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Howard Bancorp, Inc. Reports Increases in Assets, Loans, Capital and Earnings for 2012

  Howard Bancorp, Inc. Reports Increases in Assets, Loans, Capital and
  Earnings for 2012

Business Wire

ELLICOTT CITY, Md. -- January 17, 2013

Howard Bancorp, Inc. (NASDAQ: HBMD), the parent company of Howard Bank, today
reported its financial results for the fiscal year ending December 31, 2012
with the following highlights:

  *Successfully raised gross proceeds of $10.2 million in a common stock
    offering which closed in third quarter of 2012.
  *The opening of our fifth full service branch location in Annapolis, MD
  *Shares of common stock began trading on the NASDAQ Capital Market
  *Total assets grew to $402 million at December 31, 2012, representing
    growth of $79 million or 24% over same period of 2011.
  *Total loans increased by nearly $46 million or 17%, to $322 million, when
    comparing year end 2012 to the end of 2011.
  *December 31, 2012 deposits increased to $315 million from $263 million,
    representing growth of over $52 million or 20%, of which noninterest
    bearing deposits grew by over $34 million or 55% for the year.
  *Net income for 2012 was $1.62 million, which compared to $1.38 million for
    2011, reflecting net income growth of 17%.

For the year ended December 31, 2012, the company reported net income of $1.62
million compared to net income of $1.38 million in 2011, an improvement of
$236 thousand or 17%. Net interest income was $13.5 million for 2012 which
represented an increase of $0.9 million or 7% compared to 2011, and was driven
by our continued balance sheet growth. In addition to the increase in net
interest income, the provision for loan losses in 2012 of $0.7 million was 38%
less than the 2011 provision of $1.2 million. Noninterest revenues of $0.8
million for 2012 decreased by $369 thousand or 32% compared to $1.1 million in
2011, as 2011 included gains on sales of OREO of $459 thousand, while 2012
included a loss on OREO sales of $131 thousand. Total noninterest expenses for
2012 of $10.8 million increased by $0.7 million or 7% over total expenses of
$10.1 million in 2011. Compensation expenses increased by $1.1 million or 21%
for 2012 versus 2011 due to increases in staffing as we continue to open new
locations, as well as increases in benefit expenses, primarily from increasing
costs of providing medical insurance. Partially offsetting this compensation
increase was a reduction in the expense of valuation adjustments on OREO
properties. In 2011, the Company recorded $777 thousand in expense due to
decreasing valuations on properties held, while this same expense for 2012 was
only $48 thousand, representing a year over year reduction of $729 thousand.

As mentioned above, 2012 represented a year of continued balance sheet growth
with December 31, 2012 total assets of $402 million, total loans of $322
million, and total deposits of $315 million, representing growth of 24%, 17%,
and 20%, respectively, over the 2011 year end balances. Included in the $315
million of total deposits at year end 2012 were non-interest bearing balances
of $96.0 million, which increased by $33.8 million or 55%, compared to
non-interest balances of $62.0 million at the end of 2011. This growth in
operating accounts reflects significant customer acquisition as well as
increased balances from existing customers. In addition to the deposit growth
realized in 2012, total borrowings for 2012 versus 2011, which include both
customer repurchase agreements and FHLB borrowings increased by $10 million
and $6 million, respectively.

At December 31, 2012 Howard Bancorp, Inc. had total capital of $46.7 million
representing an increase of $10.1 million or 28% over total capital of $36.6
million at December 31, 2011. The majority of the increase in capital resulted
from the gross proceeds of $10.2 million in a common stock offering which
closed in the third quarter of 2012. The remainder of the capital growth
represents retention of the previous four quarters of earnings. Howard Bank
continues to be well in excess of the required capital levels to be considered
well-capitalized under all regulatory capital guidelines.

For the fourth quarter of 2012, Howard Bancorp recorded net income of $439
thousand, which compares to net income of $353 thousand for the fourth quarter
of 2011, representing an increase of 24% and net income of $387 thousand for
the third quarter of 2012. Comparing the fourth quarter of 2012 to the same
quarter in 2011 net interest income increased by $270 thousand or 8%, the
provision for loan losses decreased by $355 thousand and total expenses were
up by $178 thousand or 6%.

Asset quality for Howard Bank continued to be a major focus of attention for
management and the board of directors throughout 2012. One of the Bank’s
primary measures of asset quality is the ratio of non-accrual loans and OREO
as a percentage of total assets. This asset quality measure showed improvement
for 2012 with a ratio of 1.32% as of December 31, 2012 versus 2.32% at the end
of 2011.

