8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): July 1, 2016

Randolph Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

Massachusetts	001-37780	81-1844402
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

10 Cabot Place, Stoughton, Massachusetts 02072

(Address of principal executive offices)

(781) 963-2100

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets.

On July 1, 2016, Randolph Bancorp, Inc. (the “Company”) completed its acquisition of First Eastern Bankshares Corporation (“First Eastern”), with the Company as the surviving corporation (the “Merger”) pursuant to the terms and conditions of the Agreement and Plan of Merger, dated as of September 1, 2015 (the “Merger Agreement”), by and among Randolph Bancorp, First Eastern Bankshares Corporation and Richard F. Kalagher. Additionally, First Federal Savings Bank of Boston, First Eastern’s wholly owned subsidiary, merged with and into Randolph Savings Bank (the “Bank”), a wholly owned subsidiary of the Company, with the Bank continuing as the surviving bank.

On July 6, 2016, the Company filed a Current Report on Form 8-K with the Securities and Exchange Commission (“the Commission”) to report the completion of the Merger and the related matters. The purpose of this filing is to amend the Form 8-K filed on July 6, 2016 to include the information required by Item 9.01(a) and (b).

Item 9.01 Financial Statements and Exhibits.

(a)	Financial Statements of Businesses Acquired
(1)	The audited consolidated financial statements of First Eastern as of and for the years ended December 31, 2015 and 2014, and the accompanying notes thereto and the related Independent Auditors’ Report are filed as Exhibit 99.1 hereto and incorporated herein by reference to the Registration Statement on Form S-1 filed with the Commission on March 4, 2016, as amended.
(2)	The unaudited consolidated financial statements of First Eastern as of June 30, 2016 and for the six months ended June 30, 2016 and 2015, and the accompanying notes thereto are filed as Exhibit 99.2 hereto.
(b)	Pro Forma Financial Information
	The unaudited pro forma condensed combined financial statements of the Company as of and for the year ended December 31, 2015 and as of and for the six months ended June 30, 2016 are filed as Exhibit 99.3 hereto.
(d)	Exhibits

Number	Description
23.1	Consent of Marcum LLP
99.1	The audited consolidated financial statements of First Eastern as of and for the years ended December 31, 2015 and 2014 and the accompanying notes thereto and the related Independent Auditors’ Report (incorporated by reference to the Registration Statement on Form S-1 filed by the Company with the Commission on March 4, 2016, as amended)
99.2	The unaudited consolidated financial statements of First Eastern as of June 30, 2016 and for the six months ended June 30, 2016 and 2015, and the accompanying notes thereto
99.3	The unaudited pro forma condensed combined financial statements of the Company as of and for the year ended December 31, 2015 and as of and for the six months ended June 30, 2016

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized.

Randolph Bancorp, Inc.
By:	/s/ Michael K. Devlin
Name:	Michael K. Devlin
Title:	Executive Vice President and Chief Financial Officer

Date: September 15, 2016

EXHIBIT INDEX

Exhibit No.	Description
23.1	Consent of Marcum LLP
99.1	The audited consolidated financial statements of First Eastern as of and for the years ended December 31, 2015 and 2014, and the accompanying notes thereto and the related Independent Auditors’ Report (incorporated by reference to the Registration Statement on Form S-1 filed by the Company with the Commission on March 4, 2016 as amended)
99.2	The unaudited consolidated financial statements of First Eastern as of June 30, 2016 and for the six months ended June 30, 2016 and 2015, and the accompanying notes thereto
99.3	The unaudited pro forma condensed combined financial statements of the Company as of and for the year ended December 31, 2015 and as of and for the six months ended June 30, 2016

EX-23.1

Exhibit 23.1

INDEPENDENT AUDIT FIRM’S CONSENT

We consent to the incorporation by reference in this Current Report of Randolph Bancorp, Inc. on Form 8-K/A of our report dated March 4, 2016, with respect to our audits of the consolidated financial statements of First Eastern Bankshares Corporation and Subsidiary as of December 31, 2015 and 2014, and for the years ended December 31, 2015 and 2014, which report appears in Randolph Bancorp, Inc.’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 4, 2016 as amended.

/s/ Marcum LLP

Marcum LLP

Boston, MA

September 15, 2016

EX-99.2

Exhibit 99.2

FIRST EASTERN BANKSHARES CORPORATION

AND SUBSIDARY

Consolidated Balance Sheet (Unaudited)

(In thousands)

	June 30,
	2016
Assets
Cash and due from banks	$	2,951
Mortgage loans held for sale		26,209
Loans receivable, net		30,824
Federal Home Loan Bank stock, at cost		649
Accrued interest receivable		99
Mortgage servicing rights		4,396
Premises and equipment, net		1,566
Goodwill, net		789
Other assets		1,298
Total assets	$	68,781
Liabilities and Equity
Deposits	$	41,737
Federal Home Loan Bank advances		13,128
Mortgagors’ escrow accounts		575
Deferred income taxes		22
Other liabilities		1,320
Total liabilities		56,782
Equity:
Common stock, $1 par value, 1,000,000 shares authorized, 1,000 shares issued and outstanding		1
Additional paid-in capital		196
Retained earnings		11,802
Total equity		11,999
Total liabilities and equity	$	68,781

See accompanying notes to consolidated financial statements

FIRST EASTERN BANKSHARES CORPORATION

AND SUBSIDARY

Consolidated Statements of Operations (Unaudited)

(In thousands)

	Six Months Ended June 30,
	2016			2015
Interest and dividend income:
Loans receivable	$	962		$	1,085
Short term investments and other interest bearing deposits		10			6
Total interest and dividend income		972			1,091
Interest expense:
Deposits		105			120
Federal Home Loan Bank advances		40			35
Total interest expense		145			155
Net interest income		827			936
Provision for loan losses		—			—
Net interest income after provision for loan losses		827			936
Non-interest income:
Loan servicing fees		318			82
Net gain on sales of mortgage loans		5,435			5,240
Other operating income		36			37
Total non-interest income		5,789			5,359
Non-interest expenses:
Compensation and fringe benefits (Note 1)		5,805			4,405
Occupancy and equipment		863			820
Losses on and expenses of foreclosed real estate, net		5			10
Other operating expenses		1,048			625
Total non-interest expenses		7,721			5,860
Income (loss) before income taxes		(1,105	)		435
Income tax expense (benefit)		(14	)		—
Net income (loss)	$	(1,091	)	$	435

