.40 |
| 2.06 |
| 48.8 |
| 537,206 |
| 28.10 |
| 27.47 |
| 0.90 |
| 3.19 |
| 0.92 |
| 3.27 |
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PVBC |
| Provident Bancorp Inc (MHC) |
| Amesbury |
| MA |
| NASDAQ |
| 13.01 |
| 123.6 |
| 0.35 |
| 0.47 |
| 18.18 |
| 18.18 |
| 37.49 |
| 27.55 |
| 71.56 |
| 71.56 |
| 16.37 |
| 0.00 |
| 0.00 |
| 0.0 |
| 754,784 |
| 22.88 |
| 22.88 |
| 0.44 |
| 1.91 |
| 0.59 |
| 2.60 |
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TFSL |
| TFS Financial Corp (MHC) |
| Cleveland |
| OH |
| NASDAQ |
| 16.33 |
| 4,750.1 |
| 0.23 |
| 0.23 |
| 16.78 |
| 16.75 |
| 70.31 |
| 70.31 |
| 97.30 |
| 97.49 |
| 30.60 |
| 0.40 |
| 2.45 |
| 172.2 |
| 15,521,413 |
| 31.45 |
| 31.39 |
| 0.44 |
| 1.38 |
| 0.44 |
| 1.38 |
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Source: SNL Financial, LC and RP Financial, LC. calculations.
Comparison to Recent Offerings and Publicly-Traded Mortgage Banking Companies
As indicated at the beginning of this chapter, RP Financial’s analysis of recent conversion offering pricing characteristics at closing and in the aftermarket has been limited to a “technical” analysis and, thus, the pricing characteristics of recent conversion offerings can not be a primary determinate of value. Particular focus was placed on the P/TB approach in this analysis, since the P/E multiples do not reflect the actual impact of reinvestment and the source of the stock proceeds (i.e., external funds vs. deposit withdrawals). The most recent first-step MHC offering that is comparable to HarborOne Bank’s first-step MHC offering was completed by Provident Bancorp, Inc. of Amesbury, Massachusetts. Provident Bancorp’s offering, which closed in July 2015, raised gross proceeds of $42.7 million through the sale of 45.0% of its stock in a public offering. Provident Bancorp’s offering closed at slightly above the maximum of its offering range at a fully-converted pro forma price/tangible book ratio of 68.10%. In comparison, the Bank’s pro forma price/tangible book ratio at the midpoint value reflects an implied discount of 9.30%. Comparative pre-conversion financial data for Provident Bancorp has been included in the Chapter III tables and show that, in comparison to HarborOne Bank, Provident Bancorp maintained a higher tangible equity-to-assets ratio (11.51% versus 8.17% for HarborOne Bank), a higher return on average assets (0.71% versus 0.27% for HarborOne Bank) and a lower ratio of non-performing assets (inclusive of performing troubles debt restructurings) as a percent of assets (0.86% versus 2.62% for HarborOne Bank).
In light of the significance of the Bank’s mortgage banking activities on the Bank’s overall operations, we also reviewed current pricing of publicly-traded mortgage banking companies compared to the pricing of the Bank’s Peer Group. The publicly-traded mortgage banking companies are currently trading at a P/TB ratio of 110% and 11 times forward earnings. Comparatively, pricing for the Peer Group reflected a P/TB ratio of 113% and a core P/E multiple of 21 times.
Valuation Conclusion
Based on the foregoing, it is our opinion that, as of February 5, 2016, the estimated aggregate pro forma market value of the shares to be issued immediately following the conversion, both shares issued publicly as well as to the MHC, equaled $227,700,000 at the midpoint, equal to 22,770,000 shares offered at a per share value of $10.00. Pursuant to
conversion guidelines, the 15% offering range indicates a minimum value of $193,545,000 and a maximum value of $261,855,000. Based on the $10.00 per share offering price determined by the Board, this valuation range equates to total shares outstanding of 19,354,500 at the minimum and 26,185,500 at the maximum. In the event the appraised value is subject to an increase, the aggregate pro forma market value may be increased up to a super maximum value of $301,133,250 without a resolicitation. Based on the $10.00 per share offering price, the super maximum value would result in total shares outstanding of 30,113,325. The Board of Directors has established a public offering range such that the public ownership of the Bank will constitute a 45.0% ownership interest prior to the issuance of shares to the Foundation. Accordingly, the offering to the public of the minority stock will equal $87,095,250 at the minimum, $102,465,000 at the midpoint, $117,834,750 at the maximum and $135,509,960 at the super maximum of the valuation range. Based on the public offering range and inclusive of the shares issued to the Foundation, equal to 1.2% of the shares issued in the stock issuance, the public ownership of shares will represent 46.2% of the shares issued throughout the valuation range. The pro forma valuation calculations relative to the Peer Group (fully-converted basis) are shown in Table 4.4 and are detailed in Exhibit IV-7 and Exhibit IV-8; the pro forma valuation calculations relative to the Peer Group based on reported financials are shown in Table 4.5 and are detailed in Exhibits IV-9 and IV-10.
EXHIBITS
LIST OF EXHIBITS
Exhibit |
|
|
Number |
| Description |
|
|
|
I-1 |
| Map of Office Locations |
|
|
|
I-2 |
| Audited Financial Statements |
|
|
|
I-3 |
| Key Operating Ratios |
|
|
|
I-4 |
| Investment Portfolio Composition |
|
|
|
I-5 |
| Yields and Costs |
|
|
|
I-6 |
| Loan Loss Allowance Activity |
|
|
|
I-7 |
| Interest Rate Risk Analysis |
|
|
|
I-8 |
| Fixed and Adjustable Rate Loans |
|
|
|
I-9 |
| Loan Portfolio Composition |
|
|
|
I-10 |
| Contractual Maturity by Loan Type |
|
|
|
I-11 |
| Loan Originations, Purchases, Sales and Repayments |
|
|
|
I-12 |
| Non-Performing Assets |
|
|
|
I-13 |
| Deposit Composition |
|
|
|
I-14 |
| Maturity of Time Deposits |
|
|
|
I-15 |
| Borrowing Activity |
|
|
|
II-1 |
| Description of Office Properties |
|
|
|
II-2 |
| Historical Interest Rates |
LIST OF EXHIBITS (continued)
Exhibit |
|
|
Number |
| Description |
|
|
|
III-1 |
| General Characteristics of Publicly-Traded Institutions |
|
|
|
III-2 |
| Public Market Pricing of Northeast Thrift Institutions |
|
|
|
III-3 |
| Public Market Pricing of Mid-Atlantic Thrift Institutions |
|
|
|
III-4 |
| Peer Group Market Area Comparative Analysis |
|
|
|
IV-1 |
| Stock Prices: As of February 5, 2016 |
|
|
|
IV-2 |
| Historical Stock Price Indices |
|
|
|
IV-3 |
| Stock Indices as of February 5, 2016 |
|
|
|
IV-4 |
| Massachusetts Thrift Acquisitions 2011 - Present |
|
|
|
IV-5 |
| Director and Senior Management Summary Resumes |
|
|
|
IV-6 |
| Pro Forma Regulatory Capital Ratios |
|
|
|
IV-7 |
| Pro Forma Analysis Sheet — Fully Converted Basis |
|
|
|
IV-8 |
| Pro Forma Effect of Conversion Proceeds — Fully Converted Basis |
|
|
|
IV-9 |
| Pro Forma Analysis Sheet — Minority Stock Offering |
|
|
|
IV-10 |
| Pro Forma Effect of Conversion Proceeds — Minority Stock Offering |
|
|
|
V-1 |
| Firm Qualifications Statement |
EXHIBIT I-1
HarborOne Bank
Map of Office Locations
Exhibit I-1 HarborOne Bank Map of Office Locations Source: SNL Financial, LC.
wakefield salem wobum lunn lincoin medford somerville waltham wellesley boston needham dedham quincy norwood hull weymouth scituate randolph hanover franklin stoughton pembroke marifield kingston attleboro taunton middleboro plymouth dighton lakeville
EXHIBIT I-2
HarborOne Bank
Audited Financial Statements
[Incorporated by Reference]
EXHIBIT I-3
HarborOne Bank
Key Operating Ratios
Exhibit I-3
HarborOne Bank
Key Operating Ratios
|
| At or For the Year Ended December 31, |
| ||||||||
|
| 2015 |
| 2014 |
| 2013 |
| 2012(1) |
| 2011(1) |
|
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
|
Return on average assets (ratio of net income to average total assets) |
| 0.27 | % | 0.13 | % | 0.38 | % | 0.46 | % | 0.38 | % |
Return on average equity (ratio of net income to average equity) |
| 3.04 | % | 1.38 | % | 3.98 | % | 5.01 | % | 4.27 | % |
Interest rate spread(2) |
| 2.50 | % | 2.26 | % | 2.23 | % | 2.34 | % | 2.45 | % |
Net interest margin(3) |
| 2.60 | % | 2.38 | % | 2.36 | % | 2.51 | % | 2.65 | % |
Efficiency ratio(4) |
| 88.80 | % | 88.99 | % | 88.88 | % | 81.11 | % | 82.04 | % |
Average interest-earning assets to average interest-bearing liabilities |
| 115.38 | % | 115.72 | % | 115.73 | % | 115.29 | % | 114.65 | % |
Average equity to average total assets |
| 8.93 | % | 9.40 | % | 9.54 | % | 9.23 | % | 8.96 | % |
Asset Quality Ratios: |
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets to total assets |
| 1.47 | % | 1.87 | % | 1.90 | % | 2.19 | % | 2.46 | % |
Non-performing loans to total loans |
| 1.69 | % | 2.12 | % | 2.13 | % | 2.57 | % | 2.77 | % |
Allowance for loan losses to non-performing loans |
| 46.56 | % | 39.49 | % | 42.44 | % | 43.73 | % | 41.61 | % |
Allowance for loan losses to total loans |
| 0.79 | % | 0.84 | % | 0.90 | % | 1.12 | % | 1.15 | % |
Capital Ratios: |
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 to risk weighted Assets |
| 10.7 | % | N/A |
| N/A |
| N/A |
| N/A |
|
Tier 1 capital to risk weighted assets |
| 10.7 | % | 12.2 | % | 14.0 | % | N/A |
| N/A |
|
Total capital to risk weighted assets |
| 11.6 | % | 13.1 | % | 13.0 | % | N/A |
| N/A |
|
Tier 1 capital to average assets |
| 8.3 | % | 8.9 | % | 9.1 | % | N/A |
| N/A |
|
(1) As a credit union during 2011 and 2012, HarborOne Bank was subject to different capital requirements.
(2) Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Represents net interest income as a percent of average interest-earning assets.
(4) Represents noninterest expense divided by the sum of net interest income and noninterest income.
Source: HarborOne Bank’s prospectus.
EXHIBIT I-4
HarborOne Bank
Investment Portfolio Composition
Exhibit I-4
HarborOne Bank
Investment Portfolio Composition
|
| At December 31, |
| ||||||||||||||||
|
| 2015 |
| 2014 |
| 2013 |
| ||||||||||||
|
| Amortized |
| Fair |
| Amortized |
| Fair |
| Amortized |
| Fair |
| ||||||
(In thousands) |
| Cost |
| Value |
| Cost |
| Value |
| Cost |
| Value |
| ||||||
Securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
U.S. government and government-sponsored enterprise obligations |
| $ | 5,000 |
| $ | 4,967 |
| $ | 4,891 |
| $ | 4,983 |
| $ | 14,571 |
| $ | 14,308 |
|
U.S. government-sponsored mortgage-backed and collateralized mortgage obligations |
| 93,071 |
| 93,086 |
| 127,016 |
| 127,392 |
| 121,683 |
| 121,110 |
| ||||||
SBA asset-backed securities |
| 30,258 |
| 30,488 |
| 15,539 |
| 15,640 |
| — |
| — |
| ||||||
Total securities available for sale |
| $ | 128,329 |
| $ | 128,541 |
| $ | 147,446 |
| $ | 148,015 |
| $ | 136,254 |
| $ | 135,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
U.S. government and government-sponsored enterprise obligations |
| $ | 9,954 |
| $ | 9,940 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
|
U.S. government-sponsored mortgage-backed and collateralized mortgage obligations |
| 27,594 |
| 27,563 |
| 32,088 |
| 32,372 |
| 31,234 |
| 30,055 |
| ||||||
Other bonds and obligations: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
State and political subdivisions |
| 26,031 |
| 27,703 |
| 26,296 |
| 27,933 |
| 26,043 |
| 25,913 |
| ||||||
Total securities held to maturity |
| $ | 63,579 |
| $ | 65,206 |
| $ | 58,384 |
| $ | 60,305 |
| $ | 57,277 |
| $ | 55,968 |
|
Source: HarborOne Bank’s prospectus.
EXHIBIT I-5
HarborOne Bank
Yields and Costs
Exhibit I-5
HarborOne Bank
Yields and Costs
|
| For the Years Ended December 31, |
| ||||||||||||||||||||||
|
| 2015 |
| 2014 |
| 2013 |
| ||||||||||||||||||
|
| Average |
| Interest |
| Average |
| Average |
| Interest |
| Average |
| Average |
| Interest |
| Average |
| ||||||
|
| Outstanding |
| Earned/ |
| Yield/ |
| Outstanding |
| Earned/ |
| Yield/ |
| Outstanding |
| Earned/ |
| Yield/ |
| ||||||
(Dollars in thousands) |
| Balance |
| Paid |
| Rate |
| Balance |
| Paid |
| Rate |
| Balance |
| Paid |
| Rate |
| ||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Loans(1) |
| $ | 1,746,346 |
| $ | 61,413 |
| 3.52 | % | $ | 1,618,958 |
| $ | 56,379 |
| 3.48 | % | $ | 1,566,556 |
| $ | 56,007 |
| 3.58 | % |
Investment securities(2) |
| 229,296 |
| 5,606 |
| 2.44 | % | 228,747 |
| 4,876 |
| 2.13 | % | 184,463 |
| 3,080 |
| 1.67 | % | ||||||
Other interest-earning assets |
| 35,479 |
| 98 |
| 0.28 | % | 54,128 |
| 137 |
| 0.25 | % | 58,489 |
| 148 |
| 0.25 | % | ||||||
Total interest-earning assets |
| 2,011,120 |
| 67,117 |
| 3.34 | % | 1,901,834 |
| 61,392 |
| 3.23 | % | 1,809,508 |
| 59,235 |
| 3.27 | % | ||||||
Noninterest-earning assets |
| 110,501 |
|
|
|
|
| 83,965 |
|
|
|
|
| 73,076 |
|
|
|
|
| ||||||
Total assets |
| $ | 2,121,621 |
|
|
|
|
| $ | 1,985,798 |
|
|
|
|
| $ | 1,882,584 |
|
|
|
|
| |||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Savings accounts |
| $ | 286,381 |
| 492 |
| 0.17 | % | $ | 270,776 |
| 515 |
| 0.19 | % | $ | 261,700 |
| 652 |
| 0.25 | % | |||
NOW accounts |
| 109,674 |
| 69 |
| 0.06 | % | 101,642 |
| 67 |
| 0.07 | % | 96,487 |
| 72 | �� | 0.07 | % | ||||||
Money market accounts |
| 559,745 |
| 2,417 |
| 0.43 | % | 440,597 |
| 1,907 |
| 0.43 | % | 331,887 |
| 1,192 |
| 0.36 | % | ||||||
Certificates of deposit |
| 491,235 |
| 5,722 |
| 1.16 | % | 537,149 |
| 6,544 |
| 1.22 | % | 529,600 |
| 6,518 |
| 1.23 | % | ||||||
Total interest-bearing deposits |
| 1,447,036 |
| 8,700 |
| 0.60 | % | 1,350,164 |
| 9,033 |
| 0.67 | % | 1,219,674 |
| 8,434 |
| 0.69 | % | ||||||
FHLB advances |
| 296,016 |
| 5,875 |
| 1.98 | % | 293,316 |
| 6,845 |
| 2.33 | % | 343,840 |
| 7,947 |
| 2.31 | % | ||||||
Total interest-bearing liabilities |
| 1,743,051 |
| 14,575 |
| 0.84 | % | 1,643,480 |
| 15,878 |
| 0.97 | % | 1,563,514 |
| 16,381 |
| 1.05 | % | ||||||
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Noninterest-bearing deposits |
| 167,517 |
|
|
|
|
| 137,475 |
|
|
|
|
| 122,400 |
|
|
|
|
| ||||||
Other noninterest-bearing liabilities |
| 21,596 |
|
|
|
|
| 18,185 |
|
|
|
|
| 17,144 |
|
|
|
|
| ||||||
Total liabilities |
| 1,932,164 |
|
|
|
|
| 1,799,140 |
|
|
|
|
| 1,703,058 |
|
|
|
|
| ||||||
Total equity |
| 189,457 |
|
|
|
|
| 186,658 |
|
|
|
|
| 179,526 |
|
|
|
|
| ||||||
Total liabilities and equity |
| $ | 2,121,621 |
|
|
|
|
| $ | 1,985,798 |
|
|
|
|
| $ | 1,882,584 |
|
|
|
|
| |||
Net interest income |
|
|
| $ | 52,542 |
|
|
|
|
| $ | 45,514 |
|
|
|
|
| $ | 42,854 |
|
|
| |||
Interest rate spread(3) |
|
|
|
|
| 2.50 | % |
|
|
|
| 2.26 | % |
|
|
|
| 2.23 | % | ||||||
Less: tax equivalent adjustment |
|
|
| 316 |
|
|
|
|
| 313 |
|
|
|
|
| 123 |
|
|
| ||||||
Net interest income as reported |
|
|
| $ | 52,225 |
|
|
|
|
| $ | 45,201 |
|
|
|
|
| $ | 42,731 |
|
|
| |||
Net interest-earning assets(4) |
| $ | 268,069 |
|
|
|
|
| $ | 258,354 |
|
|
|
|
| $ | 245,994 |
|
|
|
|
| |||
Net interest margin(5) |
|
|
|
|
| 2.60 | % |
|
|
|
| 2.38 | % |
|
|
|
| 2.36 | % | ||||||
Tax equivalent effect |
|
|
|
|
| 0.01 | % |
|
|
|
| 0.01 | % |
|
|
|
| 0.01 | % | ||||||
Net interest margin on a fully tax equivalent basis |
|
|
|
|
| 2.61 | % |
|
|
|
| 2.39 | % |
|
|
|
| 2.37 | % | ||||||
Ratio of interest-earning assets to interest-bearing liabilities |
| 115.38 | x |
|
|
|
| 115.72 | x |
|
|
|
| 115.73 | x |
|
|
|
|
(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 2.31%, 1.99% and 1.60% for the years ended December 31, 2015, 2014, and 2013, 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 represent total interest-earning assets less total interest-bearing liabilities.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.
Source: HarborOne Bank’s prospectus.
EXHIBIT I-6
HarborOne Bank
Loan Loss Allowance Activity
Exhibit I-6
HarborOne Bank
Loan Loss Allowance Activity
|
| For the Year Ended December 31, |
| |||||||||||||
(Dollars in thousands) |
| 2015 |
| 2014 |
| 2013 |
| 2012 |
| 2011 |
| |||||
Allowance at beginning of period |
| $ | 13,934 |
| $ | 14,529 |
| $ | 17,254 |
| $ | 17,873 |
| $ | 16,736 |
|
Provision for loan losses |
| 1,257 |
| 2,589 |
| 2,235 |
| 3,839 |
| 4,024 |
| |||||
Charge offs: |
|
|
|
|
|
|
|
|
|
|
| |||||
Residential real estate: |
|
|
|
|
|
|
|
|
|
|
| |||||
One- to four-family |
| (860 | ) | (2,223 | ) | (2,977 | ) | (2,430 | ) | (1,193 | ) | |||||
Second mortgages and equity lines of credit |
| (161 | ) | (352 | ) | (385 | ) | (950 | ) | (356 | ) | |||||
Commercial real estate |
| — |
| (67 | ) | (41 | ) | — |
| (116 | ) | |||||
Construction |
| — |
| (67 | ) | (631 | ) | (221 | ) | — |
| |||||
Commercial |
| — |
| (229 | ) | (110 | ) | — |
| (212 | ) | |||||
Consumer: |
| (1,007 | ) | (949 | ) | (1,146 | ) | (1,191 | ) | (1,361 | ) | |||||
Total charge-offs |
| (2,028 | ) | (3,887 | ) | (5,290 | ) | (4,792 | ) | (3,238 | ) | |||||
Recoveries: |
|
|
|
|
|
|
|
|
|
|
| |||||
Residential real estate: |
|
|
|
|
|
|
|
|
|
|
| |||||
One- to four-family |
| 358 |
| 393 |
| 54 |
| 114 |
| 154 |
| |||||
Second mortgages and equity lines of credit |
| — |
| — |
| — |
| — |
| — |
| |||||
Commercial real estate |
| — |
| — |
| — |
| — |
| — |
| |||||
Construction |
| — |
| 130 |
| — |
| — |
| — |
| |||||
Commercial |
| 7 |
| 2 |
| — |
| — |
| 1 |
| |||||
Consumer: |
| 172 |
| 178 |
| 276 |
| 220 |
| 196 |
| |||||
Total recoveries |
| 537 |
| 703 |
| 330 |
| 334 |
| 351 |
| |||||
Net charge-offs |
| 1,491 |
| 3,184 |
| 4,960 |
| 4,458 |
| 2,887 |
| |||||
Allowance at end of period |
| $ | 13,700 |
| $ | 13,934 |
| $ | 14,529 |
| $ | 17,254 |
| $ | 17,873 |
|
Total loans outstanding(1) |
| $ | 1,743,088 |
| $ | 1,665,828 |
| $ | 1,606,343 |
| $ | 1,535,275 |
| $ | 1,548,541 |
|
Average loans outstanding |
| $ | 1,746,346 |
| $ | 1,618,958 |
| $ | 1,566,556 |
| $ | 1,585,499 |
| $ | 1,499,741 |
|
Allowance for loan losses as a percent of total loans outstanding(1) |
| 0.79 | % | 0.84 | % | 0.90 | % | 1.12 | % | 1.15 | % | |||||
Net loans charged off as a percent of average loans outstanding |
| 0.09 | % | 0.20 | % | 0.32 | % | 0.28 | % | 0.19 | % | |||||
Allowance for loan losses to nonperforming loans |
| 46.56 | % | 39.49 | % | 42.44 | % | 43.73 | % | 41.61 | % |
(1) Loans are presented before allowance for loan losses, but include deferred loan origination costs (fees), net.
Source: HarborOne Bank’s prospectus.
EXHIBIT I-7
HarborOne Bank
Interest Rate Risk Analysis
Exhibit I-7
HarborOne Bank
Interest Rate Risk Analysis
At December 31, 2015 |
| ||||||||||||
|
|
|
| Estimated Increase (Decrease) in |
| EVE as Percentage of Economic |
| ||||||
|
|
|
| EVE |
| Value of Assets(3) |
| ||||||
Changes in Interest |
|
|
|
|
|
|
|
|
| Changes in |
| ||
Rates (basis points)(1) |
| Estimated EVE(2) |
| Amount |
| Percent |
| EVE Ratio |
| Basis Points |
| ||
|
| (Dollars in thousands) |
| ||||||||||
+300 |
| $ | 211,507 |
| $ | (52,162 | ) | (19.8 | )% | 10.6 | % | (1.40 | ) |
0 |
| $ | 263,669 |
|
|
| 0.0 | % | 12.0 | % | 0.00 |
| |
-100 |
| $ | 253,850 |
| $ | (9,819 | ) | (3.7 | )% | 11.4 | % | (0.60 | ) |
(1) Assumes instantaneous parallel changes in interest rates.
(2) EVE, or Economic Value of Equity at Risk, measures the Bank’s exposure to equity due to changes in a forecast interest rate environment.
(3) EVE Ratio represents EVE divided by the economic value of assets which should translate into built in stability for future earnings.
Source: HarborOne Bank’s prospectus.
EXHIBIT I-8
HarborOne Bank
Fixed and Adjustable Rate Loans
Exhibit I-8
HarborOne Bank
Fixed and Adjustable Rate Loans
|
| Fixed |
| Adjustable |
|
|
| |||
(In thousands) |
| Rates |
| Rates |
| Total |
| |||
Residential real estate loans: |
|
|
|
|
|
|
| |||
One- to four-family residential |
| $ | 629,466 |
| $ | 81,503 |
| $ | 710,969 |
|
Second mortgages and equity lines of credit |
| 22,313 |
| 77,061 |
| 99,374 |
| |||
Commercial real estate |
| 114,992 |
| 150,490 |
| 265,482 |
| |||
Construction |
| 25,244 |
| 10,586 |
| 35,830 |
| |||
Commercial |
| 23,387 |
| 47,085 |
| 70,472 |
| |||
Consumer |
| 548,944 |
| — |
| 548,944 |
| |||
Total |
| $ | 1,364,346 |
| $ | 366,725 |
| $ | 1,731,071 |
|
Source: HarborOne Bank’s prospectus.
EXHIBIT I-9
HarborOne Bank
Loan Portfolio Composition
Exhibit I-9
HarborOne Bank
Loan Portfolio Composition
|
| At December 31, |
| |||||||||||||||||||||||
|
| 2015 |
| 2014 |
| 2013 |
| 2012 |
| 2011 |
| |||||||||||||||
(Dollars in thousands) |
| Amount |
| Percent |
| Amount |
| Percent |
| Amount |
| Percent |
| Amount |
| Percent |
| Amount |
| Percent |
| |||||
Residential real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
One- to four-family |
| $ | 710,969 |
| 41 | % | $ | 768,129 |
| 47 | % | $ | 806,371 |
| 51 | % | $ | 781,445 |
| 51 | % | $ | 776,002 |
| 51 | % |
Second mortgages and equity lines of credit |
| 99,374 |
| 6 |
| 95,465 |
| 6 |
| 96,194 |
| 6 |
| 104,766 |
| 7 |
| 122,845 |
| 8 |
| |||||
Commercial real estate |
| 265,482 |
| 15 |
| 142,452 |
| 9 |
| 63,795 |
| 4 |
| 42,694 |
| 3 |
| 26,553 |
| 2 |
| |||||
Construction |
| 35,830 |
| 2 |
| 26,125 |
| 2 |
| 29,822 |
| 2 |
| 20,476 |
| 1 |
| 13,867 |
| 1 |
| |||||
Total mortgage loans on real estate |
| 1,111,655 |
| 64 |
| 1,032,171 |
| 62 |
| 996,182 |
| 63 |
| 949,381 |
| 62 |
| 939,267 |
| 61 |
| |||||
Commercial |
| 70,472 |
| 4 |
| 47,453 |
| 3 |
| 22,969 |
| 1 |
| 16,473 |
| 1 |
| 15,513 |
| 1 |
| |||||
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Auto |
| 532,071 |
| 31 |
| 556,095 |
| 34 |
| 559,661 |
| 35 |
| 544,206 |
| 36 |
| 568,079 |
| 37 |
| |||||
Personal |
| 16,873 |
| 1 |
| 15,968 |
| 1 |
| 12,826 |
| 1 |
| 10,889 |
| — |
| 11,054 |
| 1 |
| |||||
Total consumer |
| 548,944 |
| 32 |
| 572,063 |
| 35 |
| 572,487 |
| 36 |
| 555,095 |
| 36 |
| 579,133 |
| 38 |
| |||||
Total loans |
| 1,731,071 |
| 100 | % | 1,651,687 |
| 100 | % | 1,591,638 |
| 100 | % | 1,520,949 |
| 100 | % | 1,533,913 |
| 100 | % | |||||
Deferred loan origination costs, net |
| 12,017 |
|
|
| 14,141 |
|
|
| 14,705 |
|
|
| 14,326 |
|
|
| 14,628 |
|
|
| |||||
Allowance for loan losses |
| (13,700 | ) |
|
| (13,934 | ) |
|
| (14,529 | ) |
|
| (17,254 | ) |
|
| (17,873 | ) |
|
| |||||
Loans, net |
| $ | 1,729,388 |
|
|
| $ | 1,651,894 |
|
|
| $ | 1,591,814 |
|
|
| $ | 1,518,021 |
|
|
| $ | l,530,668 |
|
|
|
Source: HarborOne Bank’s prospectus.
EXHIBIT I-10
HarborOne Bank
Contractual Maturity by Loan Type
Exhibit I-10
HarborOne Bank
Contractual Maturity by Loan Type
|
| One- to |
| Second Mortgage |
|
|
|
|
|
|
|
|
|
|
| |||||||
|
| Four-Family |
| and Equity |
|
|
|
|
|
|
|
|
|
|
| |||||||
|
| Residential |
| Lines of |
| Commercial |
|
|
|
|
|
|
| Total |
| |||||||
(In thousands) |
| Real Estate |
| Credit |
| Real Estate |
| Construction |
| Commercial |
| Consumer |
| Loans |
| |||||||
Due during the years ending December 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
2016 |
| $ | 161 |
| $ | 122 |
| $ | 191 |
| $ | 965 |
| $ | 13,657 |
| $ | 28,254 |
| $ | 43,350 |
|
2017 |
| 261 |
| 350 |
| 4,952 |
| 974 |
| 2,941 |
| 76,656 |
| 86,134 |
| |||||||
2018 |
| 4,978 |
| 1,216 |
| 11,585 |
| 617 |
| 4,632 |
| 146,188 |
| 169,216 |
| |||||||
2019 to 2020 |
| 21,491 |
| 5,859 |
| 25,669 |
| — |
| 25,274 |
| 245,660 |
| 323,953 |
| |||||||
2021 to 2025 |
| 67,105 |
| 39,882 |
| 190,815 |
| 17,714 |
| 20,152 |
| 48,997 |
| 384,665 |
| |||||||
2026 to 2030 |
| 158,178 |
| 23,479 |
| 22,523 |
| 5,599 |
| 896 |
| 2,041 |
| 212,716 |
| |||||||
2031 and beyond |
| 458,795 |
| 28,466 |
| 9,747 |
| 9,961 |
| 2,920 |
| 1,148 |
| 511,037 |
| |||||||
Total |
| $ | 710,969 |
| $ | 99,374 |
| $ | 265,481 |
| $ | 35,831 |
| $ | 70,472 |
| $ | 548,944 |
| $ | 1,731,071 |
|
Source: HarborOne Bank’s prospectus.
EXHIBIT I-11
HarborOne Bank
Loan Originations, Purchases, Sales and Repayments
Exhibit I-11
HarborOne Bank
Loan Originations, Purchases, Sales and Repayments
|
| Years Ended December31, |
| |||||||
(In thousands) |
| 2015 |
| 2104 |
| 2,013 |
| |||
Total loans and loans held for sale at beginning of period (excluding net deferred loan costs) |
| $ | 1,655,212 |
| $ | 1,593,699 |
| $ | 1,532,446 |
|
Loan originations: |
|
|
|
|
|
|
| |||
Residential real estate: |
|
|
|
|
|
|
| |||
One- to four-family residential—Bank |
| 156,403 |
| 105,344 |
| 252,195 |
| |||
One- to four-family residential—Merrimack Mortgage (“MMC”) |
| 547,795 |
| — |
| — |
| |||
Second mortgages and lines of credit |
| 32,725 |
| 28,881 |
| 22,890 |
| |||
Commercial real estate |
| 132,053 |
| 78,394 |
| 20,706 |
| |||
Construction |
| 28,263 |
| 29,523 |
| 44,702 |
| |||
Total mortgage loans on real estate |
| 897,239 |
| 242,142 |
| 340,493 |
| |||
Commercial |
| 19,143 |
| 13,766 |
| 13,558 |
| |||
Consumer |
| 254,444 |
| 291,832 |
| 285,281 |
| |||
Total loans originations |
| 1,170,826 |
| 547,740 |
| 639,331 |
| |||
Loan purchases:(1) |
|
|
|
|
|
|
| |||
Residential real estate: |
|
|
|
|
|
|
| |||
One- to four-family residential acquired from MMC on July 1, 2015 |
| 81,410 |
| — |
| — |
| |||
Commercial real estate |
| 33,018 |
| 6,977 |
| — |
| |||
Total mortgage loans on real estate |
| 114,428 |
| 6,977 |
| — |
| |||
Commercial |
| 12,985 |
| 23,133 |
| — |
| |||
Total loan purchases |
| 127,413 |
| 30,110 |
| — |
| |||
Loan sales:(2) |
|
|
|
|
|
|
| |||
Residential real estate: |
|
|
|
|
|
|
| |||
One- to four-family residential—Bank |
| (103,886 | ) | (57,843 | ) | (111,576 | ) | |||
One- to four-family residential—MMC |
| (567,663 | ) | — |
| — |
| |||
Commercial |
| (4,930 | ) | — |
| — |
| |||
Total mortgage loans on real estate |
| (676,479 | ) | (57,843 | ) | (111,576 | ) | |||
Consumer |
| (31,337 | ) | (40,697 | ) | — |
| |||
Total loan sales |
| (707,816 | ) | (98,540 | ) | (111,576 | ) | |||
Other: |
|
|
|
|
|
|
| |||
Principal repayments, net |
| (393,587 | ) | (382,393 | ) | (428,514 | ) | |||
Unadvanced funds on originations |
| (54,736 | ) | (32,742 | ) | (33,561 | ) | |||
Transfer to other real estate owned |
| (2,444 | ) | (2,662 | ) | (4,428 | ) | |||
Total other |
| (450,767 | ) | (417,797 | ) | (466,503 | ) | |||
Net loan activity |
| 139,656 |
| 61,513 |
| 61,253 |
| |||
Total loans and loans held for sale at end of period (excluding net deferred loan costs) |
| $ | 1,794,868 |
| $ | 1,655,212 |
| $ | l,593,699 |
|
(1) Includes loan purchases and participations by the Bank in loans originated by other financial institutions.
