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 ended
September 30, 2021.
Third Quarter 2021 Highlights
- Net income:
- Net income of $6.4 million for the quarter, up 38% from third
quarter of 2020 and down 15% from the second quarter of 2021
- Core net income1 of $7.1 million for the quarter, up 54% from
third quarter of 2020 and down 5% from second quarter of 2021
- Earnings per share:
- Earnings per share (“EPS”), both basic and diluted, of $0.34
for the quarter, up 37% from third quarter of 2020 and down 15%
from second quarter of 2021
- Core diluted EPS1 of $0.37 for the quarter, up 52% from third
quarter of 2020 and down 5% from second quarter of 2021
- Pre-provision net revenue (“PPNR”)1:
- PPNR,1 at $8.7 million for the quarter, up 14% from third
quarter of 2020 and down 14% from second quarter of 2021
- Core PPNR,1 at $9.6 million for the quarter, up 25% from third
quarter of 2020 and down 5% from second quarter of 2021
- Core PPNR, as a percentage of average assets,1 was 1.47% for
the quarter, up 26 basis points (“BP”) from third quarter of 2020
and down 10 BP from second quarter of 2021
- Loans:
- Total loans declined by $39.3 million during the quarter, with
Paycheck Protection Program (“PPP”) loans down $62.7 million
- Portfolio loan1 growth (which excludes PPP loans) of $23.5
million during the quarter (5.2% annualized growth rate)
- Net interest margin:
- Net interest margin, at 3.32% for the quarter, was up 17 BP
from third quarter of 2020 and down 7 BP from second quarter of
2021
- Operating net interest margin,1 which excludes the impact of
loan fair value accretion and net interest income from PPP lending,
was 3.13% for the quarter, down 1 BP from third quarter of 2020 and
down 12 BP from second quarter of 2021
- Asset quality:
- COVID-19 related loan deferrals of $25.6 million at September
30, 2021 (1.3% of total loans and 1.4% of portfolio loans), down
from $30.4 million at June 30, 2021
- Nonperforming assets to total assets was 0.64% as of September
30, 2021, down 7 BP from third quarter of 2020 and down 1 BP from
second quarter of 2021
- No provision for credit losses recorded during either the
second or third quarters of 2021, compared to $1.7 million in the
third quarter of 2020
- Net loan loss recoveries were $65 thousand for the quarter,
compared to net charge-offs of $78 thousand in the third quarter of
2020 and $79 thousand in the second quarter of 2021
- Allowance for loan losses was 0.96% of total loans and 1.01% of
portfolio loans 1 as of September 30, 2021; compared to 0.94% and
1.05%, respectively, at September 30, 2020, and 0.94% and 1.02%,
respectively, at June 30, 2021
- Noninterest expense management:
- Noninterest expenses were $13.3 million for the quarter, up 5%
from third quarter of 2020 and up 8% from second quarter of
2021
- Merger-related expenses of $880 thousand, resulting from the
Company’s proposed merger with F.N.B. Corporation (“FNB”), which
was announced on July 13, 2021, were recorded in the third quarter
of 2021
- Core noninterest expenses,1 which excludes merger-related
expenses, were $12.4 million for the quarter, down 2% from third
quarter of 2020 and up 1% from second quarter of 2021
- PPP update:
- $64.2 million of PPP loans forgiven during the quarter
- Of the total $301.5 million in principal balances of loans
originated under the program, $82.1 million in principal balances
were outstanding at September 30, 2021
- Unaccreted net deferred fees were $2.2 million at September 30,
2021
1 These are financial measures not calculated in accordance with
generally accepted accounting principles (“GAAP”). Please refer to
the section entitled “Reconciliation of Non-GAAP Financial
Measures” in this press release and to the financial tables
entitled “GAAP to Non-GAAP reconciliation” for a reconciliation to
the most directly comparable GAAP financial measures.
Net Income and EPS
The Company reported net income of $6.4 million, or $0.34 per
both basic and diluted common share, for the third quarter of 2021.
This compares to net income of $4.6 million, or $0.25 per both
basic and diluted common share, for the third quarter of 2020 and
net income of $7.5 million, or $0.40 per both basic and diluted
common share, for the second quarter of 2021.
Third quarter 2021 basic and diluted EPS increased by $0.09 when
compared to the third quarter of 2020 and decreased by $0.06 when
compared to the second quarter of 2021. The following table
presents an EPS rollforward for the third quarter of 2021 compared
to both the third quarter of 2020 and the second quarter of 2021.
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.
Third Quarter 2021
Compared to:
FN
Q3 2020
Q2 2021
EPS, Third Quarter 2020 / Second Quarter 2021
$
0.25
$
0.40
Decrease in the provision for credit losses
1
0.07
-
Pretax income from SBA Paycheck Protection Program ("PPP")
2
0.02
-
Merger-related expense
3
(0.04
)
(0.04
)
All other, net
0.04
(0.02
)
EPS, Third Quarter 2021
$
0.34
$
0.34
CHANGE
$
0.09
$
(0.06
)
1
No provision for credit losses was
recorded in the third quarter of 2021, a decrease of $1.7 million
from the third quarter of 2020, and unchanged from the second
quarter of 2021.
2
The Company commenced originating 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.
Third quarter of 2021 pretax income of $1.6 million from this
program represented an increase of $567 thousand from the third
quarter of 2020 and an increase of $8 thousand from the second
quarter of 2021.
3
The third quarter of 2021 included
merger-related expenses resulting from the Company’s proposed
merger with FNB, which was announced on July 13, 2021 of $880
thousand (pretax). There were no merger-related expenses in the
third quarter of 2020 or the second quarter of 2021.
Core net income is a non-GAAP financial measure that excludes,
if applicable, merger-related expenses and certain other items, to
provide a picture of ongoing activities deemed core to the
Company’s strategy. Core net income for the third quarter of 2021
was $7.1 million, or $0.37 per diluted common share.
- This compares to core net income, which was unchanged from
reported net income, of $4.6 million, or $0.25 per diluted common
share, for the third quarter of 2020. The $0.12 per share increase
in core diluted EPS in the third quarter of 2021, when compared to
the third quarter of 2020, was primarily the result of a lower
provision for credit losses, which was down $1.7 million (+$0.07
after tax per share), and an increase in the pretax contribution
from PPP lending activities of $567 thousand (+$0.02 after tax per
share).
- This also compares to core net income, which was unchanged from
reported net income, of $7.5 million, or $0.40 per diluted common
share, for the second quarter of 2021. The $0.03 per share decrease
in core diluted EPS in the third quarter of 2021, when compared to
the second quarter of 2021, was the result of the after tax impact
of a $542 thousand decrease in pretax income. Total revenues
decreased by $404 thousand (net interest income decreased by $195
thousand, with $214 thousand of this decrease attributable to a
decrease in the accretion of fair value adjustments on acquired
loans (“FV accretion”), and noninterest income decreased by $209
thousand). In addition, noninterest expenses increased by $138
thousand. *
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, if applicable, merger-related
expenses and certain other items, was $9.6 million for the third
quarter of 2021. The third quarter of 2021 core PPNR was up $1.9
million, or 25.4%, from $7.7 million for the third quarter of 2020,
and was down $542 thousand, or 5.3%, when compared to $10.1 million
for the second quarter of 2021.*
The Company reported net income of $20.0 million, or $1.07 and
$1.06 per basic and diluted share, respectively, for the nine
months ended September 30, 2021. This compared to a net loss of
$21.5 million, or a loss of $1.14 per both basic and diluted share,
for the nine months ended September 30, 2020. The net loss for the
nine months ended September 30, 2020 included the $34.5 million
goodwill impairment charge recorded in the second quarter of 2020.
Core net income for the nine months ended September 30, 2021 was
$20.7 million, or $1.10 per both basic and diluted share,
respectively, compared to $11.0 million, or $0.58 per both basic
and diluted share, respectively, for the nine months ended
September 30, 2020. Core PPNR for the nine months ended September
30, 2021 was $29.1 million, a $6.5 million, or 29.1% increase from
$22.6 million for the nine months ended September 30, 2020.
Paycheck Protection Program
Loans
The Company originated 1,653 loans with a total principal
balance of $301.5 million under the PPP program prior to its end in
May of 2021. As of September 30, 2021, 1,282 loans with a total
principal balance of $219.4 million have been forgiven. The Company
continues its focus on assisting our customers through the
completion of the loan forgiveness process. PPP loans, net of
unaccreted net deferred fees, totaled $79.9 million at September
30, 2021, a decrease of $116.5 million from $196.4 million at
September 30, 2020 and a decrease of $62.8 million from $142.7
million at June 30, 2021. PPP loan principal balances were $82.1
million at September 30, 2021 while unaccreted net deferred fees
were $2.2 million at September 30, 2021.
After the SBA relaunched the program on January 19, 2021, the
Company originated $100.5 million of PPP loans in the first and
second quarters of 2021, consisting of 591 loans with an average
loan size of $170 thousand. Of these 2021 originations, 191 loans,
with an aggregate principal balance of $24.6 million, were forgiven
during the third quarter of 2021. Of the 591 loans originated in
2021, 227 have been forgiven totaling $27.0 million through
September 30, 2021, representing 38.4% of the number of 2021 PPP
loans and 26.9% of 2021 principal balances.