See accompanying notes to consolidated financial statements

FIRST EASTERN BANKSHARES CORPORATION

AND SUBSIDARY

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	For the Six Months Ended June 30,
	2016			2015
Cash flows from operating activities:
Net income (loss)	$	(1,091	)	$	435
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		93			98
Amortization of mortgage servicing rights		725			813
Gain on sales and adjustments to foreclosed real estate		2			2
Loss on disposal and sales of equipment		28			—
Mortgage loans originated for sale		(184,149	)		(224,115	)
Proceeds from sale of mortgage loans		180,073			219,552
Gain on sale of mortgage loans		(4,890	)		(5,240	)
Net increase in mortgage servicing rights		(1,047	)		(1,340	)
Accrued interest receivable		31			(15	)
Other, net		322			643
Net cash used in operating activities		(9,903	)		(9,167	)
Cash flows from investing activities:
Net decrease (increase) in loans		2,549			(1,111	)
Purchases of premises and equipment		(65	)		(27	)
Capital additions to foreclosed real estate		—			(46	)
Proceeds from sales of foreclosed real estate		9			501
Redemption of Federal Home Loan Bank stock		282			—
Net cash provided by (used in) investing activities		2,775			(683	)
Cash flows from financing activities:
Net increase in deposits		6,957			1,838
Net (decrease) increase in short term advances from Federal Home Loan Bank		(1,500	)		5,500
Payments on advances from the Federal Home Loan Bank		(1,255	)		(1,251	)
Net increase in borrowers’ escrow accounts		129			104
Dividends paid		(1,000	)		(850	)
Net cash provided by financing activities		3,331			5,341
Net decrease in cash and cash equivalents		(3,797	)		(4,509	)
Cash and cash equivalents at beginning of period		6,748			7,509
Cash and cash equivalents at end of period	$	2,951		$	3,000
Supplemental cash flow information:
Interest paid on deposits and borrowed funds	$	144		$	146
Income taxes paid	$	69		$	44

See accompanying notes to consolidated financial statements

FIRST EASTERN BANKSHARES CORPORATION

AND SUBSIDARY

Notes to Unaudited Consolidated Financial Statements

June 30, 2016 and 2015

NOTE 1—NATURE OF OPERATIONS AND BASIS OF PRESENTATION

The consolidated financial statements include the accounts of First Eastern Bankshares Corporation, its wholly-owned subsidiary, First Federal Savings Bank of Boston (the “Bank”), and its wholly-owned subsidiaries, First Realty Acquisition Corporation and Prime Title Services, Inc. (collectively, the “Corporation”).The Corporation is actively engaged in the mortgage banking business wherein it originates residential mortgage loans, primarily in New England, for sale in the secondary mortgage market on both a servicing retained and servicing released basis. In addition, the Corporation provides a variety of financial services to individuals and small businesses in Eastern Massachusetts. Its primary deposit products are checking, savings and term certificate accounts, and its primary portfolio lending products are residential and construction loans. The Federal Deposit Insurance Corporation (“FDIC”) provides insurance coverage on all deposits up to $250,000 per depositor. As an FDIC insured institution, the Corporation and the Bank are subject to regulation including the maintenance of minimum regulatory capital requirements. As of June 30, 2016, the Corporation and the Bank exceeded all minimum regulatory capital requirements.

Effective in 2004, the Corporation elected to be treated as an “S” corporation under the Internal Revenue Code. As such, the Corporation is not liable for federal income taxes but is liable for state income taxes.

The accompanying unaudited interim consolidated financial statements include the accounts of Corporation and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting. Accordingly, the accompanying interim financial statements do not include all information required under GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, primarily consisting of normal recurring adjustments, have been included. The operating results for the six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 or any other interim period.

For further information, including a summary of significant accounting policies, refer to the Corporation’s audited consolidated financial statements as of December 31, 2015 and 2014 and for the years then ended and the notes thereto, which are incorporated by reference to the Registration Statement on Form S-1 of Randolph Bancorp, Inc. filed with the Securities and Exchange Commission on March 4, 2016, as amended.

On September 1, 2015, the Corporation and its sole shareholder entered into a merger agreement with Randolph Bancorp pursuant to which the Corporation would merge with Randolph Bancorp in a transaction to be accounted for as a business combination. On July 1, 2016, the Corporation was acquired by Randolph Bancorp, Inc. for cash of $13.9 million and merged with its subsidiary Randolph Savings Bank. Prior to consummation of this transaction and in accordance with the terms of the merger agreement, the Corporation paid bonuses to certain of its officers aggregating $1.6 million which are included in compensation and fringe benefits expense in the accompanying statement of operations for the six months ended June 30, 2016.

NOTE 2—LOANS RECEIVABLE

Loans receivable at June 30, 2016 are summarized as follows (in thousands):

Mortgage loans on real estate:
Residential real estate	$	15,271
Commercial		3,959
Construction		19,855
		39,085
Less:
Due to borrowers on advanced loans		(7,722	)
Total mortgage loans		31,363
Consumer loans		4
Total loans		31,367
Allowance for loan losses		(565	)
Net deferred loan origination costs and fees		22
	$	30,824

NOTE 3—ALLOWANCE FOR LOAN LOSSES

The following table summarizes the changes in the allowance for loan losses by portfolio segment for the six months ended June 30, 2016 and 2015:

	Residential			Residential		Commercial
	Real Estate			Construction		Construction			Consumer		Unallocated		Total
	(In thousands)
Six Months Ended June 30, 2016
Balance at December 31, 2015	$	305		$	96	$	47		$	—	$	115	$	563
Provision for loan losses		(105	)		18		(11	)		—		98		—
Loans charged-off		—			—		—			—		—		—
Recoveries		2			—		—			—		—		2
Balance at June 30, 2016	$	202		$	114	$	36		$	—	$	213	$	565
Six Months Ended June 30, 2015
Balance at December 31, 2014	$	293		$	126	$	73		$	—	$	80	$	572
Provision for loan losses		(40	)		—		5			—		35		—
Loans charged-off		—			—		—			—		—		—
Recoveries		2			—		—			—		—		2
Balance at June 30, 2015	$	255		$	126	$	78		$	—	$	115	$	574

NOTE 3—ALLOWANCE FOR LOAN LOSSES (CONTINUED)

Additional information pertaining to the allowance for loan losses at June 30, 2016 is as follows:

	Residential		Residential		Commercial
	Real Estate		Construction		Construction		Consumer		Unallocated		Total
	(In thousands)
Allowance for impaired loans	$	56	$	—	$	—	$	—	$	—	$	56
Allowance for non-impaired loans		146		114		36		—		213		509
Total allowance for loan losses	$	202	$	114	$	36	$	—	$	213	$	565
Impaired loans	$	1,074	$	—	$	68	$	—	$	—	$	1,142
Non-impaired loans		14,197		12,133		3,891		4		—		30,225
Total loans	$	15,271	$	12,133	$	3,959	$	4	$	—	$	31,367

Credit Quality Information

The Corporation utilizes a six grade internal loan rating system for commercial real estate and commercial loans as follows:

Loans rated 1-3: Loans in this category are considered “pass” rated loans with low to average risk.

