EXHIBIT 13




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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,
    
    
    December 31,2010
    
    
    2009AssetsCash and cash equivalentsCash
    
    $
    5,300,368
    
    
    $
    4,644,416Federal funds sold
    
    
    65,936
    
    
    
    3,113,785Total cash and cash equivalents
    
    
    5,366,304
    
    
    
    7,758,201Securities, available for sale (Note 2)
    
    
    3,200,002
    
    
    
    3,672,982Federal home loan bank stock
    
    
    160,200
    
    
    
    162,100Loans held for sale
    
    
    322,500
    
    
    
    Loans (Note 3)Total portfolio loans
    
    
    100,378,678
    
    
    
    79,655,896Less: allowance for loan losses
    
    
    (1,448,096
    )
    
    
    (1,173,865
    )Net portfolio loans
    
    
    98,930,582
    
    
    
    78,482,031Premises & equipment (Note 4)
    
    
    1,359,510
    
    
    
    1,488,689Interest receivable and other assets
    
    
    995,438
    
    
    
    1,072,770Total assets
    
    $
    110,334,536
    
    
    $
    92,636,773Liabilities and Shareholders EquityDeposits (Note 5)Non-interest bearing
    
    $
    14,190,295
    
    
    $
    8,494,903Interest bearing
    
    
    83,060,199
    
    
    
    72,970,583Total deposits
    
    
    97,250,494
    
    
    
    81,465,486Secured borrowings
    
    
    1,469,095
    
    
    
    Interest payable and other liabilities
    
    
    629,422
    
    
    
    443,354Total liabilities
    
    
    99,349,011
    
    
    
    81,908,840Shareholders equitySenior cumulative perpetual preferred stock series A
$1,000 liquidation value per share, 5%Authorized, issued and outstanding - 1,635 shares
    
    
    1,635,000
    
    
    
    1,635,000Discount on senior preferred stock series A
    
    
    (61,027
    )
    
    
    (79,427
    )Senior cumulative perpetual preferred stock series B
$1,000 liquidation value per share, 9%Authorized, issued and outstanding - 82 shares
    
    
    82,000
    
    
    
    82,000Premium on preferred stock series B
    
    
    6,634
    
    
    
    8,634Senior cumulative perpetual preferred stock series C
$1,000 liquidation value per share, 5%Authorized, issued and outstanding - 1,744 shares
    
    
    1,744,000
    
    
    
    1,744,000Common stock, no par valueAuthorized - 4,500,000 sharesIssued and outstanding - 1,800,000 shares
    
    
    17,034,330
    
    
    
    17,034,330Additional paid in capital
    
    
    493,154
    
    
    
    489,459Accumulated deficit
    
    
    (10,061,474
    )
    
    
    (10,299,436
    )Accumulated other comprehensive income
    
    
    112,908
    
    
    
    113,373Total shareholders equity
    
    
    10,985,525
    
    
    
    10,727,933Total liabilities and shareholders equity
    
    $
    110,334,536
    
    
    $
    92,636,773
  A-1




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC
CONSOLIDATED STATEMENT OF OPERATIONS
 For the Years Ended December 31,2010
    
    
    2009
    
    
    2008Interest IncomeInterest and fees on loans
    
    $
    5,587,997
    
    
    $
    3,859,870
    
    
    $
    3,070,224Interest on securities
    
    
    162,281
    
    
    
    151,777
    
    
    
    138,339Interest on federal funds and bank balances
    
    
    1,331
    
    
    
    30,956
    
    
    
    118,258Total interest income
    
    
    5,751,609
    
    
    
    4,042,603
    
    
    
    3,326,821Interest ExpenseInterest on deposits
    
    
    1,337,544
    
    
    
    1,345,475
    
    
    
    1,386,846Interest on federal funds and short-term borrowings
    
    
    2,415
    
    
    
    
    
    
    
    Total interest expense
    
    
    1,339,959
    
    
    
    1,345,475
    
    
    
    1,386,846Net Interest Income
    
    
    4,411,650
    
    
    
    2,697,128
    
    
    
    1,939,975Provision for loan losses
    
    
    593,750
    
    
    
    480,380
    
    
    
    384,003Net Interest Income After Provision for Loan Losses
    
    
    3,817,900
    
    
    
    2,216,748
    
    
    
    1,555,972Non-interest IncomeService charges on deposit accounts
    
    
    52,016
    
    
    
    42,052
    
    
    
    44,957Other income
    
    
    73,512
    
    
    
    43,188
    
    
    
    54,318Total non-interest income
    
    
    125,528
    
    
    
    85,240
    
    
    
    99,275Non-interest expenseSalaries and employee benefits
    
    
    1,641,944
    
    
    
    1,571,537
    
    
    
    1,422,774Occupancy expense
    
    
    442,456
    
    
    
    549,986
    
    
    
    820,491Equipment expense
    
    
    140,693
    
    
    
    242,488
    
    
    
    Loss on branch closing
    
    
    
    
    
    
    609,330
    
    
    
    Advertising and public relations
    
    
    114,612
    
    
    
    61,740
    
    
    
    185,211Data processing expense
    
    
    190,530
    
    
    
    211,514
    
    
    
    74,431Professional fees
    
    
    392,289
    
    
    
    373,502
    
    
    
    278,087Other expenses
    
    
    590,212
    
    
    
    594,813
    
    
    
    386,355Total non-interest expense
    
    
    3,512,736
    
    
    
    4,214,910
    
    
    
    3,167,349Net Income (Loss) Before Federal Income Tax
    
    
    430,692
    
    
    
    (1,912,922
    )
    
    
    (1,512,102
    )Federal income tax
    
    
    
    
    
    
    
    
    
    
    Net Income (Loss)
    
    
    430,692
    
    
    
    (1,912,922
    )
    
    
    (1,512,102
    )Dividend on senior preferred stock
    
    
    176,330
    
    
    
    64,055
    
    
    
    Accretion of discount on preferred stock
    
    
    16,400
    
    
    
    11,207
    
    
    
    Net Income (Loss) Applicable to Common Shareholders
    
    $
    237,962
    
    
    $
    (1,988,184
    )
    
    $
    (1,512,102
    )Basic and Diluted Income (Loss) per Share
    
    $
    0.13
    
    
    $
    (1.10
    )
    
    $
    (0.84
    )
  A-2




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC
CONSOLIDATED STATEMENT 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 payment expense
    
    
    
    
    
    
    
    
    
    
    4,553
    
    
    
    
    
    
    
    
    
    
    
    4,553Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,512,102
    )
    
    
    
    
    
    
    (1,512,102
    )Change in unrealized gain on securities, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59,879
    
    
    
    59,879Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,452,223
    )Balance at December 31, 2008
    
    
    
    
    
    
    17,034,330
    
    
    
    466,553
    
    
    
    (8,331,252
    )
    
    
    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 preferred stock A
    
    
    12,573
    
    
    
    
    
    
    
    
    
    
    
    (12,573
    )
    
    
    
    
    
    
    Issue preferred stock B
    
    
    82,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,000Premium preferred stock B
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000Amortization of pref. stock B
    
    
    (1,366
    )
    
    
    
    
    
    
    
    
    
    
    1,366
    
    
    
    
    
    
    
    Issue 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 tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (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
    
    
    
    10,727,933Accretion of preferred stock A
    
    
    18,400
    
    
    
    
    
    
    
    
    
    
    
    (18,400
    )
    
    
    
    
    
    
    Amortization of pref. stock B
    
    
    (2,000
    )
    
    
    
    
    
    
    
    
    
    
    2,000
    
    
    
    
    
    
    
    Preferred Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (176,330
    )
    
    
    
    
    
    
    (176,330
    )Share based payments expense
    
    
    
    
    
    
    
    
    
    
    3,695
    
    
    
    
    
    
    
    
    
    
    
    3,695Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    430,692
    
    
    
    
    
    
    
