HarborOne Bancorp 8-K HarborOne Bancorp, Inc. Announces 2017 Second Quarter Earnings

Exhibit 99.1

HarborOne Bancorp, Inc. Announces 2017 Second Quarter Earnings 

Contact: Joseph F. Casey, EVP, COO, CFO

Brockton, Massachusetts (July  21, 2017): HarborOne Bancorp, Inc. (the “Company”) (NASDAQ: HONE), the holding company for HarborOne Bank (the “Bank”), announced second quarter 2017 net income of $3.2 million or $0.10 per share as compared to $2.7 million, or $0.09 per share in the prior quarter and net loss of $681,000 in the same quarter last year.    

The Company reported net income of $5.9 million or $0.19 per share for the six months ended June 30, 2017 compared to a net loss of $557,000 for the same period in 2016. 

The Company’s results for the quarter ended June 30, 2016 included a one-time contribution of $4.8 million to The HarborOne Foundation (the “Foundation”). Excluding this non-recurring expense, net income would have been $2.2 million for the second quarter of 2016 and $2.3 million for the first six months of 2016.

James W. Blake, President and CEO stated, “We are pleased with the Company’s overall performance again this quarter. We had solid net income growth of 17% from the previous quarter driven by commercial loan  growth, a rebound in mortgage banking activity and continued improvement in asset quality.”

Net Interest Income

The Company’s net interest and dividend income was $18.2 million for the quarter ended June 30, 2017,  up $783,000, or 4.5%, from $17.4 million for the quarter ended March 31, 2017 and up $3.6 million,  or 24.3%, from $14.7 million for the quarter ended June 30, 2016. The interest rate spread and net interest margin on a tax-equivalent basis were 2.87% and 3.03%, respectively, for the quarter ended June 30, 2017 compared to 2.83% and 2.99%, respectively, for the quarter ended March 31, 2017 and 2.68% and 2.81%, respectively, for the quarter ended June 30, 2016.    

The increase in net interest income from the previous quarter reflects a $763,000, or 3.6%, increase in total interest and dividend income and a decrease of $20,000, or 0.5% in total interest expense.  The increase in interest and dividend income is primarily due to the commercial loan growth that provided an increase in average outstanding loans of $17.5 million combined with a 4 basis point increase in yield on loans. Interest expense was essentially flat as average interest-bearing deposits increased $68.1 million with no change in the cost of those funds and average FHLB advances decreased $37.1 million coupled with a 1 basis point decrease in total cost of borrowed funds.

The increase in net interest income over the prior year quarter is primarily due to growth in the Company’s average loan balances to $2.13 billion from $1.88 billion and an increase in the yield on loans to 3.82% from 3.61%, again primarily driven by commercial loan growth as well as higher rates on variable rate loans.  Total interest and dividend income increased  $3.8 million, or 21.0%, and total interest expense increased $243,000, or 7.0%.    

Noninterest Income

Noninterest income increased to $14.3 million for the quarter ended June 30, 2017,  up  $2.9 million, or 24.8%, from the quarter ended March 31, 2017.  This increase is primarily due to a  54.4% increase in mortgage loan originations at Merrimack Mortgage Company, LLC (“Merrimack”) as a result of seasonal fluctuations resulting in a $2.7 million, or 37.1%  increase in mortgage banking income. Mortgage banking income was also impacted by servicing rights fair value adjustments amounting to  a $1.1 million decrease in the second quarter of 2017 compared to a $442,000 decrease in the first quarter of 2017 and a $2.2 million decrease in the second quarter of 2016. Servicing rights fair value adjustments largely reflect fluctuations in the 10-year Constant Maturity Treasury rate and residential real estate mortgage loan rates.  Noninterest income decreased  $1.6 million, or 10.0%  primarily driven by a decrease of $1.5 million, or 13.1%, in mortgage banking income as compared to the quarter ended June 30, 2016. Compared to the same quarter prior year, Merrimack’s mortgage originations decreased 19.1% in 2017 primarily as a result of higher residential mortgage interest rates and reduced refinance volume in 2017.