Loans rated 4: Loans in this category are considered “special mention”. These loans are starting to show signs of potential weakness and are closely being monitored by management. If not corrected or mitigated, the weakness may expose the Corporation to an increased risk of loss.

Loans rated 5: Loans in this category are considered “substandard”. Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or of the pledged collateral. There is a distinct possibility that the Corporation will sustain some loss if the weakness is not corrected.

Loans rated 6: Loans in this category are considered as “doubtful”. Loans classified as doubtful have all the weaknesses inherent to those classified as substandard with the added characteristic that the weakness makes collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

NOTE 3—ALLOWANCE FOR LOAN LOSSES (CONTINUED)

Credit Quality Information (Continued)

The following table presents the Corporation’s loans by risk rating at June 30, 2016:

	Residential Real Estate		Residential Construction		Commercial Construction
	(In thousands)
Loans rated 1 - 3A	$	14,509	$	12,133	$	3,959
Loans rated 4		361		—		—
Loans rated 5		401		—		—
	$	15,271	$	12,133	$	3,959

The Corporation does not assign risk ratings to consumer loans unless they are contractually past 90 days past due or more or where legal action has commenced against the borrower. Those loans not assigned a rating are considered “pass”.

On an annual basis, or more often if needed, the Corporation formally reviews the ratings on all commercial construction loans. Annually, the Corporation engages an independent third party to review a significant portion of loans within these segments. Management uses the results of these reviews as part of its annual review process.

The following is a summary of past due and non-accrual loans at June 30, 2016:

	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Non-accrual Loans
	(In thousands)
Residential real estate	$	361	$	—	$	401	$	762	$	401
Residential construction		—		—		—		—		—
Commercial construction		—		—		—		—		—
Consumer		—		—		—		—		—
Total	$	361	$	—	$	401	$	762	$	401

At June 30, 2016, there were no loans past due 90 days or more and still accruing interest.

NOTE 3—ALLOWANCE FOR LOAN LOSSES (CONTINUED)

Credit Quality Information (Continued)

The following is a summary of impaired loans at June 30, 2016:

	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
Impaired loans without a valuation allowance:
Residential real estate	$	479	$	479	$	—
Residential construction		—		—		—
Commercial construction		68		68		—
Total		547		547		—
Impaired loans with a valuation allowance:
Residential real estate		595		595		56
Residential construction		—		—		—
Commercial construction		—		—		—
Total		595		595		56
Total impaired loans	$	1,142	$	1,142	$	56

Additional information pertaining to impaired loans follows:

	Average		Interest		Cash Basis
	Recorded		Income		Interest
	Investment		Recognized		Recognized
	(In thousands)
Six Months Ended June 30, 2016
Residential real estate	$	1,300	$	35	$	35
Residential construction		—		—		—
Commercial construction		71		2		2
Total	$	1,371	$	37	$	37
Six Months Ended June 30, 2015
Residential real estate	$	1,553	$	35	$	33
Residential construction		—		—		—
Commercial construction		291		9		11
Total	$	1,844	$	44	$	44

No additional funds are committed to be advanced in connection with impaired loans.

NOTE 3—ALLOWANCE FOR LOAN LOSSES (CONTINUED)

Credit Quality Information (Continued)

Troubled Debt Restructurings

The Company periodically grants concessions to borrowers experiencing financial difficulties.

At June 30, 2016, the Company had six residential real estate loans aggregating $846,000, which were subject to troubled debt restructuring agreements of which $388,000 were performing in accordance with the terms of the modified loan agreements.

Loans are designated as troubled debt restructures when a concession is made on credit as a result of financial difficulties of the borrower. Typically, such concessions consist of a reduction in interest rate to a below market rate, taking into account the credit quality of the note or a deferment of payments, principal or interest, which materially alters the Corporation’s position or significantly extends the note’s maturity date, such that the present value of cash flows to be received is materially less than those contractually established at the loan’s origination. Restructured loans are included in the impaired loan category.

Losses on loans modified as TDRs, if any, are charged against the allowance for loan losses when management believes the uncollectibility of the loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance for loan losses. Loans modified as TDRs with payment defaults are considered in the general component of the allowance for loan losses for each of the Corporation’s loan classes.

NOTE 4—LOAN SERVICING

Mortgage loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balance of mortgage loans serviced for others was $789.3 million at June 30, 2016.

The Corporation measures impairment of its servicing rights on a disaggregate basis based on the predominant risk characteristics of the portfolio and discounts the asset’s estimated future cash flows using a current market rate. The Corporation has determined the predominant risk characteristics to be prepayment risk and interest-rate risk. The fair value of the existing mortgage servicing rights as of June 30, 2016 exceeded its book value and did not require a valuation allowance to be established. To determine the fair value of mortgage servicing rights, the Corporation estimates the expected future net servicing revenue based on common industry assumptions, as well as on the Corporation’s historical experience.

An analysis of mortgage servicing rights for the six month period ended June 30, 2016 is as follows (in thousands):

Balance, beginning of period	$	4,074
Capitalized rights		1,047
Amortization		(725	)
Balance, end of period	$	4,396
Fair value, end of period	$	6,216

NOTE 5—DEPOSITS

Deposit account balances at June 30, 2016, are summarized as follows (in thousands):

Demand deposits	$	13,010
NOW accounts		3,430
Regular savings		1,759
Money market		5,258
Official checks		714
Total non-certificate accounts		24,171
Term certificates less than $250,000		16,310
Term certificates of $250,000 or more		1,256
Total certificate accounts		17,566
	$	41,737

At June 30, 2016, scheduled maturities of term certificates are as follows:

Within one year	$	15,517
Over one year to three years		1,946
Over three years		103
	$	17,566

NOTE 6—ADVANCES AND BORROWINGS FROM FEDERAL HOME LOAN BANK

At June 30, 2016, the Corporation had outstanding advances from the Federal Home Loan Bank of Boston amounting to $13.1 million, which mature at various dates through 2021 and bear interest at rates ranging from .52% to 2.05%. These advances may be prepaid at any time subject to a prepayment fee.

