SOURCE: Birmingham Bloomfield Bancshares, Inc

Birmingham Bloomfield Bancshares, Inc

July 27, 2016 12:00 ET

Birmingham Bloomfield Bancshares, Inc. Announces Results for Period Ended June 30, 2016

BIRMINGHAM , MI--(Marketwired - July 27, 2016) - Birmingham Bloomfield Bancshares, Inc. (OTCBB: BBBI) ("the Company"), the holding company for Bank of Birmingham, today announced unaudited results for the quarter and six month periods ended June 30, 2016. The Company continues to generate strong asset growth and increase total revenue.

The Company reported net income of $249,000 or $0.13 per common share for the second quarter of 2016 compared to net income of $588,000 or $0.31 per common share for the same period of 2015. Net income for the six month period ended June 30, 2016 was $562,000 or $0.30 per common share compared to $876,000 or $0.47 per common share for the same period last year. The reduction in earnings is a function of higher provision, decrease in SBA sale revenue and additional operating costs.

Chief Executive Officer, Rob Farr, issued the results and commented: "The overall fundamentals remain strong as we grow the franchise despite the additional provision costs and operating expenses. We have experienced solid loan growth in our primary markets that continues to drive an increase in core revenue. We have also increased total assets 20% in the past year as we have successfully executed on our growth initiatives. We remain focused on improving our performance and building on the success of the Bank."

Results of Operation

The Company reported net interest income of $2.489 million for the second quarter of 2016, a 16.3% increase compared to the same quarter of 2015 and 3.8% increase from the first quarter of 2016. Net interest margin for the quarter was 3.82% compared to 3.85% for the most recent linked quarter and 4.00% for March 31, 2015. The margin compression is a result of the competitive market conditions affecting loan pricing and additional funding costs associated with the term debt facility. Net interest income for the first six months of 2016 was $4.888 million, an increase of 16.1% relative to the same period of 2015. The increase was the direct result of earning asset growth.

The Company provided $405,000 in provision expense during the quarter and the allowance relative to total loans was 1.17% at June 30, 2016. The provision expense is a function of new loan volume and additional reserves associated with impaired loans. A total of $553,000 was charged off during the period as a problem loan was liquidated. The total amount of the charge off was previously reserved and no additional loss was recognized on the sale. Total nonaccrual loans declined during the period due to the sale and disposition of collateral related to a problem loan.

Total provision expense for the year to date period ending June 30, 2016 was $815,000 compared to $525,000 in 2015. The increase is the result of loan growth, charge off activity and additional reserves on problem loans.

Total non-interest income for the second quarter of 2016 was $218,000, compared to $562,000 for the same period of 2015. For the year to date period ending June 30, 2016 total non-interest income was $440,000, a decrease of $358,000 relative to the prior period. The reduction in income is primarily a function of lower SBA revenue on loan sales in the secondary market.

Total non-interest expense for the second quarter of 2016 was $1.921 million, compared to $1.610 million in 2015. Year to date non-interest expense for 2016 was $3.655 million, an increase of $540,000 relative to the same period in 2015. The increase was the result of additional expenses associated with our continued growth and investments in the infrastructure of the organization, specifically personnel, data processing, loan origination, professional fees and regulatory costs.

Balance Sheet

Total assets as of June 30, 2016 were $274.6 million, an increase of $46.3 million from the prior year and 12.5% from December 31, 2015. Total portfolio loans reached $238.2 million at the end of the second quarter, an increase of $11.1 million from first quarter and $35.4 million from June 30, 2015. The increase is due to our targeted marketing efforts, dedicated approach to serving our customers and proactive business development efforts. The asset quality of the Company has improved as total non-performing loans declined to 0.41% of the portfolio at the end of the quarter. Total deposits as of June 30, 2016 were $249.3 million, an increase of $44.4 million from the same period in 2015. The growth was a function of our more visible profile in the community and successful execution on our initiatives to increase core deposits. The Bank continues to be classified as well capitalized based on regulatory guidelines and is a recommended institution by Bauer Financial.

Subsequent Events

On July 20, 2016, the Company and Arbor Bancorp, Inc., jointly announced the signing of a definitive agreement for Arbor Bancorp, Inc. to acquire the Company in an all cash transaction valued at $16.50 per share for total consideration of approximately $33.3 million. Based on the terms of the agreement, shareholders of the Company will receive cash for each share of common stock and all outstanding stock options and organizer warrants will be paid off. Completion of the merger is subject to certain closing conditions, including receipt of regulatory and shareholder approval. For more information, please see our joint press release dated July 20, 2016.

