Howard Bancorp, Inc. Announces Second Quarter 2010 Results

ELLICOTT CITY, Md.--(BUSINESS WIRE)-- Howard Bancorp, Inc. (OTC, Electronic Bulletin Board: HBMD), the parent company of Howard Bank, today reported its quarterly and year-to-date financial results for the period ending June 30, 2010. For the first six months of 2010 Howard Bancorp recorded net income of $530 thousand which represents an increase of over 400% compared to net income of $104 thousand for the first half of 2009. Net interest income of $5.4 million for the first six months of 2010 increased by nearly $1.5 million or 37% compared to the same period in 2009, while total expenses increased by only 9% when comparing the six months of 2010 to 2009. Much of this increase in earnings was attributable to continued balance sheet growth with an increase in total assets of 20%, an increase in deposits of 24%, and growth in total loans of 12% when comparing the second quarter of 2010 with the similar balances at the end of June 2009.

Howard Bancorp was able to record this significant increase in year over year net income while also continuing to add to the bank’s loan loss reserves. Reflecting the ongoing softness in the economy, the bank recorded a provision for loan losses of $658 thousand for the first half of 2010, compared to $270 thousand for the same period in 2009. Our asset quality measures remain well controlled and relatively stable. At June 30, 2009, non accrual loans of $5.0 million and other real estate owned (OREO) of $2.1 million represented 2.77% of our total assets. This compares to second quarter 2010 non accrual loans of $5.8 million and OREO of $1.1 million which represent 2.22% of total assets. The bank remains well capitalized with a tier one leverage ratio, tier one risk based ratio, and total risk based capital ratio of 8.13%, 9.65% and 10.90%, respectively.

For the three months ending June 30, 2010, Howard Bancorp recorded second quarter net income of $215 thousand which is more than double the $87 thousand for the second quarter of 2009, although reduced from the $315 thousand for the first quarter of 2010. Comparing the second quarter of 2010 to the same period of 2009, quarterly net interest income rose 28% while operating expenses rose only 5%. The provision for loan losses for the three months ended June 30, 2010 was $447 thousand compared to $163 thousand for the second quarter of 2009. Similarly, the second quarter 2010 provision was the primary reason for the reduction in net income for the second quarter compared to the first quarter of 2010 with $447 thousand in the second quarter compared to $211 thousand in the first quarter of 2010.

Chairman and CEO Mary Ann Scully stated: “We are pleased to report a profit in these challenging times thanks to continued improvements in our operating earnings. These earnings are the result of consistent growth in our portfolio of loans which are comprised primarily of loans supporting local businesses and professionals, as well as ongoing increases in transactional deposits provided by those local customers serviced by the bank. We have prudently invested in bank technology, delivery and additional staff and are realizing efficiencies associated with those decisions. Because of the bank’s continued commitment to local small businesses, and the negative impact that the uncertainties in the current economic climate are having on this market segment, the bank remains focused on ongoing identification and proactive management of any potentially impaired relationships and this has resulted in additional loan loss provisions and some charge-offs but we are comfortable with the resulting stability in the bank’s asset quality ratios.

Our growth is largely the result of the confidence placed in us by our targeted clients. It has allowed us to date to absorb the growing burden of regulatory oversight and the related costs and we anticipate having to bear an even greater burden now being imposed by our national legislators. Overall, we are proud to report that we have continued to grow in this tough climate by supporting the local economy, and at the same time have meaningfully increased our earnings in spite of both the stresses of additional reserves on a small number of creditors and the increased regulatory burden. Most of all, we continue to have faith in this marketplace and the meaningful role that we are able to play in our local communities. While there remains much uncertainty in the economy and in the direction of some parts of the banking industry, we remain confident in our ability to navigate through these unparalleled times. Our goal remains as always to not merely survive these difficult times, but to take advantage of the numerous opportunities that inevitably arise as a result of change.”

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.