Birmingham Bloomfield Bancshares, Inc. Announces Continued Profitability with Second Quarter Results

BIRMINGHAM, Mich., July 26, 2011 /PRNewswire/ -- Birmingham Bloomfield Bancshares, Inc. (OTC Bulletin Board: BBBI) ("the Company"), the holding company for Bank of Birmingham, today announced continued profitability and record earnings for the first six months of 2011. The favorable results are a product of improved margins, lower loan loss provision expense and increased noninterest income.

The Company reported net income of $261,000 or $0.15 per common share for the second quarter of 2011 compared to net income of $85,000 or $0.05 per common share for the same period of 2010. Net income for the six month period ended June 30, 2011 was $676,000 or $0.38 per common share compared to $67,000 or $0.04 per common share for the same period last year.

Results of Operation

The Company continues to experience an increase in net interest income as a result of growth in the loan portfolio, higher yields on earning assets and lower net funding costs. Net interest income for the second quarter of 2011 was $1.251 million an increase of 17.3% compared to the same period last year. Net interest margin continued the trend of quarterly improvement reaching 4.51% for the period. Net interest income for the first six months of 2011 increased 24.6% to $2.511 million compared to the same period ended June 30, 2010. Net interest margin for the six month period ended June 30, 2011 was 4.50% compared to 4.08% for the same period last year.

Provision expense for the second quarter of 2011 was $15,000, a decrease of $162,000 from the same period last year and $24,000 less than March 31, 2011. Total provision expense for the year to date period ending June 30, 2011 was $54,000 a reduction of $235,000 relative to same period of 2010. The lower provision expense reported for the current year is directly attributable to the improved credit quality of the loan portfolio and limited number of nonperforming assets. The Company did not experience any charge offs during the first six months of 2011, compared to $296,000 for the same period last year.

Revenue from non-interest income sources continue to positively impact the performance of the Company. Noninterest income for the second quarter of 2011 was $280,000 an increase of $243,000 compared to the same period last year. Total non-interest income for the six month period ended June 30, 2011 reached $605,000, an increase of $541,000 relative to the same period of 2010. The improvement is a result of an increase in the volume of residential mortgage loans sold in the secondary market and Small Business Administration ("SBA") loan activity. Mortgage related income for the three and six month period ended June 30, 2011 was $47,000 and $59,000, respectively. SBA loan sales generated revenue of $209,000 during the second quarter of 2011 and $501,000 for the six month period ended June 30, 2011. The mortgage and SBA revenue sources are new for the Company in 2011.

Total non-interest expense for the second quarter of 2011 was $1.207 million, an increase of $414,000 compared to the same period of last year and marginally higher than the $1.083 million reported as of March 31, 2011. Year to date non-interest expense for 2011 totaled $2.290 million, an increase of $664,000 relative to the same period last year. The increased expenses are the result of costs associated with developing the mortgage division, adding additional loan production offices for mortgage activity, hiring additional personnel and engaging professionals to assist the Company with strategic objectives.

Balance Sheet

Total assets as of June 30, 2011 were $118.604 million, a modest increase from the period ended March 31, 2011, and a 7.5% increase from December 31, 2010. The balance sheet growth is the direct result of an increase in loan and deposit balances. The Company continues to focus on generating core, organic growth in our primary markets by providing a diverse portfolio of products. The asset quality of the Company remains strong. Nonperforming assets as of June 30, 2011 totaled $298,000 and the allowance for loan loss represented 1.50% of total loans. At June 30, 2011 the Company's book value was $4.60 and the subsidiary bank continues to be classified as well capitalized based on regulatory capital guidelines.

Chief Executive Officer Rob Farr issued the results and commented, "We are excited to report the positive results of the Company for the first six months of 2011. We have been able to achieve a Return on Average Assets before preferred dividends of 1.34% and maintain a strong margin given the difficult interest rate environment and economy. Our core profitability continues to perform above peer and provide value to the franchise. The results of the Company are a product of the strategic initiatives management and the Board have implemented over the past 12 months. We look forward to the remainder of the 2011 and the future of the organization."

