BIRMINGHAM , MI--(Marketwired - July 27, 2016) - Birmingham Bloomfield Bancshares, Inc. (OTCBB: BBBI) ("the Company"), the holding company for Bank of Birmingham, today announced unaudited results for the quarter and six month periods ended June 30, 2016. The Company continues to generate strong asset growth and increase total revenue.
The Company reported net income of $249,000 or $0.13 per common share for the second quarter of 2016 compared to net income of $588,000 or $0.31 per common share for the same period of 2015. Net income for the six month period ended June 30, 2016 was $562,000 or $0.30 per common share compared to $876,000 or $0.47 per common share for the same period last year. The reduction in earnings is a function of higher provision, decrease in SBA sale revenue and additional operating costs.
Chief Executive Officer, Rob Farr, issued the results and commented: "The overall fundamentals remain strong as we grow the franchise despite the additional provision costs and operating expenses. We have experienced solid loan growth in our primary markets that continues to drive an increase in core revenue. We have also increased total assets 20% in the past year as we have successfully executed on our growth initiatives. We remain focused on improving our performance and building on the success of the Bank."
Results of Operation
The Company reported net interest income of $2.489 million for the second quarter of 2016, a 16.3% increase compared to the same quarter of 2015 and 3.8% increase from the first quarter of 2016. Net interest margin for the quarter was 3.82% compared to 3.85% for the most recent linked quarter and 4.00% for March 31, 2015. The margin compression is a result of the competitive market conditions affecting loan pricing and additional funding costs associated with the term debt facility. Net interest income for the first six months of 2016 was $4.888 million, an increase of 16.1% relative to the same period of 2015. The increase was the direct result of earning asset growth.
The Company provided $405,000 in provision expense during the quarter and the allowance relative to total loans was 1.17% at June 30, 2016. The provision expense is a function of new loan volume and additional reserves associated with impaired loans. A total of $553,000 was charged off during the period as a problem loan was liquidated. The total amount of the charge off was previously reserved and no additional loss was recognized on the sale. Total nonaccrual loans declined during the period due to the sale and disposition of collateral related to a problem loan.
Total provision expense for the year to date period ending June 30, 2016 was $815,000 compared to $525,000 in 2015. The increase is the result of loan growth, charge off activity and additional reserves on problem loans.
Total non-interest income for the second quarter of 2016 was $218,000, compared to $562,000 for the same period of 2015. For the year to date period ending June 30, 2016 total non-interest income was $440,000, a decrease of $358,000 relative to the prior period. The reduction in income is primarily a function of lower SBA revenue on loan sales in the secondary market.
Total non-interest expense for the second quarter of 2016 was $1.921 million, compared to $1.610 million in 2015. Year to date non-interest expense for 2016 was $3.655 million, an increase of $540,000 relative to the same period in 2015. The increase was the result of additional expenses associated with our continued growth and investments in the infrastructure of the organization, specifically personnel, data processing, loan origination, professional fees and regulatory costs.
Balance Sheet
Total assets as of June 30, 2016 were $274.6 million, an increase of $46.3 million from the prior year and 12.5% from December 31, 2015. Total portfolio loans reached $238.2 million at the end of the second quarter, an increase of $11.1 million from first quarter and $35.4 million from June 30, 2015. The increase is due to our targeted marketing efforts, dedicated approach to serving our customers and proactive business development efforts. The asset quality of the Company has improved as total non-performing loans declined to 0.41% of the portfolio at the end of the quarter. Total deposits as of June 30, 2016 were $249.3 million, an increase of $44.4 million from the same period in 2015. The growth was a function of our more visible profile in the community and successful execution on our initiatives to increase core deposits. The Bank continues to be classified as well capitalized based on regulatory guidelines and is a recommended institution by Bauer Financial.
Subsequent Events
On July 20, 2016, the Company and Arbor Bancorp, Inc., jointly announced the signing of a definitive agreement for Arbor Bancorp, Inc. to acquire the Company in an all cash transaction valued at $16.50 per share for total consideration of approximately $33.3 million. Based on the terms of the agreement, shareholders of the Company will receive cash for each share of common stock and all outstanding stock options and organizer warrants will be paid off. Completion of the merger is subject to certain closing conditions, including receipt of regulatory and shareholder approval. For more information, please see our joint press release dated July 20, 2016.