Noninterest Expense

Noninterest expenses were $26.9 million for the quarter ended June 30, 2017, an increase of $2.5 million, or 10.1%, from the quarter ended March 31, 2017.  The increase was primarily due to the increase in mortgage loan originations which contributed to an increase of $1.4 million, or 9.3%, in compensation and benefits and an increase of $519,000, or 38.1%, in loan expense primarily from an increase in loan closing expense on loans held for sale.    Noninterest expense decreased  $4.3 million,  or 13.8%, from the quarter ended June 30, 2016 primarily due to the $4.8 million charitable contribution made in 2016. 

Asset Quality

The Company recorded a  $470,000 provision for loan losses for the quarter ended June 30, 2017, $265,000 for the quarter ended March 31, 2017 and $801,000 for the quarter ended June 30, 2016.  The provisions in the second quarter of 2017 and 2016 were primarily due to commercial loan growth. In the first quarter of 2017, the Company adjusted general reserve allocations for commercial real estate

and commercial loans based on updated peer data. The updated peer data resulted in lower general reserve rates and reserves on these loan types; however, the decrease was partially offset by commercial loan growth.    Changes in the provision for loan losses are also based on management’s assessment of loan portfolio growth and composition changes, historical charge-off trends, and ongoing evaluation of credit quality and current economic conditions. The allowance for loan losses was $17.2 million, or 0.82%, of total loans at June 30, 2017, compared to $16.9 million, or 0.82%, of total loans, at March 31, 2017 and $14.4 million, or 0.79%, of total loans, at June 30, 2016. Net charge-offs totaled $173,000 for the quarter ended June 30, 2017, or 0.03%, of average loans outstanding on an annualized basis, compared to $349,000 and 0.07% for the quarter ended March 31, 2017 and $58,000 and 0.01% for the quarter ended June 30, 2016.

Nonperforming assets were $22.5 million at June 30, 2017 compared to $23.5 million at March 31, 2017 and $27.8 million at June 30, 2016. Nonperforming assets as a percentage of total assets were 0.86% at June 30, 2017,  0.91% at March 31, 2017 and 1.23% at June 30, 2016. The steady decline reflects the Company’s continued efforts to minimize nonperforming assets through diligent collection efforts, prudent workout arrangements and strong underwriting.

Balance Sheet

Total assets increased $65.9 million, or 2.6%, to $2.63 billion at June 30, 2017 from $2.57 billion at March 31, 2017. Net loans increased $32.2 million, or 1.6%, to $2.08 billion at June 30, 2017 from $2.05 billion at March 31, 2017.  The net increase in loans for the three months ended June 30, 2017 was primarily due to increases of $35.2 million in commercial real estate loans, $5.8 million in residential real estate loans and  $2.4 million in commercial and industrial loans, partially offset by a  decrease of $2.2 million in construction loans and $8.2 million in consumer loans.  Loans held for sale increased $39.9 million, or 76.9%, to $91.9 million at June 30, 2017 from $51.9 million at March 31,  2017 due to the seasonal increase in residential mortgage originations.  

Total deposits increased $69.1 million, or 3.6%, to $1.99 billion at June 30, 2017 from $1.93 billion at March 31, 2017.  Compared to the prior quarter non-certificate accounts increased $59.3 million,  brokered deposits increased $15.0 million and term certificate accounts decreased $5.3 million.  The increase in non-certificate accounts was primarily due to HarborOne Bancorp Inc.’s participation in the Bank’s reciprocal deposit program that was established in June with respect to the Company’s $64.8 million deposit at the Bank, which effectively converts the Company’s deposit at the Bank to multiple deposits at other financial institutions which are not eliminated in consolidation. The reciprocal deposit program provides access to FDIC insured deposit products in aggregate amounts exceeding current insurance limits for depositors. Borrowings were  $265.1 million at June 30, 2017 and $275.1 million at March 31, 2017.

Total stockholders’ equity was $336.6 million at June 30, 2017 compared to $332.7 million at March 31, 2017 and $324.3 million at June 30, 2016.   The tangible common equity to tangible assets ratio was 12.34% at June 30, 2017, 12.50% at March 31, 2017 and 13.79% at June 30, 2016.  At June 30, 2017, the Company and the Bank exceed all regulatory capital requirements.

About HarborOne Bancorp, Inc.

