SOURCE: Birmingham Bloomfield Bancshares, Inc.

October 25, 2012 14:00 ET

Birmingham Bloomfield Bancshares, Inc. Announces Improved Pre-Tax Earnings and Strong Loan Demand

BIRMINGHAM, MI--(Marketwire - Oct 25, 2012) -  Birmingham Bloomfield Bancshares, Inc. (OTCQB: BBBI) ("the Company"), the holding company for Bank of Birmingham, today announced unaudited results for the three and nine month periods ended September 30, 2012. The positive results are the product of an increase in net interest income and portfolio loan growth.

The Company reported net income of $138,000 or $0.08 per common share for the third quarter of 2012 compared to net income of $109,000 or $0.06 per common share for the same period of 2011. Net income for the nine month period ended September 30, 2012 was $682,000 or $0.38 per common share compared to $785,000 or $0.44 per common share for the same period last year. The 2012 performance was impacted by the recognition of income tax expense not required in 2011. Excluding tax expense, net income before preferred dividends was $228,000 and $1,089,000, respectively for the three and nine month periods of 2012, an increase of 29.1% and 14.7% compared to the same periods of 2011.

Chief Executive Officer, Rob Farr, issued the results and commented, "The core operations of the Bank continue to improve and provide a strong foundation for the Company. The year to date performance produced record earnings on a pre-tax basis and the third quarter pre-tax, pre-provision Return on Average Assets was 1.52%. Our net interest margin was 4.65% for the quarter and loan demand remains strong in our market as total loans reached $118.4 million, an increase of 11.4% from December 31, 2011. We have been very successful in reporting improved results during this difficult economic environment and continue to focus on providing meaningful value for our shareholders."

Results of Operation

The Company continues to experience an increase in net interest income as a result of growth in the loan portfolio and lower net funding costs. Net interest income for the third quarter of 2012 was $1.507 million a 17.6% increase relative to the same quarter of 2011. Net interest margin for the quarter was 4.65%, compared to 4.91% for the most recent linked quarter. The compression is a result of the current balance sheet mix and the competitive pricing environment. Net interest income for the first nine months of 2012 increased 15.9% to $4.396 million compared to the same period of 2011. Net interest margin for the year to date period ended September 30, 2012 was 4.78% compared to 4.48% in 2011.

The Company provided $330,000 in provision expense during the third quarter of 2012, an increase of $225,000 compared to the same period last year. Total provision expense for the year to date period ending September 30, 2012 was $400,000, compared to $159,000 for the nine month period in 2011. The increase in provision expense is attributable to the new loan volume and additional reserve requirements on collaterally deficient loans. There have been no net charge offs during 2012 compared to $108,000 for the same period last year.

Non-interest income continues to have a significant impact on the performance of the organization. Total non-interest income for the third quarter of 2012 was $300,000, compared to $319,000 for the same period of 2011. The decrease is a result of a reduction in revenue from SBA loan activity and sales of residential mortgage loans in the secondary market. The decline was mitigated by an increase in other revenue, primarily from earnings on Bank Owned Life Insurance. Total non-interest income for the year to date period ending September 30, 2012 was $895,000, a decrease of $29,000 from 2012. The reduction is a function of lower SBA loan volume, but the impact of the lost revenue was offset by an increase in earnings on residential mortgage activity, additional ancillary fee income and a gain on the sale of a bank owned property.

Total non-interest expense for the third quarter of 2012 was $1.248 million, compared to $1.317 million for the same quarter of 2011. The net decrease was the result of a focused effort to reduce expenses and improve operational efficiency. The largest decline was reported in salaries and benefits. This was a result of a reduction in the average number employees for the period. Year to date non-interest expense for 2012 was $3.803 million, an increase of $195,000 relative to the same period in 2011. The increase in expenses was the result of increased commissions associated with higher residential mortgage loan volume, facility expansion, operating system investments, and dedicating resources to business marketing efforts to improve franchise recognition.