Birmingham Bloomfield Bancshares, Inc. is the holding company for Bank of Birmingham, a full-service community bank serving Oakland County. 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 Oakland County market area. Every Bank of Birmingham customer has a relationship manager who serves as a single point of contact empowered to provide all the bank's services. Birmingham Bloomfield Bancshares, Inc. Market Makers include Monroe Securities, Chicago; Boenning & Scattergood, Philadelphia; Stockcross Financial Services.
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. The Company assumes no responsibility to update forward-looking statements.
(Unaudited Consolidated Financial Statements Follow)
Birmingham Bloomfield Bancshares, Inc.
Consolidated Balance Sheet (Unaudited)
June 30, December 31, June 30,
2016 2015 2015
------------- ------------- -------------
ASSETS
----------------------------------
Cash and due from banks $ 29,701,529 $ 14,232,848 $ 17,428,891
Federal funds sold - - -
------------- ------------- -------------
Total cash and cash equivalents 29,701,529 14,232,848 17,428,891
Securities available-for-sale 3,234,912 3,933,083 4,380,578
Federal Home Loan Bank Stock 251,900 243,300 243,300
------------- ------------- -------------
Total securities 3,486,812 4,176,383 4,623,878
Portfolio loans
Consumer loans 3,039,867 2,355,187 2,055,653
Mortgage loans 40,117,635 35,060,825 27,411,925
Commercial leases 38,160,479 35,940,633 32,466,654
Commercial loans 156,891,373 148,782,782 140,904,476
------------- ------------- -------------
Total loans 238,209,354 222,139,427 202,838,708
Less: Allowance for loan loss 2,787,653 2,525,350 2,585,587
------------- ------------- -------------
Net loans 235,421,701 219,614,077 200,253,121
Premises and equipment, net 941,004 996,183 1,033,857
Bank owned life insurance 2,421,072 2,389,018 2,356,060
Deferred Tax Asset 1,237,450 1,202,501 1,249,940
Accrued interest receivable and
other assets 1,440,650 1,592,630 1,376,604
------------- ------------- -------------
TOTAL ASSETS $274,650,218 $244,203,640 $228,322,351
============= ============= =============
LIABILITIES
----------------------------------
Deposits
Noninterest-bearing $ 65,616,830 $ 57,526,790 $ 50,573,628
Interest-bearing 183,722,023 162,960,444 154,390,799
------------- ------------- -------------
Total deposits 249,338,853 220,487,234 204,964,427
Other Borrowings 5,530,925 4,621,000 -
Accrued interest payable, taxes
and other liabilities 1,681,618 1,718,161 2,427,274
------------- ------------- -------------
Total liabilities 256,551,396 226,826,395 207,391,701
SHAREHOLDERS' EQUITY
----------------------------------
Senior preferred stock, series D - - 4,621,000
Common Stock, no par value 17,541,404 17,412,285 17,412,285
Authorized - 9,000,000 shares,
Issued and outstanding -
1,887,610, 1,872,632 and
1,872,632 shares respectively
Accumulated other comprehensive
income 32,621 23,808 32,064
Additional paid in capital -
share based payments 535,754 514,454 493,154
Accumulated deficit (10,957) (573,302) (1,627,853)
------------- ------------ ------------
Total shareholders' equity 18,098,822 17,377,245 20,930,650
------------- ------------- -------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $274,650,218 $244,203,640 $228,322,351
============= ============= =============
Book value per share $ 9.59 $ 9.28 $ 8.71
Birmingham Bloomfield Bancshares, Inc.