    430,692Change in unrealized gain on securities, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (465
    )
    
    
    (465
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    430,227Balance at December 31, 2010
    
    $
    3,406,607
    
    
    $
    17,034,330
    
    
    $
    493,154
    
    
    $
    (10,061,474
    )
    
    $
    112,908
    
    
    $
    10,985,525
  A-3




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC
CONSOLIDATED STATEMENT OF CASH FLOWS
 For the Years Ended December 31,2010
    
    
    2009
    
    
    2008Cash flows from operating activitiesNet income (loss)
    
    $
    430,692
    
    
    $
    (1,912,922
    )
    
    $
    (1,512,102
    )Share based payment expense
    
    
    3,695
    
    
    
    22,906
    
    
    
    4,553Provision for loan losses
    
    
    593,750
    
    
    
    480,380
    
    
    
    384,003Loans originated for sale
    
    
    (322,500
    )
    
    
    
    
    
    
    Accretion of securities
    
    
    (5,287
    )
    
    
    (5,147
    )
    
    
    (30,604
    )Gain on calls of securities
    
    
    (237
    )
    
    
    (3,028
    )
    
    
    (19,270
    )Gain on sale of fixed assets
    
    
    (226
    )
    
    
    
    
    
    
    Depreciation expense
    
    
    180,312
    
    
    
    303,360
    
    
    
    312,660Loss on disposal of branch assets
    
    
    
    
    
    
    482,830
    
    
    
    Net decrease (increase) in other assets
    
    
    77,332
    
    
    
    (699,474
    )
    
    
    66,511Net increase (decrease) in other liabilities
    
    
    186,068
    
    
    
    204,822
    
    
    
    629Net cash provided by (used) in operating
activities
    
    
    1,143,599
    
    
    
    (1,126,273
    )
    
    
    (793,620
    )Cash flows from investing activitiesNet change in portfolio loans
    
    
    (21,042,301
    )
    
    
    (22,813,386
    )
    
    
    (19,967,702
    )Purchase of securities
    
    
    (2,976,260
    )
    
    
    (2,954,862
    )
    
    
    (3,990,436
    )Proceeds from calls or maturities of securities
    
    
    3,264,900
    
    
    
    2,999,391
    
    
    
    2,815,718Proceeds from sales of securities
    
    
    
    
    
    
    
    
    
    
    Principal payments on securities
    
    
    191,299
    
    
    
    
    
    
    
    Purchases of premises and equipment
    
    
    (50,907
    )
    
    
    (42,562
    )
    
    
    (25,276
    )Net cash used in investing activities
    
    
    (20,613,269
    )
    
    
    (22,811,419
    )
    
    
    (21,167,696
    )Cash flows from financing activitiesIncrease in deposits
    
    
    15,785,008
    
    
    
    23,717,451
    
    
    
    21,485,687Net change in short term borrowings
    
    
    1,469,095
    
    
    
    
    
    
    
    Proceeds from sale of senior preferred stock
    
    
    
    
    
    
    3,379,000
    
    
    
    Dividend on senior preferred stock
    
    
    (176,330
    )
    
    
    (64,055
    )
    
    
    Net cash provided by financing activities
    
    
    17,077,773
    
    
    
    27,032,396
    
    
    
    21,485,687(Decrease) increase in cash and cash equivalents
    
    
    (2,391,897
    )
    
    
    3,094,704
    
    
    
    (475,629
    )Cash and cash equivalents  beginning of period
    
    
    7,758,201
    
    
    
    4,663,497
    
    
    
    5,139,126Cash and cash equivalents  end of period
    
    $
    5,366,304
    
    
    $
    7,758,201
    
    
    $
    4,663,497Supplemental Information:Interest paid
    
    $
    1,235,563
    
    
    $
    1,302,913
    
    
    $
    1,296,872Income tax paid
    
    
    
    
    
    
    
    
    
    
    Loans transferred to other real estate
    
    
    
    
    
    
    
    
    
    
    
  A-4




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Summary of Significant accounting principles
 Basis
of Presentation and Organization
 Use of Estimates
 Nature of Operations
 Cash and Cash Equivalents
 Securities
  Loans
Held for Sale
 Loans
   A-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
 Bank
Premises and Equipment
 Income
Taxes
 A-6




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Summary of Significant Accounting Policies  continued
 Secured Borrowings
 Other Comprehensive Income
 Earnings per Share
 Reclassification
 Recently Issued Accounting Standards
    A-7




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 2  Securities
  Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value2010U. S. Government agency securities
    
    $
    1,350
    
    
    $
    11
    
    
    $
    
    
    
    $
    1,361Municipal securities
    
    
    650
    
    
    
    7
    
    
    
    
    
    
    
    657Mortgage backed securities
    
    
    837
    
    
    
    91
    
    
    
    
    
    
    
    928Corporate bonds
    
    
    250
    
    
    
    4
    
    
    
    
    
    
    
    254Sub-Total Available for Sale
    
    $
    3,087
    
    
    $
    113
    
    
    $
    
    
    
    $
    3,200FHLB Stock
    
    
    160
    
    
    
    
    
    
    
    
    
    
    
    160Total Securities
    
    $
    3,247
    
    
    $
    113
    
    
    $
    
    
    
    $
    3,3602009U. 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
    
    
    $
    
    
    
    $
    3,835
     EstimatedAmortized
    
    
    FairCost
    
    
    ValueDue in one year or less
    
    $
    1,200
    
    
    $
    1,203Due in one year through five years
    
    
    1,617
    
    
    
    1,699Due in five years through ten years
    
    
    270
    
    
    
    298Due after ten years
    
    
    
    
    
    
    Total
    
    $
    3,087
    
    
    $
    3,200
 A-8




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##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 2  Securities  continued
  Note 3  Loans
  2010
    
    
    2009Mortgage loans on real estate:Residential 1 to 4 family
    
    $
    3,380
    
    
    $
    1,353Multifamily
    
    
    12,355
    
    
    
    12,647Commercial
    
    
    49,029
    
    
    
    35,917Construction
    
    
    2,024
    
    
    
    518Second mortgage
    
    
    118
    
    
    
    171Equity lines of credit
    
    
    11,794
    
    
    
    11,445Total mortgage loans on real estate
    
    
    78,700
    
    
    
    62,051Commercial loans
    
    
    20,776
    
    
    
    17,186Consumer installment loans
    
    
    964
    
    
    
    512Total loans
    
    
    100,440
    
    
    
    79,749Less: Allowance for loan losses
    
    
    (1,448
    )
    
    
    (1,174
    )Net deferred loan fees
    
    
    (61
    )
    
    
    (93
    )Net loans
    
    $
    98,931
    
    
    $
    78,482
  Home2010
    
    Commercial
    
    
    Equity
    
    
    Residential
    
    
    Consumer
    
    
    TotalAllowance for Loan LossesBeginning balance
    
    $
    991
    
    
    $
    166
    
    
    $
    10
    
    
    $
    7
    
    
    $
    1,174Charge-offs
    
    
    (141
    )
    
    
    (225
    )
    
    
    
    
    
    
    
    
    
    
    (366
    )Recoveries
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46Provision
    
    
    174
    
    
    
    410
    
    
    
    4
    
    
    
    6
    
    
    
    594Ending balance
    
    $
    1,070
    
    
    $
    351
    
    
    $
    14
    
    
    $
    13
    
    
    $
    1,448Percent of principal balance
    
    
    1.21
    %
    
    
    3.45
    %
    
    
    1.21
    %
    
    
    1.25
    %
    
    
    1.44
    %Ending balance: individually
evaluated for impairment
    
    $
    25
    
    
    $
    212
    
    
    $
    
    
    
    $
    
    
    
