Birmingham Bloomfield Bancshares, Inc. Announces Record First Quarter

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Birmingham Bloomfield Bancshares, Inc.

Apr 21, 2011, 01:54 ET

BIRMINGHAM, Mich., April 21, 2011 /PRNewswire/ -- Birmingham Bloomfield Bancshares, Inc. (OTC Bulletin Board: BBBI), the holding company for Bank of Birmingham, today reported record net income for the first quarter of 2011 and the fourth consecutive quarter of profitability.

The Corporation reported net income of $414,297 or $0.23 per share of common stock for the first quarter of 2011, compared to a net loss of $18,112 or $0.01 per share for the first quarter of 2010. The results were positively impacted by improved net interest margin, lower provision for loan loss expense and significant non-interest income production.

Results of Operation

The Corporation achieved a Return on Average Assets "ROA" before preferred dividends of 1.62% for the first quarter of 2011 compared to a 0.12% ROA for the same period last year and a 0.60% ROA for the fourth quarter of 2010. The improvement was directly attributable to an increase in core operating revenue and lower loan loss provision.

Total net interest income for the first quarter of 2011 increased 32.8% to $1.260 million compared to 949,000 for the first quarter of 2010. The net interest income growth was realized by improving the overall net interest margin on earnings assets and organically increasing the asset size of the organization through local loan production. Net interest margin increased from 4.06% in the first quarter of 2010 to 4.49% in the current quarter. This continues a trend the Corporation has experienced over the past 5 linked quarters.

Provision expense declined $73,000 during the current quarter relative to the first quarter of 2010 as the Corporation did not experience any charge offs and overall credit quality improved.

Non-interest income increased $298,000 in the first quarter of 2011 compared to the same period of last year as a result of the sale of residential mortgage originations in the secondary market and Small Business Administration "SBA" loan activity. The Corporation added a residential mortgage operation to the portfolio of products available to customers in the fall of 2010 and was able to generate revenue of $11,000 in the first quarter of 2011. In addition, the Corporation successfully sold the guaranteed balance of originated SBA loans to investors for a premium in the first quarter of 2011 and produced additional non-interest income of $291,000.

Total non-interest expense during the first quarter of 2011 increased to $1.083 million from $834,000 for the same period of last year. The increased operating costs were mainly the result of the added costs associated with the mortgage division, hiring additional personnel, implementing new marketing initiatives and utilizing various consultants to assist the Corporation in addressing key strategies. Despite the increased operating costs, the Corporation's efficiency ratio, a measurement of the cost to generate revenue, declined to 68.4% during the most recent quarter, a positive trend.

Balance Sheet

The Corporation continues to experience quality growth in our core markets as total assets reached $116.521 million as of March 31, 2011 an increase of $17.711 million from the same quarter last year and $6.186 from December 31, 2010. The increase is the direct result of growth in loan and deposit balances. Total loans over the past 12 months have grown $12.052 million as the Corporation concentrates lending efforts on organic, local loan opportunities. In addition, the profile of products available to customers continues to expand as the Bank offers more options for residential mortgage and commercial customers, including SBA products. The subsidiary Bank also remains well capitalized based on regulatory capital guidelines.

Chief Executive Officer Rob Farr issued the results and commented "the Corporation is positively positioned to benefit from an improving economy. We have a strong capital position and ability to make quality loans for customers in our market. The first quarter results reflect the Corporation's successful implementation of our strategic plan and addition of new income sources to diversify earnings. The Bank has expanded the loan options available to customers with the addition of the residential mortgage division and SBA lending products. Our core revenue represented by our net interest margin remains above peers and continues to provide a strong foundation for the organization. We are optimistic about our possibilities in 2011."

Birmingham Bloomfield Bancshares, Inc. is the holding company for Bank of Birmingham, a full-service community bank serving Birmingham, Bloomfield Hills, Beverly Hills and Franklin. Bank of Birmingham is dedicated to providing financial services to small and medium sized businesses; their owners and employees; professionals; and individuals who work or reside in the Birmingham / Bloomfield market area. Every Bank of Birmingham customer has a relationship manager who serves a single point of contact empowered to provide all the bank's services.

