Howard Bancorp, Inc. (NASDAQ: HBMD) (“Howard Bancorp” or the
“Company”), 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, 2020.
Net Income (Loss) and Income (Loss) per
Share
The Company reported net income of $4.5 million, or $0.24 per
both basic and diluted common share, for the fourth quarter of
2020. This compares to net income of $5.9 million, or $0.31 per
both basic and diluted common share, for the fourth quarter of 2019
and net income of $4.6 million, or $0.25 per both basic and diluted
common share, for the third quarter of 2020. For the year ended
December 31, 2020, the Company reported a net loss of $17.0
million, or a loss of $0.91 per both basic and diluted common
share. This compares to net income of $16.9 million, or $0.89 per
both basic and diluted common share, for the year ended December
31, 2019.
The decreases in fourth quarter 2020 basic and diluted earnings
per common share were $0.07 when compared to the fourth quarter of
2019 and $0.01 when compared to the third quarter of 2020. The
decrease in year 2020 basic and diluted earnings per common share
was $1.80 when compared to year 2019. The following table presents
a rollforward of earnings per share for the fourth quarter of 2020
compared to both the fourth quarter of 2019 and the third quarter
of 2020 as well year 2020 compared to year 2019. The column noted
as “FN” references each item in the rollforward to a footnote with
additional information; reconciling items are presented on an after
tax basis.
Fourth Quarter 2020
Compared to:
FN
Fourth
Quarter
2019
Third
Quarter
2020
Year 2020
Compared
to 2019
EPS, 4th Quarter 2019 / 3rd Quarter 2020 / Year 2019
$
0.31
$
0.25
$
0.89
Goodwill impairment charge (no tax impact)
1
-
-
(1.84
)
Decrease in pretax income from former mortgage banking activities
2
(0.03
)
-
(0.09
)
Increase in the provision for credit losses
3
(0.04
)
-
(0.23
)
Pretax income from SBA Paycheck Protection Program ("PPP")
4
0.07
0.03
0.16
Branch optimization charges in 2019 and 2020
5
(0.04
)
(0.02
)
0.11
Securities gains
6
-
-
0.10
Prepayment penalties on Federal Home Loan Bank of Atlanta advances
7
-
-
0.02
Litigation settlement accrual - 2020 potential litigation
8
(0.04
)
(0.04
)
(0.08
)
Litigation settlement accrual - 2019 potential litigation
9
-
-
0.03
Proceeds from agreement to exit mortgage banking activities
10
(0.03
)
-
(0.03
)
CFO departure charge (first quarter 2020)
11
-
-
(0.03
)
Tax benefit resulting from CARES Act (first quarter 2020)
12
0.01
0.01
0.07
Impact of share repurchase
13
-
-
0.02
All other, net
0.03
0.01
(0.01
)
EPS, Fourth Quarter 2020 / Year 2020
$
0.24
$
0.24
$
(0.91
)
CHANGE
$
(0.07
)
$
(0.01
)
$
(1.80
)
- The second quarter of 2020 included a $34.5 million goodwill
impairment charge, included within noninterest expense. There were
no goodwill impairment charges in the third or fourth quarter of
2020 or in 2019.
- The fourth quarter of 2019 included $807 thousand in pretax
income from the Company’s former mortgage banking activities, which
were concluded in the first quarter of 2020. For the year 2020,
pretax income from the Company’s former mortgage banking activities
was $130 thousand, a decrease of $2.1 million from year 2019.
- The fourth quarter 2020 provision for credit losses was $1.7
million, an increase of $950 thousand from the fourth quarter of
2019, and unchanged from the third quarter of 2020. The year 2020
provision for credit losses was $9.8 million, an increase of $5.6
million from the year 2019.
- The Company originated loans under the SBA’s PPP program in the
second quarter of 2020 and began the process of loan forgiveness in
the fourth quarter of 2020. Fourth quarter 2020 pretax income of
$1.7 million from this program represented an increase of $645
thousand from the third quarter of 2020. For the year 2020, pretax
income from this program was $3.8 million. The PPP program did not
exist prior to the second quarter of 2020.
- The fourth quarter of 2020 included a branch optimization net
charge, included within noninterest expense, of $554 thousand, an
increase of $892 thousand compared to a $338 thousand partial
reversal of a prior charge in the fourth quarter of 2019. There
were no branch optimization charge in the first, second, or third
quarters of 2020. For the year 2020, branch optimization charges
were $554 thousand, a decrease of $2.7 million from the year
2019.
- The year 2020 included securities gains of $3.0 million, an
increase of $2.4 million from the year 2019. We did not recognize
any securities gains in the third or fourth quarters of 2020. $13
thousand of securities losses were recorded in the fourth quarter
of 2019.
- The year 2020 included prepayment penalties on Federal Home
Loan Bank of Atlanta (“FHLB”) advances, included within noninterest
expense, of $224 thousand, a decrease of $427 thousand from the
year 2019. We did not recognize any prepayment penalties in the
third or fourth quarters of 2020 or in the fourth quarter of
2019.
- The fourth quarter of 2020 included a $1.0 million increase to
a litigation accrual, included within noninterest expense,
initially recorded in the second quarter of 2020 for potential
litigation claims stemming from certain mortgages originated by
First Mariner Bank. For the year 2020, total accruals were $2.0
million. The increase in the accrual was the result of a settlement
of this potential litigation in January 2021. This accrual was not
related to the $700 thousand litigation settlement charge recorded
in the third quarter of 2019 and described in FN 9 below.
- The third quarter of 2019 and year 2019 included a $700
thousand litigation settlement charge, included in noninterest
expense, stemming from certain mortgages originated by First
Mariner Bank before its merger with Howard Bank.
- The fourth quarter of 2019 and year 2019 also included, within
noninterest income, the proceeds from an agreement to exit the
Company’s mortgage banking operations of $750 thousand.
- The first quarter and year 2020 included noninterest expenses
of $788 thousand attributable to the departure of the Company’s
former CFO. There were no expenses attributable to the departure of
any executive officers in the year 2019.
- A $1.3 million tax benefit resulting from the carryback of our
2018 net operating loss as a result of a provision in the
Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)
was recorded in 2020, substantially all in the first quarter. There
was no comparable item in year 2019.
- The Company completed a share repurchase program during the
first quarter of 2020. A total of 392,565 shares were repurchased,
or approximately 2.0% of shares outstanding at December 31,
2019.
Core net income is a non-GAAP financial measure that excludes,
if applicable, the earnings contribution from the Company’s former
mortgage banking activities, the goodwill impairment charge, and
certain other items to provide a picture of ongoing activities
deemed core to the Company’s strategy. Core net income for the
fourth quarter of 2020 was $5.5 million, or $0.29 per both basic
and diluted common share. This compares to core net income of $4.5
million, or $0.24 per both basic and diluted common share for the
fourth quarter of 2019. The $0.05 per share increase in core
earnings per share when comparing the fourth quarter of 2020 to the
fourth quarter of 2019 was primarily the result of the pretax
contribution from PPP lending activities of $1.7 million (+$0.07
after tax per share), partially offset by a higher provision for
credit losses, reflecting the current economic environment, which
was up $950 thousand (-$0.04 after tax per share). This also
compares to core net income of $4.6 million, or $0.25 per both
basic and diluted common share, for the third quarter of 2020. The
$0.04 per share increase in core earnings per share when comparing
the fourth quarter of 2020 to the third quarter of 2020 was
primarily the result of an increase in the pretax contribution from
PPP lending activities, which was up $645 thousand (+$0.03 after
tax per share). *
Core net income for the year 2020 was $16.5 million, or $0.88
per both basic and diluted common share. This compares to core net
income of $17.6 million, or $0.92 per both basic and diluted common
share for the year 2019. The $0.04 per share decrease in 2020 core
earnings per share was primarily the result of a higher provision
for credit losses, reflecting the current economic environment,
which was up $5.6 million (-$0.23 after tax per share), partially
offset by the pretax contribution from PPP lending activities of
$3.8 million (+$0.16 after tax per share).
Core pre-provision net revenue (“core PPNR”), a non-GAAP
financial measure that adds back the provision for credit losses to
GAAP pretax income and excludes the pretax earnings contribution of
the Company’s mortgage banking activities, the goodwill impairment
charge, and certain other items, was $8.8 million for the fourth
quarter of 2020. The fourth quarter of 2020 core PPNR was up $2.2
million, or 32.6%, from $6.6 million for the fourth quarter of
2019, primarily attributable to the contribution from PPP lending
activities ($1.7 million). The fourth quarter of 2020 core PPNR was
up $1.1 million, or 15.0%, when compared to the third quarter 2020
core PPNR of $7.7 million, primarily attributable to the increase
in the contribution from PPP lending activities ($645 thousand).
Core PPNR for the year 2020 was $31.4 million, an increase of $4.2
million, or 15.3%, from core PPNR of $27.2 million for the year
2019. The increase in year 2020 compared to year 2019 was primarily
attributable to the contribution from PPP lending activities ($3.8
million). *
Paycheck Protection Program
Loans
The Company continues to actively participate in the SBA’s PPP
program, with 351 applications taken, totaling $72.8 million, in
the first four days after the program was relaunched by the SBA on
January 19, 2021. During the second and third quarters of 2020,
$201.0 million of loans were originated under the program,
consisting of 1,062 loans with an average loan size of $189
thousand. A total of 149 loans, with an aggregate principal balance
of $30.1 million, were forgiven during the fourth quarter of 2020.
An additional 83 loans, with an aggregate principal balance of
$25.0 million, were forgiven through January 22, 2021.
During 2020, the Company received and deferred total processing
fees from the SBA for originated PPP loans of $6.7 million. In
addition, $782 thousand of origination costs were deferred. The net
deferred fees are being accreted as a yield adjustment over the
contractual term of the underlying PPP loans. PPP lending generated
pretax income of $1.7 million, or $0.07 after tax per share, in the
fourth quarter of 2020, an increase of $645 thousand, or $0.03
after tax per share, from the third quarter of 2020. The fourth
quarter increase was attributable to the accelerated recognition of
net deferred fees upon loan forgiveness. For the year 2020, PPP
lending generated pretax income of $3.8 million, or $0.16 after tax
per share. PPP loans, net of unearned income, totaled $167.6
million at December 31, 2020, a decrease of $28.7 million from
September 30, 2020.
Certain information in this earnings release is presented with
respect to “portfolio loans”, a non-GAAP financial measure defined
as total loans and leases, but excluding the PPP loans. The Company
believes that portfolio loan related measures provide additional
useful information for purposes of evaluating the Company’s results
of operations and financial condition with respect to both the
fourth quarter and year 2020 when comparing to other periods, since
the PPP loans are 100% guaranteed, were not subject to traditional
loan underwriting standards, and a substantial portion of these
loans are expected to be forgiven and repaid by the SBA within the
next 12-18 months. *
COVID-19 Loan Modifications
The Company has provided loan modifications to both commercial
and retail customers, on a case by case basis, in the form of
payment deferrals for periods up to six months. Deferrals trended
favorably from their peak of $315 million (17.9% of both total
loans and portfolio loans) on April 24, 2020, dropping to $47.3
million (2.5% of total loans and 2.8% of portfolio loans) at
November 6, 2020, the most recent date when the Company previously
disclosed deferral data. Since that date, deferrals have decreased
slightly, with loans that have resumed full payment more than
offsetting new deferrals or deferral extensions. As of January 22,
2021, deferrals are $41.4 million, or 2.2% of total loans and 2.4%
of portfolio loans. Included in total deferrals at January 22, 2021
are second deferrals (including deferrals where the cumulative
inception to date deferral is greater than six months but less than
a year) of $20.3 million. Full payment deferrals represent 56% of
total deferrals while principal only deferrals represent 44% of
total deferrals. *
Asset Quality and Allowance for Loan and
Lease Losses
Nonperforming assets (“NPAs”) totaled $20.2 million at December
31, 2020, an increase of $2.0 million from September 30, 2020 and a
decrease of $2.1 million from December 31, 2019. NPAs consisted of
$19.4 million of nonperforming loans (“NPLs”) and $743 thousand of
other real estate owned (“OREO”) at December 31, 2020. NPLs were
1.04% of total loans and 1.14% of portfolio loans at December 31,
2020. NPAs represented 0.79% of total assets, 1.08% of total loans
and OREO, and 1.19% of portfolio loans and OREO at December 31,
2020. *
- This compares to NPAs of $22.2 million at December 31, 2019
that consisted of $19.1 million in NPLs and $3.1 million of OREO.
NPLs were 1.10% of total loans at December 31, 2019 while
nonperforming assets represented 0.94% of total assets and 1.27% of
total loans and OREO at December 31, 2019.
- This compares to NPAs of $18.1 million at September 30, 2020
that consisted of $17.0 million in NPLs and $1.1 million of OREO.
NPLs were 0.90% of total loans and 1.01% of portfolio loans at
September 30, 2020 while NPAs represented 0.71% of total assets,
0.96% of total loans and OREO, and 1.07% of portfolio loans and
OREO at September 30, 2020.
