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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 Commission File Number 000-52584
 BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
  Michigan
    
    20-3993452(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 33583 Woodward Avenue, Birmingham. MI 48009
 (Address of principal executive offices, including zip code)
 (248) 723-7200
 (Registrants telephone number, including area code)
 
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  Large accelerated filer o

    
    Accelerated filer o
    
    Non-accelerated filer   o
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    Smaller reporting company þ




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TABLE OF CONTENTS  PART IITEM 1. BusinessITEM 1A. Risk FactorsITEM 1B. Unresolved Staff CommentsITEM 2. PropertiesITEM 3. Legal ProceedingsITEM 4. Submission of Matters to a Vote of Security HoldersPART IIITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesITEM 6. Selected Financial DataITEM 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsITEM 7A. Quantitative and Qualitative Disclosures about Market RiskITEM 8. Financial Statements and Supplemental DataITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureITEM 9A (T). Controls and ProceduresITEM 9B. Other InformationPART IIIITEM 10. Directors, Executive Officers and Corporate GovernanceITEM 11. Executive CompensationITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersITEM 13. Certain Relationships and Related Transactions, and Director IndependenceITEM 14. Principal Accounting Fees and ServicesITEM 15. Exhibits and Financial Statement SchedulesSIGNATURESExhibit IndexEX-10.9EX-10.10EX-11.0EX-13EX-21EX-23EX-31.1EX-31.2EX-32.1    Table of Contents  Documents Incorporated by Reference:
  .
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Disclosure Regarding Forward Looking Statements
   3




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BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
 
 PART I
 
 ITEM 1. Business
 Overview
    Philosophy and strategy
   
    
    Capitalizing on the diverse community involvement, professional expertise and
personal and business contacts of our directors, organizers and executive officers;
    
    Hiring and retaining experienced and qualified banking personnel;
    
    Providing individualized attention with consistent, local decision-making authority;
    
    Utilizing technology and strategic outsourcing to provide a broad array of
convenient products and services;
    
    Operating from highly visible and accessible banking offices in close proximity to a
concentration of targeted commercial businesses and professionals;
    
    Attracting its customer base by offering competitive interest rates on deposit
accounts.
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Market opportunities
 Primary service areas
  Local economy
   Competition
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Business strategy
 Management philosophy
 Operating strategy
 
    
    Experienced senior management. The Banks senior management possesses extensive
experience in banking industry, as well as substantial business and banking contacts in
our primary service areas.
    
    Quality employees. Bank of Birmingham will strive to hire highly trained and
seasoned staff.
    
    Community-oriented board of directors. All of the Banks directors are either
experienced bankers or local business and community leaders. Most have significant
business ties to the Banks primary service areas, enabling them to be sensitive and
responsive to the needs of the community. Additionally, the board of directors
represents a wide variety of business experience and community involvement.
    
    Highly visible sites. The main office is highly visible and located in close
proximity to major traffic arteries. The main office is located at 33583 Woodward
Avenue, Birmingham, Michigan in an area that provides easy access to potential banking
customers traveling in the Birmingham area. The Bank also operates another
full-service banking office at 4145 West Maple, Bloomfield Township, Michigan, to serve
the expanding Bloomfield area. We believe that these sites give the Bank a highly
visible presence in a market that is dominated by branch offices of Banks headquartered
out of the area. We believe this enhances the Banks image as a strong competitor.
    
    Individual customer focus. Bank of Birmingham focuses on providing individual
service and attention to our target customers, which include local businesses,
professionals and individuals. The Banks products and services are delivered
personally though two full-service offices and supported by effective technical and
non-technical service delivery systems. Clients will enjoy the convenience of on-site
visits by the Banks business relationship managers, a courier service for non-cash
deposits and business consultation services.
    
    Financial and information center.Bank of Birmingham serves as a financial and
information center for the community, and will assemble and sponsor professionals to
conduct seminars and workshops on a variety of subjects of interest to assist members
of our community in developing or enhancing their personal and professional
effectiveness.
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Growth strategies
 
    
    Capitalize on community orientation. We are capitalizing on the Banks position as
an independent, locally-owned community bank to attract individuals, professionals and
local business customers that may be underserved by larger banking institutions in our
market area.
    
    Emphasize local decision-making. The Bank emphasizes local decision-making by
experienced bankers. This will help the Bank attract local businesses and
service-minded customers.
    
    Attract experienced lending officers. Bank of Birmingham has hired experienced,
well-trained lending officers capable of soliciting loan business immediately.
    