Balance Sheet

Total assets as of September 30, 2012 were $148.5 million, a 19.4% increase from December 31, 2011. The growth was the result of an increase in business development efforts, a focused commitment to generate organic loan growth in our local market and expanding the product options available to customers. Total portfolio loans reached $118.4 million at the end of the third quarter, an increase of $5.4 million from June 30, 2012 and $15.9 million from September 30, 2011. The asset quality of the Company remains excellent; no charge offs have been reported in 2012 and the allowance for loan loss was 1.67% of total portfolio loans. Total deposits as of September 30, 2012 were $131.1 million, an increase of 18.0% from the same period in 2011. The Bank continues to be classified as well capitalized based on regulatory guidelines and the Tier 1 ratio was 9.20% for the quarter.

Birmingham Bloomfield Bancshares, Inc. is the holding company for Bank of Birmingham, a full-service community bank serving Oakland County. Bank of Birmingham is dedicated to providing financial services to small and medium sized businesses; their owners and employees; professionals; and individuals who work or reside in the Oakland County market area. Every Bank of Birmingham customer has a relationship manager who serves a single point of contact empowered to provide all the bank's services. Birmingham Bloomfield Bancshares, Inc. marketmakers include Howe Barnes Hoefer and Arnett (acquired by Raymond James), Chicago; Monroe Securities, Chicago; and Hudson Securities, Inc., Jersey City, New Jersey.

Forward-Looking Statements

This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), which involve significant risks and uncertainties. Actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include: changes in interest rates and interest-rate relationships; changes in the national and local economy; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulations; changes in tax laws; changes in prices, levies, and assessments; our ability to successfully integrate acquisitions into our existing operations, and the availability of new acquisitions, joint ventures and alliance opportunities; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; and other factors included in the Company's filings with the Securities and Exchange Commission, available free via EDGAR. The Company assumes no responsibility to update forward-looking statements. 

(Unaudited Consolidated Financial Statements Follow) 

   
Birmingham Bloomfield Bancshares, Inc.  
Consolidated Balance Sheet (Unaudited)  
                   
                   
                   
    September 30,     December 31,     September 30,  
    2012     2011     2011  
ASSETS                        
    Cash and due from banks   $ 20,841,410     $ 4,693,585     $ 15,212,448  
    Federal funds sold     -       -       -  
  Total cash and cash equivalents     20,841,410       4,693,585       15,212,448  
                           
    Securities available-for-sale     3,837,942       4,594,761       4,182,261  
    Securities held-to-maturity     -       -       -  
    Federal Home Loan Bank Stock     218,100       169,900       169,900  
  Total securities     4,056,042       4,764,661       4,352,161  
                         
  Loans held for sale     -       2,484,829       1,232,221  
                           
  Portfolio loans                        
    Consumer loans     1,380,152       1,305,501       1,165,438  
    Mortgage loans     16,222,484       11,572,620       10,641,099  
    Commercial loans     100,837,254       93,419,805       90,773,268  
  Total loans     118,439,890       106,297,926       102,579,805  
    Less: Allowance for loan loss     1,974,350       1,574,350       1,499,350  
  Net loans     116,465,540       104,723,576       101,080,455  
                           
    Premises and equipment, net     1,326,624       1,395,187       1,446,008  
    Bank owned life insurance     2,162,296       2,100,000       -  
    Accrued interest receivable and other assets     3,644,739       4,235,623       1,419,754  
                         
  TOTAL ASSETS   $ 148,496,651     $ 124,397,461     $ 124,743,047  
                         
                         
                         
LIABILITIES                        
  Deposits                        
    Noninterest-bearing   $ 21,733,611     $ 19,662,283     $ 15,830,438  
    Interest-bearing     109,413,057       88,015,546       95,340,302  
  Total deposits     131,146,668       107,677,829       111,170,740  
                           
    Short term borrowings     -       -       -  
    Accrued interest payable, taxes and other liabilities     667,533       755,090       516,351  
  Total liabilities     131,814,201       108,432,919       111,687,091  
                         