Principal maturities under these advances are as follows (in thousands):

Period Ending December 31,
2016	$	10,757
2017		519
2018		364
2019		270
2020		1,186
Thereafter		32
	$	13,128

The Corporation is a member of the Federal Home Loan Bank of Boston (FHLB). As part of its borrowing arrangement with the FHLB, the Bank is required to purchase FHLB stock in an amount determined on the basis of its residential mortgage loans and its borrowings from the FHLB. This stock, which is restricted, is redeemable at par and earns dividends declared at the discretion of the FHLB.

The Bank has a variable rate overnight line of credit of $2,000,000 with the Federal Home Loan Bank of Boston. No borrowings were outstanding at June 30, 2016.

All borrowings from the Federal Home Loan Bank of Boston are secured by certain unencumbered mortgage loans. In addition, the Bank’s stock in the Federal Home Loan Bank is pledged to secure borrowings.

NOTE 7—COMMITMENTS AND CONTINGENT LIABILITIES

The Corporation enters into financial agreements in the normal course of business that have off-balance sheet risks. These arrangements are used to meet the financing needs of its customers and to limit its own exposure to fluctuating market conditions. These financial agreements include commitments to originate loans, unused commercial and home equity lines of credit, unadvanced portions of construction loans and commercial letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated statements of financial condition.

Financial instruments with off-balance-sheet risk at June 30, 2016 are as follows (in thousands):

Commitments to originate loans	$	51,821
Commitments to sell loans		34,536
Unadvanced portions of constructions loans		7,722

The Corporation’s exposure to credit loss in the event of nonperformance by the other party of these financial agreements is represented by the contractual amount of those commitments. These financial instruments are agreements to lend to a customer provided there are no violations of any conditions established in the contract. In addition, the agreements generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some commitments are expected to expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. The amount and type of collateral obtained, if deemed necessary by the Corporation upon extension of credit, varies and is based on management’s credit evaluation of the counterparty.

The Corporation uses the same credit policies in making commitments as it does for on-balance sheet instruments. The Corporation evaluates each customer’s creditworthiness on a case-by-case basis.

The Corporation may be subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the ultimate outcome of the claims and litigation, if any, will not have a material adverse effect on the Corporation’s financial position.

NOTE 8—FAIR VALUE MEASUREMENTS

DETERMINATION OF FAIR VALUE

The Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 825, Financial Instruments, permits entities to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a Corporation commitment. Subsequent changes must be recorded in earnings.

FASB ASC 820, Fair Value Measurement, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Under this guidance, fair value measurements are not adjusted for transaction costs.

NOTE 8—FAIR VALUE MEASUREMENTS (CONTINUED)

FAIR VALUE HIERARCHY

This guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under this guidance are described below.

Level 1	Valuations for assets and liabilities traded in active exchange markets. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.
Level 2	Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

ASSETS MEASURED AT FAIR VALUE ON A NON-RECURRING BASIS

The Corporation may be required, from time to time, to measure certain other assets and liabilities on a non-recurring basis in accordance with generally accepted accounting principles. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. The following table summarizes the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets at June 30, 2016.

Carrying values of assets measured at fair value on a nonrecurring basis at June 30, 2016 are as follows:

	June 30, 2016
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
Mortgage loans held for sale	$	26,209	$	—	$	26,209	$	—
Impaired loans		1,142		—		—		1,142
Mortgage servicing rights		4,396		—		4,396		—
	$	31,747	$	—	$	30,605	$	1,142

A description of the valuation techniques applied to the Corporation’s major categories of assets and liabilities measured at fair value on a non-recurring basis follows:

Mortgage loans held for sale – Mortgage loans held for sale are evaluated to determine they are carried at the lower of cost or fair value. The fair value is based on market prices for similar assets. For this reason, mortgage loans held for sale are categorized as Level 2 assets.

Impaired loans – Impaired loans are evaluated and valued at the time the loan is identified as impaired, at the lower of cost or market value. Market value is measured based on the value of the collateral securing these loans and are classified as Level 3 in the fair value hierarchy. The value of real estate collateral is determined based on appraisal by qualified licensed appraisers hired by the Corporation. Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the property.

Mortgage Servicing Rights: Mortgage serving rights are carried at the lower of cost or market and are periodically evaluated for impairment using a valuation model that calculates the present value of net servicing income, using various market-based assumptions related to fees, discount rates and prepayment speeds for similar assets resulting in a Level 2 categorization.

There were no liabilities measured at fair value on a non-recurring basis at June 30, 2016. In addition, there were no gains or losses recognized during the six months ended June 30, 2016 on assets measured at fair value on a non-recurring basis.

EX-99.3

Exhibit 99.3

Pro Forma Unaudited Condensed Combined Financial Statements

On July 1, 2016, Randolph Bancorp, Inc. (the “Company”) completed its mutual-to-stock conversion and stock offering (the “Offering”). The Company sold 5,686,750 shares of common stock at $10.00 per share for gross offering proceeds of $56,867,500 in the Offering. On July 1, 2016, the Company also completed its acquisition of First Eastern Bankshares Corporation (“First Eastern”), with the Company as the surviving corporation (the “Merger”) pursuant to the terms and conditions of the Agreement and Plan of Merger, dated as of September 1, 2015 (the “Merger Agreement”), by and among Randolph Bancorp, First Eastern and Richard F. Kalagher. Additionally, First Federal Savings Bank of Boston, First Eastern’s wholly owned subsidiary, merged with and into Randolph Savings Bank (the “Bank”), a wholly owned subsidiary of the Company, with the Bank continuing as the surviving bank. The following pro forma unaudited condensed combined balance sheets and the pro forma unaudited combined statements of operations give effect to the Offering and the Merger, based on the assumptions set forth below. The condensed pro forma unaudited combined financial statements as of and for the year ended December 31, 2015 are based, in part, on the audited consolidated financial statements of Randolph Bancorp and First Eastern as of and for the year ended December 31, 2015. The condensed pro forma unaudited combined financial statements as of and for the six months ended June 30, 2016 are based, in part, on the unaudited consolidated financial statements of Randolph Bancorp and First Eastern as of and for the six months ended June 30, 2016. The pro forma unaudited condensed combined financial statements give effect to the Offering at historical cost and the Merger using the acquisition method of accounting as required by accounting principles generally accepted in the United States of America.

