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Section 1: 8-K/A (8-K/A)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 8-K/A

 

(Amendment No. 1)

 


 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of Earliest Event Reported): October 5, 2018

 

HarborOne Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

 


 

Massachusetts

 

001-37778

 

81-1607465

(State or other jurisdiction

 

(Commission

 

(IRS Employer

of incorporation)

 

File Number)

 

Identification Number

 

770 Oak Street, Brockton, Massachusetts 02301

(Address of principal executive offices)

 

(508) 895-1000

(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:

 

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

 

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

 

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

 

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

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 


 

Item 2.01                   Completion of Acquisition or Disposition of Assets.

 

On October 5, 2018, HarborOne Bancorp, Inc. (the “Company”) filed a Current Report on Form 8-K (the “Original Report”) to report that on October 5, 2018, the Company completed its previously announced acquisition of Coastway Bancorp, Inc. (“Coastway”), with HarborOne as the surviving corporation (the “Merger”). Additionally, Coastway Community Bank, a wholly owned subsidiary of Coastway, merged with and into HarborOne Bank, a wholly owned subsidiary of HarborOne, with HarborOne Bank continuing as the surviving bank

 

This amendment to the Original Report is being filed to provide the financial statements and pro forma financial information required by Item 9.01(a) and 9.01(b), respectively, of Form 8-K.

 

Item 9.01                   Financial Statements and Exhibits.

 

(a)                                                         Financial Statements of Business Acquired

 

The audited consolidated financial statements of Coastway as of December 31, 2017 and 2016, and for each of the two years in the period ended December 31, 2017, as well as the accompanying notes thereto and the related Report of Independent Registered Public Accounting Firm, are filed as Exhibit 99.1 and incorporated herein by reference.

 

The unaudited consolidated financial statements of Coastway as of and for the three and six months ended June 30, 2018, as well as the accompanying notes thereto, are filed as Exhibit 99.2 and incorporated herein by reference.

 

The unaudited consolidated financial statements of Coastway as of and for the three and six months ended June 30, 2017, as well as the accompanying notes thereto, are filed as Exhibit 99.3 and incorporated herein by reference.

 

(b)                                                         Pro Forma Financial Information

 

The following unaudited pro forma combined condensed consolidated financial information giving effect to the Merger is furnished under this Item 9.01(b) as Exhibit 99.4 attached hereto, and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability of such section, not shall be deemed incorporated by reference in any filing of Community Bank System under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing:

 

·                  Unaudited pro forma combined condensed balance sheet as of June 30, 2018, giving effect to the Merger as if it occurred on June 30, 2018;

 

·                  Unaudited pro forma combined condensed consolidated statement of income for the six months ended June 30, 2018, giving effect to the Merger as if it occurred on January 1, 2017; and

 

·                  Unaudited pro forma combined condensed consolidated statement of income for the year ended December 31, 2017, giving effect to the Merger as if it occurred on January 1, 2017.

 

Item 9.01                                           Financial Statements and Exhibits

 

(d)                                                                                 Exhibits

 

Number

 

Description

23.1

 

Consent of Crowe LLP*

 

2


 

99.1

 

Audited consolidated financial statements of Coastway as of December 31, 2017 and 2016 and for each of the two years in the period ended December 31, 2017 (incorporated by reference to the Form 10-K filed by Coastway with the SEC on March 12, 2018 (File No. 001-36263).

 

 

 

99.2

 

Unaudited consolidated financial statements of Coastway as of and for the three and six month period ended June 30, 2018 (incorporated by reference to the Form 10-Q filed by Coastway with the SEC on August 2, 2018 (File No. 001-36263).

 

 

 

99.3

 

Unaudited consolidated financial statements of Coastway as of and for the three and six month period ended June 30, 2017 (incorporated by reference to the Form 10-Q filed by Coastway with the SEC on August 3, 2017 (File No. 001-36263).

 

 

 

99.4

 

Unaudited pro forma combined condensed balance sheet as of June 30, 2018, giving effect to the Merger as if it occurred on June 30, 2018; unaudited pro forma combined condensed consolidated statement of income for the six months ended June 30, 2018, giving effect to the Merger as if it occurred on January 1, 2017; and unaudited pro forma combined condensed consolidated statement of income for the year ended December 31, 2017, giving effect to the Merger as it if occurred on January 1, 2017.*

 


*                                                                                         Filed herewith.

 

3


 

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.

 

 

HARBORONE BANCORP, INC.

