EXHIBIT 13




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##### 



rob.farr@bkofb.com




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##### 



(PLANTE MORAN LOGO)
    
    Plante & Moran, PLLC
Suite 500
2601 Cambridge Court
Auburn Hills, MI 48326
Tel: 248.375.7100
Fax: 248.375.7101
plantemoran.com




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC
CONSOLIDATED BALANCE SHEETS
 December 31,2009
    
    
    2008AssetsCash and cash equivalentsCash
    
    $
    4,644,416
    
    
    $
    1,201,318Federal funds sold
    
    
    3,113,785
    
    
    
    3,462,179Total cash and cash equivalents
    
    
    7,758,201
    
    
    
    4,663,497Securities, available for sale (Note 3)
    
    
    3,835,082
    
    
    
    3,880,401Loans (Note 4)Total loans
    
    
    79,655,896
    
    
    
    56,840,675Less: allowance for loan losses
    
    
    (1,173,865
    )
    
    
    (710,000
    )Net loans
    
    
    78,482,031
    
    
    
    56,130,675Premises & equipment (Note 6)
    
    
    1,488,689
    
    
    
    2,232,317Interest receivable and other assets
    
    
    1,072,770
    
    
    
    391,646Total assets
    
    $
    92,636,773
    
    
    $
    67,298,536Liabilities and Shareholders EquityDeposits (Note 5)Non-interest bearing
    
    $
    8,494,903
    
    
    $
    5,194,795Interest bearing
    
    
    72,970,583
    
    
    
    52,553,240Total deposits
    
    
    81,465,486
    
    
    
    57,748,035Interest payable and other liabilities
    
    
    443,354
    
    
    
    238,532Total liabilities
    
    
    81,908,840
    
    
    
    57,986,567Shareholders equitySenior cumulative perpetual preferred stock series A
$1,000 liquidation value per share, 5%Authorized,
issued and outstanding - 1,635 shares
    
    
    1,635,000
    
    
    
    -Discount on senior preferred stock series A
    
    
    (79,427
    )
    
    
    Senior cumulative perpetual preferred stock series B
$1,000 liquidation value per share, 9%Authorized, issued and outstanding - 82 shares
    
    
    82,000
    
    
    
    Premium on preferred stock series B
    
    
    8,634
    
    
    
    Senior cumulative perpetual preferred stock series C
$1,000 liquidation value per share, 5%Authorized, issued and outstanding - 1,744
shares
    
    
    1,744,000
    
    
    
    Common stock, no par valueAuthorized - 4,500,000 sharesIssued and outstanding - 1,800,000 shares
    
    
    17,034,330
    
    
    
    17,034,330Additional paid in capital-share based payments
    
    
    489,459
    
    
    
    466,553Accumulated deficit
    
    
    (10,299,436
    )
    
    
    (8,311,252
    )Accumulated other comprehensive income
    
    
    113,373
    
    
    
    122,338Total shareholders equity
    
    
    10,727,933
    
    
    
    9,311,969Total liabilities and shareholders equity
    
    $
    92,636,773
    
    
    $
    67,298,536
  1




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC
CONSOLIDATED STATEMENT OF OPERATIONS
 For the Years Ended December 31,2009
    
    
    2008Interest IncomeLoans, including fees
    
    $
    3,876,233
    
    
    $
    3,052,072Taxable securities
    
    
    151,777
    
    
    
    138,339Federal funds sold
    
    
    4,103
    
    
    
    116,000Correspondent bank
    
    
    26,853
    
    
    
    2,258Total interest income
    
    
    4,058,966
    
    
    
    3,308,669Interest expenseDeposits
    
    
    1,345,475
    
    
    
    1,386,846Total interest expense
    
    
    1,345,475
    
    
    
    1,386,846Net interest income
    
    
    2,713,491
    
    
    
    1,921,823Provision for loan losses
    
    
    480,380
    
    
    
    384,003Net interest income after
provision for loan losses
    
    
    2,233,111
    
    
    
    1,537,820Non-interest incomeLoan fees and charges
    
    
    13,118
    
    
    
    18,152Deposit fees and charges
    
    
    70,178
    
    
    
    69,009Other income
    
    
    15,062
    
    
    
    30,266Total non-interest income
    
    
    98,358
    
    
    
    117,427Non-interest expenseSalaries and benefits
    
    
    1,601,016
    
    
    
    1,422,774Occupancy & equipment expense
    
    
    808,973
    
    
    
    820,491Loss on Bloomfield Branch closure
    
    
    609,330
    
    
    
    Data processing expense
    
    
    211,514
    
    
    
    185,211Advertising and public relations
    
    
    61,740
    
    
    
    74,431Professional fees
    
    
    340,397
    
    
    
    278,087Printing and office supplies
    
    
    27,950
    
    
    
    25,066Other expense
    
    
    583,471
    
    
    
    361,289Total non-interest expense
    
    
    4,244,391
    
    
    
    3,167,349Income taxes
    
    
    
    
    
    
    Net loss
    
    $
    (1,912,922
    )
    
    $
    (1,512,102
    )Dividend on senior preferred stock
    
    
    (64,055
    )
    
    
    Accretion of discount on pref stock
    
    
    (11,207
    )
    
    
    Effective dividend on preferred stock
    
    
    (75,262
    )
    
    
    Net loss applicable to common shareholders
    
    $
    (1,988,184
    )
    
    $
    (1,512,102
    )Basic loss per share
    
    
    (1.10
    )
    
    
    (0.84
    )Diluted loss per share
    
    
    (1.10
    )
    
    
    (0.84
    )
  2




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (DEFICIT)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherPreferred
    
    
    Common
    
    
    Paid in
    
    
    Accumulated
    
    
    ComprehensiveStock
    
    
    Stock
    
    
    Capital
    
    
    Deficit
    
    
    Income
    
    
    TotalBalance at December 31, 2007
    
    
    
    
    
    
    17,034,330
    
    
    
    462,000
    
    
    $
    (6,799,150
    )
    
    
    62,459
    
    
    
    10,759,639Share based payments expense
    
    
    
    
    
    
    
    
    
    
    4,553
    
    
    
    
    
    
    
    
    
    
    
    4,553Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,512,102
    )
    
    
    
    
    
    
    (1,512,102
    )Change in unrealized gain on
securities  Net of reclassification
adjustment of $19,270 (Note 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59,879
    
    
    
    59,879Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,447,670
    )Balance at December 31, 2008
    
    
    
    
    
    
    17,034,330
    
    
    
    466,553
    
    
    $
    (8,311,252
    )
    
    
    122,338
    
    
    $
    9,311,969Issue senior preferred stock A
    
    
    1,635,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,635,000Discount senior preferred stock A
    