Chairman and CEO Mary Ann Scully stated: “We are pleased to report another
year of increased earnings driven by core revenue growth as well as
improvement in asset quality. We believe that the nature of the revenue growth
positions the Company well for any uptick in economic conditions in 2013 as it
shows a consistent ability to grow loans and deposits even in difficult
markets. We have also been able to generate earnings increases while
continuing our investment in our targeted markets with a new branch opened in
Annapolis in 2012 and expectations of a new branch in Baltimore County in
2013. In addition to solid performance, we are delighted to enter 2013 with
additional capital ready to support organic and acquired growth and as an SEC
registrant trading on NASDAQ. Each year has presented us with new
opportunities and new vistas for growth and we expect 2013 to be another year
of greater returns.”

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.

Additional information is available at www.howardbank.com.

SUMMARY FINANCIAL HIGHLIGHTS
                                                                   
                   Twelve Months Ended                 Three Months Ended
                     12/31/12          12/31/11          12/31/12          12/31/11
                                                                      
Operation
Statement Data:
Net interest       $ 13,531,521      $ 12,623,051      $ 3,574,331       $ 3,304,544
income
Provision for        717,987           1,163,777         68,056            423,214
loan losses
Noninterest          767,503           1,136,630         218,322           643,910
income
Noninterest         10,822,947      10,147,946      2,979,726       2,801,463   
expense
Pretax income       2,758,090       2,447,958       744,871         723,777     
Total Income tax    1,137,748       1,063,343       306,242         370,491     
provision
Net income          1,620,342       1,384,616       438,629         353,286     
                                                                         
Preferred            (615,818    )     (450,784    )     (144,743    )     (172,728    )
dividends
                                                                      
Net income avail   $ 1,004,524      $ 933,831        $ 293,887        $ 180,558     
to common shares
                                                                         
                                                                         
Per share data
and shares
outstanding:
Net inc avail to
com stock per      $ 0.31            $ 0.35            $ 0.07            $ 0.07
share
Book value per
common share       $ 8.45            $ 9.12            $ 8.45            $ 9.12
(period end)
Average common
shares               3,269,835         2,638,443         4,036,879         2,635,001
outstanding
Shares
outstanding at       4,040,471         2,640,264         4,040,471         2,640,264
period end
                                                                         
Financial
Condition data:
Total assets       $ 401,675,034     $ 323,082,341     $ 401,675,034     $ 323,082,341
Loans receivable     322,218,310       276,531,077       322,218,310       276,531,077
Allowance for        (2,764,295  )     (3,432,806  )     (2,764,295  )     (3,432,806  )
credit losses
Other
interest-earning     38,971,817        15,613,849        38,971,817        15,613,849
assets
Total deposits       314,858,008       262,642,040       314,858,008       262,642,040
Borrowings           38,987,457        22,983,855        38,987,457        22,983,855
Total
shareholders’        46,720,844        36,629,933        46,720,844        36,629,933
equity
Common equity        34,158,844        24,067,933        34,158,844        24,067,933
                                                                         
Average assets       356,354,797       306,568,843       377,901,318       318,491,797
Average
stockholders’        41,337,710        31,749,340        46,605,987        36,775,793
equity
Average common
stockholders’        28,775,710        23,736,886        34,043,987        24,213,793
equity
Average equity
to average           11.60       %     10.36       %     12.33       %     11.55       %
assets
                                                                         
Selected
performance
ratios:
Return on            0.45        %     0.45        %     0.46        %     0.44        %
average assets
Return on
average common       5.63        %     5.83        %     5.11        %     5.79        %
equity
Net interest
income to            3.80        %     4.12        %     3.75        %     4.12        %
average assets
Non interest
income to            0.22        %     0.37        %     0.23        %     0.80        %
average assets
Non interest
expense to           3.04        %     3.31        %     3.13        %     3.49        %
average assets
Efficiency ratio     75.69       %     73.75       %     78.57       %     70.95       %
                                                                         
Asset quality
ratios:
($ in thousands)
Nonperforming      $ 2,401           $ 5,614           $ 2,401           $ 5,614
loans
OREO               $ 2,903           $ 1,885           $ 2,903           $ 1,885
Nonperforming
loans to gross       0.75        %     2.03        %     0.75        %     2.03        %
loans
Allowance for
loan losses to       0.86        %     1.24        %     0.86        %     1.24        %
loans
Allowance to
nonperforming        115         %     61          %     115         %     61          %
loans
Nonperforming
assets to loans      1.63        %     2.69        %     1.63        %     2.69        %
and OREO
Nonperforming
assets to Total      1.32        %     2.32        %     1.32        %     2.32        %
Assets

Contact:

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