(2) Includes loan sales and participations by other financial institutions in loans originated by the Bank.
Source: HarborOne Bank’s prospectus.
EXHIBIT I-12
HarborOne Bank
Non-Performing Assets
Exhibit I-12
HarborOne Bank
Non-Performing Assets
|
| At December 31, |
| |||||||||||||
(Dollars in thousands) |
| 2015 |
| 2014 |
| 2013 |
| 2012 |
| 2011 |
| |||||
Nonaccrual loans: |
|
|
|
|
|
|
|
|
|
|
| |||||
Residential real estate: |
|
|
|
|
|
|
|
|
|
|
| |||||
One- to four-family |
| $ | 25,841 |
| $ | 31,333 |
| $ | 29,729 |
| $ | 33,991 |
| $ | 35,911 |
|
Second mortgages and equity lines of credit |
| 2,386 |
| 1,102 |
| 2,301 |
| 2,126 |
| 2,166 |
| |||||
Commercial real estate |
| — |
| 1,241 |
| 654 |
| 373 |
| 2,711 |
| |||||
Construction |
| 136 |
| — |
| 482 |
| 1,677 |
| 1,677 |
| |||||
Commercial |
| 731 |
| 1,053 |
| 897 |
| 721 |
| — |
| |||||
Consumer |
| 333 |
| 555 |
| 175 |
| 568 |
| 489 |
| |||||
Total nonaccrual loans(1) |
| 29,427 |
| 35,284 |
| 34,238 |
| 39,456 |
| 42,954 |
| |||||
Repossessed Assets: |
|
|
|
|
|
|
|
|
|
|
| |||||
One- to four-family residential |
| 2,286 |
| 2,915 |
| 2,884 |
| 1,308 |
| 2,961 |
| |||||
Other repossessed assets |
| 61 |
| 11 |
| 11 |
| 140 |
| 46 |
| |||||
Total nonperforming assets |
| 31,774 |
| 38,210 |
| 37,133 |
| 40,904 |
| 45,961 |
| |||||
Performing troubled debt restructurings |
| 24,963 |
| 26,814 |
| 31,492 |
| 32,971 |
| 9,440 |
| |||||
Total nonperforming assets and performing troubled debt restructurings |
| $ | 56,737 |
| $ | 65,024 |
| $ | 68,625 |
| $ | 73,875 |
| $ | 55,401 |
|
Total nonperforming loans to total loans(2) |
| 1.69 | % | 2.12 | % | 2.13 | % | 2.57 | % | 2.77 | % | |||||
Total nonperforming assets and performing troubled debt restructurings to total assets |
| 2.62 | % | 3.18 | % | 3.51 | % | 3.95 | % | 2.96 | % | |||||
Total nonperforming assets to total assets |
| 1.47 | % | 1.87 | % | 1.90 | % | 2.19 | % | 2.46 | % |
(1) $9.4 million troubled debt restructurings are included in total nonaccrual loans.
(2) Loans are presented before allowance for loan losses, but include deferred loan origination costs (fees), net.
Source: HarborOne Bank’s prospectus.
EXHIBIT I-13
HarborOne Bank
Deposit Composition
Exhibit I-13
HarborOne Bank
Deposit Composition
|
| For the Years Ended December 31, |
| |||||||||||||||||||
|
| 2015 |
| 2014 |
| 2013 |
| |||||||||||||||
|
|
|
|
|
| Weighted |
|
|
|
|
| Weighted |
|
|
|
|
| Weighted |
| |||
|
| Average |
|
|
| Average |
| Average |
|
|
| Average |
| Average |
|
|
| Average |
| |||
(Dollars in thousands) |
| Balance |
| Percent |
| Rate |
| Balance |
| Percent |
| Rate |
| Balance |
| Percent |
| Rate |
| |||
Deposit type: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Noninterest-bearing demand |
| $ | 167,517 |
| 10 | % | — | % | $ | 137,475 |
| 9 | % | — | % | $ | 122,400 |
| 9 | % | — | % |
NOW accounts |
| 109,674 |
| 7 |
| 0.07 |
| 101,642 |
| 7 |
| 0.07 |
| 96,487 |
| 7 |
| 0.07 |
| |||
Regular savings and club |
| 286,381 |
| 18 |
| 0.17 |
| 270,776 |
| 18 |
| 0.19 |
| 261,700 |
| 19 |
| 0.21 |
| |||
Money market |
| 559,745 |
| 35 |
| 0.44 |
| 440,597 |
| 30 |
| 0.42 |
| 331,887 |
| 25 |
| 0.39 |
| |||
Certificates of deposit |
| 491,235 |
| 30 |
| 1.15 |
| 537,149 |
| 36 |
| 1.20 |
| 529,600 |
| 39 |
| 1.27 |
| |||
Total |
| $ | 1,614,552 |
| 100 | % | 0.51 | % | $ | 1,487,639 |
| 100 | % | 0.58 | % | $ | 1,342,074 |
| 100 | % | 0.65 | % |
Source: HarborOne Bank’s prospectus.
EXHIBIT I-14
HarborOne Bank
Maturity of Time Deposits
Exhibit I-14
HarborOne Bank
Maturity of Time Deposits
|
| Period to Maturity |
|
|
|
|
| ||||||||||||||
|
|
|
| More Than |
| More than |
| More Than |
|
|
|
|
| % of Total |
| ||||||
|
| Less than |
| One Year to |
| Two Years to |
| Three Years |
| More than |
|
|
| Certificate |
| ||||||
(Dollars in thousands) |
| One Year |
| Two Years |
| Three Years |
| to Four Years |
| Four Years |
| Total |
| Accounts |
| ||||||
Less than 0.50% |
| $ | 91,319 |
| $ | 2,954 |
| $ | — |
| $ | — |
| $ | — |
| $ | 94,273 |
| 20.4 | % |
0.50% to 0.99% |
| 88,591 |
| 20,644 |
| 4,714 |
| — |
| — |
| 113.949 |
| 24.6 | % | ||||||
1.00% to 1.49% |
| 27,556 |
| 52,777 |
| 24.641 |
| 5,238 |
| 4,990 |
| 115.202 |
| 24.9 | % | ||||||
1.50% to 1.99% |
| 3,581 |
| 71,097 |
| 14,107 |
| 14,824 |
| 10,217 |
| 113,826 |
| 24.6 | % | ||||||
2.00% to 2.99% |
| 19,927 |
| 807 |
| 291 |
| 3,465 |
| 57 |
| 25,247 |
| 5.5 | % | ||||||
3.00% and greater |
| 95 |
| — |
| — |
| — |
| — |
| 95 |
| — | % | ||||||
Total |
| $ | 231,069 |
| $ | 148,279 |
| $ | 43,753 |
| $ | 23,527 |
| $ | 15,964 |
| $ | 462,592 |
| 100.00 | % |
Source: HarborOne Bank’s prospectus.
EXHIBIT I-15
HarborOne Bank
Borrowing Activity
Exhibit I-15
HarborOne Bank
Borrowing Activity
|
| At or For the Years Ended |
| |||||||
|
| December 31, |
| |||||||
(Dollars in thousands) |
| 2015 |
| 2014 |
| 2013 |
| |||
FHLB Advances: |
|
|
|
|
|
|
| |||
Balance outstanding at end of year |
| $ | 249,598 |
| $ | 329,602 |
| $ | 339,606 |
|
Average amount outstanding during the year |
| $ | 296,016 |
| $ | 293,316 |
| $ | 343,840 |
|
Maximum outstanding at any month end |
| $ | 334,602 |
| $ | 329,602 |
| $ | 369,607 |
|
Weighted average interest rate during the year |
| 1.98 | % | 2.33 | % | 2.31 | % | |||
Weighted average interest rate at end of year |
| 2.08 | % | 1.81 | % | 2.21 | % |
Source: HarborOne Bank’s prospectus.
EXHIBIT II-1
Description of Office Properties
Exhibit II-1
HarborOne Bank
Description of Office Properties
Properties
At December 31, 2015, the Bank conducted its business from its corporate headquarters located at 770 Oak St, Brockton, Massachusetts and fourteen full service branches, one loan production office and two limited service branches located in Plymouth, Norfolk and Bristol counties in eastern Massachusetts and Providence, Rhode Island. In addition to its corporate headquarters, the bank owns ten of these locations and leases five branches, the loan production office as well as five remote ATM locations.
Merrimack Mortgage conducts its business from its headquarters in Manchester, New Hampshire and 34 offices in New Hampshire, Maine, Connecticut, and Massachusetts. All of these locations are leased facilities.
Source: HarborOne Bank’s prospectus.
EXHIBIT II-2
Historical Interest Rates
Exhibit II-2
Historical Interest Rates(1)
|
| Prime |
| 90 Day |
| One Year |
| 10 Year |
| |
Year/Qtr. Ended |
| Rate |
| T-Note |
| T-Note |
| T-Note |
| |
|
|
|
|
|
|
|
|
|
|
|
2004: | Quarter 1 |
| 4.00 | % | 0.95 | % | 1.20 | % | 3.86 | % |
| Quarter 2 |
| 4.00 | % | 1.33 | % | 2.09 | % | 4.62 | % |
| Quarter 3 |
| 4.75 | % | 1.70 | % | 2.16 | % | 4.12 | % |
| Quarter 4 |
| 5.25 | % | 2.22 | % | 2.75 | % | 4.24 | % |
|
|
|
|
|
|
|
|
|
|
|
2005: | Quarter 1 |
| 5.75 | % | 2.80 | % | 3.43 | % | 4.51 | % |
| Quarter 2 |
| 6.00 | % | 3.12 | % | 3.51 | % | 3.98 | % |
| Quarter 3 |
| 6.75 | % | 3.55 | % | 4.01 | % | 4.34 | % |
| Quarter 4 |
| 7.25 | % | 4.08 | % | 4.38 | % | 4.39 | % |
|
|
|
|
|
|
|
|
|
|
|
2006: | Quarter 1 |
| 7.75 | % | 4.63 | % | 4.82 | % | 4.86 | % |
| Quarter 2 |
| 8.25 | % | 5.01 | % | 5.21 | % | 5.15 | % |
| Quarter 3 |
| 8.25 | % | 4.88 | % | 4.91 | % | 4.64 | % |
| Quarter 4 |
| 8.25 | % | 5.02 | % | 5.00 | % | 4.71 | % |
|
|
|
|
|
|
|
|
|
|
|
2007: | Quarter 1 |
| 8.25 | % | 5.04 | % | 4.90 | % | 4.65 | % |
| Quarter 2 |
| 8.25 | % | 4.82 | % | 4.91 | % | 5.03 | % |
| Quarter 3 |
| 7.75 | % | 3.82 | % | 4.05 | % | 4.59 | % |
| Quarter 4 |
| 7.25 | % | 3.36 | % | 3.34 | % | 3.91 | % |
|
|
|
|
|
|
|
|
|
|
|
2008: | Quarter 1 |
| 5.25 | % | 1.38 | % | 1.55 | % | 3.45 | % |
| Quarter 2 |
| 5.00 | % | 1.90 | % | 2.36 | % | 3.99 | % |
| Quarter 3 |
| 5.00 | % | 0.92 | % | 1.78 | % | 3.85 | % |
| Quarter 4 |
| 3.25 | % | 0.11 | % | 0.37 | % | 2.25 | % |
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2009: | Quarter 1 |
| 3.25 | % | 0.21 | % | 0.57 | % | 2.71 | % |
| Quarter 2 |
| 3.25 | % | 0.19 | % | 0.56 | % | 3.53 | % |
| Quarter 3 |
| 3.25 | % | 0.14 | % | 0.40 | % | 3.31 | % |
| Quarter 4 |
| 3.25 | % | 0.06 | % | 0.47 | % | 3.85 | % |
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2010: | Quarter 1 |
| 3.25 | % | 0.16 | % | 0.41 | % | 3.84 | % |
| Quarter 2 |
| 3.25 | % | 0.18 | % | 0.32 | % | 2.97 | % |
| Quarter 3 |
| 3.25 | % | 0.18 | % | 0.32 | % | 2.97 | % |
| Quarter 4 |
| 3.25 | % | 0.12 | % | 0.29 | % | 3.30 | % |
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2011: | Quarter 1 |
| 3.25 | % | 0.09 | % | 0.30 | % | 3.47 | % |
| Quarter 2 |
| 3.25 | % | 0.03 | % | 0.19 | % | 3.18 | % |
| Quarter 3 |
| 3.25 | % | 0.02 | % | 0.13 | % | 1.92 | % |
| Quarter 4 |
| 3.25 | % | 0.02 | % | 0.12 | % | 1.89 | % |
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2012: | Quarter 1 |
| 3.25 | % | 0.07 | % | 0.19 | % | 2.23 | % |
| Quarter 2 |
| 3.25 | % | 0.09 | % | 0.21 | % | 1.67 | % |
| Quarter 3 |
| 3.25 | % | 0.10 | % | 0.17 | % | 1.65 | % |
| Quarter 4 |
| 3.25 | % | 0.05 | % | 0.16 | % | 1.78 | % |
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2013: | Quarter 1 |
| 3.25 | % | 0.07 | % | 0.14 | % | 1.87 | % |
| Quarter 2 |
| 3.25 | % | 0.04 | % | 0.15 | % | 2.52 | % |
| Quarter 3 |
| 3.25 | % | 0.02 | % | 0.10 | % | 2.64 | % |
| Quarter 4 |
| 3.25 | % | 0.07 | % | 0.13 | % | 3.04 | % |
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2014: | Quarter 1 |
| 3.25 | % | 0.05 | % | 0.13 | % | 2.73 | % |
| Quarter 2 |
| 3.25 | % | 0.04 | % | 0.11 | % | 2.53 | % |
| Quarter 3 |
| 3.25 | % | 0.02 | % | 0.13 | % | 2.52 | % |
| Quarter 4 |
| 3.25 | % | 0.04 | % | 0.25 | % | 2.17 | % |
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2015: | Quarter 1 |
| 3.25 | % | 0.03 | % | 0.26 | % | 1.94 | % |
| Quarter 2 |
| 3.25 | % | 0.01 | % | 0.28 | % | 2.35 | % |
| Quarter 3 |
| 3.25 | % | 0.00 | % | 0.33 | % | 2.06 | % |
| Quarter 4 |
| 3.50 | % | 0.16 | % | 0.65 | % | 2.27 | % |
As of Feb. 5, 2016 |
| 3.50 | % | 0.30 | % | 0.55 | % | 1.86 | % |
(1) End of period data.
Sources: Federal Reserve and The Wall Street Journal.
EXHIBIT III-1
General Characteristics of Publicly-Traded Institutions
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
February 5, 2016
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| February 5, 2016 |
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| Total |
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| Fiscal |
| Conv. |
| Stock |
| Market |
| ||
Ticker |
| Financial Institution |
| Exchange |
| Region |
| City |
| State |
| Assets |
| Offices |
| Mth End |
| Date |
| Price |
| Value |
| ||
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| ($Mil) |
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| ($) |
| ($Mil) |
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| ||
ANCB |
| Anchor Bancorp |
| NASDAQ |
| WE |
| Lacey |
| WA |
| 381 | (1) | 10 |
| Jun |
| 1/26/11 |
| $ | 24.17 |
| $ | 61 |
|
ASBB |
| ASB Bancorp, Inc. |
| NASDAQ |
| SE |
| Asheville |
| NC |
| 798 | (1) | 13 |
| Dec |
| 10/12/11 |
| $ | 24.91 |
| $ | 99 |
|
ACFC |
| Atlantic Coast Financial Corporation |
| NASDAQ |
| SE |
| Jacksonville |
| FL |
| 818 | (1) | 12 |
| Dec |
| 2/4/11 |
| $ | 5.55 |
| $ | 86 |
|
BKMU |
| Bank Mutual Corporation |
| NASDAQ |
| MW |
| Milwaukee |
| WI |
| 2,467 | (1) | 70 |
| Dec |
| 10/30/03 |
| $ | 7.21 |
| $ | 328 |
|
BFIN |
| BankFinancial Corporation |
| NASDAQ |
| MW |
| Burr Ridge |
| IL |
| 1,431 | (1) | 20 |
| Dec |
| 6/24/05 |
| $ | 12.00 |
| $ | 244 |
|
BYBK |
| Bay Bancorp, Inc. |
| NASDAQ |
| MA |
| Columbia |
| MD |
| 474 | (1) | 13 |
| Dec |
| 1/0/00 |
| $ | 4.80 |
| $ | 53 |
|
BNCL |
| Beneficial Bancorp, Inc. |
| NASDAQ |
| MA |
| Philadelphia |
| PA |
| 4,728 | (1) | 57 |
| Dec |
| 1/13/15 |
| $ | 12.53 |
| $ | 1,039 |
|
BHBK |
| Blue Hills Bancorp, Inc. |
| NASDAQ |
| NE |
| Norwood |
| MA |
| 1,934 | (1) | 11 |
| Dec |
| 7/22/14 |
| $ | 13.82 |
| $ | 394 |
|
BOFI |
| BofI Holding, Inc. |
| NASDAQ |
| WE |
| San Diego |
| CA |
| 6,260 | (1) | 3 |
| Jun |
| 3/14/05 |
| $ | 14.80 |
| $ | 933 |
|
BYFC |
| Broadway Financial Corporation |
| NASDAQ |
| WE |
| Los Angeles |
| CA |
| 404 | (1) | 3 |
| Dec |
| 1/9/96 |
| $ | 1.50 |
| $ | 32 |
|
BLMT |
| BSB Bancorp, Inc. |
| NASDAQ |
| NE |
| Belmont |
| MA |
| 1,692 | (1) | 7 |
| Dec |
| 10/5/11 |
| $ | 21.38 |
| $ | 194 |
|
CFFN |
| Capitol Federal Financial, Inc. |
| NASDAQ |
| MW |
| Topeka |
| KS |
| 9,844 | (1) | 47 |
| Sep |
| 12/22/10 |
| $ | 12.00 |
| $ | 1,646 |
|
CARV |
| Carver Bancorp, Inc. |
| NASDAQ |
| MA |
| New York |
| NY |
| 737 | (1) | 9 |
| Mar |
| 10/25/94 |
| $ | 3.19 |
| $ | 12 |
|
CFBK |
| Central Federal Corporation |
| NASDAQ |
| MW |
| Worthington |
| OH |
| 331 | (1) | 4 |
| Dec |
| 12/30/98 |
| $ | 1.35 |
| $ | 22 |
|
CHFN |
| Charter Financial Corporation |
| NASDAQ |
| SE |
| West Point |
| GA |
| 1,027 | (1) | 17 |
| Sep |
| 4/9/13 |
| $ | 13.01 |
| $ | 198 |
|
CBNK |
| Chicopee Bancorp, Inc. |
| NASDAQ |
| NE |
| Chicopee |
| MA |
| 695 | (1) | 9 |
| Dec |
| 7/20/06 |
| $ | 17.98 |
| $ | 94 |
|
CSBK |
| Clifton Bancorp Inc. |
| NASDAQ |
| MA |
| Clifton |
| NJ |
| 1,154 | (1) | 11 |
| Mar |
| 4/2/14 |
| $ | 13.88 |
| $ | 345 |
|
CWAY |
| Coastway Bancorp, Inc. |
| NASDAQ |
| NE |
| Warwick |
| RI |
| 528 | (1) | 11 |
| Dec |
| 1/15/14 |
| $ | 12.29 |
| $ | 60 |
|
DCOM |
| Dime Community Bancshares, Inc. |
| NASDAQ |
| MA |
| Brooklyn |
| NY |
| 4,832 | (1) | 26 |
| Dec |
| 6/26/96 |
| $ | 16.42 |
| $ | 614 |
|
ESBK |
| Elmira Savings Bank |
| NASDAQ |
| MA |
| Elmira |
| NY |
| 566 | (1) | 13 |
| Dec |
| 3/1/85 |
| $ | 18.11 |
| $ | 49 |
|
ENFC |
| Entegra Financial Corp. |
| NASDAQ |
| SE |
| Franklin |
| NC |
| 984 | (1) | 15 |
| Dec |
| 10/1/14 |
| $ | 16.98 |
| $ | 111 |
|
EQFN |
| Equitable Financial Corp. |
| NASDAQ |
| MW |
| Grand Island |
| NE |
| 212 | (1) | 6 |
| Jun |
| 7/9/15 |
| $ | 8.47 |
| $ | 29 |
|
ESSA |
| ESSA Bancorp, Inc. |
| NASDAQ |
| MA |
| Stroudsburg |
| PA |
| 1,607 | (1) | 31 |
| Sep |
| 4/4/07 |
| $ | 13.34 |
| $ | 151 |
|
EVER |
| EverBank Financial Corp |
| NYSE |
| SE |
| Jacksonville |
| FL |
| 25,215 | (1) | 12 |
| Dec |
| 5/2/12 |
| $ | 13.73 |
| $ | 1,717 |
|
FCAP |
| First Capital, Inc. |
| NASDAQ |
| MW |
| Corydon |
| IN |
| 465 | (1) | 17 |
| Dec |
| 1/4/99 |
| $ | 25.00 |
| $ | 69 |
|
FBNK |
| First Connecticut Bancorp, Inc. |
| NASDAQ |
| NE |
| Farmington |
| CT |
| 2,708 | (1) | 26 |
| Dec |
| 6/30/11 |
| $ | 16.21 |
| $ | 257 |
|
FDEF |
| First Defiance Financial Corp. |
| NASDAQ |
| MW |
| Defiance |
| OH |
| 2,228 | (1) | 34 |
| Dec |
| 10/2/95 |
| $ | 37.61 |
| $ | 339 |
|
FFNW |
| First Financial Northwest, Inc. |
| NASDAQ |
| WE |
| Renton |
| WA |
| 984 | (1) | 2 |
| Dec |
| 10/10/07 |
| $ | 13.02 |
| $ | 179 |
|
FNWB |
| First Northwest Bancorp |
| NASDAQ |
| WE |
| Port Angeles |
| WA |
| 958 | (1) | 10 |
| Jun |
| 1/30/15 |
| $ | 12.45 |
| $ | 163 |
|
FBC |
| Flagstar Bancorp, Inc. |
| NYSE |
| MW |
| Troy |
| MI |
| 12,519 | (1) | 99 |
| Dec |
| 4/30/97 |
| $ | 17.77 |
| $ | 1,004 |
|
FSBW |
| FS Bancorp, Inc. |
| NASDAQ |
| WE |
| Mountlake Terrace |
| WA |
| 642 | (1) | 12 |
| Dec |
| 7/10/12 |
| $ | 23.81 |
| $ | 77 |
|
GTWN |
| Georgetown Bancorp, Inc. |
| NASDAQ |
| NE |
| Georgetown |
| MA |
| 287 | (1) | 3 |
| Dec |
| 7/12/12 |
| $ | 19.40 |
| $ | 35 |
|
HBK |
| Hamilton Bancorp, Inc. |
| NASDAQ |
| MA |
| Towson |
| MD |
| 364 | (1) | 5 |
| Mar |
| 10/10/12 |
| $ | 14.14 |
| $ | 48 |
|
HIFS |
| Hingham Institution for Savings |
| NASDAQ |
| NE |
| Hingham |
| MA |
| 1,691 | (1) | 13 |
| Dec |
| 12/20/88 |
| $ | 120.02 |
| $ | 255 |
|
HMNF |
| HMN Financial, Inc. |
| NASDAQ |
| MW |
| Rochester |
| MN |
| 619 | (1) | 13 |
| Dec |
| 6/30/94 |
| $ | 11.64 |
| $ | 52 |
|
HFBL |
| Home Federal Bancorp, Inc. of Louisiana |
| NASDAQ |
| SW |
| Shreveport |
| LA |
| 366 | (1) | 6 |
| Jun |
| 12/22/10 |
| $ | 22.40 |
| $ | 46 |
|
HMST |
| HomeStreet, Inc. |
| NASDAQ |
| WE |
| Seattle |
| WA |
| 4,976 | (1) | 46 |
| Dec |
| 2/10/12 |
| $ | 19.43 |
| $ | 477 |
|
IROQ |
| IF Bancorp, Inc. |
| NASDAQ |
| MW |
| Watseka |
| IL |
| 558 | (1) | 6 |
| Jun |
| 7/8/11 |
| $ | 17.46 |
| $ | 70 |
|
ISBC |
| Investors Bancorp, Inc. |
| NASDAQ |
| MA |
| Short Hills |
| NJ |
| 20,331 | (1) | 142 |
| Dec |
| 5/8/14 |
| $ | 11.48 |
| $ | 3,843 |
|
JXSB |
| Jacksonville Bancorp, Inc. |
| NASDAQ |
| MW |
| Jacksonville |
| IL |
| 306 | (1) | 6 |
| Dec |
| 7/15/10 |
| $ | 25.75 |
| $ | 46 |
|
KRNY |
| Kearny Financial Corp. |
| NASDAQ |
| MA |
| Fairfield |
| NJ |
| 4,302 | (1) | 42 |
| Jun |
| 5/19/15 |
| $ | 11.51 |
| $ | 1,077 |
|
LPSB |
| La Porte Bancorp, Inc. |
| NASDAQ |
| MW |
| La Porte |
| IN |
| 545 | (1) | 7 |
| Dec |
| 10/5/12 |
| $ | 14.65 |
| $ | 82 |
|
LSBG |
| Lake Sunapee Bank Group |
| NASDAQ |
| NE |
| Newport |
| NH |
| 1,491 | (1) | 34 |
| Dec |
| 5/27/86 |
| $ | 13.63 |
| $ | 114 |
|
MLVF |
| Malvern Bancorp, Inc. |
| NASDAQ |
| MA |
| Paoli |
| PA |
| 656 | (1) | 8 |
| Sep |
| 10/12/12 |
| $ | 16.80 |
| $ | 110 |
|
MELR |
| Melrose Bancorp, Inc. |
| NASDAQ |
| NE |
| Melrose |
| MA |
| 224 | (1) | 1 |
| Dec |
| 10/22/14 |
| $ | 15.00 |
| $ | 42 |
|
EBSB |
| Meridian Bancorp, Inc. |
| NASDAQ |
| NE |
| Peabody |
| MA |
| 3,376 | (1) | 30 |
| Dec |
| 7/29/14 |
| $ | 13.72 |
| $ | 753 |
|
CASH |
| Meta Financial Group, Inc. |
| NASDAQ |
| MW |
| Sioux Falls |
| SD |
| 2,530 | (1) | 11 |
| Sep |
| 9/20/93 |
| $ | 40.67 |
| $ | 346 |
|
MSBF |
| MSB Financial Corp. |
| NASDAQ |
| MA |
| Millington |
| NJ |
| 371 | (1) | 5 |
| Dec |
| 7/17/15 |
| $ | 12.43 |
| $ | 74 |
|
NYCB |
| New York Community Bancorp, Inc. |
| NYSE |
| MA |
| Westbury |
| NY |
| 49,045 | (1) | 265 |
| Dec |
| 11/23/93 |
| $ | 15.38 |
| $ | 7,458 |
|
NFBK |
| Northfield Bancorp, Inc. |
| NASDAQ |
| MA |
| Woodbridge |
| NJ |
| 3,181 | (1) | 40 |
| Dec |
| 1/25/13 |
| $ | 14.95 |
| $ | 722 |
|
NWBI |
| Northwest Bancshares, Inc. |
| NASDAQ |
| MA |
| Warren |
| PA |
| 8,935 | (1) | 183 |
| Dec |
| 12/18/09 |
| $ | 12.05 |
| $ | 1,228 |
|
Exhibit III-1
Characteristics of Publicly-Traded Thrifts
February 5, 2016
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| As of |
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| February 5, 2016 |
| ||||
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| Total |
|
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| Fiscal |
| Conv. |
| Stock |
| Market |
| ||
Ticker |
| Financial Institution |
| Exchange |
| Region |
| City |
| State |
| Assets |
| Offices |
| Mth End |
| Date |
| Price |
| Value |
| ||
|
|
|
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|
|
|
|
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|
|
| ($Mil) |
|
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| ($) |
| ($Mil) |
| ||
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OSHC |
| Ocean Shore Holding Co. |
| NASDAQ |
| MA |
| Ocean City |
| NJ |
| 1,067 | (1) | 11 |
| Dec |
| 12/21/09 |
| $ | 17.75 |
| $ | 114 |
|
OCFC |
| OceanFirst Financial Corp. |
| NASDAQ |
| MA |
| Toms River |
| NJ |
| 2,558 | (1) | 28 |
| Dec |
| 7/3/96 |
| $ | 16.30 |
| $ | 282 |
|
ORIT |
| Oritani Financial Corp. |
| NASDAQ |
| MA |
| Township of Washington. |
| NJ |
| 3,349 | (1) | 27 |
| Jun |
| 6/24/10 |
| $ | 15.48 |
| $ | 687 |
|
PBHC |
| Pathfinder Bancorp, Inc. |
| NASDAQ |
| MA |
| Oswego |
| NY |
| 607 | (1) | 18 |
| Dec |
| 10/17/14 |
| $ | 12.19 |
| $ | 53 |
|
PBBI |
| PB Bancorp, Inc. |
| NASDAQ |
| NE |
| Putnam |
| CT |
| 469 | (1) | 8 |
| Jun |
| 1/8/16 |
| $ | 8.62 |
| $ | 68 |
|
PBSK |
| Poage Bankshares, Inc. |
| NASDAQ |
| MW |
| Ashland |
| KY |
| 425 | (1) | 9 |
| Dec |
| 9/13/11 |
| $ | 17.28 |
| $ | 68 |
|
PROV |
| Provident Financial Holdings, Inc. |
| NASDAQ |
| WE |
| Riverside |
| CA |
| 1,177 | (1) | 15 |
| Jun |
| 6/28/96 |
| $ | 17.08 |
| $ | 143 |
|
PFS |
| Provident Financial Services, Inc. |
| NYSE |
| MA |
| Iselin |
| NJ |
| 8,859 | (1) | 90 |
| Dec |
| 1/16/03 |
| $ | 18.57 |
| $ | 1,216 |
|
PBIP |
| Prudential Bancorp, Inc. |
| NASDAQ |
| MA |
| Philadelphia |
| PA |
| 487 | (1) | 7 |
| Sep |
| 10/10/13 |
| $ | 15.62 |
| $ | 131 |
|
RVSB |
| Riverview Bancorp, Inc. |
| NASDAQ |
| WE |
| Vancouver |
| WA |
| 896 | (1) | 17 |
| Mar |
| 10/1/97 |
| $ | 4.35 |
| $ | 98 |
|
SVBI |
| Severn Bancorp, Inc. |
| NASDAQ |
| MA |
| Annapolis |
| MD |
| 774 | (1) | 4 |
| Dec |
| 1/0/00 |
| $ | 5.22 |
| $ | 53 |
|
SIFI |
| SI Financial Group, Inc. |
| NASDAQ |
| NE |
| Willimantic |
| CT |
| 1,454 | (1) | 25 |
| Dec |
| 1/13/11 |
| $ | 13.91 |
| $ | 170 |
|
SBCP |
| Sunshine Bancorp, Inc. |
| NASDAQ |
| SE |
| Plant City |
| FL |
| 442 | (1) | 10 |
| Dec |
| 7/15/14 |
| $ | 14.12 |
| $ | 74 |
|
TBNK |
| Territorial Bancorp Inc. |
| NASDAQ |
| WE |
| Honolulu |
| HI |
| 1,784 | (1) | 29 |
| Dec |
| 7/13/09 |
| $ | 25.40 |
| $ | 245 |
|
TSBK |
| Timberland Bancorp, Inc. |
| NASDAQ |
| WE |
| Hoquiam |
| WA |
| 816 | (1) | 22 |
| Sep |
| 1/13/98 |
| $ | 12.39 |
| $ | 87 |
|
TRST |
| TrustCo Bank Corp NY |
| NASDAQ |
| MA |
| Glenville |
| NY |
| 4,726 | (1) | 147 |
| Dec |
| 1/0/00 |
| $ | 5.49 |
| $ | 523 |
|
UCBA |
| United Community Bancorp |
| NASDAQ |
| MW |
| Lawrenceburg |
| IN |
| 520 | (1) | 8 |
| Jun |
| 1/10/13 |
| $ | 13.70 |
| $ | 58 |
|
UCFC |
| United Community Financial Corp. |
| NASDAQ |
| MW |
| Youngstown |
| OH |
| 1,971 | (1) | 31 |
| Dec |
| 7/9/98 |
| $ | 5.71 |
| $ | 271 |
|
UBNK |
| United Financial Bancorp, Inc. |
| NASDAQ |
| NE |
| Glastonbury |
| CT |
| 5,843 | (1) | 54 |
| Dec |
| 3/4/11 |
| $ | 11.25 |
| $ | 562 |
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WSBF |
| Waterstone Financial, Inc. |
| NASDAQ |
| MW |
| Wauwatosa |
| WI |
| 1,745 | (1) | 13 |
| Dec |
| 1/23/14 |
| $ | 13.42 |
| $ | 395 |
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WAYN |
| Wayne Savings Bancshares, Inc. |
| NASDAQ |
| MW |
| Wooster |
| OH |
| 424 | (1) | 12 |
| Dec |
| 1/9/03 |
| $ | 12.85 |
| $ | 36 |
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WEBK |
| Wellesley Bancorp, Inc. |
| NASDAQ |
| NE |
| Wellesley |
| MA |
| 590 | (1) | 5 |
| Dec |
| 1/26/12 |
| $ | 18.42 |
| $ | 45 |
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WBB |
| Westbury Bancorp, Inc. |
| NASDAQ |
| MW |
| West Bend |
| WI |
| 639 | (1) | 9 |
| Sep |
| 4/10/13 |
| $ | 18.70 |
| $ | 79 |
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WFD |
| Westfield Financial, Inc. |
| NASDAQ |
| NE |
| Westfield |
| MA |
| 1,357 | (1) | 14 |
| Dec |
| 1/4/07 |
| $ | 7.84 |
| $ | 143 |
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WBKC |
| Wolverine Bancorp, Inc. |
| NASDAQ |
| MW |
| Midland |
| MI |
| 344 | (1) | 3 |
| Dec |
| 1/20/11 |
| $ | 25.50 |
| $ | 56 |
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WSFS |
| WSFS Financial Corporation |
| NASDAQ |
| MA |
| Wilmington |
| DE |
| 5,068 | (1) | 54 |
| Dec |
| 11/26/86 |
| $ | 27.88 |
| $ | 830 |
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WVFC |
| WVS Financial Corp. |
| NASDAQ |
| MA |
| Pittsburgh |
| PA |
| 334 | (1) | 6 |
| Jun |
| 11/29/93 |
| $ | 11.58 |
| $ | 24 |
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GCBC |
| Greene County Bancorp, Inc. (MHC) |
| NASDAQ |
| MA |
| Catskill |
| NY |
| 768 | (1) | 15 |
| Jun |
| 12/30/98 |
| $ | 31.00 |
| $ | 131 |
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KFFB |
| Kentucky First Federal Bancorp (MHC) |
| NASDAQ |
| MW |
| Frankfort |
| KY |
| 296 | (1) | 7 |
| Jun |
| 3/3/05 |
| $ | 9.17 |
| $ | 77 |
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LSBK |
| Lake Shore Bancorp, Inc. (MHC) |
| NASDAQ |
| MA |
| Dunkirk |
| NY |
| 472 | (1) | 11 |
| Dec |
| 4/4/06 |
| $ | 13.40 |
| $ | 80 |
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MGYR |
| Magyar Bancorp, Inc. (MHC) |
| NASDAQ |
| MA |
| New Brunswick |
| NJ |
| 551 | (1) | 6 |
| Sep |
| 1/24/06 |
| $ | 9.75 |
| $ | 57 |
|
OFED |
| Oconee Federal Financial Corp. (MHC) |
| NASDAQ |
| SE |
| Seneca |
| SC |
| 469 | (1) | 7 |
| Jun |
| 1/14/11 |
| $ | 19.40 |
| $ | 114 |
|
PVBC |
| Provident Bancorp, Inc. (MHC) |
| NASDAQ |
| NE |
| Amesbury |
| MA |
| 699 | (1) | 8 |
| Dec |
| 7/16/15 |
| $ | 13.01 |
| $ | 124 |
|
TFSL |
| TFS Financial Corporation (MHC) |
| NASDAQ |
| MW |
| Cleveland |
| OH |
| 12,369 | (1) | 38 |
| Sep |
| 4/23/07 |
| $ | 16.33 |
| $ | 4,723 |
|
(1) As of September 30, 2015.