    
    (92,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (92,000
    )Accretion of senior pref stock A
    
    
    12,573
    
    
    
    
    
    
    
    
    
    
    
    (12,573
    )
    
    
    
    
    
    
    0Issue preferred stock B
    
    
    82,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,000Premium preferred stock B
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000Amortization of premium pref
stock B
    
    
    (1,366
    )
    
    
    
    
    
    
    
    
    
    
    1,366
    
    
    
    
    
    
    
    0Issue senior preferred stock C
    
    
    1,744,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,744,000Preferred dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (64,055
    )
    
    
    
    
    
    
    (64,055
    )Share based payments expense
    
    
    
    
    
    
    
    
    
    
    22,906
    
    
    
    
    
    
    
    
    
    
    
    22,906Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,912,922
    )
    
    
    
    
    
    
    (1,912,922
    )Change in unrealized gain on
securities  Net of reclassification
adjustment of $3,028 (Note 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,965
    )
    
    
    (8,965
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,921,887
    )Balance at December 31, 2009
    
    $
    3,390,207
    
    
    $
    17,034,330
    
    
    $
    489,459
    
    
    $
    (10,299,436
    )
    
    $
    113,373
    
    
    $
    10,727,933
  3




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BIRMINGHAM BLOOMFIELD BANCSHARES, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Years Ended December 31,2009
    
    
    2008Cash flows from operating activitiesNet loss
    
    $
    (1,912,922
    )
    
    $
    (1,512,102
    )Share based payments expense
    
    
    22,906
    
    
    
    4,553Provision for loan losses
    
    
    480,380
    
    
    
    384,003Accretion of securities
    
    
    (5,147
    )
    
    
    (30,604
    )Gain on calls of securities
    
    
    (3,028
    )
    
    
    (19,270
    )Depreciation expense
    
    
    786,190
    
    
    
    312,660Net decrease (increase) in other assets
    
    
    (699,474
    )
    
    
    66,511Net increase in other liabilities
    
    
    204,822
    
    
    
    629Net cash used in operating activities
    
    
    (1,126,273
    )
    
    
    (793,620
    )Cash flows from investing activitiesOrigination of loans, net of principal repayments
    
    
    (22,813,386
    )
    
    
    (19,967,702
    )Purchase of securities
    
    
    (2,954,862
    )
    
    
    (3,990,436
    )Proceeds from sales, calls or maturities of securities
    
    
    2,999,391
    
    
    
    2,815,718Purchases of premises and equipment
    
    
    (42,562
    )
    
    
    (25,276
    )Net cash used in investing activities
    
    
    (22,811,419
    )
    
    
    (21,167,696
    )Cash flows from financing activitiesIncrease in deposits
    
    
    23,717,451
    
    
    
    21,485,687Proceeds from sale of senior preferred stock
    
    
    3,379,000
    
    
    
    Dividend on senior preferred stock
    
    
    (64,055
    )
    
    
    Net cash provided by financing activities
    
    
    27,032,396
    
    
    
    21,485,687(Decrease) increase in cash and cash equivalents
    
    
    3,094,704
    
    
    
    (475,629
    )Cash and
cash equivalents at the beginning of the period
    
    
    4,663,497
    
    
    
    5,139,126Cash and cash equivalents at the
end of the period
    
    $
    7,758,201
    
    
    $
    4,663,497
  4




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BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Summary of Significant accounting principles
 Basis of Presentation
 Organization
 Use of Estimates
 Nature of Operations
 Cash and Cash Equivalents
 Loans
  5




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BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Summary of Significant Accounting Policies  continued
   Allowance for Loan Losses
     Off-balance-sheet Instruments
 6




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BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Summary of Significant Accounting Policies  continued
 Property and Equipment
 Income Taxes 
 Other Comprehensive Income
 Earnings per Share
 Reclassification
 Note 2  Fair Value Accounting
 Valuation Hierarchy
  
    
    Level 1  inputs to the valuation methodology are quoted prices (unadjusted) for
identical assets or liabilities in active markets which the Corporation can participate.Birmingham Bloomfield Bancshares currently holds no securities in level one of the
hierarchy.
    
    Level 2  inputs to the valuation methodology include quoted prices for similar assets
and liabilities in active markets, and inputs that are observable for the asset or
liability, either directly or indirectly, for substantially the full term of the financial
instrument.Level 2 assets and liabilities for Birmingham Bloomfield Bancshares, Inc. include available
for sale investments in government sponsored agencies, asset backed securities, and
investments in obligations of state and political subdivisions. Fair values of these items
are determined via external pricing from vendors.
 7




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BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 2
 Fair Value Accounting  continued
 
    
    Level 3  inputs to the valuation methodology are unobservable and significant to the
fair value measurement, and include inputs that are available in situations where there is
little, if any, market activity for the related asset or liability.Level 3 assets and liabilities for Birmingham Bloomfield Bancshares, Inc. include FHLB
stock.
    Quoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    Unobservable
    
    
    Balance atAssets
    
    
    Inputs
    
    
    Inputs
    
    
    DecemberLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    31, 2009Securities available for sale
    
    $
    
    
    
    $
    3,673
    
    
    $
    0
    
    
    $
    3,673
 Note 3  Securities
  Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value2009U. S. Government agency securities
    
    $
    2,342
    
    
    $
    18
    
    
    $
    
    
    
    $
    2,360Municipal securities
    
    
    200
    
    
    
    4
    
    
    
    
    
    
    
    204Mortgage backed securities
    
    
    1,018
    
    
    
    91
    
    
    
    
    
    
    
    1,109Corporate bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sub-Total Available for Sale
    
    $
    3,560
    
    
    $
    113
    
    
    $
    
    
    
    $
    3,673FHLB Stock
    
    
    162
    
    
    
    
    
    
    
    
    
    
    
    162Total Securities
    
    $
    3,722
    
    
    $
    113
    
    
    $
    
    
    
    $
    3,8352008U. S. Government agency securities
    
    $
    2,004
    
    
    $
    30
    
    
    $
    
    
    
    $
    2,034Municipal securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mortgage backed securities
    
    
    1,250
    
    
    
    92
    
    
    
    
    
    
    
    1,342Corporate bonds
    
    
    504
    
    
    
    
    
    
    
    
    
    
    
    504Total Securities
    
    $
    3,758
    
    
    $
    122
    
    
    $
    
    
    
    $
    3,880
 8




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BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 3
 Securities - continued
   EstimatedAmortized
    
    
    FairCost
    
    
    ValueDue in one year or less
    
    $
    
    
    
    $
    Due in one year through five years
    
    
    2,542
    
    
    
    2,564Due in five years through ten years
    
    
    162
    
    
    
    162Due after ten years
    
    
    
