##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10  QSB
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 Commission File Number 000-52584
 BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
  Michigan
    
    20-1132959(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
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)
  þ o
   o þ
  o þ




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##### 



INDEX
 PART I  FINANCIAL INFORMATION
    
    
    3ITEM 1. FINANCIAL STATEMENTS
    
    
    3ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
    
    
    13ITEM 3. CONTROLS AND PROCEDURES
    
    
    21PART II. OTHER INFORMATION
    
    
    22ITEM
1. LEGAL PROCEEDINGS
    
    
    22ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    22ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    22ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    22ITEM 5. OTHER INFORMATION
    
    
    22ITEM 6. EXHIBITS
    
    
    23Certification Pursuant to Rules 13a-15(e) and 15d-15(e)Certification Pursuant to Rules 13a-15(e) and 15d-15(e)Certification Pursuant to Rules 13a-14(b) or Rule 15d-14(b)




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 September 30,2007AssetsCash and cash equivalentsCash
    
    $
    1,866,571Federal funds sold
    
    
    8,296,889Total cash and cash equivalents
    
    
    10,163,460Securities, available for sale (Note 2)
    
    
    5,912,278Loans (Note 3)Total loans
    
    
    31,081,985Less: Allowance for loan losses
    
    
    (470,000
    )Net loans
    
    
    30,611,985Premises & equipment
    
    
    2,597,327Interest receivable and other assets
    
    
    307,233Total assets
    
    $
    49,592,283Liabilities and Shareholders EquityDeposits (Note 4)Non-interest bearing
    
    $
    6,037,131Interest bearing
    
    
    31,679,248Total deposits
    
    
    37,716,379Interest payable and other liabilities
    
    
    545,534Total liabilities
    
    
    38,261,913Shareholders equityCommon stock, no par value Authorized  4,500,000 shares Issued and outstanding  1,800,000 shares
    
    
    17,034,330Accumulated other comprehensive income
    
    
    23,055Additional paid in capital  share based payments
    
    
    448,000Accumulated deficit
    
    
    (6,175,015
    )Total shareholders equity
    
    
    11,330,370Total liabilities and shareholders equity
    
    $
    49,592,283




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For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest IncomeLoans, including fees
    
    $
    470,388
    
    
    $
    14,969
    
    
    $
    1,068,700
    
    
    $
    14,969Taxable securities
    
    
    60,895
    
    
    
    
    
    
    
    69,793
    
    
    
    Federal funds sold
    
    
    179,689
    
    
    
    97,421
    
    
    
    553,001
    
    
    
    97,421Total interest income
    
    
    710,972
    
    
    
    112,390
    
    
    
    1,691,494
    
    
    
    112,390Interest expenseDeposits
    
    
    330,104
    
    
    
    14,922
    
    
    
    774,211
    
    
    
    14,922Borrowings
    
    
    
    
    
    
    24,594
    
    
    
    
    
    
    
    71,452Total interest expense
    
    
    330,104
    
    
    
    39,516
    
    
    
    774,211
    
    
    
    86,374Net interest income
    
    
    380,868
    
    
    
    72,874
    
    
    
    917,283
    
    
    
    26,016Provision for loan losses
    
    
    155,000
    
    
    
    30,000
    
    
    
    275,000
    
    
    
    30,000Net interest income (expense) after
provision for loan losses
    
    
    225,868
    
    
    
    42,874
    
    
    
    642,283
    
    
    
    (3,984
    )Non-interest incomeService charges and other fees
    
    
    18,064
    
    
    
    699
    
    
    
    26,466
    
    
    
    699Other income
    
    
    10,476
    
    
    
    
    
    
    
    67,992
    
    
    
    Total non-interest income
    
    
    28,540
    
    
    
    699
    
    
    
    94,458
    
    
    
    699Non-interest expenseSalaries and benefits
    
    
    450,171
    
    
    
    532,629
    
    
    
    1,345,933
    
    
    
    937,250Occupancy & equipment expense
    
    
    205,659
    
    
    
    110,217
    
    
    
    663,212
    
    
    
    282,921FAS 123R share based payments
    
    
    28,000
    
    
    
    420,000
    
    
    