Birmingham Bloomfield Bancshares, Inc. marketmakers include Howe Barnes Hoefer and Arnett (acquired by Raymond James), Chicago; Monroe Securities, Chicago; Hill, Thompson, Magid & Co; Jersey City, New Jersey; and Hudson Securities, Inc., Jersey City, New Jersey.

Forward-Looking Statements

This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), which involve significant risks and uncertainties. Actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include: changes in interest rates and interest-rate relationships; changes in the national and local economy; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulations; changes in tax laws; changes in prices, levies, and assessments; our ability to successfully integrate acquisitions into our existing operations, and the availability of new acquisitions, joint ventures and alliance opportunities; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; and other factors included in the Corporation's filings with the Securities and Exchange Commission, available free via EDGAR. The Corporation assumes no responsibility to update forward-looking statements.

(Unaudited Consolidated Financial Statements Follow)

Birmingham Bloomfield Bancshares, Inc. Consolidated Balance Sheet (Unaudited)

			March 31,
			2011	2010
ASSETS
		Cash and due from banks	$ 14,036,879	$ 5,283,928
		Federal funds sold	-	2,238,858
	Total cash and cash equivalents		14,036,879	7,522,786

		Securities available-for-sale	3,150,652	3,633,928
		Securities held-to-maturity	-	-
		Federal Home Loan Bank Stock	160,200	162,100
	Total securities		3,310,852	3,796,028

	Loans held for Sale		-	-

	Portfolio loans
		Consumer loans	813,491	501,498
		Mortgage loans	11,257,843	10,604,172
		Commercial loans	86,133,771	75,047,441
	Total loans		98,205,105	86,153,111
		Less: Allowance for loan loss	1,487,099	1,254,964
	Net loans		96,718,007	84,898,147

		Premises and equipment, net	1,435,426	1,444,071
		Accrued interest receivable and other assets	1,019,575	1,148,941

	*TOTAL ASSETS*		$ 116,520,738	$ 98,809,973

LIABILITIES
	Deposits
		Noninterest-bearing	$ 12,477,840	$ 9,320,275
		Interest-bearing	92,110,155	78,412,227
	Total deposits		104,587,995	87,732,502

		Short term borrowings	-	-
		Accrued interest payable, taxes and other liabilities	529,559	359,774
	Total liabilities		105,117,554	88,092,276

SHAREHOLDERS' EQUITY

		Senior preferred stock A	1,635,000	1,635,000
		Discount on senior preferred stock A	(56,427)	(74,827)
		Warrant preferred stock B	82,000	82,000
		Premium on warrant preferred stock B	6,133	8,134
		Senior preferred stock C	1,744,000	1,744,000
		Discount on senior preferred stock C	-	-
		Common Stock, no par value	17,034,330	17,034,330
		Authorized – 4,500,000 shares
		Issued and outstanding – 1,800,000 shares
		Accumulated other comprehensive income	112,171	113,454
		Additional paid in capital	-	-
		Additional paid in capital - share based payments	493,154	493,154
		Accumulated deficit	(9,647,177)	(10,317,548)
	Total shareholders' equity		11,403,185	10,717,697

	*TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY*		$ 116,520,738	$ 98,809,973
			-	-
*Book value per share*			$4.44	$4.07

Birmingham Bloomfield Bancshares, Inc. Consolidated Statement of Income (Unaudited)

				Year to Date
				March 31,
				2011	2010
Interest Income
		Interest and fees on loans
			Commercial loans	$ 1,413,787	$ 1,109,519
			Installment loans	13,088	8,449
			Mortgage loans	19,525	17,009
			Home Equity loans	97,931	88,749
			Late charges and fees	11,478	8,413
	*Total loan interest and fee income*			1,555,809	1,232,139