    
    
    
    Subtotal
    
    
    2,704
    
    
    
    2,726Mortgage backed securities
    
    
    1,018
    
    
    
    1,109Total
    
    $
    3,722
    
    
    $
    3,835
  9




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 4  Loans
 A summary of the balances of loans as of December 31, 2009 and 2008 is as follows (000s omitted):
 2009
    
    
    2008Mortgage loans on real estate:Residential 1 to 4 family
    
    $
    1,353
    
    
    $
    2,745Multifamily
    
    
    12,641
    
    
    
    7,676Commercial
    
    
    35,861
    
    
    
    23,064Construction
    
    
    518
    
    
    
    3,000Second mortgage
    
    
    171
    
    
    
    736Equity lines of credit
    
    
    11,445
    
    
    
    10,381Total mortgage loans on real estate
    
    
    61,989
    
    
    
    47,602Commercial loans
    
    
    17,160
    
    
    
    8,232Consumer installment loans
    
    
    507
    
    
    
    1,007Total loans
    
    
    79,656
    
    
    
    56,841Less:Allowance for loan losses
    
    
    1,174
    
    
    
    710Net loans
    
    $
    78,482
    
    
    $
    56,131
 An analysis of the allowance for loan losses follows (000s omitted):
 2009
    
    
    2008Balance at beginning of year
    
    $
    710
    
    
    $
    560Provision for loan losses
    
    
    480
    
    
    
    384Loans charged off
    
    
    (18
    )
    
    
    (318
    )Recoveries of loans previously charged off
    
    
    2
    
    
    
    84Balance at end of year
    
    $
    1,174
    
    
    $
    710
   2009
    
    
    2008Balance at January 1
    
    $
    1,473
    
    
    $
    1,038Loans no longer related-party
    
    
    
    
    
    
    (72
    )New loans
    
    
    1,165
    
    
    
    950Repayments
    
    
    (711
    )
    
    
    (443
    )Balance at December 31
    
    $
    1,927
    
    
    $
    1,473
 10




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 5  Bank Premises and Equipment
  2009
    
    
    2008Leasehold improvements
    
    $
    2,131
    
    
    $
    2,126Furniture and equipment
    
    
    462
    
    
    
    454Computer equipment & software
    
    
    424
    
    
    
    394Total
    
    
    3,017
    
    
    
    2,974Less: accumulated depreciation
    
    
    1,528
    
    
    
    742Net premises and equipment
    
    $
    1,489
    
    
    $
    2,232
   Note 6  Deposits
  2009
    
    
    2008Non-interest bearing deposits
    
    $
    8,495
    
    
    $
    5,195NOW accounts
    
    
    7,894
    
    
    
    7,882Savings and money market accounts
    
    
    19,600
    
    
    
    10,571Certificates of deposit <$100,000
    
    
    13,240
    
    
    
    13,089Certificates of deposit >$100,000
    
    
    32,236
    
    
    
    21,011Total
    
    $
    81,465
    
    
    $
    57,748
  <$100,000
    
    
    >$100,000
    
    
    Total2010
    
    $
    8,613
    
    
    $
    12,840
    
    
    $
    21,4532011
    
    
    3,543
    
    
    
    16,997
    
    
    
    20,5402012
    
    
    767
    
    
    
    2,266
    
    
    
    3,0332013
    
    
    
    
    
    
    133
    
    
    
    1332014
    
    
    317
    
    
    
    
    
    
    
    317Total
    
    $
    13,240
    
    
    $
    32,236
    
    
    $
    45,476
 11




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 7  Stock Option Plan
       Calculated volatility
    
    
    12.40
    %Weighted average dividends
    
    
    0.00
    %Expected term (in years)
    
    
    5Risk-free rate
    
    
    4.50
    %
 12




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 7
 Stock Option Plan - continued
  Note 8  Income Taxes
  The components of the net deferred tax assets, included in other assets, are as follows:
 2009
    
    
    2008Deferred tax assets:Allowance for loan losses
    
    $
    285,014
    
    
    $
    142,662Organizational costs
    
    
    542,828
    
    
    
    590,375Net operating loss carry-forward
    
    
    2,398,855
    
    
    
    2,049,105Share based compensation
    
    
    166,416
    
    
    
    158,628Other
    
    
    77,716
    
    
    
    48,626Total deferred tax assets
    
    
    3,470,829
    
    
    
    2,989,396Less valuation allowance
    
    
    3,449,615
    
    
    
    2,808,334Deferred tax liabilities:Fixed assets
    
    
    
    
    
    
    134,261Other
    
    
    85,274
    
    
    
    46,801Total deferred tax liabilities
    
    
    85,274
    
    
    
    181,062Net deferred tax assets
    
    $
    
    
    
    $
    
 13




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 8
 Income Taxes - continued
  2009
    
    
    2008Current expense
    
    $
    
    
    
    $
    Deferred (benefit) expense
    
    
    
    
    
    
    Total income tax expense
    
    $
    
    
    
    $
    
  2009
    
    
    2008Income tax benefit at federal
statutory rate of 34 percent
    
    $
    (650,393
    )
    
    $
    (514,115
    )Increases resulting from
nondeductible expenses
    
    
    9,112
    
    
    
    6,992Other
    
    
    
    
    
    
    Change in valuation allowance
    
    
    641,281
    
    
    
    507,123Income tax expense
    
    $
    
    
    
    $
    
 Note 9  Leases and Commitments
   2010
    
    $
    235,6762011
    
    
    229,8402012
    
    
    234,4162013
    
    
    239,0982014
    
    
    243,910thereafter
    
    
    2,975,548Total
    
    $
    4,153,088
 14




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 10  Restrictions on dividends, loans and advances
    Note 11  Fair Value of Financial Instruments
   Cash and Cash Equivalents
 Securities
 Loans Receivable
 Deposit Liabilities
 15




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note
11  Fair Value of Financial Instruments - continued
 Accrued Interest
 Other Financial Instruments
  2009
    
    2008Estimated
    
    
    
    
    
    EstimatedCarrying
    
    Fair
    
    Carrying
    
    FairValue
    
    Value
    
    Value
    
    ValueFinancial assets:Cash and cash equivalents
    
    $
    7,758
    
    
    $
    7,758
    
    
    $
    4,663
    
    
    $
    4,663Securities available for
sale
    
    
    3,835
    
    
    
    3,835
    
    
    
    3,880
    
    
    
    3,880Loans
    
    
    78,482
    
    
    
    78,952
    
    
    
    56,131
    
    
    
    56,563Accrued interest
receivable
    
    
    335
    
    
    
    335
    
    
    
    293
    
    
    
    293Financial liabilities:Deposits
    
    
    81,465
    
    
    