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 as a single point of contact empowered to provide all the bank's services. Birmingham Bloomfield Bancshares, Inc. Market Makers include Monroe Securities, Chicago; Boenning & Scattergood, Philadelphia; Stockcross Financial Services.

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. The Company assumes no responsibility to update forward-looking statements.

(Unaudited Consolidated Financial Statements Follow)

Birmingham Bloomfield Bancshares, Inc.  
Consolidated Balance Sheet (Unaudited)  
              
              
              
   June 30,   December 31,   June 30, 
   2016   2015   2015 
ASSETS             
  Cash and due from banks  $29,701,529   $14,232,848   $17,428,891  
  Federal funds sold   -    -    -  
 Total cash and cash equivalents   29,701,529    14,232,848    17,428,891  
                 
  Securities available-for-sale   3,234,912    3,933,083    4,380,578  
  Federal Home Loan Bank Stock   251,900    243,300    243,300  
 Total securities   3,486,812    4,176,383    4,623,878  
                 
 Portfolio loans                
  Consumer loans   3,039,867    2,355,187    2,055,653  
  Mortgage loans   40,117,635    35,060,825    27,411,925  
  Commercial leases   38,160,479    35,940,633    32,466,654  
  Commercial loans   156,891,373    148,782,782    140,904,476  
 Total loans   238,209,354    222,139,427    202,838,708  
  Less: Allowance for loan loss   2,787,653    2,525,350    2,585,587  
 Net loans   235,421,701    219,614,077    200,253,121  
                 
  Premises and equipment, net   941,004    996,183    1,033,857  
  Bank owned life insurance   2,421,072    2,389,018    2,356,060  
  Deferred Tax Asset   1,237,450    1,202,501    1,249,940  
  Accrued interest receivable and other assets   1,440,650    1,592,630    1,376,604  
                 
 TOTAL ASSETS  $274,650,218   $244,203,640   $228,322,351  
                 
                 
                 
LIABILITIES                
 Deposits                
  Noninterest-bearing  $65,616,830   $57,526,790   $50,573,628  
  Interest-bearing   183,722,023    162,960,444    154,390,799  
 Total deposits   249,338,853    220,487,234    204,964,427  
                 
  Other Borrowings   5,530,925    4,621,000    -  
  Accrued interest payable, taxes and other liabilities   1,681,618    1,718,161    2,427,274  
 Total liabilities   256,551,396    226,826,395    207,391,701  
                 
SHAREHOLDERS' EQUITY                
  Senior preferred stock, series D   -    -    4,621,000  
  Common Stock, no par value   17,541,404    17,412,285    17,412,285  
   Authorized - 9,000,000 shares, Issued and outstanding -  1,887,610, 1,872,632 and 1,872,632 shares respectively                
  Accumulated other comprehensive income   32,621    23,808    32,064  
  Additional paid in capital - share based payments   535,754    514,454    493,154  
  Accumulated deficit   (10,957 )  (573,302 )  (1,627,853 )
 Total shareholders' equity   18,098,822    17,377,245    20,930,650  
                 
 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $274,650,218   $244,203,640   $228,322,351  
                 
Book value per share  $9.59   $9.28   $8.71  
                 
                 
Birmingham Bloomfield Bancshares, Inc.
Consolidated Statement of Income (Unaudited)
             
   For the three months ended  For the six months ended
   June 30,  June 30,
   2016  2015  2016  2015
Interest Income            
  Interest and fees on loans                
   Commercial loans  $1,937,555  $1,760,658  $3,822,278  $3,437,884
   Commercial leases   447,205   356,663   887,368   677,768
   Consumer loans   36,712   27,337   70,806   55,389
   Mortgage loans   248,736   155,400   482,482   298,512
   Home Equity loans   152,725   108,800   292,437   215,075
   Late charges and fees   6,964   6,857   26,544   33,173
 Total loan interest and fee income   2,829,898   2,415,715   5,581,915   4,717,801
                 
  Interest bearing deposits   32,958   12,116   56,151   23,495
  Federal Funds Sold   -   -   -   62
                 
  Interest on investment securities                
   Taxable   16,332   22,485   33,276   45,906
   Tax-exempt   -   -   -   -
 Total investment income   16,332   22,485   33,276   45,906
                 
 Total interest income   2,879,188   2,450,315   5,671,342   4,787,264
                 
Interest Expense                
  Interest on deposits   344,729   310,301   693,148   577,499
  Interest on borrowed funds   45,292   -   90,458   1
 Total interest expense   390,021   310,301   783,606   577,500
                 
