Howard Bank reports net income increase for first half of 2016

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Howard Bank saw an increase in net income this year, but expenses have also gone up, the bank reported in its second quarter earnings release on Thursday.

Net income available to common shareholders was up 77 percent from $2.44 million for the first half of 2016 compared to $1.38 million in the first six months of 2015. In the second quarter this year, which ended on June 30, the Ellicott City bank’s net income was $1.5 million on $0.22 per share, up from $760,000 and $0.16 per share last year, or about double.

The bank attributed the disparity between the net income growth and earnings per share growth between the first half of this year and 2015 to a 2.5 million or 55 percent increase in the average number of shares outstanding for 2016 related to the bank’s common stock offering in June 2015 and shares issued in connection with Howard Bank’s acquisition of Patapsco Bank in the third quarter of 2015.

“We are pleased to report yet another quarter of strong organic loan growth with an annualized growth rate of 12 percent in the second quarter – above our benchmark levels of 8% to 10% in organic growth,” chairman and CEO Mary Ann Scully said.

Total assets grew to $989 million by the end of the second quarter, representing growth of $42 million, or 4 percent from the end of 2015 and a 32 percent increase over this time last year.

The reported a decrease in total capital levels. In May, Howard redeemed the $12.6 million of Small Business Lending Fund preferred stock issued to the U.S. Treasury in 2011. Both total capital and total common equity were $83.1 million at the end of the second quarter compared to total capital of $84.6 million and total common equity of $72.1 million in the year-ago period, the bank said.

Total non-interest expenses grew $.4 million, or 29 percent, in the first half of 2016 compared to the same period in 2015. About $1.7 million of that was related to organic growth and an increase in the number of bank locations and the larger infrastructure from the Patapsco acquisition. Occupancy costs went up by $684,000 or 36 percent, the majority of that increase was attributed to exit lease agreements for three branch locations that were closed last quarter, the bank said.