    $
    237Ending balance: collectively
evaluated for impairment
    
    $
    1,045
    
    
    $
    139
    
    
    $
    14
    
    
    $
    13
    
    
    $
    1,211Portfolio LoansEnding unpaid principal balance
    
    $
    88,080
    
    
    $
    10,166
    
    
    $
    1,153
    
    
    $
    1,041
    
    
    $
    100,440Ending unpaid principal
balance: individually
evaluated for impairment
    
    $
    2,107
    
    
    $
    887
    
    
    $
    
    
    
    $
    
    
    
    $
    2,994Ending unpaid principal
balance: collectively
evaluated for impairment
    
    $
    85,973
    
    
    $
    9,279
    
    
    $
    1,153
    
    
    $
    1,041
    
    
    $
    97,446
 A-9




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 3  Loans  continued
 Home2009
    
    Commercial
    
    
    Equity
    
    
    Residential
    
    
    Consumer
    
    
    TotalAllowance for Loan LossesBeginning balance
    
    $
    546
    
    
    $
    120
    
    
    $
    30
    
    
    $
    14
    
    
    $
    710Charge-offs
    
    
    
    
    
    
    (18
    )
    
    
    
    
    
    
    
    
    
    
    (18
    )Recoveries
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Provision
    
    
    445
    
    
    
    62
    
    
    
    (20
    )
    
    
    (7
    )
    
    
    480Ending balance
    
    $
    991
    
    
    $
    166
    
    
    $
    10
    
    
    $
    7
    
    
    $
    1,174Percent of principal balance
    
    
    1.44
    %
    
    
    1.77
    %
    
    
    1.20
    %
    
    
    1.29
    %
    
    
    1.47
    %Ending balance: individually
evaluated for impairment
    
    $
    152
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    152Ending balance: collectively
evaluated for impairment
    
    $
    839
    
    
    $
    166
    
    
    $
    10
    
    
    $
    7
    
    
    $
    1,022Ending balance: loans acquired
with deteriorated credit
quality
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Portfolio LoansEnding unpaid principal balance
    
    $
    68,970
    
    
    $
    9,405
    
    
    $
    832
    
    
    $
    542
    
    
    $
    79,749Ending unpaid principal
balance: individually
evaluated for impairment
    
    $
    1,681
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,681Ending unpaid principal
balance: collectively
evaluated for impairment
    
    $
    67,289
    
    
    $
    9,405
    
    
    $
    832
    
    
    $
    542
    
    
    $
    78,068
   A-10




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 3  Loans  continued
   2010  Commercial Loans
 Commercial
    
    
    Commercial
    
    
    Commercial
    
    
    CommercialCredit Quality
    
    Real Estate
    
    
    Term
    
    
    LOC
    
    
    Construction1  pass
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2  pass
    
    
    392
    
    
    
    
    
    
    
    
    
    
    
    3  pass
    
    
    16,845
    
    
    
    3,994
    
    
    
    4,416
    
    
    
    4  pass
    
    
    40,348
    
    
    
    6,265
    
    
    
    5,071
    
    
    
    1,2505  special mention
    
    
    2,994
    
    
    
    1,249
    
    
    
    1,574
    
    
    
    7746  substandard
    
    
    1,441
    
    
    
    857
    
    
    
    610
    
    
    
    7  doubtful
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8  loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    62,020
    
    
    $
    12,365
    
    
    $
    11,671
    
    
    $
    2,024
 Consumer Loans
 Home Equity
    
    
    Residential
    
    
    Home Equity
    
    
    Consumer
    
    
    ConsumerCredit Quality
    
    LOC
    
    
    Mortgage
    
    
    Term
    
    
    Installment
    
    
    LOCPass
    
    $
    8,808
    
    
    $
    1,035
    
    
    $
    118
    
    
    $
    335
    
    
    $
    673Special mention
    
    
    344
    
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    Substandard
    
    
    1,014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Doubtful
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    10,166
    
    
    $
    1,035
    
    
    $
    118
    
    
    $
    368
    
    
    $
    673
 2009  Commercial Loans
 Commercial
    
    
    Commercial
    
    
    Commercial
    
    
    CommercialCredit Quality
    
    Real Estate
    
    
    Term
    
    
    LOC
    
    
    Construction1  pass
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2  pass
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3  pass
    
    
    15,888
    
    
    
    4,265
    
    
    
    3,741
    
    
    
    4  pass
    
    
    27,319
    
    
    
    5,896
    
    
    
    4,143
    
    
    
    5  special mention
    
    
    3,027
    
    
    
    175
    
    
    
    1,465
    
    
    
    5186  substandard
    
    
    757
    
    
    
    1,166
    
    
    
    610
    
    
    
    7  doubtful
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8  loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    46,991
    
    
    $
    11,502
    
    
    $
    9,959
    
    
    $
    518
 Consumer Loans
 Home Equity
    
    
    Residential
    
    
    Home Equity
    
    
    Consumer
    
    
    ConsumerCredit Quality
    
    LOC
    
    
    Mortgage
    
    
    Term
    
    
    Installment
    
    
    LOCPass
    
    $
    8,144
    
    
    $
    661
    
    
    $
    171
    
    
    $
    409
    
    
    $
    133Special mention
    
    
    344
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Substandard
    
    
    917
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Doubtful
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    9,405
    
    
    $
    661
    
    
    $
    171
    
    
    $
    409
    
    
    $
    133
 A-11




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 3  Loans  continued
     Pre-
    
    Post-Number of
    
    Modification
    
    Modification2010
    
    Contract
    
    Investment
    
    InvestmentTrouble Debt RestructuringCommercial Real Estate
    
    
    1
    
    
    $
    699
    
    
    $
    699Commercial Term
    
    
    
    
    
    
    
    
    
    
    Commercial LOC
    
    
    
    
    
    
    
    
    
    
    Construction
    
    
    
    
    
    
    
    
    
    
    Home Equity
    
    
    
    
    
    
    
    
    
    
    Residential Mortgage
    
    
    
    
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    
    
    
    
    
  Recorded
    
    Unpaid
    
    
    
    
    
    Average
    
    Interest2010
    
    Investment
    
    Principal
    
    Allowance
    
    Investment
    
    RecognizedNo related allowance recorded:Home Equity Line of Credit
    
    $
    298
    
    
    $
    298
    
    
    $
    
    
    
    $
    256
    
    
    $
    Allowance recorded:Commercial Line of Credit
    
    
    1,407
    
    
    
    1,407
    
    
    
    17
    
    
    
    1,418
    
    
    
    99Commercial Real Estate
    
    
    699
    
    
    
    699
    
    
    
    8
    
    
    
    117
    
    
    
    7Home Equity Line of Credit
    
    
    590
    
    
    
    590
    
    
    
    212
    
    
    
    197
    
    
    
    10Total:Commercial
    
    $
    2,107
    
    
    $
    2,107
    
    
    $
    25
    
    
    $
    1,674
    
    
    $
    106Home Equity
    
    $
    887
    
    
    $
    887
    
    
    $
    212
    
    
    $
    453
    
    
    $
    10
 A-12




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 3  Loans  continued
 Recorded
    
    Unpaid
    
    
    
    
    
    Average
    
    Interest2009
    
    Investment
    
    Principal
    
    Allowance
    
    Investment
    
    RecognizedNo related allowance recorded:Commercial Line of Credit
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Allowance recorded:Commercial Line of Credit
    
    
    1,681
    
    
    
    1,681
    
    
    
    152
    
    
    
    143
    
    
    
    6Total:Commercial
    
    $
    1,681
    
    
    $
    1,681
    
    
    $
    152
    
    
    $
    143
    
    
    $
    6
   Loans past due
    
    
    Total
    
    
    
    
    
    
    Total
    
    
    Non-
    
    
    >90 days2010
    
    30  59
    
    
    60  90
    
    
    Over 90
    
    
    Past Due
    
    
    Current
    
    
    Loans
    
    
    Accrual
    
    
    AccruingCommercial real estate
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    62,020
    
    
    $
    62,020
    
    
    $
    
    
    