Consolidated Statement of Income (Unaudited)
For the three months For the six months
ended ended
--------------------- ---------------------
June 30, June 30,
--------------------- ---------------------
2016 2015 2016 2015
---------- ---------- ---------- ----------
Interest Income
--------------------------------
Interest and fees on loans
Commercial loans $1,937,555 $1,760,658 $3,822,278 $3,437,884
Commercial leases 447,205 356,663 887,368 677,768
Consumer loans 36,712 27,337 70,806 55,389
Mortgage loans 248,736 155,400 482,482 298,512
Home Equity loans 152,725 108,800 292,437 215,075
Late charges and fees 6,964 6,857 26,544 33,173
---------- ---------- ---------- ----------
Total loan interest and fee
income 2,829,898 2,415,715 5,581,915 4,717,801
Interest bearing deposits 32,958 12,116 56,151 23,495
Federal Funds Sold - - - 62
Interest on investment
securities
Taxable 16,332 22,485 33,276 45,906
Tax-exempt - - - -
---------- ---------- ---------- ----------
Total investment income 16,332 22,485 33,276 45,906
Total interest income 2,879,188 2,450,315 5,671,342 4,787,264
Interest Expense
--------------------------------
Interest on deposits 344,729 310,301 693,148 577,499
Interest on borrowed funds 45,292 - 90,458 1
---------- ---------- ---------- ----------
Total interest expense 390,021 310,301 783,606 577,500
---------- ---------- ---------- ----------
Net Interest Income 2,489,167 2,140,014 4,887,736 4,209,764
Provision for loan losses 405,000 180,000 815,000 525,000
---------- ---------- ---------- ----------
Net Interest Income After
Provision for Loan Losses 2,084,167 1,960,014 4,072,736 3,684,764
Non-interest Income
--------------------------------
Service charge income 26,281 24,777 50,385 51,286
Mortgage banking activities 44,581 25,132 52,330 53,348
SBA loan sales 111,828 478,634 270,382 627,506
Other income 35,420 33,161 67,009 65,683
---------- ---------- ---------- ----------
Total non-interest income 218,110 561,704 440,106 797,823
Non-interest Expense
--------------------------------
Salaries and employee benefits 1,053,580 894,635 2,033,739 1,765,691
Occupancy expense 125,035 139,840 261,815 273,553
Equipment expense 47,835 49,873 79,665 94,930
Advertising 87,540 67,083 147,438 134,193
Data Processing 104,809 80,130 202,503 149,608
Professional fees 341,227 153,870 483,070 271,644
Loan origination expense 48,902 51,228 106,492 96,242
Regulatory Assessments 62,546 43,189 116,420 85,229
Other expense 49,546 129,867 223,457 243,627
---------- ---------- ---------- ----------
Total non-interest expense 1,921,020 1,609,715 3,654,599 3,114,717
Net Income Before Income Taxes 381,257 912,003 858,243 1,367,870
Income tax expense 132,362 312,813 295,899 468,714
---------- ---------- ---------- ----------
Net Income 248,895 599,190 562,344 899,156
Dividend on preferred stock - 11,552 - 23,105
---------- ---------- ---------- ----------
Net Income applicable to common
shareholders $ 248,895 $ 587,638 $ 562,344 $ 876,051
========== ========== ========== ==========
Income per share - basic &
diluted $ 0.13 $ 0.31 $ 0.30 $ 0.47
Birmingham Bloomfield Bancshares, Inc.
Financial Summary and Selected Ratios (Unaudited)
(Dollars in thousands except per share data)
Year to Date
----------------------------------------------
June 30, Change
----------------------- ----------------------
2016 2015 Amount Percentage
----------- ----------- ---------- -----------
INCOME STATEMENT
-----------------------------
Interest Income $ 5,671 $ 4,787 $ 884 18.5%
Interest Expense 784 578 206 35.7%
----------- ----------- ----------
Net Interest Income 4,888 4,210 678 16.1%
Provision for loan loss 815 525 290 55.2%
Non-interest income 440 798 (358) -44.8%
Non-interest expense 3,655 3,115 540 17.3%
----------- ----------- ----------
Net Income before Income
Taxes 858 1,368 (510) -37.3%
Income tax expense 296 469 (173) -36.9%
----------- ----------- ----------
Net Income 562 899 (337) -37.5%
Dividend on preferred
stock - 23 (23) -100.0%
----------- ----------- ----------
Net Income - common
shareholders $ 562 $ 876 $ (314) -35.8%
=========== =========== ==========
Income per share - basic
& diluted $ 0.30 $ 0.47 $ (0.17) -36.4%
=========== =========== ==========
BALANCE SHEET DATA