    81,807
    
    
    
    57,748
    
    
    
    57,897Accrued interest payable
    
    
    77
    
    
    
    77
    
    
    
    153
    
    
    
    153
 Note 12  Retirement Plans
  Note 13  Parent Only Financial Statements
  16




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 13
 Parent Only Financial Statements  continued
  December 31,2009
    
    
    2008AssetsCash and cash equivalents
    
    $
    2,l93,387
    
    
    $
    555,817Investment in subsidiary
    
    
    8,581,286
    
    
    
    8,757,652Total assets
    
    $
    10,774,673
    
    
    $
    9,313,469Liabilities and Shareholders EquityOther liabilities
    
    $
    46,740
    
    
    $
    1,500Shareholders equity
    
    
    10,727,933
    
    
    
    9,311,969Total liabilities and shareholders equity
    
    $
    10,774,673
    
    
    $
    9,313,469
  For the Years Ended December 31,2009
    
    
    2008Interest income
    
    $
    
    
    
    $
    Interest expense
    
    
    
    
    
    
    Net interest income
    
    
    
    
    
    
    Non-interest expenseSalaries and benefits
    
    
    59,567
    
    
    
    (40,322
    )Occupancy & equipment expense
    
    
    
    
    
    
    Professional fees
    
    
    142,075
    
    
    
    101,100Printing and office supplies
    
    
    
    
    
    
    Other expense
    
    
    54,879
    
    
    
    36,555Total non-interest expense
    
    
    256,521
    
    
    
    97,333Income taxes
    
    
    
    
    
    
    Net (loss) income before equity in
loss of subsidiary
    
    
    (256,521
    )
    
    
    (97,333
    )Equity in loss of subsidiary
    
    
    (1,656,401
    )
    
    
    (1,414,769
    )Net loss
    
    
    ($1,912,922
    )
    
    
    ($1,512,102
    )Dividend on preferred stock
    
    
    (64,055
    )
    
    
    Accretion of discount on preferred stock
    
    
    (11,207
    )
    
    
    Effective dividend on preferred stock
    
    
    (75,262
    )
    
    
    Net loss applicable to common shareholders
    
    
    ($1,988,184
    )
    
    
    ($1,512,102
    )
 17




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 13  Parent Only Financial Statements  continued
  2009
    
    
    2008Cash flows from operating activitiesNet loss
    
    $
    (1,912,922
    )
    
    $
    (1,512,102
    )Loss of subsidiary
    
    
    1,656,401
    
    
    
    1,414,769Share based payments expense
    
    
    22,906
    
    
    
    4,553Net increase (decrease) in other liabilities
    
    
    45,240
    
    
    
    (68,500
    )Net cash (used in) provided by operating activities
    
    
    (188,375
    )
    
    
    (161,280
    )Cash flows from investing activitiesInvestment in subsidiary
    
    
    (1,489,000
    )
    
    
    Net cash used in investing activities
    
    
    (1,489,000
    )
    
    
    Cash flows from financing activitiesProceeds from sale of senior preferred stock
    
    
    3,379,000
    
    
    
    Dividend on senior preferred stock
    
    
    (64,055
    )
    
    
    Net cash provided by financing activities
    
    
    3,314,945
    
    
    
    (Decrease) increase in cash and cash equivalents
    
    
    1,637,570
    
    
    
    (161,280
    )Cash and cash equivalents at the
beginning of the period
    
    
    555,817
    
    
    
    717,097Cash and cash equivalents at the
end of the period
    
    $
    2,193,387
    
    
    $
    555,817
 Note 14  Off Balance Sheet Risk
 Credit-related Financial Instruments
   18




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 14
 Off Balance Sheet Risk - continued
  Contract Amount2009
    
    2008Commitments to grant loans
    
    $
    9,570,000
    
    
    $
    2,400,000Unfunded commitments under lines of credit
    
    $
    9,636,000
    
    
    $
    11,655,000Commercial and standby letters of credit
    
    $
    603,000
    
    
    $
    110,000
    Collateral Requirements
  Legal Contingencies
 19




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 15  Minimum Regulatory Capital Requirements
   For Capital
    
    To beActual
    
    Adequacy Purposes
    
    Well-CapitalizedAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioAs of December 31, 2009Total risk-based capital
(to risk weighted assets)
Bank of Birmingham
    
    $
    9,467
    
    
    
    12.0
    %
    
    $
    6,318
    
    
    
    8.0
    %
    
    $
    7,897
    
    
    
    10.0
    %Tier I capital
(to risk weighted assets)
Bank of Birmingham
    
    $
    8,468
    
    
    
    10.7
    %
    
    $
    3,159
    
    
    
    4.0
    %
    
    $
    4,738
    
    
    
    6.0
    %Tier I capital
(to average assets)
Bank of Birmingham
    
    $
    8,468
    
    
    
    9.4
    %
    
    $
    3,590
    
    
    
    4.0
    %
    
    $
    4,488
    
    
    
    5.0
    %As of December 31, 2008Total risk-based capital
(to risk weighted assets)
Bank of Birmingham
    
    $
    9,345
    
    
    
    16.6
    %
    
    $
    4,491
    
    
    
    8.0
    %
    
    $
    5,614
    
    
    
    10.0
    %Tier I capital
(to risk weighted assets)
Bank of Birmingham
    
    $
    8,635
    
    
    
    15.4
    %
    
    $
    2,246
    
    
    
    4.0
    %
    
    $
    3,369
    
    
    
    6.0
    %Tier I capital
(to average assets)
Bank of Birmingham
    
    $
    8,635
    
    
    
    12.8
    %
    
    $
    2,695
    
    
    
    4.0
    %
    
    $
    3,369
    
    
    
    5.0
    %
 20




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 16  QUARTERLY RESULTS OF OPERATIONS
  For the Three-Month Period endedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 312009Interest income
    
    $
    883
    
    
    $
    938
    
    
    $
    1,085
    
    
    $
    1,153Interest expense
    
    
    340
    
    
    
    328
    
    
    
    337
    
    
    
    340Net interest income
    
    
    543
    
    
    
    610
    
    
    
    748
    
    
    
    813Provision for loan losses
    
    
    34
    
    
    
    115
    
    
    
    32
    
    
    
    300Net interest income after
provision for loan losses
    
    
    509
    
    
    
    494
    
    
    
    716
    
    
    
    513Noninterest income
    
    
    26
    
    
    
    25
    
    
    
    27
    
    
    
    21Noninterest expense
    
    
    848
    
    
    
    991
    
    
    
    867
    
    
    
    1,538Net loss before income taxes
    
    
    (313
    )
    
    
    (472
    )
    
    
    (123
    )
    
    
    (1,004
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (313
    )
    