Source: SNL Financial, LC.
EXHIBIT III-2
Public Market Pricing of Northeast Thrift Institutions
Exhibit III-2
Public Market Pricing
Northeast Companies
As of February 5, 2016
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| Per Share Data |
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| Capitalization |
| Core |
| Book |
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| Dividends(3) |
| Financial Characteristics(5) |
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| Market |
| 12 Month |
| Value/ |
| Pricing Ratios(2) |
| Amount/ |
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| Total |
| Equity/ |
| Tang. Eq./ |
| NPAs/ |
| Reported |
| Core |
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| Value |
| EPS(1) |
| Share |
| P/E |
| P/B |
| P/A |
| P/TB |
| P/Core |
| Share |
| Yield |
| Ratio(4) |
| Assets |
| Assets |
| T. Assets |
| Assets |
| ROAA |
| ROAE |
| ROAA |
| ROAE |
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| ($Mil) |
| ($) |
| ($) |
| (x) |
| (%) |
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| (%) |
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| (%) |
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All Non-MHC Public Companies(6) |
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Averages |
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| $ | 16.39 |
| $ | 435.84 |
| $ | 1.06 |
| $ | 15.16 |
| 17.93x |
| 104.85 | % | 13.38 | % | 113.19 | % | 18.53x |
| $ | 0.29 |
| 1.79 | % | 44.94 | % | $ | 3,109 |
| 13.51 | % | 12.79 | % | 1.46 | % | 0.74 | % | 6.05 | % | 0.77 | % | 6.24 | % | |
Median |
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| $ | 14.01 |
| $ | 122.65 |
| $ | 0.74 |
| $ | 14.38 |
| 16.55x |
| 102.61 | % | 12.65 | % | 107.14 | % | 17.41x |
| $ | 0.24 |
| 1.53 | % | 41.38 | % | $ | 984 |
| 12.29 | % | 11.79 | % | 1.10 | % | 0.70 | % | 5.40 | % | 0.68 | % | 5.22 | % | |
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Northeast Non-MHC Public Companies(6) |
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Averages |
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| $ | 21.57 |
| $ | 212.50 |
| $ | 1.21 |
| $ | 17.39 |
| 20.91x |
| 109.85 | % | 12.80 | % | 117.48 | % | 22.73x |
| $ | 0.31 |
| 1.65 | % | 39.80 | % | $ | 1,623 |
| 12.16 | % | 11.59 | % | 0.89 | % | 0.47 | % | 4.37 | % | 0.48 | % | 4.45 | % | |
Medians |
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| $ | 13.91 |
| $ | 143.30 |
| $ | 0.46 |
| $ | 15.30 |
| 21.04x |
| 104.77 | % | 11.70 | % | 111.19 | % | 22.56x |
| $ | 0.18 |
| 1.16 | % | 31.43 | % | $ | 1,454 |
| 10.64 | % | 9.76 | % | 0.84 | % | 0.42 | % | 4.25 | % | 0.40 | % | 3.53 | % | |
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Northeast Non-MHC Public Companies |
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BHBK | Blue Hills Bancorp, Inc. |
| MA |
| $ | 13.82 |
| $ | 393.77 |
| $ | 0.26 |
| $ | 14.48 |
| NM |
| 98.73 | % | 18.62 | % | 101.74 | % | NM |
| $ | 0.08 |
| 0.58 | % | 14.29 | % | $ | 1,934 |
| 21.07 | % | 20.57 | % | 0.27 | % | 0.42 | % | 1.83 | % | 0.40 | % | 1.71 | % |
BLMT | BSB Bancorp, Inc. |
| MA |
| $ | 21.38 |
| $ | 194.30 |
| NA |
| $ | 15.80 |
| 30.11x |
| 135.31 | % | 11.48 | % | 135.31 | % | NM |
| NA |
| NA |
| NM |
| $ | 1,692 |
| 8.48 | % | 8.48 | % | 0.58 | % | 0.42 | % | 4.45 | % | NA |
| NA |
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CBNK | Chicopee Bancorp, Inc. |
| MA |
| $ | 17.98 |
| $ | 93.69 |
| $ | 0.46 |
| $ | 16.98 |
| 29.97x |
| 104.95 | % | 13.81 | % | 104.95 | % | 29.97x |
| $ | 0.36 |
| 2.00 | % | 53.33 | % | $ | 695 |
| 12.73 | % | 12.73 | % | 1.18 | % | 0.36 | % | 2.61 | % | 0.36 | % | 2.61 | % |
CWAY | Coastway Bancorp, Inc. |
| RI |
| $ | 12.29 |
| $ | 59.73 |
| $ | 0.28 |
| $ | 14.53 |
| NM |
| 84.60 | % | 11.33 | % | 84.60 | % | NM |
| NA |
| NA |
| NM |
| $ | 528 |
| 13.39 | % | 13.39 | % | 2.31 | % | 0.26 | % | 1.75 | % | 0.26 | % | 1.75 | % | |
FBNK | First Connecticut Bancorp, Inc. |
| CT |
| $ | 16.21 |
| $ | 257.44 |
| $ | 0.82 |
| $ | 15.30 |
| 19.53x |
| 104.77 | % | 9.50 | % | 104.77 | % | 21.66x |
| $ | 0.24 |
| 1.48 | % | 26.51 | % | $ | 2,708 |
| 8.98 | % | 8.98 | % | 1.26 | % | 0.52 | % | 5.57 | % | 0.48 | % | 5.16 | % |
GTWN | Georgetown Bancorp, Inc. |
| MA |
| $ | 19.40 |
| $ | 35.47 |
| $ | 0.84 |
| $ | 17.24 |
| 22.56x |
| 111.19 | % | 11.98 | % | 111.19 | % | 22.56x |
| $ | 0.19 |
| 0.98 | % | 22.09 | % | $ | 287 |
| 10.97 | % | 10.97 | % | NA |
| 0.54 | % | 4.88 | % | 0.54 | % | 4.88 | % |
HIFS | Hingham Institution for Savings |
| MA |
| $ | 120.02 |
| $ | 255.49 |
| $ | 8.69 |
| $ | 62.94 |
| 13.31x |
| 185.12 | % | 14.45 | % | 185.12 | % | 13.32x |
| $ | 1.20 |
| 1.00 | % | 16.19 | % | $ | 1,691 |
| 7.92 | % | 7.92 | % | 0.40 | % | 1.17 | % | 14.72 | % | 1.17 | % | 14.71 | % |
LSBG | Lake Sunapee Bank Group |
| NH |
| $ | 13.63 |
| $ | 114.18 |
| $ | 1.24 |
| $ | 16.30 |
| 12.62x |
| 83.52 | % | 7.52 | % | 135.42 | % | NM |
| $ | 0.56 |
| 4.11 | % | 50.93 | % | $ | 1,491 |
| 9.67 | % | 6.36 | % | 0.88 | % | 0.65 | % | 6.79 | % | 0.69 | % | 7.24 | % |
MELR | Melrose Bancorp, Inc. |
| MA |
| $ | 15.00 |
| $ | 42.44 |
| NA |
| $ | 16.23 |
| NM |
| 92.45 | % | 18.98 | % | 92.45 | % | NM |
| NA |
| NA |
| NM |
| $ | 224 |
| 20.53 | % | 20.53 | % | 0.13 | % | -0.09 | % | -0.44 | % | 0.00 | % | -0.02 | % | ||
EBSB | Meridian Bancorp, Inc. |
| MA |
| $ | 13.72 |
| $ | 752.89 |
| $ | 0.40 |
| $ | 10.71 |
| 29.83x |
| 128.01 | % | 21.36 | % | 131.06 | % | 31.87x |
| $ | 0.12 |
| 0.87 | % | 13.04 | % | $ | 3,376 |
| 17.27 | % | 16.94 | % | 1.47 | % | 0.72 | % | 4.07 | % | 0.64 | % | 3.59 | % |
PBBI | PB Bancorp, Inc. |
| CT |
| $ | 8.62 |
| $ | 67.93 |
| $ | 0.09 |
| $ | 6.67 |
| NM |
| 129.17 | % | 14.32 | % | 148.98 | % | NM |
| $ | 0.10 |
| 1.16 | % | 139.77 | % | $ | 469 |
| 11.09 | % | 9.76 | % | NA |
| 0.14 | % | 1.26 | % | 0.15 | % | 1.37 | % |
SIFI | SI Financial Group, Inc. |
| CT |
| $ | 13.91 |
| $ | 169.96 |
| $ | 0.36 |
| $ | 12.60 |
| NM |
| 110.43 | % | 11.70 | % | 125.27 | % | NM |
| $ | 0.16 |
| 1.15 | % | 47.06 | % | $ | 1,454 |
| 10.59 | % | 9.46 | % | 0.85 | % | 0.31 | % | 2.75 | % | 0.33 | % | 2.94 | % |
UBNK | United Financial Bancorp, Inc. |
| CT |
| $ | 11.25 |
| $ | 561.62 |
| $ | 1.08 |
| $ | 12.55 |
| 11.25x |
| 89.78 | % | 9.02 | % | 111.71 | % | 10.51x |
| $ | 0.48 |
| 4.27 | % | 48.00 | % | $ | 5,843 |
| 10.64 | % | 8.71 | % | 0.83 | % | 0.74 | % | 6.68 | % | 0.96 | % | 8.61 | % |
WEBK | Wellesley Bancorp, Inc. |
| MA |
| $ | 18.42 |
| $ | 45.36 |
| $ | 0.93 |
| $ | 20.90 |
| 16.16x |
| 86.93 | % | 7.30 | % | 86.93 | % | NM |
| $ | 0.12 |
| 0.65 | % | 10.09 | % | $ | 590 |
| 8.72 | % | 8.72 | % | NA |
| 0.40 | % | 4.37 | % | 0.40 | % | 4.33 | % |
WFD | Westfield Financial, Inc. |
| MA |
| $ | 7.84 |
| $ | 143.30 |
| $ | 0.28 |
| $ | 7.59 |
| 23.76x |
| 102.75 | % | 10.69 | % | 102.75 | % | 29.19x |
| $ | 0.12 |
| 1.53 | % | 36.36 | % | $ | 1,357 |
| 10.29 | % | 10.29 | % | 0.57 | % | 0.45 | % | 4.25 | % | 0.36 | % | 3.47 | % |
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Northeast MHCs |
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PVBC | Provident Bancorp, Inc. (MHC) |
| MA |
| $ | 13.01 |
| $ | 123.58 |
| NA |
| $ | 10.51 |
| NM |
| 121.86 | % | 16.62 | % | 121.86 | % | NM |
| NA |
| NA |
| NM |
| $ | 699 |
| 16.74 | % | 16.74 | % | NA |
| NA |
| 4.05 | % | NA |
| 5.48 | % |
(1) Core income, on a diluted per-share basis. Core income is net income after taxes and before extraordinary items, less net income attributable to noncontrolling interest, gain on the sale of securities, amortization of intangibles, goodwill and nonrecurring items. Assumed tax rate is 35%.
(2) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB = Price to tangible book value; and P/Core = Price to core earnings. P/E and P/Core =NM if the ratio is negative or above 35x.
(3) Indicated 12 month dividend, based on last quarterly dividend declared.
(4) Indicated 12 month dividend as a percent of trailing 12 month earnings.
(5) ROAA (return on average assets) and ROAE (return on average equity) are indicated ratios based on trailing 12 month earnings and average equity and assets balances.
(6) Excludes from averages and medians those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.
Source: SNL Financial, LC. and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2015 by RP® Financial, LC.
EXHIBIT III-3
Public Market Pricing of Mid-Atlantic Thrift Institutions
Exhibit III-3
Public Market Pricing
Mid-Atlantic Companies
As of February 5, 2016
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| Per Share Data |
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| Capitalization |
| Core |
| Book |
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| Dividends(3) |
| Financial Characteristics(5) |
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| Price/ |
| Market |
| 12 Month |
| Value/ |
| Pricing Ratios(2) |
| Amount/ |
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| Payout |
| Total |
| Equity/ |
| Tang. Eq./ |
| NPAs/ |
| Reported |
| Core |
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| Share |
| Value |
| EPS(1) |
| Share |
| P/E |
| P/B |
| P/A |
| P/TB |
| P/Core |
| Share |
| Yield |
| Ratio(4) |
| Assets |
| Assets |
| T. Assets |
| Assets |
| ROAA |
| ROAE |
| ROAA |
| ROAE |
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| ($) |
| ($Mil) |
| ($) |
| ($) |
| (x) |
| (%) |
| (%) |
| (%) |
| (x) |
| ($) |
| (%) |
| (%) |
| ($Mil) |
| (%) |
| (%) |
| (%) |
| (%) |
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All Non-MHC Public Companies(6) |
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Averages |
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| $ | 16.39 |
| $ | 435.84 |
| $ | 1.06 |
| $ | 15.16 |
| 17.93x |
| 104.85 | % | 13.38 | % | 113.19 | % | 18.53x |
| $ | 0.29 |
| 1.79 | % | 44.94 | % | $ | 3,109 |
| 13.51 | % | 12.79 | % | 1.46 | % | 0.74 | % | 6.05 | % | 0.77 | % | 6.24 | % | ||
Median |
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| $ | 14.01 |
| $ | 122.65 |
| $ | 0.74 |
| $ | 14.38 |
| 16.55x |
| 102.61 | % | 12.65 | % | 107.14 | % | 17.41x |
| $ | 0.24 |
| 1.53 | % | 41.38 | % | $ | 984 |
| 12.29 | % | 11.79 | % | 1.10 | % | 0.70 | % | 5.40 | % | 0.68 | % | 5.22 | % | ||
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Mid-Atlantic Non-MHC Public Companies(6) |
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Averages |
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| $ | 13.48 |
| $ | 829.37 |
| $ | 0.65 |
| $ | 12.58 |
| 18.26x |
| 107.08 | % | 14.31 | % | 120.32 | % | 18.05x |
| $ | 0.31 |
| 2.14 | % | 54.70 | % | $ | 5,164 |
| 14.57 | % | 13.58 | % | 1.42 | % | 0.65 | % | 5.17 | % | 0.63 | % | 5.11 | % | ||
Medians |
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| $ | 13.88 |
| $ | 281.77 |
| $ | 0.53 |
| $ | 13.11 |
| 15.85x |
| 105.54 | % | 13.65 | % | 116.71 | % | 16.22x |
| $ | 0.24 |
| 1.73 | % | 49.62 | % | $ | 1,607 |
| 12.41 | % | 11.03 | % | 1.05 | % | 0.64 | % | 5.14 | % | 0.65 | % | 5.17 | % | ||
Mid-Atlantic Non-MHC Public Companies |
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BYBK | Bay Bancorp, Inc. |
| MD |
| $ | 4.80 |
| $ | 53.03 |
| $ | 0.30 |
| $ | 6.05 |
| 28.24x |
| 78.34 | % | 10.80 | % | 81.50 | % | 23.58x |
| $ | 0.00 |
| 0.00 | % | NM |
| $ | 474 |
| 14.10 | % | 13.59 | % | 2.00 | % | 0.55 | % | 3.98 | % | 0.67 | % | 4.82 | % | |
BNCL | Beneficial Bancorp, Inc. |
| PA |
| $ | 12.53 |
| $ | 1,038.92 |
| $ | 0.31 |
| $ | 13.42 |
| NM |
| 93.35 | % | NA |
| 105.38 | % | NM |
| NA |
| NA |
| NM |
| $ | 4,728 |
| 23.51 | % | 21.40 | % | 0.30 | % | 0.48 | % | 2.41 | % | 0.52 | % | 2.60 | % | ||
CARV | Carver Bancorp, Inc. |
| NY |
| $ | 3.19 |
| $ | 11.79 |
| $ | 0.05 |
| $ | 2.73 |
| NM |
| 116.71 | % | 1.70 | % | 116.71 | % | NM |
| $ | 0.00 |
| 0.00 | % | NM |
| $ | 737 |
| 7.50 | % | 7.50 | % | 2.62 | % | -0.02 | % | -0.28 | % | 0.00 | % | -0.01 | % | |
CSBK | Clifton Bancorp Inc. |
| NJ |
| $ | 13.88 |
| $ | 344.76 |
| $ | 0.27 |
| $ | 13.14 |
| NM |
| 105.54 | % | 30.18 | % | 105.54 | % | NM |
| $ | 0.24 |
| 1.73 | % | 77.42 | % | $ | 1,154 |
| 29.32 | % | 29.32 | % | 0.44 | % | 0.73 | % | 2.42 | % | 0.58 | % | 1.92 | % | |
DCOM | Dime Community Bancshares, Inc. |
| NY |
| $ | 16.42 |
| $ | 613.65 |
| $ | 1.15 |
| $ | 13.01 |
| 13.35x |
| 124.23 | % | 12.19 | % | 140.00 | % | 14.34x |
| $ | 0.56 |
| 3.41 | % | 45.53 | % | $ | 4,832 |
| 10.01 | % | 8.96 | % | 0.25 | % | 1.00 | % | 9.68 | % | 0.92 | % | 8.88 | % | |
ESBK | Elmira Savings Bank |
| NY |
| $ | 18.11 |
| $ | 49.30 |
| $ | 1.11 |
| $ | 16.49 |
| 15.48x |
| 109.52 | % | 8.94 | % | 151.07 | % | 16.22x |
| $ | 0.92 |
| 5.08 | % | 78.63 | % | $ | 566 |
| 9.65 | % | 7.63 | % | 0.80 | % | 0.74 | % | 7.41 | % | 0.71 | % | 7.16 | % | |
ESSA | ESSA Bancorp, Inc. |
| PA |
| $ | 13.34 |
| $ | 151.15 |
| $ | 0.94 |
| $ | 15.09 |
| 15.33x |
| 88.90 | % | 8.57 | % | 98.69 | % | 14.92x |
| $ | 0.36 |
| 2.70 | % | 41.38 | % | $ | 1,607 |
| 10.66 | % | 9.99 | % | 1.53 | % | 0.62 | % | 5.68 | % | 0.62 | % | 5.73 | % | |
HBK | Hamilton Bancorp, Inc. |
| MD |
| $ | 14.14 |
| $ | 48.33 |
| $ | (0.01 | ) | $ | 17.84 |
| NM |
| 79.27 | % | NA |
| 89.76 | % | NM |
| NA |
| NA |
| NM |
| $ | 364 |
| 16.76 | % | 15.09 | % | 2.40 | % | -0.05 | % | -0.25 | % | 0.00 | % | -0.01 | % | ||
ISBC | Investors Bancorp, Inc. |
| NJ |
| $ | 11.48 |
| $ | 3,842.91 |
| $ | 0.53 |
| $ | 9.87 |
| 20.86x |
| 116.04 | % | 18.40 | % | 119.45 | % | 20.94x |
| $ | 0.24 |
| 2.09 | % | 38.18 | % | $ | 20,331 |
| 16.54 | % | 16.17 | % | 0.77 | % | 0.93 | % | 5.14 | % | 0.94 | % | 5.17 | % | |
KRNY | Kearny Financial Corp. |
| NJ |
| $ | 11.51 |
| $ | 1,076.51 |
| $ | 0.12 |
| $ | 12.44 |
| NM |
| 92.29 | % | 24.44 | % | 102.09 | % | NM |
| $ | 0.08 |
| 0.70 | % | 54.45 | % | $ | 4,302 |
| 27.05 | % | 25.15 | % | 0.61 | % | 0.15 | % | 0.76 | % | 0.29 | % | 1.53 | % | |
MLVF | Malvern Bancorp, Inc. |
| PA |
| $ | 16.80 |
| $ | 110.18 |
| $ | 0.53 |
| $ | 12.41 |
| 22.70x |
| 133.30 | % | 15.15 | % | 133.30 | % | 24.83x |
| $ | 0.11 |
| 0.00 | % | NM |
| $ | 656 |
| 12.41 | % | 12.41 | % | 0.56 | % | 0.60 | % | 4.65 | % | 0.54 | % | 4.23 | % | |
MSBF | MSB Financial Corp. |
| NJ |
| $ | 12.43 |
| $ | 74.01 |
| $ | 0.07 |
| $ | 12.82 |
| NM |
| 96.93 | % | 19.96 | % | 96.93 | % | NM |
| $ | 0.00 |
| 0.00 | % | NM |
| $ | 371 |
| 20.59 | % | 20.59 | % | 4.87 | % | 0.12 | % | 0.95 | % | 0.12 | % | 0.95 | % | |
NYCB | New York Community Bancorp, Inc. |
| NY |
| $ | 15.38 |
| $ | 7,458.43 |
| $ | 1.10 |
| $ | 13.11 |
| NM |
| 125.67 | % | 14.82 | % | 213.34 | % | 12.16x |
| $ | 0.68 |
| 4.42 | % | NM |
| $ | 49,045 |
| 11.88 | % | 7.27 | % | 0.18 | % | 1.00 | % | 8.42 | % | 1.00 | % | 8.38 | % | |
NFBK | Northfield Bancorp, Inc. |
| NJ |
| $ | 14.95 |
| $ | 721.68 |
| $ | 0.44 |
| $ | 12.25 |
| 33.22x |
| 121.69 | % | 21.27 | % | 125.35 | % | 32.33x |
| $ | 0.28 |
| 1.87 | % | 62.22 | % | $ | 3,181 |
| 17.54 | % | 17.12 | % | 1.16 | % | 0.62 | % | 3.24 | % | 0.63 | % | 3.29 | % | |
NWBI | Northwest Bancshares, Inc. |
| PA |
| $ | 12.05 |
| $ | 1,227.55 |
| $ | 0.73 |
| $ | 11.42 |
| 18.83x |
| 105.54 | % | 13.71 | % | 137.55 | % | 16.94x |
| $ | 0.60 |
| 4.98 | % | 89.06 | % | $ | 8,935 |
| 13.00 | % | 10.28 | % | 1.17 | % | 0.77 | % | 5.71 | % | 0.84 | % | 6.24 | % | |
OSHC | Ocean Shore Holding Co. |
| NJ |
| $ | 17.75 |
| $ | 113.65 |
| $ | 1.12 |
| $ | 17.29 |
| 15.85x |
| 101.67 | % | 10.89 | % | 107.62 | % | 15.85x |
| $ | 0.24 |
| 1.35 | % | 21.43 | % | $ | 1,067 |
| 10.37 | % | 9.94 | % | 1.05 | % | 0.64 | % | 6.28 | % | 0.65 | % | 6.36 | % | |
OCFC | OceanFirst Financial Corp. |
| NJ |
| $ | 16.30 |
| $ | 281.77 |
| $ | 1.24 |
| $ | 13.58 |
| 13.47x |
| 118.17 | % | 10.87 | % | 119.21 | % | 12.70x |
| $ | 0.52 |
| 3.19 | % | 42.98 | % | $ | 2,558 |
| 9.18 | % | 9.10 | % | 2.13 | % | 0.83 | % | 8.97 | % | 0.86 | % | 9.22 | % | |
ORIT | Oritani Financial Corp. |
| NJ |
| $ | 15.48 |
| $ | 687.28 |
| $ | 0.90 |
| $ | 11.88 |
| 12.00x |
| 132.59 | % | 19.56 | % | 132.59 | % | 24.13x |
| $ | 0.70 |
| 4.52 | % | 93.02 | % | $ | 3,349 |
| 15.60 | % | 15.60 | % | 0.42 | % | 1.49 | % | 9.51 | % | 1.16 | % | 7.41 | % | |
PBHC | Pathfinder Bancorp, Inc. |
| NY |
| $ | 12.19 |
| $ | 53.05 |
| $ | 0.57 |
| $ | 13.27 |
| 18.47x |
| 91.78 | % | 8.70 | % | 100.00 | % | 21.55x |
| $ | 0.20 |
| 1.64 | % | 24.24 | % | $ | 607 |
| 11.72 | % | 11.03 | % | 1.26 | % | 0.51 | % | 4.30 | % | 0.44 | % | 3.71 | % | |
PFS | Provident Financial Services, Inc. |
| NJ |
| $ | 18.57 |
| $ | 1,216.14 |
| $ | 1.38 |
| $ | 18.11 |
| 13.96x |
| 101.68 | % | 13.65 | % | 160.61 | % | 13.99x |
| $ | 0.68 |
| 3.66 | % | 49.62 | % | $ | 8,859 |
| 13.37 | % | 8.97 | % | 1.10 | % | 0.97 | % | 7.17 | % | 1.00 | % | 7.41 | % | |
PBIP | Prudential Bancorp, Inc. |
| PA |
| $ | 15.62 |
| $ | 131.12 |
| $ | 0.10 |
| $ | 13.85 |
| NM |
| 113.11 | % | 25.08 | % | 113.11 | % | NM |
| $ | 0.12 |
| 0.77 | % | 112.50 | % | $ | 487 |
| 24.02 | % | 24.02 | % | 3.51 | % | 0.43 | % | 1.78 | % | 0.17 | % | 0.71 | % | |
SVBI | Severn Bancorp, Inc. |
| MD |
| $ | 5.22 |
| $ | 52.65 |
| $ | 0.26 |
| $ | 5.87 |
| 24.86x |
| 88.03 | % | 7.16 | % | 88.52 | % | NM |
| $ | 0.00 |
| 0.00 | % | NM |
| $ | 774 |
| 11.10 | % | 11.06 | % | 4.54 | % | 0.65 | % | 5.98 | % | 0.65 | % | 5.98 | % | |
TRST | TrustCo Bank Corp NY |
| NY |
| $ | 5.49 |
| $ | 522.99 |
| $ | 0.45 |
| $ | 4.33 |
| 12.36x |
| 126.54 | % | 11.05 | % | 126.71 | % | 12.41x |
| $ | 0.26 |
| 4.78 | % | 59.12 | % | $ | 4,726 |
| 8.72 | % | 8.71 | % | 1.04 | % | 0.91 | % | 10.65 | % | 0.90 | % | 10.56 | % | |
WSFS | WSFS Financial Corporation |
| DE |
| $ | 27.88 |
| $ | 829.79 |
| $ | 1.95 |
| $ | 18.46 |
| 15.07x |
| 142.95 | % | 14.85 | % | 169.79 | % | 13.59x |
| $ | 0.24 |
| 0.86 | % | 11.89 | % | $ | 5,068 |
| 9.98 | % | 8.97 | % | 0.81 | % | 1.07 | % | 10.43 | % | 1.14 | % | 11.17 | % | |
WVFC | WVS Financial Corp. |
| PA |
| $ | 11.58 |
| $ | 23.62 |
| $ | 0.70 |
| $ | 15.85 |
| 16.31x |
| 73.06 | % | 7.15 | % | 73.06 | % | 16.31x |
| $ | 0.16 |
| 1.38 | % | 28.17 | % | $ | 334 |
| 9.67 | % | 9.67 | % | 0.08 | % | 0.43 | % | 4.25 | % | 0.43 | % | 4.25 | % | |
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GCBC | Greene County Bancorp, Inc. (MHC) |
| NY |
| $ | 31.00 |
| $ | 131.10 |
| $ | 1.81 |
| $ | 16.28 |
| 16.23x |
| 185.30 | % | 16.45 | % | 185.30 | % | 16.23x |
| $ | 0.74 |
| 2.39 | % | 38.48 | % | $ | 768 |
| 8.96 | % | 8.96 | % | 0.78 | % | 1.05 | % | 11.51 | % | 1.06 | % | 11.67 | % | |
LSBK | Lake Shore Bancorp, Inc. (MHC) |
| NY |
| $ | 13.40 |
| $ | 80.12 |
| $ | 0.50 |
| $ | 12.27 |
| 23.93x |
| 109.21 | % | NA |
| 109.21 | % | 27.09x |
| $ | 0.28 |
| 2.09 | % | 37.50 | % | $ | 472 |
| 15.53 | % | 15.53 | % | 1.28 | % | 0.68 | % | 4.57 | % | 0.60 | % | 4.03 | % | |
MGYR | Magyar Bancorp, Inc. (MHC) |
| NJ |
| $ | 9.75 |
| $ | 56.74 |
| $ | 0.16 |
| $ | 8.02 |
| NM |
| 121.05 | % | 9.93 | % | 121.05 | % | NM |
| NA |
| NA |
| NM |
| $ | 551 |
| 8.48 | % | 8.48 | % | 4.14 | % | 0.17 | % | 1.91 | % | 0.18 | % | 2.04 | % | ||
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Mid-Atlantic Companies Under Acquisition |
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AF | Astoria Financial Corporation |
| NY |
| $ | 15.12 |
| $ | 1,522.91 |
| $ | 88.00 |
| $ | 15.06 |
| 19.14x |
| 99.30 | % | 10.19 | % | 112.93 | % | 18.54x |
| $ | 0.16 |
| 1.06 | % | 20.25 | % | $ | 15,099 |
| 10.91 | % | 9.80 | % | 1.68 | % | 0.60 | % | 5.78 | % | 0.60 | % | 5.77 | % | |
CBNJ | Cape Bancorp, Inc. |
| NJ |
| $ | 12.47 |
| $ | 168.85 |
| $ | 22.00 |
| $ | 12.45 |
| 12.99x |
| 100.28 | % | 10.54 | % | 117.36 | % | 17.22x |
| $ | 0.40 |
| 3.21 | % | 37.50 | % | $ | 1,563 |
| 10.85 | % | 9.41 | % | 1.07 | % | 0.85 | % | 7.16 | % | 0.63 | % | 5.28 | % | |
FXCB | Fox Chase Bancorp, Inc. |
| PA |
| $ | 19.13 |
| $ | 225.11 |
| $ | 10.00 |
| $ | 15.18 |
| 22.51x |
| 127.24 | % | 20.00 | % | 127.24 | % | 20.10x |
| $ | 0.56 |
| 2.93 | % | 82.35 | % | $ | 1,099 |
| 16.02 | % | 16.02 | % | 1.11 | % | 0.91 | % | 5.62 | % | 0.97 | % | 5.98 | % | |
(1) Core income, on a diluted per-share basis. Core income is net income after taxes and before extraordinary items, less net income attributable to noncontrolling interest, gain on the sale of securities, amortization of intangibles, goodwill and nonrecurring items. Assumed tax rate is 35%.
