Howard Bancorp, Inc. Receives Preliminary Approval to Participate in the U.S. Treasury Capital Purchase Program

Company Release - 02/18/2009 16:45

ELLICOTT CITY, Md.--(BUSINESS WIRE)-- Howard Bancorp (OTC, Electronic Bulletin Board: HBMD), the parent company of Howard Bank, announced today that it has received preliminary approval to participate in the U.S. Treasury Department's Capital Purchase Program. The U.S. Treasury Department has approved an investment in Howard Bancorp of up to $5.98 million, the maximum level available to an institution of its asset size, for the purchase of preferred stock and warrants to purchase preferred stock. Howard Bancorp is now considering its next steps around possible utilization of such capital. The Capital Purchase Program is being made available to healthy financial institutions to further strengthen their balance sheets through the issuance of non voting preferred stock to the U.S. Treasury. According to Treasury statements regarding the program, the intent of the program is to directly infuse capital into healthy, viable banks with the goal of increasing the flow of financing available to small businesses and consumers. With additional capital, banks are better able to meet the lending needs of their communities and customers, and businesses have greater access to the credit that they need to keep operating and growing. At the announcement of the program in November of 2008, banking regulators encouraged all healthy financial institutions to consider applying for the capital. Participation in the program is totally voluntary.

According to Howard Bancorp Chairman and CEO, Mary Ann Scully, "We determined that we should follow the suggestion of regulators to consider this program and made application to our regulators for such consideration. We are pleased to have received their preliminary approval to participate in the Capital Purchase Program. At the end of 2008, the total risk based capital ratio at the Howard Bank level was 12.6% - in excess of the 10% requirement to be considered well capitalized. Howard Bancorp, the bank's parent holding company, holds additional capital of $1.9 million that has not been downstreamed to the bank and that is available to increase the capital level of the bank if needed. While we do not require additional capital at this time, we are considering how we could effectively use this capital to positively impact our community through a further increase in our capacity to lend, as well as enhance the long term interests of our shareholders. Therefore, we are now exploring the terms, costs and benefits of participation in the program through this form of capital infusion and we are evaluating the opportunities for the bank and for our customers and communities served, with this potential infusion of capital.

In our earnings release of January 22, we announced a 160% improvement in full year pretax profits and we emphasized that we were growing at double digit rates and remained profitable despite the stresses banks face with today's challenging credit and interest rate environment. We also announced that we are continuing to invest in the future by hiring talented staff and entering new community markets with branches and offices. We believe that our customers' behavior continues to demonstrate their belief that our balance sheet provides a safe haven for depositors. We believe that our receipt of preliminary approval to participate in the Capital Purchase Program provides further affirmation of our financial strength and viability and reaffirms our continued faith in the future of our bank."

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.