    $
    Commercial term
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,365
    
    
    
    12,365
    
    
    
    
    
    
    
    Commercial LOC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,671
    
    
    
    11,671
    
    
    
    
    
    
    
    Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,024
    
    
    
    2,024
    
    
    
    
    
    
    
    Home equity LOC
    
    
    
    
    
    
    
    
    
    
    298
    
    
    
    298
    
    
    
    9,868
    
    
    
    10,166
    
    
    
    298
    
    
    
    Residential mortgage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,035
    
    
    
    1,035
    
    
    
    
    
    
    
    Home equity term
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118
    
    
    
    118
    
    
    
    
    
    
    
    Consumer installment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    368
    
    
    
    368
    
    
    
    
    
    
    
    Consumer LOC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    673
    
    
    
    673
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    298
    
    
    $
    298
    
    
    $
    100,142
    
    
    $
    100,440
    
    
    $
    298
    
    
    $
    
 Loans past due
    
    
    Total
    
    
    
    
    
    
    Total
    
    
    Non-
    
    
    >90 days2009
    
    30  59
    
    
    60  90
    
    
    Over 90
    
    
    Past Due
    
    
    Current
    
    
    Loans
    
    
    Accrual
    
    
    AccruingCommercial real estate
    
    $
    112
    
    
    $
    
    
    
    $
    
    
    
    $
    112
    
    
    $
    46,879
    
    
    $
    46,991
    
    
    $
    
    
    
    $
    Commercial term
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,502
    
    
    
    11,502
    
    
    
    
    
    
    
    Commercial LOC
    
    
    381
    
    
    
    
    
    
    
    
    
    
    
    381
    
    
    
    9,578
    
    
    
    9,959
    
    
    
    
    
    
    
    Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    518
    
    
    
    518
    
    
    
    
    
    
    
    Home equity LOC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,405
    
    
    
    9,405
    
    
    
    
    
    
    
    Residential mortgage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    661
    
    
    
    661
    
    
    
    
    
    
    
    Home equity term
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    171
    
    
    
    171
    
    
    
    
    
    
    
    Consumer installment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    409
    
    
    
    409
    
    
    
    
    
    
    
    Consumer LOC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    133
    
    
    
    133
    
    
    
    
    
    
    
    $
    493
    
    
    $
    
    
    
    $
    
    
    
    $
    493
    
    
    $
    79,256
    
    
    $
    79,749
    
    
    $
    
    
    
    $
    
 A-13




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 3  Loans  continued
  2010
    
    
    2009Balance at January 1
    
    $
    1,927
    
    
    $
    1,473New loans
    
    
    581
    
    
    
    1,165Repayments
    
    
    (726
    )
    
    
    (711
    )Balance at December 31
    
    $
    1,782
    
    
    $
    1,927
 Note 4  Bank Premises and Equipment
  2010
    
    
    2009Leasehold improvements
    
    $
    1,638
    
    
    $
    1,625Furniture and equipment
    
    
    375
    
    
    
    357Computer equipment & software
    
    
    420
    
    
    
    400Total
    
    
    2,433
    
    
    
    2,382Less: accumulated depreciation
    
    
    1,073
    
    
    
    893Net premises and equipment
    
    $
    1,360
    
    
    $
    1,489
   Note 5  Deposits
  2010
    
    
    2009Non-interest bearing deposits
    
    $
    14,190
    
    
    $
    8,495NOW accounts
    
    
    7,897
    
    
    
    7,894Savings and money market accounts
    
    
    24,700
    
    
    
    19,600Certificates of deposit <$100,000
    
    
    12,153
    
    
    
    13,240Certificates of deposit >$100,000
    
    
    38,310
    
    
    
    32,236Total
    
    $
    97,250
    
    
    $
    81,465
 A-14




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 5  Deposits  continued
  <$100,000
    
    
    >$100,000
    
    
    Total2011
    
    $
    5,510
    
    
    $
    23,970
    
    
    $
    29,4802012
    
    
    5,562
    
    
    
    11,876
    
    
    
    17,4382013
    
    
    745
    
    
    
    2,344
    
    
    
    3,0892014
    
    
    324
    
    
    
    120
    
    
    
    4442015
    
    
    12
    
    
    
    
    
    
    
    12Thereafter
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    12,153
    
    
    $
    38,310
    
    
    $
    50,463
 Note 6
 Stock Options and Warrants
   
   A-15




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 6
 Stock Options and  Warrants   continued
  Calculated volatility
    
    
    12.40
    %Weighted average dividends
    
    
    0.00
    %Expected term (in years)
    
    
    5Risk-free rate
    
    
    4.50
    %
  Note 7  Income Taxes
   2010
    
    
    2009Deferred tax assets:Allowance for loan losses
    
    $
    344,430
    
    
    $
    285,014Organizational costs
    
    
    495,281
    
    
    
    542,828Net operating loss carry-forward
    
    
    2,302,452
    
    
    
    2,398,855Share based compensation
    
    
    142,800
    
    
    
    142,800Other
    
    
    90,852
    
    
    
    82,383Total deferred tax asset
    
    
    3,375,815
    
    
    
    3,451,880Less: Valuation allowance
    
    
    3,266,096
    
    
    
    3,425,999Deferred tax liabilities:Fixed assets
    
    
    86,019
    
    
    
    Other
    
    
    23,700
    
    
    
    25,881Total deferred tax liabilities
    
    
    109,719
    
    
    
    25,881Net deferred tax assets
    
    $
    
    
    
    $
    
 A-16




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 7  Income Taxes  continued
  2010
    
    
    2009Current expense
    
    $
    
    
    
    $
    Deferred (benefit) expense
    
    
    
    
    
    
    Total income tax expense
    
    $
    
    
    
    $
    
  2010
    
    
    2009Income tax (expense ) benefit at federal
statutory rate of 34%
    
    $
    146,435
    
    
    $
    (650,393
    )Increases resulting from nondeductible expenses
    
    
    13,468
    
    
    
    9,112Other
    
    
    
    
    
    
    Change in valuation allowance
    
    
    (159,903
    )
    
    
    641,281Income tax expense
    
    $
    
    
    
    $
    
 Note 8  Leases and Commitments
   2011
    
    $
    244,8402012
    
    
    234,4162013
    
    
    239,0982014
    
    
    243,9102015
    
    
    248,746thereafter
    
    
    2,726,802Total
    
    $
    3,937,812
 A-17




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 9  Restrictions on dividends, loans and advances
    Note 10  Retirement Plans
  Note 11  Parent Only Financial Statements
   December 31,2010
    
    
    2009AssetsCash and cash equivalents
    
    $
    1,854,322
    
    
    $
    2,193,387Investment in subsidiary
    
    
    9,230,821
    
    
    
    8,581,286Total assets
    
    $
    11,085,143
    
    
    $
    10,774,673Liabilities and Shareholders EquityOther liabilities
    
    $
    99,618
    
    
    $
    46,740Shareholders equity
    
    
    10,985,525
    
    
    
    10,727,933Total liabilities and shareholders equity
    
    $
    11,085,143
    
    
    $
    10,774,673
 A-18




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 11  Parent Only Financial Statements  continued
  For the Years Ended December 31,2010
    
    
    2009
    
    
    2008Dividends from subsidiary
    
    $
    
    
    
    $
    
    
    
    $
    Other income
    
    
    
    
    
    
    
    
    
    
    Total income
    
    
    
    
    
    
    
    
    
    
    Salaries and employee benefits
    
    
    15,000
    
    
    
    59,567
    
    
    
    (40,322
    )Professional fees
    
    
    184,881
    
    
    
    142,075
    
    
    
    101,100Other expenses
    
    
    19,427
    
    
    
    54,879
    
    
    
    36,555Total non-interest expense
    
    
    219,308
    
    
    
    256,521
    
    
    
    97,333Income taxes (benefit)
    
    
    
    
    
    
    
    
    
