##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10 - Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 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
 (248) 723-7200
  þ o
  o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company þ
  o þ




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##### 



INDEX
 PART I  FINANCIAL INFORMATION
    
    
    3ITEM 1. FINANCIAL STATEMENTS
    
    
    3ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    16ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    25ITEM 4. CONTROLS AND PROCEDURES
    
    
    25PART II. OTHER INFORMATION
    
    
    27ITEM 1. LEGAL PROCEEDINGS
    
    
    27ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    27ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    27ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    27ITEM 5. OTHER INFORMATION
    
    
    27ITEM 6. EXHIBITS
    
    
    28EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 BIRMINGHAM BLOOMFIELD BANCSHARES, INC  CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2009
    
    
    2008(unaudited)AssetsCash and cash equivalentsCash
    
    $
    6,920,168
    
    
    $
    1,201,318Federal funds sold
    
    
    2,410,489
    
    
    
    3,462,179Total cash and cash equivalents
    
    
    9,330,657
    
    
    
    4,663,497Securities, available for sale (Note 3)
    
    
    4,406,090
    
    
    
    3,880,401Loans (Note 4)Total loans
    
    
    67,485,024
    
    
    
    56,840,675Less: allowance for loan losses
    
    
    (872,426
    )
    
    
    (710,000
    )Net loans
    
    
    66,612,598
    
    
    
    56,130,675Premises & equipment (Note 6)
    
    
    2,023,389
    
    
    
    2,232,317Interest receivable and other assets
    
    
    440,005
    
    
    
    391,646Total assets
    
    $
    82,812,739
    
    
    $
    67,298,536Liabilities and Shareholders EquityDeposits (Note 5)Non-interest bearing
    
    $
    7,897,199
    
    
    $
    5,194,795Interest bearing
    
    
    64,694,097
    
    
    
    52,553,240Total deposits
    
    
    72,591,296
    
    
    
    57,748,035Interest payable and other liabilities
    
    
    204,686
    
    
    
    238,532Total liabilities
    
    
    72,795,982
    
    
    
    57,986,567Shareholders equitySenior cumulative perpetual preferred stock series A
$1,000 liquidation value per share, 5%
Authorized, issued and outstanding  1,635 shares
    
    
    1,635,000
    
    
    
    Warrant cumulative perpetual preferred stock series B
$1,000 liquidation value per share, 9%
Authorized, issued and outstanding  82 shares
    
    
    82,000
    
    
    
    Discount on senior preferred stock
    
    
    (84,154
    )
    
    
    Premium on warrant preferred stock
    
    
    9,148
    
    
    
    Common stock, no par valueAuthorized  4,500,000 sharesIssued and outstanding  1,800,000 shares
    
    
    17,034,330
    
    
    
    17,034,330Additional paid in capital  share based payments
    
    
    485,764
    
    
    
    466,553Accumulated deficit
    
    
    (9,254,567
    )
    
    
    (8,311,252
    )Accumulated other comprehensive income
    
    
    109,236
    
    
    
    122,338Total shareholders equity
    
    
    10,016,757
    
    
    
    9,311,969Total liabilities and shareholders equity
    
    $
    82,812,739
    
    
    $
    67,298,536
  3




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Interest IncomeLoans, including fees
    
    $
    1,038,306
    
    
    $
    817,556
    
    
    $
    2,774,781
    
    
    $
    2,196,208Taxable securities
    
    
    36,437
    
    
    
    42,176
    
    
    
    110,948
    
    
    
    97,811Federal funds sold
    
    
    1,019
    
    
    
    23,711
    
    
    
    2,934
    
    
    
    113,841Correspondent bank
    
    
    9,526
    
    
    
    
    
    
    
    17,122
    
    
    
    Total interest income
    
    
    1,085,288
    
    
    
    883,443
    
    
    
    2,905,785
    
    
    
    2,407,860Interest expenseDeposits
    
    
    337,221
    
    
    
    351,789
    
    
    