Pro forma net earnings have been calculated for the year ended December 31, 2015 and the six months ended June 30, 2016 as if the shares of Randolph Bancorp, Inc. common stock issued in the Offering had been sold as of the beginning of such period. Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the indicated number of shares of Randolph Bancorp, Inc. common stock.

The unaudited condensed combined pro forma balance sheet as of December 31, 2015 assumes the Offering and Merger were consummated on December 31, 2015. The unaudited condensed combined pro forma balance sheet as of June 30, 2016 assumes the Offering and Merger were consummated on June 30, 2016.

The pro forma financial information presented is not necessarily indicative of the actual results that would have been achieved had the Offering and Merger been consummated at the beginning of the periods presented, and is not indicative of future results.

Pro forma merger adjustments include entries to reflect the estimated fair value adjustments to assets and liabilities and the amortization of such adjustments created in the acquisition. The pro forma merger adjustments presented herein are preliminary and are subject to change. Factors which could give rise to a change from the amounts presented include changes in the underlying values of assets and liabilities if market conditions differ from current assumptions and the development of new information not known at the time the estimates presented herein were completed.

Adjustments to reflect the estimated interest income to be earned on the net proceeds of the offering, the estimated interest income to be foregone on the cash required to fund the Merger and related expenses, and other estimated expense reductions from consolidating the operations of First Eastern with those of Randolph Bancorp, Inc. have been excluded from the calculation of pro forma net income (loss) as such items are not considered to be objectively measurable.

We have utilized a third party appraiser specializing in the financial services industry to estimate the fair value of all First Eastern’s financial assets and liabilities as well as their related amortization periods, and a real estate appraiser to estimate the fair value of its real property.

In connection with the Merger, the plan to integrate the Company’s and First Eastern’s operations is in the process of being implemented. To date, decisions have been made to consolidate computer systems using the Company’s existing systems, to maintain all existing offices of First Eastern and to utilize the Company’s benefit program. Over the next several months, details of other aspects of the plan to integrate the operations of the two companies will continue to be refined. This process will include assessments of personnel and service contracts to determine where redundancies may exist. Certain decisions arising from these assessments may involve involuntary termination of employees and canceling contracts with service providers. The Company expects to incur Merger-related integration costs including system conversion and de-conversion costs, employee retention and severance payments, signage costs and costs incurred in communications with customers. These costs, except for signage costs which are capitalizable assets, will be expensed as incurred. These costs are expected to be incurred primarily in 2016 and the first half of 2017 and are not reflected in the accompanying pro forma financial information. In addition, any cost savings that may result from the integration of operations have not been reflected in the pro forma financial information.

The following table presents pro forma balance sheet information (in thousands) at June 30, 2016 reflecting the Offering and the Merger.

Pro Forma Unaudited Condensed Combined Balance Sheet

June 30, 2016

																Randolph
							Randolph			First Eastern						Bancorp Pro
	Randolph						Bancorp			Bankshares						Forma As
	Bancorp			Offering			Pro Forma as			Corporation			Merger			Converted
	Historical			Adjustments(1)			Converted			Historical			Adjustments(2)			after Merger
Assets
Noninterest-bearing balances and currency and coin	$	3,592		$	—		$	3,592		$	2,951					$	6,543
Interest-bearing balances		69,262			(16,948	)(3)		52,314			—			(13,907	)(11)		38,407
Certificates of deposit		4,675			—			4,675			—			—			4,675
Available-for-sale securities		55,253			—			55,253			—			—			55,253
Loans held for sale		4,822			—			4,822			26,209			450	(12)		31,481
Loans, net of unearned income		298,858			—			298,858			31,389			(369	)(13)		329,878
Allowance for loan losses		(3,259	)		—			(3,259	)		(565	)		565	(14)		(3,259	)
Loans, net of unearned income and allowance		295,599			—			295,599			30,824			196			326,619
FHLB stock		1,943			—			1,943			649						2,592
Accrued interest receivable		1,036			—			1,036			99						1,135
Premises and equipment, net		3,155			—			3,155			1,566			1,534	(15)		6,255
Mortgage servicing rights		2,768			—			2,768			4,396			1,820	(16)		8,984
Goodwill		—			—			—			789			(789	)(17)		—
Core deposit intangible		—			—			—			—			118	(18)		118
Bank-owned life insurance		7,935			—			7,935			—			—			7,935
Foreclosed real estate		350			—			350			—			—			350
Other assets		5,817			(862	)(4)		4,955			1,298			(36	)(19)		6,217
Total assets	$	456,207		$	(17,810	)	$	438,397		$	68,781		$	(10,614	)	$	496,564
Liabilities
Deposits
Non-interest bearing		49,616			—			49,616			13,724			—	(20)		63,340
Interest bearing		274,526			(1,224	)(5)		273,302			28,013			53	(20)		301,368
Stock subscriptions		67,442			(67,442	)(5)		—			—			—			—
FHLB advances		24,068			—			24,068			13,128			60	(20)		37,256
Mortgagors escrow accounts		1,311			—			1,311			575			—			1,886
Post-employment benefit obligations		2,883			—			2,883			—			—			2,883
Other liabilities		2,190			1,438	(6)		3,628			1,342			88	(21)		5,058
Total liabilities		422,036			(67,228	)		354,808			56,782			201			411,791
Equity capital
Common stock		—			59	(7)		59			1			(1	)(22)		59
Paid in capital		—			56,329	(8)		56,329			196			(196	)(22)		56,329
Retained earnings		32,917			(2,275	)(9)		30,642			11,802			(11,802	)(23)		30,642
Bargain purchase gain		—			—			—			—			1,184	(24)		1,184
Accumulated other comprehensive income		1,254			—			1,254			—			—			1,254
Common stock acquired by ESOP		—			(4,695	)(10)		(4,695	)		—			—			(4,695	)
Total equity capital	$	34,171			49,418		$	83,589		$	11,999		$	(10,815	)	$	84,773
Total liabilities and equity capital	$	456,207		$	(17,810	)	$	438,397		$	68,781		$	(10,614	)	$	496,564

(1) Shows the effect of the conversion of Randolph Bancorp based on actual gross proceeds of $56.9 million, offering expenses of $2.3 million, establishment of an employee stock ownership plan that acquired 8.0% of total shares issued, and a contribution of cash ($454,000) and common stock to a newly formed charitable foundation in an amount equal to 4.0% of the shares issued in the Offering.

(2) Reflects the acquisition method of accounting adjustments related to the acquisition of First Eastern Bankshares Corporation.

