##### 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 June 30, 2007
 Commission File Number 000-52584
 BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
  Michigan
    
    20-1132959(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
 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
    
    
    23ITEM 6. EXHIBITS
    
    
    24Certification 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
 
 June 30,2007AssetsCash and cash equivalentsCash
    
    $
    977,019Federal funds sold
    
    
    16,178,250Total cash and cash equivalents
    
    
    17,155,269Securities, available for sale (Note 2)
    
    
    2,376,941Loans (Note 3)Total loans
    
    
    21,010,486Less: Allowance for loan losses
    
    
    (315,000
    )Net loans
    
    
    20,695,486Premises & equipment
    
    
    2,688,327Interest receivable and other assets
    
    
    201,498Total assets
    
    $
    43,117,521Liabilities and Shareholders EquityDeposits (Note 4)Non-interest bearing
    
    $
    4,590,590Interest bearing
    
    
    25,889,910Total deposits
    
    
    30,480,500Interest payable and other liabilities
    
    
    715,319Total liabilities
    
    
    31,195,819Shareholders equityCommon stock, no par valueAuthorized  4,500,000 sharesIssued and outstanding  1,800,000 shares
    
    
    17,034,330Accumulated other comprehensive loss
    
    
    (19,722
    )Additional paid in capital  share based payments
    
    
    420,000Accumulated deficit
    
    
    (5,512,906
    )Total shareholders equity
    
    
    11,921,702Total liabilities and shareholders equity
    
    $
    43,117,521




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For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest IncomeLoans, including fees
    
    $
    344,895
    
    
    $
    
    
    
    $
    598,312
    
    
    $
    Taxable securites
    
    
    8,898
    
    
    
    
    
    
    
    8,898
    
    
    
    Federal funds sold
    
    
    211,338
    
    
    
    
    
    
    
    373,312
    
    
    
    Total interest income
    
    
    565,131
    
    
    
    
    
    
    
    980,522
    
    
    
    Interest expenseDeposits
    
    
    274,464
    
    
    
    
    
    
    
    444,107
    
    
    
    Borrowings
    
    
    
    
    
    
    30,358
    
    
    
    
    
    
    
    46,858Total interest expense
    
    
    274,464
    
    
    
    30,358
    
    
    
    444,107
    
    
    
    46,858Net interest income (expense)
    
    
    290,667
    
    
    
    (30,358
    )
    
    
    536,415
    
    
    
    (46,858
    )Provision for loan losses
    
    
    85,000
    
    
    
    
    
    
    
    120,000
    
    
    
    Net interest income (expense) after
provision for loan losses
    
    
    205,667
    
    
    
    (30,358
    )
    
    
    416,415
    
    
    
    (46,858
    )Non-interest incomeService charges and other fees
    
    
    3,327
    
    
    
    
    
    
    
    8,402
    
    
    
    Other income
    
    
    24,755
    
    
    
    
    
    
    
    57,516
    
    
    
    Total non-interest income
    
    
    28,082
    
    
    
    
    
    
    
    65,918
    
    
    
    Non-interest expenseSalaries and benefits
    
    
    461,070
    
    
    
    319,105
    
    
    
    895,762
    
    
    
    505,894Occupancy & equipment expense
    
    
    249,800
    
    
    
    106,082
    
    
    
    457,553
    
    
    
    172,704Data processing expense
    
    
    37,122
    
    
    
    
    
    
    
    93,150
    
    
    
    Advertising and public relations
    
    
    61,178
    
    
    
    
    
    
    
    130,098
    
    
    
    Professional fees
    
    
    64,510
    
    
    
    35,763
    
    
    
    125,411
    
    
    
    43,319Other expense
    
    
    105,487
    
    
    
    61,218
    
    
    
    177,122
    
    
    
    93,913Total non-interest expense
    
    
    979,167
    
    
    
    522,168
    
    
    
    1,879,096
    
    
    
    815,830Net loss before taxes
    
    
    (745,418
    )
    
    
    (552,526
    )
    
    
    (1,396,763
    )
    