 Net Interest Income   2,489,167   2,140,014   4,887,736   4,209,764
  Provision for loan losses   405,000   180,000   815,000   525,000
 Net Interest Income After Provision for Loan Losses   2,084,167   1,960,014   4,072,736   3,684,764
                 
Non-interest Income                
  Service charge income   26,281   24,777   50,385   51,286
  Mortgage banking activities   44,581   25,132   52,330   53,348
  SBA loan sales   111,828   478,634   270,382   627,506
  Other income   35,420   33,161   67,009   65,683
 Total non-interest income   218,110   561,704   440,106   797,823
                 
Non-interest Expense                
  Salaries and employee benefits   1,053,580   894,635   2,033,739   1,765,691
  Occupancy expense   125,035   139,840   261,815   273,553
  Equipment expense   47,835   49,873   79,665   94,930
  Advertising   87,540   67,083   147,438   134,193
  Data Processing   104,809   80,130   202,503   149,608
  Professional fees   341,227   153,870   483,070   271,644
  Loan origination expense   48,902   51,228   106,492   96,242
  Regulatory Assessments   62,546   43,189   116,420   85,229
  Other expense   49,546   129,867   223,457   243,627
 Total non-interest expense   1,921,020   1,609,715   3,654,599   3,114,717
                 
 Net Income Before Income Taxes   381,257   912,003   858,243   1,367,870
  Income tax expense   132,362   312,813   295,899   468,714
 Net Income   248,895   599,190   562,344   899,156
  Dividend on preferred stock   -   11,552   -   23,105
 Net Income applicable to common shareholders  $248,895  $587,638  $562,344  $876,051
                 
Income per share - basic & diluted  $0.13  $0.31  $0.30  $0.47
  
  
Birmingham Bloomfield Bancshares, Inc.  
Financial Summary and Selected Ratios (Unaudited)  
(Dollars in thousands except per share data)  
                     
      Year to Date  
      June 30,   Change  
      2016   2015   Amount   Percentage  
INCOME STATEMENT                 
    Interest Income  $5,671   $4,787   $884   18.5 %
    Interest Expense   784    578    206   35.7 %
   Net Interest Income   4,888    4,210    678   16.1 %
    Provision for loan loss   815    525    290   55.2 %
    Non-interest income   440    798    (358 ) -44.8 %
    Non-interest expense   3,655    3,115    540   17.3 %
   Net Income before Income Taxes   858    1,368    (510 ) -37.3 %
    Income tax expense   296    469    (173 ) -36.9 %
   Net Income   562    899    (337 ) -37.5 %
    Dividend on preferred stock   -    23    (23 ) -100.0 %
   Net Income - common shareholders  $562   $876   $(314 ) -35.8 %
                        
   Income per share - basic & diluted  $0.30   $0.47   $(0.17 ) -36.4 %
                        
BALANCE SHEET DATA                    
   Total assets   274,650    228,322    46,328   20.3 %
   Average Assets   266,963    219,335    47,628   21.7 %
   Total loans   238,209    202,839    35,371   17.4 %
   Allowance for loan loss (ALLL)   2,788    2,586    202   7.8 %
   Total deposits   249,339    204,964    44,374   21.6 %
   Other borrowings   5,531    -    5,531   0.0 %
   Shareholders' equity   18,099    20,931    (2,832 ) -13.5 %
   Average Equity   17,762    15,767    1,994   12.6 %
                        
ASSET QUALITY                    
   Other real estate owned (OREO)   -    -    -   0.0 %
   Net charge-offs   553    -    553   0.0 %
   Non-accrual loans   968    2,237    (1,269 ) -56.7 %
(2)  Non-performing assets (NPA)   968    2,237    (1,269 ) -56.7 %
   Non-accrual loans / total loans   0.41 %  1.10 %  -0.70 % -63.2 %
   Allowance for loan loss / total loans   1.17 %  1.27 %  -0.10 % -8.2 %
                        
PERFORMANCE MEASUREMENTS                    
   Net interest margin (tax equivalent)   3.83 %  4.04 %  -0.21 % -5.2 %
(1)  Return on average assets (annualized)   0.42 %  0.83 %  -0.40 % -48.8 %
(3)  Return on average assets (annualized)   1.26 %  1.74 %  -0.48 % -27.6 %
(1)  Return on average common equity (annualized)   6.37 %  11.50 %  -5.13 % -44.6 %
(3)  Return on average common equity (annualized)   18.94 %  24.21 %  -5.26 % -21.7 %
   Efficiency ratio   68.6 %  62.2 %  6.39 % 10.3 %
   Total loans / Total deposits   95.5 %  99.0 %  -3.43 % -3.5 %
   Equity / Assets   6.59 %  9.17 %  -2.58 % -28.1 %
   Tangible common equity / Total assets   6.59 %  7.14 %  -0.55 % -7.7 %
                        
