Howard Bancorp, Inc. Announces Results for the First Quarter of 2013

  Howard Bancorp, Inc. Announces Results for the First Quarter of 2013

Business Wire

ELLICOTT CITY, Md. -- April 18, 2013

Howard Bancorp, Inc. (Nasdaq: HBMD), the parent company of Howard Bank (the
“Bank”), today reported its financial results for the quarter ended March 31,
2013 with the following highlights:

  *Net income available to common shareholders increased to $414 thousand for
    the first quarter of 2013, compared to $242 thousand in the first three
    months of 2012, representing an increase of $172 thousand or 71%.
  *Earnings per common share (EPS) was $.10 for the first quarter of 2013.
    Even with the issuance of an additional 1.4 million shares, which
    increased our shares outstanding by approximately 53% as a result of our
    2012 stock offering, first quarter earnings per share of $.10 compares to
    EPS of $.09 for the first quarter of 2012.
  *Total assets grew to $407 million at March 31, 2013, representing growth
    of nearly $60 million or 17% over assets at March 31, 2012.
  *Total loans increased by nearly $51 million or 18%, to $331 million, when
    comparing March 31, 2013 to March 31, 2012.
  *March 31, 2013 deposits increased to $323 million from $285 million on
    March 31, 2012, representing growth of over $38 million or 14%, of which
    noninterest bearing deposits grew by $18 million or 24%.
  *The efficiency ratio decreased to 70.98% from 75.59% when comparing the
    first quarter of 2013 versus the same period in 2012 as a result of faster
    growth in net interest income and noninterest income than in non interest
    expenses.
  *As a result of both positive earnings for each quarter and the stock
    offering which closed in the third quarter of 2012, our total capital
    increased to $47 million at March 31, 2013 from $37 million at March 31,
    2012, representing an increase of $10 million or 28%.
  *The signing of a lease for our first Baltimore County, MD branch along
    with a regional office to be located in Towson, MD.
  *The execution of an agreement to acquire approximately $39 million in
    additional loans and deposits via the purchase of a branch in Harford
    County, MD from Cecil Bank, subject to regulatory approval.

The Company’s total assets increased by nearly $60 million or 17% when
comparing March 31, 2013 assets of $407.3 million to the $347.8 million at the
same point in 2012. Total loans outstanding of $331.0 million at the end of
March 2013, showed an increase of nearly 18% compared to total loans of $280.7
million on March 31, 2012. Demand deposits, which not only represent the
lowest cost source of funding available to a bank, but also are most
reflective of the core customer relationships targeted by the Bank, grew from
$72.2 million at March 31, 2012 to $89.9 million at the end of the first
quarter of 2013, representing growth in this highly coveted deposit category
of $17.7 million or 24%. Total deposits grew by $38.5 million or 14% when
comparing March 31, 2013 to March 31, 2012.

The growth in loan levels generated an increase in total interest income for
the first quarter of 2013, which was higher than total interest income in the
same three month period in 2012 by $180 thousand or 5%. Even with overall
growth in deposits and borrowing levels, the continuing favorable shift in the
composition of deposits and our ability to attract and maintain lower cost
funding sources, the Bank was able to record and reduce total interest expense
by $88 thousand or 17% for the first quarter of 2013 versus the same period in
2012. The resulting net interest income for the quarter ended March 31, 2013
was $3.6 million versus $3.3 million for the first three months of 2012, an
increase of approximately $300 thousand or 8%.

The provision for credit losses for the first quarter of 2013 was $361
thousand compared to $141 thousand for the same period in 2012. The ratio of
the allowance for credit losses as a percentage of total loans outstanding was
0.90% at March 31, 2013, compared to 1.25% at March 31, 2012, while the ratio
of the allowance for credit losses in relation to nonperforming loans,
improved to 134% at the end of the first quarter of 2013, up from 55% at the
same point in 2012.

In addition to the growth in net interest income was an increase in
noninterest income for the first quarter of 2013 compared to the first quarter
of 2012. Service charges on deposits increased by nearly 10% for the first
three months of 2013 versus the same period in 2012, while other sources of
noninterest income grew from $7 thousand in the 2012 period to $242 thousand
in the 2013 period, an increase of $235 thousand. The first quarter of 2012
was impacted by a loss on the sale of an Other Real Estate Owned (OREO)
property of $131 thousand. There were no such losses recorded in the first
quarter of 2013. The Bank initiated a Bank Owned Life Insurance (BOLI) program
in January of 2013. This BOLI program generated $67 thousand of income during
the first three months of 2013.