    Offer fee-generating products and services. The Banks range of services, pricing
strategies, interest rates paid and charged and hours of operation are structured to
attract its target customers and increase its market share. Bank of Birmingham strives
to offer the small business person, professional, entrepreneur and consumer the best
loan services available while charging competitively for these services and utilizing
technology and strategic outsourcing to increase fee revenues.
 Lending services
 Lending policy
  Lending limits
 
    
    15% of the banks capital and surplus; or
    
    upon a 2/3 vote of the Banks board of directors, 25% of its capital and surplus.
 Credit risks
 Real estate loans
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
    
    Commercial real estate. Commercial real estate loan terms generally will be limited
to five years or less, although payments may be structured on a longer amortization
basis. Interest rates may be fixed or adjustable. The Bank generally will require
personal guarantees from the principal owners of the property supported by a review by
Bank management of the principal owners personal financial statements. Risks
associated with commercial real estate loans include fluctuations in the value of real
estate, new job creation trends, tenant vacancy rates and the quality of the borrowers
management. The Bank will limit its risk by analyzing borrowers cash flow and
collateral value on an ongoing basis.
    
    Construction and development loans. Bank of Birmingham will consider making
owner-occupied construction loans with a pre-approved take-out loan. The Bank will
also consider construction and development loans on a pre-sold basis. If the borrower
has entered into an agreement to sell the property prior to beginning construction,
then the loan is considered to be on a pre-sold basis. If the borrower has not entered
into an agreement to sell the property prior to beginning construction, then the loan
is considered to be on a speculative basis. Construction and development loans are
generally made with a term of six to twelve months and interest is paid quarterly. The
ratio of the loan principal to the value of the collateral as established by
independent appraisal typically will not exceed industry standards. Speculative loans
will be based on the borrowers financial strength and cash flow position. Loan
proceeds will be disbursed based on the percentage of completion and only after the
project has been inspected by an experienced construction lender or third-party
inspector. Risks associated with construction loans include fluctuations in the value
of real estate and new job creation trends.
    
    Residential real estate. The Banks residential real estate loans will consist of
residential second mortgage loans, residential construction loans and traditional
mortgage lending for one-to-four family residences. The Bank expects that any
long-term fixed rate mortgages will be underwritten for resale to the secondary market.
It will offer primarily adjustable rate mortgages. The majority of fixed rate loans
will be sold in the secondary mortgage market. All loans will be made in accordance
with our appraisal policy with the ratio of the loan principal to the value of
collateral as established by independent appraisal not exceeding 80%, unless the
borrower has private mortgage insurance.
    
    Commercial loans. Bank of Birmingham expects that loans for commercial
purposes in various lines of businesses will be one of the larger components of the
banks loan portfolio. The target commercial loan market will be small- to
medium-sized businesses and the business professional market. The terms of these loans
will vary by purpose and by type of underlying collateral. The commercial loans will
primarily be underwritten on the basis of the borrowers ability to service the loan
from income. The Bank will typically make equipment loans for a term of five years or
less at fixed or variable rates, with the loan fully amortized over the term. Loans to
support working capital will typically have terms not exceeding one year and will
usually be secured by accounts receivable, inventory or personal guarantees of the
principals of the business. For loans secured by accounts receivable or inventory,
principal will typically be repaid as the assets securing the loan are converted into
cash, and for loans secured with other types of collateral, principal will typically be
due at maturity. The quality of the commercial borrowers management and its ability
both to properly evaluate changes in the supply and demand characteristics affecting
its markets for products and services and to effectively respond to such changes are
significant factors in a commercial borrowers creditworthiness.
 Consumer loans
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Investments
  Asset and liability management
  Deposit services
  Other banking services
  Employees
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SUPERVISION AND REGULATION
 General
      The Corporation
 General .
 Investments and Activities .
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Capital Requirements .
    Recent Developments .
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The Bank
 General .
 Business Activities .
 Branching .
  Loans to One Borrower .
 Enforcement .
  12




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Assessments and Fees .
 Regulatory Capital Requirements .
    Prompt Corrective Regulatory Action .
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Deposit Insurance .
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Payment of Dividends by the Bank .
  Loans to Directors, Executive Officers, and Principal Shareholders .
 Certain Transactions with Related Parties .
  Standards for Safety and Soundness .
 Reserve Requirement .
 
    
    for transaction accounts totaling $10.3 million or less, a reserve of 0%; and
    
    for transaction accounts in excess of $10.3 million up to and including $44.4 million, a
reserve of 3%; and for transaction accounts totaling in excess of $44.4 million, a reserve
requirement of $1.023 million plus 10% of that portion of the total transaction accounts
greater than $44.4 million.
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ITEM 1A. Risk Factors
  
 ITEM 1B. Unresolved Staff Comments.
  
 ITEM 2. Properties.
    
 ITEM 3. Legal Proceedings.
  
