##### 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, 2006
 Commission File Number 333-128127
 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
   þ o
   þ o
  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
    
    
    7ITEM 3. CONTROLS AND PROCEDURES
    
    
    11PART II. OTHER INFORMATION
    
    
    16ITEM 1. LEGAL PROCEEDINGS
    
    
    16ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    16ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    18ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    18ITEM 5. OTHER INFORMATION
    
    
    18ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
    
    
    18Certification pursuant to Rules 13a-15(d) and 15d-15(e)Certification pursuant to Rules 13a-15(d) and 15d-15(e)Certification pursuant to Rules 13a-14(b) and 15d-14(b)
  2




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PART
I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 ASSETSCash
    
    $
    67,050Deferred offering costs (note 1)
    
    
    762,122Other Assets
    
    
    33,017Property & Equipment
    
    
    315,841Total Assets
    
    $
    1,178,030LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)Related party notes payable (note 2)
    
    $
    749,000Bank note payable (note 3)
    
    
    2,314,800Other liabilities (note 4)
    
    
    128,907Total Liabilities
    
    
    3,192,707Shareholders equity (deficit)Common Stock, $1.00 par valueAuthorized  4,500,000 sharesIssued and outstanding  100 shares at June 30, 2006
    
    
    1,000Accumulated deficit
    
    
    (2,015,677
    )Total shareholders equity (deficit)
    
    
    (2,014,677
    )Total liabilities and shareholders equity (deficit)
    
    $
    1,178,030
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Period fromFebruary 26,2004(inception)Three Months Ended June 30,
    
    
    Year to Date June 30,
    
    
    to June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006Total revenue
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0Operating expensesManagement consulting
agreements, salaries and benefits
    
    
    319,105
    
    
    
    91,489
    
    
    
    505,894
    
    
    
    253,326
    
    
    
    1,036,654Legal fees
    
    
    21,563
    
    
    
    21,319
    
    
    
    29,119
    
    
    
    58,374
    
    
    
    126,524Consulting
    
    
    0
    
    
    
    86,750
    
    
    
    0
    
    
    
    123,490
    
    
    
    230,740Accounting & auditing
    
    
    14,200
    
    
    
    0
    
    
    
    14,200
    
    
    
    600
    
    
    
    36,250Rent (note 6)
    
    
    92,703
    
    
    
    22,000
    
    
    
    147,704
    
    
    
    44,000
    
    
    
    281,287Building maintenance &
utilities
    
    
    13,379
    
    
    
    14,768
    
    
    
    25,000
    
    
    
    25,243
    
    
    
    75,250Interest expense
    
    
    30,358
    
    
    
    0
    
    
    
    46,858
    
    
    
    0
    
    
    
    60,411Miscellaneous
    
    
    61,218
    
    
    
    18,672
    
    
    
    93,913
    
    
    
    23,561
    
    
    
    168,561Total operating expenses
    
    $
    552,526
    
    
    $
    254,998
    
    
    $
    862,688
    
    
    $
    528,594
    
    
    $
    2,015,677Income taxes (note 5)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (552,526
    )
    
    $
    (254,998
    )
    
    $
    (862,688
    )
    
    $
    (528,594
    )
    
    $
    (2,015,677
    )Net loss per share
    
    
    (5,525.26
    )
    
    
    (2,549.98
    )
    
    
    (8,626.88
    )
    
    
    (5,285.94
    )
    
    
    (20,156.77
    )
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DeficitAccumulatedDuring theCommon
    
    
    DevelopmentStock
    
    
    Stage
    
    
    TotalBalance at February 26, 2004
    
    
    
    
    
    
    
    
    
    
    Issuance of 100 shares Common
Stock
    
    $
    1,000
    
    
    
    
    
    
    $
    1,000Net Loss
    
    
    
    
    
    $
    (157,531
    )
    
    
    (157,531
    )Balance at December 31, 2004
    
    
    1,000
    
    
    
    (157,531
    )
    
    
    (156,531
    )Net Loss
    
    
    