(2) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB = Price to tangible book value; and P/Core = Price to core earnings. P/E and P/Core =NM if the ratio is negative or above 35x.
(3) Indicated 12 month dividend, based on last quarterly dividend declared.
(4) Indicated 12 month dividend as a percent of trailing 12 month earnings.
(5) ROAA (return on average assets) and ROAE (return on average equity) are indicated ratios based on trailing 12 month earnings and average equity and assets balances.
(6) Excludes from averages and medians those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.
Source: SNL Financial, LC. and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2015 by RP® Financial, LC.
EXHIBIT III-4
Peer Group Market Area Comparative Analysis
Exhibit III-4
Peer Group Market Area Comparative Analysis
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| Deposit |
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| 2010-2015 |
| 2015-2021 |
| 2015 |
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| Market |
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Institution |
| County |
| 2010 |
| 2015 |
| 2021 |
| % Change |
| % Change |
| Amount |
| Average |
| Share(1) |
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BSB Bancorp, Inc. - MA |
| Middlesex |
| 1,503,085 |
| 1,575,748 |
| 1,663,792 |
| 0.9 | % | 0.9 | % | 45,380 |
| 120.7 | % | 2.22 | % |
Blue Hills Bancorp, Inc. - MA |
| Suffolk |
| 722,023 |
| 770,158 |
| 823,432 |
| 1.3 | % | 1.1 | % | 33,537 |
| 89.2 | % | 0.82 | % |
Clifton Bancorp, Inc. - NJ |
| Passaic |
| 501,226 |
| 507,449 |
| 521,471 |
| 0.2 | % | 0.5 | % | 28,358 |
| 78.3 | % | 4.18 | % |
ESSA Bancorp, Inc. - PA |
| Monroe |
| 169,842 |
| 165,381 |
| 162,062 |
| -0.5 | % | -0.3 | % | 26,193 |
| 88.1 | % | 31.04 | % |
First Connecticut Bancorp, Inc. - CT |
| Hartford |
| 894,014 |
| 899,669 |
| 902,795 |
| 0.1 | % | 0.1 | % | 35,061 |
| 91.9 | % | 5.34 | % |
Meridian Bancorp, Inc. - MA |
| Essex |
| 743,159 |
| 771,527 |
| 807,716 |
| 0.8 | % | 0.8 | % | 37,377 |
| 99.4 | % | 3.50 | % |
Ocean First Financial Corp. - NJ |
| Ocean |
| 576,567 |
| 586,602 |
| 603,372 |
| 0.3 | % | 0.5 | % | 30,761 |
| 84.9 | % | 9.98 | % |
Ocean Shore Holding Co. - NJ |
| Cape May |
| 97,265 |
| 95,231 |
| 93,575 |
| -0.4 | % | -0.3 | % | 33,865 |
| 93.5 | % | 9.33 | % |
SI Financial Group, Inc. - CT |
| Windham |
| 118,428 |
| 117,113 |
| 115,104 |
| -0.2 | % | -0.3 | % | 28,850 |
| 75.6 | % | 21.83 | % |
Westfield Financial Inc. - MA |
| Hampden |
| 463,490 |
| 468,898 |
| 478,116 |
| 0.2 | % | 0.3 | % | 27,947 |
| 74.3 | % | 9.26 | % |
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| 578,910 |
| 595,778 |
| 617,144 |
| 0.3 | % | 0.3 | % | 32,733 |
| 89.6 | % | 9.75 | % |
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| 538,897 |
| 547,026 |
| 562,422 |
| 0.2 | % | 0.4 | % | 32,149 |
| 88.6 | % | 7.30 | % |
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HarborOne Bank - MA |
| Plymouth |
| 494,919 |
| 505,606 |
| 529,058 |
| 0.4 | % | 0.8 | % | 36,479 |
| 97.0 | % | 11.32 | % |
(1) Total institution deposits in headquarters county as percent of total county deposits as of June 30, 2015.
Sources: SNL Financial, LC.
EXHIBIT IV-1
Stock Prices:
As of February 5, 2016
Exhibit IV-1A
Weekly Thrift Market Line - Part One
Prices As of February 6, 2016
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| Price Change Data |
| Current Per Share Financials |
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Companies |
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| Outstanding |
| Capitalization |
| High |
| Low |
| Last Wk |
| Last Wk |
| 52 Wks (2) |
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| EPS (3) |
| EPS (3) |
| Share |
| Share (4) |
| Share |
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| ($Mil) |
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ANCB |
| Anchor Bancorp |
| WA |
| 24.17 |
| 2,521 |
| 60.9 |
| 26.94 |
| 20.40 |
| 24.46 |
| -1.19 |
| 8.90 |
| -6.64 |
| 4.06 |
| 4.15 |
| 25.22 |
| 25.22 |
| 151.08 |
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ASBB |
| ASB Bancorp, Inc. |
| NC |
| 24.91 |
| 3,985 |
| 99.3 |
| 27.24 |
| 19.29 |
| 24.50 |
| 1.67 |
| 26.96 |
| -4.03 |
| 0.81 |
| 0.75 |
| 22.41 |
| 22.41 |
| 200.19 |
|
ACFC |
| Atlantic Coast Financial Corporation |
| FL |
| 5.55 |
| 15,501 |
| 86.0 |
| 6.75 |
| 3.74 |
| 5.55 |
| 0.00 |
| 46.83 |
| -5.29 |
| 0.49 |
| 0.70 |
| 5.16 |
| 5.16 |
| 52.77 |
|
BKMU |
| Bank Mutual Corporation |
| WI |
| 7.21 |
| 45,444 |
| 327.6 |
| 8.13 |
| 6.44 |
| 7.88 |
| -8.50 |
| 4.04 |
| -7.56 |
| 0.31 |
| NA |
| 6.09 |
| 6.09 |
| 54.28 |
|
BFIN |
| BankFinancial Corporation |
| IL |
| 12.00 |
| 20,297 |
| 243.6 |
| 13.62 |
| 11.38 |
| 12.27 |
| -2.20 |
| 2.65 |
| -4.99 |
| 2.05 |
| 2.07 |
| 10.39 |
| 10.32 |
| 70.52 |
|
BYBK |
| Bay Bancorp, Inc. |
| MD |
| 4.80 |
| 11,047 |
| 53.0 |
| 5.51 |
| 4.51 |
| 4.71 |
| 1.91 |
| 5.50 |
| -5.14 |
| 0.25 |
| 0.30 |
| 6.05 |
| 5.80 |
| 42.92 |
|
BNCL |
| Beneficial Bancorp, Inc. |
| PA |
| 12.53 |
| 82,915 |
| 1,038.9 |
| 14.26 |
| 10.91 |
| 12.95 |
| -3.24 |
| 13.70 |
| -5.93 |
| 0.29 |
| 0.31 |
| 13.42 |
| 11.89 |
| 57.02 |
|
BHBK |
| Blue Hills Bancorp, Inc. |
| MA |
| 13.82 |
| 28,493 |
| 393.8 |
| 16.58 |
| 12.82 |
| 14.70 |
| -5.99 |
| 3.60 |
| -9.73 |
| 0.28 |
| 0.26 |
| 14.48 |
| 14.05 |
| 67.89 |
|
BOFI |
| BofI Holding, Inc. |
| CA |
| 14.80 |
| 63,032 |
| 932.9 |
| 35.98 |
| 14.78 |
| 17.16 |
| -13.75 |
| -32.63 |
| -29.69 |
| 1.44 |
| 1.44 |
| 9.12 |
| 9.12 |
| 99.31 |
|
BYFC |
| Broadway Financial Corporation |
| CA |
| 1.50 |
| 29,077 |
| 43.6 |
| 2.08 |
| 1.13 |
| 1.50 |
| 0.01 |
| 30.43 |
| -0.66 |
| 0.14 |
| 0.13 |
| 1.40 |
| 1.40 |
| 13.89 |
|
BLMT |
| BSB Bancorp, Inc. |
| MA |
| 21.38 |
| 9,088 |
| 194.3 |
| 23.64 |
| 17.67 |
| 22.10 |
| -3.26 |
| 13.12 |
| -8.59 |
| 0.71 |
| NA |
| 15.80 |
| 15.80 |
| 186.22 |
|
CFFN |
| Capitol Federal Financial, Inc. |
| KS |
| 12.00 |
| 137,131 |
| 1,645.6 |
| 13.36 |
| 11.39 |
| 12.27 |
| -2.20 |
| -5.14 |
| -4.46 |
| 0.58 |
| 0.58 |
| 10.33 |
| 10.33 |
| 71.79 |
|
CARV |
| Carver Bancorp, Inc. |
| NY |
| 3.19 |
| 3,696 |
| 11.8 |
| 7.60 |
| 1.92 |
| 1.92 |
| 66.14 |
| -47.71 |
| -14.94 |
| 0.01 |
| 0.05 |
| 2.73 |
| 2.73 |
| 199.33 |
|
CFBK |
| Central Federal Corporation |
| OH |
| 1.35 |
| 16,034 |
| 21.6 |
| 1.50 |
| 1.12 |
| 1.37 |
| -1.46 |
| 3.85 |
| 2.27 |
| 0.04 |
| 0.04 |
| 1.50 |
| 1.50 |
| 20.67 |
|
CHFN |
| Charter Financial Corporation |
| GA |
| 13.01 |
| 15,229 |
| 198.1 |
| 14.76 |
| 11.36 |
| 13.44 |
| -3.20 |
| 13.13 |
| -1.51 |
| 0.34 |
| 0.35 |
| 12.79 |
| 12.51 |
| 67.44 |
|
CBNK |
| Chicopee Bancorp, Inc. |
| MA |
| 17.98 |
| 5,211 |
| 93.7 |
| 18.25 |
| 15.90 |
| 18.00 |
| -0.11 |
| 9.04 |
| 3.69 |
| 0.46 |
| 0.46 |
| 16.98 |
| 16.98 |
| 133.46 |
|
CSBK |
| Clifton Bancorp Inc. |
| NJ |
| 13.88 |
| 24,839 |
| 344.8 |
| 14.98 |
| 13.09 |
| 14.43 |
| -3.81 |
| 2.06 |
| -3.21 |
| 0.34 |
| 0.27 |
| 13.14 |
| 13.14 |
| 46.46 |
|
CWAY |
| Coastway Bancorp, Inc. |
| RI |
| 12.29 |
| 4,858 |
| 59.7 |
| 14.01 |
| 10.75 |
| 12.42 |
| -1.01 |
| 10.67 |
| -6.00 |
| 0.28 |
| 0.28 |
| 14.53 |
| 14.53 |
| 108.76 |
|
DCOM |
| Dime Community Bancshares, Inc. |
| NY |
| 16.42 |
| 37,372 |
| 613.6 |
| 18.74 |
| 15.16 |
| 17.19 |
| -4.48 |
| 6.14 |
| -6.12 |
| 1.26 |
| 1.15 |
| 13.01 |
| 11.52 |
| 129.31 |
|
ESBK |
| Elmira Savings Bank |
| NY |
| 18.11 |
| 2,723 |
| 49.3 |
| 22.00 |
| 18.11 |
| 18.12 |
| -0.06 |
| -17.61 |
| -8.92 |
| 1.16 |
| 1.11 |
| 16.49 |
| 11.94 |
| 207.97 |
|
ENFC |
| Entegra Financial Corp. |
| NC |
| 16.98 |
| 6,531 |
| 110.9 |
| 19.90 |
| 14.93 |
| 17.35 |
| -2.13 |
| 10.98 |
| -12.28 |
| 3.54 |
| 3.68 |
| 19.99 |
| 19.99 |
| 150.72 |
|
EQFN |
| Equitable Financial Corp. |
| NE |
| 8.47 |
| 3,477 |
| 29.5 |
| 9.09 |
| 5.32 |
| 8.71 |
| -2.75 |
| 54.03 |
| -3.86 |
| 0.42 |
| 0.42 |
| 10.10 |
| 10.10 |
| 60.86 |
|
ESSA |
| ESSA Bancorp, Inc. |
| PA |
| 13.34 |
| 11,331 |
| 151.1 |
| 13.92 |
| 11.98 |
| 13.51 |
| -1.26 |
| 7.93 |
| -2.49 |
| 0.93 |
| 0.94 |
| 15.09 |
| 14.03 |
| 141.79 |
|
EVER |
| EverBank Financial Corp |
| FL |
| 13.73 |
| 125,021 |
| 1,716.5 |
| 21.18 |
| 12.80 |
| 14.07 |
| -2.42 |
| -23.68 |
| -14.08 |
| 0.89 |
| 0.96 |
| 13.39 |
| 13.00 |
| 201.68 |
|
FCAP |
| First Capital, Inc. |
| IN |
| 25.00 |
| 2,759 |
| 69.0 |
| 28.25 |
| 23.01 |
| 24.23 |
| 3.18 |
| 6.02 |
| -4.21 |
| 1.94 |
| 1.99 |
| 21.57 |
| 19.61 |
| 168.64 |
|
FBNK |
| First Connecticut Bancorp, Inc. |
| CT |
| 16.21 |
| 15,882 |
| 257.4 |
| 18.40 |
| 14.42 |
| 16.27 |
| -0.37 |
| 5.26 |
| -6.89 |
| 0.89 |
| 0.82 |
| 15.30 |
| 15.30 |
| 170.54 |
|
FDEF |
| First Defiance Financial Corp. |
| OH |
| 37.61 |
| 9,010 |
| 338.9 |
| 42.46 |
| 31.26 |
| 38.93 |
| -3.39 |
| 17.09 |
| -0.45 |
| 2.76 |
| 2.81 |
| 30.37 |
| 23.41 |
| 247.32 |
|
FFNW |
| First Financial Northwest, Inc. |
| WA |
| 13.02 |
| 13,769 |
| 179.3 |
| 14.00 |
| 11.49 |
| 13.53 |
| -3.77 |
| 4.66 |
| -6.73 |
| 0.71 |
| 0.71 |
| 12.32 |
| 12.32 |
| 71.47 |
|
FNWB |
| First Northwest Bancorp |
| WA |
| 12.45 |
| 13,100 |
| 163.1 |
| 14.26 |
| 11.62 |
| 12.95 |
| -3.86 |
| 0.81 |
| -12.01 |
| NA |
| NA |
| 14.68 |
| NA |
| 73.14 |
|
FBC |
| Flagstar Bancorp, Inc. |
| MI |
| 17.77 |
| 56,483 |
| 1,003.7 |
| 25.05 |
| 13.95 |
| 18.65 |
| -4.72 |
| 18.86 |
| -23.11 |
| 1.87 |
| 2.38 |
| 21.92 |
| 21.92 |
| 221.64 |
|
FSBW |
| FS Bancorp, Inc. |
| WA |
| 23.81 |
| 3,242 |
| 77.2 |
| 26.49 |
| 18.71 |
| 24.75 |
| -3.80 |
| 25.58 |
| -8.41 |
| 2.81 |
| 2.89 |
| 22.60 |
| 22.60 |
| 198.01 |
|
GTWN |
| Georgetown Bancorp, Inc. |
| MA |
| 19.40 |
| 1,828 |
| 35.5 |
| 20.00 |
| 17.55 |
| 18.87 |
| 2.81 |
| 8.08 |
| 2.54 |
| 0.84 |
| 0.84 |
| 17.24 |
| 17.24 |
| 157.22 |
|
HBK |
| Hamilton Bancorp, Inc. |
| MD |
| 14.14 |
| 3,418 |
| 48.3 |
| 16.00 |
| 12.61 |
| 14.00 |
| 1.00 |
| 10.47 |
| -0.84 |
| -0.05 |
| -0.01 |
| 17.84 |
| 15.75 |
| 106.46 |
|
HIFS |
| Hingham Institution for Savings |
| MA |
| 120.02 |
| 2,129 |
| 255.5 |
| 135.03 |
| 86.21 |
| 123.01 |
| -2.43 |
| 36.39 |
| 0.18 |
| 8.70 |
| 8.69 |
| 62.94 |
| 62.94 |
| 794.34 |
|
HMNF |
| HMN Financial, Inc. |
| MN |
| 11.64 |
| 4,483 |
| 52.2 |
| 12.61 |
| 10.18 |
| 11.52 |
| 1.04 |
| -4.98 |
| 0.78 |
| 0.69 |
| 0.65 |
| 15.33 |
| 15.24 |
| 138.06 |
|
HFBL |
| Home Federal Bancorp, Inc. of Louisiana |
| LA |
| 22.40 |
| 2,038 |
| 45.6 |
| 27.37 |
| 19.06 |
| 22.00 |
| 1.82 |
| 13.71 |
| -3.66 |
| 1.73 |
| 1.73 |
| 20.96 |
| 20.96 |
| 179.67 |
|
HMST |
| HomeStreet, Inc. |
| WA |
| 19.43 |
| 24,539 |
| 476.8 |
| 24.43 |
| 17.00 |
| 20.48 |
| -5.13 |
| 10.34 |
| -10.50 |
| 1.98 |
| 2.21 |
| 20.87 |
| 19.95 |
| 202.77 |
|
IROQ |
| IF Bancorp, Inc. |
| IL |
| 17.46 |
| 4,014 |
| 70.1 |
| 19.97 |
| 16.35 |
| 18.02 |
| -3.11 |
| 4.55 |
| -5.62 |
| 0.85 |
| 0.81 |
| 20.14 |
| 20.14 |
| 139.02 |
|
ISBC |
| Investors Bancorp, Inc. |
| NJ |
| 11.48 |
| 334,894 |
| 3,842.9 |
| 13.13 |
| 11.05 |
| 11.69 |
| -1.84 |
| -0.56 |
| -7.76 |
| 0.53 |
| 0.53 |
| 9.87 |
| 9.61 |
| 60.71 |
|
JXSB |
| Jacksonville Bancorp, Inc. |
| IL |
| 25.75 |
| 1,793 |
| 46.2 |
| 33.08 |
| 21.97 |
| 25.75 |
| 0.00 |
| 14.44 |
| -2.02 |
| 1.66 |
| 1.52 |
| 26.10 |
| 24.58 |
| 170.82 |
|
KRNY |
| Kearny Financial Corp. |
| NJ |
| 11.51 |
| 93,528 |
| 1,076.5 |
| 13.00 |
| 9.49 |
| 12.09 |
| -4.80 |
| 19.91 |
| -9.16 |
| 0.06 |
| 0.12 |
| 12.44 |
| 11.27 |
| 46.00 |
|
LPSB |
| La Porte Bancorp, Inc. |
| IN |
| 14.65 |
| 5,569 |
| 81.6 |
| 15.50 |
| 12.49 |
| 14.70 |
| -0.34 |
| 16.59 |
| -3.62 |
| 0.82 |
| 0.82 |
| 15.15 |
| 13.61 |
| 97.80 |
|
LSBG |
| Lake Sunapee Bank Group |
| NH |
| 13.63 |
| 8,377 |
| 114.2 |
| 16.35 |
| 13.36 |
| 13.74 |
| -0.80 |
| -11.43 |
| -2.85 |
| 1.16 |
| 1.24 |
| 16.30 |
| 9.98 |
| 177.97 |
|
MLVF |
| Malvern Bancorp, Inc. |
| PA |
| 16.80 |
| 6,558 |
| 110.2 |
| 17.70 |
| 12.00 |
| 16.79 |
| 0.06 |
| 38.96 |
| -4.33 |
| 0.58 |
| 0.53 |
| 12.41 |
| 12.41 |
| 99.98 |
|
MELR |
| Melrose Bancorp, Inc. |
| MA |
| 15.00 |
| 2,830 |
| 42.4 |
| 15.69 |
| 13.20 |
| 15.02 |
| -0.13 |
| 14.07 |
| -1.83 |
| NA |
| NA |
| 16.23 |
| 16.23 |
| 79.02 |
|
EBSB |
| Meridian Bancorp, Inc. |
| MA |
| 13.72 |
| 54,875 |
| 752.9 |
| 14.91 |
| 11.87 |
| 14.05 |
| -2.35 |
| 10.65 |
| -2.70 |
| 0.45 |
| 0.40 |
| 10.71 |
| 10.46 |
| 61.52 |
|
CASH |
| Meta Financial Group, Inc. |
| SD |
| 40.67 |
| 8,495 |
| 345.5 |
| 53.51 |
| 33.61 |
| 43.36 |
| -6.20 |
| 19.30 |
| -11.45 |
| 2.66 |
| 3.30 |
| 33.24 |
| 24.60 |
| 297.78 |
|
MSBF |
| MSB Financial Corp. |
| NJ |
| 12.43 |
| 5,954 |
| 74.0 |
| 12.89 |
| 8.86 |
| 12.39 |
| 0.32 |
| 34.92 |
| -0.56 |
| 0.07 |
| 0.07 |
| 12.82 |
| 12.82 |
| 62.28 |
|
NYCB |
| New York Community Bancorp, Inc. |
| NY |
| 15.38 |
| 484,943 |
| 7,458.4 |
| 19.18 |
| 14.26 |
| 15.48 |
| -0.65 |
| -2.78 |
| -5.76 |
| 1.11 |
| 1.10 |
| 13.11 |
| 7.62 |
| 101.14 |
|
NFBK |
| Northfield Bancorp, Inc. |
| NJ |
| 14.95 |
| 48,273 |
| 721.7 |
| 16.40 |
| 14.28 |
| 15.48 |
| -3.42 |
| 1.98 |
| -6.09 |
| 0.43 |
| 0.44 |
| 12.25 |
| 11.89 |
| 65.91 |
|
NWBI |
| Northwest Bancshares, Inc. |
| PA |
| 12.05 |
| 101,872 |
| 1,227.6 |
| 14.11 |
| 11.52 |
| 12.57 |
| -4.14 |
| 1.69 |
| -10.01 |
| 0.67 |
| 0.73 |
| 11.42 |
| 8.75 |
| 87.71 |
|
OSHC |
| Ocean Shore Holding Co. |
| NJ |
| 17.75 |
| 6,403 |
| 113.7 |
| 18.06 |
| 13.91 |
| 17.97 |
| -1.22 |
| 24.61 |
| 3.50 |
| 1.10 |
| 1.12 |
| 17.29 |
| 16.49 |
| 166.71 |
|
OCFC |
| OceanFirst Financial Corp. |
| NJ |
| 16.30 |
| 17,287 |
| 281.8 |
| 21.00 |
| 16.25 |
| 17.72 |
| -8.01 |
| -1.75 |
| -18.62 |
| 1.21 |
| 1.24 |
| 13.58 |
| 13.46 |
| 147.97 |
|
ORIT |
| Oritani Financial Corp. |
| NJ |
| 15.48 |
| 44,398 |
| 687.3 |
| 17.43 |
| 14.18 |
| 16.72 |
| -7.42 |
| 7.50 |
| -6.18 |
| 1.16 |
| 0.90 |
| 11.88 |
| 11.88 |
| 75.42 |
|
PBHC |
| Pathfinder Bancorp, Inc. |
| NY |
| 12.19 |
| 4,352 |
| 53.1 |
| 13.32 |
| 9.81 |
| 12.39 |
| -1.61 |
| 23.26 |
| -5.54 |
| 0.67 |
| 0.57 |
| 13.27 |
| 12.18 |
| 139.52 |
|
PBBI |
| PB Bancorp, Inc. |
| CT |
| 8.62 |
| 7,881 |
| 67.9 |
| 10.15 |
| 6.17 |
| 8.80 |
| -2.05 |
| 36.13 |
| 1.12 |
| 0.08 |
| 0.09 |
| 6.67 |
| 5.79 |
| 59.48 |
|
PBSK |
| Poage Bankshares, Inc. |
| KY |
| 17.28 |
| 3,923 |
| 67.8 |
| 18.85 |
| 14.63 |
| 17.29 |
| -0.06 |
| 15.59 |
| 1.05 |
| 1.02 |
| 0.88 |
| 18.06 |
| 17.36 |
| 108.42 |
|
PROV |
| Provident Financial Holdings, Inc. |
| CA |
| 17.08 |
| 8,346 |
| 142.5 |
| 19.19 |
| 15.06 |
| 17.48 |
| -2.29 |
| 9.21 |
| -9.58 |
| 1.10 |
| 1.10 |
| 16.52 |
| 16.52 |
| 141.06 |
|
PFS |
| Provident Financial Services, Inc. |
| NJ |
| 18.57 |
| 65,489 |
| 1,216.1 |
| 21.20 |
| 17.71 |
| 19.64 |
| -5.45 |
| 1.42 |
| -7.84 |
| 1.34 |
| 1.38 |
| 18.11 |
| 11.56 |
| 135.27 |
|
PBIP |
| Prudential Bancorp, Inc. |
| PA |
| 15.62 |
| 8,395 |
| 131.1 |
| 16.20 |
| 12.15 |
| 15.62 |
| 0.00 |
| 27.51 |
| 2.76 |
| 0.26 |
| 0.10 |
| 13.85 |
| 13.85 |
| 58.04 |
|
RVSB |
| Riverview Bancorp, Inc. |
| WA |
| 4.35 |
| 22,500 |
| 97.9 |
| 5.48 |
| 4.00 |
| 4.32 |
| 0.69 |
| -0.46 |
| -7.25 |
| 0.26 |
| 0.25 |
| 4.73 |
| 3.59 |
| 39.84 |
|
SVBI |
| Severn Bancorp, Inc. |
| MD |
| 5.22 |
| 10,086 |
| 52.6 |
| 5.88 |
| 4.25 |
| 5.53 |
| -5.61 |
| 15.74 |
| -9.22 |
| 0.26 |
| 0.26 |
| 5.87 |
| 5.84 |
| 76.74 |
|
SIFI |
| SI Financial Group, Inc. |
| CT |
| 13.91 |
| 12,218 |
| 170.0 |
| 14.47 |
| 11.00 |
| 13.96 |
| -0.36 |
| 25.32 |
| 1.90 |
| 0.34 |
| 0.36 |
| 12.60 |
| 11.10 |
| 118.97 |
|
SBCP |
| Sunshine Bancorp, Inc. |
| FL |
| 14.12 |
| 5,259 |
| 74.3 |
| 15.50 |
| 11.80 |
| 14.28 |
| -1.14 |
| 19.44 |
| -7.12 |
| -0.64 |
| -0.46 |
| 14.47 |
| 12.29 |
| 84.06 |
|
TBNK |
| Territorial Bancorp Inc. |
| HI |
| 25.40 |
| 9,660 |
| 245.4 |
| 29.44 |
| 21.45 |
| 26.65 |
| -4.69 |
| 16.78 |
| -8.44 |
| 1.56 |
| 1.51 |
| 22.52 |
| 22.52 |
| 184.63 |
|
TSBK |
| Timberland Bancorp, Inc. |
| WA |
| 12.39 |
| 6,994 |
| 86.7 |
| 13.86 |
| 9.28 |
| 12.49 |
| -0.80 |
| 15.69 |
| -0.16 |
| 1.17 |
| 1.14 |
| 12.76 |
| 11.95 |
| 116.64 |
|
TRST |
| TrustCo Bank Corp NY |
| NY |
| 5.49 |
| 95,262 |
| 523.0 |
| 7.20 |
| 5.17 |
| 5.50 |
| -0.18 |
| -18.79 |
| -10.59 |
| 0.45 |
| 0.45 |
| 4.33 |
| 4.33 |
| 49.61 |
|
UCBA |
| United Community Bancorp |
| IN |
| 13.70 |
| 4,201 |
| 57.6 |
| 15.42 |
| 11.77 |
| 13.80 |
| -0.72 |
| 14.17 |
| -8.61 |
| 0.63 |
| 0.71 |
| 15.75 |
| 15.11 |
| 123.75 |
|
UCFC |
| United Community Financial Corp. |
| OH |
| 5.71 |
| 47,518 |
| 271.3 |
| 6.33 |
| 3.58 |
| 6.13 |
| -6.85 |
| 3.82 |
| -3.22 |
| 0.30 |
| 0.30 |
| 5.12 |
| 5.12 |
| 41.48 |
|
UBNK |
| United Financial Bancorp, Inc. |
| CT |
| 11.25 |
| 49,922 |
| 561.6 |
| 14.16 |
| 10.28 |
| 11.30 |
| -0.44 |
| -12.79 |
| -12.66 |
| 0.83 |
| 1.08 |
| 12.55 |
| 10.06 |
| 117.04 |
|
WSBF |
| Waterstone Financial, Inc. |
| WI |
| 13.42 |
| 29,429 |
| 394.9 |
| 14.48 |
| 12.38 |
| 13.85 |
| -3.10 |
| 3.79 |
| -4.82 |
| 0.53 |
| 0.53 |
| 13.27 |
| 13.25 |
| 59.28 |
|
Exhibit IV-1A
Weekly Thrift Market Line - Part One
Prices As of February 6, 2016
|
|
|
| Market Capitalization |
| Price Change Data |
| Current Per Share Financials |
| ||||||||||||||||||||||||
|
|
|
| Price/ |
| Shares |
| Market |
| 52 Week (1) |
|
|
| % Change From |
| LTM |
| LTM Core |
| BV/ |
| TBV/ |
| Assets/ |
| ||||||||
Companies |
|
|
| Share(1) |
| Outstanding |
| Capitalization |
| High |
| Low |
| Last Wk |
| Last Wk |
| 52 Wks (2) |
| MRY (2) |
| EPS (3) |
| EPS (3) |
| Share |
| Share (4) |
| Share |
| ||
|
|
|
| ($) |
| (000) |
| ($Mil) |
| ($) |
| ($) |
| ($) |
| (%) |
| (%) |
| (%) |
| ($) |
| ($) |
| ($) |
| ($) |
| ($) |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
WAYN |
| Wayne Savings Bancshares, Inc. |
| OH |
| 12.85 |
| 2,782 |
| 35.7 |
| 14.49 |
| 11.69 |
| 12.57 |
| 2.21 |
| -7.97 |
| -2.74 |
| 0.62 |
| 0.62 |
| 14.28 |
| 13.67 |
| 152.41 |
|
WEBK |
| Wellesley Bancorp, Inc. |
| MA |
| 18.42 |
| 2,462 |
| 45.4 |
| 20.59 |
| 18.05 |
| 18.54 |
| -0.65 |
| -3.46 |
| -3.05 |
| 0.94 |
| 0.93 |
| 20.90 |
| 20.90 |
| 239.41 |
|
WBB |
| Westbury Bancorp, Inc. |
| WI |
| 18.70 |
| 4,229 |
| 79.1 |
| 19.63 |
| 16.05 |
| 18.35 |
| 1.88 |
| 15.40 |
| 3.86 |
| 0.85 |
| 0.87 |
| 18.21 |
| 18.21 |
| 151.08 |
|
WFD |
| Westfield Financial, Inc. |
| MA |
| 7.84 |
| 18,279 |
| 143.3 |
| 8.60 |
| 7.06 |
| 7.98 |
| -1.75 |
| 6.81 |
| -6.67 |
| 0.34 |
| 0.28 |
| 7.59 |
| 7.59 |
| 74.25 |
|
WBKC |
| Wolverine Bancorp, Inc. |
| MI |
| 25.50 |
| 2,180 |
| 55.6 |
| 27.73 |
| 23.70 |
| 25.75 |
| -0.97 |
| 7.37 |
| -4.28 |
| 1.70 |
| 1.46 |
| 28.51 |
| 28.51 |
| 157.79 |
|
WSFS |
| WSFS Financial Corporation |
| DE |
| 27.88 |
| 29,763 |
| 829.8 |
| 35.42 |
| 23.59 |
| 29.06 |
| -4.06 |
| 6.12 |
| -13.84 |
| 1.83 |
| 1.95 |
| 18.46 |
| 16.42 |
| 170.28 |
|
WVFC |
| WVS Financial Corp. |
| PA |
| 11.58 |
| 2,040 |
| 23.6 |
| 12.60 |
| 10.75 |
| 11.51 |
| 0.61 |
| 3.58 |
| -5.85 |
| 0.70 |
| 0.70 |
| 15.85 |
| 15.85 |
| 163.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
MHCs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
GCBC |
| Greene County Bancorp, Inc. (MHC) |
| IN |
| 31.00 |
| 4,229 |
| 131.1 |
| 33.00 |
| 25.20 |
| 31.43 |
| -1.37 |
| 5.08 |
| -2.97 |
| 1.79 |
| 1.81 |
| 16.28 |
| 16.28 |
| 181.54 |
|
KFFB |
| Kentucky First Federal Bancorp (MHC) |
| OH |
| 9.17 |
| 8,440 |
| 77.4 |
| 10.37 |
| 7.95 |
| 9.30 |
| -1.40 |
| 15.35 |
| -1.82 |
| 0.26 |
| 0.26 |
| 7.96 |
| 6.25 |
| 35.06 |
|
LSBK |
| Lake Shore Bancorp, Inc. (MHC) |
| CT |
| 13.40 |
| 5,979 |
| 80.1 |
| 15.85 |
| 13.00 |
| 13.42 |
| -0.15 |
| -0.74 |
| 0.00 |
| 0.57 |
| 0.50 |
| 12.27 |
| 12.27 |
| 79.00 |
|
MGYR |
| Magyar Bancorp, Inc. (MHC) |
| WI |
| 9.75 |
| 5,819 |
| 56.7 |
| 11.15 |
| 8.35 |
| 9.80 |
| -0.51 |
| 17.47 |
| -2.60 |
| 0.15 |
| 0.16 |
| 8.02 |
| 8.02 |
| 94.61 |
|
OFED |
| Oconee Federal Financial Corp. (MHC) |
| OH |
| 19.40 |
| 5,882 |
| 114.1 |
| 20.95 |
| 16.50 |
| 18.91 |
| 2.59 |
| -3.05 |
| 4.02 |
| 0.85 |
| 0.87 |
| 13.99 |
| 13.41 |
| 79.65 |
|
PVBC |
| Provident Bancorp, Inc. (MHC) |
| MA |
| 13.01 |
| 9,499 |
| 123.6 |
| 13.49 |
| 11.26 |
| 12.90 |
| 0.85 |
| NA |
| 0.15 |
| NA |
| NA |
| 10.51 |
| 10.51 |
| 73.60 |
|
TFSL |
| TFS Financial Corporation (MHC) |
| WI |
| 16.33 |
| 289,244 |
| 4,723.3 |
| 19.42 |
| 13.94 |
| 17.45 |
| -6.42 |
| 14.92 |
| -13.28 |
| 0.25 |
| NA |
| 5.95 |
| 5.91 |
| 42.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Under Acquisition |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
ABCW |
| Anchor BanCorp Wisconsin Inc. |
| MA |
| 40.93 |
| 9,597 |
| 392.8 |
| 45.75 |
| 32.57 |
| 42.68 |
| -4.10 |
| 22.36 |
| -5.95 |
| 14.19 |
| 13.93 |
| 37.49 |
| 37.49 |
| 233.07 |
|
AF |
| Astoria Financial Corporation |
| MI |
| 15.12 |
| 100,721 |
| 1,522.9 |
| 18.13 |
| 12.47 |
| 15.13 |
| -0.07 |
| 17.30 |
| -4.61 |
| 0.84 |
| 0.84 |
| 15.06 |
| 13.22 |
| 149.91 |
|
CBNJ |
| Cape Bancorp, Inc. |
| DE |
| 12.47 |
| 13,541 |
| 168.9 |
| 14.15 |
| 8.63 |
| 13.25 |
| -5.89 |
| 42.35 |
| 0.32 |
| 0.86 |
| 0.65 |
| 12.45 |
| 10.63 |
| 115.45 |
|
CHEV |
| Cheviot Financial Corp. |
| PA |
| 14.29 |
| 6,803 |
| 97.2 |
| 16.35 |
| 13.81 |
| 15.04 |
| -4.99 |
| 1.49 |
| -6.78 |
| 0.26 |
| 0.24 |
| 14.24 |
| 12.68 |
| 84.75 |
|
FXCB |
| Fox Chase Bancorp, Inc. |
| NY |
| 19.13 |
| 11,768 |
| 225.1 |
| 20.78 |
| 16.05 |
| 19.57 |
| -2.25 |
| 15.52 |
| -5.72 |
| 0.88 |
| 0.94 |
| 15.18 |
| 15.18 |
| 93.37 |
|
(1) Average of High/Low or Bid/Ask price per share.