SHAREHOLDERS' EQUITY                        
    Senior preferred stock, series D     4,621,000       4,621,000       4,621,000  
    Common Stock, no par value     17,105,618       17,066,618       17,066,618  
    Authorized - 9,000,000 shares, Issued and outstanding - 1,824,662                        
    1,812,662 and 1,812,662 shares respectively                        
    Accumulated other comprehensive income     91,669       95,168       152,009  
    Additional paid in capital - share based payments     493,154       493,154       493,154  
    Accumulated deficit     (5,628,991 )     (6,311,398 )     (9,276,825 )
  Total shareholders' equity     16,682,451       15,964,542       13,055,956  
                         
  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 148,496,651     $ 124,397,461     $ 124,743,047  
                         
Book value per share   $ 6.61     $ 6.26     $ 4.65  
                         
                         
Birmingham Bloomfield Bancshares, Inc.
Consolidated Statement of Income (Unaudited)
                 
    For the three months ended   For the nine months ended
    September 30,   September 30,
    2012   2011   2012   2011
Interest Income                        
    Interest and fees on loans                        
      Commercial loans   $ 1,507,071   $ 1,419,136   $ 4,422,140   $ 4,234,101
      Installment loans     18,358     16,621     52,636     43,168
      Mortgage loans     69,602     21,335     181,095     56,504
      Home Equity loans     90,632     94,114     278,370     289,706
      Late charges and fees     28,230     3,460     62,483     21,240
  Total loan interest and fee income     1,713,893     1,554,666     4,996,724     4,644,719
                         
    Interest bearing deposits     7,317     4,940     13,907     15,291
    Federal Funds Sold     -     -     -     13
                         
    Interest on investment securities                        
      Taxable     23,309     22,064     72,249     74,786
      Tax-exempt     992     408     3,000     408
  Total investment income     24,301     22,472     75,249     75,194
                         
  Total interest income     1,745,511     1,582,078     5,085,880     4,735,217
                         
Interest Expense                        
    Interest on deposits     238,608     301,195     689,555     929,127
    Interest on borrowed funds     -     -     64     14,509
  Total interest expense     238,608     301,195     689,619     943,636
                           
  Net Interest Income     1,506,903     1,280,883     4,396,261     3,791,581
    Provision for loan losses     330,000     105,000     400,000     159,000
  Net Interest Income After Provision for Loan Losses     1,176,903     1,175,883     3,996,261     3,632,581
                         
Non-interest Income                        
    Service charge income     19,413     15,208     58,710     39,369
    Mortgage banking activities     77,165     108,384     274,032     167,145
    SBA loan sales     173,099     186,151     321,848     686,884
    Other income     30,031     8,808     240,733     30,426
  Total non-interest income     299,708     318,551     895,323     923,824
                         
Non-interest Expense                        
    Salaries and employee benefits     653,234     729,641     2,055,073     1,955,026
    Occupancy expense     122,137     145,294     356,804     388,979
    Equipment expense     49,950     55,722     150,229     133,310
    Advertising     81,712     29,276     172,180     110,019
    Data Processing     63,178     57,379     180,219     166,952
    Professional fees     102,328     105,963     378,629     363,403
    Loan origination expense     48,091     37,223     155,147     86,273
    Regulatory Assessments     25,270     33,603     74,245     115,931
    Other expense     102,264     123,360     280,363     287,503
  Total non-interest expense     1,248,164     1,317,461     3,802,889     3,607,396
                         
  Net Income Before Income Taxes     228,447     176,973     1,088,695     949,009
    Income tax expense     78,700     -     361,351     -
  Net Income     149,747     176,973     727,344     949,009
    Dividend and accretion on preferred stock     11,552     67,995     44,936     164,360
  Net Income applicable to common shareholders   $ 138,195   $ 108,978   $ 682,408   $ 784,649
                         
Income per share - basic   $ 0.08   $ 0.06   $ 0.38   $ 0.44
                         
                         
                         