During the second and third quarters of 2020, the Company
originated a total of $201.0 million in PPP loans, consisting of
1,062 loans with an average loan size of $189 thousand. A total of
168 of those loans, with an aggregate principal balance of $39.6
million, were forgiven during the third quarter of 2021. Of the
1,062 loans originated in 2020, 1,055 have been forgiven totaling
$192.4 million through September 30, 2021, representing 99.3% of
the number of 2020 PPP loans and 95.7% of 2020 principal balances.
As of September 30, 2021, two loans with an aggregate principal
balance of $451 thousand were not fully forgiven and are now
amortizing loans.
The Company deferred net fees of $9.6 million, consisting of
total processing fees of $10.9 million from the SBA for originated
PPP loans, less $1.3 million in origination costs. The net deferred
fees are being accreted as a yield adjustment over the contractual
term of the underlying PPP loans, with accelerated accretion upon
forgiveness. PPP lending generated pretax income of $1.6 million,
or $0.06 after tax per share, in the third quarter of 2021, an
increase of $567 thousand, or $0.02 after tax per share, from the
third quarter of 2020 and an increase of $8 thousand from the
second quarter of 2021.
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 the third
quarter of 2021 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
six months. *
COVID-19 Loan Modifications
COVID-19 related loan modifications to both commercial and
retail customers that the Company provided on a case by case basis,
in the form of payment deferrals for periods up to six months,
continue to trend favorably from their peak of $315 million (17.9%
of both total loans and portfolio loans) on April 24, 2020. As of
September 30, 2021, deferrals were $25.6 million, or 1.3% of total
loans and 1.4% of portfolio loans, down from $30.4 million as of
June 30, 2021. Included in total deferrals at September 30, 2021
are second deferrals (including deferrals where the cumulative
inception to date deferral is greater than six months) of $13.1
million. Principal only deferrals represent 99.9% of total
deferrals. *
Asset Quality and Allowance for Loan and
Lease Losses
Nonperforming assets (“NPAs”) totaled $16.3 million at September
30, 2021, a decrease of $583 thousand from June 30, 2021 and a
decrease of $1.9 million from September 30, 2020. NPAs consisted of
$15.9 million of nonperforming loans (“NPLs”) and $334 thousand of
other real estate owned (“OREO”) at September 30, 2021. NPLs were
0.84% of total loans and 0.87% of portfolio loans at September 30,
2021. NPAs represented 0.64% of total assets, 0.85% of total loans
and OREO, and 0.89% of portfolio loans and OREO at September 30,
2021. *
- 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 nonperforming assets 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.
- This compares to NPAs of $16.8 million at June 30, 2021 that
consisted of $16.2 million in NPLs and $629 thousand of OREO. NPLs
were 0.83% of total loans and 0.90% of portfolio loans at June 30,
2021 while NPAs represented 0.65% of total assets, 0.87% of total
loans and OREO, and 0.94% of portfolio loans and OREO at June 30,
2021.
Net loan loss recoveries were $65 thousand in the third quarter
of 2021 and represented -0.01% of average loans (annualized). This
compares to net charge-offs of $78 thousand, or 0.02% of average
loans (annualized) in the third quarter of 2020 and $79 thousand,
or 0.02% of average loans (annualized) in the second quarter of
2021. The allowance for loan and lease losses (the “allowance”) was
$18.4 million on September 30, 2021. No provision for credit losses
was recorded in the third quarter of 2021.
Because the Company is a smaller reporting company under SEC
rules, the allowance was determined under the incurred loss model.
The $18.4 million allowance represented 0.96% of total loans, 1.01%
of portfolio loans, and 115.2% of NPLs at September 30, 2021. *
- 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 $696
thousand increase in the allowance at September 30, 2021 was the
result of aggregate provisions for credit losses attributable to
the allowance of $2.7 million partially offset by aggregate net
charge-offs of $2.0 million during the four-quarter period ending
September 30, 2021 (with $1.8 million of the net charge-offs
recorded in the first quarter of 2021).
- This compares to an allowance of $18.3 million at June 30,
2021. The June 30, 2021 allowance represented 0.94% of total loans,
1.02% of portfolio loans, and 112.8% of NPLs. The $65 thousand
increase in the allowance at September 30, 2021 was the result of
net loan loss recoveries of $65 thousand during the quarter ended
September 30, 2021 and no provision for credit losses.
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 used by
management 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 1.18% at
September 30, 2021, a decrease of 14 BP from September 30, 2020 and
unchanged from June 30, 2021. The allowance and unamortized fair
value marks as a percentage of portfolio loans plus fair value
marks was 1.24% at September 30, 2021, a decrease of 24 BP from
September 30, 2020 and a decrease of 3 BP from June 30, 2021. *
The Company’s asset quality trends indicate minimal additional
stress in the loan portfolio; we believe our ongoing active
management of the portfolio, COVID-19 related loan modifications,
and PPP loan relief have reduced the risk in the portfolio.
Management continues to closely monitor portfolio conditions and
reevaluate the adequacy of the allowance. While traditional lagging
indicators of delinquencies and nonperforming loans remain
historically modest, the pandemic continues to adversely impact the
economy. As a result, management believes there still 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 September 30, 2021 was $308.2 million,
an increase of $4.9 million from June 30, 2021. The increase was
primarily due to third quarter 2021 net income of $6.4 million
partially offset by a $1.9 million decrease in accumulated other
comprehensive income (“AOCI”), which represents the after tax
impact of changes in the fair value of available-for-sale
securities. Book value per common share was $16.38 at September 30,
2021, an increase of $0.24 per share since June 30, 2021, with
third quarter EPS of $0.34 per share partially offset by the change
in AOCI representing a decrease of $0.10 per share.
Tangible stockholders’ equity, a non-GAAP financial measure that
deducts goodwill and other intangible assets, net of any applicable
deferred tax liabilities, was $273.7 million at September 30, 2021.
This compares to $268.3 million at June 30, 2021, with the $5.3
million increase primarily due to third quarter net income of $6.4
million and $425 thousand of core deposit intangible amortization,
partially offset by the $1.9 million decrease in AOCI. Tangible
book value per common share, a non-GAAP measure that divides
tangible stockholders’ equity by the number of shares outstanding,
was $14.55 per share at September 30, 2021, an increase of $0.27
per share since June 30, 2021. *
The Company’s regulatory capital ratios are all well in excess
of regulatory “well-capitalized” and internal target minimum
levels. Note that the Company had adopted the regulatory AOCI
opt-out election; as a result, AOCI is not a component of
regulatory capital and, therefore, changes in AOCI do not impact
regulatory capital ratios. The total capital ratio was 14.99% while
both the Common Equity Tier 1 (“CET 1”) and Tier 1 capital ratios
were 12.63% at September 30, 2021. The Tier 1 to average assets
(“leverage”) ratio was 10.03%. A comparison of the Company’s
September 30, 2021 regulatory capital ratios to September 30, 2020
and June 30, 2021 is as follows:
- 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
September 30, 2021 regulatory capital ratios were above the
September 30, 2020 levels.
- Regulatory capital ratios at June 30, 2021 consisted of a total
capital ratio of 14.62% while both the CET 1 and Tier 1 capital
ratios were 12.26%. The leverage ratio was 9.74%. All September 30,
2021 regulatory capital ratios were above the June 30, 2021
levels.
Net Interest Income and Net Interest
Margin
Net interest income was $19.9 million for the third quarter of
2021, a decrease of $195 thousand, or 1.0%, from $20.1 million for
the second quarter of 2021, and an increase of $1.6 million, or
8.8%, from $18.3 million in the third quarter of 2020. PPP net
interest income increased by $8 thousand from the second quarter of
2021 and increased by $567 thousand from the third quarter of 2020.
Non-PPP related changes in net interest income were attributable to
the impact of portfolio loan growth, lower funding costs, and lower
yields on earning assets.
The following table presents selected yields and rates for the
third quarters of 2021 and 2020 as well as the second quarter of
2021. Changes in the third quarter 2021 yields and rates from the
third quarter of 2020 and the second quarter of 2021 are also
included in the table.
Third Quarter 2021
Change from:
Third
Quarter
2021
Third
Quarter
2020
Second
Quarter
2021
Third
Quarter
2020
Second
Quarter
2021
Selected yields and rates: Net interest margin
3.32
%
3.15
%
3.39
%
0.17
%
-0.07
%
Operating net interest margin *
3.13
%
3.14
%
3.25
%
-0.01
%
-0.12
%
Earning asset yield
3.53
%
3.62
%
3.61
%
-0.09
%
-0.08
%
Total loan yield
4.03
%
4.04
%
4.07
%
-0.01
%
-0.04
%
Cost of total IBL + demand deposits
0.22
%
0.48
%
0.23
%
-0.26
%
-0.01
%
Impact of fair value adjustments on acquired loans: Net interest
margin
0.07
%
0.11
%
0.12
%
-0.04
%
-0.05
%
Earning asset yield
0.08
%
0.12
%
0.12
%
-0.04
%
-0.04
%
Total loan yield
0.09
%
0.13
%
0.13
%
-0.04
%
-0.04
%
Impact of PPP loans: Net interest margin
0.12
%
-0.10
%
0.02
%
0.22
%
0.10
%
Earning asset yield
0.12
%
-0.10
%
0.03
%
0.22
%
0.09
%
Total loan yield
0.12
%
-0.18
%
-0.01
%
0.30
%
0.13
%
The third quarter 2021 net interest margin of 3.32% was up 17 BP
from the third quarter of 2020 and down 7 BP from the second
quarter of 2021. The impact of FV accretion and net interest income
from PPP lending had a significant impact on the reported net
interest margin. Operating net interest margin is a non-GAAP
financial measure defined as net interest income excluding both FV
accretion and net interest income from PPP lending divided by
average earning assets excluding both the average balance of fair
value adjustments on acquired loans and the average balance of PPP
loans. The Company believes that operating net interest margin
related measures provide additional useful information for purposes
of evaluating the Company’s results of operations, by eliminating
the non-sustainable contribution from PPP lending and the
volatility from FV accretion. *
The third quarter 2021 operating net interest margin of 3.13%
was down 1 BP from the third quarter of 2020. While the cost of
funds (defined as average total interest-bearing liabilities
(“IBL”) + demand deposits) decreased by 26 BP, the yield on earning
assets, as adjusted for FV accretion and interest income from PPP
lending, decreased by 27 BP, with these decreases due to the impact
of lower market interest rates. The third quarter 2021 operating
net interest margin of 3.13% was down 12 BP from 3.25% in the
second quarter of 2021. The yield on earning assets, as adjusted
for FV accretion and interest income from PPP lending, decreased by
12 BP while the cost of funds decreased by 1 BP from the second
quarter of 2021.