-----------------------------
Total assets 274,650 228,322 46,328 20.3%
Average Assets 266,963 219,335 47,628 21.7%
Total loans 238,209 202,839 35,371 17.4%
Allowance for loan loss
(ALLL) 2,788 2,586 202 7.8%
Total deposits 249,339 204,964 44,374 21.6%
Other borrowings 5,531 - 5,531 0.0%
Shareholders' equity 18,099 20,931 (2,832) -13.5%
Average Equity 17,762 15,767 1,994 12.6%
ASSET QUALITY
-----------------------------
Other real estate owned
(OREO) - - - 0.0%
Net charge-offs 553 - 553 0.0%
Non-accrual loans 968 2,237 (1,269) -56.7%
(2) Non-performing assets
(NPA) 968 2,237 (1,269) -56.7%
Non-accrual loans / total
loans 0.41% 1.10% -0.70% -63.2%
Allowance for loan loss /
total loans 1.17% 1.27% -0.10% -8.2%
PERFORMANCE MEASUREMENTS
-----------------------------
Net interest margin (tax
equivalent) 3.83% 4.04% -0.21% -5.2%
(1) Return on average assets
(annualized) 0.42% 0.83% -0.40% -48.8%
(3) Return on average assets
(annualized) 1.26% 1.74% -0.48% -27.6%
(1) Return on average common
equity (annualized) 6.37% 11.50% -5.13% -44.6%
(3) Return on average common
equity (annualized) 18.94% 24.21% -5.26% -21.7%
Efficiency ratio 68.6% 62.2% 6.39% 10.3%
Total loans / Total
deposits 95.5% 99.0% -3.43% -3.5%
Equity / Assets 6.59% 9.17% -2.58% -28.1%
Tangible common equity /
Total assets 6.59% 7.14% -0.55% -7.7%
Book value per share $ 9.59 $ 8.71 $ 0.88 10.1%
Stock price $ 9.15 $ 9.05 $ 0.10 1.1%
Stock price / book value
(%) 95.4% 103.9% -8.48% -8.2%
Income per share - basic
& diluted $ 0.30 $ 0.47 $ (0.17) -36.4%
Income per share - basic
& diluted (LTM) $ 0.86 $ 0.94 $ (0.08) -8.5%
Price to earnings ratio
(P/E) (year to date) 15.2x 9.5x 5.7x 59.4%
Shares outstanding 1,887,610 1,872,632 14,978 0.8%
Average shares
outstanding 1,880,410 1,863,524 16,886 0.9%
(1) Amount is computed on net income before preferred dividends.
(2) Non-performing assets includes non-accrual loans and other real estate
owned.
(3) Amount is computed on pre-tax, pre-provision earnings before preferred
dividends
Birmingham Bloomfield Bancshares, Inc.
Financial Summary and Selected Ratios (Unaudited)
(Dollars in thousands except per share data)
Quarter Ended
----------------------------------
June 30, March 31,
2016 2016
---------------- ----------------
INCOME STATEMENT
-----------------------------------------
Interest Income $ 2,879 $ 2,792
Interest Expense 390 394
---------------- ----------------
Net Interest Income 2,489 2,399
Provision for loan loss 405 410
Non-interest income 218 222
Non-interest expense 1,921 1,734
---------------- ----------------
Net Income before Income Taxes 381 477
Income tax expense 132 164
---------------- ----------------
Net Income 249 313
Dividend on preferred stock - -
---------------- ----------------
Net Income applicable to common
shareholders $ 249 $ 313
================ ================
Income per share - basic & diluted $ 0.13 $ 0.17
================ ================
BALANCE SHEET DATA
-----------------------------------------
Total assets 274,650 273,894
Average Assets 272,776 261,080
Total loans 238,209 227,052
Allowance for loan loss (ALLL) 2,788 2,935
Total deposits 249,339 249,830
Other borrowings 5,531 4,526
Shareholders' equity 18,099 17,744
ASSET QUALITY
-----------------------------------------
Other real estate owned (OREO) - -
Net charge-offs 553 -
Non-accrual loans 968 2,083
(2) Non-performing assets (NPA) 968 2,083
Non-accrual loans / total loans 0.41% 0.92%
Allowance for loan loss / total
loans 1.17% 1.29%
PERFORMANCE MEASUREMENTS
-----------------------------------------
Net interest margin (tax equivalent) 3.82% 3.85%
(1) Return on average assets
(annualized) 0.37% 0.48%
(3) Return on average assets
(annualized) 1.16% 1.37%
(1) Return on average common equity
(annualized) 5.59% 7.16%
(3) Return on average common equity
(annualized) 17.65% 20.26%
Efficiency ratio 71.0% 66.2%
Total loans / Total deposits 95.5% 90.9%
Equity / Assets 6.59% 6.48%
Tangible common equity / Total
assets 6.59% 6.48%
Book value per share $ 9.59 $ 9.46
Stock price $ 9.15 $ 8.79
Stock price / book value (%) 95.4% 93.0%
Income per share - basic & diluted $ 0.13 $ 0.17
Shares outstanding 1,887,610 1,876,610
Average shares outstanding 1,885,434 1,875,386
Birmingham Bloomfield Bancshares, Inc.