Net charge-offs were $195 thousand in the fourth quarter of 2020
and represented 0.04% of both average total loans and average
portfolio loans (annualized). This compares to net recoveries of
$55 thousand, or -0.01% of average loans (annualized) in the fourth
quarter of 2019 and $78 thousand, or 0.02% of average portfolio
loans (annualized) in the third quarter of 2020. For the year 2020,
net charge-offs were $764 thousand, or 0.04% of both average total
loans and average portfolio loans. The allowance for loan and lease
losses (the “allowance”) was $19.2 million at December 31, 2020.
The provision for credit losses for the fourth quarter of 2020 was
$1.7 million. *
Because the Company is a smaller reporting company under SEC
rules, the allowance was determined under the incurred loss model.
The allowance represented 1.03% of total loans, 1.13% of portfolio
loans, and 98.6% of NPLs at December 31, 2020. *
- This compares to an allowance of $10.4 million at December 31,
2019. The December 31, 2019 allowance represented 0.60% of total
loans and 54.3% of NPLs. The $8.8 million increase in the allowance
at December 31, 2020 was the result of aggregate provisions for
credit losses attributable to the allowance of $9.5 million
partially offset by aggregate net charge-offs of $764 thousand
during the year 2020.
- This compares to an allowance of $17.7 million at September 30,
2020. The September 30, 2020 allowance represented 0.94% of total
loans, 1.05% of portfolio loans, and 104.0% of NPLs. The $1.5
million increase in the allowance at December 31, 2020 was the
result of a provision for credit losses attributable to the
allowance of $1.7 million partially offset by net charge-offs of
$195 thousand during the fourth quarter of 2020.
The Company’s allowance as a percentage of total loans has
historically been lower than certain of our peers due to the
accounting for acquired loans and their initial impact on the
allowance. The allowance and unamortized fair value marks as a
percentage of portfolio loans, a non-GAAP measure that management
uses to assess credit coverage, adds the unamortized fair value
marks to total loans, portfolio loans, and the allowance. The fair
value marks, unlike the allowance, are not available to absorb
general losses but are only available to absorb losses for the
specific loan to which they apply, however, this measure provides
the Company with an additional indicator of potential loss
absorption capacity. The allowance and unamortized fair value marks
as a percentage of total loans plus fair value marks was 1.37% at
December 31, 2020, an increase of 0.05% from September 30, 2020 and
an increase of 0.26% from December 31, 2019. The allowance and
unamortized fair value marks as a percentage of portfolio loans
plus fair value marks was 1.50% at December 31, 2020, an increase
of 0.02% from September 30, 2020 and an increase of 0.39% from
December 31, 2019.*
The Company’s asset quality trends show very modest additional
stress in the loan portfolio, although we believe our ongoing
active management of the portfolio, COVID-19 related loan
modifications, and PPP loans have reduced the short-term risk in
the portfolio. However, despite this modest change, after
evaluating the overall significant stress the pandemic has had on
the economy, and management’s belief that this stress will continue
for at least the next several quarters, the Company increased the
allowance at December 31, 2020 by $1.5 million over the September
30, 2020 level, with $894 thousand of the fourth quarter increase
attributable to a specific allocation of the allowance for one loan
relationship. The allowance at December 31, 2020 increased by $8.8
million compared to December 31, 2019. With the exception of the
one specific allocation, the quarterly increases in the allowance
were based on management’s evaluation of certain qualitative
factors included in the determination of the allowance, primarily
economic factors driven by the unemployment rate and GDP as well as
factors driven by the level of loans to potentially highly impacted
industries and risk rating downgrades.
The Maryland economy is open with limited restrictions and a
substantial amount of economic activity has returned; however,
unemployment still remains high, and many businesses are still
experiencing significant drops in revenue. The substantial and
continuing rise in new COVID-19 cases, hospitalizations, and deaths
since the end of September may lead to ongoing limitations on
economic activity in the future. Management will continue to
closely monitor portfolio conditions and reevaluate the adequacy of
the allowance. While the level of payment deferrals and PPP loan
assistance have reduced the short-term risk in the Company’s loan
portfolio and traditional lagging indicators of delinquencies and
nonperforming loans remain historically modest, management believes
there is the potential for additional risk rating downgrades and an
increase in charge-offs in future periods.
Stockholders’ Equity and Regulatory
Capital Ratios
Stockholders’ equity at December 31, 2020 was $294.6 million, an
increase of $5.1 million from September 30, 2020. The increase was
primarily due to fourth quarter 2020 net income of $4.5 million and
a $517 thousand increase in accumulated other comprehensive income,
which represents the after tax impact of an increase in the fair
value of available-for-sale securities. Book value per common share
was $15.72 at December 31, 2020, a decrease of $0.76 per share
since December 31, 2019, with the decrease attributable to the
goodwill impairment charge ($1.84 per share reduction) recorded in
the second quarter of 2020. Book value per share increased by $0.27
per share since September 30, 2020.
Tangible stockholders’ equity, a non-GAAP financial measure that
deducts goodwill and other intangible assets, net of any applicable
deferred tax liabilities, was $258.8 million at December 31, 2020.
This compares to $253.2 million at September 30, 2020, with the
$5.6 million increase primarily due to fourth quarter 2020 net
income of $4.5 million, a $517 thousand increase in accumulated
other comprehensive income, and the $471 thousand after tax effect
of core deposit intangible amortization. Tangible stockholders’
equity has increased by $16.9 million since December 31, 2019.
Tangible book value per common share, a non-GAAP measure that
divides tangible stockholders’ equity by the number of shares
outstanding, was $13.81 per share at December 31, 2020, an increase
of 8.8%, or $1.13 per share since December 31, 2019 and an increase
of $0.30 per share since September 30, 2020. *
The Company’s regulatory capital ratios are all well in excess
of regulatory “well-capitalized” and internal target minimum
levels. The total capital ratio was 14.32% while both the Common
Equity Tier 1 (“CET 1”) and Tier 1 capital ratios were 11.83% at
December 31, 2020. The Tier 1 to average assets (“leverage”) ratio
was 9.26%. A comparison of the Company’s December 31, 2020
regulatory capital ratios to December 31, 2019 and September 30,
2020 is as follows:
- Regulatory capital ratios at December 31, 2019 consisted of a
total capital ratio of 13.14% while both the CET 1 and Tier 1
capital ratios were 11.09%. The leverage ratio was 9.55%. All
December 31, 2020 regulatory capital ratios based on risk-weighted
assets were above the December 31, 2019 levels. The December 31,
2020 leverage ratio was lower due to PPP loans and their impact on
average total assets.
- Regulatory capital ratios at September 30, 2020 consisted of a
total capital ratio of 14.11% while both the CET 1 and Tier 1
capital ratios were 11.65%. The leverage ratio was 9.07%. All
December 31, 2020 regulatory capital ratios were above the
September 30, 2020 levels.
Liquidity
The Company’s liquidity position remains strong. The Company has
continued to experience increases in low-cost customer deposits
since the end of the first quarter of 2020. The Company also
continues to build stable sources of contingency funding capacity,
and management remains confident that it will be able to access
these funds in the event that the markets again become
restricted.
This confidence is reflected in the fact that during the fourth
quarter of 2020, the Company repaid the $31.1 million of borrowings
reported at September 30, 2020 under the Federal Reserve Bank of
Richmond’s (“FRB”) Paycheck Protection Program Lending Facility
(“PPPLF”). While the Company had originally planned to use the
PPPLF as the funding source for all PPP loans, strong customer
deposit growth and the availability of alternative short-term
funding sources at a lower cost resulted in limited utilization of
the PPPLF. At this time, the Company has no plans to further
utilize the PPPLF.
Net Interest Income and Net Interest
Margin
Net interest income was $19.7 million for the fourth quarter of
2020, an increase of $1.4 million, or 7.6%, from $18.3 million for
the third quarter of 2020, and an increase of $2.4 million, or
13.8%, from $17.3 million in the fourth quarter of 2019. PPP net
interest income, up primarily due to accelerated accretion of net
deferred origination fees on forgiven PPP loans, represented $645
thousand of this increase from the third quarter of 2020 and $1.7
million of this increase from the fourth quarter of 2019. Net
interest income for the year 2020 was $73.6 million, an increase of
$4.3 million, or 6.2%, from $69.3 million in 2019. PPP lending
generated $3.6 million of net interest income in 2020. The PPP
program did not exist in 2019. Non PPP related increases in net
interest income were attributable to the impact of lower funding
costs partially offset by lower yields on earning assets.
The following table presents selected yields and rates for the
fourth quarters of 2020 and 2019 as well as the third quarter of
2020. Changes in the fourth quarter 2020 yields and rates from the
fourth quarter of 2019 and the third quarter of 2020 are also
included in the table. In addition, yields and rates for the years
2020 and 2019, with the change in year 2020 yields and rates from
year 2019, are also included in the table.
Fourth Quarter 2020
Change from:
Year 2020
Fourth
Quarter
2020
Fourth
Quarter
2019
Third
Quarter
2020
Fourth
Quarter
2019
Third
Quarter
2020
Year 2020
Year 2019
Change
from Year
2019
Selected
yields and rates:
Net interest margin
3.39%
3.38%
3.15%
0.01%
0.24%
3.27%
3.50%
-0.23%
Earning asset yield
3.74%
4.41%
3.62%
-0.67%
0.12%
3.84%
4.62%
-0.78%
Total loan yield
4.23%
4.70%
4.04%
-0.47%
0.19%
4.25%
4.89%
-0.64%
Portfolio loan yield
4.25%
4.70%
4.22%
-0.45%
0.03%
4.34%
4.89%
-0.55%
Cost of interest-bearing deposits
0.35%
1.23%
0.56%
-0.88%
-0.21%
0.68%
1.24%
-0.56%
Cost of interest-bearing liabilities ("IBL")
0.52%
1.40%
0.69%
-0.88%
-0.17%
0.82%
1.48%
-0.66%
Cost of total deposits
0.23%
0.90%
0.36%
-0.67%
-0.13%
0.46%
0.92%
-0.46%
Cost of total IBL + demand deposits
0.37%
1.07%
0.48%
-0.70%
-0.11%
0.59%
1.15%
-0.56%
Impact of fair value adjustments on acquired loans:
Net interest margin
0.16%
0.08%
0.10%
0.08%
0.06%
0.10%
0.10%
0.00%
Earning asset yield
0.16%
0.08%
0.11%
0.08%
0.05%
0.10%
0.11%
-0.01%
Total loan yield
0.21%
0.10%
0.13%
0.11%
0.08%
0.13%
0.13%
0.00%
Impact of PPP loans:
Net interest margin
0.02%
0.00%
-0.09%
0.02%
0.11%
-0.04%
0.00%
-0.04%
Earning asset yield
0.03%
0.00%
-0.10%
0.03%
0.13%
-0.05%
0.00%
-0.05%
Total loan yield
-0.02%
0.00%
-0.18%
-0.02%
0.16%
-0.09%
0.00%
-0.09%
Net interest margin compression is a continuing trend as market
interest rates, after falling to historically low levels through
the second quarter of 2020, have generally stabilized. The
following table presents selected market interest rates for the
periods presented; all are averages except the December 31, 2020
rates:
Prime Rate
Fed Funds
Effective Rate
30 Day
LIBOR
10 Year
Treasury
2019 Fourth Quarter
4.83%
1.65%
1.79%
1.80%
2020 Third Quarter
3.25%
0.09%
0.16%
0.65%
2020 Fourth Quarter
3.25%
0.09%
0.15%
0.86%
Change from: 2020 Third Quarter
0.00%
0.00%
-0.01%
0.21%
2019 Fourth Quarter
-1.58%
-1.56%
-1.64%
-0.94%
Year 2019
5.28%
2.16%
2.22%
2.14%
Year 2020
3.54%
0.37%
0.52%
0.89%
Change from: Year 2019
-1.74%
-1.79%
-1.70%
-1.25%
At December 31, 2020
3.25%
0.09%
0.14%
0.93%
Noninterest Income
Noninterest income was $2.1 million for the fourth quarter of
2020, a decrease of $3.5 million from the $5.6 million reported in
the fourth quarter of 2019, and an increase of $56 thousand from
the $2.1 million reported in the third quarter of 2020. There were
no securities gains in the third or fourth quarter of 2020 while
$13 thousand of securities losses were reported in the fourth
quarter of 2019. There was no noninterest income attributable to
the Company’s former mortgage banking activities in either the
third or fourth quarter of 2020 compared to $2.7 million in the
fourth quarter of 2019. Noninterest income for the year 2020 was
$12.4 million, an $8.7 million decrease from $21.0 million for the
year 2019. The decline in noninterest income from our exited
mortgage banking activities of $9.2 million in 2020 was partially
offset by noninterest income growth in our continuing banking
activities.