(2) Or since offering price if converted of first listed in the past 52 weeks. Percent change figures are actual year-to-date and are not annualized.
(3) EPS (earnings per share) is based on actual trailing 12 month data and is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing 12 month common earnings and average common equity and total assets balances.
(6) Annualized based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing 12 month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by public (non-MHC) shares.
Source: SNL Financial, LC. and RP® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2015 by RP® Financial, LC.
Exhibit IV-1B
Weekly Thrift Market Line - Part Two
Prices As of February 6, 2016
|
|
|
| Key Financial Ratios |
| Asset Quality Ratios |
| Pricing Ratios |
| Dividend Data (6) |
| ||||||||||||||||||||||||||
|
|
|
|
|
| Equity/ |
| Tang Equity/ |
| Reported Earnings |
| Core Earnings |
| NPAs/ |
| Rsvs/ |
| Price/ |
| Price/ |
| Price/ |
| Price/ |
| Price/ |
| Div/ |
| Dividend |
| Payout |
| ||||
Companies |
|
|
| Assets(1) |
| Assets(1) |
| ROA(5) |
| ROE(5) |
| ROA(5) |
| ROE(5) |
| Assets |
| NPLs |
| Earnings |
| Book |
| Assets |
| Tang Book |
| Core Earnings |
| Share |
| Yield |
| Ratio (7) |
| ||
|
|
|
|
|
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (x) |
| (%) |
| (%) |
| (%) |
| (x) |
| ($) |
| (%) |
| (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
ANCB |
| Anchor Bancorp |
| WA |
| 16.62 |
| 16.62 |
| 2.65 |
| 16.22 |
| 2.71 |
| 16.58 |
| NA |
| NA |
| 61.97 |
| 96.30 |
| 15.26 |
| 96.30 |
| 50.37 |
| NA |
| NA |
| NM |
|
ASBB |
| ASB Bancorp, Inc. |
| NC |
| 12.38 |
| 12.38 |
| 0.42 |
| 3.39 |
| 0.39 |
| 3.12 |
| 2.06 |
| 83.46 |
| 27.99 |
| 110.70 |
| 12.68 |
| 110.70 |
| 31.26 |
| NA |
| NA |
| NM |
|
ACFC |
| Atlantic Coast Financial Corporation |
| FL |
| 9.79 |
| 9.79 |
| 1.00 |
| 9.92 |
| 1.44 |
| 14.31 |
| 5.13 |
| 19.84 |
| 11.10 |
| 107.14 |
| 10.04 |
| 107.14 |
| 7.72 |
| 0.00 |
| 0.00 |
| NM |
|
BKMU |
| Bank Mutual Corporation |
| WI |
| 11.26 |
| 11.26 |
| 0.60 |
| 5.07 |
| NA |
| NA |
| 0.66 |
| 148.19 |
| 23.26 |
| 117.27 |
| 13.09 |
| 117.27 |
| 22.40 |
| 0.20 |
| 2.77 |
| 64.52 |
|
BFIN |
| BankFinancial Corporation |
| IL |
| 14.89 |
| 14.80 |
| 2.87 |
| 19.87 |
| 2.89 |
| 20.04 |
| 1.00 |
| 106.43 |
| 27.27 |
| 114.69 |
| 16.10 |
| 115.40 |
| 26.19 |
| 0.20 |
| 1.67 |
| 47.73 |
|
BYBK |
| Bay Bancorp, Inc. |
| MD |
| 14.10 |
| 13.59 |
| 0.55 |
| 3.98 |
| 0.67 |
| 4.82 |
| 2.00 |
| 21.57 |
| 28.24 |
| 78.34 |
| 10.80 |
| 81.50 |
| 23.58 |
| 0.00 |
| 0.00 |
| NM |
|
BNCL |
| Beneficial Bancorp, Inc. |
| PA |
| 23.51 |
| 21.40 |
| 0.48 |
| 2.41 |
| 0.52 |
| 2.60 |
| 0.30 |
| 374.27 |
| 43.21 |
| 93.35 |
| NA |
| 105.38 |
| 40.18 |
| NA |
| NA |
| NM |
|
BHBK |
| Blue Hills Bancorp, Inc. |
| MA |
| 21.07 |
| 20.57 |
| 0.42 |
| 1.83 |
| 0.40 |
| 1.71 |
| 0.27 |
| 288.04 |
| 49.36 |
| 98.73 |
| 18.62 |
| 101.74 |
| 51.02 |
| 0.08 |
| 0.58 |
| 14.29 |
|
BOFI |
| BofI Holding, Inc. |
| CA |
| 9.24 |
| 9.24 |
| 1.64 |
| 18.39 |
| 1.65 |
| 18.48 |
| 0.50 |
| 101.66 |
| 9.47 |
| 153.36 |
| 14.01 |
| 153.36 |
| 9.47 |
| NA |
| NA |
| NM |
|
BYFC |
| Broadway Financial Corporation |
| CA |
| 10.06 |
| 10.06 |
| 1.16 |
| 10.97 |
| 1.10 |
| 10.35 |
| 4.78 |
| 35.89 |
| 10.71 |
| 107.30 |
| 10.80 |
| 107.30 |
| 11.53 |
| 0.04 |
| 0.00 |
| NM |
|
BLMT |
| BSB Bancorp, Inc. |
| MA |
| 8.48 |
| 8.48 |
| 0.42 |
| 4.45 |
| NA |
| NA |
| 0.58 |
| 124.66 |
| 30.11 |
| 135.31 |
| 11.48 |
| 135.31 |
| NA |
| NA |
| NA |
| NM |
|
CFFN |
| Capitol Federal Financial, Inc. |
| KS |
| 14.39 |
| 14.39 |
| 0.70 |
| 5.32 |
| 0.70 |
| 5.32 |
| 0.55 |
| 18.79 |
| 20.69 |
| 118.32 |
| 18.02 |
| 118.32 |
| 20.69 |
| 0.34 |
| 2.83 |
| 144.83 |
|
CARV |
| Carver Bancorp, Inc. |
| NY |
| 7.50 |
| 7.50 |
| -0.02 |
| -0.28 |
| 0.00 |
| -0.01 |
| 2.62 |
| 29.36 |
| NM |
| 116.71 |
| 1.70 |
| 116.71 |
| 63.76 |
| 0.00 |
| 0.00 |
| NM |
|
CFBK |
| Central Federal Corporation |
| OH |
| 10.60 |
| 10.60 |
| 0.42 |
| 3.91 |
| 0.42 |
| 3.93 |
| 2.44 |
| 100.87 |
| 33.75 |
| 89.92 |
| 6.67 |
| 89.92 |
| 33.75 |
| 0.00 |
| 0.00 |
| NM |
|
CHFN |
| Charter Financial Corporation |
| GA |
| 19.95 |
| 19.60 |
| 0.56 |
| 2.62 |
| 0.58 |
| 2.71 |
| 1.32 |
| 93.40 |
| 24.09 |
| 99.88 |
| 19.72 |
| 102.16 |
| 23.70 |
| 0.20 |
| 1.54 |
| 37.04 |
|
CBNK |
| Chicopee Bancorp, Inc. |
| MA |
| 12.73 |
| 12.73 |
| 0.36 |
| 2.61 |
| 0.36 |
| 2.61 |
| 1.18 |
| 78.23 |
| 29.97 |
| 104.95 |
| 13.81 |
| 104.95 |
| 29.97 |
| 0.36 |
| 2.00 |
| 53.33 |
|
CSBK |
| Clifton Bancorp Inc. |
| NJ |
| 29.32 |
| 29.32 |
| 0.73 |
| 2.42 |
| 0.58 |
| 1.92 |
| 0.44 |
| 71.02 |
| 44.77 |
| 105.54 |
| 30.18 |
| 105.54 |
| 56.93 |
| 0.24 |
| 1.73 |
| 77.42 |
|
CWAY |
| Coastway Bancorp, Inc. |
| RI |
| 13.39 |
| 13.39 |
| 0.26 |
| 1.75 |
| 0.26 |
| 1.75 |
| 2.31 |
| 26.41 |
| 43.91 |
| 84.60 |
| 11.33 |
| 84.60 |
| 43.91 |
| NA |
| NA |
| NM |
|
DCOM |
| Dime Community Bancshares, Inc. |
| NY |
| 10.01 |
| 8.96 |
| 1.00 |
| 9.68 |
| 0.92 |
| 8.88 |
| 0.25 |
| 177.15 |
| 13.35 |
| 124.23 |
| 12.19 |
| 140.00 |
| 14.34 |
| 0.56 |
| 3.41 |
| 45.53 |
|
ESBK |
| Elmira Savings Bank |
| NY |
| 9.65 |
| 7.63 |
| 0.74 |
| 7.41 |
| 0.71 |
| 7.16 |
| 0.80 |
| 91.16 |
| 15.48 |
| 109.52 |
| 8.94 |
| 151.07 |
| 16.22 |
| 0.92 |
| 5.08 |
| 78.63 |
|
ENFC |
| Entegra Financial Corp. |
| NC |
| 13.29 |
| 13.29 |
| 2.51 |
| 20.34 |
| 2.62 |
| 21.17 |
| 2.60 |
| 47.59 |
| 4.66 |
| 84.35 |
| 10.75 |
| 85.19 |
| NA |
| NA |
| NA |
| NM |
|
EQFN |
| Equitable Financial Corp. |
| NE |
| 16.59 |
| 16.59 |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| 20.36 |
| 83.87 |
| 13.92 |
| 83.87 |
| 20.23 |
| NA |
| NA |
| NM |
|
ESSA |
| ESSA Bancorp, Inc. |
| PA |
| 10.66 |
| 9.99 |
| 0.62 |
| 5.68 |
| 0.62 |
| 5.73 |
| 1.53 |
| 40.35 |
| 15.33 |
| 88.90 |
| 8.57 |
| 98.69 |
| 14.92 |
| 0.36 |
| 2.70 |
| 41.38 |
|
EVER |
| EverBank Financial Corp |
| FL |
| 7.23 |
| 7.05 |
| 0.55 |
| 6.95 |
| 0.59 |
| 7.46 |
| 0.62 |
| 51.16 |
| 14.45 |
| 99.90 |
| 6.49 |
| 102.81 |
| NA |
| 0.24 |
| 1.75 |
| 23.16 |
|
FCAP |
| First Capital, Inc. |
| IN |
| 12.81 |
| 11.79 |
| 1.14 |
| 9.24 |
| 1.17 |
| 9.51 |
| 0.82 |
| 106.04 |
| 13.37 |
| 115.92 |
| NA |
| 127.46 |
| NA |
| 0.84 |
| 3.36 |
| 44.92 |
|
FBNK |
| First Connecticut Bancorp, Inc. |
| CT |
| 8.98 |
| 8.98 |
| 0.52 |
| 5.57 |
| 0.48 |
| 5.16 |
| 1.26 |
| 59.41 |
| 19.53 |
| 104.77 |
| 9.50 |
| 104.77 |
| 21.66 |
| 0.24 |
| 1.48 |
| 26.51 |
|
FDEF |
| First Defiance Financial Corp. |
| OH |
| 12.50 |
| 9.92 |
| 1.19 |
| 9.44 |
| 1.22 |
| 9.63 |
| 1.59 |
| 82.93 |
| 13.34 |
| 122.17 |
| 14.90 |
| 158.10 |
| 13.12 |
| 0.88 |
| 2.34 |
| 29.08 |
|
FFNW |
| First Financial Northwest, Inc. |
| WA |
| 17.78 |
| 17.78 |
| 1.06 |
| 5.56 |
| 1.05 |
| 5.53 |
| 5.41 |
| 20.69 |
| 19.43 |
| 105.04 |
| 18.29 |
| 105.04 |
| 19.56 |
| 0.24 |
| 1.84 |
| 44.78 |
|
FNWB |
| First Northwest Bancorp |
| WA |
| 20.07 |
| NA |
| -0.51 |
| -3.13 |
| 0.17 |
| 1.06 |
| 1.05 |
| 74.19 |
| NM |
| 86.13 |
| 17.03 |
| NA |
| 111.59 |
| NA |
| NA |
| NM |
|
FBC |
| Flagstar Bancorp, Inc. |
| MI |
| 12.01 |
| 12.01 |
| 1.21 |
| 9.39 |
| 1.20 |
| 9.35 |
| 1.53 |
| 113.22 |
| 7.93 |
| 79.51 |
| 7.46 |
| 79.51 |
| NA |
| 0.00 |
| 0.00 |
| NM |
|
FSBW |
| FS Bancorp, Inc. |
| WA |
| 11.41 |
| 11.41 |
| 1.54 |
| 12.41 |
| 1.59 |
| 12.75 |
| 0.16 |
| 702.28 |
| 8.13 |
| 102.46 |
| 11.39 |
| 102.46 |
| 7.68 |
| 0.28 |
| 1.18 |
| 9.56 |
|
GTWN |
| Georgetown Bancorp, Inc. |
| MA |
| 10.97 |
| 10.97 |
| 0.54 |
| 4.88 |
| 0.54 |
| 4.88 |
| NA |
| NA |
| 22.56 |
| 111.19 |
| 11.98 |
| 111.19 |
| 22.56 |
| 0.19 |
| 0.98 |
| 22.09 |
|
HBK |
| Hamilton Bancorp, Inc. |
| MD |
| 16.76 |
| 15.09 |
| -0.05 |
| -0.25 |
| 0.00 |
| -0.01 |
| 2.40 |
| 20.93 |
| NM |
| 79.27 |
| NA |
| 89.76 |
| NM |
| NA |
| NA |
| NM |
|
HIFS |
| Hingham Institution for Savings |
| MA |
| 7.92 |
| 7.92 |
| 1.17 |
| 14.72 |
| 1.17 |
| 14.71 |
| 0.40 |
| 143.42 |
| 13.31 |
| 185.12 |
| 14.45 |
| 185.12 |
| 13.32 |
| 1.20 |
| 1.00 |
| 16.19 |
|
HMNF |
| HMN Financial, Inc. |
| MN |
| 11.10 |
| 11.04 |
| 0.61 |
| 5.00 |
| 0.58 |
| 4.75 |
| 2.15 |
| 81.36 |
| 19.08 |
| 74.92 |
| 8.11 |
| 75.35 |
| 20.32 |
| 0.00 |
| 0.00 |
| NM |
|
HFBL |
| Home Federal Bancorp, Inc. of Louisiana |
| LA |
| 12.02 |
| 12.02 |
| 0.97 |
| 7.80 |
| 0.97 |
| 7.78 |
| 0.00 |
| NM |
| 13.41 |
| 106.58 |
| 12.65 |
| 106.58 |
| 13.41 |
| 0.32 |
| 1.43 |
| 18.56 |
|
HMST |
| HomeStreet, Inc. |
| WA |
| 9.25 |
| 8.88 |
| 0.91 |
| 9.62 |
| 1.01 |
| 10.67 |
| 1.74 |
| 34.41 |
| 9.91 |
| 92.19 |
| 8.76 |
| 96.39 |
| 9.32 |
| NA |
| NA |
| NM |
|
IROQ |
| IF Bancorp, Inc. |
| IL |
| 14.54 |
| 14.54 |
| 0.60 |
| 3.97 |
| 0.57 |
| 3.79 |
| 0.90 |
| 94.57 |
| 20.79 |
| 86.98 |
| 12.51 |
| 86.98 |
| NA |
| 0.10 |
| 0.57 |
| 11.90 |
|
ISBC |
| Investors Bancorp, Inc. |
| NJ |
| 16.54 |
| 16.17 |
| 0.93 |
| 5.14 |
| 0.94 |
| 5.17 |
| 0.77 |
| 146.24 |
| 20.86 |
| 116.04 |
| 18.40 |
| 119.45 |
| 20.94 |
| 0.24 |
| 2.09 |
| 38.18 |
|
JXSB |
| Jacksonville Bancorp, Inc. |
| IL |
| 15.25 |
| 14.49 |
| 0.97 |
| 6.52 |
| 0.89 |
| 5.98 |
| 1.16 |
| 90.73 |
| 15.24 |
| 101.26 |
| 14.96 |
| 107.70 |
| 16.37 |
| 0.32 |
| 1.24 |
| 78.11 |
|
KRNY |
| Kearny Financial Corp. |
| NJ |
| 27.05 |
| 25.15 |
| 0.15 |
| 0.76 |
| 0.29 |
| 1.53 |
| 0.61 |
| 71.97 |
| NM |
| 92.29 |
| 24.44 |
| 102.09 |
| 82.49 |
| 0.08 |
| 0.70 |
| 54.45 |
|
LPSB |
| La Porte Bancorp, Inc. |
| IN |
| 15.49 |
| 14.13 |
| 0.85 |
| 5.24 |
| 0.85 |
| 5.22 |
| 1.09 |
| 68.33 |
| 17.87 |
| 96.71 |
| 14.98 |
| 107.68 |
| 17.93 |
| 0.16 |
| 1.09 |
| 19.51 |
|
LSBG |
| Lake Sunapee Bank Group |
| NH |
| 9.67 |
| 6.36 |
| 0.65 |
| 6.79 |
| 0.69 |
| 7.24 |
| 0.88 |
| 69.01 |
| 12.62 |
| 83.52 |
| 7.52 |
| 135.42 |
| NA |
| 0.56 |
| 4.11 |
| 50.93 |
|
MLVF |
| Malvern Bancorp, Inc. |
| PA |
| 12.41 |
| 12.41 |
| 0.60 |
| 4.65 |
| 0.54 |
| 4.23 |
| 0.56 |
| 187.43 |
| 22.70 |
| 133.30 |
| 15.15 |
| 133.30 |
| 24.83 |
| 0.11 |
| 0.00 |
| NM |
|
MELR |
| Melrose Bancorp, Inc. |
| MA |
| 20.53 |
| 20.53 |
| -0.09 |
| -0.44 |
| 0.00 |
| -0.02 |
| 0.13 |
| 198.25 |
| NA |
| 92.45 |
| 18.98 |
| 92.45 |
| NA |
| NA |
| NA |
| NA |
|
EBSB |
| Meridian Bancorp, Inc. |
| MA |
| 17.27 |
| 16.94 |
| 0.72 |
| 4.07 |
| 0.64 |
| 3.59 |
| 1.47 |
| 66.40 |
| 29.83 |
| 128.01 |
| 21.36 |
| 131.06 |
| 31.87 |
| 0.12 |
| 0.87 |
| 13.04 |
|
CASH |
| Meta Financial Group, Inc. |
| SD |
| 10.73 |
| 8.17 |
| 0.78 |
| 8.83 |
| 0.96 |
| 10.94 |
| 0.26 |
| 94.57 |
| 15.89 |
| 119.27 |
| 11.67 |
| 156.82 |
| 13.07 |
| 0.52 |
| 1.28 |
| 20.31 |
|
MSBF |
| MSB Financial Corp. |
| NJ |
| 20.59 |
| 20.59 |
| 0.12 |
| 0.95 |
| 0.12 |
| 0.95 |
| 4.87 |
| 20.46 |
| NM |
| 96.93 |
| 19.96 |
| 96.93 |
| 187.42 |
| 0.00 |
| 0.00 |
| NM |
|
NYCB |
| New York Community Bancorp, Inc. |
| NY |
| 11.88 |
| 7.27 |
| 1.00 |
| 8.42 |
| 1.00 |
| 8.38 |
| 0.18 |
| 290.08 |
| NM |
| 125.67 |
| 14.82 |
| 213.34 |
| 12.16 |
| 0.68 |
| 4.42 |
| NM |
|
NFBK |
| Northfield Bancorp, Inc. |
| NJ |
| 17.54 |
| 17.12 |
| 0.62 |
| 3.24 |
| 0.63 |
| 3.29 |
| 1.16 |
| 70.10 |
| 33.22 |
| 121.69 |
| 21.27 |
| 125.35 |
| 32.33 |
| 0.28 |
| 1.87 |
| 62.22 |
|
NWBI |
| Northwest Bancshares, Inc. |
| PA |
| 13.00 |
| 10.28 |
| 0.77 |
| 5.71 |
| 0.84 |
| 6.24 |
| 1.17 |
| 64.37 |
| 18.83 |
| 105.54 |
| 13.71 |
| 137.55 |
| 16.94 |
| 0.60 |
| 4.98 |
| 89.06 |
|
OSHC |
| Ocean Shore Holding Co. |
| NJ |
| 10.37 |
| 9.94 |
| 0.64 |
| 6.28 |
| 0.65 |
| 6.36 |
| 1.05 |
| 33.52 |
| 15.85 |
| 101.67 |
| 10.89 |
| 107.62 |
| 15.85 |
| 0.24 |
| 1.35 |
| 21.43 |
|
OCFC |
| OceanFirst Financial Corp. |
| NJ |
| 9.18 |
| 9.10 |
| 0.83 |
| 8.97 |
| 0.86 |
| 9.22 |
| 2.13 |
| 32.41 |
| 13.47 |
| 118.17 |
| 10.87 |
| 119.21 |
| 12.70 |
| 0.52 |
| 3.19 |
| 42.98 |
|
ORIT |
| Oritani Financial Corp. |
| NJ |
| 15.60 |
| 15.60 |
| 1.49 |
| 9.51 |
| 1.16 |
| 7.41 |
| 0.42 |
| 271.36 |
| 12.00 |
| 132.59 |
| 19.56 |
| 132.59 |
| 24.13 |
| 0.70 |
| 4.52 |
| 93.02 |
|
PBHC |
| Pathfinder Bancorp, Inc. |
| NY |
| 11.72 |
| 11.03 |
| 0.51 |
| 4.30 |
| 0.44 |
| 3.71 |
| 1.26 |
| 79.76 |
| 18.47 |
| 91.78 |
| 8.70 |
| 100.00 |
| 21.55 |
| 0.20 |
| 1.64 |
| 24.24 |
|
PBBI |
| PB Bancorp, Inc. |
| CT |
| 11.09 |
| 9.76 |
| 0.14 |
| 1.26 |
| 0.15 |
| 1.37 |
| NA |
| NA |
| NM |
| 129.17 |
| 14.32 |
| 148.98 |
| 94.19 |
| 0.10 |
| 1.16 |
| 139.77 |
|
PBSK |
| Poage Bankshares, Inc. |
| KY |
| 16.65 |
| 16.12 |
| 0.88 |
| 5.40 |
| 0.76 |
| 4.68 |
| 1.40 |
| 52.02 |
| 16.94 |
| 95.70 |
| 15.94 |
| 99.52 |
| 19.67 |
| 0.24 |
| 1.39 |
| 23.53 |
|
PROV |
| Provident Financial Holdings, Inc. |
| CA |
| 11.83 |
| 11.83 |
| 0.86 |
| 6.90 |
| 0.86 |
| 6.90 |
| 1.65 |
| 57.38 |
| 17.79 |
| 103.39 |
| 12.24 |
| 103.39 |
| 17.79 |
| 0.48 |
| 2.81 |
| 50.00 |
|
PFS |
| Provident Financial Services, Inc. |
| NJ |
| 13.37 |
| 8.97 |
| 0.97 |
| 7.17 |
| 1.00 |
| 7.41 |
| 1.10 |
| 69.07 |
| 13.96 |
| 101.68 |
| 13.65 |
| 160.61 |
| 13.99 |
| 0.68 |
| 3.66 |
| 49.62 |
|
PBIP |
| Prudential Bancorp, Inc. |
| PA |
| 24.02 |
| 24.02 |
| 0.43 |
| 1.78 |
| 0.17 |
| 0.71 |
| 3.51 |
| 18.05 |
| 65.08 |
| 113.11 |
| 25.08 |
| 113.11 |
| 184.19 |
| 0.12 |
| 0.77 |
| 112.50 |
|
RVSB |
| Riverview Bancorp, Inc. |
| WA |
| 11.93 |
| 9.34 |
| 0.70 |
| 5.71 |
| 0.68 |
| 5.63 |
| 2.32 |
| 50.93 |
| 15.00 |
| 92.37 |
| 11.05 |
| 121.75 |
| NA |
| 0.07 |
| 1.61 |
| 19.40 |
|
SVBI |
| Severn Bancorp, Inc. |
| MD |
| 11.10 |
| 11.06 |
| 0.65 |
| 5.98 |
| 0.65 |
| 5.98 |
| 4.54 |
| 26.15 |
| 24.86 |
| 88.03 |
| 7.16 |
| 88.52 |
| NA |
| 0.00 |
| 0.00 |
| NM |
|
SIFI |
| SI Financial Group, Inc. |
| CT |
| 10.59 |
| 9.46 |
| 0.31 |
| 2.75 |
| 0.33 |
| 2.94 |
| 0.85 |
| 84.49 |
| 40.91 |
| 110.43 |
| 11.70 |
| 125.27 |
| 38.28 |
| 0.16 |
| 1.15 |
| 47.06 |
|
SBCP |
| Sunshine Bancorp, Inc. |
| FL |
| 13.85 |
| 12.01 |
| -0.91 |
| -4.23 |
| -0.68 |
| -3.15 |
| 0.50 |
| 88.58 |
| NM |
| 104.00 |
| 14.64 |
| 121.14 |
| NM |
| NA |
| NA |
| NM |
|
TBNK |
| Territorial Bancorp Inc. |
| HI |
| 12.24 |
| 12.24 |
| 0.84 |
| 6.65 |
| 0.82 |
| 6.45 |
| 0.42 |
| 31.24 |
| 15.97 |
| 111.71 |
| 13.47 |
| 111.71 |
| 16.48 |
| 0.72 |
| 2.83 |
| 49.06 |
|
TSBK |
| Timberland Bancorp, Inc. |
| WA |
| 10.93 |
| 10.31 |
| 1.07 |
| 9.70 |
| 1.04 |
| 9.46 |
| 3.35 |
| 53.57 |
| 9.53 |
| 95.17 |
| 10.35 |
| 101.47 |
| 9.73 |
| 0.32 |
| 2.58 |
| 25.38 |
|
TRST |
| TrustCo Bank Corp NY |
| NY |
| 8.72 |
| 8.71 |
| 0.91 |
| 10.65 |
| 0.90 |
| 10.56 |
| 1.04 |
| 104.66 |
| 12.36 |
| 126.54 |
| 11.05 |
| 126.71 |
| 12.41 |
| 0.26 |
| 4.78 |
| 59.12 |
|
UCBA |
| United Community Bancorp |
| IN |
| 13.73 |
| 13.24 |
| 0.53 |
| 3.86 |
| 0.60 |
| 4.35 |
| 2.16 |
| 46.99 |
| 19.03 |
| 85.52 |
| 11.28 |
| 89.36 |
| 17.43 |
| 0.24 |
| 1.75 |
| 33.33 |
|
UCFC |
| United Community Financial Corp. |
| OH |
| 12.38 |
| 12.37 |
| 0.79 |
| 6.09 |
| 0.79 |
| 6.08 |
| 2.24 |
| 42.81 |
| 16.79 |
| 111.09 |
| 13.65 |
| 111.10 |
| 16.85 |
| 0.10 |
| 1.75 |
| 25.00 |
|
UBNK |
| United Financial Bancorp, Inc. |
| CT |
| 10.64 |
| 8.71 |
| 0.74 |
| 6.68 |
| 0.96 |
| 8.61 |
| 0.83 |
| 63.90 |
| 11.25 |
| 89.78 |
| 9.02 |
| 111.71 |
| 10.51 |
| 0.48 |
| 4.27 |
| 48.00 |
|
WSBF |
| Waterstone Financial, Inc. |
| WI |
| 22.39 |
| 22.36 |
| 0.90 |
| 3.68 |
| 0.90 |
| 3.68 |
| 2.50 |
| 53.75 |
| 25.32 |
| 101.14 |
| 22.64 |
| 101.29 |
| 25.34 |
| 0.20 |
| 1.49 |
| 37.74 |
|
Exhibit IV-1B
Weekly Thrift Market Line - Part Two
Prices As of February 6, 2016
|
|
|
| Key Financial Ratios |
| Asset Quality Ratios |
| Pricing Ratios |
| Dividend Data (6) |
| |||||||||||||||||||||||||
|
|
|
| Equity/ |
| Tang Equity/ |
| Reported Earnings |
| Core Earnings |
| NPAs/ |
| Rsvs/ |
| Price/ |
| Price/ |
| Price/ |
| Price/ |
| Price/ |
| Div/ |
| Dividend |
| Payout |
| |||||
|
|
|
| Assets(1) |
| Assets(1) |
| ROA(5) |
| ROE(5) |
| ROA(5) |
| ROE(5) |
| Assets |
| NPLs |
| Earnings |
| Book |
| Assets |
| Tang Book |
| Core Earnings |
| Share |
| Yield |
| Ratio (7) |
| |
|
|
|
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (x) |
| (%) |
| (%) |
| (%) |
| (x) |
| ($) |
| (%) |
| (%) |
| |
Companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
WAYN | Wayne Savings Bancshares, Inc. |
| OH |
| 9.37 |
| 9.00 |
| 0.41 |
| 4.36 |
| 0.41 |
| 4.36 |
| 1.26 |
| 52.74 |
| 20.72 |
| 89.94 |
| 8.43 |
| 94.01 |
| 20.72 |
| 0.36 |
| 2.80 |
| 58.06 |
|
WEBK | Wellesley Bancorp, Inc. |
| MA |
| 8.72 |
| 8.72 |
| 0.40 |
| 4.37 |
| 0.40 |
| 4.33 |
| NA |
| 130.10 |
| 16.16 |
| 86.93 |
| 7.30 |
| 86.93 |
| NA |
| 0.12 |
| 0.65 |
| 10.09 |
|
WBB | Westbury Bancorp, Inc. |
| WI |
| 12.34 |
| 12.34 |
| 0.57 |
| 4.28 |
| 0.58 |
| 4.39 |
| 0.80 |
| 116.79 |
| 17.80 |
| 101.75 |
| 12.01 |
| 101.75 |
| 17.11 |
| NA |
| NA |
| NM |
|
WFD | Westfield Financial, Inc. |
| MA |
| 10.29 |
| 10.29 |
| 0.45 |
| 4.25 |
| 0.36 |
| 3.47 |
| 0.57 |
| 108.46 |
| 23.76 |
| 102.75 |
| 10.69 |
| 102.75 |
| 29.19 |
| 0.12 |
| 1.53 |
| 36.36 |
|
WBKC | Wolverine Bancorp, Inc. |
| MI |
| 18.18 |
| 18.18 |
| 1.02 |
| 5.74 |
| 0.88 |
| 4.95 |
| 2.36 |
| 120.94 |
| 15.00 |
| 89.44 |
| 16.26 |
| 89.44 |
| 17.41 |
| NA |
| NA |
| 58.82 |
|
WSFS | WSFS Financial Corporation |
| DE |
| 9.98 |
| 8.97 |
| 1.07 |
| 10.43 |
| 1.14 |
| 11.17 |
| 0.81 |
| 97.02 |
| 15.07 |
| 142.95 |
| 14.85 |
| 169.79 |
| 13.59 |
| 0.24 |
| 0.86 |
| 11.89 |
|
WVFC | WVS Financial Corp. |
| PA |
| 9.67 |
| 9.67 |
| 0.43 |
| 4.25 |
| 0.43 |
| 4.25 |
| 0.08 |
| 124.71 |
| 16.31 |
| 73.06 |
| 7.15 |
| 73.06 |
| 16.31 |
| 0.16 |
| 1.38 |
| 28.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
MHCs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
GCBC | Greene County Bancorp, Inc. (MHC) |
| IN |
| 8.96 |
| 8.96 |
| 1.05 |
| 11.51 |
| 1.06 |
| 11.67 |
| 0.78 |
| 164.87 |
| 16.23 |
| 185.30 |
| 16.45 |
| 185.30 |
| 16.23 |
| 0.74 |
| 2.39 |
| 38.48 |
|
KFFB | Kentucky First Federal Bancorp (MHC) |
| OH |
| 22.81 |
| 18.84 |
| 0.74 |
| 3.26 |
| 0.74 |
| 3.26 |
| NA |
| NA |
| 38.21 |
| 114.50 |
| 25.22 |
| 145.79 |
| NA |
| 0.40 |
| 4.36 |
| 166.67 |
|
LSBK | Lake Shore Bancorp, Inc. (MHC) |
| CT |
| 15.53 |
| 15.53 |
| 0.68 |
| 4.57 |
| 0.60 |
| 4.03 |
| 1.28 |
| 36.80 |
| 23.93 |
| 109.21 |
| NA |
| 109.21 |
| 27.09 |
| 0.28 |
| 2.09 |
| 37.50 |
|
MGYR | Magyar Bancorp, Inc. (MHC) |
| WI |
| 8.48 |
| 8.48 |
| 0.17 |
| 1.91 |
| 0.18 |
| 2.04 |
| 4.14 |
| 43.65 |
| 54.17 |
| 121.05 |
| 9.93 |
| 121.05 |
| 50.71 |
| NA |
| NA |
| NM |
|
OFED | Oconee Federal Financial Corp. (MHC) |
| OH |
| 17.57 |
| 16.96 |
| 1.07 |
| 6.13 |
| 1.10 |
| 6.27 |
| 1.11 |
| 28.64 |
| 22.82 |
| 138.65 |
| 24.36 |
| 144.68 |
| 22.31 |
| 0.40 |
| 2.06 |
| 47.06 |
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PVBC | Provident Bancorp, Inc. (MHC) |
| MA |
| 16.74 |
| 16.74 |
| NA |
| 4.05 |
| NA |
| 5.48 |
| NA |
| NA |
| NA |
| 121.86 |
| 16.62 |
| 121.86 |
| NA |
| NA |
| NA |
| NA |
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TFSL | TFS Financial Corporation (MHC) |
| WI |
| 13.98 |
| 13.91 |
| 0.57 |
| 4.04 |
| NA |
| NA |
| 1.88 |
| 33.35 |
| 65.32 |
| 277.45 |
| 38.12 |
| 279.04 |
| NA |
| 0.40 |
| 2.45 |
| 136.00 |
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Under Acquisition |
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ABCW | Anchor BanCorp Wisconsin Inc. |
| MA |
| 16.09 |
| 16.09 |
| 6.30 |
| 51.74 |
| 6.18 |
| 50.81 |
| 4.30 |
| 41.22 |
| 2.81 |
| 107.15 |
| 17.47 |
| 107.15 |
| 2.83 |
| NA |
| NA |
| NM |
|
AF | Astoria Financial Corporation |
| MI |
| 10.91 |
| 9.80 |
| 0.60 |
| 5.78 |
| 0.60 |
| 5.77 |
| 1.68 |
| 44.04 |
| 19.14 |
| 99.30 |
| 10.19 |
| 112.93 |
| 18.54 |
| 0.16 |
| 1.06 |
| 20.25 |
|
CBNJ | Cape Bancorp, Inc. |
| DE |
| 10.85 |
| 9.41 |
| 0.85 |
| 7.16 |
| 0.63 |
| 5.28 |
| 1.07 |
| 78.67 |
| 12.99 |
| 100.28 |
| 10.54 |
| 117.36 |
| 17.22 |
| 0.40 |
| 3.21 |
| 37.50 |
|
CHEV | Cheviot Financial Corp. |
| PA |
| 16.80 |
| 15.24 |
| 0.30 |
| 1.78 |
| 0.28 |
| 1.69 |
| NA |
| NA |
| NM |
| 100.77 |
| 17.00 |
| 112.67 |
| 76.28 |
| 0.40 |
| 2.80 |
| 278.57 |
|
FXCB | Fox Chase Bancorp, Inc. |
| NY |
| 16.02 |
| 16.02 |
| 0.91 |
| 5.62 |
| 0.97 |
| 5.98 |
| 1.11 |
| 112.81 |
| 22.51 |
| 127.24 |
| 20.00 |
| 127.24 |
| 20.10 |
| 0.56 |
| 2.93 |
| 82.35 |
|
(1) Average of High/Low or Bid/Ask price per share.
