Howard Bancorp, Inc. Announces Several Milestone
Achievements for the 3rd Quarter of 2006

Wednesday October 11, 4:10 pm ET

ELLICOTT CITY, Md.—(BUSINESS WIRE)—Howard Bancorp, Inc. (OTC, Electronic Bulletin Board:HBMD), the parent company of Howard Bank, announced today that the Company achieved its first quarterly profit, recording a net income of $3 thousand for the quarter ending September 30, 2006, which also corresponded with the second anniversary of the Bank's opening. The Company's year-to-date revenues grew 158% over the comparable period in 2005, led by 300% growth in net interest income after the provision for credit losses. Net interest income growth was driven by continued strong loan originations funded by core deposits while quarterly expenses have been flat throughout 2006.


Third Quarter 2006 Highlights

Record high level of assets, loans and deposits - Total assets ended the quarter at $132.3 million, which represented an increase of $38.1 million or 41% over December 31, 2005 assets of $94.1 million. Loans grew 54% from year-end 2005 and exceeded the $100 million threshold, ending the quarter at $106.4 million. Deposits also exceeded $100 million milestone ending the quarter at $109 million, a growth of 44% over deposit levels on December 31, 2005.
Third branch location opened - Howard Bank opened its third branch location near the intersection of Johns Hopkins Road and Route 29. This branch, which is contiguous to the new Maple Lawn development in Howard County, places Howard Bank in a prime growth location as planned development is expected to continue in this new and vibrant section of the county.
Community recognition - Howard Bank was a recipient of one of only five Howard County Economic Development Authority's Annual Achievement Awards. This award recognized the Bank's outstanding contribution to economic development in the county as well as the Bank's leadership and continued support of the community. It represented the first time a bank has been bestowed this honor. In addition, the Bank was also named by Smart CEO magazine to the 2006 "Future 50" list designated for high growth firms in the Greater Baltimore region.
Introduction of expanded Investor Relations resources on the Bank's website, www.howardbank.com. - The Company launched an expanded investor relations section on its website. This allows existing and prospective investors to keep abreast of the Company's most current financial results, peer comparisons, market share data, as well as recent press releases and upcoming events. It is accessible at www.howardbank.com, under the "About Us" tab entitled Investor Relations. In addition, interested parties may also request an e-mail notification of the daily stock price and other information as it is updated on the website.

Chairman and CEO Mary Ann Scully stated: "We are very gratified by the reception that Howard Bank has received in the community. We believe that this positive community reception to the message of a sophisticated new small business and owner focused Bank is reflected in the balance sheet growth and strong operating results that we have achieved in our first two years of operations. When we initiated capital raising in the fall of 2003 and winter of 2004, we informed our investors that we hoped to achieve profitability at around the two year timeframe, and I am delighted that we were able to deliver as intended. Our balance sheet momentum remains strong as evidenced in our growth in assets, loans and deposits. With the opening of our third branch location and plans underway for a fourth branch location on Route 40 in Ellicott City, we embark upon another period of significant investment in our delivery infrastructure to allow us to service more customers and to fund loan growth more efficiently. While we anticipate that this will have the short term effect of increasing expenses at a temporarily faster rate than revenue growth, the investment is consistent with our long term strategy and will continue to add to overall long term shareholder value."

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.

HOWARD BANCORP, INC.
CONSOLIDATED BALANCE SHEETS

(unaudited)
September 30,
2006

December 31,
2005

(unaudited)
September 30,
2005
ASSETS            
Cash and due from banks  
$4,276,641
 
$2,324,221
 
$2,194,198
Federal funds sold  
6,650,810
 
7,995,922
 
14,366,321
Total cash and cash equivalents
 
$10,927,451
 
$10,320,143
 
$16,560,519
Securities available-for-sale  
12,748,641
 
13,297,790
 
5,978,870
Nonmarketable equity securities  
278,300
 
72,600
 
72,600
Loans, net of unearned income  
106,350,018
 
69,227,719
 
58,317,928
Allowance for credit losses  
(1,177,500)
 
(775,500)
 
(653,000)
Net loans  
105,172,518
 
68,452,219
 
57,664,928
Bank premises and equipment, net  
2,225,133
 
1,386,745
 
1,382,439
Interest receivable and other assets  
909,759
 
605,177
 
493,973
Total assets  
$132,261,802
 
$94,134,674
 
$82,153,329
LIABILITIES  
 
 
Noninterest-bearing deposits  
$16,202,389
 
$10,097,093
 
$11,203,676
Interest-bearing deposits  
92,776,806
 
65,650,403
 
52,377,434
Total deposits  
$108,979,195
 
$75,747,496
 
$63,581,110
Federal funds purchased and
repurchase agreements
 
5,189,877
 
-
 
711
Accrued expenses and other liabilities  
484,663
 
429,161
 
497,535
Total liabilities  
$114,653,735
 
$76,176,657
 
$64,079,356
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
           
Common stock  
22,520
22,383
22,156
Capital surplus  
22,685,940
22,540,070
22,332,714
Accumulated deficit  
(5,090,364)
(4,574,078)
(4,262,672)
Accumulated other comprehensive loss  
(10,029)
(30,358)
(18,225)
Total shareholders' equity  
$17,608,067
$17,958,017
$18,073,973
Total liabilities and shareholders' equity  
$132,261,802
$94,134,674
$82,153,329