Birmingham Bloomfield Bancshares, Inc.  
Financial Summary and Selected Ratios (Unaudited)  
(Dollars in thousands except per share data)  
                           
      Year to Date  
      September 30,     Change  
      2012     2011     Amount     Percentage  
INCOME STATEMENT                              
    Interest Income   $ 5,086     $ 4,735     $ 351     7.4 %
    Interest Expense     690       944       (254 )   -26.9 %
  Net Interest Income     4,396       3,792       605     15.9 %
    Provision for loan loss     400       159       241     151.6 %
    Non-interest income     895       924       (29 )   -3.1 %
    Non-interest expense     3,803       3,607       195     5.4 %
  Net Income before Income Taxes     1,089       949       140     14.7 %
    Income tax expense     361       -       361     0.0 %
  Net Income     727       949       (222 )   -23.4 %
    Dividend and accretion on preferred stock     45       164       (119 )   -72.7 %
  Net Income - common shareholders   $ 682     $ 785     $ (102 )   -13.0 %
                                   
  Income per share - basic & diluted   $ 0.38     $ 0.44     $ (0.06 )   -13.9 %
                                 
BALANCE SHEET DATA                              
  Total assets     148,497       124,743       23,754     19.0 %
  Average Assets     135,682       118,010       17,672     15.0 %
  Total loans     118,440       102,580       15,860     15.5 %
  Allowance for loan loss (ALLL)     1,974       1,499       475     31.7 %
  Total deposits     131,147       111,171       19,976     18.0 %
  Other borrowings     -       -       -     0.0 %
  Shareholders' equity     16,682       13,056       3,626     27.8 %
  Average Equity     16,449       11,728       4,721     40.3 %
                                 
ASSET QUALITY                              
  Other real estate owned (OREO)     -       298       (298 )   -100.0 %
  Net charge-offs     -       108       (108 )   -100.0 %
  Non-accrual loans     708       -       708     0.0 %
(2) Non-performing assets (NPA)     708       298       410     137.5 %
  Non-accrual loans / total loans     0.60 %     0.00 %     0.60 %   0.0 %
  Allowance for loan loss / total loans     1.67 %     1.46 %     0.21 %   14.0 %
                                 
PERFORMANCE MEASUREMENTS                              
  Net interest margin (tax equivalent)     4.78 %     4.48 %     0.30 %   6.7 %
(1) Return on average assets (annualized)     0.72 %     1.08 %     -0.36 %   -33.0 %
(3) Return on average assets (annualized)     1.47 %     1.26 %     0.21 %   17.1 %
(1) Return on average common equity (annualized)     8.21 %     15.80 %     -7.59 %   -48.0 %
(3) Return on average common equity (annualized)     16.81 %     18.44 %     -1.63 %   -8.8 %
  Efficiency ratio     71.9 %     76.5 %     -4.64 %   -6.1 %
  Tier 1 Leverage Ratio (Bank only)     9.20 %     9.22 %     -0.02 %   -0.22 %
  Equity / Assets     11.23 %     10.47 %     0.77 %   7.3 %
  Total loans / Total deposits     90.3 %     92.3 %     -1.96 %   -2.1 %
  Book value per share   $ 6.61     $ 4.65     $ 1.96     42.1 %
  Income (loss) per share - basic & diluted   $ 0.38     $ 0.44     $ (0.06 )   -13.9 %
  Shares outstanding     1,824,662       1,812,662       12,000     0.7 %
  Average shares outstanding     1,817,874       1,800,557       17,317     1.0 %
                                 
(1) Amount is computed on net income before preferred dividends.  
(2) Non-performing assets includes non-accrual loans and other real estate owned.  
(3) Amount is computed on pre-tax, pre-provision earnings before preferred dividends  
     
     
     
Birmingham Bloomfield Bancshares, Inc.  
Financial Summary and Selected Ratios (Unaudited)  
(Dollars in thousands except per share data)  
                         