(3) Calculated as follows:

	(in thousands)
Contribution of cash to foundation	$	(454	)
Refund of stock oversubscriptions		(16,494	)
Offering adjustment	$	(16,948	)

(4) Stock offering costs netted against paid-in-capital.

(5) Stock subscriptions held in deposit accounts and converted to equity or refunded due to oversubscription.

(6) To accrue costs related to stock offering.

(7) Par value $0.01 per share based on the issuance of 5,686,750 shares in the Offering and 181,976 shares contributed to the charitable foundation.

(8) Calculated as follows:

	(in thousands)
Net proceeds of offering	$	54,568
Contribution of stock to foundation		1,820
Less: par value (footnote 7)		(59	)
Offering adjustment	$	56,329

(9) Pre-tax expense of the cash and stock contribution to the foundation (no tax benefit recognized).

(10) Contra-equity account established to reflect the employee stock ownership plan unearned compensation.

(11) Represents the merger consideration paid to the shareholder of First Eastern Bankshares Corporation.

(12) Adjustment to state First Eastern Bankshares Coporation loans held for sale at their estimated fair value based on an independent appraisal.

(13) Adjustment to state First Eastern Bankshares Corporation loans, net of unearned income at their estimated fair value inclusive of credit risk based on an independent appraisal

(14) Adjustment to record the elimination of First Eastern Bankshares Corporation’s allowance for loan losses.

(15) Adjustment to reflect the estimated fair value at acquisition date of acquired premises and equipment based on a third party appraisal of real property owned by First Eastern Bankshares Corporation.

(16) Adjustment to reflect the estimated fair value of First Eastern Bankshares Corporation’s mortgage servicing rights based on an independent third party appraisal which evaluated the present value of estimated future net servicing income, using market-based assumptions including risk characteristics, prepayment speeds, cost of servicing, and interest rates.

(17) Adjustment to record the elimination of First Eastern Bankshares Corporation’s existing goodwill.

(18) Adjustment to reflect the estimated fair value of the core deposit intangible calculated at 1.10% of First Eastern Bankshares Corporation core deposits based on an independent appraisal.

(19) Adjustment to reflect reversal of capitalized origination costs for loans in process.

(20) Adjustments to record the estimated fair value of term certificate deposits and borrowings based on the interest rates currently offered on instruments having similar remaining maturities based on an independent appraisal.

(21) Adjustment to reflect fair value of best efforts contracts with mortgage investors.

(22) Adjustment to record the elimination of First Eastern Bankshares Corporation common stock and paid in capital pursuant to acquisition accounting.

(23) Adjustment to record the elimination of First Eastern Bankshares Corporation’s historical retained earnings pursuant to acquisition accounting.

(24) Adjustment to record the estimated bargain purchase gain calculated as follows:

	(in thousands)
Fair value of assets acquired	$	72,074
Fair value of liabilities assumed		56,983
Fair value of net assets acquired		15,091
Purchase price (as adjusted for special bonus)		13,907
Bargain purchase gain	$	1,184

As provided by the merger agreement, a special bonus was paid to certain executives of First Eastern Bankshares Corporation prior to consummation of the transaction which reduced the purchase price.

.

The following table presents pro forma balance sheet information (in thousands) at December 31, 2015 reflecting the Offering and the Merger.

Pro Forma Unaudited Condensed Combined Balance Sheet

December 31, 2015

																Randolph
							Randolph			First Eastern						Bancorp Pro
	Randolph						Bancorp			Bankshares						Forma As
	Bancorp			Offering			Pro Forma as			Corporation			Merger			Converted
	Historical			Adjustments(1)			Converted			Historical			Adjustments(2)			after Merger
Assets
Noninterest-bearing balances and currency and coin	$	2,721		$	—		$	2,721		$	182					$	2,903
Interest-bearing balances		1,925			51,719	(3)		53,644			6,566			(15,500	)(10)		44,710
Certificates of deposit		4,675			—			4,675			—			—			4,675
Available-for-sale securities		62,267			—			62,267			—			—			62,267
Loans held for sale		2,870			—			2,870			17,243			450	(11)		20,563
Loans, net of unearned income		288,390			—			288,390			33,936			(367	)(12)		321,959
Allowance for loan losses		(3,239	)		—			(3,239	)		(563	)		563	(13)		(3,239	)
Loans, net of unearned income and allowance		285,151			—			285,151			33,373			196			318,720
FHLB stock		2,728			—			2,728			931						3,659
Accrued interest receivable		1,065			—			1,065			130						1,195
Premises and equipment, net		2,891			—			2,891			1,622			1,534	(14)		6,047
Mortgage servicing rights		2,567			—			2,567			4,074			1,820	(15)		8,461
Goodwill		—			—			—			789			(789	)(16)		—
Core deposit intangible		—			—			—			—			118	(17)		118
Bank-owned life insurance		9,620			—			9,620			—			—			9,620
Foreclosed real estate		500			—			500			11			—			511
Other assets		4,183			(773	)(4)		3,410			1,145			(36	)(18)		4,519
Total assets	$	383,163		$	50,946		$	434,109		$	66,066		$	(12,207	)	$	487,968
Liabilities
Deposits in domestic offices
Non-interest bearing		37,968			—			37,968			10,647			—	(19)		48,615
Interest bearing		271,227			—			271,227			24,133			53	(19)		295,413
FHLB advances		34,914			—			34,914			15,883			60	(19)		50,857
Mortgagors escrow accounts		1,445			—			1,445			446			—			1,891
Post-employment benefit obligations		3,294			—			3,294			—			—			3,294
Other liabilities		1,856			1,528	(5)		3,384			867			—			4,251
Total liabilities		350,704			1,528			352,232			51,976			113			404,321
Equity capital
Common stock		—			59	(6)		59			1			(1	)(20)		59
Paid in capital		—			56,329	(7)		56,329			196			(196	)(20)		56,329
Retained earnings		32,198			(2,275	)(8)		29,923			13,893			(13,893	)(21)		29,923
Bargain purchase gain		—			—			—			—			1,770	(22)		1,770
Accumulated other comprehensive income		261			—			261			—			—			261
Common stock acquired by ESOP		—			(4,695	)(9)		(4,695	)		—			—			(4,695	)
Total equity capital	$	32,459			49,418		$	81,877		$	14,090		$	(12,320	)	$	83,647
Total liabilities and equity capital	$	383,163		$	50,946		$	434,109		$	66,066		$	(12,207	)	$	487,968

(1) Shows the effect of the conversion of Randolph Bancorp based on actual gross proceeds of $56.9 million, offering expenses of $2.3 million, establishment of an employee stock ownership plan that acquired 8.0% of total shares issued, and a contribution of cash ($454,000) and common stock to a newly formed charitable foundation in an amount equal to 4.0% of the shares issued in the Offering.