HarborOne Bancorp, Inc. is the holding company for HarborOne Bank, the largest co-operative bank in New England. HarborOne Bank serves the financial needs of consumers, businesses, and municipalities throughout Southeastern Massachusetts through a network of 14 full-service branches, two limited service branches, a commercial loan office in Providence, Rhode Island, a residential lending office in Westford, Massachusetts, and 13 free-standing ATMs. The Bank also provides a range of educational services through “HarborOne U,” with classes on small business, financial literacy and personal enrichment at two campuses located adjacent to our Brockton and Mansfield locations. Merrimack Mortgage Company, LLC, a subsidiary of HarborOne Bank, is a full-service mortgage lender with 33 offices in Massachusetts, New Hampshire and Maine, and also does business in seven additional states.

Forward Looking Statements

Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on the Company’s business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which the Company operates, including changes that adversely affect borrowers’ ability to service and repay the Company’s loans; changes in the value of securities in the Company’s investment portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; changes in government regulation; changes in accounting standards and practices; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; demand for loans in the Company’s market area; the Company’s ability to attract

and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that the Company may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, HarborOne Bancorp, Inc.’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.

Use of Non-GAAP Measures

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

HarborOne Bancorp, Inc.

Consolidated Balance Sheet Trend

(Unaudited)

	June 30,		March 31,		December 31,		September 30,		June 30,
(Dollars in thousands)	2017		2017		2016		2016		2016
Assets
Cash and due from banks	$	17,492	$	18,621	$	16,464	$	15,706	$	18,773
Short-term investments		84,105		83,778		33,751		3,549		11,365
Total cash and cash equivalents		101,597		102,399		50,215		19,255		30,138
Securities available for sale, at fair value		160,795		165,348		136,469		115,397		121,957
Securities held to maturity, at amortized cost		45,660		46,531		47,877		49,213		50,504
Federal Home Loan Bank stock, at cost		16,356		17,863		15,749		15,255		13,078
Loans held for sale, at fair value		91,849		51,932		86,443		114,054		99,697
Loans:
Residential real estate		771,121		765,368		770,935		774,404		773,169
Commercial real estate		592,325		557,174		495,801		450,945		377,386
Construction		66,908		69,134		58,443		40,438		31,414
Total mortgage loans on real estate		1,430,354		1,391,676		1,325,179		1,265,787		1,181,969
Commercial		114,234		111,849		100,501		88,718		82,333
Consumer		543,394		551,603		563,104		555,874		560,144
Loans		2,087,982		2,055,128		1,988,784		1,910,379		1,824,446
Less: Allowance for loan losses		(17,181)		(16,884)		(16,968)		(15,832)		(14,439)
Net deferred loan costs		8,682		9,041		9,931		10,336		10,893
Net loans		2,079,483		2,047,285		1,981,747		1,904,883		1,820,900
Mortgage servicing rights, at fair value		20,313		20,839		20,333		15,534		12,688
Goodwill and other intangible assets		13,541		13,563		13,585		13,607		13,630
Other assets		102,476		100,384		95,892		99,935		104,166
Total assets	$	2,632,070	$	2,566,144	$	2,448,310	$	2,347,133	$	2,266,758
Liabilities and Stockholders' Equity
Deposits:
NOW and demand deposit accounts	$	395,150	$	392,012	$	365,869	$	358,628	$	339,379
Regular savings and club accounts		334,112		338,338		316,947		317,198		316,195
Money market deposit accounts		706,547		646,123		595,211		596,377		620,975
Brokered deposits		92,803		77,774		54,045		20,236		—
Term certificate accounts		465,179		470,490		472,681		442,472		433,685
Total deposits		1,993,791		1,924,737		1,804,753		1,734,911		1,710,234
Short-term borrowed funds		30,000		75,000		80,000		50,000		—
Long-term borrowed funds		235,117		200,118		195,119		195,120		195,096
Other liabilities and accrued expenses		36,527		33,554		39,054		39,188		37,138
Total liabilities		2,295,435		2,233,409		2,118,926		2,019,219		1,942,468
Common stock		321		321		321		321		321
Additional paid-in capital		144,705		144,555		144,420		144,175		144,107
Unearned compensation - ESOP		(10,982)		(11,130)		(11,278)		(11,575)		(11,872)
Retained earnings		203,159		199,946		197,211		194,275		190,723
Accumulated other comprehensive income (loss)		(568)		(957)		(1,290)		718		1,011
Total stockholders' equity		336,635		332,735		329,384		327,914		324,290
Total liabilities and stockholders' equity	$	2,632,070	$	2,566,144	$	2,448,310	$	2,347,133	$	2,266,758