		Interest bearing deposits		4,618	5,605
		Federal Funds Sold		13	729

		Interest on investment securities
			Taxable	27,911	34,699
			Tax-exempt	-	-
	*Total investment income*			27,911	34,699

	*Total interest income*			1,588,351	1,273,172

Interest Expense
		Interest on deposits		314,055	324,246
		Interest on borrowed funds		14,509	-
	*Total interest expense*			328,564	324,246

	*Net Interest Income*			1,259,787	948,926
		Provision for loan losses		39,000	112,405
	*Net Interest Income After Provision for Loan Losses*			1,220,787	836,521

Non-interest Income
		Service charge income		11,572	9,635
		Mortgage banking activities		11,439	-
		Other income		302,098	17,387
	*Total non-interest income*			325,109	27,022

Non-interest Expense
		Salaries and employee benefits		582,017	400,624
		Occupancy expense		118,102	118,634
		Equipment expense		35,400	35,577
		Loss on branch closing		-	-
		Advertising		36,046	5,280
		Data Processing		49,013	55,550
		Professional fees		111,524	68,211
		Other expense		151,314	150,327
	*Total non-interest expense*			1,083,416	834,203

	*Net Income (Loss) Before Income Taxes*			462,480	29,339
		Income tax expense		-	-
	*Net Income (Loss)*			462,480	29,339
		Dividend and accretion on preferred stock		48,183	47,451
	*Net Income (Loss) applicable to common shareholders*			$ 414,297	$ (18,112)

*Income (Loss) per share - basic*				$ 0.23	$ (0.01)

Birmingham Bloomfield Bancshares, Inc. Financial Summary and Selected Ratios (Unaudited) (Dollars in thousands except per share data)

			Year to Date
			March 31,		Change
			2011	2010	Amount	Percentage
INCOME STATEMENT
		Interest Income	$ 1,588	$ 1,273	$ 315	24.8%
		Interest Expense	329	324	4	1.3%
	Net Interest Income		1,260	949	311	32.8%
		Provision for loan loss	39	112	(73)	-65.3%
		Non-interest income	325	27	298	1103.1%
		Non-interest expense	1,083	834	249	29.9%
	Income (loss) before Income Taxes		462	29	433	1476.3%
		Income tax expense	-	-	-	0.0%
	Net Income (Loss)		462	29	433	1476.3%
		Dividend and accretion on preferred stock	48	47	1	1.5%
	Net Income (Loss) - common shareholders		$ 414	$ (18)	$ 432	2387.4%

	Income (loss) per share - basic & diluted		$ 0.23	$ (0.01)	$ 0.24	2387.4%

BALANCE SHEET DATA
	Total assets		116,521	98,810	17,711	17.9%
	Average Assets		115,445	97,520	17,925	18.4%
	Total loans		98,205	86,153	12,052	14.0%
	Allowance for loan loss (ALLL)		1,487	1,255	232	18.5%
	Total deposits		104,588	87,733	16,855	19.2%
	Other borrowings		-	-	-	0.0%
	Shareholders' equity		11,403	10,718	685	6.4%
	Average Equity		11,140	10,723	418	3.9%

ASSET QUALITY
	Other real estate owned (OREO)		-	-	-	0.0%
	Net charge-offs		-	31	(31)	-100.0%
	Non-accrual loans		298	-	298	0.0%
(2)	Non-performing assets (NPA)		298	-	298	0.0%
	Non-accrual loans / total loans		0.30%	0.00%	0.30%	0.0%
	Allowance for loan loss / total loans		1.51%	1.46%	0.06%	4.0%