    28,000
    
    
    
    420,000Data processing expense
    
    
    40,822
    
    
    
    8,882
    
    
    
    133,972
    
    
    
    8,882Advertising and public relations
    
    
    34,293
    
    
    
    25,089
    
    
    
    164,391
    
    
    
    25,089Professional fees
    
    
    57,680
    
    
    
    6,365
    
    
    
    183,091
    
    
    
    49,684Other expense
    
    
    99,892
    
    
    
    26,956
    
    
    
    277,014
    
    
    
    222,142Total non-interest expense
    
    
    916,517
    
    
    
    1,130,138
    
    
    
    2,795,613
    
    
    
    1,945,968Net loss before taxes
    
    
    (662,109
    )
    
    
    (1,086,565
    )
    
    
    (2,058,872
    )
    
    
    (1,949,253
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    ($662,109
    )
    
    
    ($1,086,565
    )
    
    
    ($2,058,872
    )
    
    
    ($1,949,253
    )Basic loss per share
    
    
    ($0.37
    )
    
    
    ($1.08
    )
    
    
    ($1.14
    )
    
    
    ($5.76
    )Diluted loss per share
    
    
    ($0.37
    )
    
    
    ($1.08
    )
    
    
    ($1.14
    )
    
    
    ($5.76
    )




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AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon
    
    
    Paid in
    
    
    Accumulated
    
    
    ComprehensiveStock
    
    
    Capital
    
    
    Deficit
    
    
    Gain
    
    
    TotalBalance at January
1, 2007
    
    $
    17,034,330
    
    
    $
    420,000
    
    
    
    ($4,116,143
    )
    
    
    
    
    
    $
    13,338,187Share based
payments expense
    
    
    
    
    
    
    28,000
    
    
    
    
    
    
    
    
    
    
    
    28,000Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    (2,058,872
    )
    
    
    
    
    
    
    (2,058,872
    )Unrealized gain
on securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,055
    
    
    
    23,055Total
comprehensive
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,035,817
    )Balance at
September 30, 2007
    
    $
    17,034,330
    
    
    $
    448,000
    
    
    
    ($6,175,015
    )
    
    $
    23,055
    
    
    $
    11,330,370




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##### Table of Contents



For the Nine Months EndedSeptember 30,2007
    
    
    2006Cash flows from operating activitiesNet loss
    
    
    ($2,058,872
    )
    
    
    ($1,949,253
    )Share based payments expense
    
    
    28,000
    
    
    
    420,000Provision for loan losses
    
    
    275,000
    
    
    
    30,000Accretion of securities
    
    
    (12,067
    )
    
    
    Depreciation expense
    
    
    284,700
    
    
    
    Loss on disposal of equipment
    
    
    36,216
    
    
    
    Net (increase) decrease in other assets
    
    
    (191,739
    )
    
    
    387,524Net increase (decrease) in other liabilities
    
    
    408,717
    
    
    
    (63,470
    )Net cash used in operating activities
    
    
    (1,230,045
    )
    
    
    (1,175,199
    )Cash flows from investing activitiesIncrease in loans
    
    
    (18,168,408
    )
    
    
    (1,951,426
    )Purchase of securities
    
    
    (6,042,503
    )
    
    
    Proceeds from maturities of securities
    
    
    165,347
    
    
    
    Purchases of premises and equipment
    
    
    (743,863
    )
    
    
    (1,785,725
    )Proceeds from reimbursement of leasehold
improvements
    
    
    144,500
    
    
    
    Net cash used in investing activities
    
    
    (24,644,927
    )
    
    
    (3,737,151
    )Cash flows from financing activitiesIncrease in deposits
    
    
    27,487,431
    
    
    
    5,177,762Sale of stock
    
    
    
    
    
    
    13,208,759Decrease in notes payable from related parties
    
    
    
    
    
    
    (749,000
    )Decrease in bank note payable
    
    
    
    
    
    
    (960,000
    )Net cash provided by financing activities
    
    
    27,487,431
    
    
    
    16,677,521Increase in cash and cash equivalents
    
    
    1,612,459
    
    
    
    11,765,171Cash and cash equivalents at the
beginning of the period
    
    
    8,551,001
    
    
    