    $
    (472
    )
    
    $
    (123
    )
    
    $
    (1,004
    )Dividend on preferred stock
    
    
    
    
    
    
    (6
    )
    
    
    (22
    )
    
    
    (36
    )Accretion of discount
    
    
    
    
    
    
    (3
    )
    
    
    (4
    )
    
    
    (5
    )Net loss applicable to common shareholders
    
    $
    (313
    )
    
    $
    (481
    )
    
    $
    (149
    )
    
    $
    (1,045
    )Net loss per shareBasic
    
    $
    (0.17
    )
    
    $
    (0.26
    )
    
    $
    (0.08
    )
    
    $
    (0.58
    )Diluted
    
    $
    (0.17
    )
    
    $
    (0.26
    )
    
    $
    (0.08
    )
    
    $
    (0.58
    )
 21




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 16
 QUARTERLY RESULTS OF OPERATIONS
 For the Three-Month Period endedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 312008Interest income
    
    $
    728
    
    
    $
    797
    
    
    $
    883
    
    
    $
    901Interest expense
    
    
    314
    
    
    
    340
    
    
    
    352
    
    
    
    381Net interest income
    
    
    414
    
    
    
    457
    
    
    
    531
    
    
    
    520Provision for loan losses
    
    
    50
    
    
    
    95
    
    
    
    109
    
    
    
    130Net interest income after
provision for loan losses
    
    
    364
    
    
    
    362
    
    
    
    422
    
    
    
    390Noninterest income
    
    
    38
    
    
    
    24
    
    
    
    35
    
    
    
    20Noninterest expense
    
    
    1,027
    
    
    
    785
    
    
    
    692
    
    
    
    663Net loss before income taxes
    
    
    (625
    )
    
    
    (399
    )
    
    
    (235
    )
    
    
    (253
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (625
    )
    
    $
    (399
    )
    
    $
    (235
    )
    
    $
    (253
    )Net loss per shareBasic
    
    $
    (0.35
    )
    
    $
    (0.22
    )
    
    $
    (0.13
    )
    
    $
    (0.14
    )Diluted
    
    $
    (0.35
    )
    
    $
    (0.22
    )
    
    $
    (0.13
    )
    
    $
    (0.14
    )
 NOTE 17  SHAREHOLDERS EQUITY
 Participation in the TARP Capital Purchase Program
    22




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 17
 SHAREHOLDERS EQUITY - continued
   23




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 FORWARD LOOKING STATEMENTS
   OVERVIEW
   24




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 OVERVIEW continued
     CRITICAL ACCOUNTING POLICIES
 Allowance for loan losses
  25




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 CRITICAL
ACCOUNTING POLICIES - continued
   Income Tax Valuation Allowance
  OPERATIONS
   26




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Selected Financial Information
  (dollars in thousands)
 For the Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Total assets
    
    $
    92,637
    
    
    $
    67,299
    
    
    $
    47,260
    
    
    $
    23,704
    
    
    $
    640Gross loans
    
    
    79,656
    
    
    
    56,841
    
    
    
    37,107
    
    
    
    12,914
    
    
    
    Allowance for Loan Losses
    
    
    1,174
    
    
    
    710
    
    
    
    560
    
    
    
    195
    
    
    
    Total deposits
    
    
    81,465
    
    
    
    57,748
    
    
    
    36,262
    
    
    
    10,229
    
    
    
    Borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,709Total stockholders equity (deficit)
    
    
    10,728
    
    
    
    9,312
    
    
    
    10,760
    
    
    
    13,338
    
    
    
    (1,151
    )Summary of operationsInterest income
    
    
    4,058
    
    
    
    3,309
    
    
    
    2,463
    
    
    
    385
    
    
    
    Interest expense
    
    
    1,345
    
    
    
    1,387
    
    
    
    1,090
    
    
    
    158
    
    
    
    14Net interest income
    
    
    2,713
    
    
    
    1,922
    
    
    
    1,373
    
    
    
    227
    
    
    
    14Provision for loan losses
    
    
    480
    
    
    
    384
    
    
    
    465
    
    
    
    195
    
    
    
    Noninterest income
    
    
    98
    
    
    
    117
    
    
    
    132
    
    
    
    7
    
    
    
    Noninterest expense
    
    
    4,244
    
    
    
    3,167
    
    
    
    3,723
    
    
    
    3,002
    
    
    
    981Loss before taxes
    
    
    (1,913
    )
    
    
    (1,512
    )
    
    
    (2,683
    )
    
    
    (2,963
    )
    
    
    (995
    )Provision for income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (1,913
    )
    
    $
    (1,512
    )
    
    $
(2,683
    )
    
    $
    (2,963
    )
    
    $
    (995
    )Dividend on senior preferred stock
    
    
    (64
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accretion of discount on pref stock
    
    
    (11
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Effective dividend on preferred stock A
    
    
    (75
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss applicable to common shareholders
    
    $
    (1,988
    )
    
    $
    (1,512
    )
    
    $
    (2,683
    )
    
    $
    (2,963
    )
    
    $
    (995
    )Per share Data:Basic earnings
    
    $
    (1.10
    )
    
    $
    (0.84
    )
    
    $
    (1.49
    )
    
    $
    (4.19
    )
    
    $
    (9,954.59
    )Diluted earnings
    
    $
    (1.10
    )
    
    $
    (0.84
    )
    
    $
    (1.49
    )
    
    $
    (4.19
    )
    
    $
    (9,954.59
    )Dividend declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 27




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
  For the Year EndedDecember 31,2009
    
    2008
    
    2007
    
    2006
    
    2005Total nonperforming assets as a
percentage of total assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total nonperforming loans as a
percentage of total loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total allowance for loan losses as a
percentage of total loans
    
    
    1.47
    %
    
    
    1.25
    %
    
    
    1.50
    %
    
    
    1.50
    %
    
    
    Return on average assets
    
    
    -1.30
    %
    
    
    -2.47
    %
    
    
    -6.43
    %
    
    
    -37.62
    %
    
    
    -199.09
    %Return on average equity
    
    
    -10.56
    %
    
    
    -15.19
    %
    
    
    -21.42
    %
    
    
    -44.89
    %
    
    
    Net interest margin
    
    
    3.51
    %
    
    
    3.31
    %
    
    
    3.63
    %
    
    
    4.90
    %
    
    
    Average equity to average assets
    
    
    12.32
    %
    
    
    16.28
    %
    
    
    30.01
    %
    
    
    -83.82
    %
    
    
    
 FINANCIAL CONDITION
   Cash and Cash Equivalents
  28




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Investments
   After One but
    
    
    After Five but
    
    
    
    
    
    
    
    
    
