Birmingham Bloomfield Bancshares, Inc. Announces Record Pre-Tax Income for 2012

Marketwired

BIRMINGHAM, MI--(Marketwire - Jan 28, 2013) - Birmingham Bloomfield Bancshares, Inc. (OTCQB: BBBI) ("the Company"), the holding company for Bank of Birmingham, today announced unaudited results for the quarter and year to date periods ended December 31, 2012. The performance delivered record pre-tax net income and significant growth in the loan portfolio.

The Company reported net income of $337,000 or $0.18 per common share for the fourth quarter of 2012 compared to net income of $2,965,000 or $1.64 per common share for the same period of 2011. Net income for the year to date period ended December 31, 2012 was $1,019,000 or $0.56 per common share compared to $3,750,000 or $2.08 per common share for the same period last year. The prior year results were positively impacted by the recognition of the Company's deferred tax asset recorded in the fourth quarter of 2011; the adjustment totaled $2,885,000 or $1.60 per share. Excluding the impact of income taxes, pre-tax net income before preferred dividends was $1,614,000 for the period ended December 31, 2012 compared to $1,049,000 for 2011. This represents a year over year increase of 53.8%.

Chief Executive Officer, Rob Farr, issued the results and commented, "2012 was a very successful year for the organization. We were able to report record pre-tax earnings, realize substantial growth in total assets as a result of quality loan opportunities and improve net interest margin by implementing strategic actions to enhance the profitability of the balance sheet. Our pre-tax, pre-provision Return on Average Assets for 2012 was 1.48% compared to 1.08% in 2011 and book value reached $6.79. We also expanded our product options during the year to better service the needs of the community and diversify our revenue sources. Overall, this was an outstanding year for the Bank and provides us momentum moving into 2013."

Results of Operation

The Company reported net interest income of $1.544 million for the fourth quarter of 2012, a 14.3% increase relative to the same quarter of 2011. The improvement was the result of portfolio loan growth and a reduction in funding costs. Net interest margin for the quarter was 4.59% compared to 4.65% for the most recent linked quarter. The compression was a result of the competitive pricing environment and product mix of the balance sheet. Net interest income for the full year of 2012 was $5.940 million, an increase of 15.5% compared to the same period of 2011. Net interest margin for the year to date period ended December 31, 2012 was 4.73% compared to 4.51% in 2011. The increased margin was a direct result of a reduction in deposit costs.

The Company provided $70,000 in provision expense during the fourth quarter of 2012, a decrease of $5,000 compared to the same period last year and $260,000 less than the third quarter of 2012. Total provision expense for the year to date period ending December 31, 2012 was $470,000, compared to $234,000 for the twelve month period in 2011. The increase in provision expense is attributable to new loan volume and additional reserve requirements on collaterally deficient impaired loans. There have been no net charge offs during 2012 compared to $108,000 for 2011.

The Company continues to generate substantial revenue from non-interest income activity. Total non-interest income for the fourth quarter of 2012 was $348,000, compared to $309,000 during the same period of 2011. The increase was a result of higher revenue from the sale of SBA and residential mortgage loans in the secondary market and earnings on Bank Owned Life Insurance. Total non-interest income for the year to date period ending December 31, 2012 was $1,243,000, an increase of $10,000 from 2011. The modest improvement was a function of an increase in deposit fee income, earnings on Bank Owned Life Insurance and gain on the sale of a bank owned property, despite a reduction in revenue from loan sales on SBA and residential mortgages due to lower volume.

Total non-interest expense for the fourth quarter of 2012 was $1.296 million, compared to $1.484 million for the same quarter of 2011. The decrease was a result of a reduction in the number of personnel and lower origination costs due to a decrease in loan volume associated with mortgage loans originated for sale. Year to date non-interest expense for 2012 was $5.098 million, an increase of $7,000 relative to the same period in 2011. The nominal increase was the result of investments in operating system technology, dedicating resources to business marketing efforts and additional professional fees associated with strategic initiatives. However, several categories did experience a decrease in costs during the period, including salaries and occupancy expense due to a reduction in personnel and elimination of loan production offices.