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income - Trend

(Unaudited)

	Quarters Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
(Dollars in thousands, except per share amounts)	2017		2017		2016		2016		2016
Interest and dividend income:
Interest and fees on loans	$	19,640	$	19,135	$	18,092	$	17,144	$	16,293
Interest on loans held for sale		620		546		788		866		581
Interest on securities		1,332		1,216		1,002		988		1,023
Other interest and dividend income		320		252		167		164		209
Total interest and dividend income		21,912		21,149		20,049		19,162		18,106
Interest expense:
Interest on deposits		2,567		2,432		2,283		2,092		2,165
Interest on borrowed funds		1,130		1,285		1,211		1,168		1,289
Total interest expense		3,697		3,717		3,494		3,260		3,454
Net interest and dividend income		18,215		17,432		16,555		15,902		14,652
Provision for loan losses		470		265		1,456		1,710		801
Net interest income, after provision for loan losses		17,745		17,167		15,099		14,192		13,851
Noninterest income:
Mortgage banking income:
Changes in mortgage servicing rights fair value		(1,052)		(442)		2,970		351		(2,163)
Other		11,200		7,846		12,404		16,513		13,837
Total mortgage banking income		10,148		7,404		15,374		16,864		11,674
Deposit account fees		3,071		2,845		2,979		3,010		2,928
Income on retirement plan annuities		113		110		111		111		108
Gain on sale of consumer loans		—		78		—		—		29
Gain on sale and call of securities, net		—		—		—		—		41
Bank-owned life insurance income		261		257		263		275		274
Other income		706		760		557		609		834
Total noninterest income		14,299		11,454		19,284		20,869		15,888
Noninterest expenses:
Compensation and benefits		16,414		15,019		18,616		18,902		16,407
Occupancy and equipment		2,724		2,986		2,516		2,458		2,463
Data processing		1,528		1,522		1,557		1,450		1,446
Loan expense		1,882		1,363		2,710		3,316		2,128
Marketing		1,041		482		835		592		607
Professional fees		1,080		930		822		709		602
Deposit insurance		446		462		208		437		418
Prepayment penalties on Federal Home Loan Bank		—		—		—		—		400
Charitable foundation contributions		—		—		—		—		4,820
Other expenses		1,763		1,641		2,099		1,745		1,878
Total noninterest expenses		26,878		24,405		29,363		29,609		31,169
Income (loss) before income taxes		5,166		4,216		5,020		5,452		(1,430)
Income tax provision (benefit)		1,953		1,481		2,084		1,900		(749)
Net income (loss)	$	3,213	$	2,735	$	2,936	$	3,552	$	(681)
Earnings per common share:
Basic and diluted	$	0.10	$	0.09	$	0.09	$	0.11		N/A
Weighted average shares outstanding:
Basic and diluted		31,013,002		30,998,163		30,973,588		30,943,808		N/A

HarborOne Bancorp, Inc.

Consolidated Statements of Net Income

(Unaudited)

