Howard Bancorp, Inc. Announces Second Quarter 2007 Profit and Growth Results

Ellicott City, MD, July 26, 2007 — Howard Bancorp, Inc. (OTC, Electronic Bulletin Board: HBMD), the parent company of Howard Bank, today announced net income of $16 thousand for the second quarter of 2007. The second quarter net income compares to a $116 thousand loss recorded in the first quarter of 2007.  On a year-to-date basis, Howard Bancorp’s net loss of $100 thousand reflects an 80% improvement over the $520 thousand loss reported for the first six months of 2006. Revenues rose 38% for the six month period ending June 30, 2007 as compared to June 30, 2006, significantly outpacing the 17% increase in non-interest expenses over the same period.  The revenue growth was primarily attributable to gains in net interest income resulting from continued balance sheet growth. Total assets grew to $167 million as of June 30, 2007, a 37% increase compared to the same period in 2006. Total loans increased by 52% ending at $147 million at the end of the second quarter of 2007 versus loans of $97 million at June 30, 2006. The loan growth was funded substantially with deposits and other customer funds. Total deposits grew by 39%, with June 30, 2007 deposits of $138 million compared to deposits of $99 million at June 30, 2006.  The 17% increase in non-interest expenses for the six months of 2007 versus 2006 was primarily attributable to the operating expenses associated with a third branch location which opened in late September of 2006.

For the first time since it commenced operations in 2004, Howard Bank placed a loan into non-accrual status. The loan in question is a $2.8 million land development loan. Despite the property’s location in an attractive market, the bank has determined it is prudent, given the recent downturn in the local real estate market, to independently re-evaluate the sufficiency of the collateral value under various scenarios. The bank is presently awaiting the results of those evaluations.

Chairman and CEO Mary Ann Scully stated: “We are pleased with our financial results thus far for 2007. Strong loan demand from our target market of local small and medium sized businesses continues to drive our balance sheet growth.  In a notably difficult funding environment, our ability to fund this asset growth by growing deposits through our branches, and not having to rely on external borrowings, which generally have both a higher cost and less strategic value is significant. As a result, our increase in revenues, coupled with managing and leveraging our existing infrastructure, allowed us to overcome the incremental increase in costs of our third branch, and report this return to profitability for the second quarter of 2007.

We continue to focus on credit quality as well as quantity. Deterioration of some small percentage of seasoned credits is inevitable in a real estate market returning to normalcy and the combination of knowledgeable underwriting with proactive management of relationships should serve us well in this challenging environment.

In addition to our financial performance, we are also honored to have been named “Small Business of the Year” by the Maryland Chamber of Commerce in its 6 – 50 employee category.  The award is designed to honor the dedication, innovation and entrepreneurial spirit displayed by small businesses in Maryland. We are also very proud of the recognition received in the community by several associates as well as the promotion of several associates into leadership roles on the boards of various charitable and civic organizations, all reflecting Howard Bancorp’s successful integration into the communities we serve.

Howard Bancorp and Howard Bank have been able to navigate through a compressed and inverted interest rate cycle, ever increasing competitive and regulatory pressures, and continued change in the local banking providers through merger/acquisition activities to become a recognized leader as Howard County’s only locally owned and locally managed financial institution.  We are proud that customers and the community have embraced our commitment to combine a competitively broad suite of products and services with a much higher level of personalized and experienced advice than is available elsewhere.”

This press release contains statements that are forward-looking, as that term is defined by the Private Securities Litigation Reform Act of 1995 or the Securities and Exchange Commission in its rules, regulations, and releases. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. All forward-looking statements are based on current expectations regarding important risk factors, including but not limited to real estate values, local and national economic conditions, and the impact of interest rates on financing. Accordingly, actual results may differ from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by the Company or any other person that results expressed therein will be achieved. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Additional information is available at www.howardbank.com.

Contact:

Howard Bancorp, Inc.
George C. Coffman, Chief Financial Officer, 410-750-0020

HOWARD BANCORP, INC.
CONSOLIDATED BALANCE SHEETS

						Annual Increase / (Decrease)
		June 30, 2007		June 30, 2006		$		%
ASSETS
Cash and due from banks		$5,450,625		$2,791,336		$2,659,289		95	%
Federal funds sold		2,369,110		6,918,693		(4,549,583)		(66)
Total cash and cash equivalents		7,819,735		9,710,029		(1,890,294)		(19)
Securities available-for-sale		10,084,786		13,792,226		(3,707,440)		(27)
Nonmarketable equity securities		266,000		278,300		(12,300)		(4)
Loans, net of unearned income		146,783,316		96,684,120		50,099,196		52
Allowance for credit losses		(1,643,500)		(1,083,000)		(560,500)		52
Net loans		145,139,816		95,601,120		49,538,696		52
Bank premises and equipment, net		2,621,475		1,514,717		1,106,758		73
Interest receivable and other assets		1,137,814		701,111		436,703		62
Total assets		$167,069,626		$121,597,503		$45,472,123		37	%
LIABILITIES
Noninterest-bearing deposits		$21,759,763		$13,441,923		$8,317,840		62	%
Interest-bearing deposits		116,457,274		85,979,211		30,478,063		35
Total deposits		138,217,037		99,421,134		38,795,903		39
Federal funds purchased and repurchase agreements		5,793,908		2,237,452		3,556,456		159
Borrowings		-		2,000,000		(2,000,000)		(100)
Accrued expenses and other liabilities		571,526		536,585		34,941		7
Total liabilities		144,582,471		104,195,171		40,387,300		39
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock		26,280		22,392		3,888		17
Capital surplus		27,897,079		22,549,276		5,347,803		24
Accumulated deficit		(5,419,854)		(5,093,779)		(326,075)		6
Accumulated other comprehensive loss		(16,350)		(75,557)		59,207		(78)
Total shareholders’ equity		22,487,155		17,402,332		5,084,823		29
Total liabilities and shareholders’equity		$167,069,626		$121,597,503		$45,472,123		37	%