 

 

 

 

By:

/s/ Joseph F. Casey

 

Name:

Joseph F. Casey

 

Title:

President and Chief Operating Officer

 

 

 

Date:  November 7, 2018

 

 

 

4


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Section 2: EX-23.1 (EX-23.1)

Exhibit 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We consent to the incorporation by reference in the Current Report on Form 8-K/A of HarborOne Bancorp, Inc. of our report dated March 12, 2018 on the consolidated financial statements appearing on Form 10-K of Coastway Bancorp, Inc. for the year ended December 31, 2017.

 

 

/s/ Crowe LLP

 

Crowe LLP

 

 

Livingston, New Jersey

 

 

 

November 7, 2018

 

 


(Back To Top)

Section 3: EX-99.4 (EX-99.4)

Exhibit 99.4

 

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

 

On October 5, 2018, HarborOne Bancorp, Inc. (“HarborOne”) acquired Coastway Bancorp, Inc. (“Coastway”). The following unaudited pro forma combined condensed consolidated financial information combines the historical consolidated financial position and results of operations of HarborOne and its subsidiaries and Coastway and its subsidiaries, as an acquisition by HarborOne of Coastway using the acquisition method of accounting and giving effect to the related pro forma adjustments described in the accompanying notes. Under the acquisition method of accounting, the assets and liabilities of Coastway were recorded by HarborOne at their respective fair values as of the date the merger was completed. The unaudited pro forma combined financial information should be read in conjunction with HarborOne’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, and Annual Report on Form 10-K for the year ended December 31, 2017, and Coastway’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, and Annual Report on Form 10-K for the year ended December 31, 2017.

 

The unaudited pro forma combined condensed financial information is presented for illustrative purposes only and does not indicate the financial results of the combined company had the companies actually been combined at the beginning of each period presented, nor the impact of possible business model changes. The unaudited pro forma combined condensed consolidated financial information also does not consider any potential effects of changes in market conditions on revenues, expense efficiencies, asset dispositions, and share repurchases, among other factors. In addition, as explained in more detail in the accompanying notes, the preliminary allocation of the pro forma purchase price reflected in the unaudited pro forma combined condensed consolidated financial information is subject to adjustment and could materially vary from the actual purchase price allocation as additional information becomes available. Accrued income taxes and deferred taxes were recorded on a provisional basis and could vary from the actual recorded balance once finalized.

 

The Coastway merger was announced on March 14, 2018, and was completed on October 5, 2018. The Coastway merger provided that Coastway’s shareholders would receive $28.25 per share of Coastway common stock.

 

The unaudited pro forma combined condensed consolidated balance sheet gives effect to the merger as if the transaction had occurred on June 30, 2018. The unaudited pro forma combined condensed consolidated income statements for the six months ended June 30, 2018, and the year ended December 31, 2017, give effect to the merger as if the transaction had become effective on January 1, 2017.

 


 

HarborOne Bancorp, Inc. Unaudited Combined Condensed Consolidated Balance Sheet as of June 30, 2018

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

HarborOne

 

 

 

HarborOne

 

Coastway

 

 

 

 

 

Bancorp, Inc. Pro

 

 

 

Bancorp, Inc

 

Bancorp, Inc.

 

Pro Forma

 

 

 

Forma

 

 

 

As Reported

 

As Reported

 

Adjustments

 

Ref

 

Combined

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

132,496

 

$

50,084

 

$

(125,565

)

A

 

$

57,015

 

Securities available for sale

 

185,702

 

 

 

 

 

185,702

 

Securities held-to-maturity

 

48,251

 

 

 

 

 

48,251

 

Federal Home Loan Bank stock, at cost

 

15,310

 

11,368

 

 

 

 

26,678

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

71,017

 

16,238

 

 

 

 

87,255

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

2,300,695

 

712,113

 

(23,644

)

B

 

2,989,164

 

Allowance for loan losses

 

(19,244

)

(3,358

)

3,358

 

B

 

(19,244

)

Net loans

 

2,281,451

 

708,755

 

(20,286

)

 

 

2,969,920

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

13,717

 

 

58,361

 

C

 

72,078

 

Other intangible, net

 

 

 

8,823

 

D

 

8,823

 

Other assets

 

131,770

 

48,459

 

3,423

 

E, G

 

183,652

 

Total assets

 

$

2,879,714

 

$

834,904

 

$

(75,244

)

 

 

$

3,639,374

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

2,202,502

 

$

501,944

 

$

(1,814

)

F

 

$

2,702,632

 

Short-term borrowings

 

70,000

 

250,950

 

 

 

 

320,950

 

Long-term debt

 

217,438

 

 

 

 

 

217,438

 

Other liabilities

 

41,198

 

8,580

 

 

 

 

49,778

 

Total liabilities

 

2,531,138

 

761,474

 

(1,814

)

 

 

3,290,798

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

348,576

 

73,430

 

(73,430

)

H

 

348,576

 

Total liabilities and stockholders’ equity

 

$

2,879,714

 

$

834,904

 

$

(75,244

)

 

 

$

3,639,374

 

 

See accompanying notes to unaudited pro forma combined condensed consolidated financial statements.