(2) Or since offering price if converted of first listed in the past 52 weeks. Percent change figures are actual year-to-date and are not annualized.
(3) EPS (earnings per share) is based on actual trailing 12 month data and is not shown on a pro forma basis.
(4) Exludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing 12 month common earnings and average common equity and total assets balances.
(6) Annualized based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing 12 month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by public (non-MHC) shares.
Source: SNL Financial, LC. and RP® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.
Copyright (c) 2015 by RP® Financial, LC.
EXHIBIT IV-2
Historical Stock Prices Indices
Exhibit IV-2
Historical Stock Price Indices(1)
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| SNL |
| SNL |
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| NASDAQ |
| Thrift |
| Bank |
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Year/Qtr. Ended |
| DJIA |
| S&P 500 |
| Composite |
| Index |
| Index |
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2004: |
| Quarter 1 |
| 10357.7 |
| 1126.2 |
| 1994.2 |
| 1585.3 |
| 562.20 |
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| Quarter 2 |
| 10435.5 |
| 1140.8 |
| 2047.8 |
| 1437.8 |
| 546.62 |
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| Quarter 3 |
| 10080.3 |
| 1114.6 |
| 1896.8 |
| 1495.1 |
| 556.00 |
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| Quarter 4 |
| 10783.0 |
| 1211.9 |
| 2175.4 |
| 1605.6 |
| 595.10 |
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2005: |
| Quarter 1 |
| 10503.8 |
| 1180.6 |
| 1999.2 |
| 1516.6 |
| 551.00 |
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| Quarter 2 |
| 10275.0 |
| 1191.3 |
| 2057.0 |
| 1577.1 |
| 563.27 |
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| Quarter 3 |
| 10568.7 |
| 1228.8 |
| 2151.7 |
| 1527.2 |
| 546.30 |
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| Quarter 4 |
| 10717.5 |
| 1248.3 |
| 2205.3 |
| 1616.4 |
| 582.80 |
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2006: |
| Quarter 1 |
| 11109.3 |
| 1294.8 |
| 2339.8 |
| 1661.1 |
| 595.50 |
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| Quarter 2 |
| 11150.2 |
| 1270.2 |
| 2172.1 |
| 1717.9 |
| 601.14 |
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| Quarter 3 |
| 11679.1 |
| 1335.9 |
| 2258.4 |
| 1727.1 |
| 634.00 |
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| Quarter 4 |
| 12463.2 |
| 1418.3 |
| 2415.3 |
| 1829.3 |
| 658.60 |
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2007: |
| Quarter 1 |
| 12354.4 |
| 1420.9 |
| 2421.6 |
| 1703.6 |
| 634.40 |
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| Quarter 2 |
| 13408.6 |
| 1503.4 |
| 2603.2 |
| 1645.9 |
| 622.63 |
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| Quarter 3 |
| 13895.6 |
| 1526.8 |
| 2701.5 |
| 1523.3 |
| 595.80 |
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| Quarter 4 |
| 13264.8 |
| 1468.4 |
| 2652.3 |
| 1058.0 |
| 492.85 |
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2008: |
| Quarter 1 |
| 12262.9 |
| 1322.7 |
| 2279.1 |
| 1001.5 |
| 442.5 |
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| Quarter 2 |
| 11350.0 |
| 1280.0 |
| 2293.0 |
| 822.6 |
| 332.2 |
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| Quarter 3 |
| 10850.7 |
| 1166.4 |
| 2082.3 |
| 760.1 |
| 414.8 |
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| Quarter 4 |
| 8776.4 |
| 903.3 |
| 1577.0 |
| 653.9 |
| 268.3 |
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2009: |
| Quarter 1 |
| 7608.9 |
| 797.9 |
| 1528.6 |
| 542.8 |
| 170.1 |
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| Quarter 2 |
| 8447.0 |
| 919.3 |
| 1835.0 |
| 538.8 |
| 227.6 |
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| Quarter 3 |
| 9712.3 |
| 1057.1 |
| 2122.4 |
| 561.4 |
| 282.9 |
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| Quarter 4 |
| 10428.1 |
| 1115.1 |
| 2269.2 |
| 587.0 |
| 260.8 |
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2010: |
| Quarter 1 |
| 10856.6 |
| 1169.4 |
| 2398.0 |
| 626.3 |
| 301.1 |
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| Quarter 2 |
| 9744.0 |
| 1030.7 |
| 2109.2 |
| 564.5 |
| 257.2 |
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| Quarter 3 |
| 9744.0 |
| 1030.7 |
| 2109.2 |
| 564.5 |
| 257.2 |
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| Quarter 4 |
| 11577.5 |
| 1257.6 |
| 2652.9 |
| 592.2 |
| 290.1 |
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2011: |
| Quarter 1 |
| 12319.7 |
| 1325.8 |
| 2781.1 |
| 578.1 |
| 293.1 |
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| Quarter 2 |
| 12414.3 |
| 1320.6 |
| 2773.5 |
| 540.8 |
| 266.8 |
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| Quarter 3 |
| 10913.4 |
| 1131.4 |
| 2415.4 |
| 443.2 |
| 198.9 |
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| Quarter 4 |
| 12217.6 |
| 1257.6 |
| 2605.2 |
| 481.4 |
| 221.3 |
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2012: |
| Quarter 1 |
| 13212.0 |
| 1408.5 |
| 3091.6 |
| 529.3 |
| 284.9 |
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| Quarter 2 |
| 12880.1 |
| 1362.2 |
| 2935.1 |
| 511.6 |
| 257.3 |
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| Quarter 3 |
| 13437.1 |
| 1440.7 |
| 3116.2 |
| 557.6 |
| 276.8 |
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| Quarter 4 |
| 13104.1 |
| 1426.2 |
| 3019.5 |
| 565.8 |
| 292.7 |
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2013: |
| Quarter 1 |
| 14578.5 |
| 1569.2 |
| 3267.5 |
| 602.3 |
| 318.9 |
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| Quarter 2 |
| 14909.6 |
| 1606.3 |
| 3404.3 |
| 625.3 |
| 346.7 |
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| Quarter 3 |
| 15129.7 |
| 1681.6 |
| 3771.5 |
| 650.8 |
| 354.4 |
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| Quarter 4 |
| 16576.7 |
| 1848.4 |
| 4176.6 |
| 706.5 |
| 394.4 |
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2014: |
| Quarter 1 |
| 16457.7 |
| 1872.3 |
| 4199.0 |
| 718.9 |
| 410.8 |
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| Quarter 2 |
| 16826.6 |
| 1960.2 |
| 4408.2 |
| 723.9 |
| 405.2 |
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| Quarter 3 |
| 17042.9 |
| 1972.3 |
| 4493.4 |
| 697.7 |
| 411.0 |
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| Quarter 4 |
| 17823.1 |
| 2058.9 |
| 4736.1 |
| 738.7 |
| 432.8 |
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| �� |
2015: |
| Quarter 1 |
| 17776.1 |
| 2067.9 |
| 4900.9 |
| 749.3 |
| 418.8 |
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| Quarter 2 |
| 17619.5 |
| 2063.1 |
| 4986.9 |
| 795.7 |
| 448.4 |
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| Quarter 3 |
| 16284.7 |
| 1920.0 |
| 4620.2 |
| 811.7 |
| 409.4 |
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| Quarter 4 |
| 17425.0 |
| 2043.9 |
| 5007.4 |
| 809.1 |
| 431.5 |
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As of Feb. 5, 2016 |
| 16205.0 |
| 1880.1 |
| 4363.1 |
| 738.0 |
| 366.1 |
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(1) End of period data.
Sources: SNL Financial and The Wall Street Journal.
EXHIBIT IV-3
Stock Indices as of February 5, 2016
SNL Financial |
Current Values
Industry: Banking
Geography: United States and Canada
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| Day’s |
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| Index |
| Last |
| Day’s |
| Change |
| Market Breadth |
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| Value |
| Update |
| Change |
| (%) |
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| — |
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SNL Custom** Indexes |
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SNL Banking Indexes |
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SNL U.S. Bank and Thrift |
| 352.21 | * | 2/5/2016 |
| (4.88 | )* | (1.37 | )* | 58 | * | 335 | * | 32 | * |
SNL U.S. Bank |
| 366.14 | * | 2/5/2016 |
| (5.13 | )* | (1.38 | )* | 48 | * | 268 | * | 19 | * |
SNL U.S. Thrift |
| 738.02 | * | 2/5/2016 |
| (7.23 | )* | (0.97 | )* | 10 | * | 67 | * | 13 | * |
SNL TARP Participants |
| 43.09 | * | 2/5/2016 |
| (0.50 | )* | (1.15 | )* | 4 | * | 2 | * | 13 | * |
KBW Nasdaq Bank |
| 61.38 | * | 2/5/2016 |
| (0.79 | )* | (1.27 | )* | NA | * | NA | * | NA | * |
KBW Nasdaq Regional Bank |
| 71.70 | * | 2/5/2016 |
| (1.27 | )* | (1.74 | )* | NA | * | NA | * | NA | * |
S&P 500 Bank |
| 197.16 | * | 2/5/2016 |
| (2.58 | )* | (1.29 | )* | NA | * | NA | * | NA | * |
NASDAQ Bank |
| 2,479.51 | * | 2/5/2016 |
| (41.20 | )* | (1.63 | )* | NA | * | NA | * | NA | * |
S&P 500 Commercial Banks |
| 281.68 | * | 2/5/2016 |
| (3.69 | )* | (1.29 | )* | NA | * | NA | * | NA | * |
S&P 500 Diversified Banks |
| 339.73 | * | 2/5/2016 |
| (4.55 | )* | (1.32 | )* | NA | * | NA | * | NA | * |
S&P 500 Regional Banks |
| 66.37 | * | 2/5/2016 |
| (0.77 | )* | (1.15 | )* | NA | * | NA | * | NA | * |
S&P 500 Thrifts & Mortgage Finance |
| 4.56 | * | 11/2/2015 |
| (0.01 | )* | (0.31 | )* | NA | * | NA | * | NA | * |
SNL Asset Size Indexes |
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SNL U.S. Bank < $250M |
| 33.15 | * | 2/5/2016 |
| (0.41 | )* | (1.23 | )* | 0 | * | 1 | * | 0 | * |
SNL U.S. Bank $250M-$500M |
| 310.42 | * | 2/5/2016 |
| (5.40 | )* | (1.71 | )* | 1 | * | 4 | * | 4 | * |
SNL U.S. Thrift < $250M |
| 1,053.03 | * | 2/5/2016 |
| (15.18 | )* | (1.42 | )* | 0 | * | 2 | * | 0 | * |
SNL U.S. Thrift $250M-$500M |
| 4,996.71 | * | 2/5/2016 |
| (16.63 | )* | (0.33 | )* | 2 | * | 7 | * | 8 | * |
SNL U.S. Bank < $500M |
| 595.65 | * | 2/5/2016 |
| (10.33 | )* | (1.70 | )* | 1 | * | 5 | * | 4 | * |
SNL U.S. Thrift < $500M |
| 1,705.21 | * | 2/5/2016 |
| (7.02 | )* | (0.41 | )* | 2 | * | 9 | * | 8 | * |
SNL U.S. Bank $500M-$1B |
| 664.00 | * | 2/5/2016 |
| (1.50 | )* | (0.23 | )* | 20 | * | 28 | * | 11 | * |
SNL U.S. Thrift $500M-$1B |
| 2,140.78 | * | 2/5/2016 |
| (16.32 | )* | (0.76 | )* | 4 | * | 19 | * | 4 | * |
SNL U.S. Bank $1B-$5B |
| 735.78 | * | 2/5/2016 |
| (14.11 | )* | (1.88 | )* | 19 | * | 127 | * | 4 | * |
SNL U.S. Thrift $1B-$5B |
| 2,552.04 | * | 2/5/2016 |
| (32.46 | )* | (1.26 | )* | 1 | * | 29 | * | 1 | * |
SNL U.S. Bank $5B-$10B |
| 872.33 | * | 2/5/2016 |
| (15.19 | )* | (1.71 | )* | 5 | * | 48 | * | 0 | * |
SNL U.S. Thrift $5B-$10B |
| 703.85 | * | 2/5/2016 |
| (11.88 | )* | (1.66 | )* | 1 | * | 6 | * | 0 | * |
SNL U.S. Bank > $10B |
| 318.27 | * | 2/5/2016 |
| (4.35 | )* | (1.35 | )* | 3 | * | 60 | * | 0 | * |
SNL U.S. Thrift > $10B |
| 147.08 | * | 2/5/2016 |
| (0.92 | )* | (0.62 | )* | 2 | * | 4 | * | 0 | * |
SNL Market Cap Indexes |
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SNL Micro Cap U.S. Bank |
| 466.13 | * | 2/5/2016 |
| (2.59 | )* | (0.55 | )* | 76 | * | 144 | * | 416 | * |
SNL Micro Cap U.S. Thrift |
| 847.85 | * | 2/5/2016 |
| (5.36 | )* | (0.63 | )* | 15 | * | 47 | * | 79 | * |
SNL Micro Cap U.S. Bank & Thrift |
| 547.50 | * | 2/5/2016 |
| (3.11 | )* | (0.57 | )* | 91 | * | 191 | * | 495 | * |
SNL Small Cap U.S. Bank |
| 423.85 | * | 2/5/2016 |
| (7.48 | )* | (1.74 | )* | 9 | * | 94 | * | 12 | * |
SNL Small Cap U.S. Thrift |
| 547.21 | * | 2/5/2016 |
| (9.42 | )* | (1.69 | )* | 2 | * | 18 | * | 1 | * |
SNL Small Cap U.S. Bank & Thrift |
| 445.41 | * | 2/5/2016 |
| (7.84 | )* | (1.73 | )* | 11 | * | 112 | * | 13 | * |
SNL Mid Cap U.S. Bank |
| 280.79 | * | 2/5/2016 |
| (5.10 | )* | (1.78 | )* | 5 | * | 64 | * | 2 | * |
SNL Mid Cap U.S. Thrift |
| 265.95 | * | 2/5/2016 |
| (3.03 | )* | (1.13 | )* | 1 | * | 9 | * | 0 | * |
SNL Mid Cap U.S. Bank & Thrift |
| 282.06 | * | 2/5/2016 |
| (4.91 | )* | (1.71 | )* | 6 | * | 73 | * | 2 | * |
SNL Large Cap U.S. Bank |
| 227.43 | * | 2/5/2016 |
| (2.98 | )* | (1.29 | )* | 0 | * | 21 | * | 0 | * |
SNL Large Cap U.S. Thrift |
| 159.11 | * | 2/5/2016 |
| 0.62 | * | 0.39 | * | 1 | * | 0 | * | 0 | * |
SNL Large Cap U.S. Bank & Thrift |
| 229.69 | * | 2/5/2016 |
| (2.98 | )* | (1.28 | )* | 1 | * | 21 | * | 0 | * |
SNL Geographic Indexes |
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SNL Mid-Atlantic U.S. Bank |
| 330.48 | * | 2/5/2016 |
| (4.96 | )* | (1.48 | )* | 14 | * | 52 | * | 5 | * |
SNL Mid-Atlantic U.S. Thrift |
| 2,921.87 | * | 2/5/2016 |
| (17.02 | )* | (0.58 | )* | 4 | * | 23 | * | 4 | * |
SNL Midwest U.S. Bank |
| 435.99 | * | 2/5/2016 |
| (3.49 | )* | (0.79 | )* | 8 | * | 62 | * | 8 | * |
SNL Midwest U.S. Thrift |
| 2,564.33 | * | 2/5/2016 |
| (31.92 | )* | (1.23 | )* | 4 | * | 17 | * | 3 | * |
SNL New England U.S. Bank |
| 378.79 | * | 2/5/2016 |
| (5.67 | )* | (1.47 | )* | 1 | * | 19 | * | 0 | * |
SNL New England U.S. Thrift |
| 2,129.22 | * | 2/5/2016 |
| (28.50 | )* | (1.32 | )* | 0 | * | 12 | * | 4 | * |
SNL Southeast U.S. Bank |
| 202.36 | * | 2/5/2016 |
| (3.51 | )* | (1.71 | )* | 10 | * | 75 | * | 5 | * |
SNL Southeast U.S. Thrift |
| 295.55 | * | 2/5/2016 |
| (1.44 | )* | (0.49 | )* | 1 | * | 5 | * | 1 | * |
SNL Southwest U.S. Bank |
| 604.63 | * | 2/5/2016 |
| (10.49 | )* | (1.71 | )* | 3 | * | 25 | * | 0 | * |
SNL Southwest U.S. Thrift |
| 660.63 | * | 2/5/2016 |
| (2.95 | )* | (0.44 | )* | 0 | * | 1 | * | 0 | * |
SNL Western U.S. Bank |
| 1,168.74 | * | 2/5/2016 |
| (13.93 | )* | (1.18 | )* | 12 | * | 35 | * | 1 | * |
SNL Western U.S. Thrift |
| 89.66 | * | 2/5/2016 |
| (3.15 | )* | (3.39 | )* | 1 | * | 9 | * | 1 | * |
SNL Stock Exchange Indexes |
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SNL U.S. Bank NYSE |
| 316.11 | * | 2/5/2016 |
| (4.25 | )* | (1.33 | )* | 4 | * | 44 | * | 0 | * |
SNL U.S. Thrift NYSE |
| 125.97 | * | 2/5/2016 |
| (0.19 | )* | (0.15 | )* | 2 | * | 3 | * | 0 | * |
SNL U.S. Bank NYSE MKT |
| 612.14 | * | 2/5/2016 |
| (19.42 | )* | (3.08 | )* | 1 | * | 5 | * | 0 | * |
SNL U.S. Bank NASDAQ |
| 586.32 | * | 2/5/2016 |
| (9.73 | )* | (1.63 | )* | 43 | * | 219 | * | 19 | * |
SNL U.S. Thrift NASDAQ |
| 2,104.46 | * | 2/5/2016 |
| (28.41 | )* | (1.33 | )* | 8 | * | 64 | * | 13 | * |
SNL U.S. Bank Pink |
| 304.43 | * | 2/5/2016 |
| 0.03 | * | 0.01 | * | 42 | * | 55 | * | 415 | * |
SNL U.S. Thrift Pink |
| 270.16 | * | 2/5/2016 |
| 0.04 | * | 0.01 | * | 9 | * | 7 | * | 67 | * |
SNL Bank TSX |
| 852.58 | * | 2/5/2016 |
| (1.29 | )* | (0.15 | )* | 3 | * | 8 | * | 1 | * |
SNL Other Indexes |
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SNL U.S. Thrift MHCs |
| 5,360.33 | * | 2/5/2016 |
| (68.63 | )* | (1.26 | )* | 0 | * | 6 | * | 1 | * |
SNL Pink Asset Size Indexes |
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SNL U.S. Bank Pink < $100M |
| 173.90 | * | 2/5/2016 |
| 6.41 | * | 3.83 | * | 3 | * | 0 | * | 27 | * |
SNL U.S. Bank Pink $100M-$500M |
| 335.45 | * | 2/5/2016 |
| (0.24 | )* | (0.07 | )* | 26 | * | 23 | * | 285 | * |
SNL U.S. Bank Pink > $500M |
| 265.68 | * | 2/5/2016 |
| 0.02 | * | 0.01 | * | 13 | * | 32 | * | 103 | * |
Broad Market Indexes |
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DJIA |
| 16,204.83 | * | 2/5/2016 |
| (211.75 | )* | (1.29 | )* |
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S&P 500 |
| 1,880.05 | * | 2/5/2016 |
| (35.39 | )* | (1.85 | )* |
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S&P Mid-Cap |
| 1,279.32 | * | 2/5/2016 |
| (27.66 | )* | (2.12 | )* |
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S&P Small-Cap |
| 605.16 | * | 2/5/2016 |
| (14.62 | )* | (2.36 | )* |
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S&P 500 Financials |
| 282.15 | * | 2/5/2016 |
| (3.90 | )* | (1.36 | )* |
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SNL U.S. Financial Institutions |
| 615.96 | * | 2/5/2016 |
| (8.01 | )* | (1.28 | )* |
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MSCI US IMI Financials |
| 1,045.65 | * | 2/5/2016 |
| (14.94 | )* | (1.41 | )* |
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NASDAQ |
| 4,363.14 | * | 2/5/2016 |
| (146.42 | )* | (3.25 | )* |
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NASDAQ Finl |
| 2,869.05 | * | 2/5/2016 |
| (38.93 | )* | (1.34 | )* |
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NYSE |
| 9,390.33 | * | 2/5/2016 |
| (143.97 | )* | (1.51 | )* |
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Russell 1000 |
| 1,036.00 | * | 2/5/2016 |
| (20.87 | )* | (1.97 | )* |
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Russell 2000 |
| 985.62 | * | 2/5/2016 |
| (29.17 | )* | (2.87 | )* |
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Russell 3000 |
| 1,099.56 | * | 2/5/2016 |
| (22.90 | )* | (2.04 | )* |
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S&P TSX Composite |
| 12,763.99 | * | 2/5/2016 |
| (10.51 | )* | (0.08 | )* |
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MSCI AC World (USD) |
| 366.57 | * | 2/5/2016 |
| (5.42 | )* | (1.46 | )* |
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MSCI World (USD) |
| 1,523.87 | * | 2/5/2016 |
| (24.99 | )* | (1.61 | )* |
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Bermuda Royal Gazette/BSX |
| 1,220.18 | * | 2/5/2016 |
| (4.41 | )* | (0.36 | )* |
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Intraday data is available for certain exchanges. In all cases, the data is at least 15 minutes delayed.
* - Intraday data is not currently available. Data is as of the previous close.
** - Non-publicly traded institutions and institutions outside of your current subscription are not included in custom indexes. Custom indexes including foreign institutions do not take into account currency translations. Data is as of the previous close.
All SNL indexes are market-value weighted; i.e., an institution’s effect on an index is proportional to that institution’s market capitalization.
Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products.
Mid-Atlantic: DE, DC, MD, NJ, NY, PA, PR Midwest: IA, IN, IL, KS, KY, MI, MN, MO, ND, NE, OH, SD, WI
New England: CT, ME, MA, NH, RI, VT Southeast: AL, AR, FL, GA, MS, NC, SC, TN, VA, WV
Southwest: CO, LA, NM, OK, TX, UT West: AZ, AK, CA, HI, ID, MT, NV, OR, WA, WY
Copyright © 2016, SNL Financial LC
Usage of this product is governed by the License Agreement.