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 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)
				June 30,	December 31,	June 30,
				2011	2010	2010
ASSETS
		Cash and due from banks		$ 13,251,574	$ 5,300,368	$ 15,250,255
		Federal funds sold		-	65,936	34,492
	Total cash and cash equivalents			13,251,574	5,366,304	15,284,747
		Securities available-for-sale		2,951,686	3,200,002	4,030,157
		Securities held-to-maturity		-	-	-
		Federal Home Loan Bank Stock		169,900	160,200	162,100
	Total securities			3,121,586	3,360,202	4,192,257
	Loans held for Sale			793,209	322,500	-
	Portfolio loans
		Consumer loans		1,065,737	1,054,573	793,309
		Mortgage loans		10,545,335	11,335,007	10,592,809
		Commercial loans		88,467,511	87,989,098	78,818,713
	Total loans			100,078,583	100,378,678	90,204,831
		Less: Allowance for loan loss		1,502,099	1,448,096	1,167,482
	Net loans			98,576,484	98,930,582	89,037,349
		Premises and equipment, net		1,480,407	1,359,510	1,408,849
		Accrued interest receivable and other assets		1,380,689	995,438	1,066,513
	TOTAL ASSETS			$ 118,603,949	$ 110,334,536	$ 110,989,715
LIABILITIES
	Deposits
		Noninterest-bearing		$ 16,374,765	$ 14,190,295	$ 11,815,643
		Interest-bearing		89,930,476	83,060,199	87,988,239
	Total deposits			106,305,241	97,250,494	99,803,882
		Short term borrowings		-	1,469,095	-
		Accrued interest payable, taxes and other liabilities		602,245	629,422	363,905
	Total liabilities			106,907,486	99,349,011	100,167,787
SHAREHOLDERS' EQUITY
		Senior preferred stock A		1,635,000	1,635,000	1,635,000
		Discount on senior preferred stock A		(51,826)	(61,027)	(70,176)
		Warrant preferred stock B		82,000	82,000	82,000
		Premium on warrant preferred stock B		5,633	6,634	7,628
		Senior preferred stock C		1,744,000	1,744,000	1,744,000
		Discount on senior preferred stock C		-	-	-
		Common Stock, no par value		17,034,330	17,034,330	17,034,330
		Authorized - 4,500,000 shares
		Issued and outstanding - 1,800,000 shares
		Accumulated other comprehensive income		139,975	112,908	128,195
		Additional paid in capital		-	-	-
		Additional paid in capital - share based payments		493,154	493,154	493,154
		Accumulated deficit		(9,385,803)	(10,061,474)	(10,232,203)
	Total shareholders' equity			11,696,463	10,985,525	10,821,928
	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY			$ 118,603,949	$ 110,334,536	$ 110,989,715
				-	-	-
Book value per share				$4.60	$4.21	$4.12