    
    (862,688
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    ($
    745,418
    )
    
    ($
    552,526
    )
    
    ($
    1,396,763
    )
    
    ($
    862,688
    )Basic loss per share
    
    ($
    0.41
    )
    
    ($
    5,525.26
    )
    
    ($
    0.78
    )
    
    ($
    8,626.88
    )Diluted loss per share
    
    ($
    0.41
    )
    
    ($
    5,525.26
    )
    
    ($
    0.78
    )
    
    ($
    8,626.88
    )




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AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon
    
    
    Paid in
    
    
    Accumulated
    
    
    ComprehensiveStock
    
    
    Capital
    
    
    Deficit
    
    
    Loss
    
    
    TotalBalance at January 1, 2007
    
    $
    17,034,330
    
    
    $
    420,000
    
    
    ($
    4,116,143
    )
    
    
    
    
    
    $
    13,338,187Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    (1,396,763
    )
    
    
    
    
    
    
    (1,396,763
    )Unrealized loss on securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,722
    )
    
    
    (19,722
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,416,485
    )Balance at June 30, 2007
    
    $
    17,034,330
    
    
    $
    420,000
    
    
    ($
    5,512,906
    )
    
    ($
    19,722
    )
    
    $
    11,921,702




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##### Table of Contents



For the Six Months EndedJune 30,2007
    
    
    2006Cash flows from operating activitiesNet loss
    
    ($
    1,396,763
    )
    
    ($
    862,688
    )Provision for loan losses
    
    
    120,000
    
    
    
    Accretion of securities
    
    
    (1,189
    )
    
    
    Depreciation expense
    
    
    187,200
    
    
    
    Loss on disposal of equipment
    
    
    35,479
    
    
    
    Net increase in other assets
    
    
    (86,004
    )
    
    
    (327,831
    )Net increase in other liabilities
    
    
    578,502
    
    
    
    45,748Net cash used in operating activities
    
    
    (562,775
    )
    
    
    (1,144,771
    )Cash flows from investing activitiesIncrease in loans
    
    
    (8,096,909
    )
    
    
    Purchase of securities
    
    
    (2,408,397
    )
    
    
    Proceeds from maturities of securities
    
    
    12,923
    
    
    
    Purchases of premises and equipment
    
    
    (736,626
    )
    
    
    (175,733
    )Proceeds from reimbursement of leasehold
improvements
    
    
    144,500
    
    
    
    Net cash used in investing activities
    
    
    (11,084,509
    )
    
    
    (175,733
    )Cash flows from financing activitiesIncrease in deposits
    
    
    20,251,552
    
    
    
    Increase in line of credit payable
    
    
    
    
    
    
    1,354,800Net cash provided by financing activities
    
    
    20,251,552
    
    
    
    1,354,800Increase in cash and cash equivalents
    
    
    8,604,268
    
    
    
    34,296Cash and cash equivalents at the
beginning of the period
    
    
    8,551,001
    
    
    
    32,754Cash and cash equivalents at the
end of the period
    
    $
    17,155,269
    
    
    $
    67,050Supplemental cash flow information:Cash paid for interest:
    
    $
    422,267
    
    
    $
    46,858




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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:Mortgage backed securities
    
    $
    2,396,663
    
    
    
    
    
    
    $
    19,722
    
    
    $
    2,376,941Total securities available for sale
    
    $
    2,396,663
    
    
    
    
    
    
    $
    19,722
    
    
    $
    2,376,941
  EstimatedAmortized
    
    
    MarketCost
    
    
    ValueDue after 10 years
    
    $
    2,396,663
    
    
    $
    2,376,941$
    2,396,663
    
    
    $
    2,376,941




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Note 3  Loans
  2007Mortgage loans on real estate:Residential 1 to 4 family
    