 ITEM 4. Submission of Matters to a Vote of Security Holders.
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PART II
 
 ITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
   Market
    
    DividendsInformation
    
    paid perYear
    
    Quarter
    
    High
    
    Low
    
    share2007
    
    First
    
    $
    10.25
    
    
    $
    9.00
    
    
    
    Second
    
    $
    9.00
    
    
    $
    8.00
    
    
    
    Third
    
    $
    8.25
    
    
    $
    5.75
    
    
    
    Fourth
    
    $
    8.00
    
    
    $
    4.50
    
    
    
    2008
    
    First
    
    $
    5.50
    
    
    $
    3.50
    
    
    
    Second
    
    $
    5.30
    
    
    $
    2.25
    
    
    
    Third
    
    $
    3.00
    
    
    $
    1.50
    
    
    
    Fourth
    
    $
    4.00
    
    
    $
    2.00
    
    
    
    
 Dividends
   Recent Sales of Unregistered Securities
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ITEM 6. Selected Financial Data
  
 ITEM 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  
 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
 .
 
 ITEM 8. Financial Statements and Supplemental Data.
  
 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  
 ITEM 9A (T). Controls and Procedures.
 Disclosure Controls and Procedures
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Managements Annual Report on Internal Control over Financial Reporting
   Changes in Internal Controls
  
 ITEM 9B. Other Information
  
 PART III
  
 ITEM 10. Directors, Executive Officers and Corporate Governance.
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www.bankofbirmingham.net
 
 ITEM 11. Executive Compensation.
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ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
   Number of securitiesremaining available forNumber of securities to be
    
    Weighted-average
    
    future issuance underissued upon exercise of
    
    exercise price of
    
    equity compensation plansoutstanding options,
    
    outstanding options,
    
    (excluding securities inwarrants and rights
    
    warrants and rights
    
    column (a))Plan category
    
    (a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders
    
    
    180,000
    
    
    $
    10.00
    
    
    
    45,000Equity compensation
plans not approved
by security holders
(1)
    
    
    184,000
    
    
    $
    10.00
    
    
    
    0Total
    
    
    364,000
    
    
    $
    10.00
    
    
    
    45,000
 
 (1)
    
    Organizers of the Company were granted warrants pursuant to the Companys registration
statement dated November 14, 2005. 
 ITEM 13. Certain Relationships and Related Transactions, and Director Independence.
  
 ITEM 14. Principal Accounting Fees and Services.
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ITEM 15. Exhibits and Financial Statement Schedules
 Number
    
    Description3.1
    
    Articles of incorporation are incorporated by reference from
Exhibit 3.1 of the Corporations Registration Statement on Form
SB-2/A dated October 27, 20053.2
    
    Bylaws are incorporated by reference from Exhibit 3.2 of the
Corporations Registration Statement on Form SB-2 dated September
6, 20054.1
    
    Specimen common stock certificate is incorporated by reference from
Exhibit 4.1 of the Corporations Registration Statement on Form
SB-2 dated September 6, 20054.2
    
    Form of Birmingham Bloomfield Bancshares, Inc. Organizers Warrant
Agreement is incorporated by reference from Exhibit 4.2 of the
Corporations Registration Statement on Form SB-2 dated September
6, 20054.3
    
    Form of Birmingham Bloomfield Bancshares, Inc. Shareholders
Warrant Agreement is incorporated by reference from Exhibit 4.3 of
the Corporations Registration Statement on Form SB-2 dated
September 6, 200510.1
    
    Birmingham Bloomfield Bancshares, Inc. 2006 Stock Incentive Plan is
incorporated by reference from Exhibit 10.1 of the Corporations
Quarterly Report on Form 10-QSB for the Quarter Ended March 31,
200710.2
    
    Form of Employment Agreement by and between Birmingham Bloomfield
Bancshares, Inc. and Robert Farr is incorporated by reference from
Exhibit 10.4 of the Corporations Registration Statement on Form
SB-2 dated September 6,)+10.3
    
    Lease Agreement dated January 28, 2005, by and between Irving I.
Rosen Family Limited Partnership and Birmingham Bloomfield
Bancshares, Inc. is incorporated by reference from Exhibit 10.10 of
the Corporations Registration Statement on Form SB-2 dated
September 6, 200510.4
    
    Lease Agreement, by and between Birmingham Bloomfield Bancshares,
Inc. and Bloomfield Plaza is incorporated by reference from Exhibit
10.11 of the Corporations Registration Statement on Form SB-2
dated September 6, 200510.5
    
    Data Processing Services Agreement, dated February 16, 2005, by and
between Rurbanc Data Services, Inc. and Bank of Birmingham is
incorporated by reference from Exhibit 10.12 of the Corporations
Registration Statement on Form SB-2 dated September 6, 200510.6
    