SNL Financial LC, One SNL Plaza, PO Box 2124, Charlottesville, Virginia 22902 USA, (434) 977-1600
EXHIBIT IV-4
Massachusetts Thrift Acquistions 2011 - Present
Exhibit IV-4
Massachusetts Thrift Acquisitions 2011-Present
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| Target Financials at Announcement |
| Deal Terms and Pricing at Announcement |
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| Total |
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|
| LTM |
| LTM |
| NPAs/ |
| Rsrvs/ |
| Deal |
| Value/ |
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| Prem/ |
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Announce |
| Complete |
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| Assets |
| E/A |
| TE/A |
| ROAA |
| ROAE |
| Assets |
| NPLs |
| Value |
| Share |
| P/B |
| P/TB |
| P/E |
| P/A |
| Cdeps |
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Date |
| Date |
| Buyer Short Name |
|
|
| Target Name |
|
|
| ($000) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| (%) |
| ($M) |
| ($) |
| (%) |
| (%) |
| (x) |
| (%) |
| (%) |
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11/04/2014 |
| Def. Agrmt |
| Investor group |
|
|
| Radius Bancorp, Inc. |
| MA |
| 744,135 |
| 8.15 |
| 8.15 |
| 0.25 |
| 3.05 |
| 0.68 |
| 137.52 |
| 47.0 |
| NA |
| 81.57 |
| 81.57 |
| 27.14 |
| 6.65 |
| -2.33 |
|
08/05/2014 |
| Def. Agrmt |
| Fidelity MHC |
| MA |
| Barre Savings Bank |
| MA |
| 152,983 |
| 9.67 |
| 9.67 |
| 0.43 |
| 4.47 |
| 0.94 |
| 119.10 |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
|
07/16/2014 |
| 11/01/2015 |
| North Shore Bancorp |
| MA |
| Merrimac Savings Bank |
| MA |
| 73,637 |
| 6.97 |
| 6.97 |
| 0.37 |
| 5.63 |
| 1.66 |
| 32.68 |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
|
02/13/2014 |
| 04/17/2015 |
| Berkshire Hills Bancorp Inc. |
| MA |
| Hampden Bancorp, Inc. |
| MA |
| 705,681 |
| 12.14 |
| 12.14 |
| 0.64 |
| 5.20 |
| 1.48 |
| 55.99 |
| 114.5 |
| 20.882 |
| 134.81 |
| 134.81 |
| 25.16 |
| 16.86 |
| 6.00 |
|
12/31/2013 |
| 02/20/2015 |
| Independent Bank Corp. |
| MA |
| Peoples Federal Bancshares, Inc. |
| MA |
| 606,201 |
| 17.11 |
| 17.11 |
| 0.35 |
| 1.96 |
| 0.30 |
| 220.44 |
| 130.6 |
| 20.386 |
| 122.66 |
| 122.66 |
| 59.96 |
| 21.55 |
| 7.28 |
|
11/15/2013 |
| 01/17/2015 |
| Cape Ann SB |
| MA |
| Granite Savings Bank |
| MA |
| 70,076 |
| 13.95 |
| 13.95 |
| -0.09 |
| -0.64 |
| 0.00 |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
|
05/14/2013 |
| 09/01/2014 |
| North Shore Bancorp |
| MA |
| Saugusbank, a Co-operative Bank |
| MA |
| 206,232 |
| 8.91 |
| 8.91 |
| 0.31 |
| 3.56 |
| 3.02 |
| 25.84 |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
|
05/01/2012 |
| 06/01/2014 |
| North Brookfield SB |
| MA |
| FamilyFirst Bank |
| MA |
| 51,905 |
| 9.17 |
| 9.15 |
| -0.39 |
| -4.03 |
| 1.47 |
| 31.54 |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
|
|
| 04/30/2014 |
| Rockville Financial Inc. |
| CT |
| United Financial Bancorp, Inc. |
| MA |
| 2,490,737 |
| 12.16 |
| 10.56 |
| 0.37 |
| 2.93 |
| 0.76 |
| 81.88 |
| 370.7 |
| 18.416 |
| 119.66 |
| 140.26 |
| 48.46 |
| 14.88 |
| 7.21 |
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|
| 11/15/2013 |
| Independent Bank Corp. |
| MA |
| Mayflower Bancorp, Inc. |
| MA |
| 261,344 |
| 8.66 |
| 8.66 |
| 0.58 |
| 6.56 |
| 0.36 |
| 151.76 |
| 37.4 |
| 17.918 |
| 163.48 |
| 163.48 |
| 25.24 |
| 14.29 |
| 7.20 |
|
|
| 11/09/2012 |
| Independent Bank Corp. |
| MA |
| Central Bancorp, Inc. |
| MA |
| 521,350 |
| 8.59 |
| 8.20 |
| 0.21 |
| 2.23 |
| 2.75 |
| 29.08 |
| 54.8 |
| 32.006 |
| 154.47 |
| 164.98 |
| NM |
| 10.51 |
| 8.43 |
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|
| 07/01/2012 |
| Framingham Co-operative Bank |
| MA |
| Natick Federal Savings Bank |
| MA |
| 155,587 |
| 9.23 |
| 9.23 |
| -0.05 |
| -0.53 |
| 1.26 |
| 11.04 |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
|
03/14/2012 |
| 02/25/2012 |
| South Adams Savings Bank |
| MA |
| Adams Co-operative Bank |
| MA |
| 196,056 |
| 9.47 |
| 9.47 |
| 0.16 |
| 1.73 |
| 6.05 |
| 14.25 |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
|
09/13/2011 |
| 01/03/2012 |
| Haverhill Bank |
| MA |
| Economy Co-operative Bank |
| MA |
| 24,145 |
| 10.33 |
| 10.33 |
| 0.13 |
| 1.33 |
| 0.31 |
| 127.03 |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
|
09/08/2011 |
| 02/01/2012 |
| Salem Five Bancorp |
| MA |
| Stoneham Savings Bank |
| MA |
| 366,819 |
| 6.43 |
| 5.58 |
| -1.29 |
| -19.55 |
| 4.93 |
| 18.98 |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
|
09/01/2011 |
| 04/01/2011 |
| Hometown Bank A Co-Op Bank |
| MA |
| Athol-Clinton Co-operative Bank |
| MA |
| 89,181 |
| 9.17 |
| 9.17 |
| -1.50 |
| -15.30 |
| 13.20 |
| 20.47 |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
| NA |
|
01/20/2011 |
| 06/30/2011 |
| People’s United Financial Inc. |
| CT |
| Danvers Bancorp, Inc. |
| MA |
| 2,630,968 |
| 11.16 |
| 10.01 |
| 0.65 |
| 5.71 |
| 0.73 |
| 89.87 |
| 488.9 |
| 22.810 |
| 163.16 |
| 184.10 |
| 28.51 |
| 18.58 |
| 13.37 |
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| Average: |
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| 549,826 |
| 10.08 |
| 9.84 |
| 0.07 |
| 0.25 |
| 2.35 |
| 72.97 |
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|
| 134.26 |
| 141.69 |
| 35.75 |
| 14.76 |
| 6.74 |
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| Median: |
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| 206,232 |
| 9.23 |
| 9.23 |
| 0.25 |
| 2.23 |
| 1.26 |
| 44.33 |
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| 134.81 |
| 140.26 |
| 27.83 |
| 14.88 |
| 7.21 |
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Source: SNL Financial, LC.
EXHIBIT IV-5
HarborOne Bank
Director and Senior Management Summary Resumes
Exhibit IV-5
HarborOne Bank
Director and Senior Management Summary Resumes
The following includes a brief biography for each of our directors. The biography of each director also includes information regarding the experience, qualifications, attributes or skills that caused our board of directors to determine that such member of our board of directors should serve as a director. There are no family relationships among any of our directors or executive officers. Unless otherwise stated, each director has held his or her current occupation for the last five years.
Joseph F. Barry retired in 2003 as Senior Vice President of HMI, Inc., a travel marketing firm located in Norwood, Massachusetts, after 14 years with the company. Before joining HMI, Inc., Mr. Barry was Vice President at Knapp Shoes, Inc. from 1986 to 1989 and Vice President at Herman Shoe International, Inc. from 1983 to 1986. Mr. Barry was selected to serve as a director because of his business experience and ability to assist us in strategic planning.
James W. Blake has served as President and Chief Executive Officer of HarborOne Bank since 1995, after serving as Chief Operating Officer in 1993. Prior to joining HarborOne Bank, Mr. Blake was Senior Vice President of Retail Banking and Marketing at Mechanics Bank in Worcester, Massachusetts, from 1986 to 1993. Mr. Blake has served on the Community Depository Institutions Advisory Council of the Federal Reserve Bank of Boston. Since 2011, he has served on the Signature Healthcare Executive Business Council, and the YMCA Foundation. He also currently serves on the board of the Connecticut Online Computer Center, a position he has held since 2003. He also served on the board of the Massachusetts Credit Union League, from 1998 to 2012. As President and Chief Executive Officer, Mr. Blake is familiar with our banking operations and provides the board of directors with insight into our challenges, opportunities and operations. In addition, he was selected to serve as a director because of his extensive banking experience and familiarity with our market area.
David P. Frenette, Esq. is an attorney in solo practice in Brockton, Massachusetts, focusing primarily on elder care law, estate planning, residential and commercial real estate and business organization. Mr. Frenette has practiced law for nearly 25 years. Mr. Frenette was a partner at Frenette & Dukess from 1995 to 2012 and with Wheatley, Frenette & Dukess from 1990 to 1995, specializing in real estate closings for local banks, including HarborOne Bank. Mr. Frenette has served on the Board of Trustees of Signature Healthcare Brockton Hospital, since 1999, as well as on the Boards at the Old Colony YMCA since 1993. He is also an active member at Rotary Club of Brockton. Mr. Frenette was selected to serve as a director because of his extensive experience in the practice of law, particularly in real estate, and because of his involvement and knowledge of the local community.
Gordon Jezard retired in 2012 after a 28-year career in the automotive parts and supplies retail business, as owner of and director of operations at Bettridge Auto Parts, Inc. in Brockton, Massachusetts, which he sold in 2012. Prior to his tenure at Bettridge Auto Parts, Inc., Mr. Jezard held management positions at Eastern Edison Co., an electric company in Brockton, Massachusetts. Mr. Jezard is a graduate of Northeastern University with degrees in Business Management and Electrical Engineering. Mr. Jezard was selected to serve as a director because of his knowledge of and experience working with small businesses.
Edward F. Kent retired in 1999. Prior to retiring, Mr. Kent served as Vice President, Regulatory Affairs at Mitek Surgical Products Inc., a Johnson & Johnson Company, in Norwood, Massachusetts, and held management positions at Accumetrics, Inc., a healthcare company in San Diego, California, providing diagnostic testing, Beaver Surgical in Norwood, Massachusetts, and Acufex Microsurgical, Inc. in Norwood, Massachusetts. Mr. Kent is also the former owner of Kent Products Inc., a manufacturing company in Easton, Massachusetts. He graduated from Wentworth Institute of Technology with an aerospace engineering license and Boston University with a B.S. degree in aeronautical engineering. Mr. Kent also served in the U.S. Navy, receiving an honorable discharge in 1955. He has been an active member in the community, including having been a member of the board of the Goddard Hospital from 1983 to 1987, and a tutor at Trinity Catholic Academy in Brockton, Massachusetts and the Adult Learning Center in Brockton, Massachusetts. Mr. Kent was selected to serve as a director because of his knowledge of and service to our local community.
Exhibit IV-5 (continued)
HarborOne Bank
Director and Senior Management Summary Resumes
Barry R. Koretz is President and founder of BKA Architects, Inc. in Brockton, Massachusetts, a full-service commercial architecture and design firm he started in 1974. As President of BKA Architects, Inc., Mr. Koretz is responsible for matters related to finance, administration, business development and project management of the 50-person firm with approximately $7 million in annual billings. Mr. Koretz has served as co-chair of the Signature Healthcare Executive Business Council since 2012 and the Signature Healthcare Capital Campaign Steering Committee since 2015, and as a director of the Brockton Boys and Girls Club since 2000. Previously, Mr. Koretz was a member of the Board of Trustees of Brockton Hospital and the boards of directors of Metro South Chamber of Commerce and the United Way of Greater Plymouth County. Mr. Koretz was selected to serve as a director because of his experience owning and managing a business in our market area, which, together with his knowledge of and service to our local community, provides a unique perspective on the needs of customers in our market area.
Timothy R. Lynch has served as Chief Medical Officer at South Shore Physician Ambulatory Enterprise (SSPAE) in Weymouth, Massachusetts, since 2015, and practicing internist at South Shore Medical Center since 2013. Prior to joining SSPAE, Dr. Lynch was Lead Hospital Physician, South Region at Atrius Health from 2013 to 2015. From 1996 to 2013, Dr. Lynch held the following positions at Signature Healthcare: Vice President of Quality from 2011 to 2013; Vice President of the Medical Staff from 2010 to 2013; Vice Chairman, Physician Hospital Organization Board of Directors from 2003 to 2008; Trustee, Signature Healthcare Corporation from 2002 to 2013; Trustee, Signature Healthcare Brockton Hospital Incorporated from 2002 to 2013; and Patient Care Assessment Coordinator from 1996 to 2013. Dr. Lynch currently serves as a member of the board of directors of Health Provider Services Organization. Dr. Lynch was selected to serve as a director because of his management experience, including strategic planning, budget development and state, federal and industry regulatory compliance.
Wallace H. Peckham, III retired in 2015 from Conley & Wood, CPA’s P.C., in South Easton, Massachusetts, where he had worked since 2013 following its merger with the company he founded in 2010, Peckham & Eidlin, CPA’s, P.C., in Brockton, Massachusetts. Mr. Peckham has been self-employed since 1982 as a certified public accountant in private practice throughout Brockton, Massachusetts, providing professional services to individuals and the business community. Mr. Peckham has been a member of the Board of Trustees of Signature Healthcare, Brockton Hospital since 2007 and served as chairman from 2013 to 2014. He is a member of the Rotary Club of Brockton. Mr. Peckham was selected to serve as a director because of his financial and accounting experience, which provides a unique perspective with respect to the preparation and review of our financial statements, the supervision of our independent auditors and the review and oversight of our financial controls and procedures, accounting practices and tax matters.
Michael Sullivan has been a partner at the Ashcroft Law Firm, LLC in Boston, Massachusetts since 2009. Mr. Sullivan is recognized as an expert in government investigations, corporate compliance and ethics, fraud, corruption, health care and corporate security, with extensive policy and regulatory experience. Prior to joining the Ashcroft Law Firm, LLC, Mr. Sullivan was a United States Attorney for the District of Massachusetts from 2001 to 2009. From 2006 through 2008, Mr. Sullivan served as Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives in Washington, DC and from 1995 to 2001 he served as the District Attorney for Plymouth County, Massachusetts. Mr. Sullivan has been a member of the board of directors of Signature Healthcare since May 2009, Old Colony YMCA since 1995, Continuing Education Institute from 1989 to 1994 and Consumer Credit Counseling Services from 1986 to 1989. Mr. Sullivan was selected to serve as a director because of his extensive policy and regulatory legal experience and continued service to the community.
Exhibit IV-5 (continued)
HarborOne Bank
Director and Senior Management Summary Resumes
Executive Officers
The following table provides information regarding our executive officers who were not directors as of December 31, 2015. Our executive officers serve at the discretion of our board of directors and hold office until their successors are duly elected and qualified or until the earlier of their death, resignation or removal.
Name |
| Age |
| Position(s) |
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Joseph F. Casey |
| 55 |
| Executive Vice President, Chief Operating Officer and Chief Financial Officer at HarborOne Bancorp and HarborOne Bank |
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Leo C. Donahue |
| 66 |
| Senior Vice President — Retail Officer at HarborOne Bank |
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Wayne F. Dunn |
| 60 |
| Senior Vice President — Chief Technology Officer at HarborOne Bank |
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Christopher K. Gibbons |
| 63 |
| Senior Vice President — Consumer Lending at HarborOne Bank |
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Mark T. Langone |
| 47 |
| Senior Vice President — Chief Enterprise Risk Officer at HarborOne Bank |
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Peter F. Makowiecki |
| 55 |
| Senior Vice President — Residential Lending at HarborOne Bank |
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David B. Reilly |
| 50 |
| Senior Vice President — Operations at HarborOne Bank |
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H. Scott Sanborn |
| 52 |
| Senior Vice President — Commercial Lending at HarborOne Bank |
|
|
|
|
|
David E. Tryder |
| 50 |
| Senior Vice President and Chief Marketing Officer at HarborOne Bank |
|
|
|
|
|
Patricia M. Williams |
| 55 |
| Senior Vice President — Human Resources at HarborOne Bank |
The following is a brief biography of each of our executive officers.
Joseph F. Casey joined HarborOne Bank in 2004 and has served as Executive Vice President, Chief Operating Officer and Chief Financial Officer since 2015. Prior to his current position, he served as Executive Vice President and Chief Financial Officer from 2006 to 2015 and Senior Vice President and Chief Financial Officer from 2004 to 2006. Before joining HarborOne Bank, Mr. Casey was Vice President at Seacoast Financial Services in New Bedford, Massachusetts and Senior Vice President, Chief Financial Officer and Treasurer at Compass Bank for Savings in New Bedford, Massachusetts from 2003 to 2004, and prior to that held various titles, including Chief Financial Officer, Treasurer, Controller and Internal Auditor during his 17 years with Andover Bancorp, Inc. in Andover, Massachusetts.
Leo C. Donahue has served as Senior Vice President — Retail Officer since joining HarborOne Bank in 2007. Prior to joining HarborOne Bank, Mr. Donahue was a self-employed consultant from 2005 to 2007; Senior Vice President — Division Manager, Personal Banking Group at North Shore Bank in Peabody, Massachusetts from 2003 — 2004; and Senior Vice President — Division Manager, Personal Banking Group at Warren Five Cent Savings Bank in Peabody, Massachusetts from 1987 to 2003.
Wayne F. Dunn has served as Senior Vice President — Chief Technology Officer since joining HarborOne Bank in 2008. Prior to joining HarborOne Bank, Mr. Dunn was Director, Enterprise Solutions at NWN Corporation in Waltham, Massachusetts from 2007 to 2008; Chief Technology Officer at Clearway Technology Partners in Medway, Massachusetts in 2007; and Senior Director, Enterprise Computing and Principal Consultant at AimNet Solutions, Inc. (acquired by Cognizant Technology Solutions Corporation) in Holliston, Massachusetts from 2001 to 2007.
Exhibit IV-5 (continued)
HarborOne Bank
Director and Senior Management Summary Resumes
Christopher K. Gibbons joined HarborOne bank in August 1994 and has been the Senior Vice President — Consumer Lending since 1999. Prior to his current position, he served as Senior Vice President — Consumer Lending & Collections from 1999 to 2015 and Vice President - Consumer Lending from 1994 to 1999. Before joining HarborOne Bank, Mr. Gibbons worked at several banks in Abington, Massachusetts and Brockton, Massachusetts as Vice President — Consumer Lending.
Mark T. Langone has served as Senior Vice President — Chief Enterprise Risk Officer since joining HarborOne Bank in 2015. Prior to joining HarborOne Bank, Mr. Langone was a bank examiner at the FDIC in Foxboro, Massachusetts, from 1990 to 2003 and 2012 to 2015; Senior Vice President — Director of Risk Governance and Senior Vice President — Credit Risk Management at Sovereign Bank (now Santander Bank, N.A.) in Boston, Massachusetts from 2004 to 2012; and Senior Vice President — Senior Risk Management at Compass Bank for Savings in New Bedford, Massachusetts, from 2003 to 2004.
Peter F. Makowiecki has served as Senior Vice President — Residential Lending since joining HarborOne Bank in 2013. Prior to joining HarborOne Bank, Mr. Makowiecki held various titles, including Senior Vice President — Sales & Marketing and President of MetLife Home Loans, at MetLife Bank in Irving, Texas, from 2008 to 2010. Mr. Makowiecki was President and Chief Executive Officer of First Horizon Home Loan Corporation from 2005 to 2008 and Senior Executive Vice President — Chief Financial Officer of First Horizon Home Loan Corporation from 2000 to 2005.
David B. Reilly has served as Senior Vice President — Operations since joining HarborOne Bank in 2008. Prior to joining HarborOne Bank, Mr. Reilly was Senior Vice President — Operations from 2004 to 2008 and Vice President — Director Alternative Delivery and Customer Service in 2004 at Rockland Trust Company in Rockland, Massachusetts; Technology Integration On-Site Coordinator at Citizens Bank in Providence, Rhode Island in 2003; and Director, Information Technology from 2000 to 2003 and Vice President — Call Center Operations and Retail Delivery from 1996 to 2003 at Cambridgeport Bank in Cambridge, Massachusetts.
H. Scott Sanborn has served as Senior Vice President — Commercial Lending since joining HarborOne Bank in 2014. Prior to joining HarborOne Bank, Mr. Sanborn was Regional Vice President — Metro Boston & Rhode Island/Southeastern Massachusetts from 2011 to 2014 and Professionals Group Leader, Wealth from 2010 to 2011 at TD Bank in Boston, Massachusetts and Senior Vice President — Regional Executive & Professionals Market Leader from 2005 to 2010 and Senior Vice President — Market Manager from 2000 to 2004 at Sovereign Bank (now Santander Bank, N.A.) based in Boston, Massachusetts.
David E. Tryder has served as Senior Vice President — Chief Marketing Officer since joining HarborOne Bank in 2014. Prior to joining HarborOne Bank, Mr. Tryder was Director — Digital Strategy Group in 2013, Director — Interactive & Relationship Marketing from 2009 to 2013, and Senior Manager — Interactive Marketing from 2005 to 2009 at Dunkin’ Donuts in Canton, Massachusetts; Vice President — Marketing Director at Modem Media in Norwalk, Connecticut, from 2004 to 2005; Vice President — Marketing Director at Digitas, LLC in Boston, Massachusetts, from 2000 to 2004; and Product Manager — ATM Network and Online Banking at Fleet Bank in Boston, Massachusetts, from 1997 to 2000.
Patricia M. Williams, Senior Vice President of Human Resources, joined HarborOne in 1986. During her tenure she has held the leadership role in the Human Resources Division and has been responsible for the development, implementation and oversight of Human Resources policies, training and development, benefits, talent acquisition and retention and culture.
Source: HarborOne Bank’s prospectus.
EXHIBIT IV-6
HarborOne Bank
Pro Forma Regulatory Capital Ratios
Exhibit IV-6
HarborOne Bank
Pro Forma Regulatory Capital Ratios
|
|
|
|
|
| Pro Forma at December 31, 2015 |
| |||||||||||||||||||
|
|
|
|
|
| Based Upon the Sale in the Offering of |
| |||||||||||||||||||
|
|
|
|
|
| 8,709,525 Shares |
| 10,246,500 Shares |
| 11,783,475 Shares |
| 13,550,996 Shares |
| |||||||||||||
|
| Historical |
| (Minimum of |
| (Midpoint of |
| (Maximum of |
| (Adjusted Maximum of |
| |||||||||||||||
|
| at December 31, 2015 |
| Offering Range) |
| Offering Range) |
| Offering Range) |
| Offering Range) (1) |
| |||||||||||||||
|
|
|
| Percent of |
|
|
| Percent of |
|
|
| Percent of |
|
|
| Percent of |
|
|
| Percent of |
| |||||
|
| Amount |
| Assets(2) |
| Amount |
| Assets(2) |
| Amount |
| Assets(2) |
| Amount |
| Assets(2) |
| Amount |
| Assets(2) |
| |||||
|
| (Dollars in thousands) |
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Capital and Retained Earnings |
| $ | 190,688 |
| 8.81 | % | $ | 221,780 |
| 10.07 | % | $ | 227,511 |
| 10.30 | % | $ | 233,243 |
| 10.52 | % | $ | 239,834 |
| 10.78 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Common equity tier 1 capital(3) |
| $ | 177,809 |
| 10.84 | % | $ | 208,901 |
| 12.68 | % | $ | 214,632 |
| 13.02 | % | $ | 220,364 |
| 13.35 | % | $ | 226,955 |
| 13.74 | % |
Common equity tier 1 requirement(4) |
| 106,601 |
| 6.50 | % | 107,098 |
| 6.50 | % | 107,189 |
| 6.50 | % | 107,2800 |
| 6.50 | % | 107,384 |
| 6.50 | % | |||||
Excess |
| $ | 71,208 |
| 4.34 | % | $ | 101,803 |
| 6.18 | % | $ | 107,443 |
| 6.52 | % | $ | 113,084 |
| 6.85 | % | $ | 119,571 |
| 7.24 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Tier 1 leverage capital(3) |
| $ | 177,809 |
| 8.30 | % | $ | 208,901 |
| 9.58 | % | $ | 214,632 |
| 9.81 | % | $ | 220,364 |
| 13.35 | % | $ | 226,955 |
| 10.31 | % |
Tier 1 leverage requirement(4) |
| 107,082 |
| 5.00 | % | 108,994 |
| 5.00 | % | 109,344 |
| 5.00 | % | 109,693 |
| 5.00 | % | 110,095 |
| 5.00 | % | |||||
Excess |
| $ | 70,727 |
| 3.30 | % | $ | 99,907 |
| 4.58 | % | $ | 105,288 |
| 4.81 | % | $ | 110,671 |
| 5.04 | % | $ | 116,860 |
| 5.31 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Tier 1 risk-based capital(3) |
| $ | 177,809 |
| 10.84 | % | $ | 208,901 |
| 12.68 | % | $ | 214,632 |
| 13.02 | % | $ | 220,364 |
| 13.35 | % | $ | 226,955 |
| 13.74 | % |
Tier 1 risk-based requirement(4) |
| 171,331 |
| 8.00 | % | 174,390 |
| 8.00 | % | 174,950 |
| 8.00 | % | 175,509 |
| 8.00 | % | 176,153 |
| 8.00 | % | |||||
Excess |
| $ | 6,478 |
| 2.84 | % | $ | 34,511 |
| 4.68 | % | $ | 39,682 |
| 5.02 | % | $ | 44,855 |
| 5.35 | % | $ | 50,802 |
| 5.74 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total risk-based capital(3) |
| $ | 191,509 |
| 11.68 | % | $ | 222,601 |
| 13.51 | % | $ | 228,332 |
| 13.85 | % | $ | 234,064 |
| 14.18 | % | $ | 240,655 |
| 14.57 | % |
Total risk-based requirement(4) |
| 164,001 |
| 10.00 | % | 164,766 |
| 10.00 | % | 164,906 |
| 10.00 | % | 165,045 |
| 10.00 | % | 165,206 |
| 10.00 | % | |||||
Excess |
| $ | 27,508 |
| 1.68 | % | $ | 57,835 |
| 3.51 | % | $ | 63,426 |
| 3.85 | % | $ | 69,019 |
| 4.18 | % | $ | 75,449 |
| 4.57 | % |
Net proceeds invested in HarborOne Bank |
| $ | 41,822 |
| $ | 49,447 |
| $ | 57,072 |
| $ | 65,840 |
|
Less: Common stock acquired by employee stock ownership plan |
| (7,153 | ) | (8,416 | ) | (9,678 | ) | (11,130 | ) | ||||
Less: Common stock acquired by equity incentive plan |
| (3,577 | ) | (4,208 | ) | (4,839 | ) | (5,565 | ) | ||||
Pro forma increase in Tier 1 and total risk- based capital |
| $ | 31,092 |
| $ | 36,823 |
| $ | 42,555 |
| $ | 49,145 |
|
(1) Pro forma capital levels assume that the employee stock ownership plan purchases 8.0% of the shares of common stock sold in the stock offering and issued to the Foundation with funds HarborOne Bancorp lends to such plan. Pro forma generally accepted accounting principles (“GAAP”) capital and regulatory capital have been reduced by the amount required to fund this plan. See “Management” for a discussion of the employee stock ownership plan.
(2) Equity and Tier 1 leverage capital levels are shown as a percentage of total average assets. Risk-based capital levels are shown as a percentage of risk-weighted assets. HarborOne Bank obtained FDIC deposit insurance in 2013, and is treated as a de novo institution and required by the FDIC to maintain a Tier 1 leverage ratio of not less than 8.0% for the first seven years of operation following the effectiveness of its deposit insurance.
(3) Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 20.0% risk weighting.
(4) Reflects regulatory requirements to be considered “well-capitalized.” HarborOne Bank obtained FDIC deposit insurance in 2013, and is treated as a de novo institution and required by the FDIC to maintain a Tier 1 leverage ratio of not less than 8.0% for the first seven years of operation following the effectiveness of its deposit insurance.
EXHIBIT IV-7
HarborOne Bank
Pro Forma Analysis Sheet — Fully Converted Basis
Exhibit IV-7
PRO FORMA ANALYSIS SHEET - FULLY CONVERTED BASIS
HarborOne Bank
Prices as of February 5, 2016
|
|
|
|
|
|
|
| Peer Group |
| Massachusetts Companies |
| All Publicly-Traded |
| ||||||
Price Multiple |
|
|
| Symbol |
| Subject (1) |
| Average |
| Median |
| Average |
| Median |
| Average |
| Median |
|
Price-earnings ratio (x) |
|
|
| P/E |
| 45.63 | x | 21.13 | x | 19.53 | x | 23.67 | x | 23.76 | x | 17.93 | x | 16.55 | x |
Price-core earnings ratio (x) |
|
|
| P/Core |
| 47.31 | x | 21.03 | x | 18.76 | x | 25.38 | x | 29.19 | x | 18.53 | x | 17.41 | x |
Price-book ratio (%) |
| = |
| P/B |
| 59.56 | % | 109.43 | % | 105.16 | % | 118.34 | % | 108.07 | % | 104.85 | % | 102.61 | % |
Price-tangible book ratio (%) |
| = |
| P/TB |
| 61.77 | % | 113.20 | % | 106.58 | % | 118.72 | % | 108.07 | % | 113.19 | % | 107.14 | % |
Price-assets ratio (%) |
| = |
| P/A |
| 9.67 | % | 14.39 | % | 11.19 | % | 13.76 | % | 12.89 | % | 13.38 | % | 12.65 | % |
Valuation Parameters |
|
|
|
|
|
|
|
|
|
Pre-Conversion Earnings (Y) |
| $ | 5,768,000 |
|
Pre-Conversion Earnings (CY) |
| $ | 5,591,000 |
|
Pre-Conversion Book Value (B) |
| $ | 190,688,000 |
|
Pre-Conv. Tang. Book Val. (TB) |
| $ | 177,014,000 |
|
Pre-Conversion Assets (A) |
| $ | 2,163,142,000 |
|
Reinvestment Rate (2)(R) |
| 1.76 | % | |
Est. Conversion Expenses (3)(X) |
| 3.00 | % | |
Tax Rate (TAX) |
| 40.00 | % | |
Shares Tax |
| $ | 0 |
|
ESOP Stock Purchases (E) |
| 8.00 | %(5) | |
Cost of ESOP Borrowings (S) |
| 0.00 | %(4) | |
ESOP Amortization (T) |
| 20.00 | years | |
RRP Amount (M) |
| 4.00 | % | |
RRP Vesting (N) |
| 5.00 | years (5) | |
Foundation (F) |
| 1.50 | % | |
Tax Benefit (Z) |
| 1,350,000 |
| |
Percentage Sold (PCT) |
| 100.00 | % | |
Option (O1) |
| 10.00 | %(6) | |
Estimated Option Value (O2) |
| 28.00 | %(6) | |
Option vesting (O3) |
| 5.00 | (6) | |
Option pct taxable (O4) |
| 25.00 | %(6) |
Calculation of Pro Forma Value After Conversion |
|
|
| |||
|
|
|
|
|
| |
1. | V= | P/E * (Y) |
| V= | $227,700,000 | |
|
| 1 - P/E * PCT * ((1-X-E-M-F)*R*(1-TAX) - (1-TAX)*E/T - (1-TAX)*M/N) - (1-(TAX*O4))*(O1*O2)/O3) |
|
|
| |
|
|
|
|
|
| |
2. | V= | P/Core * (Y) |
| V= | $227,700,000 | |
|
| 1 - P/core * PCT * ((1-X-E-M-F)*R*(1-TAX) - (1-TAX)*E/T - (1-TAX)*M/N) - (1-(TAX*O4))*(O1*O2)/O3) |
|
|
| |
|
|
|
|
|
| |
3. | V= | P/B * (B+Z) |
|
| V= | $227,700,000 |
|
| 1 - P/B * PCT * (1-X-E-M-F) |
|
|
| |
|
|
|
|
|
| |
4. | V= | P/TB * (TB+Z) |
|
| V= | $227,700,000 |
|
| 1 - P/TB * PCT * (1-X-E-M-F) |
|
|
| |
|
|
|
|
|
| |
5. | V= | P/A * (A+Z) |
|
| V= | $227,700,000 |
|
| 1 - P/A * PCT * (1-X-E-M-F) |
|
|
|
|
|
|
|
|
|
|
| Shares |
|
|
| Aggregate |
| ||
|
| Shares Issued |
| Price Per |
| Gross Offering |
| Issued To |
| Total Shares |
| Market Value |
| ||
Conclusion |
| To the Public |
| Share |
| Proceeds |
| Foundation |
| Issued |
| of Shares Issued |
| ||
Supermaximum |
| 29,756,250 |
| 10.00 |
| $ | 297,562,500 |
| 357,075 |
| 30,113,325 |
| $ | 301,133,250 |
|
Maximum |
| 25,875,000 |
| 10.00 |
| 258,750,000 |
| 310,500 |
| 26,185,500 |
| 261,855,000 |
| ||
Midpoint |
| 22,500,000 |
| 10.00 |
| 225,000,000 |
| 270,000 |
| 22,770,000 |
| 227,700,000 |
| ||
Minimum |
| 19,125,000 |
| 10.00 |
| 191,250,000 |
| 229,500 |
| 19,354,500 |
| 193,545,000 |
| ||
(1) Pricing ratios shown reflect the midpoint value.
(2) Net return reflects a reinvestment rate of 1.76 percent and a tax rate of 40.0 percent.
(3) Offering expenses shown at estimated midpoint value.
(4) No cost is applicable since holding company will fund the ESOP loan.
(5) ESOP and MRP amortize over 20 years and 5 years, respectively; amortization expenses tax effected at 40.0 percent.
(6) 10 percent option plan with an estimated Black-Scholes valuation of 28.0 percent of the exercise price, including a 5 year vesting with 25 percent of the options (granted to directors) tax effected at 40.0 percent.
EXHIBIT IV-8
HarborOne Bank
Pro Forma Effect of Conversion Proceeds — Fully Converted Basis
Exhibit IV-8
PRO FORMA EFFECT OF CONVERSION PROCEEDS
HarborOne Bank
At the Minimum
1. |
| Pro Forma Market Capitalization |
| $ | 193,545,000 |
| |
|
| Less: Foundation Shares |
| 2,295,000 |
| ||
2. |
| Offering Proceeds |
| $ | 191,250,000 |
| |
|
| Less: Estimated Offering Expenses |
| 5,737,500 |
| ||
|
| Net Conversion Proceeds |
| $ | 185,512,500 |
| |
|
|
|
|
|
| ||
3. |
| Estimated Additional Income from Conversion Proceeds |
|
|
| ||
|
|
|
|
|
| ||
|
| Net Conversion Proceeds |
| $ | 185,512,500 |
| |
|
| Less: Cash Contribution to Foundation |
| 573,750 |
| ||
|
| Less: Non-Cash Stock Purchases (1) |
| 23,225,400 |
| ||
|
| Net Proceeds Reinvested |
| $ | 161,713,350 |
| |
|
| Estimated net incremental rate of return |
| 1.06 | % | ||
|
| Reinvestment Income |
| $ | 1,707,693 |
| |
|
| Less: Shares Tax |
| 0 |
| ||
|
| Less: Estimated cost of ESOP borrowings (2) |
| 0 |
| ||
|
| Less: Amortization of ESOP borrowings (3) |
| 464,508 |
| ||
|
| Less: Amortization of Options (4) |
| 975,467 |
| ||
|
| Less: Recognition Plan Vesting (5) |
| 929,016 |
| ||
|
| Net Earnings Impact |
| $ | (661,298 | ) | |
|
|
|
|
|
| Net |
|
|
| ||||
|
|
|
| Before |
| Earnings |
| After |
| ||||
|
|
|
| Conversion |
| Increase |
| Conversion |
| ||||
4. |
| Pro Forma Earnings |
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
|
| 12 Months ended December 31, 2015 (reported) |
| $ | 5,768,000 |
| $ | (661,298 | ) | $ | 5,106,702 |
| |
|
| 12 Months ended December 31, 2015 (core) |
| $ | 5,591,000 |
| $ | (661,298 | ) | $ | 4,929,702 |
| |
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
5. |
| Pro Forma Net Worth |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 190,688,000 |
| $ | 161,713,350 |
| $ | 1,147,500 |
| $ | 353,548,850 |
|
|
| December 31, 2015 (Tangible) |
| $ | 177,014,000 |
| $ | 161,713,350 |
| $ | 1,147,500 |
| $ | 339,874,850 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
6. |
| Pro Forma Assets |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 2,163,142,000 |
| $ | 161,713,350 |
| $ | 1,147,500 |
| $ | 2,326,002,850 |
|
(1) Includes ESOP and RRP stock purchases equal to 8.0 and 4.0 percent of total shares issued, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is tax-effected at a 40.0 percent rate.