    $
    1,022Multifamily
    
    
    1,866Commercial
    
    
    7,739Construction
    
    
    524Second mortgage
    
    
    792Equity lines of credit
    
    
    4,783Total mortgage loans on real estate
    
    
    16,726Commercial loans
    
    
    3,849Consumer installment loans
    
    
    435Total loans
    
    
    21,010Less:Allowance for loan losses
    
    
    315Net loans
    
    $
    20,695
  2007Balance at December 31, 2006
    
    $
    195Provision for loan losses
    
    
    120Loans charged off
    
    
    0Recoveries of loans previously charged off
    
    
    0Balance at June 30, 2007
    
    $
    315




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Note 4  Deposits
  2007Non-interest bearing deposits
    
    $
    4,591NOW accounts
    
    
    7,456Savings and money market accounts
    
    
    9,982Certificates of deposit <$100,000
    
    
    1,834Certificates of deposit >$100,000
    
    
    6,618Total
    
    $
    30,481
  <$100,000
    
    
    >$100,000
    
    
    TotalWithin 12 months
    
    $
    1,834
    
    
    $
    6,618
    
    
    $
    8,452> 12 months
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    1,834
    
    
    $
    6,618
    
    
    $
    8,452
 Note 5  Leases and Commitments
   2007 (remaining)
    
    $
    134,6602008
    
    
    274,0372009
    
    
    279,8072010
    
    
    285,6952011
    
    
    291,693thereafter
    
    
    1,187,293Total
    
    $
    2,453,185




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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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WeightedAverageWeighted
    
    
    RemainingNumber of
    
    
    Average
    
    
    Contractual
    
    
    AggregateOptions
    
    Shares
    
    
    Exercise Price
    
    
    Term (in years)
    
    
    Intrinsic ValueOutstanding at January 1, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Granted
    
    
    187,500
    
    
    
    10.00
    
    
    
    9.75
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited or expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at June 30, 2007
    
    
    187,500
    
    
    $
    10.00
    
    
    
    9.75
    
    
    $
    
  Note 7  Minimum Regulatory Capital Requirements
   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
    
    
    11,567
    
    
    
    43.94
    
    
    
    2,106
    
    
    
    8.00
    
    
    
    2,632
    
    
    
    10.00Consolidated
    
    
    12,256
    
    
    
    45.60
    
    
    
    2,150
    
    
    
    8.00
    
    
    
    2,688
    
    
    
    10.00Tier I
Capital
(to risk weighted assets)Bank of Birmingham
    
    
    11,252
    
    
    
    42.77
    
    
    
    1,052
    
    
    
    4.00
    
    
    
    1,578
    
    
    
    6.00Consolidated
    
    
    11,941
    
    
    
    44.43
    
    
    
    1,075
    
    
    
    4.00
    
    
    
    1,613
    
    
    
    6.00Tier I
Capital
(to average assets)Bank of Birmingham
    
    
    11,252
    
    
    
    29.00
    
    
    
    1,552
    
    
    
    4.00
    
    
    
    1,940
    
    
    
    5.00Consolidated
    
    
    11,941
    
    
    
    30.78
    
    
    
    1,552
    
    
    
    4.00
    
    
    
    1,940
    
    
    
    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
 th




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LIABILITIES
   As of June 30,2007Balance
    
    
    PercentageNoninterest bearing demand
    
    $
    4,591
    
    
    
    15.06NOW accounts
    
    
    7,456
    
    
    
    24.46Money market
    
    
    9,720
    
    
    
    31.89Savings
    
    
    262
    
    
    
    0.86Time deposits under $100,000
    
    
    1,834
    
    
    
    6.02Time deposits over $100,000
    
    
    6,618
    
    
    
    21.71Total deposits
    
    $
    30,481
    
    
    
    100.00




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NET INTEREST INCOME
   Three Months Ended June 30, 2007
    
    
    Six Months Ended June 30, 2007Average
    
    
    Interest
    
    
    
    
    
    
    Average
    
    
    InterestBalance
    
    
    Income/
    
    
    Average
    
    
    Balance
    
    
    Income/
    
    
    Average(000s)
    
    
    Expense
    
    
    Rate
    
    
    (000s)
    
    
    Expense
    
    
    RateAssetsLoans
    
    $
    18,580
    
    
    $
    344,895
    
    
    