    32,754Cash and cash equivalents at the
end of the period
    
    $
    10,163,460
    
    
    $
    11,797,925Supplemental cash flow information:Cash paid for interest:
    
    $
    733,550
    
    
    $
    79,785




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Note 1  Basis of Statement Preparation
    Note 2  Securities
  Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueSecurities available for sale:U. S. Government agency securities
    
    $
    2,170
    
    
    $
    4
    
    
    
    
    
    
    $
    2,174Mortgage backed securities
    
    $
    3,719
    
    
    $
    19
    
    
    
    
    
    
    $
    3,738Total securities available for sale
    
    $
    5,889
    
    
    $
    23
    
    
    
    
    
    
    $
    5,912
  EstimatedAmortized
    
    
    MarketCost
    
    
    ValueDue:Over 3 months through 1 year
    
    $
    498
    
    
    $
    498Over 1 year through 5 years
    
    $
    1,672
    
    
    $
    1,676Over 10 years
    
    $
    3,719
    
    
    $
    3,738$
    5,889
    
    
    $
    5,912




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Note 3  Loans
  2007Mortgage loans on real estate:Residential 1 to 4 family
    
    $
    868Multifamily
    
    
    1,865Commercial
    
    
    15,339Construction
    
    
    726Second mortgage
    
    
    770Equity lines of credit
    
    
    5,920Total mortgage loans on real estate
    
    
    25,488Commercial loans
    
    
    5,168Consumer installment loans
    
    
    426Total loans
    
    
    31,082Less:Allowance for loan losses
    
    
    470Net loans
    
    $
    30,612
  2007Balance at December 31, 2006
    
    $
    195Provision for loan losses
    
    
    275Loans charged off
    
    
    0Recoveries of loans previously charged off
    
    
    0Balance at September 30, 2007
    
    $
    470




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Note 4  Deposits
  2007Non-interest bearing deposits
    
    $
    6,037NOW accounts
    
    
    8,566Savings and money market accounts
    
    
    14,247Certificates of deposit <$100,000
    
    
    1,685Certificates of deposit >$100,000
    
    
    7,181Total
    
    $
    37,716
  <$100,000
    
    
    >$100,000
    
    
    TotalWithin 12 months
    
    $
    1,685
    
    
    $
    7,181
    
    
    $
    8,866> 12 months
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    1,685
    
    
    $
    7,181
    
    
    $
    8,866
 Note 5  Leases and Commitments
   2007 (remaining)
    
    $
    67,6832008
    
    
    274,0372009
    
    
    279,8072010
    
    
    285,6952011
    
    
    291,693thereafter
    
    
    3,967,666Total
    
    $
    5,166,581




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Note 6  Stock Option Plan
       Calculated volatility
    
    
    12.40
    %Weighted average dividends
    
    
    0.00
    %Expected term (in years)
    
    
    5Risk-free rate
    
    
    4.50
    %




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##### Table of Contents



WeightedAverageWeighted
    
    
    RemainingNumber of
    
    
    Average
    
    
    Contractual
    
    
    AggregateOptions
    
    Shares
    
    
    Exercise Price
    
    
    Term (in years)
    
    
    Intrinsic ValueOutstanding at January 1, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Granted
    
    
    187,500
    
    
    
    10.00
    
    
    
    9.50
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited or expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at September 30,
2007
    
    
    187,500
    
    
    $
    10.00
    
    
    
    9.50
    
    
    $
    
  Note 7  Minimum Regulatory Capital Requirements




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For Capital
    
    
    To beActual
    
    
    Adequacy Purposes
    
    
    Well-CapitalizedRatio
    
    
    
    
    
    
    Ratio
    
    
    
    
    
    
    RatioAmount
    
    
    (Percent)
    
    
    Amount
    
    
    (Percent)
    
    
    Amount
    
    
    (Percent)Total risk-based capital(to risk weighted assets)Bank of Birmingham
    
    
    11,020
    
    
    
    30.80
    
    
    
    2,862
    
    
    
    8.00
    
    
    
    3,577
    
    
    
    10.00Consolidated
    
    
    11,764
    
    
    