    
    Net income
(loss) before net income (loss) of subsidiary
    
    
    (219,308
    )
    
    
    (256,521
    )
    
    
    (97,333
    )Undistributed net income (loss) of subsidiary
    
    
    650,000
    
    
    
    (1,656,401
    )
    
    
    (1,414,769
    )Net income (loss)
    
    
    430,692
    
    
    
    (1,912,922
    )
    
    
    (1,512,102
    )Effective dividend on preferred stock
    
    
    192,730
    
    
    
    75,262
    
    
    
    Net income (loss) applicable to common shareholders
    
    $
    237,962
    
    
    $
    (1,988,184
    )
    
    $
    (1,152,102
    )
  For the Years Ended December 31,2010
    
    
    2009
    
    
    2008Cash flows from operating activitiesNet income (loss)
    
    $
    430,692
    
    
    $
    (1,912,922
    )
    
    $
    (1,512,102
    )Undistributed (income) loss of subsidiary
    
    
    (650,000
    )
    
    
    1,656,401
    
    
    
    1,414,769Share based payments expense
    
    
    3,695
    
    
    
    22,906
    
    
    
    4,553Net decrease in other assets
    
    
    
    
    
    
    
    
    
    
    Net increase (decrease) in other liabilities
    
    
    52,878
    
    
    
    45,240
    
    
    
    (68,500
    )Net cash used in operating activities
    
    
    (162,735
    )
    
    
    (188,375
    )
    
    
    (161,280
    )Cash flows from investing activitiesInvestment in subsidiary
    
    
    
    
    
    
    (1,489,000
    )
    
    
    Decrease in premises and equipment
    
    
    
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    
    
    
    
    (1,489,000
    )
    
    
    Cash flows from financing activitiesProceeds from sale of senior preferred stock
    
    
    
    
    
    
    3,379,000
    
    
    
    Dividends on senior preferred stock
    
    
    (176,330
    )
    
    
    (64,055
    )
    
    
    Net cash (used in) provided by
financing activities
    
    
    (176,330
    )
    
    
    3,314,945
    
    
    
    Decrease in cash and cash equivalents
    
    
    (339,065
    )
    
    
    1,637,570
    
    
    
    (161,280
    )Cash and cash equivalents at beginning of period
    
    
    2,193,387
    
    
    
    555,817
    
    
    
    717,097Cash and cash equivalents at end of period
    
    $
    1,854,322
    
    
    $
    2,193,387
    
    
    $
    555,817
 A-19




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 12  Off Balance Sheet Risk
 Credit-related Financial Instruments
    Contract Amount2010
    
    2009Commitments to grant loans
    
    $
    13,564,000
    
    
    $
    9,570,000Unfunded commitments under lines of credit
    
    $
    12,914,000
    
    
    $
    9,636,000Commercial and standby letters of credit
    
    $
    803,000
    
    
    $
    603,000
    Collateral Requirements
  Legal Contingencies
 A-20




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 13  Fair Value of Financial Instruments
   Cash and Cash Equivalents
 Securities
 Loans Receivable
 Deposit Liabilities
 Accrued Interest
 Other Financial Instruments
 A-21




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 13  Fair Value of Financial Instruments  continued
  2010
    

2009Estimated
    
    
    
    
    
    EstimatedCarrying
    
    Fair
    
    Carrying
    
    FairValue
    
    Value
    
    Value
    
    ValueFinancial assets:Cash and cash equivalents
    
    $
    5,366
    
    
    $
    5,366
    
    
    $
    7,758
    
    
    $
    7,758Securities available for
sale
    
    
    3,360
    
    
    
    3,360
    
    
    
    3,835
    
    
    
    3,835Loans
    
    
    98,931
    
    
    
    99,786
    
    
    
    78,482
    
    
    
    78,952Loans held for sale
    
    
    323
    
    
    
    323
    
    
    
    
    
    
    
    Accrued interest
receivable
    
    
    440
    
    
    
    440
    
    
    
    335
    
    
    
    335Financial liabilities:Deposits
    
    
    97,250
    
    
    
    97,688
    
    
    
    81,465
    
    
    
    81,807Secured borrowings
    
    
    1,469
    
    
    
    1,469
    
    
    
    
    
    
    
    Accrued interest payable
    
    
    115
    
    
    
    115
    
    
    
    77
    
    
    
    77
 Note 14  Fair Value Accounting
  
    
    Level 1  inputs to the valuation methodology are quoted prices (unadjusted) for
identical assets or liabilities in active markets which the Corporation can participate.
    
    Level 2  inputs to the valuation methodology include quoted prices for similar assets
and liabilities in active markets, and other inputs that are observable for the asset or
liability, either directly or indirectly, for substantially the full term of the financial
instrument.
    
    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.
  Available-for-sale Securities
  A-22




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 14  Fair Value Accounting  continued
  Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Fair ValueDecember 31, 2010U.S. Government Agency
    
    $
    
    
    
    $
    1,361
    
    
    $
    
    
    
    $
    1,361Municipal securities
    
    
    
    
    
    
    657
    
    
    
    
    
    
    
    657Mortgage backed securities
    
    
    
    
    
    
    928
    
    
    
    
    
    
    
    928Corporate bonds
    
    
    
    
    
    
    254
    
    
    
    
    
    
    
    254Securities available for sale
    
    $
    
    
    
    $
    3,200
    
    
    $
    
    
    
    $
    3,200December 31, 2009U.S. Government Agency
    
    $
    
    
    
    $
    2,360
    
    
    $
    
    
    
    $
    2,360Municipal securities
    
    
    
    
    
    
    204
    
    
    
    
    
    
    
    204Mortgage backed securities
    
    
    
    
    
    
    1,109
    
    
    
    
    
    
    
    1,109Corporate bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Securities available for sale
    
    $
    
    
    
    $
    3,673
    
    
    $
    
    
    
    $
    3,673
  Impaired Loans
   December 31, 2010
    
    Balance
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    LossesImpaired Loans
    
    $
    2,994
    
    
    $
    
    
    
    $
    
    
    
    $
    2,994
    
    
    $
    200
 A-23




---



##### 



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, 2010Total risk-based capital
(to risk weighted assets)
Bank of Birmingham
    
    $
    10,334
    
    
    
    10.6
    %
    
    $
    7,834
    
    
    
    8.0
    %
    
    $
    9,792
    
    
    
    10.0
    %Tier I capital
(to risk weighted assets)
Bank of Birmingham
    
    $
    9,117
    
    
    
    9.3
    %
    
    $
    3,917
    
    
    
    4.0
    %
    
    $
    5,875
    
    
    
    6.0
    %Tier I capital
(to average assets)
Bank of Birmingham
    
    $
    9,117
    
    
    
    8.1
    %
    
    $
    4,477
    
    
    
    4.0
    %
    
    $
    5,597
    
    
    
    5.0
    %As 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
    %
 A-24




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 16  QUARTERLY RESULTS OF OPERATIONS
  4th
    
    
    3rd
    
    
    2nd
    
    
    1stQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter2010Interest income
    
    $
    1,501
    
    
    $
    1,531
    
    
    $
    1,436
    
    
    $
    1,283Interest expense
    
    
    327
    
    
    
    337
    
    
    
    352
    
    
    
    324Net interest income
    
    
    1,174
    
    
    
    1,194
    
    
    
    1,084
    
    
    
    959Provision for loan losses
    
    
    49
    
    
    
    256
    
    
    
    177
    
    
    
    112Non-interest income
    
    
    21
    
    
    
    27
    
    
    
    42
    
    
    
    35Non-interest expense
    
    
    977
    
    
    
    867
    
    
    
    815
    
    
    
    853Income before income taxes
    
    
    169
    
    
    
    98
    
    
    
    134
    
    
    
    29Income tax expense (benefit)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    169
    
    
    
    98
    
    
    
    134
    
    
    