Total noninterest expenses grew to $2.8 million for the first quarter of 2013
compared to $2.5 million for the first quarter of 2012, an increase of 8%. The
majority of the increases in noninterest expenses were in the compensation and
occupancy categories, which combined grew by $297 thousand for the first three
months of 2013 versus the same period in 2012. These types of increases in
expenses result from the continuing growth of our business development
initiatives, branch expansion efforts, and operating infrastructure
enhancement.

Asset quality measures, although showing signs of gradual improvement for the
Bank, continue to be a major focus of attention for management and the board
of directors. 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 2013 with a ratio of 1.21% as of March
31, 2013 versus 2.23% at the end of the first quarter of 2012.

All of our regulatory capital ratios continue to significantly exceed those
levels that categorize us as a well capitalized bank. Average equity to
average assets was 12.05%.

Chairman and CEO Mary Ann Scully stated: “Howard Bancorp’s consistent focus on
profitable growth is once again evident in our financial performance. We have
put a number of new building blocks in place for continued penetration and
growth in both the Baltimore and Harford County markets to complement our
strengthening position in Howard and Anne Arundel markets. We continue to
assume leadership positions in the greater Baltimore not for profit community.
We remain an employer of choice allowing us to attract strong talent looking
for opportunity to serve their clients, see their fingerprints on a company
and make a greater difference. We are entering new markets with a physical
presence as well as new colleagues. We are pleased with the continued strong
growth levels in all balance sheet categories and the resulting very positive
impact on our net income and earnings available to shareholders. Our growth in
assets and revenues translates to a growth in impact for our clients,
communities and colleagues. The resulting growth in income available to
shareholders as well as improvement in certain key financial ratios translates
to growth in marketplace relevance for our shareholders.”

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.
Such statements include continued penetration and growth in Baltimore and
Harford Counties and our entering new markets. 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 receipt of any required
regulatory approvals, real estate values, local and national economic
conditions, and the impact of interest rates on financing, as well as other
risks and uncertainties, as described in Howard Bancorp, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2012 as filed with the Securities
and Exchange Commission. 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.


Howard Bancorp, Inc.
                                                            
                                               Three months ended March 31,
(in thousands, except per share data.)         2013              2012
Operation Statement Data:
Interest income                                $ 3,989           $ 3,809
Interest expense                                 439               527
Provision for credit losses                      361               141
Noninterest income                               326               86
Noninterest expense                              2,751             2,546
Federal and state income tax expense             281               282
(benefit)
Net income                                       483               399
Preferred Stock Dividends                        69                157
Net income available to common                   414               242
shareholders
                                                                             
Per share data and shares outstanding:
Net income per common share, basic             $ 0.10            $ 0.09
Net income per common share, diluted           $ 0.10            $ 0.09
Book value per common share at period end      $ 8.55            $ 9.20
Average common shares outstanding                4,040,471         2,640,264
Diluted average common shares outstanding        4,040,471         2,640,264
Shares outstanding at period end                 4,040,471         2,640,264
                                                                             
Financial Condition data:
Total assets                                   $ 407,321         $ 347,821
Loans receivable (gross)                         331,004           280,661
Allowance for credit losses                      2,980             3,521
Other interest-earning assets                    25,508            52,502
Total deposits                                   323,417           284,899
Borrowings                                       35,752            25,180
Total stockholders’ equity                       47,127            36,865
Common equity                                    34,565            24,303
                                                                             
Average assets                                   390,782           337,443
Average stockholders' equity                     47,086            36,979
Average common stockholders' equity              35,524            24,417
                                                                             
Selected performance ratios:
Return on average assets                         0.50      %       0.48      %
Return on average common equity                  5.51      %       6.57      %
Net interest margin^(1)                          3.94      %       4.11      %
Efficiency ratio^(2)                             70.98     %       75.59     %
                                                                             
Asset quality ratios:
Nonperforming loans to gross loans               0.67      %       2.25      %
Allowance for credit losses to loans             0.90      %       1.25      %
Allowance for credit losses to                   134.29    %       55.85     %
nonperforming loans
Nonperforming assets to loans and other          1.48      %       2.74      %
real estate
Nonperforming assets to total assets             1.21      %       2.23      %
                                                                             
Capital ratios:
Leverage ratio                                   12.04     %       10.91     %
Tier I risk-based capital ratio                  13.69     %       12.98     %
Total risk-based capital ratio                   14.56     %       14.22     %
Average equity to average assets                 12.05     %       10.96     %
                                                                             

    
(1)   Net interest margin is net interest income divided by average earning
      assets.
(2)   Efficiency ratio is noninterest expense divided by the sum of net
      interest income and noninterest income.
      

Contact:

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