Core noninterest income, a non-GAAP financial measure that
excludes noninterest income attributable to the Company’s mortgage
banking activities and securities gains in each quarter as well as
the proceeds from an agreement to exit mortgage banking activities
recorded in the fourth quarter of 2019, was $2.1 million for the
fourth quarter of 2020, a $31 thousand decrease from the fourth
quarter of 2019, and a $56 thousand increase from the third quarter
of 2020. Core noninterest income for the year 2020 was $7.9
million, a $1.1 million decrease from $9.0 million for the year
2019. *
- The $31 thousand decrease when compared to the fourth quarter
of 2019 primarily consisted of the following: lower levels of
nonsufficient funds (“NSF”) and overdraft charges, included in
service charges on deposit accounts (-$214 thousand) partially due
to accommodations to COVID-19 impacted customers in the current
economic environment and higher liquidity maintained by other
customers; this item was partially offset by an increase in
interchange fees due to VISA incentive payments, included in other
income (+$86 thousand), and an increase in loan related fees and
service charges (+$75 thousand).
- The $56 thousand increase when compared to the third quarter of
2020 primarily consisted of the following: an increase in service
charges on deposit accounts due primarily to a growing volume of
NSF and overdraft charges (+$21 thousand); an increase in
interchange fees, as card activity volumes gradually continue to
improve in addition to the VISA incentive payments, included in
other income (+$101 thousand); and the decrease in loan related
fees and service charges (-$118 thousand). The third quarter 2020
loan related fees and services charges included swap fee income of
$197 thousand.
- The $1.1 million decrease in year 2020 when compared to year
2019 primarily consisted of the following: lower levels of NSF and
overdraft charges (-$832 thousand) partially due to accommodations
to COVID-19 impacted customers in the current economic environment
and higher liquidity maintained by other customers, and a decrease
in interchange fees (-$238 thousand). As noted above, fourth
quarter noninterest income showed signs of a reversal of some of
these pressures.
Noninterest Expenses
Noninterest expenses totaled $14.6 million for the fourth
quarter of 2020, an increase of $205 thousand from the $14.4
million reported in the fourth quarter of 2019, and an increase of
$1.9 million from the $12.7 million reported in the third quarter
of 2020. There were no noninterest expenses attributable to the
Company’s former mortgage banking activities in either the third or
fourth quarter of 2020 compared to $2.1 million in the fourth
quarter of 2019.
The fourth quarter of 2020 included a $1.0 million increase to
the litigation accrual initially recorded in the second quarter of
2020 for potential litigation claims stemming from certain
mortgages originated by First Mariner Bank. For the year 2020,
total accruals were $2.0 million. The increase in the accrual was
the result of a settlement of this potential litigation in January
2021.
The fourth quarter of 2020 also included a branch optimization
net charge of $554 thousand. This charge included $1.1 million of
costs associated with the announcement, during the fourth quarter
of 2020, of our intent to close an additional two branches in early
2021. Both of the branches to be permanently closed have been
temporarily closed since March 2020 due to the pandemic. This $1.1
million charge was partially offset by the $538 thousand partial
reversal of a branch closing liability, initially recorded in the
second quarter of 2019, as a result of securing a sublease on the
former branch location.
Noninterest expenses for the year 2020 were $89.5 million, a
$25.4 million increase from $64.1 million for the year 2019. A
goodwill impairment charge of $34.5 million was included in
noninterest expenses in the second quarter of 2020. In addition,
noninterest expenses from mortgage banking activities were $1.4
million in 2020, a $7.6 million decrease from $9.0 million in
2019.
Core noninterest expenses is a non-GAAP financial measure that
excludes noninterest expenses attributable to the following: the
Company’s mortgage banking activities in each quarter; the $34.5
million goodwill impairment charge in the second quarter of 2020;
branch optimization charges recorded in the fourth quarter of 2020
and in the second and fourth quarters of 2019; accruals recorded in
the second and fourth quarters of 2020 for the settlement of
potential litigation claims stemming from certain mortgages
originated by First Mariner Bank before its merger with Howard
Bank; an unrelated litigation settlement charge in the third
quarter of 2019 stemming from certain mortgages originated by First
Mariner Bank before its merger with Howard Bank; prepayment
penalties on FHLB advances in both the second quarter of 2019 and
2020, and the charge associated with the departure of the Company’s
former CFO in the first quarter of 2020.
Core noninterest expenses were $13.0 million for the fourth
quarter of 2020, a $389 thousand increase from $12.6 million in the
fourth quarter of 2019, and a $324 thousand increase from $12.7
million in the third quarter of 2020. Core noninterest expenses for
the year 2020 were $50.0 million, a $451 thousand decrease from
$50.4 million for the year 2019. *
- The Company implemented an enhanced methodology to accrue
certain noninterest expenses (the “accrual update”) during the
fourth quarter of 2020, resulting in a higher level of data
processing fees (+$386 thousand) and professional fees (+$232
thousand). The total impact of this implementation of $618 thousand
in the fourth quarter of 2020 will not reoccur in future periods.
The variances discussed below are presented both including and
excluding the accrual update impact.
- The $389 thousand increase when compared to the fourth quarter
of 2019 (but a $229 thousand decrease excluding the accrual update
impact) consisted of the following: higher FDIC insurance expense
(+$337 thousand) as the fourth quarter 2020 assessment rate was
higher due to the impact of the goodwill impairment charge in the
second quarter of 2020 and the benefit of the FDIC’s small bank
assessment credits recognized in the third and fourth quarters of
2019 that did not reoccur in 2020; higher compensation and benefits
expenses (+$279 thousand), with $165 thousand attributable to an
accrual for an additional paid time off benefit, with a carryover
provision granted in light of COVID-19; higher occupancy costs
(+$202 thousand); higher professional fees (+$356 thousand but
+$124 thousand excluding the accrual update impact), and higher
data processing fees (+$89 thousand but down $297 thousand
excluding the accrual update impact). The above items were
partially offset by the following: lower other real estate owned
expenses (-$295 thousand), as the fourth quarter of 2019 included
increases in valuation allowances of $107 thousand; and lower
marketing and business development expenses, driven primarily by
the impact of COVID-19 (-$502 thousand).
- The $324 thousand increase when compared to the third quarter
of 2020 (but a $294 thousand decrease excluding the accrual update
impact) consisted of the following: higher data processing fees
(+$409 thousand but +$23 thousand excluding the accrual update
impact); higher professional fees (+$196 thousand but down $36
thousand excluding the accrual update impact); higher marketing and
business development expenses (+$117 thousand); the above items
were partially offset by lower compensation and benefits expenses
(-$412 thousand), with $205 thousand of the decrease attributable
to lower healthcare costs, and $100 thousand of the decrease a
result of a higher level of loan origination cost deferrals.
- The $451 thousand decrease in year 2020 when compared to year
2019 (a $1.1 million decrease excluding the accrual update impact)
primarily consisted of the following: lower data processing fees
(-$935 thousand but -$1.3 million excluding the accrual update
impact); lower marketing and business development expenses (-$788
thousand); these items were partially offset by higher professional
fess (+$262 thousand but +$30 thousand excluding the accrual update
impact), higher compensation and benefits expenses (+$1.3 million).
The increase in compensation and benefits expenses was attributable
to the paid time-off benefit (+$360 thousand), higher healthcare
expenses (+214 thousand), and higher salaries driven by staff
additions (+$600 thousand).
Income Taxes
The Company reported an income tax expense of $1.1 million for
the quarter ended December 31, 2020. The effective tax rate for the
fourth quarter of 2020 was 19.6%. The effective tax rate for the
third quarter of 2020 was 22.6% while the effective tax rate for
the fourth quarter of 2019 was 24.2%. The effective tax rate for
the year 2020 was -27.3% compared to 23.5% for the year 2019. For
comparability, after excluding the non-taxable goodwill impairment
charge from pretax income and the tax benefit of the change in net
operating loss carryback rules under the CARES Act, the effective
tax rate in 2020 would have been 23.2%.
Loans
Loans totaled $1.87 billion at December 31, 2020, a decrease of
$18.4 million, or 1.0%, from total loans at September 30, 2020.
Compared to December 31, 2019, the loan portfolio grew by $120.4
million, or 6.9%.
Portfolio loans, a non-GAAP measure defined as total loans and
leases, but excluding PPP loans, totaled $1.70 billion at December
31, 2020, an increase of $10.3 million, or 0.6%, from portfolio
loans at September 30, 2020. Compared to December 31, 2019,
portfolio loans decreased by $47.2 million, or 2.7%. *
Changes in portfolio loans were as follows:
- Compared to December 31, 2019, the $47.2 million decrease in
portfolio loans was primarily driven by residential real estate
loans down $70.7 million, or 13.8%. The commercial lending
portfolio modestly increased with commercial real estate loans up
$56.8 million, or 8.3%, commercial and industrial (“C&I”) loans
down $38.8 million, or 10.4%, primarily due to lower line
utilization, and construction and land loans down $11.6 million, or
9.1% due primarily to transfers to other loan portfolios. Consumer
loans were up $17.1 million, or 36.4%, reflecting early successes
in some niche lending activities. Compared to September 30, 2020,
the $10.3 million increase in portfolio loans was primarily driven
by growth in our commercial lending portfolio, with commercial real
estate loans up $20.4 million, or 2.8%, construction and land loans
up $12.3 million, or 11.8%; this growth was partially offset by
C&I loans down $19.8 million, or 5.6%. In addition, consumer
loans were up $10.3 million, or 19.1%. These portfolio increases
were partially offset by residential real estate loans down $12.9
million, or 2.9%.
- Despite $18.3 million of secondary market loan purchases during
the fourth quarter of 2020, the net decrease in residential real
estate loans was the result of a continued substantially higher
level of prepayments due to lower interest rates that led to
another strong mortgage refinance quarter. As a result of the exit
of the Company’s mortgage banking activities that concluded in the
first quarter of 2020 and the desire to manage loan run-off within
its residential mortgage loan portfolio, the Company commenced
buying first lien residential mortgage loans on a servicing
released basis during the third quarter of 2020.
- Despite a strong commercial loan pipeline and $23.1 million of
new loan originations during the fourth quarter of 2020, we
continued to experience lower C&I line utilization as well as
some unexpected loan payoffs resulting from the sale of borrower’s
businesses.
Average loans were $1.88 billion for the fourth quarter of 2020,
an increase of $2.4 million, or 0.01%, over average loans for the
third quarter of 2020, and an increase of $166.7 million, or 9.7%,
over average loans for the fourth quarter of 2019. Average
portfolio loans were $1.70 billion for the fourth quarter of 2020,
an increase of $11.8 million, or 0.7%, from average loans for the
third quarter of 2020. Compared to the fourth quarter of 2019,
average portfolio loans declined by $19.6 million, or 1.1%, with
the decline primarily in residential real estate loans.
Average loans were $1.85 billion for the year 2020, an increase
of $166.8 million, or 9.9%, over average loans for the year 2019.
Average portfolio loans were $1.72 billion for the year 2020, an
increase of $35.3 million, or 2.1%, from average loans for the year
2019. The year over year growth was primarily in commercial real
estate loans, partially offset by decreased residential real estate
loans.
Deposits
Total deposits were $1.98 billion at December 31, 2020, an
increase of $2.7 million, or 0.1%, over the September 30, 2020
balance of $1.97 billion. Compared to December 31, 2019, total
deposits grew by $261.0 million, or 15.2%. Changes in deposits were
as follows:
- Customer deposits, which exclude brokered and other
non-customer deposits, were $1.70 billion at December 31, 2020,
compared to $1.64 billion at September 30, 2020, an increase of
$57.2 million or 3.5%.
- Low-cost, non-maturity deposits increased by $78.2 million, or
5.7%, during the fourth quarter of 2020.
- The increase in non-maturity deposits was partially offset by
the continued managed decline in customer CD balances, down $21.0
million, or 8.2%. The Company continues to manage for lower
retention rates on maturing CDs with substantially higher rates
than current market rates. Management’s strategy is to not offer
above-market renewal rates on non-transactional, non-relationship
deposits.
- Compared to December 31, 2019, customer deposits increased by
$221.6 million, or 15.0%.
- The increase in customer deposits was primarily the result of
strong growth in low-cost, non-maturity deposits, which increased
by $317.7 million, or 27.8%. $239.1 million of the growth was in
transaction accounts, with $207.8 million of the transaction
account growth was in noninterest-bearing deposits.
- Customer CD balances declined by $96.0 million, or 29.0%.
- Brokered and other non-customer deposits were $279.4 million at
December 31, 2020, compared to $333.9 million at September 30, 2020
and $240.0 million at December 31, 2019. The $54.5 million decrease
during the fourth quarter of 2020 was offset by the $57.2 million
increase in customer deposits. Non-customer deposits are currently
the Company’s lowest-cost incremental funding source.
Average customer deposits for the fourth quarter of 2020 were
$1.66 billion, an increase of $25.5 million, or 1.6%, from the
third quarter 2020 average balance. Customer non-maturity deposit
balances increased by $44.1 million, or 3.2%, with transaction
accounts up $20.9 million; $11.0 million of the transaction account
growth was in noninterest-bearing deposits. Compared to the fourth
quarter of 2019, average customer deposits were up by $194.8
million, or 13.3%. Customer non-maturity deposit balances increased
by $284.9 million, or 25.2%, with transaction accounts up $217.7
million; $202.8 million of the transaction account growth was in
noninterest-bearing deposits.