    
    
    
    (995,458
    )
    
    
    (995,458
    )Balance at December 31, 2005
    
    
    1,000
    
    
    
    (1,152,989
    )
    
    
    (1,151,989
    )Net Loss
    
    
    
    
    
    
    (862,688
    )
    
    
    (862,688
    )Balance at June 30, 2006
    
    $
    1,000
    
    
    $
    (2,015,677
    )
    
    $
    (2,014,677
    )
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Period fromFebruary26, 2004(inception)Three Months Ended
    
    
    Year to Date June 30,
    
    
    to June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (552,526
    )
    
    $
    (254,998
    )
    
    $
    (862,688
    )
    
    $
    (528,594
    )
    
    $
    (2,015,677
    )Net increase in other assets
    
    
    (101,817
    )
    
    
    (34,000
    )
    
    
    (327,831
    )
    
    
    (51,292
    )
    
    
    (795,139
    )Net increase in other liabilities
    
    
    22,874
    
    
    
    19,165
    
    
    
    45,748
    
    
    
    63,331
    
    
    
    128,907Net cash used in operating activities
    
    
    (631,469
    )
    
    
    (269,833
    )
    
    
    (1,144,771
    )
    
    
    (516,555
    )
    
    
    (2,681,909
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchases of equipment
    
    
    (88,096
    )
    
    
    (5,998
    )
    
    
    (175,733
    )
    
    
    (16,138
    )
    
    
    (315,841
    )CASH FLOWS FROM FINANCING ACTIVITIESSale of Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000Increase in notes payable from related
parties
    
    
    
    
    
    
    45,000
    
    
    
    
    
    
    
    370,000
    
    
    
    749,000Increase in bank note payable
    
    
    749,800
    
    
    
    
    
    
    
    1,354,800
    
    
    
    
    
    
    
    2,314,800Net cash provided by financing activities
    
    
    749,800
    
    
    
    45,000
    
    
    
    1,354,800
    
    
    
    370,000
    
    
    
    3,064,800INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    30,235
    
    
    
    (230,831
    )
    
    
    34,296
    
    
    
    (162,693
    )
    
    
    67,050CASH AND CASH EQUIVALENTS
AT THE BEGINNING OF THE PERIOD
    
    
    36,815
    
    
    
    290,607
    
    
    
    32,754
    
    
    
    222,469
    
    
    
    CASH AND CASH EQUIVALENTS
AT THE END OF THE PERIOD
    
    $
    67,050
    
    
    $
    59,776
    
    
    $
    67,050
    
    
    $
    59,776
    
    
    $
    67,050
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Note 1
 Summary of Significant accounting principles
 Organization
 Basis
of Presentation
 Organization
and Preopening Costs
 Deferred
Offering Costs
 Property
and Equipment
 Income
Taxes 
 Earnings per Share
 Note 2
 Related Party Notes Payable
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Note 3
 Notes Payable
  Note 4
 Other Liabilities
  Note 5
 Income Taxes
 Income
Taxes
  Deferred tax assets:Net operating loss carryforward
    
    $
    685,000Less valuation allowance
    
    
    (685,000
    )Total net deferred tax asset
    
    $
    
  Period fromFebruaryThree Months
    
    
    26, 2004Ended
    
    
    (inception)June 30,
    
    
    To June2006
    
    
    30, 2006Loss before income taxes
    
    $
    552,256
    
    
    $
    2,015,677Income tax benefit at federal statutory rate of 34 percent
    
    
    187,767
    
    
    
    685,330Other
    
    
    233
    
    
    
    (330
    )Change in valuation allowance
    
    
    188,000
    
    
    
    685,000Total income tax expense
    
    $
    
    
    
    $
    
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Note 6  Leases and Commitments
   July 1,
2006 through December 31, 2006
    
    $
    133,7972007
    
    
    269,0222008
    
    
    274,0372009
    
    
    279,8072010
    
    
    285,6952011 and after
    
    
    1,478,986Total
    
    $
    2,721,344
  Note 7  Stock Options and Stock Warrants
  Note 8  Subsequent event
  9