 


 

HarborOne Bancorp, Inc.and Subsidiaries Unaudited Combined Condensed Consolidated Income Statement
for the Six Months Ended June 30, 2018

 

(in thousands, except per share data)

 

 

 

HarborOne
Bancorp, Inc

 

Coastway
Bancorp, Inc.

 

Pro Forma

 

 

 

HarborOne
Bancorp, Inc. Pro
Forma

 

 

 

As Reported

 

As Reported

 

Adjustments

 

Ref

 

Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income:

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

47,302

 

$

14,114

 

$

493

 

I

 

$

61,909

 

Interest and dividends on investments

 

3,063

 

 

 

 

 

3,063

 

Other interest and dividend income

 

571

 

550

 

 

 

 

1,121

 

Total Interest Income

 

50,936

 

14,664

 

493

 

 

 

66,093

 

Interest Expenese

 

9,917

 

3,557

 

181

 

J

 

13,655

 

Net interest income

 

41,019

 

11,107

 

312

 

 

 

52,438

 

Provision for loan losses

 

1,694

 

569

 

 

 

 

2,263

 

Net interest income after provision for loan losses

 

39,325

 

10,538

 

312

 

 

 

50,175

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income

 

15,742

 

1,635

 

 

 

 

17,377

 

Deposit account fees

 

6,191

 

1,847

 

 

 

 

8,038

 

Income of retirment account annuities

 

232

 

 

 

 

 

232

 

Bank-owned life insurance income

 

482

 

61

 

 

 

 

543

 

Other income

 

1,259

 

27

 

 

 

 

1,286

 

Total noninterest income

 

23,906

 

3,570

 

 

 

 

27,476

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

33,697

 

5,799

 

 

 

 

39,496

 

Occupany and equipment

 

6,236

 

1,575

 

 

 

 

7,811

 

Data Processing

 

3,122

 

968

 

 

 

 

4,090

 

Loan expenses

 

2,652

 

 

 

 

 

2,652

 

Marketing

 

2,083

 

142

 

 

 

 

2,225

 

Deposit expenses

 

657

 

 

 

 

 

657

 

Amortization of intangible assets

 

 

 

441

 

K

 

441

 

Other expenses

 

7,670

 

2,860

 

(1,663

)

L

 

8,867

 

Total noninterest expenses

 

56,117

 

11,344

 

(1,222

)

 

 

66,239

 

Income before taxes

 

7,114

 

2,764

 

1,534

 

 

 

11,412

 

Income taxes

 

1,759

 

910

 

383

 

M

 

3,052

 

Net income

 

$

5,355

 

$

1,854

 

$

1,151

 

 

 

$

8,360

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

31,574,411

 

4,026,715

 

(4,026,715

)

 

 

31,574,411

 

Diluted

 

31,574,411

 

4,087,301

 

(4,087,301

)

 

 

31,574,411

 

Basic earnings per share

 

$

0.17

 

$

0.46

 

 

 

 

 

$

0.26

 

Diluted earnings per share

 

$

0.17

 

$

0.45

 

 

 

 

 

$

0.26

 

 

See accompanying notes to unaudited pro forma combined condensed consolidated financial statements.

 


 

HarborOne Bancorp, Inc. and Subsidiaries Unaudited Combined Condensed Consolidated Income Statement
for the Year Ended December 31, 2017

 

(in thousands, except per share data)

 

 

 

HarborOne
Bancorp, Inc

 

Coastway
Bancorp, Inc.