Average customer deposits for the year 2020 were $1.60 billion,
an increase of $124.2 million, or 8.4%, from the year 2019 average
balance. Customer non-maturity deposit balances increased by $193.6
million, or 17.2%, with transaction accounts up $161.5 million;
$170.4 million of the transaction account growth was in
noninterest-bearing deposits.
Investment Securities
Investment securities available for sale were $375.4 million at
December 31, 2020, a decrease of $2.1 million, or 0.5%, from the
September 30, 2020 balance of $377.5 million. Compared to December
31, 2019, total investment securities available for sale grew by
$159.9 million, or 74.2%. This portfolio growth was primarily the
result of a leveraging strategy, implemented in the third quarter
of 2020, which resulted in a $102.4 million increase in the
mortgage-backed securities (“MBS”) portfolio. The leveraging
strategy was designed to replace the decline in the MBS portfolio’s
net interest income that resulted from the Company’s decision in
the second quarter 2020 to monetize certain unrealized gains in the
Company’s MBS portfolio. During the second quarter of 2020, $105
million of MBS with high prepayment speeds were identified and
sold, resulting in net gains of $3.0 million. These securities were
then replaced with current coupon MBS at lower yields during the
second quarter of 2020. The Company also increased the MBS
portfolio by $59.7 million in the first quarter of 2020.
Average investment securities available for sale for the fourth
quarter of 2020 were $376.1 million, an increase of $18.3 million,
or 5.1%, from the third quarter 2020 balance of $357.8 million.
Compared to the fourth quarter of 2019, total investment securities
available for sale grew by $184.6 million, or 96.4%. Average
investment securities available for sale were $309.5 million for
the year 2020, an increase of $127.1 million, or 69.7%, from the
year 2019 average balance.
Exit of Mortgage Banking
Activities
The Company completed its previously announced exit of mortgage
banking activities during the second quarter of 2020, with no
pretax income contribution in the second, third, or fourth quarters
of 2020. The contribution of mortgage banking activities for the
fourth quarter of 2019 and the years 2019 and 2020, which are
excluded from the Company’s core results, were as follows (amounts
in thousands):
Fourth
Quarter 2019
Year 2019
Year 2020
Net interest income
$
164
$
681
$
143
Noninterest income
2,699
10,628
1,425
Total revenue
2,863
11,309
1,568
Noninterest expenses
2,056
9,035
1,438
Total pretax income
$
807
$
2,274
$
130
* Please refer to the section entitled “Reconciliation of
Non-GAAP Financial Measures” and to the financial tables entitled
“GAAP to Non-GAAP reconciliation” in this press release for a
reconciliation of each non-GAAP financial measure to the most
directly comparable GAAP financial measures.
Mary Ann Scully, Chairman and CEO, commented, “The fourth
quarter of 2020 represented a continuation of a number of trends
seen since the middle of the first quarter. Most, if not all, are
attributable to the impact of the COVID-19 pandemic on the economy.
Businesses remain stressed although most are persevering thanks to
the lifelines associated with the many stimulus programs offered by
federal and state governments with some of those stimulus programs
delivered directly through the banking system. The partnership of
government and private sector banking is one we have not always
seen but it has been a critical ingredient to setting the platform
for recovery. The industry, especially community leaders like
Howard Bank, have truly acted as economic first responders. We are
deeply proud of and grateful to our colleagues for allowing us to
play this critically important leadership role which continues in
the latest round of PPP lending.
Those stimulus payments, while necessary, have, however, created
a challenging set of additional headwinds - the near zero interest
rate environment, an excess of liquidity that both reflects and
decreases commercial lending demand, and both the necessity and the
opportunity to work with impacted clients through modifications and
government supported loan programs.
Once again, we focus on core trends in the execution of our
commercially focused strategy to allow our stakeholders to see what
is constant rather than what is temporary. We discuss below our
progress, as well as identify headwinds and tailwinds that we
believe will guide the trajectory of future progress.
Our primary focus on ensuring tangible capital accretion through
sustainable core banking activities continues. Our tangible book
value increased by 9% year over year. That capital accretion is
largely driven by solid operating results reflected in our Core
PPNR. PPNR in the fourth quarter of 2020 grew 33% from the fourth
quarter of 2019. Our PPNR to average asset ratio has improved
steadily from 1.15% in 2019 to 1.38% in 2020, a 20% improvement.
More is necessary but the foundational platform in place is showing
the path forward. We believe that growth in capital, in turn, will
provide us with the ability to manage any minor shifts in asset
quality, to fund the higher loan growth we expect as disruption in
our markets continues, and to potentially take advantage of capital
management opportunities. Our focus on core banking activities has
been reinforced with the early 2020 exit of our mortgage
origination business with its inherent volatility and transactional
nature (as evidenced in the level of refinancing activity seen in
the marketplace) and has recently been leveraged with the
redeployment of resources through talent acquisition in the
contiguous Greater Washington market as well as in our core Greater
Baltimore market. Our team is growing not just in numbers but in
skill and network breadth and depth. This team growth is the
strongest and most tangible evidence of the market share and
portfolio growth to come.
While very strong origination activity of over $100 million in
the fourth quarter was unable to completely offset continuing
refinance pressure on the residential mortgage loan portfolio in
the quarter and the year, the commercial portfolio grew modestly
despite its own headwinds of historically low line utilization due
to the injection of so much liquidity into the economy. The
consumer loan portfolio growth shows the early successes in the
consumer loan niches being selectively pursued. Most notably, the
origination activity continues apace. New correspondents have been
added consistent with the residential mortgage portfolio
stabilization strategy. More importantly and strategically, we
believe our commercial pipeline is strong and the later stages of
the pipeline already shows the early but tangible impact of our
Greater Washington initiative. Funding costs continued to fall due
to economically driven liquidity, but complemented by our
transaction account focus, management of our non-transaction
account portfolio and by new customer acquisitions. This once again
helped to stabilize our net interest margin and allowed net
interest income to grow despite the temporarily flat balance sheet.
Noninterest income showed signs of stabilization after the early
2020 pull back from spending. While very noisy due to litigation
expenses, branch closure costs, and the non-recurring effect of
enhanced accounting methodologies, noninterest expenses on a
comparable basis show the consistent signs of the cost controls
committed to and deployed over the last three years and will be
further reduced with our recent branch reduction initiative whose
costs were recorded in the fourth quarter. We had a head start on
many in the industry in 2019 with our branch optimization
initiative as we recognized changing customer behaviors; the
additional branch closures bring the average branch deposit levels
well above best practices, especially in a footprint that extends
over 90 miles along the I-95 corridor. Since March of 2018, we have
reduced the number of branches from a pro forma 28 to proforma 13
in March of 2021. Future PPNR and TBV growth will, we expect, be
driven largely by the revenue improvements anticipated with market
share gains, related balance sheet growth, and stable net interest
margins as a result of funding advantages.
We firmly believe that our local leadership / policy setting
differentiation remains relevant. It is certainly increasingly
scarce. It tangibly demonstrates its muscle especially on the
talent acquisition front. Portfolio growth generally follows team
building and the team is being built. Our relationship brand will
continue to assist with funding and margin compression with its
transaction account focus, and we expect it to drive higher
noninterest income as well with certain activities underway. And
our noninterest expense to asset ratio is solid.
While very optimistic, we acknowledge the headwinds of health
crises, related but recurring economic stalls, low interest rates
and excess liquidity and how that drives competitor behavior. But
we view those headwinds as temporary and our tailwind of talent and
differentiation as sustainable.”
Earnings Conference Call
The Company will host a conference call on Thursday, January 28,
2021, at 10:00 a.m. (EDT) to discuss the results and presentation
slides and to answer questions. Those who wish to participate may
do so by calling 1-877-269-7756 and asking for the Howard Bancorp
conference call. We encourage participants to call at least ten
minutes prior to the scheduled start time so that you can be sure
to be entered into the conference before it begins. You may also
connect to the live conference and ask questions via an instant
call-back from the automated conference host to the phone number
you specify.
The Call-Back link will be available on our website at
www.howardbank.com/InvestorCall until the call has ended.
A presentation will be used during the earnings call and will be
available on the Investor Relations section of our website at
www.howardbank.com/InvestorCall
An internet-based audio replay of the call will be available on
the Investor Relations page of our website at
www.howardbank.com/InvestorCall shortly following the conclusion of
the call and will be available until February 26, 2021.
Company management will not be available to discuss the fourth
quarter 2020 results prior to the earnings conference call.
About the Company
Howard Bancorp, Inc. is the parent company of Howard Bank, a
Maryland-chartered trust company operating as a commercial bank.
Headquartered in Baltimore City, Maryland, Howard Bank operates a
general commercial banking business through its 15 branches located
throughout the Greater Baltimore Metropolitan Area. Additional
information about Howard Bancorp, Inc. and Howard Bank are
available on its website at www.howardbank.com.
Cautionary Note Regarding Forward-Looking
Statements
This press release and statements by the Company’s management
contains “forward-looking statements” as that phrase is defined in
the Private Securities Litigation Reform Act of 1995. Forward
looking statements can be identified by words such as
“anticipated,” “expects,” “intends,” “believes,” “may,” “likely,”
“will” or other statements that indicate future periods. Such
statements include, without limitation, statements regarding
management’s predictions or expectations about future economic
conditions, statements about the Company’s business or financial
performance, as well as management’s outlook or expectations for
earnings, revenues, expenses, capital levels, liquidity levels,
asset quality or other future financial or business performance,
strategies or expectations. Such forward-looking statements are
based on various assumptions (some of which may be beyond the
Company’s control) and are subject to risks and uncertainties which
change over time and other factors which could cause actual results
to differ materially from those currently anticipated. These risks
and uncertainties include, but are not limited to: the impact of
the global COVID-19 pandemic on our business, including the impact
of the actions taken by governmental authorities to try and contain
the virus or address the impact of the virus on the United States
economy (including, without limitation, the CARES Act and the
Consolidated Appropriations Act, 2021), and the resulting effect of
these items on our operations, liquidity and capital position, and
on the financial condition of the Company’s borrowers and other
customers; conditions in the financial markets and economic
conditions generally and in the bank and non-bank financial
services industries, nationally and within our local market areas,
including the effects of declines in housing markets, an increase
in unemployment levels and slowdowns in economic growth; the
Company’s level of nonperforming assets and the costs associated
with resolving problem loans including litigation and other costs;
the potential inability to replace income lost from exiting our
mortgage banking activities with new revenues; the impact of
changes in interest rates; credit quality and strength of
underlying collateral; the credit risk associated with the
substantial amount of commercial real estate, construction and land
development, and commercial and industrial loans in the Company’s
loan portfolio; the extensive federal and state regulation,
supervision and examination governing almost every aspect of the
Company’s operations and potential expenses associated with
complying with such regulations; possible additional loan losses
and impairment of the collectability of loans; the Company’s
ability to comply with applicable capital and liquidity
requirements; any further impairment of the Company’s goodwill or
other intangible assets; losses resulting from pending or potential
litigation claims may exceed amounts accrued with respect to such
matters; system failure or cybersecurity breaches of the Company’s
network security; the Company’s ability to recruit and retain key
employees; the effects of weather and natural disasters such as
floods, droughts, wind, tornadoes and hurricanes as well as effects
from geopolitical instability and man-made disasters including
terrorist attacks; the effects of any reputation, credit, interest
rate, market, operational, legal, liquidity, regulatory and
compliance risk resulting from developments related to any of the
risks discussed above; and other risks and uncertainties.
Additional risks and uncertainties are contained in the “Risk
Factors” and forward-looking statements disclosure in the Company’s
most recent Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q. The inclusion of this forward-looking information should
not be construed as a representation by us or any person that
future events, plans, or expectations contemplated by us will be
achieved. Forward-looking statements are as of the date they are
made, and the Company does not undertake to update any
forward-looking statement, whether written or oral, whether as a
result of new information, future events, or otherwise, except as
required by law.
Additional information is available at www.howardbank.com.