Birmingham Bloomfield Bancshares, Inc.
Consolidated Statement of Income (Unaudited)
					For the three months ended				For the six months ended
					June 30,				June 30,
					2011		2010		2011	2010
Interest Income
		Interest and fees on loans
			Commercial loans		$ 1,401,178		$ 1,256,460		$ 2,814,965	$ 2,365,979
			Installment loans		13,459		10,476		26,547	18,925
			Mortgage loans		15,644		18,860		35,169	35,869
			Home Equity loans		97,661		89,812		195,592	178,561
			Late charges and fees		6,302		5,149		17,780	13,562
	Total loan interest and fee income				1,534,244		1,380,757		3,090,053	2,612,896
		Interest bearing deposits			5,733		5,711		10,351	11,316
		Federal Funds Sold			-		519		13	1,248
		Interest on investment securities
			Taxable		24,811		31,357		52,722	66,055
			Tax-exempt		-		-		-	-
	Total investment income				24,811		31,357		52,722	66,055
	Total interest income				1,564,788		1,418,344		3,153,139	2,691,515
Interest Expense
		Interest on deposits			313,877		351,733		627,932	675,979
		Interest on borrowed funds			-		-		14,509	-
	Total interest expense				313,877		351,733		642,441	675,979
	Net Interest Income				1,250,911		1,066,611		2,510,698	2,015,536
		Provision for loan losses			15,000		176,892		54,000	289,297
	Net Interest Income After Provision for Loan Losses				1,235,911		889,719		2,456,698	1,726,239
Non-interest Income
		Service charge income			12,589		12,443		24,161	22,078
		Mortgage banking activities			47,322		-		58,761	-
		Other income			220,253		24,435		522,351	41,822
	Total non-interest income				280,164		36,878		605,273	63,900
Non-interest Expense
		Salaries and employee benefits			643,368		356,383		1,225,385	757,007
		Occupancy expense			125,583		101,841		243,685	220,475
		Equipment expense			42,188		34,492		77,588	70,069
		Loss on branch closing			-		-		-	-
		Advertising			44,697		46,960		80,743	52,240
		Data Processing			60,560		49,580		109,573	105,130
		Professional fees			145,916		98,177		257,440	166,388
		Other expense			144,207		104,612		295,521	254,939
	Total non-interest expense				1,206,519		792,045		2,289,935	1,626,248
	Net Income (Loss) Before Income Taxes				309,556		134,552		772,036	163,891
		Income tax expense			-		-		-	-
	Net Income (Loss)				309,556		134,552		772,036	163,891
		Dividend and accretion on preferred stock			48,182		49,207		96,365	96,658
	Net Income (Loss) applicable to common shareholders				$ 261,374		$ 85,345		$ 675,671	$ 67,233
Income (Loss) per share - basic					$ 0.15		$ 0.05		$ 0.38	$ 0.04