PERFORMANCE MEASUREMENTS
	Net interest margin (tax equivalent)		4.49%	4.06%	0.43%	10.6%
(1)	Return on average assets (annualized)		1.62%	0.12%	1.50%	1231.6%
(1)	Return on average common equity (annualized)		24.26%	1.62%	22.64%	1394.5%
	Efficiency ratio		68.36%	85.48%	-17.12%	20.0%
	Tier 1 Leverage Ratio (Bank only)		8.33%	8.80%	-0.47%	-5.34%
	Equity / Assets		9.79%	10.85%	-1.06%	-9.8%
	Total loans / Total deposits		93.9%	98.2%	-4.30%	-4.4%
	Book value per share		$ 4.44	$ 4.07	$ 0.37	9.1%
	Income (loss) per share - basic & diluted		$ 0.23	$ (0.01)	$ 0.24	2387.4%
	Shares outstanding		1,800,000	1,800,000	-	0.0%

(1) Amount is computed on net income before preferred dividends. (2) Non-performing assets includes non-accrual loans and other real estate owned.

Birmingham Bloomfield Bancshares, Inc. Financial Summary and Selected Ratios (Unaudited) (Dollars in thousands except per share data)
			Quarter Ended
			March 31,	December 31,	September 30,	June 30,	March 31,
			2011	2010	2010	2010	2010
INCOME STATEMENT
		Interest Income	$ 1,588	$ 1,554	$ 1,506	$ 1,418	$ 1,273
		Interest Expense	329	327	337	352	324
	Net Interest Income		1,260	1,226	1,170	1,067	949
		Provision for loan loss	39	49	256	177	112
		Non-interest income	325	37	24	37	27
		Non-interest expense	1,083	1,046	840	792	834
	Income (loss) before Income Taxes		462	169	98	135	29
		Income tax expense	-	-	-	-	-
	Net Income (Loss)		462	169	98	135	29
		Dividend and accretion on preferred stock	48	48	48	49	47
	Net Income (Loss) applicable to common		$ 414	$ 121	$ 50	$ 85	$ (18)

	Income (loss) per share - basic & diluted		$ 0.23	$ 0.07	$ 0.03	$ 0.05	$ (0.01)

BALANCE SHEET DATA
	Total assets		116,521	110,335	111,254	100,168	98,810
	Average Assets		115,435	111,932	110,091	106,960	97,520
	Total loans		98,205	100,379	94,284	90,478	86,153
	Allowance for loan loss (ALLL)		1,487	1,448	1,424	1,167	1,255
	Total deposits		104,588	97,250	99,997	99,804	87,733
	Other borrowings		-	1,469	-	-	-
	Shareholders' equity		11,403	10,986	10,899	10,822	10,718
	Average Equity		11,140	10,935	10,860	10,770	10,723

ASSET QUALITY
	Other real estate owned (OREO)		-	-	-	-	-
	Net charge-offs		-	24	-	265	31
	Non-accrual loans		298	298	-	-	-
(2)	Non-performing assets (NPA)		298	298	-	-	-
	Non-accrual loans / total loans		0.30%	0.30%	0.00%	0.00%	0.00%
	Allowance for loan loss / total loans		1.51%	1.44%	1.51%	1.29%	1.46%

PERFORMANCE MEASUREMENTS
	Net interest margin (tax equivalent)		4.49%	4.69%	4.41%	4.13%	4.06%
(1)	Return on average assets (annualized)		1.62%	0.60%	0.35%	0.50%	0.12%
(1)	Return on average common equity (annualized)		24.26%	8.89%	5.21%	7.32%	1.62%
	Efficiency ratio		68.36%	82.78%	70.39%	71.78%	85.48%
	Tier 1 Leverage Ratio (Bank only)		8.33%	8.15%	8.20%	8.50%	8.80%
	Equity / Assets		9.79%	9.96%	9.80%	10.80%	10.85%
	Total loans / Total deposits		93.9%	103.2%	94.3%	90.7%	98.2%
	Book value per share		$ 4.44	$ 4.21	$ 4.16	$ 4.12	$ 4.07
	Income (loss) per share - basic & diluted		$ 0.23	$ 0.07	$ 0.03	$ 0.05	$ (0.01)
	Shares outstanding		1,800,000	1,800,000	1,800,000	1,800,000	1,800,000


(1) Amount is computed on net income before preferred dividends. (2) Non-performing assets includes non-accrual loans and other real estate owned.