(2) Reflects the acquisition method of accounting adjustments related to the acquisition of First Eastern Bankshares Corporation.

(3) Calculated as follows:

	(in thousands)
Gross proceeds of offering	$	56,868
Contribution of cash to foundation		(454	)
Common stock acquired by employee stock ownership plan		(4,695	)
Pro forma adjustment	$	51,719

(4) Stock offering costs netted against paid-in-capital

(5) To accrue costs related to stock offering.

(6) Par value $0.01 per share based on the issuance of 5,686,750 shares in the Offering and 181,976 shares contributed to the charitable foundation.

(7) Calculated as follows:

	(in thousands)
Net proceeds of offering	$	54,568
Contribution of stock to foundation		1,820
Less: par value (footnote 6)		(59	)
Offering adjustment	$	56,329

(8) Pre-tax expense of the cash and stock contribution to the foundation (no tax benefit recognized).

(9) Contra-equity account established to reflect the employee stock ownership plan unearned compensation

(10) Represents the merger consideration paid to the shareholder of First Eastern Bankshares Corporation.

(11) Adjustment to state First Eastern Bankshares Corporation loans held for sale at their estimated fair value based on an independent appraisal

(12) Adjustment to state First Eastern Bankshares Corporation loans, net of unearned income at their estimated fair value inclusive of credit risk based on an independent appraisal.

(13) Adjustment to record the elimination of First Eastern Bankshares Corporation’s allowance for loan losses.

(14) Adjustment to reflect the estimated fair value at acquisition date of acquired premises and equipment based on third party appraisal of real property owned by First Eastern Bankshares Corporation.

(15) Adjustment to reflect the estimated fair value of First Eastern Bankshares Corporation’s mortgage servicing rights based on an independent third party appraisal which evaluated the present value of estimated future net servicing income, using market-based assumptions including risk characteristics, prepayment speeds, cost of servicing, and interest rates.

(16) Adjustment to record the elimination of First Eastern Bankshares Corporation’s existing goodwill.

(17) Adjustment to reflect the estimated fair value of the core deposit intangible calculated at 1.10% of First Eastern Bankshares Corporation core deposits based on an independent appraisal.

(18) Adjustment to reflect reversal of capitalized origination costs for loans in process.

(19) Adjustments to record the estimated fair value of term certificate deposits and borrowings based on the interest rates currently offered on instruments having similar remaining maturities based on an independent appraisal.

(20) Adjustment to record the elimination of First Eastern Bankshares Corporation common stock and paid in capital pursuant to acquisition method of accounting.

(21) Adjustment to record the elimination of First Eastern Bankshares Corporation’s historical retained earnings pursuant to acquisition method of accounting.

(22) Adjustment to record the estimated bargain purchase gain calculated as follows:

	(in thousands)
Fair value of assets acquired	$	69,359
Fair value of liabilities assumed		52,089
Fair value of net assets acquired		17,270
Purchase price (unadjusted)		15,500
Bargain purchase gain	$	1,770

The following table presents the pro forma statement of operations information for the year ended December 31, 2015.

Pro Forma Unaudited Condensed Combined Statement of Operations

For the Year Ended December 31, 2015

															Randolph Bancorp, Inc.
							Randolph			First Eastern
	Randolph						Bancorp, Inc.			Bankshares					Pro Forma
	Bancorp			Offering			Pro Forma as			Corporation		Merger			As Converted
	Historical			Adjustments (1)			Converted			Historical		Adjustments			After Merger
	(in thousands, except per share data)
Interest Income
Loans	$	10,488		$	—		$	10,488		$	2,229	$	418	(3)	$	13,135
Securities-taxable		1,512			—			1,512			—		—			1,512
Securities-tax exempt		409			—			409			—		—			409
Interest-bearing deposits and CDs		73			—			73			29		—			102
Total interest and dividend income		12,482			—			12,482			2,258		418			15,158
Interest expense
Deposits		1,188			—			1,188			203		(45	)(4)		1,346
FHLB advances		168			—			168			82		(22	)(4)		228
ESOP		—			—			—			—		—			—
Total interest expense		1,356			—			1,356			285		(67	)		1,574
Net interest income		11,126			—			11,126			1,973		485			13,584
Provision for loan losses		(137	)		—			(137	)		—		—			(137	)
Net interest income after provision (credit) for loan losses		11,263			—			11,263			1,973		485			13,721
Noninterest income
Customer service fees		1,572			—			1,572			16		—			1,588
Net gain on sale of mortgage loans		2,567			—			2,567			10,495		(450	)(5)		12,612
Mortgage servicing fees		234			—			234			381		(228	)(6)		387
Gain on sales/calls of securities		(7	)		—			(7	)		—		—			(7	)
Other		705			—			705			127		—			832
Total noninterest income		5,071			—			5,071			11,019		(678	)		15,412
Noninterest expense
Salaries and employee benefits		9,270			188	(2)		9,458			8,667		—			18,125
Occupancy and equipment		1,725			—			1,725			1,609		51	(7)		3,385
Other noninterest expense(10)		5,590			—			5,590			1,431		23	(8)		7,044
Total noninterest expense		16,585			188			16,773			11,707		74			28,554
Income (loss) before income taxes		(251	)		(188	)		(439	)		1,285		267			579
Income taxes (benefit)		(108	)		—			(108	)		10		(10	)(9)		(108	)
Net income (loss)	$	(143	)	$	(188	)	$	(331	)	$	1,275	$	(257	)	$	687
Pro forma basic earnings per share(11)															$	0.13

(1) Interest income on net proceeds of the Offering will be recorded as earned. The estimated interest income based on actual net cash proceeds of $49.9 million from the Offering invested at an assumed average pretax yield of 2.00% for the year ended December 31, 2015 would be approximately $998,000 pretax. The yield utilized approximates the yield on a blend of intermediate term securities as of December 31, 2014. No expenses are included for the contribution to the charitable foundation or merger-related integration costs, all of which will be expensed as incurred. The contribution to the charitable foundation was made in July 2016 and resulted in an expense of $2,275,000.

(2) Includes the expense of the employee stock ownership plan. The employee stock ownership plan loan has a balance of $4.7 million and an amortization period of 25 years with level annual payments of principal and interest. Compensation expense is also recorded on a level annual basis over the term of the loan. The employee stock ownership plan loan is funded internally, therefore no interest expense is incurred.