Birmingham Bloomfield Bancshares, Inc.
Financial Summary and Selected Ratios (Unaudited)
(Dollars in thousands except per share data)
				Year to Date
				June 30,			Change
				2011	2010		Amount	Percentage
INCOME STATEMENT
		Interest Income		$ 3,153	$ 2,692		$ 462	17.2%
		Interest Expense		642	676		(34)	-5.0%
	Net Interest Income			2,511	2,016		495	24.6%
		Provision for loan loss		54	289		(235)	-81.3%
		Non-interest income		605	64		541	847.2%
		Non-interest expense		2,290	1,626		664	40.8%
	Income (loss) before Income Taxes			772	164		608	371.1%
		Income tax expense		-	-		-	0.0%
	Net Income (Loss)			772	164		608	371.1%
		Dividend and accretion on preferred stock		96	97		(0)	-0.3%
	Net Income (Loss) - common shareholders			$ 676	$ 67		$ 608	905.0%
	Income (loss) per share - basic & diluted			$ 0.38	$ 0.04		$ 0.34	905.0%
BALANCE SHEET DATA
	Total assets			118,604	110,990		7,614	6.9%
	Average Assets			116,223	102,266		13,957	13.6%
	Total loans			100,079	90,205		9,874	10.9%
	Allowance for loan loss (ALLL)			1,502	1,167		335	28.7%
	Total deposits			106,305	99,804		6,501	6.5%
	Other borrowings			-	-		-	0.0%
	Shareholders' equity			11,696	10,822		875	8.1%
	Average Equity			11,325	10,746		579	5.4%
ASSET QUALITY
	Other real estate owned (OREO)			298	-		298	0.0%
	Net charge-offs			-	296		(296)	-100.0%
	Non-accrual loans			-	-		-	0.0%
(2)	Non-performing assets (NPA)			298	-		298	0.0%
	Non-accrual loans / total loans			0.00%	0.00%		0.00%	0.0%
	Allowance for loan loss / total loans			1.50%	1.29%		0.21%	16.0%
PERFORMANCE MEASUREMENTS
	Net interest margin (tax equivalent)			4.50%	4.08%		0.42%	10.3%
(1)	Return on average assets (annualized)			1.34%	0.32%		1.02%	314.6%
(1)	Return on average common equity (annualized)			19.67%	4.50%		15.17%	337.6%
	Efficiency ratio			73.49%	78.21%		-4.72%	-6.0%
	Tier 1 Leverage Ratio (Bank only)			8.55%	8.50%		0.05%	0.59%
	Equity / Assets			9.86%	9.75%		0.11%	1.1%
	Total loans / Total deposits			94.1%	90.4%		3.76%	4.2%
	Book value per share			$ 4.60	$ 4.12		$ 0.48	11.6%
	Income (loss) per share - basic & diluted			$ 0.38	$ 0.04		$ 0.34	905.0%
	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
				June 30,		March 31,		December 31,		September 30,		June 30,
				2011		2011		2010		2010		2010
INCOME STATEMENT
		Interest Income		$ 1,565		$ 1,588		$ 1,554		$ 1,506		$ 1,418
		Interest Expense		314		329		327		337		352
	Net Interest Income			1,251		1,260		1,226		1,170		1,067
		Provision for loan loss		15		39		49		256		177
		Non-interest income		280		325		37		24		37
		Non-interest expense		1,207		1,083		1,046		840		792
	Income (loss) before Income Taxes			310		462		169		98		135
		Income tax expense		-		-		-		-		-
	Net Income (Loss)			310		462		169		98		135
		Dividend and accretion on preferred stock		48		48		48		48		49
	Net Income (Loss) applicable to common			$ 261		$ 414		$ 121		$ 50		$ 85
	Income (loss) per share - basic & diluted			$ 0.15		$ 0.23		$ 0.07		$ 0.03		$ 0.05
BALANCE SHEET DATA
	Total assets			118,604		116,521		110,335		111,254		110,990
	Average Assets			117,002		115,435		111,366		110,091		106,960
	Total loans			100,079		98,205		100,379		94,284		90,205
	Allowance for loan loss (ALLL)			1,502		1,487		1,448		1,424		1,167
	Total deposits			106,305		104,588		97,250		99,997		99,804
	Other borrowings			-		-		1,469		-		-
	Shareholders' equity			11,696		11,403		10,986		10,899		10,822
	Average Equity			11,481		11,167		10,942		10,860		10,770
ASSET QUALITY
	Other real estate owned (OREO)			298		-		-		298		-
	Net charge-offs			-		-		24		-		265
	Non-accrual loans			-		298		298		-		-
(2)	Non-performing assets (NPA)			298		298		298		298		-
	Non-accrual loans / total loans			0.00%		0.30%		0.30%		0.00%		0.00%
	Allowance for loan loss / total loans			1.50%		1.51%		1.44%		1.51%		1.29%
PERFORMANCE MEASUREMENTS
	Net interest margin (tax equivalent)			4.51%		4.49%		4.69%		4.41%		4.13%
(1)	Return on average assets (annualized)			1.06%		1.62%		0.60%		0.35%		0.50%
(1)	Return on average common equity (annualized)			15.39%		24.17%		8.89%		5.21%		7.32%
	Efficiency ratio			78.80%		68.36%		82.78%		70.39%		71.78%
	Tier 1 Leverage Ratio (Bank only)			8.55%		8.33%		8.15%		8.19%		8.53%
	Equity / Assets			9.86%		9.79%		9.96%		9.80%		9.75%
	Total loans / Total deposits			94.1%		93.9%		103.2%		94.3%		90.4%
	Book value per share			$ 4.60		$ 4.44		$ 4.21		$ 4.16		$ 4.12
	Income (loss) per share - basic & diluted			$ 0.15		$ 0.23		$ 0.07		$ 0.03		$ 0.05
	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.

SOURCE Birmingham Bloomfield Bancshares, Inc.