    
    Mortgage-BackedWithin One Year
    
    
    Within Five Years
    
    
    within Ten
    
    
    After Ten Years
    
    
    Securities
    
    
    TotalAmount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    YieldU.S. Treasury &
Government agencies
    
    $
    
    
    
    
    
    
    
    $
    2,360
    
    
    
    2.99
    %
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    2,360
    
    
    
    2.99
    %FHLB stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    162
    
    
    
    0.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    162
    
    
    
    0.00
    %Municipal
    
    
    
    
    
    
    
    
    
    
    204
    
    
    
    3.25
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    204
    
    
    
    3.25
    %Mortgage-backed
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,109
    
    
    
    6.46
    %
    
    
    1,109
    
    
    
    6.46
    %Total
    
    $
    
    
    
    
    
    
    
    $
    2,564
    
    
    
    
    
    
    $
    162
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    1,109
    
    
    
    
    
    
    $
    3,835
  Loans, Credit Quality and Allowance for Loan Losses
  2009
    
    
    2008Commercial, financial and agricultural
    
    $
    17,186
    
    
    $
    8,242Real estate-construction
    
    
    518
    
    
    
    3,000Real estate-mortgage
    
    
    61,440
    
    
    
    44,592Consumer
    
    
    512
    
    
    
    1,007Total
    
    $
    79,656
    
    
    $
    56,841
  29




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Loans,
Credit Quality and Allowance for Loan Losses - continued
  Due After 1Due Within 1
    
    
    but Within 5
    
    
    Due After 5Year
    
    
    Years
    
    
    Years
    
    
    Total
    
    
    Fixed
    
    
    VariableCommercial, financial and agricultural
    
    $
    4,485
    
    
    $
    11,820
    
    
    $
    881
    
    
    $
    17,186
    
    
    $
    17,108
    
    
    $
    78Real estate  construction
    
    
    
    
    
    
    518
    
    
    
    
    
    
    
    518
    
    
    
    518
    
    
    
    Real estate  mortgage
    
    
    10,731
    
    
    
    37,471
    
    
    
    13,238
    
    
    
    61,440
    
    
    
    54,085
    
    
    
    7,355Consumer
    
    
    104
    
    
    
    408
    
    
    
    
    
    
    
    512
    
    
    
    499
    
    
    
    13Total
    
    $
    15,320
    
    
    $
    50,217
    
    
    $
    14,119
    
    
    $
    79,656
    
    
    $
    72,210
    
    
    $
    7,446
    2009
    
    
    2008
    
    
    2007Balance at beginning of year
    
    $
    710
    
    
    $
    560
    
    
    $
    195Provision for loan losses
    
    
    480
    
    
    
    384
    
    
    
    465Loans charged off
    
    
    (18
    )
    
    
    (318
    )
    
    
    (100
    )Recoveries of loans previously
charged off
    
    
    2
    
    
    
    84
    
    
    
    Balance at end of year
    
    $
    1,174
    
    
    $
    710
    
    
    $
    560Net charge-off rate
    
    
    0.00
    %
    
    
    0.48
    %
    
    
    0.43
    %
  30




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Loans,
Credit Quality and Allowance for Loan Losses - continued
   2009
    
    
    
    
    
    
    
    
    
    
    2008% of Total
    
    
    % of Loans to
    
    
    
    
    
    
    % of Total
    
    
    % of Loans toAllowance
    
    
    Allowance
    
    
    Total Loans
    
    
    Allowance
    
    
    Allowance
    
    
    Total LoansCommercial
    
    $
    196
    
    
    
    16.69
    %
    
    
    21.58
    %
    
    $
    103
    
    
    
    14.51
    %
    
    
    14.55
    %Real estate  construction
    
    
    6
    
    
    
    0.53
    %
    
    
    0.65
    %
    
    
    37
    
    
    
    5.21
    %
    
    
    5.27
    %Real estate  mortgage
    
    
    724
    
    
    
    61.66
    %
    
    
    77.13
    %
    
    
    437
    
    
    
    61.55
    %
    
    
    78.41
    %Consumer
    
    
    248
    
    
    
    21.12
    %
    
    
    0.64
    %
    
    
    133
    
    
    
    18.73
    %
    
    
    1.77
    %$
    1,174
    
    
    
    100.00
    %
    
    
    100.00
    %
    
    $
    710
    
    
    
    100.00
    %
    
    
    100.00
    %
 Criticized and Classified Loans
  Loan Risk RatingsSpecialMention
    
    
    Substandard
    
    
    Doubtful
    
    
    Loss
    
    
    TotalLoan TypeDecember 31, 2009Commercial
    
    $
    1,640
    
    
    $
    1,571
    
    
    $
    
    
    
    $
    
    
    
    $
    3,211Real estate  construction
    
    
    518
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    518Real estate  mortgage
    
    
    3,027
    
    
    
    962
    
    
    
    
    
    
    
    
    
    
    
    3,989Consumer
    
    
    345
    
    
    
    917
    
    
    
    
    
    
    
    
    
    
    
    1,262Total
    
    $
    5,530
    
    
    $
    3,450
    
    
    $
    
    
    
    $
    
    
    
    $
    8,980December 31, 2008Commercial
    
    $
    1,447
    
    
    $
    381
    
    
    $
    
    
    
    $
    
    
    
    $
    1,828Real estate  construction
    
    
    1,900
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,900Real estate  mortgage
    
    
    5,216
    
    
    
    121
    
    
    
    
    
    
    
    
    
    
    
    5,926Consumer
    
    
    
    
    
    
    589
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    8,563
    
    
    $
    1,091
    
    
    $
    
    
    
    $
    
    
    
    $
    9,654
 31




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Criticized
and Classified Loans - continued
    Off-Balance Sheet Items
  2009
    
    
    2008Commitments to extend credit
    
    $
    9,570
    
    
    $
    2,400Unfunded commitments under lines of credit
    
    
    9,636
    
    
    
    11,655Commercial and standby letters of credit
    
    
    603
    
    
    
    110Total
    
    $
    19,809
    
    
    $
    14,165
  32




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Deposits
  As of December 31, 2009
    
    
    As of December 31, 2008(dollars in thousands)
    
    Balance
    
    
    Percentage
    
    
    Balance
    
    
    PercentageNoninterest bearing demand
    
    $
    8,495
    
    
    
    10.43
    %
    
    $
    5,195
    
    
    
    6.38
    %NOW accounts
    
    
    7,894
    
    
    
    9.69
    
    
    
    7,882
    
    
    
    9.68Money market
    
    
    7,815
    
    
    
    9.59
    
    
    
    9,480
    
    
    
    11.64Savings
    
    
    11,785
    
    
    
    14.47
    
    
    