    1,005,080
    
    
    
    1,005,217Total interest expense
    
    
    337,221
    
    
    
    351,789
    
    
    
    1,005,080
    
    
    
    1,005,217Net interest income
    
    
    748,067
    
    
    
    531,654
    
    
    
    1,900,705
    
    
    
    1,402,643Provision for loan losses
    
    
    32,000
    
    
    
    109,146
    
    
    
    180,776
    
    
    
    253,811Net interest income after
provision for loan losses
    
    
    716,067
    
    
    
    422,508
    
    
    
    1,719,929
    
    
    
    1,148,832Non-interest incomeLoan fees and charges
    
    
    4,337
    
    
    
    3,198
    
    
    
    10,008
    
    
    
    15,027Deposit fees and charges
    
    
    20,053
    
    
    
    15,492
    
    
    
    54,779
    
    
    
    53,307Other income
    
    
    2,916
    
    
    
    16,224
    
    
    
    12,733
    
    
    
    28,141Total non-interest income
    
    
    27,306
    
    
    
    34,914
    
    
    
    77,520
    
    
    
    96,475Non-interest expenseSalaries and benefits
    
    
    398,630
    
    
    
    301,753
    
    
    
    1,176,724
    
    
    
    1,163,357Occupancy & equipment expense
    
    
    191,873
    
    
    
    198,158
    
    
    
    607,413
    
    
    
    616,402FAS 123R share based payments
    
    
    5,911
    
    
    
    (21,000
    )
    
    
    19,211
    
    
    
    Data processing expense
    
    
    54,845
    
    
    
    47,973
    
    
    
    158,610
    
    
    
    135,068Advertising and public relations
    
    
    (650
    )
    
    
    10,110
    
    
    
    56,608
    
    
    
    69,721Professional fees
    
    
    72,663
    
    
    
    54,311
    
    
    
    269,977
    
    
    
    197,067Printing and office supplies
    
    
    5,400
    
    
    
    5,384
    
    
    
    21,422
    
    
    
    19,510Other expense
    
    
    138,130
    
    
    
    95,310
    
    
    
    396,323
    
    
    
    302,068Total non-interest expense
    
    
    866,802
    
    
    
    691,999
    
    
    
    2,706,288
    
    
    
    2,503,193Net loss before taxes
    
    
    (123,429
    )
    
    
    (234,577
    )
    
    
    (908,839
    )
    
    
    (1,257,886
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (123,429
    )
    
    $
    (234,577
    )
    
    $
    (908,839
    )
    
    $
    (1,257,886
    )Dividend on senior preferred stock
    
    
    (20,438
    )
    
    
    
    
    
    
    (25,207
    )
    
    
    Accretion of discount on pref stock
    
    
    (4,422
    )
    
    
    
    
    
    
    (7,846
    )
    
    
    Effective dividend on preferred stock
    
    
    (24,860
    )
    
    
    
    
    
    
    (33,053
    )
    
    
    Dividend on warrant preferred stock
    
    
    (1,845
    )
    
    
    
    
    
    
    (2,275
    )
    
    
    Amortization of premium on warrant pref stk
    
    
    480
    
    
    
    
    
    
    
    852
    
    
    
    Effective dividend on warrant pref stk
    
    
    (1,365
    )
    
    
    
    
    
    
    (1,423
    )
    
    
    Net loss applicable to common shareholders
    
    $
    (149,654
    )
    
    $
    (234,577
    )
    
    $
    (943,315
    )
    
    $
    (1,257,886
    )Basic loss per share
    
    $
    0.08
    
    
    $
    (0.13
    )
    
    $
    0.52
    
    
    $
    (0.70
    )Diluted loss per share
    
    $
    0.08
    
    
    $
    (0.13
    )
    
    $
    0.52
    
    
    $
    (0.70
    )
  4




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
January 1, 2009 to September 30, 2009
(Unaudited)
 Additional
    
    
    
    
    