   Book value per share  $9.59   $8.71   $0.88   10.1 %
   Stock price  $9.15   $9.05   $0.10   1.1 %
   Stock price / book value (%)   95.4 %  103.9 %  -8.48 % -8.2 %
   Income per share - basic & diluted  $0.30   $0.47   $(0.17 ) -36.4 %
   Income per share - basic & diluted (LTM)  $0.86   $0.94   $(0.08 ) -8.5 %
   Price to earnings ratio (P/E) (year to date)   15.2x    9.5x    5.7x   59.4 %
   Shares outstanding   1,887,610    1,872,632    14,978   0.8 %
   Average shares outstanding   1,880,410    1,863,524    16,886   0.9 %
                        
(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 
   June 30,  March 31,  December 31,  September 30,  June 30, 
   2016  2016  2015  2015  2015 
INCOME STATEMENT                    
  Interest Income $2,879  $2,792  $2,712  $2,641  $2,450 
  Interest Expense  390   394   334   319   310 
 Net Interest Income  2,489   2,399   2,378   2,323   2,140 
  Provision for loan loss  405   410   81   -   180 
  Non-interest income  218   222   333   174   562 
  Non-interest expense  1,921   1,734   1,806   1,693   1,610 
 Net Income before Income Taxes  381   477   824   804   912 
  Income tax expense  132   164   272   280   313 
 Net Income  249   313   553   524   599 
  Dividend on preferred stock  -   -   10   12   12 
 Net Income applicable to common shareholders $249  $313  $542  $512  $588 
                      
 Income per share - basic & diluted $0.13  $0.17  $0.29  $0.27  $0.31 
                      
BALANCE SHEET DATA                    
 Total assets  274,650   273,894   244,204   235,887   228,322 
 Average Assets  272,776   261,080   246,503   233,756   223,792 
 Total loans  238,209   227,052   222,139   210,199   202,839 
 Allowance for loan loss (ALLL)  2,788   2,935   2,525   2,586   2,586 
 Total deposits  249,339   249,830   220,487   212,017   204,964 
 Other borrowings  5,531   4,526   4,621   -   - 
 Shareholders' equity  18,099   17,744   17,377   21,459   20,931 
                      
ASSET QUALITY                    
 Other real estate owned (OREO)  -   -   -   -   - 
 Net charge-offs  553   -   141   -   - 
 Non-accrual loans  968   2,083   2,083   2,237   2,237 
(2)Non-performing assets (NPA)  968   2,083   2,083   2,237   2,237 
 Non-accrual loans / total loans  0.41%  0.92%  0.94%  1.06%  1.10%
 Allowance for loan loss / total loans  1.17%  1.29%  1.14%  1.23%  1.27%
                      
PERFORMANCE MEASUREMENTS                    
 Net interest margin (tax equivalent)  3.82%  3.85%  3.99%  4.12%  4.00%
(1)Return on average assets (annualized)  0.37%  0.48%  0.89%  0.89%  1.07%
(3)Return on average assets (annualized)  1.16%  1.37%  1.46%  1.37%  1.96%
(1)Return on average common equity (annualized)  5.59%  7.16%  12.79%  12.52%  15.03%
(3)Return on average common equity (annualized)  17.65%  20.26%  20.96%  19.22%  27.39%
 Efficiency ratio  71.0%  66.2%  66.6%  67.8%  59.6%
 Total loans / Total deposits  95.5%  90.9%  100.7%  99.1%  99.0%
 Equity / Assets  6.59%  6.48%  7.12%  9.10%  9.17%
 Tangible common equity / Total assets  6.59%  6.48%  7.12%  7.14%  7.14%
                      
 Book value per share $9.59  $9.46  $9.28  $8.99  $8.71 
 Stock price $9.15  $8.79  $8.65  $8.50  $9.05 
 Stock price / book value (%)  95.4%  93.0%  93.2%  94.5%  103.9%
 Income per share - basic & diluted $0.13  $0.17  $0.29  $0.27  $0.31 
 Shares outstanding  1,887,610   1,876,610   1,872,632   1,872,632   1,872,632 
 Average shares outstanding  1,885,434   1,875,386   1,872,632   1,872,632   1,866,830 
(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