HOWARD BANCORP, INC.
CONSOLIDATED BALANCE SHEETS

						Quarterly Increase / (Decrease)
		June 30, 2007		March 31 , 2006		$		%
ASSETS
Cash and due from banks		$5,450,625		$4,018,246		$1,432,379		36	%
Federal funds sold		2,369,110		12,524,871		(10,155,761)		(81)
Total cash and cash equivalents		7,819,735		16,543,117		(8,723,382)		(53)
Securities available-for-sale		10,084,786		9,207,831		876,955		10
Nonmarketable equity securities		266,000		356,000		(90,000)		(25)
Loans, net of unearned income		146,783,316		130,017,371		16,765,945		13
Allowance for credit losses		(1,643,500)		(1,460,000)		(183,500)		13
Net loans		145,139,816		128,557,371		16,582,445		13
Bank premises and equipment, net		2,621,475		2,677,186		(55,711)		(2)
Interest receivable and other assets		1,137,814		1,049,166		88,648		8
Total assets		$167,069,626		$158,390,671		$8,678,955		5	%
LIABILITIES
Noninterest-bearing deposits		$21,759,763		$19,439,562		$2,320,201		12	%
Interest-bearing deposits		116,457,274		111,104,584		5,352,690		5
Total deposits		138,217,037		130,544,146		7,672,891		6
Federal funds purchased and repurchase agreements		5,793,908		4,912,686		881,222		18
Borrowings		-		-		-		-
Accrued expenses and other liabilities		571,526		517,237		54,289		10
Total liabilities		144,582,471		135,974,069		8,608,402		6
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock		26,280		26,233		47		0
Capital surplus		27,897,079		27,815,025		82,054		0
Accumulated deficit		(5,419,854)		(5,436,229)		16,375		(0)
Accumulated other comprehensive (loss)/income		(16,350)		11,574		(27,924)		(241)
Total shareholders’ equity		22,487,155		22,416,602		70,553		0
Total liabilities and shareholders’equity		$167,069,626		$158,390,671		$8,678,955		5	%

HOWARD BANCORP, INC.
CONSOLIDATED STATEMENTS of OPERATIONS

		For the six months ended June 30,				Increase / (Decrease)
		2007		2006		$		%
INTEREST INCOME
Interest and fees on loans		$4,831,106		$2,783,347		$2,047,759		74%
Interest and dividends on securities		235,928		313,581		(77,653)		(25)
Other interest income		273,299		164,533		108,766		66
Total interest income		5,340,333		3,261,461		2,078,872		64
INTEREST EXPENSE
Deposits		2,444,930		1,231,337		1,213,593		99
Borrowings		111,619		23,717		87,902		371
Total interest expense		2,556,549		1,255,054		1,301,495		104
NET INTEREST INCOME		2,783,784		2,006,407		777,377		39
Provision for credit losses		297,500		307,500		(10,000)		(3)
Net interest income after provision for credit losses		2,486,284		1,698,907		787,377		46
NONINTEREST INCOME
Service charges on deposit accounts		47,964		18,623		29,341		158
Other operating income		67,783		72,537		(4,754)		(7)
Total noninterest income		115,747		91,160		24,587		27
REVENUES		2,899,531		2,097,567		801,964		38
NONINTEREST EXPENSE
Compensation and benefits		1,467,296		1,295,527		171,769		13
Occupancy and equipment		557,963		440,570		117,393		27
Marketing and business development		204,525		185,380		19,145		10
Professional fees		106,491		108,302		(1,811)		(2)
Data processing fees		166,581		121,373		45,208		37
Other operating expense		198,883		158,616		40,267		25
Total noninterest expense		2,701,739		2,309,768		391,971		17
LOSS BEFORE INCOME TAXES		(99,709)		(519,701)		419,992		(81)
Income tax benefit		-		-
NET LOSS		$(99,709)		$(519,701)		$419,992		(81)%

HOWARD BANCORP, INC.
CONSOLIDATED STATEMENTS of OPERATIONS

		For the three months ended:				Increase / (Decrease)
		June 30, 2007		March 31, 2006		$		%
INTEREST INCOME
Interest and fees on loans		$2,527,837		$2,303,269		$224,568		10%
Interest and dividends on securities		119,953		115,975		3,978		3
Other interest income		116,547		156,752		(40,204)		(26)
Total interest income		2,764,337		2,575,996		188,342		7
INTEREST EXPENSE
Deposits		1,250,160		1,194,770		55,391		5
Borrowings		53,207		58,412		(5,206)		(9)
Total interest expense		1,303,367		1,253,182		50,185		4
NET INTEREST INCOME		1,460,970		1,322,814		138,157		10
Provision for credit losses		183,500		114,000		69,500		61
Net interest income after provision for credit losses		1,277,470		1,208,814		68,657		6
NONINTEREST INCOME
Service charges on deposit accounts		26,566		21,398		5,168		24