    
    Accumulated OtherPaid in
    
    
    Accumulated
    
    
    ComprehensivePreferred Stock
    
    
    Common Stock
    
    
    Capital
    
    
    Deficit
    
    
    Income
    
    
    TotalBalance at January 1, 2009
    
    
    
    
    
    $
    17,034,330
    
    
    $
    466,553
    
    
    $
    (8,311,252
    )
    
    $
    122,338
    
    
    $
    9,311,969Issue senior preferred stock
    
    
    1,635,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,635,000Issue warrant preferred stock
    
    
    82,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,000Discount senior pref. stock
    
    
    (84,154
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (84,154
    )Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,846
    )
    
    
    
    
    
    
    (7,846
    )Premium warrant pref. stock
    
    
    9,148
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,148Accretion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    852
    
    
    
    
    
    
    
    852Preferred dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27,482
    )
    
    
    
    
    
    
    (27,482
    )Share based payments
    
    
    
    
    
    
    
    
    
    
    19,211
    
    
    
    
    
    
    
    
    
    
    
    19,211Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (908,839
    )
    
    
    
    
    
    
    (908,839
    )Unrealized gain on securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,102
    )
    
    
    (13,102
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (921,941
    )Balance at September 30, 2009
    
    $
    1,641,994
    
    
    $
    17,034,330
    
    
    $
    485,764
    
    
    $
    (9,254,567
    )
    
    $
    109,236
    
    
    $
    10,016,757
  5




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Nine Months EndedSeptember 30,2009
    
    
    2008Cash flows from operating activitiesNet loss
    
    $
    (908,839
    )
    
    $
    (1,257,886
    )Share based payments expense
    
    
    19,211
    
    
    
    Provision for loan losses
    
    
    180,776
    
    
    
    253,811Accretion of securities
    
    
    (3,531
    )
    
    
    (20,821
    )Gain on sales or calls of securities
    
    
    (3,027
    )
    
    
    (19,270
    )Depreciation expense
    
    
    225,674
    
    
    
    234,000Net (increase) decrease in other assets
    
    
    (48,359
    )
    
    
    92,466Net increase (decrease) in other liabilities
    
    
    (33,846
    )
    
    
    53,541Net cash used in operating activities
    
    
    (571,941
    )
    
    
    (664,159
    )Cash flows from investing activitiesIncrease in loans
    
    
    (10,662,699
    )
    
    
    (18,875,912
    )Purchase of securities
    
    
    (2,954,862
    )
    
    
    (2,978,241
    )Proceeds from sales, calls or maturities of
securities
    
    
    2,422,629
    
    
    
    1,285,802Purchases of premises and equipment
improvements
    
    
    (16,746
    )
    
    
    (25,276
    )Net cash used in investing activities
    
    
    (11,211,678
    )
    
    
    (20,593,627
    )Cash flows from financing activitiesIncrease in deposits
    
    
    14,843,261
    
    
    
    18,537,249Proceeds from sale of senior preferred stock
    
    
    1,635,000
    
    
    
    Dividend on senior preferred stock
    
    
    (27,482
    )
    
    
    Net cash provided by financing activities
    
    
    16,450,779
    
    
    
    18,537,249Increase in cash and cash equivalents
    
    
    4,667,160
    
    
    
    (2,720,537
    )Cash and cash equivalents at the
beginning of the period
    
    
    4,663,497
    
    
    
    5,139,126Cash and cash equivalents at the
end of the period
    
    $
    9,330,657
    
    
    $
    2,418,589Supplemental cash flow information:Cash paid for interest:
    
    $
    1,070,918
    
    
    $
    882,655
  6




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Summary of Significant Accounting Policies
 Basis of Statement Presentation
    Principles of Consolidation
  Recent Accounting Developments
   The Financial Accounting Standards Board (FASB) Accounting Standards Codification TM (the
Codification or ASC)
  7




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      Note 2  Fair Value Accounting
  8




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BIRMINGHAM BLOOMFIELD BANCSHARES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Valuation Hierarchy
  
    
    Level 1  inputs to the valuation methodology are quoted prices (unadjusted) for
identical assets or liabilities in active markets which the Corporation can participate.Birmingham Bloomfield Bancshares currently holds no securities in level one of the
hierarchy.
    