    32.88
    
    
    
    2,862
    
    
    
    8.00
    
    
    
    3,577
    
    
    
    10.00Tier I Capital(to risk weighted assets)Bank of Birmingham
    
    
    10,563
    
    
    
    29.53
    
    
    
    1,431
    
    
    
    4.00
    
    
    
    2,146
    
    
    
    6.00Consolidated
    
    
    11,307
    
    
    
    31.61
    
    
    
    1,431
    
    
    
    4.00
    
    
    
    2,146
    
    
    
    6.00Tier I Capital(to average assets)Bankof Birmingham
    
    
    10,563
    
    
    
    22.10
    
    
    
    1,912
    
    
    
    4.00
    
    
    
    2,389
    
    
    
    5.00Consolidated
    
    
    11,307
    
    
    
    23.66
    
    
    
    1,912
    
    
    
    4.00
    
    
    
    2,389
    
    
    
    5.00




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
   
    
    the Corporation has no operating history upon which to base an estimate of its future
financial performance;
    
    the Corporation expects to incur losses during its initial years of operations;
    
    failure of the Corporation or the Bank to implement its business strategies may adversely
affect its financial performance;
    
    departures of key personnel or directors may impair the Banks operations;
    
    the Bank will face intense competition from a variety of competitors;
    
    the Banks legal lending limits may impair its ability to attract borrowers;
    
    an economic downturn, especially one affecting the Banks primary service areas, may have
an adverse effect on the Corporations financial performance;
    
    adverse economic conditions in the automobile manufacturing and related service
industries may impact the Corporations banking business;
    
    monetary policy and other economic factors could adversely affect the Banks
profitability;
    
    the common stock of the Corporation is not an insured deposit;




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
    
    your share ownership may be diluted in the future;
    
    the Bank could be negatively affected by changes in interest rates;
    
    the determination of the offering price in the initial public offering was arbitrary, and
shareholders may be unable to resell their shares at or above the offering price;
    
    the Corporation does not intend to pay dividends in the foreseeable future;
    
    the Corporation and Bank are subject to extensive regulatory oversight, which could
restrain growth and profitability;
    
    the Corporation may not be able to raise additional capital on terms favorable to it;
    
    subscribers will incur immediate and substantial dilution in the book value per share of
any shares that they purchase in the offering;
    
    the liquidity of the Corporations common stock will be affected by its limited trading
market;
    
    the Corporations articles of incorporation and bylaws, and the employment agreements of
the Corporations executive officers, contain provisions that could make a takeover more
difficult;
    
    management of the Bank may be unable to adequately measure and limit credit risk
associated with the loan portfolio, which would affect the Corporations profitability; and,
    
    the Corporations directors and executive officers could have the ability to influence
shareholder actions in a manner that may be adverse to a shareholders personal investment
objectives.
  OVERVIEW




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PLAN OF OPERATION




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FINANCIAL RESULTS
 ASSETS




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##### Table of Contents



LIABILITIES
   As of September 30,2007Balance
    
    
    PercentageNoninterest bearing demand
    
    $
    6,037
    
    
    
    16.00NOW accounts
    
    
    8,566
    
    
    
    22.72Money market
    
    
    14,005
    
    
    
    37.13Savings
    
    
    242
    
    
    
    0.64Time deposits under $100,000
    
    
    1,685
    
    
    
    4.47Time deposits over $100,000
    
    
    7,181
    
    
    
    19.04Total deposits
    
    $
    37,716
    
    
    
    100.00




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NET INTEREST INCOME
   Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2007
    
    
    September 30, 2007Average
    
    
    Interest
    
    
    
    
    
    
    Average
    
    
    InterestBalance
    
    
    Income/
    
    
    Average
    
    
    Balance
    
    
    Income/
    
    
    Average(000s)
    
    
    Expense
    
    
    Rate
    
    

(000s)
    
    
    Expense
    
    
    RateAssetsLoans
    
    $
    25,079
    
    
    $
    470,388
    
    
    
    7.49
    %
    
    $
    19,296
    
    
    $
    1,068,700
    
    
    
    7.38
    %Securities
    
    
    4,321
    
    
    
    60,895
    
    
    
