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Howard Bancorp, Inc. Announces Third Quarter 2012 Growth in Loans, Deposits and Net Income



  Howard Bancorp, Inc. Announces Third Quarter 2012 Growth in Loans, Deposits
  and Net Income

Business Wire

ELLICOTT CITY, Md. -- October 30, 2012

Howard Bancorp, Inc. (NASDAQ: HBMD), the parent company of Howard Bank, today
announced its operating results through September 30, 2012 with the following
highlights:

  * Successfully raised gross proceeds of $10.2 million in common stock via
    offering which closed in third quarter of 2012.
  * Applied for, and was accepted for shares to trade on NASDAQ Capital Market
  * Total Assets grew to $368 million at September 30, 2012, representing
    growth of $47 million or 15% over same period of 2011.
  * Total Loans increased by nearly $28 million or 10%, to $299 million, when
    comparing third quarter of 2012 to third quarter 2011.
  * September 30, 2012 deposits increase to $287 million from $251 million,
    representing growth of over $36 million or 15%, of which noninterest
    bearing deposits grew by over $22 million or 39% for the twelve months
    ending September 30, 2012.
  * Net income for the nine months ended September 30, 2012 was $1.2 million,
    which compared to $1.0 million for the same nine month period in 2011,
    reflecting net income growth of 15%.

Through the first nine months of 2012, net income was $1.18 million, versus
net income of $1.03 million for the nine month period in 2011 representing a
15% increase in net income. For the three months ended September 30, 2011, the
company reported net income of $387 thousand compared to net income of $337
thousand for the third quarter of 2011, an increase of $50 thousand or 15%.

Through the nine months of 2012, net interest income was $10.0 million
compared to $9.3 million for 2011, an increase of nearly $700 thousand or 7%.
Noninterest income also increased to $549 thousand during the nine months of
2012 as compared to $503 thousand for the same period of 2011. Year to date
total noninterest expenses of $7.8 million represented an increase of $0.5
million or 7% compared to total noninterest expenses for the first three
quarters of 2011. Expenses during 2012 included increased compensation costs
due to the opening of our fifth branch location, and also continued investment
in our talent infrastructure to keep pace with the needs of a growing
organization. Included in 2011 noninterest expenses was approximately $393
thousand in valuation adjustments on the carrying value of certain Other Real
Estate Owned (OREO) properties, while similar costs for 2012 were reduced to
only $48 thousand.

When comparing the results for the third quarter of 2012 to the same period in
2011, net interest income of $3.4 million for 2012 also showed positive
momentum, increasing by nearly $220 thousand or 7% compared to net interest
income of $3.2 million in 2011. For the three months ended in September,
noninterest income was $217 thousand for the third quarter of 2012 versus $139
thousand for the same period of 2011. The provision for credit losses for the
third quarter of 2012 was $308 thousand compared to $558 thousand for the
third quarter of 2011, a decrease of nearly $250 thousand or 45%. Total
expenses for the third quarter of 2012 were $2.7 million, which reflected an
increase of nearly $500 thousand over the $2.2 million in expenses for the
third quarter of 2011. The primary increase in expenses related to operating
our most recent branch addition in Annapolis which opened in the second
quarter of 2012. The remainder of the increase was largely due to professional
fees relating to expansion plans and other strategic projects.

The improvement in net interest income and overall revenues for 2012 was
primarily the result of continued balance sheet growth and decreases in the
cost of funding our asset growth. At September 30, 2012, total assets were
$368 million, an increase of $47.2 million or 15% over total assets of $321
million at the same point in 2011. Total loans ended the third quarter of 2012
at $299 million, an increase of $27.6 million or 10% over 2011, and total
deposits increased by $36.5 million or 15% to end the third quarter of 2012 at
$287 million. Included in the growth in deposits was an increase in
noninterest bearing deposits of $22.3 million, which represented year over
year growth of nearly 39%.

At September 30, 2011, Howard Bancorp, Inc. had total capital of $46.3 million
representing 12.57% of period end total assets. This is an increase of $9.9
million or 27% over total capital of $36.4 million or 11.34% of total assets
at September 30, 2011. The majority of the increase in capital was the common
stock offering which closed during the quarter.

In addition to the strengthening of our capital base, our asset quality
measures continue to improve. As of September 30, 2012 the bank had
non-accrual loans totaling $2.6 million, representing less than 1% of total
loans. The total of nonaccrual loans and OREO totaled $5.5 million at
September 30, 2012, which represented 1.51% of total assets, while this same
measure at the end of the third quarter of 2011 was 2.58%.