    Level 2  inputs to the valuation methodology include quoted prices for similar assets
and liabilities in active markets, and inputs that are observable for the asset or
liability, either directly or indirectly, for substantially the full term of the financial
instrument.Level 2 assets and liabilities for Birmingham Bloomfield Bancshares, Inc. include available
for sale investments in government sponsored agencies, asset backed securities, and
investments in obligations of state and political subdivisions. Fair values of these items
are determined via external pricing from vendors.
    
    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.Level 3 assets and liabilities for Birmingham Bloomfield Bancshares, Inc. include FHLB stock.
    Quoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    Unobservable
    
    
    Balance atAssets
    
    
    Inputs
    
    
    Inputs
    
    
    SeptemberLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    30, 2009Securities available for sale
    
    $
    
    
    
    $
    4,244
    
    
    $
    162
    
    
    $
    4,406
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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 3  Securities
  Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    unrealized
    
    
    unrealized
    
    
    fairSeptember 30, 2009 (unaudited)
    
    cost
    
    
    gains
    
    
    losses
    
    
    valueU.S. Government agency securities
    
    $
    2,844
    
    
    $
    13
    
    
    $
    
    
    
    $
    2,857Municipal securities
    
    
    200
    
    
    
    4
    
    
    
    
    
    
    
    204Mortgage backed securities
    
    
    1,091
    
    
    
    92
    
    
    
    
    
    
    
    1,183Corporate bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    FHLB Stock
    
    
    162
    
    
    
    
    
    
    
    
    
    
    
    162Total securities available for sale
    
    $
    4,297
    
    
    $
    109
    
    
    $
    
    
    
    $
    4,406
 Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    unrealized
    
    
    unrealized
    
    
    fairDecember 31, 2008
    
    cost
    
    
    gains
    
    
    losses
    
    
    valueU.S. Government agency securities
    
    $
    2,004
    
    
    $
    30
    
    
    $
    
    
    
    $
    2,034Municipal securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mortgage backed securities
    
    
    1,250
    
    
    
    92
    
    
    
    
    
    
    
    1,342Corporate bonds
    
    
    504
    
    
    
    
    
    
    
    
    
    
    
    504FHLB Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    3,758
    
    
    $
    122
    
    
    $
    
    
    
    $
    3,880
   EstimatedAmortized
    
    
    faircost
    
    
    valueDue in one year or less
    
    $
    
    
    
    $
    Due in one year through five years
    
    
    3,044
    
    
    
    3,061Due in five years through ten years
    
    
    162
    
    
    
    162Due after ten years
    
    
    
    
    
    
    Subtotal
    
    
    3,206
    
    
    
    3,223Mortgage backed securities,
due after 10 years
    
    
    1,091
    
    
    
    1,183Total
    
    $
    4,297
    
    
    $
    4,406
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BIRMINGHAM BLOOMFIELD BANCSHARES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 4  Loans
  September 30,
    
    
    December 31,2009
    
    
    2008(unaudited)Mortgage loans on real estate:Residential 1 to 4 family
    
    $
    1,709
    
    
    $
    2,745Multifamily
    
    
    11,213
    
    
    
    7,676Commercial
    
    
    29,302
    
    
    
    23,085Construction
    
    
    1,218
    
    
    
    3,000Second mortgage
    
    
    173
    
    
    
    736Equity lines of credit
    
    
    11,347
    
    
    
    10,381Total mortgage loans on real estate
    
    
    54,962
    
    
    
    47,623Commercial loans
    
    
    12,069
    
    
    
    8,242Consumer installment loans
    
    
    501
    
    
    
    1,007Total loans
    
    
    67,532
    
    
    