HOWARD BANCORP, INC.
CONSOLIDATED BALANCE SHEETS

 
Current Yr
Increase /
(Decrease)
Yr over Yr
Increase /
(Decrease)
ASSETS  
Cash and due from banks  
84%
95%
Federal funds sold  
(17)
(54)
Total cash and cash equivalents  
6
(34)
Securities available-for-sale  
(4)
113
Nonmarketable equity securities  
283
283
Loans, net of unearned income  
54
82
Allowance for credit losses  
52
80
Net loans  
54
82
Bank premises and equipment, net  
60
61
Interest receivable and other assets  
50
84
Total assets  
41%
61%
LIABILITIES  
Noninterest-bearing deposits  
60%
45%
Interest-bearing deposits  
41
77
Total deposits  
44
71
Federal funds purchased and repurchase agreements  
-
-
Accrued expenses and other liabilities  
13
(3)
Total liabilities  
51
79
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
       
Common stock  
1
2
Capital surplus  
1
2
Accumulated deficit  
11
19
Accumulated other comprehensive loss  
(67)
(45)
Total shareholders' equity  
(2)
(3)
Total liabilities and shareholders' equity  
41%
61%
   
   
   

 

HOWARD BANCORP, INC.
CONSOLIDATED STATEMENT of OPERATIONS

 
(unaudited)
For the nine months
ended September 30, 2006
(unaudited)
For the nine months
ended September 30, 2006
Increase /
(Decrease)
INTEREST INCOME  
Interest and fees on loans  
$4,675,953
$1,443,034
224%
Interest and dividends on securities  
479,000
200,286
139
Other interest income  
202,029
155,124
30
Total interest income  
$5,356,982
$1,798,444
198
INTEREST EXPENSE  
Deposits  
2,078,714
560,983
271
Short-term borrowings  
66,646
757
-
Total interest expense  
$2,145,360
561,740
282
NET INTEREST INCOME  
3,211,622
1,236,704
160
Provision for credit losses  
402,000
532,000
(24)
Net interest income after
provision for credit losses
 
2,809,622
704,704
299
NONINTEREST INCOME  
Service charges on deposit accounts  
33,980
12,375
175
Other operating income  
105,553
49,131
115
Total noninterest income  
139,533
61,506
127
REVENUES  
3,351,155
1,298,210
158
NONINTEREST EXPENSE  
Compensation and benefits  
1,935,609
1,619,865
19
Occupancy and equipment  
651,435
557,527
17
Marketing and business development  
265,382
262,169
1
Professional fees  
177,474
229,558
(23)
Data processing fees  
192,656
110,927
74
Other operating expense  
242,885
198,997
22
Total noninterest expense  
3,465,441
2,979,043
16
INCOME/(LOSS) BEFORE
INCOME TAXES
 
(516,286)
(2,212,833)
(77)
Income tax benefit  
-
-
NET INCOME/(LOSS)  
$(516,286)
$(2,212,833)
(77)%
   

 

HOWARD BANCORP, INC.
CONSOLIDATED STATEMENT of OPERATIONS

 
(unaudited)
For the three months
ended September 30, 2006
(unaudited)
For the three months
ended September 30, 2006
Increase /
(Decrease)
INTEREST INCOME  
Interest and fees on loans  
$1,892,608
$766,038
147%
Interest and dividends on securities  
165,418
59,647
177
Other interest income  
37,496
66,018
(43)
Total interest income  
2,095,522
891,703
135
INTEREST EXPENSE  
Deposits  
847,377
300,385
182
Short-term borrowings  
42,928
757
-
Total interest expense  
890,305
301,142
196
NET INTEREST INCOME  
1,205,217
590,561
104
Provision for credit losses  
94,500
216,500
(56)
Net interest income after
provision for credit losses
 
1,110,717
374,061
197
NONINTEREST INCOME  
Service charges on deposit accounts  
15,358
5,482
180
Other operating income  
33,015
21,724
52
Total noninterest income  
48,373
27,206
78
REVENUES  
1,253,590
617,767
103
NONINTEREST EXPENSE  
Compensation and benefits  
640,082
600,063
7
Occupancy and equipment  
210,865
188,189
12
Marketing and business development  
80,002
78,249
2
Professional fees  
69,172
110,247
(37)
Data processing fees  
71,283
46,666
53
Other operating expense  
84,270
76,147
11
Total noninterest expense  
1,155,674
1,099,561
5
INCOME/(LOSS) BEFORE
INCOME TAXES
 
3,416
(698,294)
(100)
Income tax benefit  
-
-
NET INCOME/(LOSS)  
$3,416
$(698,294)
(100)%