19.STOCKHOLDERS’ EQUITY

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 System and the Federal Deposit Insurance Corporation (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 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%, a total capital ratio of 8.0% and a leverage ratio of 4.0%. Additionally, the capital rules require a bank holding company to establish 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 rules, an insured state nonmember bank is considered “well capitalized” if it (i) has a total risk-based capital ratio of 10.0% or greater; (ii) a Tier 1 risk-based capital ratio of 8.0% or greater; (iii) a common Tier 1 equity ratio of 6.5% or greater, (iv) a leverage capital ratio of 5.0% or greater; and (v) 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. 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. Prompt corrective action provisions are not applicable to bank holding companies.

At December 31, 2019, 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 and also exceeded the minimum capital requirements, including the applicable capital conservation buffer of 2.5%.

The Company’s and Bank’s regulatory capital ratios as of December 31, 2019 and 2018 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, 2019
Common equity Tier 1 capital to risk-weighted assets	$	590,122	18.7	%	$	142,048	4.5	%		N/A	N/A
Tier 1 capital to risk-weighted assets		590,122	18.7			189,397	6.0			N/A	N/A
Total capital to risk-weighted assets		649,182	20.6			252,529	8.0			N/A	N/A
Tier 1 capital to average assets		590,122	15.3			154,659	4.0			N/A	N/A

December 31, 2018
Common equity Tier 1 capital to risk-weighted assets	$	283,738	9.9	%	$	129,246	4.5	%		N/A	N/A
Tier 1 capital to risk-weighted assets		283,738	9.9			172,328	6.0			N/A	N/A
Total capital to risk-weighted assets		339,393	11.8			229,771	8.0			N/A	N/A
Tier 1 capital to average assets		283,738	8.2			137,919	4.0			N/A	N/A

HarborOne Bank
December 31, 2019
Common equity Tier 1 capital to risk-weighted assets	$	453,707	14.4	%	$	142,053	4.5	%	$	205,188	6.5	%
Tier 1 capital to risk-weighted assets		453,707	14.4			189,404	6.0			252,539	8.0
Total capital to risk-weighted assets		477,767	15.1			252,539	8.0			315,674	10.0
Tier 1 capital to average assets		453,707	12.2			149,272	4.0			186,591	5.0

December 31, 2018
Common equity Tier 1 capital to risk-weighted assets	$	296,738	10.3	%	$	129,250	4.5	%	$	186,694	6.5	%
Tier 1 capital to risk-weighted assets		296,738	10.3			172,333	6.0			229,778	8.0
Total capital to risk-weighted assets		317,393	11.1			229,778	8.0			287,222	10.0
Tier 1 capital to average assets		296,738	8.6			137,784	4.0			172,230	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.

Preferred Stock

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