Noninterest Income
Noninterest income was $2.1 million for the third quarter of
2021, an increase of $55 thousand from the $2.1 million reported in
the third quarter of 2020, and a decrease of $209 thousand from the
$2.4 million reported in the second quarter of 2021.
- The $55 thousand increase when compared to the third quarter of
2020 primarily consisted of the following: an increase in service
charges on deposit accounts (+$213 thousand) and an increase in
interchange fees, as card activity volumes have improved since
2020, included in other income (+$114 thousand), partially offset
by a decrease in loan related fees and service charges (-$140
thousand) and a decrease in the components of other income
excluding interchange fees (-$112 thousand). The $209 thousand
decrease when compared to the second quarter of 2021 was primarily
due to a decrease in other income (-$228 thousand), which included
interchange fees (-$54 thousand), and a decrease in loan related
fees and service charges (-$46 thousand), partially offset by an
increase in service charges on deposit accounts (+$65
thousand).
Noninterest Expenses
Noninterest expenses totaled $13.3 million for the third quarter
of 2021, an increase of $606 thousand from the $12.7 million
reported in the third quarter of 2020, and an increase of $1.0
million from the $12.3 million reported in the second quarter of
2021. Merger-related expenses of $880 thousand were included in
noninterest expenses in the third quarter of 2021.
Core noninterest expenses is a non-GAAP financial measure that,
with respect to the third quarter of 2021, excludes merger-related
noninterest expenses. There were no related adjustments to reported
noninterest expense in the third quarter of 2020 and the second
quarter of 2021.
Core noninterest expenses were $12.4 million for the third
quarter of 2021, a $274 thousand decrease from $12.7 million in the
third quarter of 2020, and a $138 thousand increase from $12.3
million in the second quarter of 2021.*
- The $274 thousand decrease when compared to the third quarter
of 2020 resulted primarily from lower compensation and benefits
expenses (-$388 thousand), lower professional fees (-$218
thousand), and lower FDIC assessment expense (-$206 thousand);
these items were partially offset by higher other operating expense
(+$474 thousand) and higher marketing and business development
expenses (+$244 thousand). All other noninterest expense categories
in the aggregate were lower in the third quarter of 2021 (-$180
thousand).
- The $138 thousand increase when compared to the second quarter
of 2021 resulted primarily from higher other operating expense
(+$700 thousand), partially offset by lower compensation and
benefits expenses (-$395 thousand) and lower professional fees
(-$204 thousand). All other noninterest expense categories in the
aggregate were higher in the third quarter of 2021 (+$37
thousand).
Loans
Loans totaled $1.90 billion at September 30, 2021, a decrease of
$39.3 million, or 2.0%, from total loans at June 30, 2021. Compared
to September 30, 2020, total loans grew by $18.9 million, or
1.0%.
Portfolio loans, a non-GAAP measure defined as total loans and
leases, but excluding PPP loans, totaled $1.82 billion at September
30, 2021, an increase of $23.5 million, or 1.3%, from portfolio
loans at June 30, 2021. Compared to September 30, 2020, portfolio
loans increased by $135.3 million, or 8.0%. The changes in
portfolio loans were as follows: *
- Compared to June 30, 2021, the $23.5 million increase (5.2%
annualized growth rate) in portfolio loans was a result of the
following:
- The commercial lending portfolio, totaling $1.25 billion at
September 30, 2021, decreased by $683 thousand from June 30, 2021.
Increases in construction and land loans (+$6.5 million), were more
than offset by decreases in commercial and industrial (“C&I”)
loans (-$5.5 million) and commercial real estate (“CRE”) loans
(-$1.7 million). New loan originations of $38.4 million during the
third quarter of 2021 were offset by $39.1 million in loan
maturities, payoffs, partial paydowns, and lower line
utilization.
- Residential real estate loans were up $22.1 million, or 4.8%.
Secondary market loan purchases were $44.5 million during the third
quarter of 2021, partially offset by $22.4 million of
prepayments.
- Consumer loans were up $2.1 million, or 2.4%.
- Compared to September 30, 2020, the $135.3 million increase in
portfolio loans was a result of the following:
- The commercial lending portfolio increased by $69.7 million, or
5.9%, with CRE loans up $50.8 million, or 7.0%, construction and
land loans up $20.6 million, or 19.7%, while C&I loans were
down $1.6 million, or 0.5%.
- Consumer loans were up $33.7 million, or 62.8%, reflecting
strong growth in some niche lending activities such as marine
lending.
- Residential real estate loans were up $31.8 million, or
7.0%.
Average total loans were $1.92 billion for the third quarter of
2021, a decrease of $17.2 million, or 0.9%, over average loans for
the second quarter of 2021, and an increase of $40.1 million, or
2.1%, over average loans for the third quarter of 2020. Average
portfolio loans were $1.81 billion for the third quarter of 2021,
an increase of $44.6 million, or 2.5%, from average loans for the
second quarter of 2021. Compared to the third quarter of 2020,
average portfolio loans increased by $120.0 million, or 7.1%.
Deposits
Total deposits were $1.94 billion at September 30, 2021, a
decrease of $84.1 million, or 4.2%, from the June 30, 2021 balance
of $2.03 billion. Compared to September 30, 2020, total deposits
decreased by $31.3 million, or 1.6%. Changes in deposits were as
follows:
- Customer deposits, which exclude brokered and other
non-customer deposits, were $1.78 billion at September 30, 2021,
compared to $1.79 billion at June 30, 2021, a decrease of $10.8
million, or 0.6%.
- Low-cost, non-maturity deposits decreased by $2.8 million, or
0.2%, during the third quarter of 2021. Within non-maturity
deposits, transaction accounts increased by $2.0 million, or 0.2%,
with noninterest-bearing transaction accounts up $4.9 million, or
0.6%, while interest-bearing transaction accounts decreased by $2.9
million, or 1.4%.
- The increase in non-maturity deposits was partially offset by
the continued managed decline in customer CD balances, down $8.0
million, or 4.3%. The Company continues to manage for lower
retention rates on maturing CDs that have 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 September 30, 2020, customer deposits increased by
$144.2 million, or 8.8%.
- The increase in customer deposits was primarily the result of
strong growth in non-maturity deposits, which increased by $221.0
million, or 16.0%. Within non-maturity deposits, transaction
accounts increased by $146.9 million, or 17.4%, with
noninterest-bearing transaction accounts up $126.3 million, or
19.2%.
- Customer CD balances declined by $76.8 million, or 30.0%.
- Brokered and other non-customer deposits were $158.4 million at
September 30, 2021, compared to $231.8 million at June 30, 2021 and
$207.1 million at September 30, 2020.
Average customer deposits for the third quarter of 2021 were
$1.81 billion, an increase of $9.3 million, or 0.5%, from the
second quarter 2021 average balance. Customer non-maturity deposit
balances increased by $19.5 million, or 1.2%, with transaction
accounts up $5.7 million; within transaction accounts,
noninterest-bearing deposits were up $21.5 million. Compared to the
third quarter of 2020, average customer deposits were up by $173.1
million, or 10.6%. Customer non-maturity deposit balances increased
by $256.4 million, or 18.7%, with transaction accounts up $167.0
million; $145.8 million of the transaction account growth was in
noninterest-bearing deposits.
* Please refer to the section entitled “Reconciliation of
Non-GAAP Financial Measures” in this press release and to the
financial tables entitled “GAAP to Non-GAAP reconciliation” for a
reconciliation to the most directly comparable GAAP financial
measures.
Pending Merger
On July 13, 2021, FNB, the holding company for First National
Bank of Pennsylvania, and the Company announced the execution of a
definitive merger agreement for F.N.B. Corporation to acquire
Howard Bancorp, including its wholly-owned banking subsidiary,
Howard Bank, in an all-stock transaction. The completion of the
merger remains subject to receipt of regulatory approvals, approval
of the Company’s stockholders and satisfaction of other customary
closing conditions.
Due to the pending merger, the Company will not be holding an
earnings call to review its third quarter 2021 financial
results.
