The parent company of Brockton-based HarborOne Bank will become a fully stock-owned company.

HarborOne Bancorp announced yesterday that its board of directors and the board of trustees of its mutual holding company will adopt a plan of conversion and pursue a second-step stock offering of new shares of common stock.

As part of the conversion, the roughly $3.65 billion-asset bank will become a wholly-owned subsidiary of a new holding company, which will also be named HarborOne Bancorp, Inc.

Shares of company common stock held by people other than the mutual holding company will be converted into shares of common stock of the new holding company, according to an exchange ratio designed to preserve the same percentage ownership.

In the stock offering, depositors of the bank and former depositors of Coastway Community Bank, which was recently acquired by HarborOne, with qualifying deposits as of Feb. 28, 2018, will have first priority to purchase the new shares of common stock.

The move will not come as a surprise to many analysts, who predicted that a second step offering would come faster than anticipated after HarborOne acquired Warwick, Rhode Island-based Coastway Bank in an all-cash deal valued at $125.6 million.

Mark Fitzgibbon, an analyst at Sandler O’Neill, said in March 2018 that the all-cash deal would deplete HarborOne’s excess capital, increasing the likelihood that it would eventually convert to a fully stock-owned company.

Fitzgibbon also said at the time that it could take more than six years for the company to earn back the expected dilution to its tangible book value.

About six years ago, HarborOne was a credit union. The organization transitioned to a bank in June 2013 and then acquired Merrimack Mortgage Co. Inc. of Manchester, New Hampshire in April 2015, marking its first major acquisition since its bank conversion.

The bank then reorganized into a mutual holding company and issued a partial IPO in March 2016.

The bank said in a statement that the conversion and offering will have no impact on depositors, borrowers or other customers of the bank. The conversion is subject to approval by the company’s shareholders, the members of the mutual holding company, the Board of Governors of the Federal Reserve System and the Massachusetts Commissioner of Banks.

Parent Company of HarborOne Bank Planning Second Step Conversion

by Bram Berkowitz time to read: 1 min