    29Effective dividend on preferred stock
    
    
    48
    
    
    
    48
    
    
    
    49
    
    
    
    47Net income (loss) applicable to common shareholders
    
    
    121
    
    
    
    50
    
    
    
    85
    
    
    
    (18
    )Basic and diluted income per share
    
    $
    0.07
    
    
    $
    0.03
    
    
    $
    0.04
    
    
    $
    (0.01
    )
 4th
    
    
    3rd
    
    
    2nd
    
    
    1stQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter2009Interest income
    
    $
    1,153
    
    
    $
    1,085
    
    
    $
    938
    
    
    $
    883Interest expense
    
    
    340
    
    
    
    337
    
    
    
    328
    
    
    
    340Net interest income
    
    
    813
    
    
    
    748
    
    
    
    610
    
    
    
    543Provision for loan losses
    
    
    300
    
    
    
    32
    
    
    
    115
    
    
    
    34Non-interest income
    
    
    21
    
    
    
    27
    
    
    
    25
    
    
    
    26Non-interest expense
    
    
    1,538
    
    
    
    866
    
    
    
    992
    
    
    
    848Income (loss) before income taxes
    
    
    (1,004
    )
    
    
    (123
    )
    
    
    (472
    )
    
    
    (313
    )Income tax expense (benefit)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    (1,004
    )
    
    
    (123
    )
    
    
    (472
    )
    
    
    (313
    )Effective dividend on preferred stock
    
    
    41
    
    
    
    26
    
    
    
    9
    
    
    
    Net income (loss) applicable to common shareholders
    
    
    (1,045
    )
    
    
    (149
    )
    
    
    (481
    )
    
    
    (313
    )Basic and diluted income per share
    
    $
    (0.58
    )
    
    $
    (0.08
    )
    
    $
    (0.27
    )
    
    $
    (0.17
    )
 A-25




---



##### 



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 17  SHAREHOLDERS EQUITY
 Participation in the TARP Capital Purchase Program
     A-26




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
 FORWARD LOOKING STATEMENTS
   BACKGROUND
  OPERATIONS
   ECONOMIC TRENDS
  A-27




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
  MARKET DEVELOPMENTS
 Deposit Insurance
  Other
  REGULATION
  EXECUTIVE SUMMARY
    A-28




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
  A-29




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
 Selected Financial Information
  (Dollars in thousands except per share data)
 2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Interest income
    
    $
    5,752
    
    
    $
    4,043
    
    
    $
    3,327
    
    
    $
    2,463
    
    
    $
    379Interest expense
    
    
    1,340
    
    
    
    1,346
    
    
    
    1,387
    
    
    
    1,090
    
    
    
    158Net interest income
    
    
    4,412
    
    
    
    2,697
    
    
    
    1,940
    
    
    
    1,373
    
    
    
    221Provision for loan losses
    
    
    594
    
    
    
    480
    
    
    
    384
    
    
    
    465
    
    
    
    195Non-interest income
    
    
    126
    
    
    
    85
    
    
    
    99
    
    
    
    132
    
    
    
    13Non-interest expense
    
    
    3,513
    
    
    
    4,215
    
    
    
    3,167
    
    
    
    3,723
    
    
    
    3,002Income (loss) before income taxes
    
    
    431
    
    
    
    (1,913
    )
    
    
    (1,512
    )
    
    
    (2,683
    )
    
    
    (2,963
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    431
    
    
    
    (1,913
    )
    
    
    (1,512
    )
    
    
    (2,683
    )
    
    
    (2,963
    )Effective dividend on preferred stock
    
    
    193
    
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)  common shareholders
    
    $
    238
    
    
    $
    (1,988
    )
    
    $
    (1,512
    )
    
    $
    (2,683
    )
    
    $
    (2,963
    )Basic and diluted income per share
    
    $
    0.13
    
    
    $
    (1.10
    )
    
    $
    (0.84
    )
    
    $
    (1.49
    )
    
    $
    (1.65
    )Total Assets
    
    
    110,335
    
    
    
    92,637
    
    
    
    67,299
    
    
    
    47,260
    
    
    
    23,704Securities, available for sale
    
    
    3,200
    
    
    
    3,673
    
    
    
    3,880
    
    
    
    2,596
    
    
    
    Total gross loans
    
    
    100,379
    
    
    
    79,656
    
    
    
    56,841
    
    
    
    37,107
    
    
    
    12,914Allowance for loan losses
    
    
    1,448
    
    
    
    1,174
    
    
    
    710
    
    
    
    560
    
    
    
    195Total deposits
    
    
    97,250
    
    
    
    81,465
    
    
    
    57,748
    
    
    
    36,262
    
    
    
    10Secured borrowings
    
    
    1,469
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shareholders equity
    
    
    10,986
    
    
    
    10,728
    
    
    
    9,312
    
    
    
    10,760
    
    
    
    13,338Net interest margin
    
    
    4.32
    %
    
    
    3.51
    %
    
    
    3.31
    %
    
    
    3.63
    %
    
    
    4.90
    %Return on average assets
    
    
    0.40
    %
    
    
    -2.38
    %
    
    
    -2.47
    %
    
    
    -6.43
    %
    
    
    -16.60
    %Return on average common equity
    
    
    5.80
    %
    
    
    -23.32
    %
    
    
    -15.19
    %
    
    
    -21.39
    %
    
    
    -23.09
    %Equity / Assets
    
    
    10.0
    %
    
    
    11.6
    %
    
    
    13.8
    %
    
    
    22.8
    %
    
    
    56.3
    %Total loans / Total deposits
    
    
    103.2
    %
    
    
    97.8
    %
    
    
    98.4
    %
    
    
    102.3
    %
    
    
    126.2
    %Book value per common share (1)
    
    $
    4.21
    
    
    $
    4.08
    
    
    $
    5.17
    
    
    $
    5.98
    
    
    $
    7.41Non-accrual loans / Total loans
    
    
    0.30
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %Allowance for loan losses / Total loans
    
    
    1.44
    %
    
    
    1.47
    %
    
    
    1.25
    %
    
    
    1.51
    %
    
    
    1.51
    %
 
 (1)
    
    Book value per common share is computed by subtracting the amount of preferred stock from total stockholders
equity divided by the average number of common shares outstanding. Cash and Cash Equivalents
  Investments
  A-30




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
  0  1
    
    1  5
    
    5  10
    
    Over 10Year
    
    Years
    
    Years
    
    Years
    
    TotalU.S. Treasury & Government Agency
    
    $
    1,002
    
    
    $
    359
    
    
    $
    
    
    
    $
    
    
    
    $
    1,361Weighted average yield
    
    
    2.00
    %
    
    
    2.09
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    2.02
    %Municipal securities
    
    $
    201
    
    
    $
    456
    
    
    $
    
    
    
    $
    
    
    
    $
    657Weighted average yield
    
    
    3.25
    %
    
    
    2.70
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    2.87
    %Mortgage Backed securities
    
    $
    
    
    
    $
    630
    
    
    $
    298
    
    
    $
    
    
    
    $
    928Weighted average yield
    
    
    0.00
    %
    
    
    6.41
    %
    
    
    5.67
    %
    
    
    0.00
    %
    
    
    6.17
    %Corporate bonds
    
    $
    
    
    
    $
    254
    
    
    $
    
    
    
    $
    
    
    
    $
    254Weighted average yield
    
    
    0.00
    %
    
    
    3.47
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    3.47
    %FHLB Stock
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    160
    
    
    $
    160Weighted average yield
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
  Loans, Credit Quality and Allowance for Loan Losses
  2010
    
    
    2009Real estate mortgage
    
    $
    76,676
    
    
    $
    61,533Construction
    
    
    2,024
    
    
    
    518Commercial and industrial
    
    
    20,776
    
    
    
    17,186Consumer installment
    
    
    964
    
    
    
    512Deferred loan fees and costs
    
    
    (61
    )
    