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 13 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,” “look forward” 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;
risks related to the Company’s proposed merger with F.N.B.
Corporation, 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 NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
September 30,
2021
2020
2021
2021
2020
Income Statement Data: Interest income
$
63,758
$
64,651
$
21,141
$
21,382
$
20,951
Interest expense
4,101
10,734
1,254
1,300
2,679
Net interest income
59,657
53,917
19,887
20,082
18,272
Provision for credit losses
1,000
8,145
-
-
1,700
Net interest income after provision for credit losses
58,657
45,772
19,887
20,082
16,572
Noninterest income
6,566
10,214
2,144
2,353
2,089
Noninterest expense
37,954
74,896
13,315
12,297
12,709
Income (loss) before income taxes
27,269
(18,910
)
8,716
10,138
5,952
Income tax expense (benefit)
7,251
2,552
2,356
2,682
1,348
Net income (loss)
$
20,018
$
(21,462
)
$
6,360
$
7,456
$
4,604
Per Share Data and Shares Outstanding: Net income
(loss) per common share - basic
$
1.07
$
(1.14
)
$
0.34
$
0.40
$
0.25
Net income (loss) per common share - diluted
$
1.06
$
(1.14
)
$
0.34
$
0.40
$
0.25
Book value per common share, at period end
$
16.38
$
15.45
$
16.38
$
16.14
$
15.45
Tangible book value per common share, at period end (1)
$
14.55
$
13.51
$
14.55
$
14.28
$
13.51
Average common shares outstanding
18,788
18,773
18,807
18,787
18,737
Diluted average common shares outstanding
18,872
18,773
18,896
18,871
18,737
Shares outstanding, at period end
18,812
18,742
18,812
18,795
18,742
Balance Sheet Data: Total assets
$
2,527,258
$
2,559,184
$
2,527,258
$
2,599,541
$
2,559,184
Portfolio loans, net of unearned income (1)
1,823,337
1,688,030
1,823,337
1,799,847
1,688,030
Paycheck Protection Program loans, net of unearned income
79,918
196,375
79,918
142,660
196,375
Total loans and leases, net of unearned income
1,903,255
1,884,405
1,903,255
1,942,507
1,884,405
Allowance for loan losses
18,353
17,657
18,353
18,288
17,657
Other interest-earning assets
411,732
454,897
411,732
442,583
454,897
Total deposits
1,941,418
1,972,738
1,941,418
2,025,557
1,972,738
Total borrowings
254,224
269,861
254,224
247,126
269,861
Common and total stockholders' equity
308,177
289,500
308,177
303,263
289,500
Average total assets
2,571,694
2,474,988
2,587,555
2,587,151
2,524,773
Average common and total stockholders' equity
302,234
307,493
309,058
300,234
288,727
Selected Performance Metrics: Return on average
assets (2)
1.04
%
(1.16
)%
0.98
%
1.16
%
0.73
%
Return on average common equity (2)
8.86
%
(9.32
)%
8.16
%
9.96
%
6.34
%
Pre-provision net revenue ("PPNR") (1)
$
28,269
$
(10,765
)
$
8,716
$
10,138
$
7,652
PPNR to average assets (1)
1.52
%
1.22
%
1.47
%
1.57
%
1.50
%
Net interest margin (2),(3)
3.38
%
3.23
%
3.32
%
3.39
%
3.15
%
Efficiency ratio (4)
57.31
%
116.79
%
60.44
%
54.81
%
62.42
%
Core efficiency ratio (1)
55.98
%
62.07
%
56.44
%
54.81
%
62.42
%
Asset Quality Ratios: Nonperforming loans to
portfolio loans (1)
0.87
%
1.01
%
0.87
%
0.90
%
1.01
%
Nonperforming assets to portfolio loans and OREO (1)
0.89
%
1.07
%
0.89
%
0.94
%
1.07
%
Nonperforming assets to total assets
0.64
%
0.71
%
0.64
%
0.65
%
0.71
%
Allowance for loan losses to total loans
0.96
%
0.94
%
0.96
%
0.94
%
0.94
%
Allowance for loan losses to portfolio loans (1)
1.01
%
1.05
%
1.01
%
1.02
%
1.05
%
Allowance for loan losses to nonperforming loans
115.20
%
103.96
%
115.20
%
112.76
%
103.96
%
Net chargeoffs to average total loans and leases (2)
0.13
%
0.04
%
(0.01
)%
0.02
%
0.02
%
Capital Ratios (Bancorp): Tier 1 capital to average
assets (leverage ratio)
10.03
%
9.07
%
10.03
%
9.74
%
9.07
%
Common equity tier 1 capital to risk-weighted assets
12.63
%
11.65
%
12.63
%
12.26
%
11.65
%
Tier 1 capital to risk-weighted assets
12.63
%
11.65
%
12.63
%
12.26
%
11.65
%
Total capital to risk-weighted assets
14.99
%
14.11
%
14.99
%
14.62
%
14.11
%
Average equity to average assets
11.75
%
12.42
%
11.94
%
11.60
%
11.44
%
(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 NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
September 30,
2021
2020
2021
2021
2020
Interest income
$
63,758
$
64,651
$
21,141
$
21,382
$
20,951
Interest expense
4,101
10,734
1,254
1,300
2,679
Net interest income
59,657
53,917
19,887
20,082
18,272
Provision for credit losses
1,000
8,145
-
-
1,700
Net interest income after provision for credit losses
58,657
45,772
19,887
20,082
16,572
Noninterest income: Service charges on deposit accounts
1,912
1,581
719
654
506
Realized and unrealized gains from mortgage banking
-
1,036
-
-
-
Gain (loss) on sale of securities
-
3,044
-
-
-
Income from bank owned life insurance
1,266
1,327
421
421
441
Loan related fees and service charges
793
1,120
225
271
365
Other income
2,595
2,106
779
1,007
777
Total noninterest income
6,566
10,214
2,144
2,353
2,089
Noninterest expense: Compensation and benefits
20,813
21,836
6,748
7,143
7,136
Occupancy and equipment
3,872
3,576
1,229
1,318
1,301
Marketing and business development
1,071
1,092
433
341
189
Professional fees
2,148
2,183
605
809
823
Data processing fees
2,799
2,673
933
982
897
FDIC assessment
618
780
152
171
358
Other real estate owned
127
461
87
-
115
Loan production expense
554
907
219
181
247
Amortization of core deposit intangible
1,780
2,038
571
594
659
Goodwill impairment charge
-
34,500
-
-
-
Merger-related expense
880
-
880
-
-
Other operating expense
3,292
4,850
1,458
758
984
Total noninterest expense
37,954
74,896
13,315
12,297
12,709
Income (loss) before income taxes
27,269
(18,910
)
8,716
10,138
5,952
Income tax expense
7,251
2,552
2,356
2,682
1,348
Net income (loss)
$
20,018
$
(21,462
)
$
6,360
$
7,456
$
4,604
Net income (loss) per common share: Basic
$
1.07
$
(1.14
)
$
0.34
$
0.40
$
0.25
Diluted
$
1.06
$
(1.14
)
$
0.34
$
0.40
$
0.25
Average common shares outstanding: Basic
18,788
18,773
18,807
18,787
18,737
Diluted
18,872
18,773
18,896
18,871
18,737
Selected Performance Metrics: Return on average
assets
1.04
%
(1.16
)%
0.98
%
1.16
%
0.73
%
Return on average common equity
8.86
%
(9.32
)%
8.16
%
9.96
%
6.34
%
Core Pre-provision net revenue ("PPNR") (1)
$
29,149
$
22,572
$
9,596
$
10,138
$
7,652
Core PPNR to average assets (1)
1.52
%
1.22
%
1.47
%
1.57
%
1.50
%
Net interest margin
3.38
%
3.23
%
3.32
%
3.39
%
3.15
%
Efficiency ratio
57.31
%
116.79
%
60.44
%
54.81
%
62.42
%
Core efficiency ratio (1)
55.98
%
62.07
%
56.44
%
54.81
%
62.42
%
(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
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2021
2021
2020
2020
ASSETS Cash and due from banks
$
12,592
$
12,681
$
10,750
$
9,415
$
11,043
Interest bearing deposits with banks
51,065
59,754
68,822
65,204
59,539
Total cash and cash equivalents
63,657
72,435
79,572
74,619
70,582
Securities available for sale, at fair value
347,448
367,873
377,040
375,397
377,471
Securities held to maturity, at amortized cost
4,000
6,000
6,250
7,250
7,250
Federal Home Loan Bank of Atlanta stock, at cost
9,219
8,956
9,706
10,637
10,637
Portfolio loans, net of unearned income (1)
1,823,337
1,799,847
1,745,862
1,698,322
1,688,030
Paycheck Protection Program loans, net of unearned inc
79,918
142,660
201,588
167,639
196,375
Total loans and leases, net of unearned income
1,903,255
1,942,507
1,947,450
1,865,961
1,884,405
Allowance for loan losses
(18,353
)
(18,288
)
(18,368
)
(19,162
)
(17,657
)
Net loans and leases
1,884,902
1,924,219
1,929,082
1,846,799
1,866,748
Bank premises and equipment, net
39,910
40,290
40,700
41,142
42,147
Goodwill
31,449
31,449
31,449
31,449
31,449
Core deposit intangible
4,015
4,586
5,180
5,795
6,431
Bank owned life insurance
78,863
78,443
78,021
77,597
77,157
Other real estate owned
334
629
629
743
1,155
Deferred tax assets, net
29,201
28,324
32,175
31,254
34,687
Interest receivable and other assets
34,260
36,337
35,746
35,309
33,470
Total assets
$
2,527,258
$
2,599,541
$
2,625,550
$
2,537,991
$
2,559,184
LIABILITIES Noninterest-bearing deposits
$
783,326
