What You Really Missed about: Howard Bancorp, Inc. (NASDAQ: HBMD)

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On 03 Feb 2020, Howard Bancorp, Inc. (NASDAQ: HBMD) spotted trading -11.30% off 52-week high price. On the other end, the stock has been noted 35.16% away from the low price over the last 52-weeks. The stock changed 0.83% to recent value of $17.03. The stock transacted 21512 shares during most recent day however it has an average volume of 29.18K shares. The company has 19.9M of outstanding shares and 13.56M shares were floated in the market.

Howard Bancorp, Inc (HBMD) recently stated its financial results for the quarter ended December 31, 2019. A summary of results and other developments during the fourth quarter of 2019 is as follows:

Net income was $5.9M for the fourth quarter of 2019, contrast to $4.6M for third quarter of 2019, and $145 thousand for the fourth quarter of 2018. This represented earnings of $0.31 per basic and diluted ordinary share for the fourth quarter of 2019, contrast to $0.24 per share for the third quarter of 2019 and $0.01 per share for the fourth quarter of 2018. Pretax income for the fourth quarter of 2019 included $750 thousand of additional noninterest revenues resulting from an contract entered into late in the fourth quarter to transfer our mortgage division employees to another company and thus to discontinue our mortgage activities. There was also a reduction in occupancy expense Because of the elimination of a $339 thousand lease liability that was assigned to another institution on one branch location that we closed earlier in 2019. Pretax income for the third quarter of 2019 was reduced Because of a $700 thousand charge related to the settlement of a legal suit stemming from mortgages originated at First Mariner Bank previous to its recapitalization in 2014. The aforementioned $1.1M increase to fourth quarter pretax income and the $700 thousand decrease in pretax income for the third quarter 2019, net of tax, influenced basic and diluted earnings per share (“EPS”) by $0.04 and ($0.03) respectively, leading to operating EPS of $0.27 in both the third and fourth quarter of 2019. The following table summarizes our key performance metrics for the periods presented:

As noted above, late in the fourth quarter of 2019, we entered into an contract whereby we would release certain mortgage division management members from their employment contracts and allow those individuals to create a Limited Liability Company (“LLC”) for the purpose moving Howard Bank’s mortgage employees elsewhere. In addition, the contract transfers ownership of the domain name “VAmortgage.com” to the newly created LLC. In consideration of the release of the employment contracts, the assumption of the employees, and the transfer of VAmortgage.com domain name, the newly formed LLC paid the bank $750,000. Both parties agree that there would be a transition period of about 45 days, and that after the transition, Howard Bank would discontinue its mortgage banking operations. Howard Bank expects to have the majority of the residential first lien mortgage pipeline finalized by the end of the first quarter of 2020.

Total assets at December 31, 2019 were $2.4B, and increased by $81.1M or 4% from total assets at September 30, 2019 from a raise in cash and cash equivalents of $35M, a raise in the securities portfolio of $50M. The net portfolio loan growth of $16M or 1% during the fourth quarter of 2019, was offset by the decline of $16M in Loans Held For Sale. A large commercial loan payoff late in the fourth quarter combined with two new predictable commercial loan closings that shifted into January of 2020, influenced both average and period end linked quarter growth. Average C&I loan balances were 2.7% higher in the fourth quarter than in the third quarter while overall average commercial balances were 6% higher. The decline in Loans Held For Sale was Because of the typical seasonal declines in mortgage originations during the fourth quarter each year. For the year ended December 31, 2019, total assets increased by $18.1M or 5% from $2.27B at December 31, 2018 to $2.37B at the end of 2019. Total portfolio loans increased from 1.65B at December 31, 2018 to $1.75B to end 2019, representing growth of $95.8M or 6%, with C&I loans increasing by $36M or 11% for the year. Because of the timing of the loan growth during both 2018 and 2019, the average balances of our portfolio loans increased by 11.3% for 2019 contrast to 2018, with average commercial real estate loans increasing by over 9%, and average C&I loans increasing by nearly 12%.

The price moved ahead of -1.35% from the mean of 20 days, -0.03% from mean of 50 days SMA and performed 9.11% from mean of 200 days price. Company’s performance for the week was -3.95%, 0.47% for month and YTD performance remained 0.89%.


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