    56,872Less:Allowance for loan losses
    
    
    872
    
    
    
    710Net deferred loan fees
    
    
    47
    
    
    
    31Net loans
    
    $
    66,613
    
    
    $
    56,131
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,(unaudited)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Balance at beginning of period
    
    $
    840
    
    
    $
    789
    
    
    $
    710
    
    
    $
    560Charge-offs
    
    
    
    
    
    
    (198
    )
    
    
    (18
    )
    
    
    (198
    )Recoveries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84Provision for loan losses
    
    
    32
    
    
    
    109
    
    
    
    180
    
    
    
    254Balance at end of period
    
    $
    872
    
    
    $
    700
    
    
    $
    872
    
    
    $
    700
  11




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 5  Deposits
  September 30,
    
    
    December 31,2009
    
    
    2008(unaudited)Non-interest bearing deposits
    
    $
    7,897
    
    
    $
    5,195NOW accounts
    
    
    7,819
    
    
    
    7,882Savings and money market accounts
    
    
    20,405
    
    
    
    10,571Certificates of deposit <$100,000
    
    
    13,205
    
    
    
    13,089Certificates of deposit >$100,000
    
    
    23,265
    
    
    
    21,011Total
    
    $
    72,591
    
    
    $
    57,748
  <$100,000
    
    
    >$100,000
    
    
    TotalWithin 12 months
    
    $
    10,751
    
    
    $
    16,717
    
    
    $
    27,468> 12 months
    
    
    2,454
    
    
    
    6,548
    
    
    
    9,002Total
    
    $
    13,205
    
    
    $
    23,265
    
    
    $
    36,470
 Note 6  Leases and Commitments
   2009
    
    $
    712010
    
    
    2862011
    
    
    2922012
    
    
    2982013
    
    
    304Thereafter
    
    
    3,365Total
    
    $
    4,616
 12




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 7  Fair Value of Financial Instruments
   Cash and Cash Equivalents
 Securities
 Loans Receivable
 Deposit Liabilities
 Accrued Interest
 Other Financial Instruments
 13




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 7  Fair Value of Financial Instruments  continued
  September 30, 2009
    
    December 31, 2008Estimated
    
    
    
    
    
    EstimatedCarrying
    
    Fair
    
    Carrying
    
    FairValue
    
    Value
    
    Value
    
    ValueFinancial assets:Cash and cash equivalents
    
    $
    9,331
    
    
    $
    9,331
    
    
    $
    4,663
    
    
    $
    4,663Securities available for
sale
    
    
    4,406
    
    
    
    4,406
    
    
    
    3,880
    
    
    
    3,880Loans
    
    
    67,485
    
    
    
    67,471
    
    
    
    56,841
    
    
    
    57,273Accrued interest
receivable
    
    
    350
    
    
    
    350
    
    
    
    293
    
    
    
    293Financial liabilities:Deposits
    
    
    72,591
    
    
    
    74,869
    
    
    
    57,748
    
    
    
    57,897Accrued interest payable
    
    
    87
    
    
    
    87
    
    
    
    153
    
    
    
    153
 14




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 8  Minimum Regulatory Capital Requirements
   For Capital
    
    To beActual
    
    Adequacy Purposes
    
    Well-CapitalizedAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioAs of September 30, 2009Total risk-based capital
(to risk weighted assets)
Bank of Birmingham
    
    $
    8,775
    
    
    
    13.0
    %
    
    $
    5,407
    
    
    
    8.0
    %
    
    $
    6,758
    
    
    
    10.0
    %Tier I capital
(to risk weighted assets)
Bank of Birmingham
    
    $
    7,920
    
    
    
    11.7
    %
    
    $
    2,703
    
    
    
    4.0
    %
    
    $
    4,055
    
    
    
    6.0
    %Tier I capital
(to average assets)
Bank of Birmingham
    
    $
    7,920
    
    
    
    9.4
    %
    
    $
    3,389
    
    
    
    4.0
    %
    
    $
    4,236
    
    
    