HOWARD BANCORP, INC. AND SUBSIDIARY Selected Unaudited
Financial Data (in thousands except per share data)
FOR THE YEAR
ENDED
FOR THE THREE MONTHS
ENDED
December
31,
December
31,
December
31,
September 30,
December
31,
2020
2019
2020
2020
2019
Income Statement Data: Interest income
$
86,363
$
91,434
$
21,713
$
20,951
$
22,550
Interest expense
12,761
22,124
2,028
2,679
5,283
Net interest income
73,602
69,310
19,685
18,272
17,267
Provision for credit losses
9,845
4,193
1,700
1,700
750
Net interest income after provision for credit losses
63,757
65,117
17,985
16,572
16,517
Noninterest income
12,359
21,034
2,145
2,089
5,625
Noninterest expense
89,463
64,078
14,567
12,709
14,362
(Loss) income before income taxes
(13,347
)
22,073
5,564
5,952
7,780
Income tax expense (benefit)
3,645
5,192
1,093
1,348
1,880
Net (loss) income
$
(16,991
)
$
16,881
$
4,471
$
4,604
$
5,900
Per Share Data and Shares Outstanding: Net (loss)
income per common share - basic
$
(0.91
)
$
0.89
$
0.24
$
0.25
$
0.31
Net (loss) income per common share - diluted
$
(0.91
)
$
0.89
$
0.24
$
0.25
$
0.31
Book value per common share, at period end
$
15.72
$
16.48
$
15.72
$
15.45
$
16.48
Tangible book value per common share, at period end (1)
$
13.81
$
12.68
$
13.81
$
13.51
$
12.68
Average common shares outstanding
18,766
19,068
18,743
18,737
19,080
Diluted average common shares outstanding
18,766
19,071
18,748
18,737
19,083
Shares outstanding, at period end
18,745
19,067
18,745
18,742
19,067
Balance Sheet Data: Total assets
$
2,537,991
$
2,374,619
$
2,537,991
$
2,559,184
$
2,374,619
Portfolio loans, net of unearned income (1)
1,698,322
1,745,513
1,698,322
1,688,030
1,745,513
Paycheck Protection Program loans, net of unearned inc.
167,639
-
167,639
196,375
-
Total loans and leases, net of unearned income
1,865,961
1,745,513
1,865,961
1,884,405
1,745,513
Allowance for loan losses
19,162
10,401
19,162
17,657
10,401
Other interest-earning assets
458,488
343,149
458,488
454,897
343,149
Total deposits
1,975,414
1,714,365
1,975,414
1,972,738
1,714,365
Total borrowings
242,071
319,368
242,071
269,861
319,368
Common and total stockholders' equity
294,632
314,148
294,632
289,500
314,148
Average total assets
2,488,280
2,250,334
2,527,869
2,524,773
2,292,369
Average common and total stockholders' equity
304,173
304,925
294,285
288,727
311,777
Selected Performance Metrics: Return on average
assets (2)
(0.68
)
%
0.75
%
0.70
%
0.73
%
1.02
%
Return on average common equity (2)
(5.59
)
%
5.54
%
6.04
%
6.34
%
7.51
%
Pre-provision net revenue ("PPNR") (1)
$
31,369
$
27,197
$
8,798
$
7,652
$
6,635
PPNR to average assets (1)
1.26
%
1.21
%
1.38
%
1.21
%
1.15
%
Net interest margin (2),(3)
3.27
%
3.50
%
3.39
%
3.15
%
3.38
%
Efficiency ratio (4)
104.07
%
70.93
%
66.73
%
62.42
%
62.74
%
Core efficiency ratio (1)
61.44
%
64.96
%
59.70
%
62.42
%
65.58
%
Asset Quality Ratios: Nonperforming loans to
portfolio loans (1)
1.14
%
1.10
%
1.14
%
1.01
%
1.10
%
Nonperforming assets to portfolio loans and OREO (1)
1.19
%
1.27
%
1.19
%
1.07
%
1.27
%
Nonperforming assets to total assets
0.79
%
0.94
%
0.79
%
0.71
%
0.94
%
Allowance for loan losses to total loans
1.03
%
0.60
%
1.03
%
0.94
%
0.60
%
Allowance for loan losses to portfolio loans (1)
1.13
%
0.60
%
1.13
%
1.05
%
0.60
%
Allowance for loan losses to nonperforming loans
98.62
%
54.33
%
98.62
%
103.96
%
54.33
%
Net chargeoffs to average total loans and leases (2)
0.04
%
0.22
%
0.04
%
0.02
%
(0.01
)
%
Capital Ratios (Bancorp): Tier 1 capital to average
assets (leverage ratio)
9.26
%
9.55
%
9.26
%
9.07
%
9.55
%
Common equity tier 1 capital to risk-weighted assets
11.83
%
11.09
%
11.83
%
11.65
%
11.09
%
Tier 1 capital to risk-weighted assets
11.83
%
11.09
%
11.83
%
11.65
%
11.09
%
Total capital to risk-weighted assets
14.32
%
13.14
%
14.32
%
14.11
%
13.14
%
Average equity to average assets
12.22
%
13.55
%
11.64
%
11.44
%
13.60
%
(1) This is a non-GAAP measure. See the GAAP to Non-GAAP
Reconciliation at the end of the financial statements. (2)
Annualized (3) Net interest income divided by average earning
assets (4) Noninterest expense divided by the sum of net interest
income and noninterest income
HOWARD BANCORP, INC. AND
SUBSIDIARY Unaudited Consolidated Statements of Income
(Loss) (in thousands except per share data)
FOR THE YEAR
ENDED
FOR THE THREE MONTHS
ENDED
December
31,
December
31,
December
31,
September
30,
December
31,
2020
2019
2020
2020
2019
Interest income
$
86,363
$
91,434
$
21,713
$
20,951
$
22,550
Interest expense
12,761
22,124
2,028
2,679
5,283
Net interest income
73,602
69,310
19,685
18,272
17,267
Provision for credit losses
9,845
4,193
1,700
1,700
750
Net interest income after provision for credit losses
63,757
65,117
17,985
16,572
16,517
Noninterest income: Service charges on deposit accounts
2,116
2,747
535
506
710
Realized and unrealized gains from mortgage banking
1,036
7,798
-
-
1,951
Gain (loss) on sale of securities
3,044
645
-
-
(13
)
Gain (loss) on the disposal of premises & equipment
6
(70
)
-
-
13
Income from bank owned life insurance
1,767
1,858
440
441
466
Loan related fees and service charges
1,367
3,934
247
365
912
Other income
3,023
4,122
923
777
1,586
Total noninterest income
12,359
21,034
2,145
2,089
5,625
Noninterest expense: Compensation and benefits
28,560
32,056
6,724
7,136
7,811
Occupancy and equipment
5,472
9,076
1,896
1,301
880
Marketing and business development
1,399
2,339
306
189
853
Professional fees
3,202
2,954
1,019
823
704
Data processing fees
3,979
4,914
1,306
897
1,217
FDIC assessment
1,123
464
342
358
12
Other real estate owned
486
845
26
115
321
Loan production expense
1,129
2,700
222
247
719
Amortization of core deposit intangible
2,674
3,013
636
659
717
Goodwill impairment charge
34,500
-
-
-
-
Other operating expense
6,939
5,717
2,089
984
1,128
Total noninterest expense
89,463
64,078
14,567
12,709
14,362
Income (loss) before income taxes
(13,347
)
22,073
5,564
5,952
7,780
Income tax expense (benefit)
3,645
5,192
1,093
1,348
1,880
Net income (loss)
$
(16,991
)
$
16,881
$
4,471
$
4,604
$
5,900
Net income (loss) per common share: Basic
$
(0.91
)
$
0.89
$
0.24
$
0.25
$
0.31
Diluted
$
(0.91
)
$
0.89
$
0.24
$
0.25
$
0.31
Average common shares outstanding: Basic
18,766
19,068
18,743
18,737
19,080
Diluted
18,766
19,071
18,748
18,737
19,083
Selected Performance Metrics: Return on average
assets
-0.68
%
0.75
%
0.70
%
0.73
%
1.02
%
Return on average common equity
-5.59
%
5.54
%
6.04
%
6.34
%
7.51
%
Core Pre-provision net revenue ("PPNR") (1)
$
31,369
$
27,197
$
8,798
$
7,652
$
6,635
Core PPNR to average assets (1)
1.26
%
1.21
%
1.38
%
1.21
%
1.15
%
Net interest margin
3.27
%
3.50
%
3.39
%
3.15
%
3.38
%
Efficiency ratio
104.07
%
70.93
%
66.73
%
62.42
%
62.74
%
Core efficiency ratio (1)
61.44
%
64.96
%
59.70
%
62.42
%
65.58
%
(1) This is a non-GAAP measure. See the GAAP to Non-GAAP
Reconciliation at the end of the financial statements.
HOWARD
BANCORP, INC. AND SUBSIDIARY Unaudited Consolidated Balance
Sheets (in thousands except per share data)
PERIOD
ENDED
December
31,
September
30,
June 30,
March 31,
December
31,
2020
2020
2020
2020
2019
ASSETS Cash and due from banks
$
9,415
$
11,043
$
12,652
$
15,951
$
12,992
Interest bearing deposits with banks
65,204
59,539
46,418
179,999
96,985
Total cash and cash equivalents
74,619
70,582
59,070
195,950
109,977
Securities available for sale, at fair value
375,397
377,471
276,889
275,252
215,505
Securities held to maturity, at amortized cost
7,250
7,250
7,250
7,750
7,750
Federal Home Loan Bank of Atlanta stock, at cost
10,637
10,637
12,592
16,757
14,152
Loans held for sale, at fair value
-
-
-
3,795
30,710
Portfolio loans, net of unearned income (1)
1,698,322
1,688,030
1,704,911
1,761,419
1,745,513
Paycheck Protection Program loans, net of unearned inc (1)
167,639
196,375
193,719
-
-
Total loans and leases, net of unearned income
1,865,961
1,884,405
1,898,630
1,761,419
1,745,513
Allowance for loan losses
(19,162
)
(17,657
)
(16,356
)
(13,384
)
(10,401
)
Net loans and leases
1,846,799
1,866,748
1,882,274
1,748,035
1,735,112
Bank premises and equipment, net
41,142
42,147
42,434
42,543
42,724
Goodwill
31,449
31,449
31,449
65,949
65,949
Core deposit intangible
5,795
6,431
7,090
7,770
8,469
Bank owned life insurance
77,597
77,157
76,716
76,275
75,830
Other real estate owned
743
1,155
2,137
2,322
3,098
Deferred tax assets, net
31,254
34,687
35,034
33,529
36,010
Interest receivable and other assets
35,309
33,470
30,515
31,967
29,333
Total assets
$
2,537,991
$
2,559,184
$
2,463,450
$
2,507,894
$
2,374,619
LIABILITIES Noninterest-bearing deposits
$
676,801
$
657,028
$
671,598
$
483,499
$
468,975
Interest-bearing deposits
1,298,613
1,315,710
1,159,076
1,305,400
1,245,390
Total deposits
1,975,414
1,972,738
1,830,674
1,788,899
1,714,365
FHLB advances
200,000
200,000
246,000
344,000
285,000
Fed funds and repos
13,634
41,473
37,834
5,321
6,127
Subordinated debt
28,437
28,388
28,339
28,290
28,241
Total borrowings
242,071
269,861
312,173
377,611
319,368
Accrued expenses and other liabilities
25,874
27,085
37,322
26,026
26,738
Total liabilities
2,243,359
2,269,684
2,180,169
2,192,536
2,060,471
STOCKHOLDERS' EQUITY Common stock - $0.01 par value
187
187
187
187
191
Additional paid in capital
270,591
270,445
270,057
269,918
276,156
Retained earnings
18,165
13,696
9,090
38,501
35,158
Accumulated other comprehensive income
5,689
5,172
3,947
6,752
2,643
Total stockholders' equity
294,632