    Item Processing Services Agreement, dated February 16, 2005, by and
between Rurbanc Data Services, Inc. and Bank of Birmingham is
incorporated by reference from Exhibit 10.13 of the Corporations
Registration Statement on Form SB-2 dated September 6, 200510.7
    
    Employment Agreement by and between Birmingham Bloomfield
Bancshares, Inc. and Lance Krajacic incorporated by reference from
Annual Report on Form 10-KSB for the year ended December 31, 2007+10.8
    
    Form of Incentive Stock Option Agreement (Incorporated by reference
from Quarterly Report on Form 10-QSB for the quarter ended March
31, 2007)10.9
    
    Amendment to Robert Farr Employment Agreement to comply with
Regulation 409A(filed herewith)10.10
    
    Amendment to Lance Krajacic Employment Agreement to comply with
Regulation 409A(filed herewith)11
    
    Computation of Per Share Earnings13
    
    2008 Shareholder Report (except for portions of the 2008
Shareholder Report that are expressly incorporated by reference
into this Annual Report of Form 10-K, the 2008 Shareholder Report
shall not be deemed filed as apart hereof.)14
    
    Code of Ethics is incorporated by reference from Exhibit 14 of the
Corporations Annual Report on Form 10-KSB for the year ended
December 31, 200521
    
    List of Subsidiaries23
    
    Consent of Plante & Moran, PLLC31.1
    
    Certification of Chief Executive Officer Pursuant to Rule 15d-15(e)
of the securities Exchange Act.31.2
    
    Certification of Chief Financial Officer Pursuant to Rule 15d-15(e)
of the securities Exchange Act.32
    
    Certification Pursuant to Rule 14d-14(b) of the Securities Exchange
Act and 18 U.S.C. section 1350
 
 +
    
    Indicates a compensatory plan or contract.


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BIRMINGHAM BLOOMFIELD BANCSHARES,
INC.By:
    /s/ Robert E. FarrRobert E. FarrPresident and Chief Executive Officer  SIGNATURE
    
    TITLE
    
    DATE/s/ William R. Aikens

William R. Aikens
    
    Director
    
    March 31, 2009/s/ Harry Cendrowski

Harry Cendrowski
    
    Director
    
    March 31, 2009/s/ Donald E. Copus

Donald E. Copus
    
    Director
    
    March 31, 2009/s/ John M. Erb

John M. Erb
    
    Director
    
    March 31, 2009/s/ Robert E. Farr

Robert E. Farr
    
    Director, President & Chief
Executive Officer
(Principal Executive Officer)
    
    March 31, 2009/s/ Charles Kaye

Charles Kaye
    
    Director
    
    March 31, 2009/s/ Lance N. Krajacic, Jr.

Lance N. Krajacic, Jr.
    
    Director
    
    March 31, 2009/s/ Scott McCallum

Scott McCallum
    
    Director
    
    March 31, 2009/s/ Richard J. Miller

Richard J. Miller
    
    Director
    
    March 31, 2009/s/ Daniel P. ODonnell

Daniel P. ODonnell
    
    Director
    
    March 31, 2009
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SIGNATURE
    
    TITLE
    
    DATE/s/ Charles T. Pryde

Charles T. Pryde
    
    Director
    
    March 31, 2009/s/
Walter G. Schwartz

Walter G. Schwartz
    
    Director
    
    March 31, 2009/s/ Henry Spellman

Henry Spellman
    
    Director
    
    March 31, 2009/s/ Thomas J. Wagner

Thomas J. Wagner
    
    Director
    
    March 31, 2009/s/ Deborah A. Thompson

Deborah A. Thompson
    
    Chief Financial Officer
(Principal Financial and
Accounting Officer)
    
    March 31, 2009
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Exhibit Index
 Number
    
    Description10.9
    
    Amendment to Robert Farr Employment Agreement to comply with Regulation 409A10.10
    
    Amendment to Lance Krajacic Employment Agreement to comply with Regulation 409A11.0
    
    Computation of Per Share Earnings13
    
    2008 Shareholder Report (except for portions of the 2008 Shareholder Report
that are expressly incorporated by reference in this Annual Report of Form
10-K, the 2008 Shareholder Report of the Corporation shall not be deemed filed
as apart thereof.)21
    
    List of Subsidiaries23
    
    Consent of Plante & Moran, PLLC31.1
    
    Certification of Chief Executive Officer Pursuant to Rule 15d-15(e) of the
securities Exchange Act.31.2
    
    Certification of Acting Chief Financial Officer Pursuant to Rule 15d-15(e) of
the securities Exchange Act.32
    
    Certification Pursuant to Rule 14d-14(b) of the Securities Exchange Act and 18
U.S.C. section 1350
 25