    5.0
    %As of December 31, 2008Total risk-based capital
(to risk weighted assets)
Bank of Birmingham
    
    $
    9,345
    
    
    
    16.6
    %
    
    $
    4,491
    
    
    
    8.0
    %
    
    $
    5,614
    
    
    
    10.0
    %Tier I capital
(to risk weighted assets)
Bank of Birmingham
    
    $
    8,635
    
    
    
    15.4
    %
    
    $
    2,246
    
    
    
    4.0
    %
    
    $
    3,369
    
    
    
    6.0
    %Tier I capital
(to average assets)
Bank of Birmingham
    
    $
    8,635
    
    
    
    12.8
    %
    
    $
    2,695
    
    
    
    4.0
    %
    
    $
    3,369
    
    
    
    5.0
    %
 15




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  Managements Discussion and Analysis of Financial Condition and Results of Operations
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 Disclosure Regarding Forward Looking Statements
   16




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  Managements Discussion and Analysis of Financial Condition and Results of Operations
 OVERVIEW
   FINANCIAL CONDITION
  Cash and Cash Equivalents
  17




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  Managements Discussion and Analysis of Financial Condition and Results of Operations
 Investments
  Loans, Credit Quality and Allowance for Loan Losses
      18




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  Managements Discussion and Analysis of Financial Condition and Results of Operations
  Premises and Equipment
 .
 Deposits
 ,
 As of September 30,2009(000s omitted)
    
    Balance
    
    
    PercentageNoninterest bearing demand
    
    $
    7,897
    
    
    
    10.9NOW accounts
    
    
    7,819
    
    
    
    10.8Money market
    
    
    9,845
    
    
    
    13.6Savings
    
    
    10,560
    
    
    
    14.5Time deposits under $100,000
    
    
    13,205
    
    
    
    18.1Time deposits over $100,000
    
    
    23,265
    
    
    
    32.1Total deposits
    
    $
    72,591
    
    
    
    100.0
    %
 19




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  Managements Discussion and Analysis of Financial Condition and Results of Operations
 RESULTS OF OPERATIONS
 Net Interest Income
 rd
  Three Months Ended September 30,2009
    
    
    2008Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    
    
    
    
    Yield/
    
    
    Balance
    
    
    
    
    
    
    Yield/(000s)
    
    
    Interest
    
    
    Rate
    
    
    (000s)
    
    
    Interest
    
    
    RateInterest-earning assetsLoans
    
    $
    67,801
    
    
    $
    1,038,306
    
    
    
    6.13
    %
    
    $
    53,000
    
    
    $
    817,556
    
    
    
    6.17
    %Securities
    
    
    3,773
    
    
    
    36,437
    
    
    
    3.86
    %
    
    
    3,893
    
    
    
    42,176
    
    
    
    4.33
    %Federal funds sold
    
    
    2,316
    
    
    
    1,019
    
    
    
    0.18
    %
    
    
    4,791
    
    
    
    23,711
    
    
    
    1.98
    %Interest-bearing balance with
other financial institutions
    
    
    8,092
    
    
    
    9,526
    
    
    
    0.47
    %
    
    
    
    
    
    
    
    
    
    
    Total interest-earning assets
    
    
    81,982
    
    
    
    1,085,288
    
    
    
    5.30
    %
    
    
    61,684
    
    
    
    883,443
    
    
    
    5.73
    %Cash and due from banks
    
    
    1,266
    
    
    
    
    
    
    
    
    
    
    
    1,329All other assets
    
    
    1,574
    
    
    
    
    
    
    
    
    
    
    
    1,958Total assets
    
    $
    84,822
    
    
    
    
    
    
    
    
    
    
    $
    64,971Interest-bearing liabilitiesNOW accounts
    
    $
    8,040
    
    
    
    13,474
    
    
    
    0.67
    %
    
    $
    7,615
    
    
    
    32,950
    
    
    
    1.73
    %Money market
    
    
    10,261
    
    
    