289,500
283,281
315,358
314,148
Total liabilities and stockholders' equity
$
2,537,991
$
2,559,184
$
2,463,450
$
2,507,894
$
2,374,619
Capital Ratios (Bancorp) Tier 1 capital to average
assets (leverage ratio)
9.26
%
9.07
%
8.73
%
9.10
%
9.55
%
Common equity tier 1 capital to risk-weighted assets
11.83
%
11.65
%
11.66
%
10.95
%
11.09
%
Tier 1 capital to risk-weighted assets
11.83
%
11.65
%
11.66
%
10.95
%
11.09
%
Total capital to risk-weighted assets
14.32
%
14.11
%
14.09
%
13.16
%
13.14
%
Asset Quality Measures Nonperforming loans
$
19,430
$
16,984
$
18,469
$
17,203
$
19,143
Other real estate owned (OREO)
743
1,155
2,137
2,322
3,098
Total nonperforming assets
$
20,173
$
18,139
$
20,606
$
19,525
$
22,241
Nonperforming loans to portfolio loans (1)
1.14
%
1.01
%
1.08
%
0.98
%
1.10
%
Nonperforming assets to portfolio loans and OREO (1)
1.19
%
1.07
%
1.21
%
1.11
%
1.27
%
Nonperforming assets to total assets
0.79
%
0.71
%
0.84
%
0.78
%
0.94
%
Allowance for loan losses to total loans
1.03
%
0.94
%
0.86
%
0.76
%
0.60
%
Allowance for loan losses to portfolio loans (1)
1.13
%
1.05
%
0.96
%
0.76
%
0.60
%
Allowance for loan losses to nonperforming loans
98.62
%
103.96
%
88.56
%
77.80
%
54.33
%
Net chargeoffs to average total loans and leases (2)
0.04
%
0.02
%
0.01
%
0.11
%
-0.01
%
Provision for credit losses to average portfolio loans (1), (2)
0.40
%
0.40
%
0.69
%
0.79
%
0.17
%
(1) This is a non-GAAP measure. See the GAAP to Non-GAAP
Reconciliation at the end of the financial statements. (2)
Annualized
HOWARD BANCORP, INC. AND SUBSIDIARY Average
Balances, Yields, and Rates (in thousands)
Three Months Ended December 31,
2020
Three Months Ended September 30,
2020
Three Months Ended December 31,
2019
Average
Balance
Income /
Expense
Yield /
Rate
Average
Balance
Income /
Expense
Yield /
Rate
Average
Balance
Income /
Expense
Yield /
Rate
Earning assets Loans and leases: Commercial loans and leases
$
353,596
$
3,159
3.55
%
$
343,991
$
3,981
4.60
%
$
381,463
$
4,529
4.71
%
Commercial real estate
733,116
8,763
4.76
702,633
7,768
4.40
679,767
8,426
4.92
Construction and land
108,020
1,054
3.88
125,059
1,188
3.78
120,617
1,574
5.18
Residential real estate
443,753
4,508
4.04
463,874
4,382
3.76
488,505
5,228
4.25
Consumer
58,548
632
4.29
49,722
565
4.52
46,232
578
4.96
Total portfolio loans
1,697,033
18,116
4.25
1,685,279
17,884
4.22
1,716,584
20,335
4.70
Paycheck Protection Program loans
186,267
1,886
4.03
195,588
1,240
2.52
-
-
-
Total loans and leases
1,883,300
20,002
4.23
1,880,867
19,124
4.04
1,716,584
20,335
4.70
Securities available for sale: U.S. Gov agencies
58,424
365
2.49
79,391
531
2.66
71,675
495
2.74
Mortgage-backed
308,737
963
1.24
272,495
942
1.38
110,039
797
2.87
Corporate debentures
8,910
137
6.12
5,932
100
6.71
9,728
148
6.04
Total available for sale securities
376,071
1,465
1.55
357,818
1,573
1.75
191,442
1,440
2.98
Securities held to maturity
7,250
107
5.87
7,250
106
5.83
9,750
149
6.06
FHLB Atlanta stock, at cost
10,951
132
4.80
13,221
140
4.21
6,554
102
6.17
Interest bearing deposits in banks
32,356
6
0.07
46,049
8
0.07
66,070
186
1.12
Loans held for sale
-
-
-
-
-
-
37,500
339
3.59
Total earning assets
2,309,928
21,712
3.74
%
2,305,205
20,951
3.62
%
2,027,900
22,551
4.41
%
Cash and due from banks
11,534
11,772
13,350
Bank premises and equipment, net
41,979
42,376
42,813
Goodwill and other intangible assets
37,644
38,290
74,619
Other assets
144,336
143,565
143,418
Less: allowance for loan losses
(17,552
)
(16,435
)
(9,731
)
Total assets
$
2,527,869
$
2,524,773
$
2,292,369
Interest-bearing liabilities Deposits: Interest-bearing
demand accounts
$
200,144
$
27
0.05
%
$
190,272
$
36
0.08
%
$
185,278
$
190
0.41
%
Money market
431,769
107
0.10
386,189
261
0.27
357,617
771
0.86
Savings
154,953
20
0.05
149,973
27
0.07
131,847
62
0.19
Time deposits
505,462
971
0.76
493,827
1,390
1.12
565,213
2,810
1.97
Total interest-bearing deposits
1,292,328
1,125
0.35
1,220,261
1,714
0.56
1,239,955
3,833
1.23
Borrowings: FHLB advances
207,335
450
0.86
260,807
483
0.74
228,862
976
1.69
Fed funds and repos
18,706
5
0.11
40,492
35
0.34
-
-
-
Subordinated debt
28,405
447
6.26
28,356
447
6.27
28,161
474
6.68
Total borrowings
254,446
902
1.41
329,655
965
1.17
257,023
1,450
2.24
Total interest-bearing funds
1,546,774
2,027
0.52
%
1,549,916
2,679
0.69
%
1,496,978
5,283
1.40
%
Noninterest-bearing deposits
660,549
649,525
457,748
Other liabilities
26,261
36,605
25,866
Total liabilities
2,233,584
2,236,046
1,980,592
Stockholders' equity
294,285
288,727
311,777
Total liabilities & equity
$
2,527,869
$
2,524,773
$
2,292,369
Net interest rate spread (1)
$
19,685
3.22
%
$
18,272
2.93
%
$
17,268
3.01
%
Effect of noninterest-bearing funds
0.17
0.22
0.37
Net interest margin on earning assets (2)
3.39
%
3.15
%
3.38
%
(1) The difference between the annualized yield on average
total earning assets and the annualized cost of average total
interest-bearing liabilities (2) Annualized net interest
income divided by average total earning assets
HOWARD BANCORP,
INC. AND SUBSIDIARY Average Balances, Yields, and Rates
(in thousands)
Year Ended December 31, 2020
Year Ended December 31, 2019
Average
Balance
Income /
Expense
Yield /
Rate
Average
Balance
Income /
Expense
Yield /
Rate
Earning assets Loans and leases: Commercial loans and leases
$
362,579
$
14,440
3.98
%
$
357,129
$
17,880
5.01
%
Commercial real estate
705,392
33,855
4.80
667,557
33,424
5.01
Construction and land
124,324
4,992
4.02
121,156
6,782
5.60
Residential real estate
476,568
19,083
4.00
487,586
21,803
4.47
Consumer
49,911
2,252
4.51
50,017
2,471
4.94
Total portfolio loans
1,718,774
74,622
4.34
1,683,445
82,360
4.89
Paycheck Protection Program loans
131,469
4,022
3.06
-
-
-
Total loans and leases
1,850,243
78,644
4.25
1,683,445
82,360
4.89
Securities available for sale: U.S. Gov agencies
72,197
1,920
2.66
85,421
2,376
2.78
Mortgage-backed
230,841
3,828
1.66
93,566
2,889
3.09
Corporate debentures
6,473
421
6.50
3,433
269
7.84
Total available for sale securities
309,511
6,169
1.99
182,420
5,534
3.03
Securities held to maturity
7,497
438
5.84
9,503
583
6.13
FHLB Atlanta stock, at cost
13,218
665
5.03
10,825
668
6.17
Interest bearing deposits in banks
62,235
268
0.43
63,806
1,094
1.71
Loans held for sale
4,920
179
3.64
30,276
1,195
3.95
Total earning assets
2,247,624
86,363
3.84
%
1,980,275
91,434
4.62
%
Cash and due from banks
13,234
13,970
Bank premises and equipment, net
42,368
43,823
Goodwill and other intangible assets
55,701
77,139
Other assets
143,897
144,625
Less: allowance for loan losses
(14,544
)
(9,498
)
Total assets
$
2,488,280
$
2,250,334
Interest-bearing liabilities Deposits: Interest-bearing
demand accounts
$
190,153
$
277
0.15
%
$
199,091
$
912
0.46
%
Money market
388,213
1,415
0.36
356,955
2,814
0.79
Savings
144,894
117
0.08
135,868
249
0.18
Time deposits
520,055
6,623
1.27
556,398
11,487
2.06
Total interest-bearing deposits
1,243,315
8,432
0.68
1,248,312
15,462
1.24
Borrowings: FHLB advances
261,090
2,465
0.94
206,687
4,728
2.29
Fed funds and other borrowings
20,702
57
0.28
7,748
31
0.40
Subordinated debt
28,332
1,807
6.38
28,140
1,903
6.76
Total borrowings
310,124
4,329
1.40
242,575
6,662
2.75
Total interest-bearing funds
1,553,439
12,761
0.82
%
1,490,887
22,124
1.48
%
Noninterest-bearing deposits
602,005
431,557
Other liabilities
28,663
22,965
Total liabilities
2,184,107
1,945,409
Stockholders' equity
304,173
304,925
Total liabilities & equity
$
2,488,280
$
2,250,334
Net interest rate spread (1)
$
73,602
3.02
%
$
69,310
3.13
%
Effect of noninterest-bearing funds
0.25
0.37
Net interest margin on earning assets (2)
3.27
%
3.50
%
(1) The difference between the annualized yield on average
total earning assets and the annualized cost of average total
interest-bearing liabilities (2) Annualized net interest income
divided by average total earning assets
Reconciliation of Non-GAAP Financial Measures
This press release contains references to financial measures
that are not defined in generally accepted accounting principles
(“GAAP”). Such non-GAAP financial measures should not be considered
in isolation or as a substitute for the most directly comparable or
other financial measures calculated in accordance with GAAP.
Moreover, the manner in which we calculate the non-GAAP financial
measures that we discuss in this press release may differ from that
of other companies reporting measures with similar names. You
should understand how such other banking organizations calculate
their financial measures with names similar to the non-GAAP
financial measures we have discussed in this press release when
comparing such non-GAAP financial measures.
The Company considers the use of select non-GAAP financial
measures and ratios to be useful for financial and operational
decision making and useful in evaluating period-to-period
comparisons. The Company believe that these non-GAAP financial
measures provide meaningful supplemental information regarding our
performance by excluding certain expenditures or assets that we
believe are not indicative of our primary business operating
results. We believe these measures provide investors with
information regarding balance sheet profitability, and we believe
that management and investors benefit from referring to these
non-GAAP financial measures in assessing our performance and when
planning, forecasting, analyzing and comparing past, present and
future periods.