	Six Months Ended June 30,
(Dollars in thousands, except per share amounts)	2017		2016		$ Change		% Change
Interest and dividend income:
Interest and fees on loans	$	38,775	$	31,936	$	6,839	21.4	%
Interest on loans held for sale		1,166		1,041		125	12.0
Interest on securities		2,548		2,122		426	20.1
Other interest and dividend income		572		446		126	28.3
Total interest and dividend income		43,061		35,545		7,516	21.1
Interest expense:
Interest on deposits		4,999		4,335		664	15.3
Interest on borrowed funds		2,415		2,672		(257)	(9.6)
Total interest expense		7,414		7,007		407	5.8
Net interest and dividend income		35,647		28,538		7,109	24.9
Provision for loan losses		735		1,006		(271)	(26.9)
Net interest income, after provision for loan losses		34,912		27,532		7,380	26.8
Noninterest income:
Mortgage banking income:
Changes in mortgage servicing rights fair value		(1,494)		(4,451)		2,957	66.4
Other		19,046		23,213		(4,167)	(18.0)
Total mortgage banking income		17,552		18,762		(1,210)	(6.4)
Deposit account fees		5,916		5,675		241	4.2
Income on retirement plan annuities		223		214		9	4.2
Gain on sale of consumer loans		78		79		(1)	(1.3)
Gain on sale and call of securities, net		—		283		(283)	(100.0)
Bank-owned life insurance income		518		550		(32)	(5.8)
Other income		1,466		1,387		79	5.7
Total noninterest income		25,753		26,950		(1,197)	(4.4)
Noninterest expenses:
Compensation and benefits		31,433		31,925		(492)	(1.5)
Occupancy and equipment		5,710		5,247		463	8.8
Data processing		3,050		2,860		190	6.6
Loan expense		3,245		3,720		(475)	(12.8)
Marketing		1,523		1,172		351	29.9
Professional fees		2,010		1,179		831	70.5
Deposit insurance		908		821		87	10.6
Prepayment penalties on Federal Home Loan Bank		—		400		(400)	(100.0)
Charitable foundation contributions		—		4,820		(4,820)	(100.0)
Other expenses		3,404		3,582		(178)	(5.0)
Total noninterest expenses		51,283		55,726		(4,443)	(8.0)
Income (loss) before income taxes		9,382		(1,244)		10,626	854.2
Income tax provision (benefit)		3,434		(687)		4,121	599.9
Net income (loss)	$	5,948	$	(557)	$	6,505	1167.9	%
Earnings per common share:
Basic and diluted	$	0.19		N/A		N/A
Weighted average shares outstanding:
Basic and diluted		31,005,623		N/A		N/A

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

	Quarters Ended
	June 30, 2017							March 31, 2017							June 30, 2016
	Average							Average							Average
	Outstanding					Yield/		Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost (6)		Balance			Interest		Cost (6)		Balance			Interest		Cost (6)
	(Dollars in thousands)
Interest-earning assets:
Loans (1)	$	2,129,280		$	20,260	3.82	%	$	2,111,768		$	19,681	3.78	%	$	1,881,488		$	16,874	3.61	%
Investment securities (2)		209,691			1,408	2.69			197,525			1,292	2.65			173,731			1,101	2.55
Other interest-earning assets		81,370			320	1.58			67,428			252	1.52			51,257			209	1.64
Total interest-earning assets		2,420,341			21,988	3.64			2,376,721			21,225	3.62			2,106,476			18,184	3.47
Noninterest-earning assets		129,281							124,148							131,104
Total assets	$	2,549,622						$	2,500,869						$	2,237,580
Interest-bearing liabilities:
Savings accounts	$	338,607			141	0.17		$	326,731			151	0.19		$	317,180			137	0.17
NOW accounts		128,794			20	0.06			123,340			19	0.06			120,702			19	0.06
Money market accounts		667,468			831	0.50			627,073			753	0.49			642,758			724	0.45
Certificates of deposit		469,249			1,369	1.17			469,774			1,350	1.17			446,848			1,285	1.16
Brokered deposit		76,555			206	1.08			65,698			159	0.98			—			—	—
Total interest-bearing deposits		1,680,673			2,567	0.61			1,612,616			2,432	0.61			1,527,488			2,165	0.57
FHLB advances		254,832			1,130	1.78			291,896			1,285	1.79			239,245			1,289	2.17
Total interest-bearing liabilities		1,935,505			3,697	0.77			1,904,512			3,717	0.79			1,766,733			3,454	0.79
Noninterest-bearing liabilities:
Noninterest-bearing deposits		250,654							237,056							244,651
Other noninterest-bearing liabilities		29,432							28,981							28,887
Total liabilities		2,215,591							2,170,549							2,040,271
Total equity		334,031							330,320							197,309
Total liabilities and equity	$	2,549,622						$	2,500,869						$	2,237,580
Tax equivalent net interest income					18,291							17,508					��		14,730
Tax equivalent interest rate spread (3)						2.87	%						2.83	%						2.68	%
Less: tax equivalent adjustment					76							76							78
Net interest income as reported				$	18,215						$	17,432						$	14,652
Net interest-earning assets (4)	$	484,836						$	472,209						$	339,743
Net interest margin (5)						3.02	%						2.97	%						2.80	%
Tax equivalent effect						0.01							0.02							0.01
Net interest margin on a fully tax equivalent basis						3.03	%						2.99	%						2.81	%
Average interest-earning assets to average interest-bearing liabilities		125.05	%						124.79	%						119.23	%
(1) Includes loans held for sale, nonaccruing loan balances and interest received on such loans.
(2) Includes securities available for sale and securities held to maturity.  Interest income from tax exempt securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented.  The yield on investments before tax equivalent adjustments for the quarters presented were 2.55%, 2.50%, and 2.37%, respectively.
(3) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.
(6) Annualized

HarborOne Bancorp, Inc.