(4) Option valuation based on Black-Scholes model, 5 year vesting, and assumes 25 percent is taxable.
(5) RRP is amortized over 5 years, and amortization expense is tax effected at 40.0 percent.
Exhibit IV-8
PRO FORMA EFFECT OF CONVERSION PROCEEDS
HarborOne Bank
At the Midpoint
1. |
| Pro Forma Market Capitalization |
| $ | 227,700,000 |
|
|
| Less: Foundation Shares |
| 2,700,000 |
| |
2. |
| Offering Proceeds |
| $ | 225,000,000 |
|
|
| Less: Estimated Offering Expenses |
| 6,750,000 |
| |
|
| Net Conversion Proceeds |
| $ | 218,250,000 |
|
|
|
|
|
|
| |
3. |
| Estimated Additional Income from Conversion Proceeds |
|
|
| |
|
|
|
|
|
| |
|
| Net Conversion Proceeds |
| $ | 218,250,000 |
|
|
| Less: Cash Contribution to Foundation |
| 675,000 |
| |
|
| Less: Non-Cash Stock Purchases (1) |
| 27,324,000 |
| |
|
| Net Proceeds Reinvested |
| $ | 190,251,000 |
|
|
| Estimated net incremental rate of return |
| 1.06 | % | |
|
| Reinvestment Income |
| $ | 2,009,051 |
|
|
| Less: Shares Tax |
| 0 |
| |
|
| Less: Estimated cost of ESOP borrowings (2) |
| 0 |
| |
|
| Less: Amortization of ESOP borrowings (3) |
| 546,480 |
| |
|
| Less: Amortization of Options (4) |
| 1,147,608 |
| |
|
| Less: Recognition Plan Vesting (5) |
| 1,092,960 |
| |
|
| Net Earnings Impact |
| $ | (777,997 | ) |
|
|
|
|
|
| Net |
|
|
| |||
|
|
|
| Before |
| Earnings |
| After |
| |||
|
|
|
| Conversion |
| Increase |
| Conversion |
| |||
4. |
| Pro Forma Earnings |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| |||
|
| 12 Months ended December 31, 2015 (reported) |
| $ | 5,768,000 |
| $ | (777,997 | ) | $ | 4,990,003 |
|
|
| 12 Months ended December 31, 2015 (core) |
| $ | 5,591,000 |
| $ | (777,997 | ) | $ | 4,813,003 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
5. |
| Pro Forma Net Worth |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 190,688,000 |
| $ | 190,251,000 |
| $ | 1,350,000 |
| $ | 382,289,000 |
|
|
| December 31, 2015 (Tangible) |
| $ | 177,014,000 |
| $ | 190,251,000 |
| $ | 1,350,000 |
| $ | 368,615,000 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
6. |
| Pro Forma Assets |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 2,163,142,000 |
| $ | 190,251,000 |
| $ | 1,350,000 |
| $ | 2,354,743,000 |
|
(1) Includes ESOP and RRP stock purchases equal to 8.0 and 4.0 percent of total shares issued, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is tax-effected at a 40.0 percent rate.
(4) Option valuation based on Black-Scholes model, 5 year vesting, and assumes 25 percent is taxable.
(5) RRP is amortized over 5 years, and amortization expense is tax effected at 40.0 percent.
Exhibit IV-8
PRO FORMA EFFECT OF CONVERSION PROCEEDS
HarborOne Bank
At the Maximum Value
1. |
| Pro Forma Market Capitalization |
| $ | 261,855,000 |
|
|
| Less: Foundation Shares |
| 3,105,000 |
| |
2. |
| Offering Proceeds |
| $ | 258,750,000 |
|
|
| Less: Estimated Offering Expenses |
| 7,762,500 |
| |
|
| Net Conversion Proceeds |
| $ | 250,987,500 |
|
|
|
|
|
|
| |
3. |
| Estimated Additional Income from Conversion Proceeds |
|
|
| |
|
|
|
|
|
| |
|
| Net Conversion Proceeds |
| $ | 250,987,500 |
|
|
| Less: Cash Contribution to Foundation |
| 776,250 |
| |
|
| Less: Non-Cash Stock Purchases (1) |
| 31,422,600 |
| |
|
| Net Proceeds Reinvested |
| $ | 218,788,650 |
|
|
| Estimated net incremental rate of return |
| 1.06 | % | |
|
| Reinvestment Income |
| $ | 2,310,408 |
|
|
| Less: Shares Tax |
| 0 |
| |
|
| Less: Estimated cost of ESOP borrowings (2) |
| 0 |
| |
|
| Less: Amortization of ESOP borrowings (3) |
| 628,452 |
| |
|
| Less: Amortization of Options (4) |
| 1,319,749 |
| |
|
| Less: Recognition Plan Vesting (5) |
| 1,256,904 |
| |
|
| Net Earnings Impact |
| $ | (894,697 | ) |
|
|
|
|
|
| Net |
|
|
| |||
|
|
|
| Before |
| Earnings |
| After |
| |||
|
|
|
| Conversion |
| Increase |
| Conversion |
| |||
4. |
| Pro Forma Earnings |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| |||
|
| 12 Months ended December 31, 2015 (reported) |
| $ | 5,768,000 |
| $ | (894,697 | ) | $ | 4,873,303 |
|
|
| 12 Months ended December 31, 2015 (core) |
| $ | 5,591,000 |
| $ | (894,697 | ) | $ | 4,696,303 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
5. |
| Pro Forma Net Worth |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 190,688,000 |
| $ | 218,788,650 |
| $ | 1,552,500 |
| $ | 411,029,150 |
|
|
| December 31, 2015 (Tangible) |
| $ | 177,014,000 |
| $ | 218,788,650 |
| $ | 1,552,500 |
| $ | 397,355,150 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
6. |
| Pro Forma Assets |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 2,163,142,000 |
| $ | 218,788,650 |
| $ | 1,552,500 |
| $ | 2,383,483,150 |
|
(1) Includes ESOP and RRP stock purchases equal to 8.0 and 4.0 percent of total shares issued, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is tax-effected at a 40.0 percent rate.
(4) Option valuation based on Black-Scholes model, 5 year vesting, and assumes 25 percent is taxable.
(5) RRP is amortized over 5 years, and amortization expense is tax effected at 40.0 percent.
Exhibit IV-8
PRO FORMA EFFECT OF CONVERSION PROCEEDS
HarborOne Bank
At the Super Maximum Value
1. |
| Pro Forma Market Capitalization |
| $ | 301,133,250 |
|
|
| Less: Foundation Shares |
| 3,570,750 |
| |
2. |
| Offering Proceeds |
| $ | 297,562,500 |
|
|
| Less: Estimated Offering Expenses |
| 8,926,875 |
| |
|
| Net Conversion Proceeds |
| $ | 288,635,625 |
|
|
|
|
|
|
| |
3. |
| Estimated Additional Income from Conversion Proceeds |
|
|
| |
|
|
|
|
|
| |
|
| Net Conversion Proceeds |
| $ | 288,635,625 |
|
|
| Less: Cash Contribution to Foundation |
| 892,688 |
| |
|
| Less: Non-Cash Stock Purchases (1) |
| 36,135,990 |
| |
|
| Net Proceeds Reinvested |
| $ | 251,606,947 |
|
|
| Estimated net incremental rate of return |
| 1.06 | % | |
|
| Reinvestment Income |
| $ | 2,656,969 |
|
|
| Less: Shares Tax |
| 0 |
| |
|
| Less: Estimated cost of ESOP borrowings (2) |
| 0 |
| |
|
| Less: Amortization of ESOP borrowings (3) |
| 722,720 |
| |
|
| Less: Amortization of Options (4) |
| 1,517,712 |
| |
|
| Less: Recognition Plan Vesting (5) |
| 1,445,440 |
| |
|
| Net Earnings Impact |
| $ | (1,028,902 | ) |
|
|
|
|
|
| Net |
|
|
| |||
|
|
|
| Before |
| Earnings |
| After |
| |||
|
|
|
| Conversion |
| Increase |
| Conversion |
| |||
4. |
| Pro Forma Earnings |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| |||
|
| 12 Months ended December 31, 2015 (reported) |
| $ | 5,768,000 |
| $ | (1,028,902 | ) | $ | 4,739,098 |
|
|
| 12 Months ended December 31, 2015 (core) |
| $ | 5,591,000 |
| $ | (1,028,902 | ) | $ | 4,562,098 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
5. |
| Pro Forma Net Worth |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 190,688,000 |
| $ | 251,606,947 |
| $ | 1,785,375 |
| $ | 444,080,322 |
|
|
| December 31, 2015 (Tangible) |
| $ | 177,014,000 |
| $ | 251,606,947 |
| $ | 1,785,375 |
| $ | 430,406,322 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
6. |
| Pro Forma Assets |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 2,163,142,000 |
| $ | 251,606,947 |
| $ | 1,785,375 |
| $ | 2,416,534,322 |
|
(1) Includes ESOP and RRP stock purchases equal to 8.0 and 4.0 percent of total shares issued, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is tax-effected at a 40.0 percent rate.
(4) Option valuation based on Black-Scholes model, 5 year vesting, and assumes 25 percent is taxable.
(5) RRP is amortized over 5 years, and amortization expense is tax effected at 40.0 percent.
EXHIBIT IV-9
HarborOne Bank
Pro Forma Analysis Sheet — Minority Stock Offering
EXHIBIT IV-9
PRO FORMA ANALYSIS SHEET - MINORITY STOCK OFFERING
HarborOne Bank
February 5, 2016
|
|
|
|
|
|
| Peer Group |
| Massachusetts Companies |
| All Publicly-Traded |
| ||||||
Price Multiple |
|
| Symbol |
| Subject (1) |
| Mean |
| Median |
| Mean |
| Median |
| Mean |
| Median |
|
Price-earnings ratio (x) |
|
| P/E |
| 42.34x |
| 21.13x |
| 19.53x |
| 23.67x |
| 23.76x |
| 17.93x |
| 16.55x |
|
Price-core earnings ratio (x) |
|
| P/Core |
| 43.78x |
| 21.03x |
| 18.76x |
| 25.38x |
| 29.19x |
| 18.53x |
| 17.41x |
|
Price-book ratio (%) | = |
| P/B |
| 82.03% |
| 109.43% |
| 105.16% |
| 118.34% |
| 108.07% |
| 104.85% |
| 102.61% |
|
Price-tangible book ratio (%) | = |
| P/TB |
| 86.28% |
| 113.20% |
| 106.58% |
| 118.72% |
| 108.07% |
| 113.19% |
| 107.14% |
|
Price-assets ratio (%) | = |
| P/A |
| 10.12% |
| 14.39% |
| 11.19% |
| 13.76% |
| 12.89% |
| 13.38% |
| 12.65% |
|
Valuation Parameters |
|
|
| |
|
|
|
|
|
Pre-Conversion Earnings (Y)(2) |
| $ | 5,767,000 |
|
Pre-Conversion Earnings (CY)(2) |
| $ | 5,590,000 |
|
Pre-Conversion Book Value (B)(2) |
| $ | 190,588,000 |
|
Pre-Conv. Tang. Book Value (TB)(2) |
| $ | 176,914,000 |
|
Pre-Conversion Assets (A)(2) |
| $ | 2,163,042,000 |
|
Reinvestment Rate (3)(R) |
| 1.76 | % | |
Est. Conversion Expenses (4)(X) |
| 3.49 | % | |
Tax Rate (TAX) |
| 40.00 | % | |
|
|
|
| |
ESOP Stock Purchases (E) |
| 8.00 | %(6) | |
Cost of ESOP Borrowings (S) |
| 0.00 | %(5) | |
ESOP Amortization (T) |
| 20.00 | years | |
MRP Amount (M) |
| 4.00 | % | |
MRP Vesting (N) |
| 5.00 | years(6) | |
Foundation (F) |
| 2.67 | % | |
Tax Benefit (Z) |
| 1,366,200 |
| |
Percentage Sold (PCT) |
| 46.20 | % | |
Option (O1) |
| 10.00 | %(7) | |
Estimated Option Value (O2) |
| 28.30 | %(7) | |
Option vesting (O3) |
| 5.00 | (7) | |
Option pct taxable (O4) |
| 25.00 | %(7) |
Calculation of Pro Forma Value After Conversion |
|
|
| ||||
|
|
|
|
|
| ||
1. | V= | P/E * (Y) |
| V= | $227,700,000 |
| |
|
| 1 - P/E * PCT * ((1-X-E-M-F)*R*(1-TAX) - (1-TAX)*E/T - (1-TAX)*M/N) - (1-(TAX*O4))*(O1*O2)/O3) |
|
|
| ||
|
|
|
|
|
| ||
2. | V= | P/Core * (Y) |
| V= | $227,700,000 |
| |
|
| 1 - P/core * PCT * ((1-X-E-M-F)*R*(1-TAX) - (1-TAX)*E/T - (1-TAX)*M/N) - (1-(TAX*O4))*(O1*O2)/O3) |
|
|
| ||
|
|
|
|
|
| ||
3. | V= | P/B * (B+Z) |
| V= | $227,700,000 |
| |
|
| 1 - P/B * PCT * (1-X-E-M-F) |
|
|
| ||
|
|
|
|
|
| ||
4. | V= | P/TB * (TB+Z) |
| V= | $227,700,000 |
| |
|
| 1 - P/TB * PCT * (1-X-E-M-F) |
|
|
| ||
|
|
|
|
|
| ||
5. | V= | P/A * (A+Z) |
| V= | $227,700,000 |
| |
|
| 1 - P/A * PCT * (1-X-E-M-F) |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Aggregate |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| Shares |
|
|
| Market Value |
|
|
| ||
|
| Shares Owned by |
|
| Shares Issued |
| Price Per |
| Gross Offering |
| Issued to |
| Total Shares |
| of Shares Issued |
| Full Value |
| ||
Conclusion |
| The MHC |
|
| To the Public |
| Share |
| Proceeds |
| Foundation |
| Issued Publicly |
| Publicly |
| Total Shares |
| ||
Super Maximum |
| 16,200,969 |
|
| 13,550,996 |
| 10.00 |
| $ | 135,509,960 |
| 361,360 |
| 13,912,356 |
| $ | 139,123,563 |
| 30,113,325 |
|
Maximum |
| 14,087,799 |
|
| 11,783,475 |
| 10.00 |
| $ | 117,834,750 |
| 314,226 |
| 12,097,701 |
| 120,977,010 |
| 26,185,500 |
| |
Midpoint |
| 12,250,260 |
|
| 10,246,500 |
| 10.00 |
| $ | 102,465,000 |
| 273,240 |
| 10,519,740 |
| 105,197,400 |
| 22,770,000 |
| |
Minimum |
| 10,412,721 |
|
| 8,709,525 |
| 10.00 |
| $ | 87,095,250 |
| 232,254 |
| 8,941,779 |
| 89,417,790 |
| 19,354,500 |
| |
(1) Pricing ratios shown reflect the midpoint value.
(2) Adjusted for capitalizing MHC with $100,000.
(3) Net return reflects a reinvestment rate of 1.76 percent, and a tax rate of 40.0 percent.
(4) Offering expenses shown at estimated midpoint value.
(5) No cost is applicable since holding company will fund the ESOP loan.
(6) ESOP and MRP amortize over 20 years and 5 years, respectively; amortization expenses tax effected at 40.0 percent.
(7) 10 percent option plan with an estimated Black-Scholes valuation of 28.30 percent of the exercise price, including a 5 year vesting with 25 percent of the options (granted to directors) tax effected at 40.0 percent.
EXHIBIT IV-10
HarborOne Bank
Pro Forma Effect of Conversion Proceeds — Minority Stock Offering
Exhibit IV-10
PRO FORMA EFFECT OF CONVERSION PROCEEDS
HarborOne Bank
At the Minimum
1. |
| Pro Forma Market Capitalization |
| $ | 89,417,790 |
|
|
| Less: Foundation Shares |
| 2,322,540 |
| |
2. |
| Offering Proceeds |
| $ | 87,095,250 |
|
|
| Less: Estimated Offering Expenses |
| 3,451,243 |
| |
|
| Net Conversion Proceeds |
| $ | 83,644,007 |
|
|
|
|
|
|
| |
3. |
| Estimated Additional Income from Conversion Proceeds |
|
|
| |
|
|
|
|
|
| |
|
| Net Conversion Proceeds |
| $ | 83,644,007 |
|
|
| Less: Cash Contribution to Foundation |
| 580,635 |
| |
|
| Less: Non-Cash Stock Purchases (1) |
| 10,730,135 |
| |
|
| Net Proceeds Reinvested |
| $ | 72,333,237 |
|
|
| Estimated net incremental rate of return |
| 1.06 | % | |
|
| Reinvestment Income |
| $ | 763,839 |
|
|
| Less: Estimated cost of ESOP borrowings (2) |
| 0 |
| |
|
| Less: Amortization of ESOP borrowings (3) |
| 214,603 |
| |
|
| Less: Amortization of Options (4) |
| 455,494 |
| |
|
| Less: Recognition Plan Vesting (5) |
| 429,205 |
| |
|
| Net Earnings Impact |
| $ | (335,463 | ) |
|
|
|
|
|
| Net |
|
|
| |||
|
|
|
| Before |
| Earnings |
| After |
| |||
|
|
|
| Conversion |
| Increase |
| Conversion |
| |||
4. |
| Pro Forma Earnings |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| |||
|
| 12 Months ended December 31, 2015 (reported) |
| $ | 5,767,000 |
| $ | (335,463 | ) | $ | 5,431,537 |
|
|
| 12 Months ended December 31, 2015 (core) |
| $ | 5,590,000 |
| $ | (335,463 | ) | $ | 5,254,537 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
5. |
| Pro Forma Net Worth |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 190,588,000 |
| $ | 72,333,237 |
| $ | 1,161,270 |
| $ | 264,082,507 |
|
|
| December 31, 2015 (Tangible) |
| $ | 176,914,000 |
| $ | 72,333,237 |
| $ | 1,161,270 |
| $ | 250,408,507 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
6. |
| Pro Forma Assets |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 2,163,042,000 |
| $ | 72,333,237 |
| $ | 1,161,270 |
| $ | 2,236,536,507 |
|
(1) Includes ESOP and MRP stock purchases equal to 8.0 and 4.0 percent of the public shares, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is tax-effected at a 40.0 percent rate.
(4) Option valuation based on Black-Scholes model, 5 year vesting, and assuming 25 percent taxable.
(5) MRP is amortized over 5 years, and amortization expense is tax effected at 40.0 percent.
Exhibit IV-10
PRO FORMA EFFECT OF CONVERSION PROCEEDS
HarborOne Bank
At the Midpoint
1. |
| Pro Forma Market Capitalization |
| $ | 105,197,400 |
| |
|
| Less: Foundation Shares |
| 2,732,400 |
| ||
2. |
| Offering Proceeds |
| $ | 102,465,000 |
| |
|
| Less: Estimated Offering Expenses |
| 3,571,156 |
| ||
|
| Net Conversion Proceeds |
| $ | 98,893,844 |
| |
|
|
|
|
|
| ||
3. |
| Estimated Additional Income from Conversion Proceeds |
|
|
| ||
|
|
|
|
|
| ||
|
| Net Conversion Proceeds |
| $ | 98,893,844 |
| |
|
| Less: Cash Contribution to Foundation |
| 683,100 |
| ||
|
| Less: Non-Cash Stock Purchases (1) |
| 12,623,688 |
| ||
|
| Net Proceeds Reinvested |
| $ | 85,587,056 |
| |
|
| Estimated net incremental rate of return |
| 1.06 | % | ||
|
| Reinvestment Income |
| $ | 903,799 |
| |
|
| Less: Estimated cost of ESOP borrowings (2) |
| 0 |
| ||
|
| Less: Amortization of ESOP borrowings (3) |
| 252,474 |
| ||
|
| Less: Amortization of Options (4) |
| 535,876 |
| ||
|
| Less: Recognition Plan Vesting (5) |
| 504,948 |
| ||
|
| Net Earnings Impact |
| $ | (389,498 | ) | |
|
|
|
|
|
| Net |
|
|
| |||
|
|
|
| Before |
| Earnings |
| After |
| |||
|
|
|
| Conversion |
| Increase |
| Conversion |
| |||
4. |
| Pro Forma Earnings |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| |||
|
| 12 Months ended December 31, 2015 (reported) |
| $ | 5,767,000 |
| $ | (389,498 | ) | $ | 5,377,502 |
|
|
| 12 Months ended December 31, 2015 (core) |
| $ | 5,590,000 |
| $ | (389,498 | ) | $ | 5,200,502 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
5. |
| Pro Forma Net Worth |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 190,588,000 |
| $ | 85,587,056 |
| $ | 1,366,200 |
| $ | 277,541,256 |
|
|
| December 31, 2015 (Tangible) |
| $ | 176,914,000 |
| $ | 85,587,056 |
| $ | 1,366,200 |
| $ | 263,867,256 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
6. |
| Pro Forma Assets |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 2,163,042,000 |
| $ | 85,587,056 |
| $ | 1,366,200 |
| $ | 2,249,995,256 |
|
(1) Includes ESOP and MRP stock purchases equal to 8.0 and 4.0 percent of the public shares, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is tax-effected at a 40.0 percent rate.
(4) Option valuation based on Black-Scholes model, 5 year vesting, and assuming 25 percent taxable.
(5) MRP is amortized over 5 years, and amortization expense is tax effected at 40.0 percent.
Exhibit IV-10
PRO FORMA EFFECT OF CONVERSION PROCEEDS
HarborOne Bank
At the Maximum
1. |
| Pro Forma Market Capitalization |
| $ | 120,977,010 |
|
|
| Less: Foundation Shares |
| 3,142,260 |
| |
2. |
| Offering Proceeds |
| $ | 117,834,750 |
|
|
| Less: Estimated Offering Expenses |
| 3,691,069 |
| |
|
| Net Conversion Proceeds |
| $ | 114,143,681 |
|
|
|
|
|
|
| |
3. |
| Estimated Additional Income from Conversion Proceeds |
|
|
| |
|
|
|
|
|
| |
|
| Net Conversion Proceeds |
| $ | 114,143,681 |
|
|
| Less: Cash Contribution to Foundation |
| 785,565 |
| |
|
| Less: Non-Cash Stock Purchases (1) |
| 14,517,241 |
| |
|
| Net Proceeds Reinvested |
| $ | 98,840,875 |
|
|
| Estimated net incremental rate of return |
| 1.06 | % | |
|
| Reinvestment Income |
| $ | 1,043,760 |
|
|
| Less: Estimated cost of ESOP borrowings (2) |
| 0 |
| |
|
| Less: Amortization of ESOP borrowings (3) |
| 290,345 |
| |
|
| Less: Amortization of Options (4) |
| 616,257 |
| |
|
| Less: Recognition Plan Vesting (5) |
| 580,690 |
| |
|
| Net Earnings Impact |
| $ | (443,532 | ) |
|
|
|
|
|
| Net |
|
|
| |||
|
|
|
| Before |
| Earnings |
| After |
| |||
|
|
|
| Conversion |
| Increase |
| Conversion |
| |||
4. |
| Pro Forma Earnings |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| |||
|
| 12 Months ended December 31, 2015 (reported) |
| $ | 5,767,000 |
| $ | (443,532 | ) | $ | 5,323,468 |
|
|
| 12 Months ended December 31, 2015 (core) |
| $ | 5,590,000 |
| $ | (443,532 | ) | $ | 5,146,468 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
5. |
| Pro Forma Net Worth |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 190,588,000 |
| $ | 98,840,875 |
| $ | 1,571,130 |
| $ | 291,000,005 |
|
|
| December 31, 2015 (Tangible) |
| $ | 176,914,000 |
| $ | 98,840,875 |
| $ | 1,571,130 |
| $ | 277,326,005 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
6. |
| Pro Forma Assets |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 2,163,042,000 |
| $ | 98,840,875 |
| $ | 1,571,130 |
| $ | 2,263,454,005 |
|
(1) Includes ESOP and MRP stock purchases equal to 8.0 and 4.0 percent of the public shares, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is tax-effected at a 40.0 percent rate.
(4) Option valuation based on Black-Scholes model, 5 year vesting, and assuming 25 percent taxable.
(5) MRP is amortized over 5 years, and amortization expense is tax effected at 40.0 percent.
Exhibit IV-10
PRO FORMA EFFECT OF CONVERSION PROCEEDS
HarborOne Bank
At the Super Maximum Value
1. |
| Pro Forma Market Capitalization |
| $ | 139,123,563 |
|
|
| Less: Foundation Shares |
| 3,613,600 |
| |
2. |
| Offering Proceeds |
| $ | 135,509,960 |
|
|
| Less: Estimated Offering Expenses |
| 3,828,968 |
| |
|
| Net Conversion Proceeds |
| $ | 131,680,992 |
|
|
|
|
|
|
| |
3. |
| Estimated Additional Income from Conversion Proceeds |
|
|
| |
|
|
|
|
|
| |
|
| Net Conversion Proceeds |
| $ | 131,680,992 |
|
|
| Less: Cash Contribution to Foundation |
| 903,400 |
| |
|
| Less: Non-Cash Stock Purchases (1) |
| 16,694,828 |
| |
|
| Net Proceeds Reinvested |
| $ | 114,082,764 |
|
|
| Estimated net incremental rate of return |
| 1.06 | % | |
|
| Reinvestment Income |
| $ | 1,204,714 |
|
|
| Less: Estimated cost of ESOP borrowings (2) |
| 0 |
| |
|
| Less: Amortization of ESOP borrowings (3) |
| 333,897 |
| |
|
| Less: Amortization of Options (4) |
| 708,695 |
| |
|
| Less: Recognition Plan Vesting (5) |
| 667,793 |
| |
|
| Net Earnings Impact |
| $ | (505,671 | ) |
|
|
|
|
|
| Net |
|
|
| |||
|
|
|
| Before |
| Earnings |
| After |
| |||
|
|
|
| Conversion |
| Increase |
| Conversion |
| |||
4. |
| Pro Forma Earnings |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| |||
|
| 12 Months ended December 31, 2015 (reported) |
| $ | 5,767,000 |
| $ | (505,671 | ) | $ | 5,261,329 |
|
|
| 12 Months ended December 31, 2015 (core) |
| $ | 5,590,000 |
| $ | (505,671 | ) | $ | 5,084,329 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
5. |
| Pro Forma Net Worth |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 190,588,000 |
| $ | 114,082,764 |
| $ | 1,806,800 |
| $ | 306,477,564 |
|
|
| December 31, 2015 (Tangible) |
| $ | 176,914,000 |
| $ | 114,082,764 |
| $ | 1,806,800 |
| $ | 292,803,564 |
|
|
|
|
| Before |
| Net Cash |
| Tax Benefit |
| After |
| ||||
|
|
|
| Conversion |
| Proceeds |
| Of Contribution |
| Conversion |
| ||||
6. |
| Pro Forma Assets |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| December 31, 2015 |
| $ | 2,163,042,000 |
| $ | 114,082,764 |
| $ | 1,806,800 |
| $ | 2,278,931,564 |
|
(1) Includes ESOP and MRP stock purchases equal to 8.0 and 4.0 percent of the public shares, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is tax-effected at a 40.0 percent rate.
(4) Option valuation based on Black-Scholes model, 5 year vesting, and assuming 25 percent taxable.
(5) MRP is amortized over 5 years, and amortization expense is tax effected at 40.0 percent.
EXHIBIT V-1
RP® Financial, LC.
Firm Qualifications Statement
RP FINANCIAL, LC.
Advisory | Planning | Valuation
FIRM QUALIFICATION STATEMENT
RP ® Financial, LC. (“RP Financial”) provides financial and management consulting, merger advisory and valuation services to the financial services companies, including banks, thrifts, credit unions, insurance companies, mortgage companies and others. We offer a broad array of services, high quality and prompt service, hands-on involvement by our senior staff, careful structuring of strategic initiatives and sophisticated valuation and other analyses consistent with industry practices and regulatory requirements. Our staff has extensive consulting, valuation, financial advisory and industry backgrounds.
STRATEGIC PLANNING SERVICES
RP Financial’s strategic planning services, for established or de novo banking companies, provide effective feasible plans with quantifiable results to enhance shareholder value, achieve regulatory approval or realize other objectives. We conduct situation analyses; establish mission/vision statements, develope strategic goals and objectives; and identify strategies to enhance value, address capital, increase earnings, manage risk and tackle operational or organizational matters. Our proprietary financial simulation models facilitate the evaluation of the feasibility, impact and merit of alternative financial strategies.
MERGER ADVISORY SERVICES
RP Financial’s merger advisory services include targeting buyers and sellers, assessing acquisition merit, conducting due diligence, negotiating and structuring deal terms, preparing merger business plans and financial simulations, rendering fairness opinions, preparing fair valuation analyses and supporting post-merger strategies. RP Financial is also expert in de novo charters, shelf charters and failed bank deals with loss sharing or other assistance. Through financial simulations, valuation proficiency and regulatory familiarity, RP Financial’s merger advisory services center on enhancing shareholder returns.
VALUATION SERVICES
RP Financial’s extensive valuation practice includes mergers, thrift stock conversions, insurance company demutualizations, merger valuation and goodwill impairment, ESOPs, going private, secondary offerings and other purposes. We are highly experienced in performing appraisals conforming with regulatory guidelines and appraisal standards. RP Financial is the nation’s leading valuation firm for thrift stock conversions, with offerings ranging up to $4 billion.
MANAGEMENT STUDIES
RP Financial provides effective organizational planning, and we are often engaged to prepare independent management studies required for regulatory enforcement actions. We evaluate Board, management and staffing needs, assess existing talent and capabilities and make strategic recommendations for new positions, replacement, succession and other organizational matters.
ENTERPRISE RISK ASSESSMENT SERVICES
RP Financial provides effective enterprise risk assessment consulting services to assist our clients in evaluating the degree to which they have properly identified, understood, measured, monitored and controlled enterprise risk as part of a deliberate risk/reward strategy and to help them implement strategies to mitigate risk, enhance performance, ensure effective reporting and compliance with laws and regulations and avoid potential future damage to their reputation and associated consequences and to mitigate residual risk and unanticipated losses.
OTHER CONSULTING SERVICES
RP Financial provides other consulting services including evaluating regulatory changes, development diversification and branching strategies, conducting feasibility studies and other research, and preparing management studies in response to regulatory enforcement actions. We assist clients with CRA plans and revising policies and procedures. Our other consulting services are aided by proprietary valuation and financial simulation models.
KEY PERSONNEL (Years of Relevant Experience & Contact Information) | ||||
|
|
|
|
|
Ronald S. Riggins, Managing Director (35) |
| (703) 647-6543 |
| rriggins@rpfinancial.com |
William E. Pommerening, Managing Director (32) |
| (703) 647-6546 |
| wpommerening@rpfinancial.com |
Marcus Faust, Managing Director (30) |
| (703) 647-6553 |
| mfaust@rpfinancial.com |
Gregory E. Dunn, Director (33) |
| (703) 647-6548 |
| gdunn@rpfinancial.com |
James P. Hennessey, Director (30) |
| (703) 647-6544 |
| jhennessey@rpfinancial.com |
James J. Oren, Director (29) |
| (703) 647-6549 |
| joren@rpfinancial.com |
Carla H. Pollard, Senior Vice President (27) |
| (703) 647-6556 |
| cpollard@rpfinancial.com |
RP Financial, LC. |
| Phone: (703) 528-1700 |
1100 North Glebe Road, Suite 600 |
| Fax: (703) 528-1788 |
Arlington, VA 22201 |
| www.rpfinancial.com |