Howard Bancorp, Inc. Reports Results for the Third Quarter of 2010 Including Over a 300% Increase in YTD Net Income
Howard Bank, today announced its operating results through September 30, 2010. Through the first nine months of 2010, net income was $661 thousand, versus net income of $162 thousand for the nine month period in 2009 representing a 309% increase in net income. For the three months ended September 30, 2010, the company reported net income of $131 thousand compared to net income of $57 thousand for the third quarter of 2009 and net income of $215 thousand for the three months ending June 30, 2010.
When comparing the results for the third quarter of 2010 to the similar period in 2009, net interest income of $2.9 million for 2010 increased by nearly $616 thousand or 26% compared to net interest income of $2.3 million in 2009. For the three months ended in September, non interest income was relatively flat at $160 thousand for the third quarter of 2010 versus $182 thousand for the same period of 2009. The resulting increase in revenues were well in excess of growth in operating expenses which grew by $191 thousand or 9% when comparing the nine month period in 2010 to the same period in 2009. Because of the lingering stress that the economic environment is having upon local businesses, the bank deemed it prudent to record a provision for loan losses in the third quarter of 2010 in the amount of $604 thousand which was $243 thousand or 67% higher than the provision expense in the third quarter of 2009.
As of September 30, 2010 the bank had fewer than ten loan relationships in a non-accrual status totaling $5.4 million in principal balances or approximately 1.73% of total assets. This compares to non-accrual loans of $5.5 million, representing 2.02% of assets at the same point in 2009. Asset quality remains a primary focus for Howard Bank, and we continue to proactively work with clients throughout this difficult cycle.
As noted above, the year to date results through the first three quarters of 2010 produced net income of $661 thousand versus $162 thousand for the same period in 2009, an increase of $499 thousand or 309%. Through the nine months of 2010, net interest income was $8.4 million compared to $6.3 million for 2009, an increase of $2.1 million or 33%. Non interest income fell nominally by $21 thousand or 4% from $534 thousand during the nine months of 2009 to $513 thousand for the same period of 2010. Year to date total non interest expenses of $6.4 million represented an increase of $518 thousand or 9% compared to total noninterest expenses for the first three quarters of 2009. 2010 includes the full cost of our recent branch expansions in western Ellicott City and Annapolis.
The improvement in net interest income and overall revenues for 2010 was primarily the result of continued balance sheet growth. At September 30, 2010, total assets were $310 million, an increase of $35 million or 13% over total assets of $275 million at the same point in 2009. Total loans ended the third quarter of 2010 at $262 million, an increase of $19.3 million or 8% over 2009, and total deposits increased by $26.1 million or 12% to end the third quarter of 2010 at $246 million. Included in the growth in deposits was an increase in noninterest bearing deposits of $8.8 million, which represented year over year growth of nearly 23%. At September 30, 2010 Howard Bancorp, Inc. had total capital of $28.9 million, which represented 9.3% of period end total assets, and total risk based capital was 12.05%, which is far in excess of the amounts required to be considered well capitalized by regulatory measurement standards.
Chairman and CEO Mary Ann Scully reported that "Howard Bank continues to weather this difficult economic environment with resilience due to a strong capital base, optimism on the longer term outlook of the communities in which we operate, and gratitude to our clients and staff for allowing us to continue to grow despite the many challenges associated with a slowly recovering economy. Our small number of non-accrual loans is manageable and stable with a number of longer standing problems working their way towards resolution. We have continued to replenish our reserves which, along with retention of earnings, allows our capital base to grow."
"The growth in our asset base has been led by the continuing confidence of new and existing depositors – most notably businesses and business owners with non interest bearing transaction accounts and operating relationships. The retention of earnings and growing deposit base have, in turn, allowed us to be one of the notable banks in our marketplace whose loan portfolio continues to grow. Like other banks, we do see a residual fear on the part of many customers towards investing in the future given the strong sense of uncertainty that pervades our economy, and a resulting reluctance to borrow, but those trends have, to date, been offset by a continuing movement of other new clients to Howard Bank from other financial institutions. The power of our brand and our reputation for adding value to small and medium sized businesses continues to resonate. We believe that, in the short term, the way forward will continue to be difficult for many small businesses and some of our customers but the underlying strengths in both our local economy and in the bank are significant and warrant optimism."
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.
For additional information about the bank, call 410-750-0020 or visit www.howardbank.com.