Howard Bancorp, Inc. Announces over 100% Improvement
ELLICOTT CITY, Md.--(BUSINESS WIRE)-- Howard Bancorp, Inc. (OTC, Electronic Bulletin Board: HBMD), the parent company of Howard Bank, today reported its financial results for the fiscal year ending December 31, 2008. For the year ended December 31, 2008, the company reported pre tax net income of $570 thousand compared to a $956 thousand loss in 2007, a 160% improvement. Due to the impact on net income of a one time recognition of deferred taxes in 2007, a more meaningful comparison of operations is achieved by analyzing these pretax results. Net after tax income for the year ended December 31, 2008 was $337 thousand compared to a profit of $1.47 million, which included the $2.4 million recognition of a deferred tax asset. For the twelve months of 2008, interest income rose by $1.0 million or 9% over 2007, while interest expense, even with growth of $30 million in deposits, decreased by $485 thousand or 9% year over year. A major factor in the reduction of interest expense given the increase in deposit levels was an increase of nearly $11 million or 39% in non-interest bearing deposits during 2008. These two factors resulted in a 26% increase ($1.5 million) in net interest income for the full year of 2008 compared to 2007. Supplementing the higher net interest income was non interest income of $515 thousand which represents an increase of $243 thousand or 89% over 2007 levels. These increases in revenues were accomplished while experiencing only a modest 8% increase in expenses. Total expenses were $6.1 million for 2008, which compared to the $5.7 million for 2007, an increase of $430 thousand.
As of December 31, 2008 total assets had increased to $230 million. When comparing this level to total assets of $191 million at the end of 2007, assets increased by $39 million or 20% throughout 2008. Outstanding loans grew by nearly $32 million or 18%, with loans of $204 million and $172 million at December 31, 2008 and 2007, respectively. Loan growth was funded primarily from increases in deposits, with total deposits of $182 million at year end 2008 versus $152 million at December 31, 2007, resulting in an increase of deposits of $30 million or 20% during 2008. Total non-interest bearing deposits were nearly $38 million at December 31, 2008, compared to $27 million at December 31, 2007. An increase in liquidity was funded with customer repurchase agreements and FHLB borrowings. The total of these two borrowing sources of $22 million at the end of 2008 was $8 million higher than borrowing levels at year end 2007.
For the fourth quarter of 2008, Howard Bancorp recorded net income after taxes of $103 thousand, which compares to $148 thousand for the third quarter of 2008, and $322 thousand for the fourth quarter of 2007. Both net interest income and non-interest income increased for the fourth quarter of 2008 versus prior quarters. Given the current economic environment, the provision for loan losses was raised in the fourth quarter of 2008 as compared to both last quarter and 2007's fourth quarter. The provision for loan losses was $331 thousand for the fourth quarter of 2008, compared to $232 thousand in the third quarter of 2008 and $127 thousand for the fourth quarter of 2007.
Chairman and CEO Mary Ann Scully stated: "Howard Bank is pleased to be growing, profitable and investing in our future despite the economic storm impacting both our marketplace and parts of our industry. In the midst of a multitude of challenges experienced by us and our customers alike, we achieved another year of double digit growth in loans, deposits and revenue and turned in another profitable quarter - our seventh since reaching profitability in early 2007. We have added to our loan loss reserves, both as a result of the growth of our loan portfolio and in a few isolated cases where we are working with a handful of clients that are having more difficulty navigating these economic conditions; however, our knowledge of each borrower and our ability to customize a solution for them has served us well in these times. We are optimistic about the future of our region and believe that now is actually an excellent time to seize additional opportunities to move ahead.
We have, therefore, recently made investments that demonstrate our ongoing ability to execute on our growth model. These include new relationship managers in Howard County, the opening of our long awaited fourth branch location in Howard County on Route 40 and our expansion into the Anne Arundel County market with the hiring of a senior team leader with over twenty years of success in that community. More importantly, we continue to invest our time and talent every day in our growing client base, each of whom look more to us now than ever to advise and support them with their own challenges and opportunities. The faith that our depositors in particular have shown in us with our almost 40% growth in demand deposits has proved particularly rewarding in many ways.
While some banks have changed perspective, and are forced to focus their attention on internal issues, we continue to look outward towards the marketplace to expand new and existing customer relationships and to strategically pursue growth opportunities. We have been recognized for the third straight year as one of the Greater Baltimore region's fastest growing companies; we continue to support local not for profit organizations with board leadership. While we expect the economy to be bumpy and even bruising for a while, we firmly maintain that now is a very good time to be a community bank; the marketplace increasingly recognizes and appreciates what we have to offer and that should continue to reflect itself in our financial performance."
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.