$
778,388
$
726,643
$
676,801
$
657,028
Interest-bearing deposits
1,158,092
1,247,169
1,318,283
1,298,613
1,315,710
Total deposits
1,941,418
2,025,557
2,044,926
1,975,414
1,972,738
FHLB advances
212,000
205,000
225,000
200,000
200,000
Fed funds and repos
13,485
13,436
10,353
13,634
41,473
Subordinated debt
28,739
28,690
28,485
28,437
28,388
Total borrowings
254,224
247,126
263,838
242,071
269,861
Accrued expenses and other liabilities
23,439
23,595
24,111
25,874
27,085
Total liabilities
2,219,081
2,296,278
2,332,875
2,243,359
2,269,684
STOCKHOLDERS' EQUITY Common stock - $0.01 par value
188
188
188
187
187
Additional paid in capital
271,512
271,086
270,934
270,591
270,445
Retained earnings
38,185
31,825
24,369
18,167
13,696
Accumulated other comprehensive income (loss)
(1,708
)
164
(2,816
)
5,687
5,172
Total stockholders' equity
308,177
303,263
292,675
294,632
289,500
Total liabilities and stockholders' equity
$
2,527,258
$
2,599,541
$
2,625,550
$
2,537,991
$
2,559,184
Capital Ratios (Bancorp) Tier 1 capital to average
assets (leverage ratio)
10.03
%
9.74
%
9.53
%
9.26
%
9.07
%
Common equity tier 1 capital to risk-weighted assets
12.63
%
12.26
%
12.06
%
11.83
%
11.65
%
Tier 1 capital to risk-weighted assets
12.63
%
12.26
%
12.06
%
11.83
%
11.65
%
Total capital to risk-weighted assets
14.99
%
14.62
%
14.47
%
14.32
%
14.11
%
Asset Quality Measures Nonperforming loans
$
15,931
$
16,219
$
15,723
$
19,430
$
16,984
Other real estate owned (OREO)
334
629
629
743
1,155
Total nonperforming assets
$
16,265
$
16,848
$
16,352
$
20,173
$
18,139
Nonperforming loans to portfolio loans (1)
0.87
%
0.90
%
0.90
%
1.14
%
1.01
%
Nonperforming assets to portfolio loans and OREO (1)
0.89
%
0.94
%
0.94
%
1.19
%
1.07
%
Nonperforming assets to total assets
0.64
%
0.65
%
0.62
%
0.79
%
0.71
%
Allowance for loan losses to total loans
0.96
%
0.94
%
0.94
%
1.03
%
0.94
%
Allowance for loan losses to portfolio loans (1)
1.01
%
1.02
%
1.05
%
1.13
%
1.05
%
Allowance for loan losses to nonperforming loans
115.20
%
112.76
%
116.82
%
98.62
%
103.96
%
Net chargeoffs to average portfolio loans and leases (1), (2)
(0.01
)%
0.02
%
0.43
%
0.05
%
0.02
%
Provision for credit losses to average portfolio loans (1), (2)
-
%
-
%
0.24
%
0.40
%
0.40
%
(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 September
30, 2021
Three Months Ended June 30,
2021
Three Months Ended September
30, 2020
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
$
349,679
$
3,182
3.61
%
$
358,980
$
3,271
3.65
%
$
343,991
$
3,247
3.76
%
Commercial real estate
769,850
8,621
4.44
755,815
8,528
4.53
702,633
8,502
4.81
Construction and land
122,024
1,137
3.70
118,704
1,116
3.77
125,059
1,188
3.78
Residential real estate
476,215
4,049
3.37
446,784
4,249
3.81
463,874
4,382
3.76
Consumer
87,501
806
3.65
80,418
748
3.73
49,722
565
4.52
Total portfolio loans
1,805,269
17,795
3.91
1,760,701
17,912
4.08
1,685,279
17,884
4.22
Paycheck Protection Program loans
115,743
1,737
5.95
177,546
1,776
4.01
195,588
1,240
2.52
Total loans and leases
1,921,012
19,532
4.03
1,938,247
19,688
4.07
1,880,867
19,124
4.04
Securities available for sale: U.S Gov agencies
42,111
252
2.37
45,256
274
2.43
79,391
531
2.66
Mortgage-backed
310,900
1,038
1.32
320,960
1,088
1.36
272,495
942
1.38
Corporate debentures
9,264
140
6.00
9,294
139
6.00
5,932
100
6.71
Total available for sale securities
362,275
1,430
1.57
375,510
1,501
1.60
357,818
1,573
1.75
Securities held to maturity
4,696
69
5.83
6,206
88
5.69
7,250
106
5.82
FHLB Atlanta stock, at cost
8,774
83
3.75
9,008
99
4.39
13,221
140
4.21
Interest bearing deposits in banks
79,756
27
0.13
45,741
6
0.06
46,049
8
0.07
Loans held for sale
-
-
-
-
-
-
-
-
-
Total earning assets
2,376,513
21,141
3.53
%
2,374,712
21,382
3.61
%
2,305,205
20,951
3.62
%
Cash and due from banks
12,000
10,781
11,772
Bank premises and equipment, net
40,176
40,593
42,376
Goodwill
31,449
31,449
31,449
Core deposit intangible
4,369
4,956
6,840
Other assets
141,346
143,052
143,566
Less: allowance for loan losses
(18,298
)
(18,392
)
(16,435
)
Total assets
$
2,587,555
$
2,587,151
$
2,524,773
Interest-bearing liabilities Deposits: Interest-bearing
demand accounts
$
211,387
$
17
0.03
%
$
227,272
$
19
0.03
%
$
190,272
$
36
0.08
%
Money market
441,738
72
0.06
428,169
66
0.06
386,189
261
0.27
Savings
181,231
14
0.03
180,992
15
0.03
149,973
27
0.07
Time deposits
385,336
260
0.27
409,404
310
0.30
493,827
1,390
1.12
Total interest-bearing deposits
1,219,692
363
0.12
1,245,837
410
0.13
1,220,261
1,714
0.56
Borrowings: FHLB advances
200,130
444
0.88
206,231
443
0.86
260,807
483
0.74
Fed funds and repos
13,304
1
0.03
10,751
1
0.04
40,492
35
0.34
Subordinated debt
28,709
446
6.16
28,608
446
6.25
28,356
447
6.27
Total borrowings
242,143
891
1.46
245,590
890
1.45
329,655
965
1.16
Total interest-bearing funds
1,461,835
1,254
0.34
%
1,491,427
1,300
0.35
%
1,549,916
2,679
0.69
%
Noninterest-bearing deposits
795,364
773,825
649,525
Other liabilities
21,298
21,665
36,605
Total liabilities
2,278,497
2,286,917
2,236,046
Stockholders' equity
309,058
300,234
288,727
Total liabilities & equity
$
2,587,555
$
2,587,151
$
2,524,773
Net interest rate spread (1)
$
19,887
3.19
%
$
20,082
3.26
%
$
18,272
2.93
%
Effect of noninterest-bearing funds
0.13
0.13
0.22
Net interest margin on earning assets (2)
3.32
%
3.39
%
3.15
%
(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)
Nine Months Ended September 30, 2021 Nine
Months Ended September 30, 2020
Average
Balance
Income /
Expense
Yield /
Rate
Average
Balance
Income /
Expense
Yield / Rate
Earning assets Loans and leases: Commercial loans and leases
$
351,184
$
9,538
3.63
%
$
365,596
$
11,281
4.12
%
Commercial real estate
754,105
25,704
4.56
696,083
25,091
4.81
Construction and land
119,344
3,363
3.77
129,798
3,938
4.05
Residential real estate
455,529
12,370
3.63
487,586
14,575
3.99
Consumer
77,767
2,211
3.80
47,011
1,621
4.61
Total portfolio loans
1,757,929
53,186
4.05
1,726,074
56,506
4.37
Paycheck Protection Program loans
159,746
5,716
4.78
113,070
2,136
2.52
Total loans and leases
1,917,675
58,902
4.11
1,839,144
58,642
4.26
Securities available for sale: U.S Gov agencies
45,184
814
2.41
76,822
1,555
2.70
Mortgage-backed
316,945
3,055
1.29
204,686
2,865
1.87
Corporate debentures
9,237
420
6.08
5,655
284
6.71
Total available for sale securities
371,366
4,289
1.54
287,163
4,704
2.19
Securities held to maturity
5,723
246
5.75
7,580
331
5.83
FHLB Atlanta stock, at cost
9,483
282
3.98
13,979
533
5.09
Interest bearning deposits in banks
54,750
39
0.10
72,267
262
0.48
Loans held for sale
-
-
-
6,572
179
3.64
Total earning assets
2,358,997
63,758
3.61
%
2,226,705
64,651
3.88
%
Cash and due from banks
11,128
13,806
Bank premises and equipment, net
40,584
42,498
Goodwill
31,449
54,240
Core deposit intangible
4,958
7,525
Other assets
143,171
143,749
Less: allowance for loan losses
(18,593
)
(13,535
)
Total assets
$
2,571,694
$
2,474,988
Interest-bearing liabilities Deposits: Interest-bearing
demand accounts
$
218,880
$
57
0.03
%
$
186,799
$
250
0.18
%
Money market
437,608
222
0.07
373,588
1,308
0.47
Savings
177,946
41
0.03
141,516
97
0.09
Time deposits
410,900
1,113
0.36
524,955
5,652
1.44
Total interest-bearing deposits
1,245,334
1,433
0.15
1,226,858
7,307
0.80
Borrowings: FHLB advances
204,658
1,328
0.87
279,140
2,015
0.96
Fed funds and other borrowings
12,347
3
0.03
21,372
52
0.33
Subordinated debt
28,591
1,337
6.25
28,307
1,360
6.42
Total borrowings
245,596
2,668
1.45
328,819
3,427
1.39
Total interest-bearing funds
1,490,930
4,101
0.37
%
1,555,677
10,734
0.92
%
Noninterest-bearing deposits
756,423
582,348
Other liabilities
22,107
29,470
Total liabilities
2,269,460
2,167,495
Stockholders' equity
302,234
307,493
Total liabilities & equity
$
2,571,694
$
2,474,988
Net interest rate spread (1)
$
59,657
3.24
%
$
53,917
2.96
%
Effect of noninterest-bearing funds
0.14
0.27
Net interest margin on earning assets (2)
3.38
%
3.23
%
(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 believes 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.
