BBJ: Mortgages move to forefront as Howard Bank looks to grow

Editor’s note: The following article appeared on on March 4, 2016.

By Rick Seltzer

In the last year, Howard Bank boosted its assets by more than a third to nearly $1 billion, snagged some top talent from area competitors and landed its first branch in Baltimore through a $10.1 million purchase of Patapsco Bancorp Inc.That doesn’t sound bad. But don’t call it being in a sweet spot.

“Anybody who’s growth-oriented never thinks they’re in a sweet spot,” CEO Mary Ann Scully said.

Scully and the leadership team at Ellicott City-based Howard Bank — the subsidiary of Howard Bancorp Inc. — talked growth plans at the end of February, about a month after Howard reported 2015 earnings with strong growth. Acquisitions were a big part of their story, but executives also went to lengths to highlight their bank’s organic growth.

Howard grew assets by 37 percent to $947 million in 2015. About a third of that growth was organic. The bank also grew loans by 37 percent to $760 million, with just under a quarter of the increase coming organically.

The organic growth took place at a time of rampant consolidation among Baltimore-area community banks. While Howard wouldn’t rule out future acquisitions, Scully said organic growth will continue to be a key part of its strategy.

“A lot of people that are doing acquisitions are doing acquisitions because they don’t feel the opportunity to do the organic side,” Scully said.

Howard’s mortgage division is led by Executive Vice President Robert A. Altieri, a former Carrollton Bancorp CEO Howard hired in 2013 to build the line of business. It’s diverse, with both retail and consumer-direct lines, Altieri said.

“We did a little south of $600 million last year, which is a pretty good number for us,” Altieri said. “Hopefully we’ll be able to do the same this year.”

The prognosis is the same for much of the bank, said Frank Turner, executive vice president and director of business development.

“Pipelines and backlogs are pretty good,” he said. “2015 was a decent year, and ‘16 looks to be OK, too.”

Howard has a goal of being the go-to bank based in the Baltimore market, Scully said. Investors have been taking note.

Howard secured a $25 million private placement in June that included a substantial chunk from Baltimore-based T. Rowe Price Group Inc.

Still, there’s no great secret to a local bank winning business, Scully said.

“Especially small- and medium-sized businesses, they need someone who understands their story,” she said. “It’s not something you can do with an algorithm … It’s something you can only do by investing the time to get to know somebody.”

Even with the organic growth, it’s hard to ignore that Howard has expanded through acquisitions. Its 2015 deal for Patapsco contributed to earnings dropping last year to $1.1 million, or 16 cents per share, down from $10.4 million, or $2.53 per share, the year before.

Source: Baltimore Business Journal