Average Balances / Yields

(Unaudited)

	Year to Date
	June 30, 2017							June 30, 2016
	Average							Average
	Outstanding					Yield/		Outstanding					Yield/
	Balance			Interest		Cost (6)		Balance			Interest		Cost (6)
	(Dollars in thousands)
Interest-earning assets:
Loans (1)	$	2,120,573		$	39,941	3.80	%	$	1,842,228		$	32,977	3.60	%
Investment securities (2)		203,642			2,700	2.67			178,673			2,279	2.57
Other interest-earning assets		74,437			572	1.55			64,621			446	1.39
Total interest-earning assets		2,398,652			43,213	3.63			2,085,522			35,702	3.44
Noninterest-earning assets		126,729							126,731
Total assets	$	2,525,381						$	2,212,253
Interest-bearing liabilities:
Savings accounts	$	332,702			292	0.18		$	309,368			267	0.17
NOW accounts		126,037			39	0.06			118,785			37	0.06
Money market accounts		647,383			1,584	0.49			636,711			1,428	0.45
Certificates of deposit		469,510			2,719	1.17			452,742			2,603	1.16
Brokered deposit		71,156			365	1.03			—			—	—
Total interest-bearing deposits		1,646,788			4,999	0.61			1,517,606			4,335	0.57
FHLB advances		273,262			2,415	1.78			252,318			2,672	2.13
Total interest-bearing liabilities		1,920,050			7,414	0.78			1,769,924			7,007	0.80
Noninterest-bearing liabilities:
Noninterest-bearing deposits		243,937							219,315
Other noninterest-bearing liabilities		29,207							27,983
Total liabilities		2,193,194							2,017,222
Total equity		332,187							195,031
Total liabilities and equity	$	2,525,381						$	2,212,253
Tax equivalent net interest income					35,799							28,695
Tax equivalent interest rate spread (3)						2.85	%						2.64	%
Less: tax equivalent adjustment					152							157
Net interest income as reported				$	35,647						$	28,538
Net interest-earning assets (4)	$	478,602						$	315,598
Net interest margin (5)						3.00	%						2.75	%
Tax equivalent effect						0.01							0.02
Net interest margin on a fully tax equivalent basis						3.01	%						2.77	%
Average interest-earning assets to average interest-bearing liabilities		124.93	%						117.83	%
(1) Includes loans held for sale, nonaccruing loan balances and interest received on such loans.
(2) Includes securities available for sale and securities held to maturity.  Interest income from tax exempt securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented.  The yield on investments before tax equivalent adjustments was 2.52% and 2.39% for the six months ended June 30, 2017 and 2016, respectively.
(3) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest bearing liabilities.
(4) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.
(6) Annualized

HarborOne Bancorp, Inc.

Average Balances and Yield Trend

(Unaudited)