The Company has excluded the after tax impact of its former
mortgage banking activities, the goodwill impairment charge, and
certain other items, as well as the income tax benefit of the
change in net operating loss carryback rules as a result of the
CARES Act. The reconciliation is presented on the following
pages.
HOWARD BANCORP, INC. AND SUBSIDIARY GAAP TO NON-GAAP
RECONCILIATION - CORE NET INCOME AND EPS (in thousands except
per share data)
FOR THE NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Net income (loss) (GAAP)
$
20,018
$
(21,462
)
$
6,360
$
7,456
$
6,202
$
4,471
$
4,604
Adjustments: Mortgage banking activities: Net interest income
-
(143
)
-
-
-
-
-
Noninterest income
-
(1,425
)
-
-
-
-
-
Noninterest expenses
-
1,438
-
-
-
-
-
Total pretax - mortgage banking activities
-
(130
)
-
-
-
-
-
Certain other items:
Securities gains
-
(3,044
)
-
-
-
-
-
Prepayment penalty - FHLB advances
-
224
-
-
-
-
-
Branch optimization charge
-
-
-
-
-
554
-
Litigation expense
-
1,000
-
-
-
980
-
CFO departure
-
788
-
-
-
-
-
Merger-related expenses
880
-
880
-
-
-
-
Goodwill impairment charge
-
34,500
-
-
-
-
-
Total pretax - certain other items
880
33,468
880
-
-
1,534
-
Total core pretax income adjustments
880
33,338
880
-
-
1,534
-
Income tax expense (benefit) of adjustments
170
(276
)
170
-
-
414
-
Total core pretax income adjustments, net of tax
710
33,614
710
-
-
1,120
-
Less: One-time benefit of NOL carryback (CARES Act)
-
(1,177
)
-
-
-
(94
)
-
Total core adjustments to net income
710
32,437
710
-
-
1,026
-
Core net income (Non-GAAP)
$
20,728
$
10,975
$
7,070
$
7,456
$
6,202
$
5,497
$
4,604
Diluted average common shares
18,872
18,773
18,896
18,871
18,797
18,748
18,737
Diluted EPS (GAAP)
$
1.06
$
(1.14
)
$
0.34
$
0.40
$
0.33
$
0.24
$
0.25
Total core adjustments to net income
$
0.04
1.73
0.04
-
-
0.05
-
Core diluted EPS (Non-GAAP)
$
1.10
$
0.58
$
0.37
$
0.40
$
0.33
$
0.29
$
0.25
GAAP TO NON-GAAP RECONCILIATION - PRE-PROVISION NET
REVENUE ("PPNR") (in thousands)
FOR THE NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Net income (loss) (GAAP)
$
20,018
$
(21,462
)
$
6,360
$
7,456
$
6,202
$
4,471
$
4,604
Plus: provision for credit losses
1,000
8,145
-
-
1,000
1,700
1,700
Plus: income tax expense
7,251
2,551
2,356
2,682
2,213
1,093
1,348
Pre-provision net revenue (Non-GAAP)
$
28,269
$
(10,766
)
$
8,716
$
10,138
$
9,415
$
7,264
$
7,652
Adjustments to net revenue: Mortgage banking activities
-
(130
)
-
-
-
-
-
Securities gains
-
(3,044
)
-
-
-
-
-
Prepayment penalty - FHLB advances
-
224
-
-
-
-
-
Branch optimization charge
-
-
-
-
-
554
-
Litigation accrual
-
1,000
-
-
-
980
-
CFO departure
-
788
-
-
-
-
-
Merger-related expense
880
-
880
-
-
-
-
Goodwill impairment charge
-
34,500
-
-
-
-
-
Total core pretax net revenue adjustments
880
33,338
880
-
-
1,534
-
Core pre-provision net revenue (PPNR)
$
29,149
$
22,572
$
9,596
$
10,138
$
9,415
$
8,798
$
7,652
GAAP TO NON-GAAP RECONCILIATION - PPNR / AVERAGE TANGIBLE
COMMON EQUITY (in thousands)
FOR THE NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Core PPNR (Non-GAAP)
$
29,149
$
22,572
$
9,596
$
10,138
$
9,415
$
8,798
$
7,652
Average common equity (GAAP)
$
302,234
$
307,493
$
309,058
$
300,234
$
297,280
$
294,285
$
288,727
Less average goodwill
(31,449
)
(54,239
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
Less average core deposit intangible, net
(3,794
)
(5,639
)
(3,357
)
(3,795
)
(4,246
)
(4,716
)
(5,076
)
Average tangible common equity (Non-GAAP)
$
266,991
$
247,615
$
274,252
$
264,991
$
261,585
$
258,120
$
252,202
Core PPNR / average tangible common equity (Non-GAAP)
14.60
%
12.18
%
13.88
%
15.35
%
14.60
%
13.56
%
12.07
%
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 NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Core PPNR (Non-GAAP)
$
29,149
$
22,572
$
9,596
$
10,138
$
9,415
$
8,798
$
7,652
Average total assets (GAAP)
2,571,694
2,474,988
2,587,555
2,587,151
2,539,849
2,527,869
2,524,773
Core PPNR / average total assets (Non-GAAP)
1.52
%
1.22
%
1.47
%
1.57
%
1.50
%
1.38
%
1.21
%
Annualized ratio based on days in quarter divided by days in
year
GAAP TO NON-GAAP RECONCILIATION - EFFICIENCY
RATIO (in thousands)
FOR THE NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Net interest income (GAAP)
$
59,657
$
53,917
$
19,887
$
20,082
$
19,688
$
19,686
$
18,272
Adjustments: Mortgage banking activities
-
(143
)
-
-
-
-
-
Total core net interest income adjustments
-
(143
)
-
-
-
-
-
Core net interest income (Non-GAAP)
$
59,657
$
53,774
$
19,887
$
20,082
$
19,688
$
19,686
$
18,272
Noninterest income (GAAP)
$
6,566
$
10,214
$
2,144
$
2,353
$
2,069
$
2,145
$
2,089
Adjustments: Mortgage banking activities
-
(1,425
)
-
-
-
-
-
Securities gains
-
(3,044
)
-
-
-
-
-
Total core noninterest income adjustments
-
(4,469
)
-
-
-
-
-
Core noninterest income (Non-GAAP)
$
6,566
$
5,745
$
2,144
$
2,353
$
2,069
$
2,145
$
2,089
Total net interest income and noninterest income
(GAAP)
$
66,223
$
64,131
$
22,031
$
22,435
$
21,757
$
21,831
$
20,361
Adjustments: Total core net interest income adjustments
-
(143
)
-
-
-
-
-
Total core noninterest income adjustments
-
(4,469
)
-
-
-
-
-
Total core net interest income and noninterest income adjustments
-
(4,612
)
-
-
-
-
-
Core net interest income + noninterest income (Non-GAAP)
$
66,223
$
59,519
$
22,031
$
22,435
$
21,757
$
21,831
$
20,361
Noninterest expense (GAAP)
$
37,954
$
74,896
$
13,315
$
12,297
$
12,342
$
14,567
$
12,709
Adjustments: Mortgage banking activities
-
(1,438
)
-
-
-
-
-
Prepayment penalty - FHLB advances
-
(224
)
-
-
-
-
-
Branch optimization charge
-
-
-
-
-
(554
)
-
Litigation accrual
-
(1,000
)
-
-
-
(980
)
-
CFO departure
-
(788
)
-
-
-
-
-
Merger-related expense
(880
)
-
(880
)
-
-
-
-
Goodwill impairment charge
-
(34,500
)
-
-
-
-
-
Total core noninterest expense adjustments
(880
)
(37,950
)
(880
)
-
-
(1,534
)
-
Core noninterest expense (Non-GAAP)
$
37,074
$
36,946
$
12,435
$
12,297
$
12,342
$
13,033
$
12,709
Efficiency ratio (GAAP)
57.31
%
116.79
%
60.44
%
54.81
%
56.73
%
66.73
%
62.42
%
Core efficiency ratio (Non-GAAP)
55.98
%
62.07
%
56.44
%
54.81
%
56.73
%
59.70
%
62.42
%
GAAP TO NON-GAAP RECONCILIATION - TANGIBLE BOOK VALUE PER
COMMON SHARE (in thousands except per share data)
FOR THE NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Common and total stockholder's equity (GAAP)
$
308,177
$
289,500
$
308,177
$
303,263
$
292,675
$
294,632
$
289,500
Total shares outstanding at period end
18,812
18,742
18,812
18,795
18,782
18,745
18,742
Book value per common share at period end (GAAP)
$
16.38
$
15.45
$
16.38
$
16.14
$
15.58
$
15.72
$
15.45
Common and total stockholder's equity (GAAP)
$