HOWARD BANCORP, INC. AND SUBSIDIARY GAAP TO NON-GAAP
RECONCILIATION - CORE NET INCOME AND EPS (in thousands except
per share data)
FOR THE YEAR
ENDED
FOR THE THREE MONTHS
ENDED
December 31,
December
31
December
31
September 30,
June 30,
March 31,
December
31
2020
2019
2020
2020
2020
2020
2019
Net (loss) income (GAAP)
$
(16,991
)
$
16,881
$
4,471
$
4,604
$
(29,409
)
$
3,343
$
5,900
Adjustments: Mortgage banking activities: Net interest income
(143
)
(681
)
-
-
-
(143
)
(164
)
Noninterest income
(1,425
)
(10,628
)
-
-
-
(1,425
)
(2,699
)
Noninterest expenses
1,438
9,035
-
-
-
1,438
2,056
Total pretax - mortgage banking activities
(130
)
(2,274
)
-
-
-
(130
)
(807
)
Certain other items: Securities gains
(3,044
)
(658
)
-
-
(3,044
)
-
-
Proceeds from agreement to exit mortgage banking activities
-
(750
)
-
-
-
-
(750
)
Prepayment penalty - FHLB advances
224
651
-
-
224
-
-
Branch optimization charge
554
3,262
554
-
-
-
(338
)
Litigation expense
1,980
700
980
-
1,000
-
-
CFO departure
788
-
-
-
-
788
-
Goodwill impairment charge
34,500
-
-
-
34,500
-
-
Total pretax - certain other items
35,002
3,205
1,534
-
32,680
788
(1,088
)
Total core pretax income adjustments
34,872
931
1,534
-
32,680
658
(1,895
)
Income tax expense (benefit) of adjustments
138
251
414
-
(454
)
178
(512
)
Total core pretax income adjustments, net of tax
34,734
680
1,120
-
33,134
480
(1,383
)
Less: One-time benefit of NOL carryback (CARES Act)
(1,271
)
-
(94
)
-
-
(1,177
)
-
Total core adjustments to net income
33,463
680
1,026
-
33,134
(697
)
(1,383
)
Core net income (Non-GAAP)
$
16,472
$
17,561
$
5,497
$
4,604
$
3,725
$
2,646
$
4,517
Diluted average common shares
18,766
19,071
18,748
18,737
18,716
18,915
19,083
Diluted EPS (GAAP)
$
(0.91
)
$
0.89
$
0.24
$
0.25
$
(1.57
)
$
0.18
$
0.31
Total core adjustments to net income
1.78
0.04
0.05
-
1.77
(0.04
)
(0.07
)
Core diluted EPS (Non-GAAP)
$
0.88
$
0.92
$
0.29
$
0.25
$
0.20
$
0.14
$
0.24
GAAP TO NON-GAAP RECONCILIATION - PRE-PROVISION
NET REVENUE ("PPNR") (in thousands)
FOR THE YEAR
ENDED FOR THE THREE MONTHS ENDED
December 31, December 31,
December 31, September 30,
June 30, March 31,
December 31,
2020
2019
2020
2020
2020
2020
2019
Net (loss) income (GAAP)
$
(16,991
)
$
16,881
$
4,471
$
4,604
$
(29,409
)
$
3,343
$
5,900
Plus: provision for credit losses
9,845
4,193
1,700
1,700
3,000
3,445
750
Plus: income tax expense
3,644
5,192
1,093
1,348
1,660
(457
)
1,880
Pre-provision net revenue (Non-GAAP)
$
(3,503
)
$
26,266
$
7,264
$
7,652
$
(24,749
)
$
6,331
$
8,530
Adjustments to net revenue: Mortgage banking activities
(130
)
(2,274
)
-
-
-
(130
)
(807
)
Securities gains
(3,044
)
(658
)
-
-
(3,044
)
-
-
Proceeds from agreement to exit mortgage banking activities
-
(750
)
-
-
-
-
(750
)
Prepayment penalty - FHLB advances
224
651
-
-
224
-
-
Branch optimization charge
554
3,262
554
-
-
-
(338
)
Litigation accrual
1,980
700
980
-
1,000
-
-
CFO departure
788
-
-
-
-
788
-
Goodwill impairment charge
34,500
-
-
-
34,500
-
-
Total core pretax net revenue adjustments
34,872
931
1,534
-
32,680
658
(1,895
)
Core pre-provision net revenue (PPNR)
$
31,369
$
27,197
$
8,798
$
7,652
$
7,931
$
6,989
$
6,635
GAAP TO NON-GAAP RECONCILIATION - PPNR / AVERAGE
TANGIBLE COMMON EQUITY (in thousands)
FOR THE YEAR
ENDED FOR THE THREE MONTHS ENDED
December 31, December 31,
December 31, September 30,
June 30, March 31,
December 31,
2020
2019
2020
2020
2020
2020
2019
Core PPNR (Non-GAAP)
$
31,369
$
27,197
$
8,798
$
7,652
$
7,931
$
6,989
$
6,635
Average common equity (GAAP)
$
304,173
$
304,925
$
294,285
$
288,727
$
319,152
$
314,805
$
311,777
Less average goodwill
(48,511
)
(67,092
)
(31,449
)
(31,449
)
(65,570
)
(65,950
)
(65,949
)
Less average core deposit intangible, net
(5,408
)
(7,532
)
(4,716
)
(5,076
)
(5,672
)
(6,170
)
(6,702
)
Average tangible common equity (non-GAAP)
$
250,254
$
230,301
$
258,120
$
252,202
$
247,910
$
242,685
$
239,125
Core PPNR / average tangible common equity (Non-GAAP)
12.53
%
11.81
%
13.56
%
12.07
%
12.87
%
11.58
%
11.01
%
Annualized ratio based on days in quarter divided by days in
year
HOWARD BANCORP, INC. AND SUBSIDIARY GAAP TO NON-GAAP
RECONCILIATION - PPNR / AVERAGE TOTAL ASSETS (in thousands)
FOR THE YEAR ENDED FOR THE THREE
MONTHS ENDED December 31,
December 31, December 31,
September 30, June 30,
March 31, December 31,
2020
2019
2020
2020
2020
2020
2019
Core PPNR (Non-GAAP)
$
31,369
$
27,197
$
8,798
$
7,652
$
7,931
$
6,989
$
6,635
Average total assets (GAAP)
2,488,280
2,250,334
2,527,869
2,524,773
2,529,797
2,369,847
2,292,369
Core PPNR / average total assets (Non-GAAP)
1.26
%
1.21
%
1.38
%
1.21
%
1.26
%
1.19
%
1.15
%
Annualized ratio based on days in quarter divided by days in
year
GAAP TO NON-GAAP RECONCILIATION - EFFICIENCY
RATIO (in thousands)
FOR THE YEAR ENDED
FOR THE THREE MONTHS ENDED December
31, December 31, December
31, September 30, June
30, March 31, December
31,
2020
2019
2020
2020
2020
2020
2019
Net interest income (GAAP)
$
73,602
$
69,310
$
19,685
$
18,272
$
18,119
$
17,525
$
17,267
Adjustments: Mortgage banking activities
(143
)
(681
)
-
-
-
(143
)
(164
)
Total core net interest income adjustments
(143
)
(681
)
-
-
-
(143
)
(164
)
Core net interest income (Non-GAAP)
$
73,459
$
68,629
$
19,685
$
18,272
$
18,119
$
17,382
$
17,103
Noninterest income (GAAP)
$
12,359
$
21,034
$
2,145
$
2,089
$
4,759
$
3,366
$
5,625
Adjustments: Mortgage banking activities
(1,425
)
(10,628
)
-
-
-
(1,425
)
(2,699
)
Securities gains
(3,044
)
(658
)
-
-
(3,044
)
-
-
Proceeds from agreement to exit mortgage banking activities
-
(750
)
-
-
-
-
(750
)
Total core noninterest income adjustments
(4,469
)
(12,036
)
-
-
(3,044
)
(1,425
)
(3,449
)
Core noninterest income (Non-GAAP)
$
7,890
$
8,998
$
2,145
$
2,089
$
1,715
$
1,941
$
2,176
Total net interest income and noninterest income
(GAAP)
$
85,961
$
90,344
$
21,830
$
20,361
$
22,878
$
20,891
$
22,892
Adjustments: Total core net interest income adjustments
(143
)
(681
)
-
-
-
(143
)
(164
)
Total core noninterest income adjustments
(4,469
)
(12,036
)
-
-
(3,044
)
(1,425
)
(3,449
)
Total core net interest income and noninterest income adjustments
(4,612
)
(12,717
)
-
-
(3,044
)
(1,568
)
(3,613
)
Core net interest income + noninterest income (Non-GAAP)
$
81,349
$
77,627
$
21,830
$
20,361
$
19,834
$
19,323
$
19,279
Noninterest expense (GAAP)
$
89,463
$
64,078
$
14,567
$
12,709
$
47,627
$
14,560
$
14,362
Adjustments: Mortgage banking activities
(1,438
)
(9,035
)
-
-
-
(1,438
)
(2,056
)
Prepayment penalty - FHLB advances
(224
)
(651
)
-
-
(224
)
-
-
Branch optimization charge
(554
)
(3,262
)
(554
)
-
-
-
338
Litigation accrual
(1,980
)
(700
)
(980
)
-
(1,000
)
-
-
CFO departure
(788
)
-
-
-
-
(788
)
-
Goodwill impairment charge
(34,500
)
-
-
-
(34,500
)
-
-
Total core noninterest expense adjustments
(39,484
)
(13,648
)
(1,534
)
-
(35,724
)
(2,226
)
(1,718
)
Core noninterest expense (Non-GAAP)
$
49,979
$
50,430
$
13,033
$
12,709
$
11,903
$
12,334
$
12,644
Efficiency ratio (GAAP)
104.07
%
70.93
%
66.73
%
62.42
%
208.18
%
69.70
%
62.74
%
Core efficiency ratio (Non-GAAP)
61.44
%
64.96
%
59.70
%
62.42
%
60.01
%
63.83
%
65.58
%
GAAP TO NON-GAAP RECONCILIATION - TANGIBLE BOOK
VALUE PER COMMON SHARE (in thousands except per share data)
FOR THE YEAR ENDED FOR THE THREE
MONTHS ENDED December 31,
December 31, December 31,
September 30, June 30,
March 31, December 31,
2020
2019
2020
2020
2020
2020
2019
Common and total stockholder's equity (GAAP)
$
294,632
$
314,148
$
294,632
$
289,500
$
283,281
$
315,358
$
314,148
Total shares outstanding at period end
18,745
19,067
18,745
18,742
18,716
18,715
19,067
Book value per common share at period end (GAAP)
$
15.72
$
16.48
$
15.72
$
15.45
$
15.14
$
16.85
$
16.48
Common and total stockholder's equity (GAAP)
$
294,632
$
314,148
$
294,632
$
289,500
$
283,281
$
315,358
$
314,148
Less goodwill
(31,449
)
(65,949
)
(31,449
)
(31,449
)
(31,449
)
(65,949
)
(65,949
)
Less deposit intangible, net of deferred tax liability
(4,398
)
(6,339
)
(4,398
)
(4,869
)
(5,358
)
(5,802
)
(6,339
)
Tangible common equity (non-GAAP)
$
258,785
$
241,860
$
258,785
$
253,182
$
246,474
$
243,607
$
241,860
Total shares outstanding at period end
18,745
19,067
18,745
18,742
18,716
18,715
19,067
Tangible book value per common share (Non GAAP)
$
13.81
$
12.68
$
13.81
$
13.51
$
13.17
$
13.02
$
12.68
HOWARD BANCORP, INC. AND SUBSIDIARY GAAP TO NON-GAAP
RECONCILIATION - TANGIBLE COMMON EQUITY / TANGIBLE ASSETS (in
thousands except per share data)
FOR THE YEAR
ENDED FOR THE THREE MONTHS ENDED
December
31,
December
31,
December
31,
September
30,
June 30,
March 31,
December
31,
2020
2019
2020
2020
2020
2020
2019
Common (and total) stockholder's equity (GAAP)
$
294,632
$
314,148
$
294,632
$
289,500
$
283,281
$
315,358
$
314,148
Less goodwill
(31,449
)
(65,949
)
(31,449
)
(31,449
)
(31,449
)
(65,949
)
(65,949
)
Less deposit intangible, net of deferred tax liability
(4,398
)
(6,339
)
(4,398
)
(4,869
)
(5,358
)
(5,802
)
(6,339
)
Tangible common equity (non-GAAP)
$
258,785
$
241,860
$
258,785
$
253,182
$
246,474
$
243,607
$
241,860
Total assets (GAAP)
$
2,559,184
$
2,293,475
$
2,537,991
$
2,559,184
$
2,463,450
$
2,507,894
#
$
2,374,619
Less goodwill
(31,449
)
(65,949
)
(31,449
)
(31,449
)
(31,449
)
(65,949
)
#
(65,949
)
Less deposit intangible, net of deferred tax liability
(4,398
)
(6,339
)
(4,398
)
(4,869
)
(5,358
)
(5,802
)
#
(6,339
)
Tangible assets (non-GAAP)
$
2,523,337
$
2,221,187
$
2,502,144
$
2,522,866
$
2,426,643
$
2,436,143
$
2,302,331
Tangible common equity / tangible assets (period end)
10.26
%
10.89
%
10.34
%
10.04
%
10.16
%
10.00
%
10.51
%
HOWARD BANCORP, INC. AND SUBSIDIARY GAAP TO
NON-GAAP RECONCILIATION - RETURN ON AVERAGE COMMON EQUITY (in
thousands)
FOR THE YEAR ENDED FOR THE
THREE MONTHS ENDED December 31,
December 31, December 31,
September 30, June 30,
March 31, December 31,
2020
2019
2020
2020
2020
2020
2019
Net (loss) income (GAAP)
$
(16,991
)
$
16,881
$
4,471
$
4,604
$
(29,409
)
$
3,343
$
5,900
Average common (and total) equity (GAAP)
304,173
304,925
294,285
288,727
319,152
314,805
311,777
Return on average common equity (GAAP)
-5.59
%
5.54
%
6.04
%
6.34
%
-37.06
%
4.27
%
7.51
%
Net (loss) income (GAAP)
$
(16,991
)
$
16,881
$
4,471
$
4,604
$
(29,409
)
$
3,343
$
5,900
Total core adjustments to net income
33,463
680
1,026
-
33,134
(697
)
(1,383
)
Core net income (Non-GAAP)
$
16,472
$
17,561
$
5,497
$
4,604
$
3,725
$
2,646
$
4,517
Average common equity
304,173
304,925
294,285
288,727
319,152
314,805
311,777
Core return on average common equity (Non-GAAP)
5.42
%
5.76
%
7.43
%
6.34
%
4.69
%
3.38
%
5.75
%
Annualized ratio based on days in quarter divided by days in