      Quarter Ended  
      September 30,   June 30,   March 31,   December 31,   September 30,  
      2012   2012   2012   2011   2011  
INCOME STATEMENT                                
    Interest Income   $ 1,746   $ 1,719   $ 1,621   $ 1,630   $ 1,582  
    Interest Expense     239     223     228     280     301  
  Net Interest Income     1,507     1,496     1,394     1,350     1,281  
    Provision for loan loss     330     50     20     75     105  
    Non-interest income     300     112     484     309     319  
    Non-interest expense     1,248     1,216     1,338     1,484     1,317  
  Net Income before Income Taxes     228     341     519     100     177  
    Income tax expense (benefit)     79     111     171     (2,885 )   -  
  Net Income     150     230     348     2,985     177  
    Dividend and accretion on preferred stock     12     22     12     20     68  
  Net Income applicable to common shareholders   $ 138   $ 208   $ 336   $ 2,965   $ 109  
                                   
  Income per share - basic & diluted   $ 0.08   $ 0.11   $ 0.19   $ 1.64   $ 0.06  
                                   
BALANCE SHEET DATA                                
  Total assets     148,497     139,851     128,663     124,397     124,743  
  Average Assets     146,057     134,375     126,499     123,317     121,526  
  Total loans     118,440     113,074     106,628     106,298     102,580  
  Allowance for loan loss (ALLL)     1,974     1,644     1,594     1,574     1,499  
  Total deposits     131,147     122,650     111,774     107,678     111,171  
  Other borrowings     -     -     -     -     -  
  Shareholders' equity     16,682     16,546     16,297     15,965     13,056  
  Average Equity     16,728     16,410     16,206     13,584     12,520  
                                   
ASSET QUALITY                                
  Other real estate owned (OREO)     -     -     -     298     298  
  Net charge-offs     -     -     -     -     108  
  Non-accrual loans     708     -     -     -     -  
(2) Non-performing assets (NPA)     708     -     -     298     298  
  Non-accrual loans / total loans     0.60 %   0.00 %   0.00 %   0.00 %   0.00 %
  Allowance for loan loss / total loans     1.67 %   1.45 %   1.50 %   1.48 %   1.46 %
                                   
PERFORMANCE MEASUREMENTS                                
  Net interest margin (tax equivalent)     4.65 %   4.91 %   4.80 %   4.61 %   4.44 %
(1) Return on average assets (annualized)     0.41 %   0.69 %   1.11 %   9.60 %   0.58 %
(3) Return on average assets (annualized)     1.52 %   1.17 %   1.71 %   0.56 %   0.92 %
(1) Return on average common equity (annualized)     4.92 %   7.84 %   12.08 %   132.13 %   8.49 %
(3) Return on average common equity (annualized)     18.35 %   13.34 %   18.72 %   7.77 %   13.53 %
  Efficiency ratio     69.1 %   75.7 %   71.3 %   89.4 %   82.4 %
  Tier 1 Leverage Ratio (Bank only)     9.20 %   9.82 %   10.13 %   9.94 %   9.22 %
  Equity / Assets     11.23 %   11.83 %   12.67 %   12.83 %   10.47 %
  Total loans / Total deposits     90.3 %   92.2 %   95.4 %   98.7 %   92.3 %
  Book value per share   $ 6.61   $ 6.54   $ 6.44   $ 6.26   $ 4.65  
  Income (loss) per share - basic & diluted   $ 0.08   $ 0.11   $ 0.19   $ 1.64   $ 0.06  
  Shares outstanding     1,824,662     1,824,662     1,812,662     1,812,662     1,812,662  
  Average shares outstanding     1,824,662     1,816,222     1,812,662     1,812,662     1,801,652  
                                   
(1) Amount is computed on net income before preferred dividends.  
(2) Non-performing assets includes non-accrual loans and other real estate owned.  
(3) Amount is computed on pre-tax, pre-provision earnings before preferred dividends  
     

Contact Information

  • Contact:
    Robert M. Farr
    Chief Executive Officer
    Birmingham Bloomfield Bancshares, Inc.
    248-283-6430