308,177
$
289,500
$
308,177
$
303,263
$
292,675
$
294,632
$
289,500
Less goodwill
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
Less deposit intangible, net of deferred tax liability
(3,076
)
(4,869
)
(3,076
)
(3,501
)
(3,942
)
(4,398
)
(4,869
)
Tangible common equity (Non-GAAP)
$
273,652
$
253,182
$
273,652
$
268,313
$
257,284
$
258,785
$
253,182
Total shares outstanding at period end
18,812
18,742
18,812
18,795
18,782
18,745
18,742
Tangible book value per common share (Non GAAP)
$
14.55
$
13.51
$
14.55
$
14.28
$
13.70
$
13.81
$
13.51
HOWARD BANCORP, INC. AND SUBSIDIARY GAAP TO
NON-GAAP RECONCILIATION - TANGIBLE COMMON EQUITY / TANGIBLE
ASSETS (in thousands except per share data)
FOR THE NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Common (and total) stockholder's equity (GAAP)
$
308,177
$
289,500
$
308,177
$
303,263
$
292,675
$
294,632
$
289,500
Less goodwill
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
Less deposit intangible, net of deferred tax liability
(3,076
)
(4,869
)
(3,076
)
(3,501
)
(3,942
)
(4,398
)
(4,869
)
Tangible common equity (Non-GAAP)
$
273,652
$
253,182
$
273,652
$
268,313
$
257,284
$
258,785
$
253,182
Total assets (GAAP)
$
2,527,258
$
2,559,184
$
2,527,258
$
2,599,541
$
2,625,550
$
2,537,991
$
2,559,184
Less goodwill
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
Less deposit intangible, net of deferred tax liability
(3,076
)
(4,869
)
(3,076
)
(3,501
)
(3,942
)
(4,398
)
(4,869
)
Tangible assets (Non-GAAP)
$
2,492,733
$
2,522,866
$
2,492,733
$
2,564,591
$
2,590,159
$
2,502,144
$
2,522,866
Tangible common equity / tangible assets (period end)
10.98
%
10.04
%
10.98
%
10.46
%
9.93
%
10.34
%
10.04
%
GAAP TO NON-GAAP RECONCILIATION - RETURN ON AVERAGE
COMMON EQUITY (in thousands)
FOR THE NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Net income (loss) (GAAP)
$
20,018
$
(21,462
)
$
6,360
$
7,456
$
6,202
$
4,471
$
4,604
Average common (and total) equity (GAAP)
302,234
307,493
309,058
300,234
297,280
294,285
288,727
Return on average common equity (GAAP)
8.86
%
-9.32
%
8.16
%
9.96
%
8.46
%
6.04
%
6.34
%
Net income (loss) (GAAP)
$
20,018
$
(21,462
)
$
6,360
$
7,456
$
6,202
$
4,471
$
4,604
Total core adjustments to net income (loss)
710
32,437
710
-
-
1,026
-
Core net income (Non-GAAP)
$
20,728
$
10,975
$
7,070
$
7,456
$
6,202
$
5,497
$
4,604
Average common equity
302,234
307,493
309,058
300,234
297,280
294,285
288,727
Core return on average common equity (Non-GAAP)
9.17
%
4.77
%
9.08
%
9.96
%
8.46
%
7.43
%
6.34
%
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 NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Net income (loss) (GAAP)
$
20,018
$
(21,462
)
$
6,360
$
7,456
$
6,202
$
4,471
$
4,604
Goodwill impairment charge
-
34,500
-
-
-
-
-
CDI amortization
1,780
2,038
571
594
615
636
659
Income tax expense on pretax total
(315
)
(551
)
(154
)
(160
)
(166
)
(171
)
(178
)
CDI amortization, net of tax
1,465
1,487
417
434
449
465
481
Total adjustments to net income
1,465
35,987
417
434
449
465
481
Tangible net income (Non-GAAP)
$
21,483
$
14,525
$
6,777
$
7,890
$
6,651
$
4,936
$
5,085
Average common equity (GAAP)
$
302,234
$
307,493
$
309,058
$
300,234
$
297,280
$
294,285
$
288,727
Less average goodwill
(31,449
)
(54,239
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
Less average core deposit intangible, net
(3,794
)
(5,639
)
(3,357
)
(3,795
)
(4,247
)
(4,716
)
(5,076
)
Average tangible common equity (Non-GAAP)
$
266,991
$
247,615
$
274,252
$
264,991
$
261,584
$
258,120
$
252,202
Tangible return on average tangible common equity
(Non-GAAP)
10.76
%
7.84
%
9.80
%
11.94
%
10.31
%
7.61
%
8.02
%
Tangible net income (Non-GAAP)
$
21,483
$
14,525
$
6,777
$
7,890
$
6,651
$
4,936
$
5,085
Total core adjustments to net income (loss) (ex goodwill
impairment)
710
(2,062
)
710
-
-
1,026
-
Core tangible net income (Non-GAAP)
$
22,193
$
12,463
$
7,487
$
7,890
$
6,651
$
5,962
$
5,085
Average tangible common equity (Non-GAAP)
$
266,991
$
247,615
$
274,252
$
264,991
$
261,584
$
258,120
$
252,202
Core tangible return on average tangible common equity
(Non-GAAP)
11.11
%
6.72
%
10.83
%
11.94
%
10.31
%
9.19
%
8.02
%
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 NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Net income (loss) (GAAP)
$
20,018
$
(21,462
)
$
6,360
$
7,456
$
6,202
$
4,471
$
4,604
Average total assets (GAAP)
2,571,694
2,474,988
2,587,555
2,587,151
2,539,849
2,527,869
2,524,773
Return on average assets (GAAP)
1.04
%
-1.16
%
0.98
%
1.16
%
0.99
%
0.70
%
0.73
%
Net income (loss) (GAAP)
20,018
(21,462
)
6,360
7,456
6,202
4,471
4,604
Total core adjustments to net income (loss)
710
32,437
710
-
-
1,026
-
Core net income (Non-GAAP)
$
20,728
$
10,975
$
7,070
$
7,456
$
6,202
$
5,497
$
4,604
Average total assets (GAAP)
2,571,694
2,474,988
2,587,555
2,587,151
2,539,849
2,527,869
2,524,773
Core return on average assets (Non-GAAP)
1.08
%
0.59
%
1.08
%
1.16
%
0.99
%
0.87
%
0.73
%
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 NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Net income (loss) (GAAP)
$
20,018
$
(21,462
)
$
6,360
$
7,456
$
6,202
$
4,471
$
4,604
Goodwill impairment charge
-
34,500
-
-
-
-
-
CDI amortization
1,780
2,038
571
594
615
636
659
Income tax expense on pretax total
(315
)
(551
)
(154
)
(160
)
(166
)
(171
)
(178
)
CDI amortization, net of tax
1,465
1,487
417
434
449
465
481
Total adjustments to net income
1,465
35,987
417
434
449
465
481
Tangible net income (Non-GAAP)
$
21,483
$
14,525
$
6,777
$
7,890
$
6,651
$
4,936
$
5,085
Average total assets (GAAP)
2,571,694
2,474,988
2,587,555
2,587,151
2,539,849
2,527,869
2,524,773
Less average goodwill
(31,449
)
(54,239
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
(31,449
)
Less average core deposit intangible, net
(3,794
)
(5,639
)
(3,357
)
(3,795
)
(4,247
)
(4,716
)
(5,076
)
Average tangible assets (Non-GAAP)
$
2,536,451
$
2,415,110
$
2,552,749
$
2,551,908
$
2,504,153
$
2,491,704
$
2,488,248
Tangible return on average tangible assets (Non-GAAP)
1.13
%
0.80
%
1.05
%
1.24
%
1.08
%
0.79
%
0.81
%
Tangible net income (Non-GAAP)
$
21,483
$
14,525
$
6,777
$
7,890
$
6,651
$
4,936
$
5,085
Total core adjustments to net income (loss) (ex goodwill
impairment)
710
(2,062
)
710
-
-
1,026
-
Core tangible net income (Non-GAAP)
$
22,193
$
12,463
$
7,487
$
7,890
$
6,651
$
5,962
$
5,085
Average tangible assets (Non-GAAP)
$
2,536,451
$
2,415,110
$
2,552,749
$
2,551,908
$
2,504,153
$
2,491,704
$
2,488,248
Core tangible return on average tangible assets
(Non-GAAP)
1.17
%
0.69
%
1.16
%
1.24
%
1.08
%
0.95
%
0.81
%
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 NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Allowance for loan losses (GAAP)