    5.64
    %
    
    
    1,693
    
    
    
    69,793
    
    
    
    5.50
    %Federal funds sold
    
    
    13,983
    
    
    
    179,689
    
    
    
    5.14
    %
    
    
    14,105
    
    
    
    553,001
    
    
    
    5.23
    %Total Earning Assets/
    
    
    43,383
    
    
    
    710,972
    
    
    
    6.55
    %
    
    
    35,094
    
    
    
    1,691,494
    
    
    
    6.43
    %Total Interest Income/Average
YieldCash and due from banks
    
    
    1,888
    
    
    
    
    
    
    
    
    
    
    
    1,403All other assets
    
    
    2,517
    
    
    
    
    
    
    
    
    
    
    
    2,605Total Assets
    
    
    47,788
    
    
    
    
    
    
    
    
    
    
    
    39,102Liabilities and EquityNOW accounts
    
    $
    8,353
    
    
    
    83,889
    
    
    
    4.02
    %
    
    $
    5,765
    
    
    
    175,314
    
    
    
    4.05
    %Money market
    
    
    12,562
    
    
    
    132,420
    
    
    
    4.22
    %
    
    
    8,925
    
    
    
    312,649
    
    
    
    4.67
    %Savings
    
    
    288
    
    
    
    1,212
    
    
    
    1.68
    %
    
    
    210
    
    
    
    2,374
    
    
    
    1.51
    %Time deposits
    
    
    8,655
    
    
    
    112,583
    
    
    
    5.20
    %
    
    
    7,311
    
    
    
    283,874
    
    
    
    5.18
    %Total Interest Bearing Liabilities/
    
    $
    29,858
    
    
    
    330,104
    
    
    
    4.42
    %
    
    $
    22,211
    
    
    
    774,211
    
    
    
    4.65
    %Total Interest Expense/Average YieldNoninterest bearing demand deposits
    
    $
    5,306
    
    
    
    
    
    
    
    
    
    
    $
    3,713All other liabilities
    
    
    249
    
    
    
    
    
    
    
    
    
    
    
    163Shareholders Equity
    
    $
    12,375
    
    
    
    
    
    
    
    
    
    
    $
    13,015Net Interest Income/
    
    
    
    
    
    $
    380,868
    
    
    
    2.13
    %
    
    
    
    
    
    $
    917,283
    
    
    
    1.78
    %Interest Rate SpreadNet Interest Margin (Net InterestIncome/Total Earning Assets)
    
    
    
    
    
    
    
    
    
    
    3.51
    %
    
    
    
    
    
    
    
    
    
    
    3.49
    %




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PROVISION FOR CREDIT LOSSES
  NONINTEREST INCOME
  NONINTEREST EXPENSE
  INCOME TAXES




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FUNDING OF OPERATIONS AND LIQUIDITY
  LIQUIDITY AND INTEREST RATE SENSITIVITY
      OFF BALANCE SHEET ARRANGEMENTS




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ITEM 3. CONTROLS AND PROCEDURES




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PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  
 ITEM 5. OTHER INFORMATION.




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ITEM 6. EXHIBITS.
 Exhibit Number
    
    Description of Exhibit31.1
    
    Rule 13a-14(a) Certification of Chief Executive Officer.31.2
    
    Rule 13a-14(a) Certification of Chief Financial Officer.32
    
    Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.




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SIGNATURES
  BIRMINGHAM BLOOMFIELD
BANCSHARES, INC.Date: November 12, 2007
    By:
    /s/ Robert E. FarrRobert E. Farr

Chief Executive OfficerDate: November 12, 2007
    By:
    /s/ Richard J. MillerRichard J. Miller

Chief Financial Officer




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EXHIBIT INDEX
 ExhibitNumber
    
    Description of Exhibit31.1
    
    Certification pursuant to Rules 13a-15(e) and 15d-15(e) of
the Securities Exchange Act31.2
    
    Certification pursuant to Rules 13a-15(e) and 15d-15(e) of
the Securities Exchange Act32
    
    Certification pursuant to Rules 13a-14(b) or Rule 15d-14(b)
of the Securities Exchange Act and 18 U.S.C. §1350