    26,402
    
    
    
    1.03
    %
    
    
    11,848
    
    
    
    60,999
    
    
    
    2.06
    %Savings
    
    
    10,038
    
    
    
    39,102
    
    
    
    1.56
    %
    
    
    781
    
    
    
    3,546
    
    
    
    1.82
    %Time deposits
    
    
    37,495
    
    
    
    258,243
    
    
    
    2.75
    %
    
    
    28,372
    
    
    
    254,294
    
    
    
    3.59
    %Total interest-bearing liabilities
    
    
    65,834
    
    
    
    337,221
    
    
    
    2.05
    %
    
    
    48,616
    
    
    
    351,789
    
    
    
    2.89
    %Non-interest bearing deposits
    
    
    8,335
    
    
    
    
    
    
    
    
    
    
    
    6,486All other liabilities
    
    
    644
    
    
    
    
    
    
    
    
    
    
    
    291Total liabilities
    
    
    74,813
    
    
    
    
    
    
    
    
    
    
    
    55,393Shareholders equity
    
    
    10,009
    
    
    
    
    
    
    
    
    
    
    
    9,578Total liabilities and shareholders
equity
    
    $
    84,822
    
    
    
    
    
    
    
    
    
    
    $
    64,971Net interest income
    
    
    
    
    
    $
    748,067
    
    
    
    
    
    
    
    
    
    
    $
    531,654Net spread
    
    
    
    
    
    
    
    
    
    
    3.25
    %
    
    
    
    
    
    
    
    
    
    
    2.84
    %Net interest margin (1)
    
    
    
    
    
    
    
    
    
    
    3.65
    %
    
    
    
    
    
    
    
    
    
    
    3.45
    %Ratio of interest-earning assets
to interest-bearing liabilities
    
    
    124.53
    %
    
    
    
    
    
    
    
    
    
    
    126.88
    %
 
 (1)
    
    Net interest earnings divided by average interest-earning assets. 20




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  Managements Discussion and Analysis of Financial Condition and Results of Operations
   Nine Months Ended September 30,2009
    
    
    2008Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    
    
    
    
    Yield/
    
    
    Balance
    
    
    
    
    
    
    Yield/(000s)
    
    
    Interest
    
    
    Rate
    
    
    (000s)
    
    
    Interest
    
    
    RateInterest-earning assetsLoans
    
    $
    62,782
    
    
    $
    2,774,781
    
    
    
    5.89
    %
    
    $
    46,756
    
    
    $
    2,196,208
    
    
    
    6.26
    %Securities
    
    
    3,554
    
    
    
    110,948
    
    
    
    4.16
    %
    
    
    2,616
    
    
    
    97,811
    
    
    
    4.99
    %Federal funds sold
    
    
    2,544
    
    
    
    2,934
    
    
    
    0.15
    %
    
    
    6,386
    
    
    
    113,841
    
    
    
    2.38
    %Interest-bearing balance with
other financial institutions
    
    
    4,927
    
    
    
    17,122
    
    
    
    0.46
    %
    
    
    
    
    
    
    
    
    
    
    Total interest-earning assets
    
    
    73,807
    
    
    
    2,905,785
    
    
    
    5.25
    %
    
    
    55,758
    
    
    
    2,407,860
    
    
    
    5.76
    %Cash and due from banks
    
    
    1,586
    
    
    
    
    
    
    
    
    
    
    
    1,277All other assets
    
    
    1,693
    
    
    
    
    
    
    
    
    
    
    
    2,050Total assets
    
    $
    77,086
    
    
    
    
    
    
    
    
    
    
    $
    59,085Interest-bearing liabilitiesNOW accounts
    
    $
    7,837
    
    
    
    52,314
    
    
    
    0.89
    %
    
    $
    8,109
    
    
    
    124,318
    
    
    
    2.04
    %Money market
    
    
    10,128
    
    
    
    91,091
    
    
    