    7.43
    %
    
    $
    16,357
    
    
    $
    598,312
    
    
    
    7.32
    %Securities
    
    
    710
    
    
    
    8,898
    
    
    
    5.01
    %
    
    
    357
    
    
    
    8,898
    
    
    
    4.98
    %Federal funds sold
    
    
    15,691
    
    
    
    211,338
    
    
    
    5.39
    %
    
    
    14,167
    
    
    
    373,312
    
    
    
    5.27
    %Total Earning Assets/
    
    
    34,981
    
    
    
    565,131
    
    
    
    6.46
    %
    
    
    30,881
    
    
    
    980,522
    
    
    
    6.35
    %Total
Interest Income/Average YieldCash and due from banks
    
    
    1,054
    
    
    
    
    
    
    
    
    
    
    
    1,156All other assets
    
    
    2,762
    
    
    
    
    
    
    
    
    
    
    
    2,649Total Assets
    
    $
    38,797
    
    
    
    
    
    
    
    
    
    
    $
    34,686Liabilities and EquityNOW accounts
    
    $
    6,420
    
    
    
    68,711
    
    
    
    4.28
    %
    
    $
    4,450
    
    
    
    91,425
    
    
    
    4.11
    %Money market
    
    
    8,421
    
    
    
    104,848
    
    
    
    4.98
    %
    
    
    7,076
    
    
    
    180,229
    
    
    
    5.09
    %Savings
    
    
    159
    
    
    
    492
    
    
    
    1.24
    %
    
    
    170
    
    
    
    1,162
    
    
    
    1.37
    %Time deposits
    
    
    7,756
    
    
    
    100,413
    
    
    
    5.18
    %
    
    
    6,627
    
    
    
    171,291
    
    
    
    5.17
    %Total Interest Bearing Liabilities/
    
    $
    22,756
    
    
    
    274,464
    
    
    
    4.82
    %
    
    $
    18,323
    
    
    
    444,107
    
    
    
    4.85
    %Total
Interest Expense/Average YieldNoninterest bearing demand deposits
    
    $
    2,341
    
    
    
    
    
    
    
    
    
    
    $
    2,924All other liabilities
    
    
    164
    
    
    
    
    
    
    
    
    
    
    
    119Shareholders Equity
    
    $
    13,536
    
    
    
    
    
    
    
    
    
    
    $
    13,320Net Interest
Income/
    
    
    
    
    
    $
    290,667
    
    
    
    1.64
    %
    
    
    
    
    
    $
    536,415
    
    
    
    1.50
    %Interest
Rate SpreadNet Interest Margin (Net Interest
    
    
    
    
    
    
    
    
    
    
    3.32
    %
    
    
    
    
    
    
    
    
    
    
    3.47
    %Income/ Total Earning Assets)




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PROVISION FOR CREDIT LOSSES
  NONINTEREST INCOME
  NONINTEREST EXPENSE
  INCOME TAXES
    FUNDING OF OPERATIONS AND LIQUIDITY




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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.
   Class I directors with a term expiring in 2009:Donald J. AboodWilliam R. AikensJane L. BrodskyHarry CendrowskiRichard J. MillerClass II directors with a term expiring in 2010:Donald E. CopusRobert E. FarrCharles KayeScott McCallumDaniel P. ODonnellHenry G. SpellmanClass III directors with a term expiring in 2008:John M. FarrCharles T. PrydeDonald RuffWalter G. SchwartzRobert StapletonThe results of the voting to approve the Corporations 2006 Stock Incentive Plan were as follows:For: 876,070Against: 36,350Abstain: 5,750
 
 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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##### Table of Contents



SIGNATURES
  BIRMINGHAM BLOOMFIELD BANCSHARES, INC.Date: August 10, 2007
    
    
    
    By:
    
    /s/ Robert E. FarrRobert E. FarrChief Executive OfficerDate: August 10, 2007
    
    
    
    By:
    
    /s/ Richard J. MillerRichard J. MillerChief Financial Officer




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##### Table of Contents



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