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Howard Bancorp, Inc. Reports 2018 Results
BALTIMORE--(BUSINESS WIRE)--January 30, 2019--Howard Bancorp, Inc. (“Howard Bancorp” or the “Company”) (Nasdaq:HBMD), the parent company of Howard Bank (“Howard Bank” or the “Bank”), today reported its financial results for the quarter and the year ended December 31, 2018. A summary of results for and other developments during the year ended December 31, 2018 are as follows:
- On March 1, 2018, we completed our acquisition of First Mariner Bank (“First Mariner”) through the merger of First Mariner with and into our bank subsidiary Howard Bank. The aggregate merger consideration was $173.8 million. With the acquisition, total assets increased by $975 million, or 85%, to $2.12 billion at March 31, 2018 versus $1.15 billion at the end of 2017, total loans increased by $669 million, or 71%, total deposits increased by $686 million, or 79%, of which total transaction deposits increased $276 million, or 95%. Howard Bank also recorded a deferred tax asset (“DTA”) of $34.2 million and $70.1 million of goodwill in the acquisition.
- In connection with the acquisition of First Mariner, we recorded $15.5 million in merger related expenses and $3.1 million in occupancy related reorganization expenses during 2018, which resulted in a pretax loss of $4.7 million and a net loss of $3.8 million, or $0.22 per basic share, for the year ended December 31, 2018. This compares to net income of $7.2 million and earnings per basic share (“EPS”) of $0.75 for 2017. Included in 2018 are several items such as the merger related expenses, the occupancy reorganization costs and other items which dramatically impacted our operating results. If you exclude these infrequent and non-recurring items, our pretax income for 2018 would have been $16.2 million, our net income would be $11.39 million, and our core operating EPS(1) would have been $0.64 for 2018.
- Following the acquisition of First Mariner, from March 31, 2018 to December 31, 2018, total assets increased by $142 million, or 7%, total loans grew by $44 million, or 3%, while total deposits increased by $136 million, or 9%, with organic growth in transaction deposits of $90 million, or 16%.
- Total common shareholders’ equity increased from $132 million at December 31, 2017 to $292 million at March 31, 2018 given the shares issued in the acquisition of First Mariner. After the closing of the acquisition of First Mariner, our total risk based capital ratio was 10.59% at March 31, 2018, and was impacted by the higher level of intangible assets and portions of the DTA which are deducted from total capital in calculating regulatory ratios. Given the Company’s mix of risk based assets, this total risk based capital ratio is the one deemed most significant. In order to provide for continued growth and supplement our regulatory capital ratios, we issued $25 million of subordinated debt in the fourth quarter of 2018 ($20 million of which was used to increase the capital of the Bank). As a result the Company’s total risk based capital position increased significantly to support continued growth:
December 31, 2017
March 31, 2018
December 31, 2018
|Total common equity||$132,253,000||$291,708,000||$294,683,000|
|Book value per share||$13.47||$15.36||$15.48|
|Tier I risk-based capital ratio||12.77||%||10.04||%||10.16||%|
|Total risk-based capital ratio||13.72||%||10.59||%||12.31||%|
Core EPS is not calculated in accordance with generally accepted accounting principles (“GAAP”). For a reconciliation of this non-GAAP financial measure to its comparable GAAP measure, see the final pages of this press release.
The following information was filed by Howard Bancorp Inc (HBMD) on Thursday, January 31, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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