	Average Balances - Trend - Quarters Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
	(In thousands)
Interest-earning assets:
Loans (1)	$	2,129,280		$	2,111,768		$	2,055,444		$	1,983,249		$	1,881,488
Investment securities (2)		209,691			197,525			168,485			166,816			173,731
Other interest-earning assets		81,370			67,428			38,912			18,030			51,257
Total interest-earning assets		2,420,341			2,376,721			2,262,841			2,168,095			2,106,476
Noninterest-earning assets		129,281			124,148			126,899			130,498			131,104
Total assets	$	2,549,622		$	2,500,869		$	2,389,740		$	2,298,593		$	2,237,580
Interest-bearing liabilities:
Savings accounts	$	338,607		$	326,731		$	319,166		$	319,202		$	317,180
NOW accounts		128,794			123,340			124,134			120,704			120,702
Money market accounts		667,468			627,073			602,263			612,761			642,758
Certificates of deposit		469,249			469,774			458,491			434,519			446,848
Brokered deposit		76,555			65,698			39,689			549			—
Total interest-bearing deposits		1,680,673			1,612,616			1,543,743			1,487,735			1,527,488
FHLB advances		254,832			291,896			257,568			232,587			239,245
Total interest-bearing liabilities		1,935,505			1,904,512			1,801,311			1,720,322			1,766,733
Noninterest-bearing liabilities:
Noninterest-bearing deposits		250,654			237,056			227,918			217,930			244,651
Other noninterest-bearing liabilities		29,432			28,981			31,055			32,888			28,887
Total liabilities		2,215,591			2,170,549			2,060,284			1,971,140			2,040,271
Total equity		334,031			330,320			329,456			327,453			197,309
Total liabilities and equity	$	2,549,622		$	2,500,869		$	2,389,740		$	2,298,593		$	2,237,580
	Annualized Yield Trend - Quarters Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Interest-earning assets:
Loans (1)		3.82	%		3.78	%		3.65	%		3.61	%		3.61	%
Investment securities (2)		2.69	%		2.65	%		2.55	%		2.54	%		2.55	%
Other interest-earning assets		1.58	%		1.52	%		1.71	%		3.62	%		1.64	%
Total interest-earning assets		3.64	%		3.62	%		3.54	%		3.53	%		3.47	%
Interest-bearing liabilities:
Savings accounts		0.17	%		0.19	%		0.18	%		0.17	%		0.17	%
NOW accounts		0.06	%		0.06	%		0.06	%		0.06	%		0.06	%
Money market accounts		0.50	%		0.49	%		0.46	%		0.44	%		0.45	%
Certificates of deposit		1.17	%		1.17	%		1.16	%		1.14	%		1.16	%
Brokered deposit		1.08	%		0.98	%		0.92	%		2.17	%		—	%
Total interest-bearing deposits		0.61	%		0.61	%		0.59	%		0.56	%		0.57	%
FHLB advances		1.78	%		1.79	%		1.87	%		2.00	%		2.17	%
Total interest-bearing liabilities		0.77	%		0.79	%		0.77	%		0.75	%		0.79	%
(1) Includes loans held for sale, nonaccruing loan balances and interest received on such loans.
(2) Includes securities available for sale and securities held to maturity.

HarborOne Bancorp, Inc.

Selected Financial Highlights

(Unaudited)

	Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
Performance Ratios (annualized):	2017			2017			2016			2016			2016
Return (loss) on average assets (ROAA)		0.50	%		0.44	%		0.49	%		0.62	%		(0.12)	%
Return (loss) on average equity (ROAE)		3.85	%		3.31	%		3.56	%		4.34	%		(1.38)	%
Efficiency ratio (1)		82.60	%		84.41	%		81.87	%		80.46	%		101.99	%
(1) Represents noninterest expense divided by the sum of net interest income and noninterest income

	At or for the Quarters Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
Asset Quality	2017			2017			2016			2016			2016
(Dollars in thousands)
Total nonperforming assets	$	22,522		$	23,471		$	22,946		$	25,992		$	27,770
Nonperforming assets to total assets		0.86	%		0.91	%		0.94	%		1.11	%		1.23	%
Allowance for loan losses to total loans		0.82	%		0.82	%		0.85	%		0.82	%		0.79	%
Net charge offs	$	173		$	349		$	320		$	317		$	58
Annualized net charge offs/average loans		0.03	%		0.07	%		0.06	%		0.07	%		0.01	%
Allowance for loan losses to nonperforming loans		80.04	%		78.17	%		80.12	%		65.92	%		55.52	%

	June 30,			March 31,			December 31,			September 30,			June 30,
Capital and Share Related	2017			2017			2016			2016			2016
Common stock outstanding		32,120,880			32,120,880			32,120,880			32,120,880			32,120,880
Book value per share	$	10.48		$	10.36		$	10.25		$	10.21		$	10.10
Tangible book value per share (1)	$	10.06		$	9.94		$	9.83		$	9.79		$	9.67
Tangible common equity / tangible assets (2)		12.34	%		12.50	%		12.97	%		13.47	%		13.79	%
(1) This non-GAAP ratio is total stockholders' equity less goodwill and other intangible assets divided by common stock outstanding.
(2) This non-GAAP ratio is total stockholders' equity less goodwill and other intangible assets to total assets less goodwill and other intangible assets.