Financial Summary and Selected Ratios (Unaudited)
(Dollars in thousands except per share data)
Quarter Ended
-----------------------------------
December September
31, 30, June 30,
2015 2015 2015
----------- ----------- -----------
INCOME STATEMENT
-----------------------------------------
Interest Income $ 2,712 $ 2,641 $ 2,450
Interest Expense 334 319 310
----------- ----------- -----------
Net Interest Income 2,378 2,323 2,140
Provision for loan loss 81 - 180
Non-interest income 333 174 562
Non-interest expense 1,806 1,693 1,610
----------- ----------- -----------
Net Income before Income Taxes 824 804 912
Income tax expense 272 280 313
----------- ----------- -----------
Net Income 553 524 599
Dividend on preferred stock 10 12 12
----------- ----------- -----------
Net Income applicable to common
shareholders $ 542 $ 512 $ 588
=========== =========== ===========
Income per share - basic & diluted $ 0.29 $ 0.27 $ 0.31
=========== =========== ===========
BALANCE SHEET DATA
-----------------------------------------
Total assets 244,204 235,887 228,322
Average Assets 246,503 233,756 223,792
Total loans 222,139 210,199 202,839
Allowance for loan loss (ALLL) 2,525 2,586 2,586
Total deposits 220,487 212,017 204,964
Other borrowings 4,621 - -
Shareholders' equity 17,377 21,459 20,931
ASSET QUALITY
-----------------------------------------
Other real estate owned (OREO) - - -
Net charge-offs 141 - -
Non-accrual loans 2,083 2,237 2,237
(2) Non-performing assets (NPA) 2,083 2,237 2,237
Non-accrual loans / total loans 0.94% 1.06% 1.10%
Allowance for loan loss / total
loans 1.14% 1.23% 1.27%
PERFORMANCE MEASUREMENTS
-----------------------------------------
Net interest margin (tax equivalent) 3.99% 4.12% 4.00%
(1) Return on average assets
(annualized) 0.89% 0.89% 1.07%
(3) Return on average assets
(annualized) 1.46% 1.37% 1.96%
(1) Return on average common equity
(annualized) 12.79% 12.52% 15.03%
(3) Return on average common equity
(annualized) 20.96% 19.22% 27.39%
Efficiency ratio 66.6% 67.8% 59.6%
Total loans / Total deposits 100.7% 99.1% 99.0%
Equity / Assets 7.12% 9.10% 9.17%
Tangible common equity / Total
assets 7.12% 7.14% 7.14%
Book value per share $ 9.28 $ 8.99 $ 8.71
Stock price $ 8.65 $ 8.50 $ 9.05
Stock price / book value (%) 93.2% 94.5% 103.9%
Income per share - basic & diluted $ 0.29 $ 0.27 $ 0.31
Shares outstanding 1,872,632 1,872,632 1,872,632
Average shares outstanding 1,872,632 1,872,632 1,866,830
(1) Amount is computed on net income before preferred dividends. (2) Non-performing assets includes non-accrual loans and other real estate owned. (3) Amount is computed on pre-tax, pre-provision earnings before preferred dividends
Contact:
Robert M. Farr
Chief Executive Officer
Birmingham Bloomfield Bancshares, Inc.
248-283-6430
