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, 2011. The company announced that for the first quarter of 2011 net income was $344 thousand, which represents an increase of 9% over the net income for the first quarter of 2010, and an increase of 26% over the fourth quarter of 2010.
The company’s total assets were relatively unchanged when comparing March 31, 2011 assets of $305.4 million to the $304.9 million at the same point in 2010. Total loans outstanding of $251.2 million at the end of March 2011, showed a decline of nearly 3% compared to total loans of $260.1 million on March 31, 2010. Demand deposits, which not only represent the lowest cost source of funding available to a bank, but also are most reflective of the core customer relationships targeted by the bank, grew from $39.6 million at March 31, 2010 to $50.5 million at the end of the first quarter of 2011, representing growth in this highly coveted deposit category of $10.9 million or 27%. Because of the lack of significant asset growth, the bank was able to utilize these additional low cost deposits to reduce balances in higher cost deposit categories.
Even with the modest decline in loans over the twelve month period, total interest income for the first quarter of 2011 was similar to the same three month period in 2010. However, given the continuing favorable shift in the composition of deposits and other funding sources, the bank was able to reduce interest expense by $324 thousand or 39% for the first quarter of 2011 versus the same period in 2010. The resulting net interest income for 2011 was $3.0 million versus $2.7 million for the first three months of 2010, an increase of approximately $348 thousand or 13 %.