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
   
    
    the Company and Bank must receive regulatory approvals before the Bank may open for
business;
    
    the Bank must satisfy certain conditions following regulatory approval before it may open
for business;
    
    any delay in beginning banking operations will result in additional losses;
    
    the Company has no operating history upon which to base an estimate of its future
financial performance;
    
    the Company expects to incur losses during its initial years of operations;
    
    failure of the Company 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 Companys financial performance;
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
    
    adverse economic conditions in the automobile manufacturing and related service
industries may impact the Companys banking business;
    
    monetary policy and other economic factors could adversely affect the Banks profitability;
    
    the common stock of the Company is not an insured deposit;
    
    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 Company does not intend to pay dividends in the foreseeable future;
    
    the Company and Bank are subject to extensive regulatory oversight, which could restrain
growth and profitability;
    
    the Company 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 Companys common stock will be affected by its limited trading
market;
    
    the Companys articles of incorporation and bylaws, and the employment agreements of the
Company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 Companys profitability; and,
    
    the Company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.
  11




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OVERVIEW
     
    
    developing building plans and specification;
    
    identifying and hiring Bank staff;
    
    preparing the business plan; and
    
    developing Bank systems, policies and procedures and infrastructure.
 PLAN OF OPERATION
   12




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FINANCIAL RESULTS
    FUNDING OF OPERATIONS AND LIQUIDITY
   13




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CAPITAL EXPENDITURES
  Liquidity and interest rate sensitivity
      14




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Capital adequacy
    
 ITEM 3. CONTROLS AND PROCEDURES
    15




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PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
    16




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Birmingham Bloomfield Bancshares, Inc.
 Minimum offering
    
    
    Maximum offeringGross proceeds
from offering
    
    $
    12,251,000
    
    
    
    100.0
    %
    
    $
    17,251,000
    
    
    
    100.0
    %Organizer Loans to be
converted to stock
    
    
    749,000
    
    
    
    6.1
    %
    
    
    749,000
    
    
    
    4.3
    %Stock Offering Expenses
    
    
    (650,000
    )
    
    
    (5.3
    )%
    
    
    (950,000
    )
    
    
    (5.5
    )%Pre-opening expenses
recognized by holding
company
    
    
    (120,000
    )
    
    
    (1.0
    )%
    
    
    (120,000
    )
    
    
    (0.7
    )%Investment in Bank stock
    
    
    (12,050,000
    )
    
    
    (98.3
    )%
    
    
    (15,550,000
    )
    
    
    (90.1
    )%$
    180,000
    
    
    
    1.5
    %
    
    $
    1,380,000
    
    
    
    8.0
    %
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Bank of Birmingham
  Minimum offering
    
    
    Maximum offeringGross Proceeds
from offering
    
    $
    12,050,000
    
    
    
    100.0
    %
    
    $
    15,550,000
    
    
    
    100.0
    %Pre-opening expenses
    
    $
    (1,910,000
    )
    
    
    (15.9
    )%
    
    $
    (1,910,000
    )
    
    
    12.3
    %Furniture, fixtures
and equipment
    
    $
    (1,050,000
    )
    
    
    (8.7
    )%
    
    $
    (1,050,000
    )
    
    
    6.8
    %Loans to customers,
investment and
other general
purposes
    
    $
    (9,090,000
    )
    
    
    75.4
    %
    
    $
    (12,590,000
    )
    
    
    80.9
    %Remaining proceeds
    
    $
    0
    
    
    
    0.0
    %
    
    $
    0
    
    
    
    0.0
    %
 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  
 ITEM 5. OTHER INFORMATION.
  
 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: August 14, 2006
    By:
    /s/ Robert E. FarrRobert E. FarrChief Executive OfficerDate:  August 14, 2006
    By:
    /s/ Richard J. MillerRichard J. MillerChief Financial Officer 19




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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
 20