Howard Bancorp, Inc. Announces Results for the First Quarter of 2010

Ellicott City, MD, April 22, 2010 --Howard Bancorp, Inc. (OTC, Electronic Bulletin Board: HBMD), the parent company of Howard Bank, today reported its financial results for the period ending March 31, 2010. The company announced its highest level of quarterly operating results with record pretax income of $566 thousand, which represented in excess of a ten fold improvement over the pretax income of $50 thousand for the first quarter of 2009. The first quarter of 2010 results also represent the company’s second largest quarterly net income of $315 thousand.

The company’s balance sheet continued to grow with assets reaching nearly $305 million which is 22% higher than total assets of $250 million at March 31, 2009. The primary driver of asset growth was an increase in the bank’s loan portfolio of $44 million to reach the $260 million level which represented 20% growth over the first quarter of 2009. This growth continued to be funded primarily from increased deposits which grew by more than $47 million or 24% from deposits of $194 million on March 31, 2009 to total deposits of $241 million for the end of the first quarter of 2010. Transaction deposits grew 15% year over year to $71.9 million while savings balances grew 71%.

As a result of this balance sheet growth, and the ability to fund the growth from stable, lower cost deposits versus other institutional sources, net interest income of $2.7 million increased $850 thousand or 47% over the $1.8 million recorded for the same period in 2009. Noninterest income also grew modestly when comparing the first quarter of 2010 to the similar period of 2009. Provisions for credit losses of $211 thousand were double the $100 thousand recorded in the first quarter of 2009. Even with this higher level of provisioning, the bank was able to achieve the record operating results, in part because increases in total expenses for the first quarter of 2010 were controlled at 13% over the expense levels incurred for the first three months of 2009. Expense growth reflected the ongoing investment in customer access with the first full year of operation for both the Centennial branch and the Annapolis regional office, as well as increased infrastructure costs to support a larger institution.

When comparing the first quarter 2010 results to the fourth quarter of 2009, total assets grew in excess of $18 million or 6% due largely to continued increases in deposits which grew by more than $12 million or 5% in the first quarter. As we have previously announced, the fourth quarter of 2009 included large loan loss provisioning as well as the expense to reflect the deterioration in value of our other real estate owned (OREO) asset.  Net interest income, which is the primary source of our revenues increased by nearly 12% for the first quarter of 2010 compared to the fourth quarter of 2009. Comparing total expenses, the first quarter of 2010 reflects a slight decrease in operating expenses compared to the last quarter of 2009, excluding the impact of the OREO valuation adjustment in the fourth quarter.

The company continues to focus on asset quality and has seen some stabilization in the nonperforming assets ratios, with total non performing assets (NPA’s) as a percentage of total assets holding at 2.01% for both the end of 2009 and the end of the first quarter of 2010. During the first quarter of 2010, only one credit relationship was moved into the non performing category.

Chairman and CEO Mary Ann Scully stated: “The first quarter of 2010 represents a welcome return to profitability after the fourth quarter and full year 2009 loan loss provisioning. Record earnings always represent a cause for celebration. As we noted in the year end press release, the operating performance of the bank remains strong and is getting stronger which  reflects the return on the  ongoing investments  that Howard Bancorp has consistently made in the communities that we serve since the day we opened almost 6 years ago. We continue to move forward on the execution of our long term plan to grow our impact with all our stakeholders. The bank opened our first commercial branch in Anne Arundel county in March, has once again been named a Future 50 Company by Smart CEO and is once again one of the Top 10 SBA Lenders in the Greater Baltimore region.  We have continued to effectively deploy the capital obtained last year from the US Treasury via the Capital Purchase Program designed for healthy growing banks.  One of the purposes of the program was to allow banks to continue to lend in their local communities safely while maintaining healthy capital ratios.  Our loan growth has been one of the highest in the region and reflects both the continuing opportunities to safely grow market share as well as the validation of our brand of doing business. Just as importantly, our depository customers have expressed their loyalty with both their operating balances and their savings and that has allowed us to lend profitably.  Our capital ratios remain healthy.  However, we continue to view cautiously the ongoing challenges facing all of us - especially our targeted small business customers - as the long awaited upturn has been concentrated in larger companies for the time being. Given this mixed environmental backdrop combined with our strong operating performances, we believe that the year ahead of us will provide both challenges and opportunities.  We remain ready for both.”


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.

Contact:

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