Chairman and CEO Mary Ann Scully stated, “We are always pleased to be able to
report progress on our goals of growth- in shareholder value, in earnings, and
in customer loans and deposits. This third quarter provided us with good news
on all those fronts. Today, many in our industry must follow a holding
strategy either because of capital scarcity, unattractive markets or economic
uncertainty, Howard Bancorp has made the decision to move forward. The
successful capital raise completed in the third quarter following the opening
of our newest branch in Annapolis and the creation of our Baltimore focused
relationship team are the end results of this commitment to our marketplace
and our belief in its strong opportunities. We believe that, in turn, it
reflects, our customers’ and shareholders’ faith in us.”

This press release contains statements that are forward-looking, as that term
is defined by the Private Securities Litigation Reform Act of 1995 or the
Securities and Exchange Commission in its rules, regulations, and releases.
The Company intends that such forward-looking statements be subject to the
safe harbors created thereby. All forward-looking statements are based on
current expectations regarding important risk factors, including but not
limited to real estate values, local and national economic conditions, and the
impact of interest rates on financing. Accordingly, actual results may differ
from those expressed in the forward-looking statements, and the making of such
statements should not be regarded as a representation by the Company or any
other person that results expressed therein will be achieved. The Company does
not undertake, and specifically disclaims any obligation, to publicly release
the result of any revisions that may be made to any forward-looking statements
to reflect events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.

                                                                  
FINANCIAL HIGHLIGHTS
Howard Bancorp, Inc.
(amounts in
thousands,         Nine Months Ended               Three Months Ended
except per share
data)
                   September 30,   September 30,   September 30,   September 30,
                     2012            2011            2012            2011
Results of
Operations
Net interest       $ 9,957         $ 9,318         $ 3,412         $ 3,192
income
Provision for        650             740             308             558
credit losses
Noninterest          549             503             216             139
income
Noninterest          7,843           7,357           2,659           2,212      
expense
Pretax Income        2,013           1,724           661             561        
Income tax           831             693             274             224        
provision
Net income           1,182           1,031           387             337        
                                                                    
Preferred            (471      )     (278      )     (157      )     (115      )
dividends
                                                                    
Net income
available to       $ 711           $ 753           $ 230           $ 222        
common shares
                                                                    
                                                                    
Per share data
and shares
outstanding:
Net income per     $ 0.24          $ 0.29          $ 0.06          $ 0.08
common share
Book value per
common share       $ 8.36          $ 9.04          $ 8.36          $ 9.04
(period end)
Average common
shares               3,012,288       2,637,829       3,748,248       2,639,780
outstanding
Shares
outstanding at       4,036,628       2,640,264       4,036,628       2,640,264
period end
                                                                    
Financial
Condition data:
Total assets       $ 368,481       $ 321,350       $ 368,481       $ 321,350
Loans and leases     298,814         271,209         298,814         271,209
receivable
Allowance for        (2,733    )     (4,016    )     (2,733    )     (4,016    )
credit losses
Other
interest-earning     43,635          19,291          43,635          19,291
assets
Total deposits       287,426         250,972         287,426         250,972
Borrowings           33,619          33,181          33,619          33,181
Total
Shareholders’        46,322          36,432          46,322          36,432
equity
Common Equity        33,760          23,870          33,760          23,870
                                                                    
Earnings Ratios
Return on            0.45      %     0.46      %     0.26      %
average assets
Return on            3.98      %     4.59      %     2.09      %     4.35      %
average equity
Net interest         4.00      %     4.37      %     3.94      %     4.37      %
margin
                                                                    
Asset quality
ratios:
Nonperforming
loans to gross       0.89      %     1.42      %     0.89      %     1.42      %
loans
Allowance for
credit losses to     0.91      %     1.48      %     0.91      %     1.48      %
loans and leases
Nonperforming
assets to total      1.51      %     2.58      %     1.51      %     2.58      %
assets
                                                                    
Capital ratios:
Tangible common
equity (TCE)         9.16      %     7.43      %     9.16      %     7.43      %
Ratio
Total risk-based     15.83     %     14.38     %     15.83     %     14.38     %
capital ratio
Tier I
risk-based           14.95     %     13.13     %     14.95     %     13.13     %
capital ratio
Leverage ratio       12.79     %     11.78     %     12.79     %     11.78     %

Additional information is available at www.howardbank.com.

Contact:

Howard Bancorp, Inc.
George C. Coffman, 410-750-0020
Chief Financial Officer
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