    1,091
    
    
    
    1.34Time deposits under $100,000
    
    
    13,240
    
    
    
    16.25
    
    
    
    13,089
    
    
    
    16.07Time deposits over $100,000
    
    
    32,236
    
    
    
    39.57
    
    
    
    21,011
    
    
    
    36.37Total deposits
    
    $
    81,465
    
    
    
    100.00
    %
    
    $
    57,748
    
    
    
    100.00
    %
 SHAREHOLDERS EQUITY
  RESULTS OF OPERATIONS
 Net Loss
  33




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Net Interest Income
 2009.
 2008.
 34




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Net
Interest Income - continued
  2009
    
    
    2008Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateInterest-earning assets:Loans receivable
    
    $
    64,992
    
    
    $
    3,876
    
    
    
    5.96
    %
    
    $
    49,244
    
    
    $
    3,052
    
    
    
    6.20
    %Securities available for sale
    
    
    3,736
    
    
    
    152
    
    
    
    4.06
    %
    
    
    2,944
    
    
    
    139
    
    
    
    4.70
    %Federal funds sold
    
    
    2,983
    
    
    
    4
    
    
    
    0.14
    %
    
    
    5,349
    
    
    
    116
    
    
    
    2.17
    %Interest-bearing balances with
other financial institutions
    
    
    5,672
    
    
    
    27
    
    
    
    0.47
    %
    
    
    464
    
    
    
    2
    
    
    
    0.49
    %Total interest-earning assets
    
    
    77,383
    
    
    
    4,059
    
    
    
    5.25
    %
    
    
    58,001
    
    
    
    3,309
    
    
    
    5.70
    %Non-interest earning assets:Cash and due from banks
    
    
    1,370
    
    
    
    
    
    
    
    
    
    
    
    1,157All other assets
    
    
    1,559
    
    
    
    
    
    
    
    
    
    
    
    2,010Total assets
    
    $
    80,312
    
    
    
    
    
    
    
    
    
    
    $
    61,168Interest-bearing liabilities:NOW accounts
    
    $
    7,919
    
    
    
    64
    
    
    
    0.81
    %
    
    $
    7,752
    
    
    
    153
    
    
    
    1.98
    %Money markets
    
    
    10,027
    
    
    
    114
    
    
    
    1.14
    %
    
    
    11,912
    
    
    
    267
    
    
    
    2.24
    %Savings deposits
    
    
    8,646
    
    
    
    139
    
    
    
    1.61
    %
    
    
    661
    
    
    
    12
    
    
    
    1.75
    %Time deposits
    
    
    36,187
    
    
    
    1,028
    
    
    
    2.84
    %
    
    
    24,681
    
    
    
    955
    
    
    
    3.87
    %Total interest-bearing liabilities
    
    
    62,779
    
    
    
    1,345
    
    
    
    2.14
    %
    
    
    45,006
    
    
    
    1,387
    
    
    
    3.08
    %Non-interest bearing demand deposits
    
    
    7,269
    
    
    
    
    
    
    
    
    
    
    
    5,935Other liabilities
    
    
    366
    
    
    
    
    
    
    
    
    
    
    
    271Total liabilities
    
    
    70,414
    
    
    
    
    
    
    
    
    
    
    
    51,212Shareholders equity
    
    
    9,898
    
    
    
    
    
    
    
    
    
    
    
    9,956Total liabilities and
shareholders equity
    
    $
    80,312
    
    
    
    
    
    
    
    
    
    
    $
    61,168Net interest income
    
    
    
    
    
    $
    2,714
    
    
    
    
    
    
    
    
    
    
    $
    1,922Net spread
    
    
    
    
    
    
    
    
    
    
    3.10
    %
    
    
    
    
    
    
    
    
    
    
    2.62
    %Net interest margin (1)
    
    
    
    
    
    
    
    
    
    
    3.51
    %
    
    
    
    
    
    
    
    
    
    
    3.31
    %Ratio of interest-earning assets to
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    123.26
    %
    
    
    
    
    
    
    
    
    
    
    128.87
    %
 
 (1)
    
    Net interest earnings divided by average interest-earning assets.  35




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Net
Interest Income - continued
  2009-2008
    
    
    2008-2007Net
    
    
    Increase/(decrease) due to
    
    
    Net
    
    
    Increase/(decrease) due toChange
    
    
    Volume
    
    
    Rate
    
    
    Change
    
    
    Volume
    
    
    RateInterest-earning assets:Loans receivable
    
    $
    824
    
    
    $
    976
    
    
    $
    (152
    )
    
    $
    1,364
    
    
    $
    1,919
    
    
    $
    (555
    )Securities available-for-sale
    
    
    13
    
    
    
    37
    
    
    
    (24
    )
    
    
    (8
    )
    
    
    17
    
    
    
    (25
    )Federal funds sold
    
    
    (112
    )
    
    
    (51
    )
    
    
    (61
    )
    
    
    (512
    )
    
    
    (351
    )
    
    
    (161
    )Interest-bearing balances with
other financial institutions
    
    
    25
    
    
    
    26
    
    
    
    (1
    )
    
    
    2
    
    
    
    2
    
    
    
    Total interest-earning assets
    
    
    750
    
    
    
    988
    
    
    
    (238
    )
    
    
    846
    
    
    
    1,587
    
    
    
    (741
    )Interest-bearing liabilities:NOW Accounts
    
    
    (89
    )
    
    
    3
    
    
    
    (93
    )
    
    
    (93
    )
    
    
    48
    
    
    
    (141
    )Money markets
    
    
    (153
    )
    
    
    (42
    )
    
    
    (111
    )
    
    
    (172
    )
    
    
    75
    
    
    
    (247
    )Savings deposits
    
    
    127
    
    
    
    140
    
    
    
    (12
    )
    
    
    8
    
    
    
    7
    
    
    
    1Time deposits
    
    
    73
    
    
    
    445
    
    
    
    (372
    )
    
    
    554
    
    
    
    871
    
    
    
    (317
    )Total interest-bearing
liabilities
    
    
    (42
    )
    
    
    546
    
    
    
    (588
    )
    
    
    (297
    )
    
    
    1,001
    
    
    
    (704
    )Net change in net interest
income
    
    $
    792
    
    
    $
    442
    
    
    $
    350
    
    
    $
    549
    
    
    $
    586
    
    
    $
    (37
    )
 Provision for Loan Losses
 
 Non-interest Income
 2009.
 36




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Non-interest Income-continued
 2008.
 Non-interest Expense
 2009.
 2008.
 37




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Income Taxes
  LIQUIDITY AND CAPITAL RESOURCES; ASSET/LIABILITY MANAGEMENT
    Amount of commitment expiration per periodLess Than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    YearsCommitments to grant loans
    