year
GAAP TO NON-GAAP RECONCILIATION - TANGIBLE
RETURN ON AVERAGE TANGIBLE COMMON EQUITY (in thousands)
FOR THE YEAR ENDED FOR THE THREE MONTHS
ENDED December 31, December
31, December 31, September
30, June 30, March
31, December 31,
2020
2019
2020
2020
2020
2020
2019
Net (loss) income (GAAP)
$
(16,991
)
$
16,881
$
4,471
$
4,604
$
(29,409
)
$
3,343
$
5,900
Goodwill impairment charge
34,500
-
-
-
34,500
-
-
CDI amortization
2,674
3,013
636
659
680
699
717
Income tax expense on pretax total
(722
)
(814
)
(172
)
(178
)
(184
)
(189
)
(194
)
CDI amortization, net of tax
1,952
2,199
464
481
496
510
523
Total adjustments to net income
36,452
2,199
464
481
34,996
510
523
Tangible net income (Non-GAAP)
$
19,461
$
19,080
$
4,935
$
5,085
$
5,587
$
3,853
$
6,423
Average common equity (GAAP)
$
304,173
$
304,925
$
294,285
$
288,727
$
319,152
$
314,805
$
311,777
Less average goodwill
(48,511
)
(67,092
)
(31,449
)
(31,449
)
(65,570
)
(65,950
)
(65,949
)
Less average core deposit intangible, net
(5,408
)
(7,532
)
(4,716
)
(5,076
)
(5,672
)
(6,170
)
(6,702
)
Average tangible common equity (non-GAAP)
$
250,254
$
230,301
$
258,120
$
252,202
$
247,910
$
242,685
$
239,125
Tangible return on average tangible common equity
(Non-GAAP)
7.78
%
8.29
%
7.61
%
8.02
%
9.06
%
6.39
%
10.66
%
Tangible net income (Non-GAAP)
$
19,461
$
19,080
$
4,935
$
5,085
$
5,587
$
3,853
$
6,423
Total core adjustments to net (loss) income (ex goodwill
impairment)
(1,037
)
680
1,026
-
(1,366
)
(697
)
(1,383
)
Core tangible net income (Non-GAAP)
$
18,424
$
19,760
$
5,961
$
5,085
$
4,221
$
3,157
$
5,040
Average tangible common equity (non-GAAP)
$
250,254
$
230,301
$
258,120
$
252,202
$
247,910
$
242,685
$
239,125
Core tangible return on average tangible common
equity (Non-GAAP)
7.36
%
8.58
%
9.19
%
8.02
%
6.85
%
5.23
%
8.36
%
Annualized ratio based on days in quarter divided by days in
year
HOWARD BANCORP, INC. AND SUBSIDIARY GAAP TO NON-GAAP
RECONCILIATION - RETURN ON AVERAGE ASSETS (in thousands)
FOR THE YEAR ENDED FOR THE THREE MONTHS
ENDED December 31, December
31, December 31, September
30, June 30, March
31, December 31,
2020
2019
2020
2020
2020
2020
2019
Net (loss) income (GAAP)
$
(16,991
)
$
16,881
$
4,471
$
4,604
$
(29,409
)
$
3,343
$
5,900
Average total assets (GAAP)
2,488,280
2,250,334
2,527,869
2,524,773
2,529,797
2,369,847
2,292,369
Return on average assets (GAAP)
-0.68
%
0.75
%
0.70
%
0.73
%
-4.68
%
0.57
%
1.02
%
Net (loss) income (GAAP)
(16,991
)
16,881
4,471
4,604
(29,409
)
3,343
5,900
Total core adjustments to net (loss) income
33,463
680
1,026
-
33,134
(697
)
(1,383
)
Core net income (Non-GAAP)
$
16,472
$
17,561
$
5,497
$
4,604
$
3,725
$
2,646
$
4,517
Average total assets (GAAP)
2,488,280
2,250,334
2,527,869
2,524,773
2,529,797
2,369,847
2,292,369
Core return on average assets (Non-GAAP)
0.66
%
0.78
%
0.87
%
0.73
%
0.59
%
0.45
%
0.78
%
Annualized ratio based on days in quarter divided by days in
year
GAAP TO NON-GAAP RECONCILIATION - TANGIBLE
RETURN ON AVERAGE TANGIBLE ASSETS (in thousands)
FOR
THE YEAR ENDED FOR THE THREE MONTHS
ENDED December 31, December
31, December 31, September
30, June 30, March
31, December 31,
2020
2019
2020
2020
2020
2020
2019
Net (loss) income (GAAP)
$
(16,991
)
$
16,881
$
4,471
$
4,604
$
(29,409
)
$
3,343
$
5,900
Goodwill impairment charge
34,500
-
-
-
34,500
-
-
CDI amortization
2,674
3,013
636
659
680
699
717
Income tax expense on pretax total
(722
)
(814
)
(172
)
(178
)
(184
)
(189
)
(194
)
CDI amortization, net of tax
1,952
2,199
464
481
496
510
523
Total adjustments to net income
36,452
2,199
464
481
34,996
510
523
Tangible net income (Non-GAAP)
$
19,461
$
19,080
$
4,935
$
5,085
$
5,587
$
3,853
$
6,423
Average total assets (GAAP)
2,488,280
2,250,334
2,527,869
2,524,773
2,529,797
2,369,847
2,292,369
Less average goodwill
(48,511
)
(67,092
)
(31,449
)
(31,449
)
(65,570
)
(65,950
)
(65,949
)
Less average core deposit intangible, net
(5,408
)
(7,532
)
(4,716
)
(5,076
)
(5,672
)
(6,170
)
(6,702
)
Average tangible assets (non-GAAP)
$
2,434,361
$
2,175,710
$
2,491,704
$
2,488,247
$
2,458,555
$
2,297,727
$
2,219,717
Tangible return on average tangible assets (Non-GAAP)
0.80
%
0.88
%
0.79
%
0.81
%
0.91
%
0.67
%
1.15
%
Tangible net income (Non-GAAP)
$
19,461
$
19,080
$
4,935
$
5,085
$
5,587
$
3,853
$
6,423
Total core adjustments to net (loss) income (ex goodwill
impairment)
(1,037
)
680
1,026
-
(1,366
)
(697
)
(1,383
)
Core tangible net income (Non-GAAP)
$
18,424
$
19,760
$
5,961
$
5,085
$
4,221
$
3,157
$
5,040
Average tangible assets (non-GAAP)
$
2,434,361
$
2,175,710
$
2,491,704
$
2,488,247
$
2,458,555
$
2,297,727
$
2,219,717
Core tangible return on average tangible assets
(Non-GAAP)
0.76
%
0.91
%
0.95
%
0.81
%
0.69
%
0.55
%
0.90
%
Annualized ratio based on days in quarter divided by days in
year
GAAP TO NON-GAAP RECONCILIATION - ALLOWANCE
FOR LOAN LOSSES AS A % OF PORTFOLIO LOANS (in thousands)
FOR THE YEAR ENDED FOR THE THREE MONTHS
ENDED December 31, December
31, December 31, September
30, June 30, March
31, December 31,
2020
2019
2020
2020
2020
2020
2019
Allowance for loan losses (GAAP)
$
19,162
$
10,401
$
19,162
$
17,657
$
16,356
$
13,384
$
10,401
Total loans and leases (GAAP)
1,865,961
1,745,513
1,865,961
1,884,405
1,898,630
1,761,419
1,745,513
Allowance as a % of total loans and leases (GAAP)
1.03
%
0.60
%
1.03
%
0.94
%
0.86
%
0.76
%
0.60
%
Allowance for loan losses (GAAP)
$
19,162
$
10,401
$
19,162
$
17,657
$
16,356
$
13,384
$
10,401
Total loans and leases (GAAP)
1,865,961
1,745,513
1,865,961
1,884,405
1,898,630
1,761,419
1,745,513
Less PPP loans outstanding
(167,639
)
-
(167,639
)
(196,375
)
(193,719
)
-
-
Portfolio loans (non-GAAP)
1,698,322
1,745,513
1,698,322
1,688,030
1,704,911
1,761,419
1,745,513
Allowance as a % of portfolio loans (non-GAAP)
1.13
%
0.60
%
1.13
%
1.05
%
0.96
%
0.76
%
0.60
%
HOWARD BANCORP, INC. AND SUBSIDIARY GAAP TO NON-GAAP
RECONCILIATION - NONPERFORMING LOANS AS A % OF PORTFOLIO LOANS
(in thousands)
FOR THE YEAR ENDED FOR
THE THREE MONTHS ENDED December 31,
December 31, December 31,
September 30, June 30,
March 31, December 31,
2020
2019
2020
2020
2020
2020
2019
Nonperforming loans
$
19,430
$
19,143
$
19,430
$
16,984
$
18,469
$
17,203
$
19,143
Total loans and leases (GAAP)
1,865,961
1,745,513
1,865,961
1,884,405
1,898,630
1,761,419
1,745,513
Nonperforming loans as a % of total loans and
leases (GAAP)
1.04
%
1.10
%
1.04
%
0.90
%
0.97
%
0.98
%
1.10
%
Nonperforming loans
$
19,430
$
19,143
$
19,430
$
16,984
$
18,469
$
17,203
$
19,143
Total loans and leases (GAAP)
1,865,961
1,745,513
1,865,961
1,884,405
1,898,630
1,761,419
1,745,513
Less PPP loans outstanding
(167,639
)
-
(167,639
)
(196,375
)
(193,719
)
-
-
Portfolio loans (non-GAAP)
1,698,322
1,745,513
1,698,322
1,688,030
1,704,911
1,761,419
1,745,513
Nonperforming loans as a % of portfolio loans
(non-GAAP)
1.14
%
1.10
%
1.14
%
1.01
%
1.08
%
0.98
%
1.10
%
GAAP TO NON-GAAP RECONCILIATION - NONPERFORMING
ASSETS AS A % OF PORTFOLIO LOANS + OREO (in thousands)
FOR THE YEAR ENDED FOR THE THREE MONTHS
ENDED December 31, December
31, December 31, September
30, June 30, March
31, December 31,
2020
2019
2020
2020
2020
2020
2019
Nonperforming assets
$
20,173
$
22,241
$
20,173
$
18,139
$
20,606
$
19,525
$
22,241
Total loans and leases (GAAP)
1,865,961
1,745,513
1,865,961
1,884,405
1,898,630
1,761,419
1,745,513
OREO
743
3,098
743
1,155
2,137
2,322
3,098
Total loans and leases + OREO
1,866,704
1,748,611
1,866,704
1,885,560
1,900,767
1,763,741
1,748,611
Nonperforming assets as a % of total loans and
leases + OREO (GAAP)
1.08
%
1.27
%
1.08
%
0.96
%
1.08
%
1.11
%
1.27
%
Nonperforming assets
$
20,173
$
22,241
$
20,173
$
18,139
$
20,606
$
19,525
$
22,241
Total loans and leases (GAAP)
1,865,961
1,745,513
1,865,961
1,884,405
1,898,630
1,761,419
1,745,513
OREO
743
3,098
743
1,155
2,137
2,322
3,098
Total loans and leases + OREO
1,866,704
1,748,611
1,866,704
1,885,560
1,900,767
1,763,741
1,748,611
Less PPP loans outstanding
(167,639
)
-
(167,639
)
(196,375
)
(193,719
)
-
-
Portfolio loans + OREO
$
1,699,065
$
1,748,611
$
1,699,065
$
1,689,185
$
1,707,048
$
1,763,741
$
1,748,611
Nonperforming assets as a % of portfolio loans +
OREO (non-GAAP)
1.19
%
1.27
%
1.19
%
1.07
%
1.21
%
1.11
%
1.27
%
GAAP TO NON-GAAP RECONCILIATION - ALLOWANCE FOR
LOAN LOSSES + FV MARKS AS A % OF PORTFOLIO LOANS + FV MARKS (in
thousands)
FOR THE YEAR ENDED FOR THE
THREE MONTHS ENDED December 31,
December 31, December 31,
September 30, June 30,
March 31, December 31,
2020
2019
2020
2020
2020
2020
2019
Allowance for loan losses (GAAP)
$
19,162
$
10,401
$
19,162
$
17,657
$
16,356
$
13,384
$
10,401
Add: Fair value marks
6,454
9,078
6,454
7,365
8,105
8,737
9,078
Allowance + fair value marks (non-GAAP)
$
25,616
$
19,479
$
25,616
$
25,022
$
24,460
$
22,121
$
19,479
Total loans and leases (GAAP)
$
1,865,961
$
1,745,513
$
1,865,961
$
1,884,405
$
1,898,630
$
1,761,419
$
1,745,513
Add: fair value marks
6,454
9,078
6,454
7,365
8,105
8,737
9,078
Total loans and leases + fair value marks (non-GAAP)
$
1,872,415
$
1,754,591
$
1,872,415
$
1,891,770
$
1,906,734
$
1,770,156
$
1,754,591
Allowance + fair value marks as a % of total loans
and leases + fair value marks (non-GAAP)
1.37
%
1.11
%
1.37
%
1.32
%
1.28
%
1.25
%
1.11
%
Allowance for loan losses (GAAP)
$
19,162
$
10,401
$
19,162
$
17,657
$
16,356
$
13,384
$
10,401
Add: Fair value marks
6,454
9,078
6,454
7,365
8,105
8,737
9,078
Allowance + fair value marks (non-GAAP)
$
25,616
$
19,479
$
25,616
$
25,022
$
24,460
$
22,121
$
19,479
Total loans and leases (GAAP)
$
1,865,961
$
1,745,513
$
1,865,961
$
1,884,405
$
1,898,630
$
1,761,419
$
1,745,513
Less PPP loans outstanding
(167,639
)
-
(167,639
)
(196,375
)
(193,719
)
-
-
Portfolio loans (non-GAAP)
$
1,698,322
$
1,745,513
$
1,698,322
$
1,688,030
$
1,704,911
$
1,761,419
$
1,745,513
Add: fair value marks
6,454
9,078
6,454
7,365
8,105
8,737
9,078
Portfolio loans + fair value marks (non-GAAP)
$
1,704,776
$
1,754,591
$
1,704,776
$
1,695,395
$
1,713,015
$
1,770,156
$
1,754,591
Allowance + fair value marks as a % of total loans
and leases + fair value marks (non-GAAP)
1.50
%
1.11
%
1.50
%
1.48
%
1.43
%
1.25
%
1.11
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210127005886/en/
Robert L. Carpenter, Jr., Executive Vice President and Chief
Financial Officer Howard Bancorp, Inc. 3301 Boston Street
Baltimore, Maryland 21224 410-750-0020 Email:
bcarpenter@howardbank.com Website: www.howardbank.com
MEDIA: Amanda Mantiply Abel Communications
Amanda@AbelCommunications.com 443-961-2418
Erica Starr Director of Marketing estarr@howardbank.com
443-573-4839
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