 

Pro Forma

 

 

 

HarborOne
Bancorp, Inc. Pro
Forma

 

 

 

As Reported

 

As Reported

 

Adjustments

 

Ref

 

Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income:

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

83,853

 

$

23,510

 

$

986

 

I

 

$

108,349

 

Interest and dividends on investments

 

5,271

 

 

 

 

 

5,271

 

Other interest and dividend income

 

1,160

 

679

 

 

 

 

1,839

 

Total Interest Income

 

90,284

 

24,189

 

986

 

 

 

115,459

 

Interest Expenese

 

15,936

 

4,474

 

363

 

J

 

20,773

 

Net interest income

 

74,348

 

19,715

 

624

 

 

 

94,687

 

Provision for loan losses

 

2,416

 

435

 

 

 

 

2,851

 

Net interest income after provision for loan losses

 

71,932

 

19,280

 

624

 

 

 

91,836

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

Mortgage banking income

 

37,195

 

3,671

 

 

 

 

40,866

 

Deposit account fees

 

12,311

 

3,479

 

 

 

 

15,790

 

Income of retirment account annuities

 

455

 

 

 

 

 

455

 

Bank-owned life insurance income

 

1,024

 

133

 

 

 

 

1,157

 

Other income

 

3,549

 

255

 

 

 

 

3,804

 

Total noninterest income

 

54,534

 

7,538

 

 

 

 

62,072

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

66,223

 

12,326

 

 

 

 

78,549

 

Occupany and equipment

 

11,706

 

3,211

 

 

 

 

14,917

 

Data Processing

 

6,157

 

1,921

 

 

 

 

8,078

 

Loan expenses

 

6,881

 

 

 

 

 

6,881

 

Marketing

 

3,595

 

312

 

 

 

 

3,907

 

Deposit expenses

 

1,349

 

903

 

 

 

 

2,252

 

Amortization of intangible assets

 

 

 

882

 

K

 

882

 

Other expenses

 

13,503

 

3,074

 

 

 

 

16,577

 

Total noninterest expenses

 

109,414

 

21,747

 

882

 

 

 

132,043

 

Income before taxes

 

17,052

 

5,071

 

(259

)

 

 

21,864

 

Income taxes

 

6,673

 

2,479

 

(65

)

M

 

9,087

 

Net income

 

$

10,379

 

$

2,592

 

$

(194

)

 

 

$

12,777

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

31,228,318

 

4,013,000

 

(4,013,000

)

 

 

31,228,318

 

Diluted

 

31,228,317

 

4,039,000

 

(4,039,000

)

 

 

31,228,317

 

Basic earnings per share

 

$

0.33

 

0.65

 

 

 

 

 

0.41

 

Diluted earnings per share

 

$

0.33

 

0.64

 

 

 

 

 

0.41

 

 

See accompanying notes to unaudited pro forma combined condensed consolidated financial statements.

 


 

Note 1—Basis of Presentation

 

The unaudited pro forma combined condensed consolidated financial information and notes have been prepared to illustrate the effects of the merger transaction involving HarborOne and Coastway using the acquisition method of accounting with HarborOne treated as the acquirer. The unaudited pro forma combined condensed consolidated financial information is presented for illustrative purposes only and does not necessarily indicate the financial results of the combined companies had the companies actually been combined at the beginning of each period presented, nor does it necessarily indicate the results of operations in future periods or the future financial position of the combined entity. Under the acquisition method of accounting, the assets and liabilities of Coastway, as of the effective date of the merger, were recorded by HarborOne at their respective fair values and the excess of the merger consideration over the fair value of the net assets was allocated to goodwill and other intangible assets.

 

The Coastway merger was announced on March 14, 2018, and was completed on October 5, 2018. The Coastway merger provided that Coastway’s shareholders would receive $28.25 per share of Coastway common stock.

 

The pro forma allocation of purchase price reflected in the unaudited pro forma combined condensed consolidated financial information is subject to adjustment and may vary from the actual purchase price allocation that was recorded at the time the merger transaction was completed. Adjustments may include, but not be limited to, changes in (i) Coastway’s balance sheet through the effective date of the merger; (ii) total merger related expenses if consummation and/or implementation costs vary from currently estimated amounts; and (iv) the underlying values of assets and liabilities if market conditions differ from current assumptions.

 

The accounting policies of HarborOne and Coastway are in the process of being reviewed in detail. Upon completion of such review, conforming adjustments or financial statement reclassification may be determined.

 

Note 2—Preliminary Purchase Price Allocation

 

The pro forma adjustments include the accounting entries to record the merger transaction under the acquisition method of accounting for business combinations. The excess of the purchase price over the fair value of net assets acquired was allocated to goodwill and other intangible assets. Fair value adjustments included in the pro forma financial statements are based upon available information and certain assumptions considered reasonable, and may be revised as additional information becomes available.