    
    (93
    )Total loans
    
    $
    100,379
    
    
    $
    79,656
  A-31




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
  0  1
    
    
    1  5
    
    
    Over 5Year
    
    
    Years
    
    
    Years
    
    
    Total
    
    
    Fixed
    
    
    VariableReal estate mortgage
    
    $
    8,421
    
    
    $
    46,119
    
    
    $
    22,137
    
    
    $
    76,677
    
    
    $
    47,565
    
    
    $
    29,112Construction
    
    
    774
    
    
    
    1,250
    
    
    
    
    
    
    
    2,024
    
    
    
    
    
    
    
    2,024Commercial and industrial
    
    
    8,723
    
    
    
    11,615
    
    
    
    438
    
    
    
    20,776
    
    
    
    10,550
    
    
    
    10,226Consumer installment
    
    
    529
    
    
    
    434
    
    
    
    
    
    
    
    963
    
    
    
    566
    
    
    
    397Total loans
    
    $
    18,447
    
    
    $
    59,418
    
    
    $
    22,575
    
    
    $
    100,440
    
    
    $
    58,681
    
    
    $
    41,759
       A-32




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
 Off-Balance Sheet Items
  2010
    
    
    2009Commitments to extend credit
    
    $
    13,564
    
    
    $
    9,570Unfunded commitments under lines of credit
    
    
    12,914
    
    
    
    9,636Commercial standby letters of credit
    
    
    803
    
    
    
    603Total commitments
    
    $
    27,281
    
    
    $
    19,809
  Deposits and Short-term Financing
  As of December 31, 2010
    
    
    As of December 31, 2009Balance
    
    
    Percentage
    
    
    Balance
    
    
    PercentageNon-interest bearing demand
    
    $
    14,190
    
    
    
    14.59
    %
    
    $
    8,495
    
    
    
    10.43
    %NOW accounts
    
    
    7,897
    
    
    
    8.12
    %
    
    
    7,894
    
    
    
    9.69
    %Money market
    
    
    8,179
    
    
    
    8.41
    %
    
    
    7,815
    
    
    
    9.59
    %Savings
    
    
    16,521
    
    
    
    16.99
    %
    
    
    11,785
    
    
    
    14.47
    %Time deposits < $100,000
    
    
    12,153
    
    
    
    12.50
    %
    
    
    13,240
    
    
    
    16.25
    %Time deposits >$100,000
    
    
    38,310
    
    
    
    39.39
    %
    
    
    32,236
    
    
    
    39.57
    %Total deposits
    
    $
    97,250
    
    
    
    100.00
    %
    
    $
    81,465
    
    
    
    100.00
    %
  SHAREHOLDERS EQUITY
  A-33




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
 RESULTS OF OPERATIONS
 Net Income
  Net Interest Income
     A-34




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
   2010
    
    
    2009Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateInterest-earning assets:Interest-bearing balances with
other financial institutions
    
    $
    9,537
    
    
    $
    29
    
    
    
    0.31
    %
    
    $
    5,672
    
    
    $
    27
    
    
    
    0.47
    %Federal funds sold
    
    
    1,197
    
    
    
    2
    
    
    
    0.11
    %
    
    
    2,983
    
    
    
    4
    
    
    
    0.14
    %Federal funds sold
    
    
    3,939
    
    
    
    133
    
    
    
    3.38
    %
    
    
    3,736
    
    
    
    152
    
    
    
    4.06
    %Loans receivable
    
    
    89,969
    
    
    
    5,588
    
    
    
    6.21
    %
    
    
    64,992
    
    
    
    3,860
    
    
    
    5.94
    %Total interest-earning assets
    
    
    104,641
    
    
    
    5,572
    
    
    
    5.50
    %
    
    
    77,383
    
    
    
    4,043
    
    
    
    5.22
    %Non-interest earning assets:Cash and due from banks
    
    
    634
    
    
    
    
    
    
    
    
    
    
    
    1,370All other assets
    
    
    1,258
    
    
    
    
    
    
    
    
    
    
    
    1,559Total assets
    
    $
    106,532
    
    
    
    
    
    
    
    
    
    
    $
    80,312Interest-bearing liabilities:NOW accounts
    
    $
    7,667
    
    
    $
    35
    
    
    
    0.46
    %
    
    $
    7,919
    
    
    
    64
    
    
    
    0.81
    %Money markets
    
    
    9,441
    
    
    
    62
    
    
    
    0.65
    %
    
    
    10,027
    
    
    
    114
    
    
    
    1.14
    %Savings deposits
    
    
    15,612
    
    
    
    157
    
    
    
    1.01
    %
    
    
    8,646
    
    
    
    139
    
    
    
    1.61
    %Time deposits
    
    
    50,659
    
    
    
    1,084
    
    
    
    2.14
    %
    
    
    36,187
    
    
    
    1,028
    
    
    
    2.84
    %Total interest-bearing deposits
    
    
    83,379
    
    
    
    1,338
    
    
    
    1.60
    %
    
    
    62,779
    
    
    
    1,345
    
    
    
    2.14
    %Short term borrowings
    
    
    40
    
    
    
    2
    
    
    
    6.00
    %
    
    
    
    
    
    
    
    
    
    
    0.00
    %Total interest-bearing liabilities
    
    $
    83,419
    
    
    $
    1,340
    
    
    
    1.61
    %
    
    $
    62,779
    
    
    
    1,345
    
    
    
    2.14
    %Non-interest bearing demand
deposits
    
    
    12,016
    
    
    
    
    
    
    
    
    
    
    
    7,269Other liabilities
    
    
    274
    
    
    
    
    
    
    
    
    
    
    
    366Total liabilities
    
    
    95,709
    
    
    
    
    
    
    
    
    
    
    
    70,414Shareholders equity
    
    
    10,823
    
    
    
    
    
    
    
    
    
    
    
    9,898Total liabilities and
shareholders equity
    
    $
    106,532
    
    
    
    
    
    
    
    
    
    
    $
    80,312Net interest income
    
    
    
    
    
    $
    4,412
    
    
    
    
    
    
    
    
    
    
    $
    2,697Net spread
    
    
    
    
    
    
    
    
    
    
    3.89
    %
    
    
    
    
    
    
    
    
    
    
    3.08
    %Net interest margin (1)
    
    
    
    
    
    
    
    
    
    
    4.22
    %
    
    
    
    
    
    
    
    
    
    
    3.49
    %
 
 (1)
    
    Net interest earnings divided by average interest-earning assets. A-35




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
  2010 compared to 2009
    
    
    2009 compared to 2008Net
    
    
    Increase/(decrease) due to
    
    
    Net
    
    
    Increase/(decrease) due toChange
    
    
    Volume
    
    
    Rate
    
    
    Change
    
    
    Volume
    
    
    RateInterest-earning assets:Interest-bearing balances with
other financial institutions
    
    $
    2
    
    
    $
    14
    
    
    $
    (12
    )
    
    $
    25
    
    
    $
    26
    
    
    $
    (1
    )Federal funds sold
    
    
    (3
    )
    
    
    (2
    )
    
    
    (1
    )
    
    
    (112
    )
    
    
    (51
    )
    
    
    (61
    )Securities available-for-sale
    
    
    (19
    )
    
    
    8
    
    
    
    (27
    )
    
    
    13
    
    
    
    37
    
    
    
    (24
    )Loans receivable
    
    
    1,729
    
    
    
    1,544
    
    
    
    185
    
    
    
    824
    
    
    
    976
    
    
    
    (152
    )Total interest income
    
    $
    1,709
    
    
    $
    1,564
    
    
    $
    145
    
    
    $
    750
    
    
    $
    988
    
    
    $
    (238
    )Interest-bearing liabilities:NOW Accounts
    
    $
    (29
    )
    
    $
    (2
    )
    
    $
    (27
    )
    
    $
    (89
    )
    