    1.20
    %
    
    
    11,797
    
    
    
    202,547
    
    
    
    2.29
    %Savings
    
    
    7,674
    
    
    
    95,054
    
    
    
    1.65
    %
    
    
    501
    
    
    
    6,377
    
    
    
    1.70
    %Time deposits
    
    
    34,468
    
    
    
    766,621
    
    
    
    2.97
    %
    
    
    22,409
    
    
    
    671,975
    
    
    
    4.00
    %Total interest-bearing liabilities
    
    
    60,107
    
    
    
    1,005,080
    
    
    
    2.23
    %
    
    
    42,816
    
    
    
    1,005,217
    
    
    
    3.13
    %Non-interest bearing deposits
    
    
    6,691
    
    
    
    
    
    
    
    
    
    
    
    5,927All other liabilities
    
    
    368
    
    
    
    
    
    
    
    
    
    
    
    273Total liabilities
    
    
    67,166
    
    
    
    
    
    
    
    
    
    
    
    49,016Shareholders equity
    
    
    9,920
    
    
    
    
    
    
    
    
    
    
    
    10,069Total liabilities and shareholders
equity
    
    $
    77,086
    
    
    
    
    
    
    
    
    
    
    $
    59,085Net interest income
    
    
    
    
    
    $
    1,900,705
    
    
    
    
    
    
    
    
    
    
    $
    1,402,643Net spread
    
    
    
    
    
    
    
    
    
    
    3.02
    %
    
    
    
    
    
    
    
    
    
    
    2.63
    %Net interest margin (1)
    
    
    
    
    
    
    
    
    
    
    3.43
    %
    
    
    
    
    
    
    
    
    
    
    3.35
    %Ratio of interest-earning assets
to interest-bearing liabilities
    
    
    122.79
    %
    
    
    
    
    
    
    
    
    
    
    130.23
    %
 
 (1)
    
    Net interest earnings divided by average interest-earning assets. 21




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  Managements Discussion and Analysis of Financial Condition and Results of Operations
   Provision for Loans Losses
  Non-Interest Income
 rd
  22




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BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  Managements Discussion and Analysis of Financial Condition and Results of Operations
  Non-Interest Expense
   23




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  Managements Discussion and Analysis of Financial Condition and Results of Operations
 Income Taxes
  LIQUIDITY AND CAPITAL RESOURCES; ASSET/LIABILITY MANAGEMENT
    24




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  Managements Discussion and Analysis of Financial Condition and Results of Operations
  Off-Balance Sheet Arrangements
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
 ITEM 4T. CONTROLS AND PROCEDURES
   25




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.  Managements Discussion and Analysis of Financial Condition and Results of Operations
    26




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
 
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS.
  ITEM 1A. RISK FACTORS.
  
 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.
  27




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
 
 ITEM 6. EXHIBITS.
 ExhibitNumber
    
    Description of Exhibits31.1
    
    Rule 13a-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a) Certification of Chief Financial Officer32.1
    
    Certification pursuant to 18 U.S.C. §1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act 02 2002.
 28




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
 SIGNATURES
  BIRMINGHAM BLOOMFIELD BANCSHARES, INC.Date: November 13, 2009
    By:
    /s/ Robert E. FarrRobert E. FarrChief Executive OfficerDate: November 13, 2009
    By:
    /s/ Deb ThompsonDeb ThompsonChief Financial Officer 29




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##### Table of Contents



BIRMINGHAM BLOOMFIELD BANCSHARES, INC.
 EXHIBIT INDEX
 ExhibitNumber
    
    Description of Exhibit31.1
    
    Certification pursuant to Rules 13a-15(f) and 15d-15(f) of
the Securities Exchange Act31.2
    
    Certification pursuant to Rules 13a-15(f) and 15d-15(f) of
the Securities Exchange Act32.1
    
    Certification pursuant to Rules 13a-14(b) or Rule 15d-14(b)
of the Securities Exchange Act and 18 U.S.C. §1350
 30