 

The pro forma purchase price for the Coastway merger is as follows:

 

(in thousands, except per share data)

Pro forma purchase price

 

Cash consideration

 

 

 

Shares outstanding

 

4,386,351

 

Cash consideration per share

 

$

28.25

 

 

 

$

123,914

 

Cash consideration for stock options

 

1,651

 

Total proforma purchase price

 

$

125,565

 

 

 

 

 

Preliminary pro forma goodwill

 

 

 

 

 

 

 

Total pro forma purchase price

 

$

125,565

 

Net assets at fair value

 

 

 

Fair value of assets acquired:

 

 

 

Cash and cash equivalents

 

50,084

 

Investments held to maturity

 

11,368

 

Loans held for sale

 

16,238

 

Loans, net

 

688,469

 

Other assets

 

51,882

 

Core deposit intangibles

 

8,823

 

Total assets acquired

 

826,864

 

Fair value of liabilities assumed:

 

 

 

Deposits

 

500,130

 

Short-term borrowings

 

250,950

 

Other liabilites

 

8,580

 

Total liabilities assumed

 

759,660

 

Net assets acquired

 

67,204

 

Preliminary pro forma goodwill

 

$

58,361

 

 

Note 3—Pro Forma Adjustments

 

The following pro forma adjustments have been reflected in the unaudited pro forma combined condensed consolidated financial information. All taxable adjustments were calculated using a 25.0% tax rate to arrive at deferred tax asset or liability adjustments. All adjustments are based on current assumptions and valuations, which are subject to change.

 

A.            Adjustments to cash to reflect the cash of $125.6 million used to purchase Coastway.

 

B.            Adjustments to loans to reflect the estimated fair value adjustments to acquired loans of $20.3 million, net, including $6.8 million of estimated credit loss,

 


 

an estimated adjustment of $11.5 million related to the difference in loan portfolio interest rates and current market interest rates, an estimated write off of deferred origination costs of $5.4 million for purchased loans, and net of the reversal of Coastway allowance for loan losses of $3.4 million.

 

C.            Adjustments to record estimated goodwill of $58.4 million associated with the Coastway transaction.

 

D.            Adjustments to record an estimated $8.8 million in core deposit intangibles.

 

E.             Adjustment to reflect the net fair value decrease of premises and equipment of $ 0.8 million based on independent third party appraisals of all significant premises and equipment owned by Coastway.

 

F.              Adjustment to Coastway time deposits of $1.8 million to reflect a current market rate of interest.

 

G.            Adjustment to other assets to record a deferred tax asset of $6.8 million associated with the fair value adjustment to acquired loans for expected net credit deterioration and interest rates associated with the Coastway transaction and to record deferred tax liability of $2.2 million associated with the core deposit intangible asset adjustment and a deferred tax liability of $454,000 associated with the time deposit fair value adjustment.

 

H.           Adjustment to eliminate Coastway shareholders’ equity.

 

I.                Net adjustments to interest and fees on loans of $493,000 for the six months ended June 30, 2018 and $886,000 for the year ended December 31, 2017 to record amortization of premiums and accretion of discounts on acquired loans of Coastway using a weighted average maturity of approximately 18.5 years.

 

J.                Net adjustments to interest expense of $181,000 for the six months ended June 30, 2018and $363,000 for the year ended December 31, 2017 to record amortization of the fair value adjustment on acquired time deposits.

 

K.            Net adjustments to amortization of intangible assets of $441,000 for the six months ended June 30, 2018 and $882,000 for the year ended December 31, 2017 to record amortization of core deposit intangible on acquired deposits  from Coastway using the straight line  method over an estimated 10 year life.

 

L.             Adjustment to eliminate acquisition expenses recorded on Coastway and HarborOne associated with the transaction with HarborOne of $1.7 million for the six months ended June 30, 2018. There were no acquisition expenses recorded for the year ended December 31, 2017.

 

M.         Adjustment to income tax expense to record income tax effect of pro forma adjustments at the estimated statutory tax rate of 25.0%.

 

Note 4—Estimated Cost Savings and Merger Integration Costs

 

HarborOne expects to realize approximately $6.0 million, or approximately 28% of Coastway noninterest expense base, in annual pre-tax cost savings following the merger. Estimated cost savings is expected to be fully realized by the end of fiscal year 2019 and is excluded from this pro forma analysis.

 

Merger and integration-related costs are not included in the pro forma combined statements of income since they will be recorded in the combined results of income as they are incurred prior to, or after completion of, the merger and are non-recurring in nature of what the historical results of the combined company would have been had the

 


 

companies been actually combined during the periods presented. Merger and integration-related costs are estimated to be $9.3 million pre-tax for the Coastway transaction.

 


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