    $
    3
    
    
    $
    (93
    )Money markets
    
    
    (52
    )
    
    
    (6
    )
    
    
    (46
    )
    
    
    (153
    )
    
    
    (42
    )
    
    
    (111
    )Savings deposits
    
    
    18
    
    
    
    84
    
    
    
    (66
    )
    
    
    127
    
    
    
    140
    
    
    
    (12
    )Time deposits
    
    
    55
    
    
    
    348
    
    
    
    (293
    )
    
    
    73
    
    
    
    445
    
    
    
    (372
    )Total interest-bearing deposits
    
    
    (8
    )
    
    
    424
    
    
    
    (432
    )
    
    
    (42
    )
    
    
    546
    
    
    
    (588
    )Short term borrowings
    
    
    2
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total interest expense
    
    $
    6
    
    
    $
    426
    
    
    $
    (432
    )
    
    $
    (42
    )
    
    $
    546
    
    
    $
    (588
    )Net change in net interest
income
    
    $
    1,715
    
    
    $
    1,138
    
    
    $
    577
    
    
    $
    792
    
    
    $
    442
    
    
    $
    350
 Provision for Loan Losses
 
 Non-interest Income
  A-36




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
  Non-interest Expense
   Income Taxes
  A-37




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
 LIQUIDITY AND CAPITAL RESOURCES; ASSET/LIABILITY MANAGEMENT
    Amount of commitment expiration by periodLess than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    YearsCommitments to grant loans
    
    $
    13,564
    
    
    $
    13,564
    
    
    $
    
    
    
    $
    
    
    
    $
    Unfunded commitments under lines of
credit
    
    
    12,914
    
    
    
    9,116
    
    
    
    58
    
    
    
    1,368
    
    
    
    2,372Commercial and standby letters of credit
    
    
    803
    
    
    
    803
    
    
    
    
    
    
    
    
    
    
    
    Total commitments
    
    $
    27,281
    
    
    $
    23,483
    
    
    $
    58
    
    
    $
    1,368
    
    
    $
    2,372
  A-38




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
 Contractual Obligations
  Payments due by periodLess than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    YearsCertificates of deposit
    
    $
    50,463
    
    
    $
    29,481
    
    
    $
    20,970
    
    
    $
    12
    
    
    $
    Capital lease obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    3,938
    
    
    
    245
    
    
    
    473
    
    
    
    493
    
    
    
    2,727Purchase agreements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    54,401
    
    
    $
    29,726
    
    
    $
    21,443
    
    
    $
    505
    
    
    $
    2,727
   Capital Resources
   A-39




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    Principal Amount Maturing In:
 2011
    
    2012
    
    2013
    
    2014
    
    2015
    
    Thereafter
    
    Total
    
    Fair ValueRATE-SENSITIVE ASSETSOther interest-earning assets
    
    $
    4,708
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    4,708
    
    
    $
    4,708Average interest rate
    
    
    0.29
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Securities available for sale
    
    $
    200
    
    
    $
    
    
    
    $
    600
    
    
    $
    500
    
    
    $
    950
    
    
    $
    837
    
    
    $
    3,087
    
    
    $
    3,200Average interest rate
    
    
    3.25
    %
    
    
    0.00
    %
    
    
    2.05
    %
    
    
    2.00
    %
    
    
    2.72
    %
    
    
    6.17
    %Gross portfolio loans
    
    $
    16,822
    
    
    $
    10,739
    
    
    $
    12,308
    
    
    $
    21,384
    
    
    $
    14,987
    
    
    $
    24,139
    
    
    $
    100,379
    
    
    $
    101,234Average interest rate
    
    
    5.91
    %
    
    
    6.62
    %
    
    
    6.39
    %
    
    
    6.71
    %
    
    
    6.23
    %
    
    
    5.19
    %RATE-SENSITIVE LIABILITIESSavings & interest bearingDemand deposits
    
    $
    32,597
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    32,597
    
    
    $
    32,597Average interest rate
    
    
    0.78
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %Time deposits
    
    $
    29,481
    
    
    $
    17,437
    
    
    $
    3,090
    
    
    $
    443
    
    
    $
    12
    
    
    $
    
    
    
    $
    50,463
    
    
    $
    50,901Average interest rate
    
    
    1.99
    %
    
    
    2.08
    %
    
    
    2.41
    %
    
    
    2.76
    %
    
    
    2.72
    %
    
    
    0.0
    %Secured borrowings
    
    $
    1,469
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,469
    
    
    $
    1,469Average interest rate
    
    
    6.00
    %
    
    
    0.00
    %
    
    
    000
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
 A-40




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
 INTEREST RATE SENSITIVITY MANAGEMENT
   After
    
    
    AfterThree
    
    
    One YearMonths
    
    
    butWithin
    
    
    but
    
    
    Within
    
    
    AfterThree
    
    
    Within
    
    
    Five
    
    
    FiveMonths
    
    
    One Year
    
    
    Years
    
    
    Years
    
    
    TotalInterest earning assetsFederal funds sold
    
    $
    66
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    66Interest bearing due from banks
    
    
    4,556
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,556Securities
    
    
    1,245
    
    
    
    133
    
    
    
    1,405
    
    
    
    484
    
    
    
    3,248Loans
    
    
    24,266
    
    
    
    23,523
    
    
    
    47,728
    
    
    
    5,183
    
    
    
    100,700Total
    
    
    30,133
    
    
    
    23,637
    
    
    
    49,113
    
    
    
    5,668
    
    
    
    108,570Interest bearing liabilitiesNOW accounts
    
    
    5,923
    
    
    
    
    
    
    
    1,974
    
    
    
    
    
    
    
    7,897Money markets
    
    
    6,134
    
    
    
    
    
    
    
    4,130
    
    
    
    
    
    
    
    16,521Savings
    
    
    12,391
    
    
    
    
    
    
    
    2,045
    
    
    
    
    
    
    
    8,179Time deposits less than $100,000
    
    
    1,643
    
    
    
    3,942
    
    
    
    6,568
    
    
    
    
    
    
    
    12,153Time deposits > $100,000
    
    
    1,051
    
    
    
    23,076
    
    
    
    14,182
    
    
    
    
    
    
    
    38,310Short term borrowings
    
    
    1,469
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,469Total
    
    
    28,611
    
    
    
    27,018
    
    
    
    30,661
    
    
    
    
    
    
    $
    84,529Rate sensitivity gap
    
    $
    1,522
    
    
    $
    (3,382
    )
    
    $
    20,233
    
    
    
    5,668Cumulative rate sensitivity gap
    
    
    
    
    
    $
    (1,860
    )
    
    $
    18,373
    
    
    $
    24,041Rate sensitivity gap ratio
    
    
    1.05
    
    X
    
    0.87
    
    X
    
    1.60
    
    X
    
    
    
    XCumulative rate sensitivity gap ratio
    
    
    
    
    
    
    0.97
    
    X
    
    1.22
    
    X
    
    1.28
    
    X
 A-41




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
   CRITICAL ACCOUNTING POLICIES
 Allowance for loan losses
  Income Tax Valuation Allowance
  SEC FORM 10-K
  A-42




---



##### 



Birmingham Bloomfield Bancshares, Inc.
Managements Discussion and Analysis of Financial Condition and Results of Operation
 STOCK INFORMATION
   High

    
    Low2010First Quarter
    
    $
    4.75
    
    
    $
    2.25Second Quarter
    
    $
    3.50
    
    
    $
    2.60Third Quarter
    
    $
    3.25
    
    
    $
    2.50Fourth Quarter
    
    $
    3.25
    
    
    $
    2.002009First Quarter
    
    $
    5.00
    
    
    $
    3.50Second Quarter
    
    $
    6.90
    
    
    $
    2.25Third Quarter
    
    $
    3.00
    
    
    $
    2.00Fourth Quarter
    
    $
    4.00
    
    
    $
    2.00
  A-43