(3) Adjustment to reflect accretion of the loan discount based on the average lives of the construction and residential mortgage loan portfolios of one and seven years, respectively.

(4) Adjustment to reflect amortization of term certificate deposits and FHLB advance premiums over their remaining contractual terms.

(5) Adjustment to reflect reversal of fair value adjustment to loans held for sale

(6) Adjustment to reflect the amortization of the fair value adjustment on mortgage servicing rights on a straight-line basis over an average life of 8 years.

(7) Adjustment to reflect the amortization of the fair value adjustment on premises and equipment on a straight-line basis over 30 years.

(8) Adjustment to reflect the amortization of the core deposit intangible over 9 years using the sum of the years’ digits method.

(9) The Company had net operating loss carryforwards for federal income tax purposes of approximately $7.6 million at December 31, 2015. State income taxes are not significant due to the use of a securities corporation. Accordingly, no provision (benefit) for income taxes has been reflected for the net impact of pro forma adjustments on the income (loss) before income taxes. Assuming a marginal tax rate of 34.0%, the tax effect of the sum of all pro forma adjustments and the untaxed earnings of First Eastern due to its S Corporation status would be $437,000 resulting in a reduction in pro forma net income of the same amount.

(10) Excludes merger transaction costs of $611,000 incurred by Randolph Bancorp in connection with the acquisition of First Eastern Bankshares Corporation.

(11) Calculated based on shares outstanding for EPS purposes as follows:

Shares issued in the offering	5,686,750
Shares contributed to the foundation	181,976
Shares acquired by the employee stock ownership plan	(469,498	)
Employee stock ownership plan shares allocated	18,780
Weighted average shares outstanding	5,418,008

The following table presents the pro forma statement of operations for the six months ended June 30, 2016.

Pro Forma Unaudited Condensed Combined Statement of Operations

For the Six Months Ended June 30, 2016

														Randolph Bancorp, Inc.
						Randolph		First Eastern
	Randolph					Bancorp, Inc.		Bankshares						Pro Forma
	Bancorp		Offering			Pro Forma as		Corporation			Merger			As Converted
	Historical		Adjustments (1)			Converted		Historical			Adjustments			After Merger
	(in thousands, except per share data)
Interest Income
Loans	$	5,548	$	—		$	5,548	$	962		$	2	(3)	$	6,512
Securities-taxable		626		—			626		—			—			626
Securities-tax exempt		187		—			187		—			—			187
Interest-bearing deposits and CDs		54		—			54		10			—			64
Total interest and dividend income		6,415		—			6,415		972			2			7,389
Interest expense
Deposits		645		—			645		105			(5	)(4)		745
FHLB advances		118		—			118		40			(9	)(4)		149
ESOP		—		—			—		—			—			—
Total interest expense		763		—			763		145			(14	)		894
Net interest income		5,652		—			5,652		827			16			6,495
Provision for loan losses		62		—			62		—			—			62
Net interest income after provision for loan losses		5,590		—			5,590		827			16			6,433
Noninterest income
Customer service fees		753		—			753		—			—			753
Net gain on sale of mortgage loans		1,739		—			1,739		5,435			—			7,174
Mortgage servicing fees		169		—			169		318			(114	)(5)		373
Gain on sales/calls of securities		62		—			62		—			—			62
Other		665		—			665		36			—			701
Total noninterest income		3,388		—			3,388		5,789			(114	)		9,063
Noninterest expense
Salaries and employee benefits		4,583		94	(2)		4,677		5,805			(1,593	)(6)		8,889
Occupancy and equipment		757		—			757		863			26	(7)		1,646
Other noninterest expense		2,915		—			2,915		1,053			9	(8)		3,977
Total noninterest expense		8,255		94			8,349		7,721			(1,558	)		14,512
Income (loss) before income taxes		723		(94	)		629		(1,105	)		1,460			984
Income taxes (benefit)		3		—			3		(14	)		14	(9)		3
Net income (loss)	$	720	$	(94	)	$	626	$	(1,091	)	$	1,446		$	981
Pro forma basic earnings per share(10)														$	0.18

(1) Interest income on net proceeds of the Offering will be recorded as earned and is not reflected as a pro forma adjustment. The estimated interest income based on actual net cash proceeds of $49.9 million from the Offering invested at an assumed average pretax yield of 2.00% for the six months ended June 30, 2016 would be $499,000 pretax. The yield utilized approximates the yield on a blend of intermediate term securities as of December 31, 2014. No expenses are included for the contribution to the charitable foundation or merger-related integration costs all of which will be expensed as incurred. The contribution to the charitable foundation was made in July 2016 and resulted in an expense of $2,275,000.

(2) Includes the expense of the employee stock ownership plan. The employee stock ownership plan loan has a balance of $4.7 million and an amortization period of 25 years with level annual payments of principal and interest. Compensation expense is also recorded on a level annual basis over the term of the loan. The employee stock ownership plan loan is funded internally, therefore no interest expense is incurred.

(3) Adjustment to reflect accretion of the loan discount based on the average lives of the construction and residential mortgage loan portfolios of one and seven years, respectively.

(4) Adjustment to reflect amortization of term certificate deposits and FHLB advance premiums over their remaining contractual terms.

(5) Adjustment to reflect the amortization of the fair value adjustment on mortgage servicing rights on a straight-line basis over an average life of 8 years.

(6) Adjustment to reverse the special bonus paid in connection with the Merger.

(7) Adjustment to reflect the amortization of the fair value adjustment on premises and equipment on a straight-line basis over 33 years.

(8) Adjustment to reflect the amortization of the core deposit intangible over 9 years using the sum of the years’ digits method.

(9) The Company had net operating loss carryforwards for federal income tax purposes of approximately $7.6 million at December 31, 2015. State income taxes are not significant due to the use of a securities corporation. Accordingly, no provision (benefit) for income taxes has been reflected for the net impact of pro forma adjustments and the untaxed earnings of First Eastern due to its S Corporation status. Assuming a marginal tax rate of 34.0%, the tax effect of the sum of all pro forma adjustments on the income (loss) before taxes would be $166,000 resulting in a reduction in pro forma net income of the same amount.

(10) Calculated based on shares outstanding for EPS purposes as follows:

Shares issued in the offering	5,686,750
Shares contributed to the foundation	181,976
Less: Shares acquired by the employee stock ownership plan	(469,498	)
Plus: Employee stock ownership plan shares allocated	23,475
Weighted average shares outstanding	5,422,703