Howard Bancorp, Inc. Announces Results for the Third Quarter of 2011 with a 56% Increase in YTD Net Income

ELLICOTT CITY, Md.--(BUSINESS WIRE)-- Howard Bancorp, Inc. (OTC, Electronic Bulletin Board: HBMD), the parent company of Howard Bank, today announced its operating results through September 30, 2011. Through the first nine months of 2011, net income was $1.031 million, versus net income of $661 thousand for the nine month period in 2010 representing a 56% increase in net income. For the three months ended September 30, 2011, the company reported net income of $337 thousand compared to net income of $131 thousand for the third quarter of 2010, an increase of $206 thousand or 156%.

Through the nine months of 2011, net interest income was $9.3 million compared to $8.4 million for 2010, an increase of $950 thousand or 11%. Non interest income was flat at $513 thousand during the nine months of 2010 as compared to $503 thousand for the same period of 2011. Year to date total non interest expenses of $7.4 million represented an increase of $1.0 million or 16% compared to total noninterest expenses for the first three quarters of 2010. 2011 expenses included increased compensation costs which represents investment in our talent infrastructure as we added to our staff to keep pace with the needs of a growing organization. Non interest expenses also included approximately $390 thousand in valuation adjustments on the carrying value of certain Other Real Estate Owned (OREO) properties, as well as the real estate taxes and other costs associated with maintaining these properties.

When comparing the results for the third quarter of 2011 to the same period in 2010, net interest income of $3.2 million for 2011 also showed positive momentum, increasing by nearly $250 thousand or 8% compared to net interest income of $2.9 million in 2010. For the three months ended in September, non interest income was slightly down at $139 thousand for the third quarter of 2011 versus $160 thousand for the same period of 2010. The resulting net growth in revenues was accomplished without an increase in noninterest expense on a quarter over quarter basis. Total expenses for the third quarter of 2011 were $2.2 million, which was the same as for the same period one year earlier. Similar to the flat operating expenses, the provision for loan losses was modestly lower at $558 thousand in the third quarter of 2011, versus $604 thousand for the same period in 2010.

The improvement in net interest income and overall revenues for 2011 was primarily the result of continued balance sheet growth and decreases in the cost of funding our asset growth. At September 30, 2011, total assets were $321 million, an increase of $11.3 million or 4% over total assets of $310 million at the same point in 2010. Total loans ended the third quarter of 2011 at $271 million, an increase of $8.8 million or 3% over 2010, and total deposits increased by $5.1 million or 2% to end the third quarter of 2011 at $251 million. Included in the growth in deposits was an increase in noninterest bearing deposits of $10.0 million, which represented year over year growth of nearly 21%.

At September 30, 2011Howard Bancorp, Inc. had total capital of $36.4 million representing 11.34% of period end total assets. This is an increase of $7.5 million or 26% over total capital of $28.9 million or 9.33% of total assets at September 30, 2010. Over $6 million of the increase represented the net proceeds, from a preferred share issue to the US Treasury in conjunction with the Small Business Lending Fund. Howard Bancorp was one of only four commercial banks in Maryland to be approved for this influx of Tier 1 capital to enable continued small business loan portfolio growth. The remainder of the capital growth represents retention of the previous four quarters of earnings.

In addition to capital strengthening, the asset quality continues to remain stable. As of September 30, 2011 the bank had fewer than ten loan relationships in a non-accrual status totaling $3.6 million, representing only 1.12% of total assets, compared to $5.4 million in principal balances or approximately 1.73% of total assets at September 30, 2010. The bank has contracts for sale by year end of 45% ($2 million) of assets now in the OREO portfolio. Asset quality remains a primary focus for Howard Bank, and we continue to proactively work with clients throughout this difficult cycle.

Chairman and CEO Mary Ann Scully stated, "We are grateful to our customers, colleagues and shareholders for their support and the resulting continued balance sheet growth and earnings improvements evidenced in this latest quarter and the year to date. While the economy remains clouded with uncertainty and fear, Howard Bancorp is seeing asset quality stabilization, and tangible opportunities to grow our loan portfolio. Our ongoing ability to fund our growth with the dynamic increases in non interest bearing accounts is particularly rewarding and is associated with new cash management activity as well as existing customers' continuing flight to safety. Therefore, despite the short term lack of confidence expressed by many and the very real need to proceed cautiously, we maintain a long term bullish view

of our marketplace. We have, most recently with the SBLF capital raise, successfully focused on ensuring that we have the capital to seize the many emergent growth opportunities that we believe are abundant in our marketplace. We look forward to continuing to resolve residual problems and to seek new challenges in order to maximize both our long term shareholder returns as well as to maximize our impact in the communities we serve."

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 here.

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