    $
    9,570
    
    
    $
    9,570
    
    
    $
    
    
    
    $
    
    
    
    $
    Unfunded commitments under lines of credit
    
    
    9,636
    
    
    
    4,182
    
    
    
    1,906
    
    
    
    694
    
    
    
    2,854Commercial and standby letters of credit
    
    
    603
    
    
    
    603
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    19,809
    
    
    $
    14,355
    
    
    $
    1,906
    
    
    $
    694
    
    
    $
    2,854
  38




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Contractual Obligations
  Payments due by periodLess Than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    YearsCertificates of deposit
    
    $
    45,476
    
    
    $
    21,453
    
    
    $
    23,573
    
    
    $
    450
    
    
    $
    Capital lease obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    4,153
    
    
    
    346
    
    
    
    464
    
    
    
    483
    
    
    
    2,976Purchase agreements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    49,629
    
    
    $
    21,799
    
    
    $
    24,037
    
    
    $
    933
    
    
    $
    2,976
   Capital Resources
   39




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operations
 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    Principal
Amount Maturing In:
 2010
    
    2011
    
    2012
    
    2013
    
    2014
    
    Thereafter
    
    Total
    
    Fair ValueRATE-SENSITIVE ASSETSGross loans
    
    $
    8,080
    
    
    $
    6,881
    
    
    $
    10,169
    
    
    $
    12,222
    
    
    $
    21,644
    
    
    $
    20,735
    
    
    $
    79,731
    
    
    $
    80,126Average interest rate
    
    
    5.73
    %
    
    
    6.09
    %
    
    
    6.63
    %
    
    
    6.43
    %
    
    
    6.61
    %
    
    
    4.17
    %Securities available for sale
    
    $
    2,342
    
    
    $
    200
    
    
    $
    316
    
    
    $
    0
    
    
    $
    342
    
    
    $
    259
    
    
    $
    3,459
    
    
    $
    3,673Average interest rate
    
    
    2.99
    %
    
    
    3.25
    %
    
    
    7.1
    %
    
    
    0
    %
    
    
    6.38
    %
    
    
    5.96
    %Other interest-earning assets
    
    $
    6,785
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    6,785
    
    
    $
    6,785Average interest rate
    
    
    0.18
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %RATE-SENSITIVE LIABILITIESSavings
& interest bearing demand deposits
    
    $
    20,621
    
    
    $
    
    
    
    $
    6,874
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    27,495
    
    
    $
    27,495Average interest rate
    
    
    1.5
    %
    
    
    0.0
    %
    
    
    0.43
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Time deposits
    
    $
    21,453
    
    
    $
    20,540
    
    
    $
    3,033
    
    
    $
    133
    
    
    $
    317
    
    
    $
    
    
    
    $
    45,476
    
    
    $
    45,818Average interest rate
    
    
    1.90
    %
    
    
    2.39
    %
    
    
    2.86
    %
    
    
    2.48
    %
    
    
    3.03
    %
    
    
    0.0
    %
 40




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 INTEREST RATE SENSITIVITY MANAGEMENT
  (dollars in thousands)
 After
    
    
    
    
    
    
    AfterThree
    
    
    
    
    
    
    One YearMonths
    
    
    
    
    
    
    butWithin
    
    
    
    
    
    
    but
    
    
    
    
    
    
    Within
    
    
    
    
    
    
    AfterThree
    
    
    
    
    
    
    Within
    
    
    
    
    
    
    Five
    
    
    
    
    
    
    FiveMonths
    
    
    
    
    
    
    One Year
    
    
    
    
    
    
    Years
    
    
    
    
    
    
    Years
    
    
    
    
    
    
    TotalInterest earning assetsFederal funds sold
    
    $
    3,114
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    3,114Interest bearing due from banks
    
    
    3671
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,671Securities
    
    
    1.015
    
    
    
    
    
    
    
    1,674
    
    
    
    
    
    
    
    679
    
    
    
    
    
    
    
    467
    
    
    
    
    
    
    
    3,835Loans
    
    
    19,294
    
    
    
    
    
    
    
    17,242
    
    
    
    
    
    
    
    38,709
    
    
    
    
    
    
    
    4,411
    
    
    
    
    
    
    
    79,656Total
    
    
    27,094
    
    
    
    
    
    
    
    18,916
    
    
    
    
    
    
    
    39,388
    
    
    
    
    
    
    
    4,878
    
    
    
    
    
    
    
    90,276Interest bearing liabilitiesNOW accounts
    
    
    5,921
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,974
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,895Money markets
    
    
    5,861
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,954
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,815Savings
    
    
    8,839
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,946
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,785Time deposits less than $100,000
    
    
    3,784
    
    
    
    
    
    
    
    4,881
    
    
    
    
    
    
    
    4,575
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,240Time deposits > $100,000
    
    
    2,685
    
    
    
    
    
    
    
    10,339
    
    
    
    
    
    
    
    19,212
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,236Total
    
    
    27,090
    
    
    
    
    
    
    
    15,220
    
    
    
    
    
    
    
    30,661
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    72,971Rate sensitivity gap
    
    $
    4
    
    
    
    
    
    
    
    3,696
    
    
    
    
    
    
    
    8,727
    
    
    
    
    
    
    
    4,878Cumulative rate sensitivity gap
    
    
    
    
    
    
    
    
    
    $
    3,700
    
    
    
    
    
    
    $
    12,427
    
    
    
    
    
    
    $
    17,305Rate sensitivity gap ratio
    
    
    1.00
    
    
    
    X
    
    
    
    1.24
    
    
    
    X
    
    
    
    1.28
    
    
    
    X
    
    
    
    
    
    
    
    XCumulative rate sensitivity gap ratio
    
    
    
    
    
    
    
    
    
    
    1.09
    
    
    
    X
    
    
    
    1.17
    
    
    
    X
    
    
    
    1.24
    
    
    
    X
 41




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 INTEREST RATE SENSITIVITY MANAGEMENT-continued
   SEC FORM 10-K
  STOCK INFORMATION
   High
    
    Low2008First Quarter
    
    $
    5.00
    
    
    $
    3.50Second Quarter
    
    $
    6.90
    
    
    $
    2.25Third Quarter
    
    $
    3.00
    
    
    $
    2.00Fourth Quarter
    
    $
    4.00
    
    
    $
    2.002009First Quarter
    
    $
    2.58
    
    
    $
    2.00Second Quarter
    
    $
    2.25
    
    
    $
    1.75Third Quarter
    
    $
    4.00
    
    
    $
    2.00Fourth Quarter
    
    $
    2.25
    
    
    $
    1.55
 42




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 STOCK INFORMATION continued
  43