MINIMUM REGULATORY CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2023

MINIMUM REGULATORY CAPITAL REQUIREMENTS

MINIMUM REGULATORY CAPITAL REQUIREMENTS

17. MINIMUM REGULATORY CAPITAL REQUIREMENTS

Minimum Regulatory Capital Requirements

The Company and Bank are subject to various regulatory capital requirements administered by the Board of Governors of the Federal Reserve and the FDIC. Failure to meet minimum capital requirements can result in mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s Consolidated Financial Statements.

Under the capital rules, risk-based capital ratios are calculated by dividing Tier 1, common equity Tier 1, and total risk-based capital, respectively, by risk-weighted assets. Assets and off-balance sheet credit equivalents are assigned to one of several risk-weight categories, based primarily on relative risk. The rules require banks and bank holding companies to maintain a minimum common equity Tier 1 capital ratio of 4.5%, a minimum Tier 1 capital ratio of 6.0%, and a total capital ratio of 8.0%. In addition, a Tier 1 leverage ratio of 4.0% is required. Additionally, the capital rules require a bank holding company to maintain a capital conservation buffer of common equity Tier 1 capital in an amount above the minimum risk-based capital requirements equal to 2.5% of total risk weighted assets, or face restrictions on the ability to pay dividends, pay discretionary bonuses, and to engage in share repurchases.

Under the FDIC’s prompt corrective action rules, an insured state nonmember bank is considered “well capitalized” if its capital ratios meet or exceed the ratios as set forth in the following table and is not subject to any written agreement, order, capital directive, or

prompt corrective action directive to meet and maintain a specific capital level for any capital measure. The Bank must meet well capitalized requirements under prompt corrective action provisions. Prompt corrective action provisions are not applicable to bank holding companies.

A bank holding company is considered “well capitalized” if the bank holding company (i) has a total risk-based capital ratio of at least 10.0%, (ii) has a Tier 1 risk-based capital ratio of at least 6.0%, and (iii) is not subject to any written agreement order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital measure.

At December 31, 2023, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The capital levels of both the Company and the Bank at December 31, 2023 also exceeded the minimum capital requirements, including the currently applicable capital conservation buffer of 2.5%.

The Company’s and Bank’s actual regulatory capital ratios as of December 31, 2023 and 2022 are presented in the table below.

									Minimum Required to be
									Considered "Well Capitalized"
					Minimum Required for				Under Prompt Corrective
	Actual				Capital Adequacy Purposes				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
HarborOne Bancorp, Inc.
December 31, 2023
Common equity Tier 1 capital to risk-weighted assets	$	567,248	12.0	%	$	212,816	4.5	%		N/A	N/A
Tier 1 capital to risk-weighted assets		567,248	12.0			283,755	6.0			N/A	N/A
Total capital to risk-weighted assets		619,138	13.1			378,340	8.0			N/A	N/A
Tier 1 capital to average assets		567,248	10.0			226,690	4.0			N/A	N/A
December 31, 2022
Common equity Tier 1 capital to risk-weighted assets	$	592,610	12.8	%	$	208,541	4.5	%		N/A	N/A
Tier 1 capital to risk-weighted assets		592,610	12.8			278,054	6.0			N/A	N/A
Total capital to risk-weighted assets		677,774	14.6			370,739	8.0			N/A	N/A
Tier 1 capital to average assets		592,610	11.5			205,897	4.0			N/A	N/A
HarborOne Bank
December 31, 2023
Common equity Tier 1 capital to risk-weighted assets	$	509,791	10.8	%	$	212,724	4.5	%	$	307,267	6.5	%
Tier 1 capital to risk-weighted assets		509,791	10.8			283,632	6.0			378,175	8.0
Total capital to risk-weighted assets		561,682	11.9			378,175	8.0			472,719	10.0
Tier 1 capital to average assets		509,791	9.0			226,666	4.0			283,333	5.0
December 31, 2022
Common equity Tier 1 capital to risk-weighted assets	$	525,522	11.3	%	$	208,447	4.5	%	$	301,090	6.5	%
Tier 1 capital to risk-weighted assets		525,522	11.3			277,929	6.0			370,572	8.0
Total capital to risk-weighted assets		575,686	12.4			370,572	8.0			463,215	10.0
Tier 1 capital to average assets		525,522	10.2			205,874	4.0			257,342	5.0

Dividend Restrictions

The Bank is subject to dividend restrictions imposed by various regulators, including a limitation on the total of all dividends that the Bank may pay to the Company in any calendar year. The total of all dividends shall not exceed the Bank’s net income for the current year (as defined by statute), plus the Bank’s net income retained for the two previous years, without regulatory approval. Dividends from the Bank are an important source of funds to the Company to make dividend payments on its common stock and for its other cash needs. The ability of the Company and the Bank to pay dividends is dependent on regulatory policies and regulatory capital

requirements. The ability to pay such dividends in the future may be adversely affected by new legislation or regulations, or by changes in regulatory policies relating to capital, safety and soundness, and other regulatory concerns.

Liquidation Account

Upon completion of its initial and second-step conversions from mutual to stock form on June 29, 2016 and August 14, 2019, respectively, the Company established a liquidation account. The liquidation account is maintained for the benefit of the eligible account holders and supplemental eligible account holders who maintain their accounts at the Bank after the offering. The liquidation account is reduced annually to the extent that such account holders have reduced their qualifying deposits as of each anniversary date. Subsequent increases will not restore an account holder’s interest in the liquidation account. The Company is not permitted to pay dividends on its capital stock if the Company’s shareholders’ equity would be reduced below the amount of the liquidation account.

Preferred Stock

The Company has 1,000,000 shares of preferred stock, no par value, authorized, and none issued or outstanding.

Treasury Stock

Any shares repurchased under the Company’s share repurchase programs were purchased in open-market transactions and are held as treasury stock. All treasury stock is held at cost.

During the year ended December 31, 2023, the Company repurchased a total of 3,728,550 shares at an average price of $12.03 for a total of $44.9 million under its share repurchase programs. During the year ended December 31, 2023, an additional 25,439 shares were acquired in connection with the satisfaction of tax obligations on vested restricted shares at an average price of $13.42 for a total of $341,000. A sixth share repurchase program of 2,325,489 shares was announced on July 5, 2023 that commenced after the completion of the fifth program which was completed in 2023. During the year ended December 31, 2022, the Company repurchased a total of 4,338,637 shares at an average price of $14.16 for a total of $61.5 million under its share repurchase programs. During the year ended December 31, 2022, an additional 67,934 shares were acquired in connection with the satisfaction of tax obligations on vested restricted shares at an average price of $14.44 for a total of $981,000. During the year ended December 31, 2021, the Company repurchased a total 5,021,067 shares at an average price of $13.68 for a total of $68.6 million under its share repurchase programs. During the year ended December 31, 2021, an additional 42,925 shares were acquired in connection with the satisfaction of tax obligations on vested restricted shares at an average price of $14.27 for a total of $613,000.