$
18,353
$
17,657
$
18,353
$
18,288
$
18,368
$
19,162
$
17,657
Total loans and leases (GAAP)
1,903,255
1,884,405
1,903,255
1,942,507
1,947,450
1,865,961
1,884,405
Allowance as a % of total loans and leases (GAAP)
0.96
%
0.94
%
0.96
%
0.94
%
0.94
%
1.03
%
0.94
%
Allowance for loan losses (GAAP)
$
18,353
$
17,657
$
18,353
$
18,288
$
18,368
$
19,162
$
17,657
Total loans and leases (GAAP)
1,903,255
1,884,405
1,903,255
1,942,507
1,947,450
1,865,961
1,884,405
Less PPP loans outstanding
(79,918
)
(196,375
)
(79,918
)
(142,660
)
(201,588
)
(167,639
)
(196,375
)
Portfolio loans (Non-GAAP)
1,823,337
1,688,030
1,823,337
1,799,847
1,745,862
1,698,322
1,688,030
Allowance as a % of portfolio loans (Non-GAAP)
1.01
%
1.05
%
1.01
%
1.02
%
1.05
%
1.13
%
1.05
%
HOWARD BANCORP, INC. AND SUBSIDIARY GAAP TO NON-GAAP
RECONCILIATION - NONPERFORMING LOANS AS A % OF PORTFOLIO LOANS
(in thousands)
FOR THE NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Nonperforming loans
$
15,931
$
16,984
$
15,931
$
16,219
$
15,723
$
19,430
$
16,984
Total loans and leases (GAAP)
1,903,255
1,884,405
1,903,255
1,942,507
1,947,450
1,865,961
1,884,405
Nonperforming loans as a % of total loans and leases
(GAAP)
0.84
%
0.90
%
0.84
%
0.83
%
0.81
%
1.04
%
0.90
%
Nonperforming loans
$
15,931
$
16,984
$
15,931
$
16,219
$
15,723
$
19,430
$
16,984
Total loans and leases (GAAP)
1,903,255
1,884,405
1,903,255
1,942,507
1,947,450
1,865,961
1,884,405
Less PPP loans outstanding
(79,918
)
(196,375
)
(79,918
)
(142,660
)
(201,588
)
(167,639
)
(196,375
)
Portfolio loans (Non-GAAP)
1,823,337
1,688,030
1,823,337
1,799,847
1,745,862
1,698,322
1,688,030
Nonperforming loans as a % of portfolio loans
(Non-GAAP)
0.87
%
1.01
%
0.87
%
0.90
%
0.90
%
1.14
%
1.01
%
GAAP TO NON-GAAP RECONCILIATION - NONPERFORMING ASSETS AS
A % OF PORTFOLIO LOANS + OREO (in thousands)
FOR THE NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Nonperforming assets
$
16,265
$
18,139
$
16,265
$
16,848
$
16,352
$
20,173
$
18,139
Total loans and leases (GAAP)
1,903,255
1,884,405
1,903,255
1,942,507
1,947,450
1,865,961
1,884,405
OREO
334
1,155
334
629
629
743
1,155
Total loans and leases + OREO
1,903,589
1,885,560
1,903,589
1,943,136
1,948,079
1,866,704
1,885,560
Nonperforming assets as a % of total loans and leases +
OREO (GAAP)
0.85
%
0.96
%
0.85
%
0.87
%
0.84
%
1.08
%
0.96
%
Nonperforming assets
$
16,265
$
18,139
$
16,265
$
16,848
$
16,352
$
20,173
$
18,139
Total loans and leases (GAAP)
1,903,255
1,884,405
1,903,255
1,942,507
1,947,450
1,865,961
1,884,405
OREO
334
1,155
334
629
629
743
1,155
Total loans and leases + OREO
1,903,589
1,885,560
1,903,589
1,943,136
1,948,079
1,866,704
1,885,560
Less PPP loans outstanding
(79,918
)
(196,375
)
(79,918
)
(142,660
)
(201,588
)
(167,639
)
(196,375
)
Portfolio loans + OREO
$
1,823,671
$
1,689,185
$
1,823,671
$
1,800,476
$
1,746,491
$
1,699,065
$
1,689,185
Nonperforming assets as a % of portfolio loans + OREO
(Non-GAAP)
0.89
%
1.07
%
0.89
%
0.94
%
0.94
%
1.19
%
1.07
%
GAAP TO NON-GAAP RECONCILIATION - ALLOWANCE FOR LOAN
LOSSES + FV MARKS AS A % OF PORTFOLIO LOANS + FV MARKS (in
thousands)
FOR THE NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Allowance for loan losses (GAAP)
$
18,353
$
17,657
$
18,353
$
18,288
$
18,368
$
19,162
$
17,657
Add: Fair value marks
4,230
7,365
4,230
4,634
5,302
6,454
7,365
Allowance + fair value marks (Non-GAAP)
$
22,583
$
25,022
$
22,583
$
22,922
$
23,670
$
25,616
$
25,022
Total loans and leases (GAAP)
$
1,903,255
$
1,884,405
$
1,903,255
$
1,942,507
$
1,947,450
$
1,865,961
$
1,884,405
Add: fair value marks
4,230
7,365
4,230
4,634
5,302
6,454
7,365
Total loans and leases + fair value marks (Non-GAAP)
$
1,907,485
$
1,891,770
$
1,907,485
$
1,947,141
$
1,952,752
$
1,872,415
$
1,891,770
Allowance + fair value marks as a % of total loans and
leases + fair value marks (Non-GAAP)
1.18
%
1.32
%
1.18
%
1.18
%
1.21
%
1.37
%
1.32
%
Allowance for loan losses (GAAP)
$
18,353
$
17,657
$
18,353
$
18,288
$
18,368
$
19,162
$
17,657
Add: Fair value marks
4,230
7,365
4,230
4,634
5,302
6,454
7,365
Allowance + fair value marks (Non-GAAP)
$
22,583
$
25,022
$
22,583
$
22,922
$
23,670
$
25,616
$
25,022
Total loans and leases (GAAP)
$
1,903,255
$
1,884,405
$
1,903,255
$
1,942,507
$
1,947,450
$
1,865,961
$
1,884,405
Less PPP loans outstanding
(79,918
)
(196,375
)
(79,918
)
(142,660
)
(201,588
)
(167,639
)
(196,375
)
Portfolio loans (Non-GAAP)
$
1,823,337
$
1,688,030
$
1,823,337
$
1,799,847
$
1,745,862
$
1,698,322
$
1,688,030
Add: fair value marks
4,230
7,365
4,230
4,634
5,302
6,454
7,365
Portfolio loans + fair value marks (Non-GAAP)
$
1,827,567
$
1,695,395
$
1,827,567
$
1,804,481
$
1,751,164
$
1,704,776
$
1,695,395
Allowance + fair value marks as a % of portfolio loans
and leases + fair value marks (Non-GAAP)
1.24
%
1.48
%
1.24
%
1.27
%
1.35
%
1.50
%
1.48
%
HOWARD BANCORP, INC. AND SUBSIDIARY GAAP TO
NON-GAAP RECONCILIATION - NET INTEREST MARGIN (in thousands)
FOR THE NINE MONTHS
ENDED
FOR THE THREE MONTHS
ENDED
September 30,
September 30,
September 30,
June 30,
March 31,
December 31,
September 30,
2021
2020
2021
2021
2021
2020
2020
Net interest income (GAAP)
$
59,657
$
53,917
$
19,887
$
20,082
$
19,688
$
19,686
$
18,272
Average earning assets (GAAP)
2,358,997
2,226,705
2,376,513
2,374,712
2,325,198
2,309,928
2,305,205
Net interest margin (GAAP)
3.38
%
3.23
%
3.32
%
3.39
%
3.43
%
3.39
%
3.15
%
Net interest income (GAAP)
59,657
53,917
$
19,887
$
20,082
$
19,688
$
19,686
$
18,272
Less net accretion of net fair value discounts on acquired loans
(1,743
)
(1,216
)
(402
)
(616
)
(725
)
(888
)
(548
)
Less PPP net interest income (implied cost of funds at 0.35%)
(5,298
)
(1,840
)
(1,635
)
(1,621
)
(2,042
)
(1,633
)
(1,038
)
Operating net interest income (Non-GAAP)
$
52,616
$
50,861
$
17,850
$
17,845
$
16,921
$
17,165
$
16,686
Average earning assets (GAAP)
2,358,997
2,226,705
2,376,513
2,374,712
2,325,198
2,309,928
2,305,205
Add net fair value discounts on acquired loans
5,110
8,380
4,471
4,918
5,956
6,921
7,696
Less PPP loans
(159,746
)
(113,070
)
(115,743
)
(177,546
)
(186,728
)
(186,267
)
(195,588
)
Operating average earning assets (Non-GAAP)
$
2,204,361
$
2,122,015
$
2,265,241
$
2,202,084
$
2,144,426
$
2,130,582
$
2,117,313
Operating net interest margin (Non-GAAP)
3.19
%
3.20
%
3.13
%
3.25
%
3.20
%
3.21
%
3.14
%
Annualized ratio based on days in quarter divided by days in
year
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211020005118/en/
Howard Bancorp, Inc. Robert L. Carpenter, Jr., Executive Vice
President and Chief Financial Officer 410-750-0020
bcarpenter@HowardBank.com
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