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.