Balance Sheet

Total assets as of December 31, 2012 were $152.8 million, a 22.8% increase from December 31, 2011. The net growth in total assets was the result of an increase in loan and deposit balances. Total portfolio loans reached $128.3 million in 2012, an increase of $21.9 million from the prior year. The growth was primarily concentrated in commercial real estate and mortgage related loans. The new loan activity was achieved by focusing on organic opportunities in our core markets, increasing business development efforts and by expanding loan product options. The asset quality of the Company remains excellent; no charge offs were reported in 2012 and the allowance for loan loss was 1.59% of the portfolio. Total deposits as of December 31, 2012 were $134.9 million, an increase of 25.3% 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 9.03% 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 Raymond James, Chicago; 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 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)  
             
             
             
    December 31,     December 31,  
    2012     2011  
ASSETS                
    Cash and due from banks   $ 15,539,072     $ 4,693,585  
    Federal funds sold     -       -  
  Total cash and cash equivalents     15,539,072       4,693,585  
                   
    Securities available-for-sale     3,725,923       4,594,761  
    Securities held-to-maturity     -       -  
    Federal Home Loan Bank Stock     218,100       169,900  
  Total securities     3,944,023       4,764,661  
                   
  Loans held for sale     -       2,484,829  
                   
  Portfolio loans                
    Consumer loans     1,801,991       1,305,501  
    Mortgage loans     16,203,001       11,572,620  
    Commercial loans     110,272,450       93,419,805  
  Total loans     128,277,442       106,297,926  
    Less: Allowance for loan loss     2,044,350       1,574,350  
  Net loans     126,233,092       104,723,576  
                   
    Premises and equipment, net     1,277,802       1,395,187  
    Bank owned life insurance     2,182,513       2,100,000  
    Accrued interest receivable and other assets     3,596,576       4,235,623  
                   
  TOTAL ASSETS   $ 152,773,078     $ 124,397,461  
                 
                 
                 
LIABILITIES                
  Deposits                
    Noninterest-bearing   $ 23,947,132     $ 19,662,283  
    Interest-bearing     110,955,051       88,015,546  
  Total deposits     134,902,183       107,677,829  
                   
    Short term borrowings     -       -  
    Accrued interest payable, taxes and other liabilities     867,356       755,090  
  Total liabilities     135,769,539       108,432,919  
                 
SHAREHOLDERS' EQUITY                
    Senior preferred stock, series D     4,621,000       4,621,000  
    Common Stock, no par value     17,105,618       17,066,618  
    Authorized - 9,000,000 shares, Issued and outstanding - 1,824,662 and 1,812,662 shares respectively                
    Accumulated other comprehensive income     76,066       95,168  
    Additional paid in capital - share based payments     493,154       493,154  
    Accumulated deficit     (5,292,299 )     (6,311,398 )
  Total shareholders' equity     17,003,539       15,964,542  
                   
  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 152,773,078     $ 124,397,461  
                 
Book value per share   $ 6.79     $ 6.26  
                 
                 
   
Birmingham Bloomfield Bancshares, Inc.  
Consolidated Statement of Income (Unaudited)  
                     
    For the three months ended     For the twelve months ended  
    December 31,     December 31,  
    2012   2011     2012   2011  
Interest Income                            
    Interest and fees on loans                            
      Commercial loans   $ 1,521,837   $ 1,447,603     $ 5,943,977   $ 5,681,704  
      Installment loans     22,447     18,791       75,083     61,959  
      Mortgage loans     85,839     29,878       266,934     86,382  
      Home Equity loans     85,124     96,215       363,494     385,921  
      Late charges and fees     23,303     6,370       85,786     27,610  
  Total loan interest and fee income     1,738,550     1,598,857       6,735,274     6,243,576  
                               
    Interest bearing deposits     7,572     5,059       21,479     20,350  
    Federal Funds Sold     -     -       -     13  
                                 
    Interest on investment securities                            
      Taxable     23,424     24,237       95,673     99,023  
      Tax-exempt     985     1,808       3,985     2,216  
  Total investment income     24,409     26,045       99,658     101,239  
                               
  Total interest income     1,770,532     1,629,961       6,856,412     6,365,178  
                             
Interest Expense                            
    Interest on deposits     227,006     279,386       916,561     1,208,513  
    Interest on borrowed funds     -     196       64     14,705  
  Total interest expense     227,006     279,582       916,625     1,223,218  
                               
  Net Interest Income     1,543,526     1,350,379       5,939,787     5,141,960  
    Provision for loan losses     70,000     75,000       470,000     234,000  
  Net Interest Income After Provision for Loan Losses     1,473,526     1,275,379       5,469,787     4,907,960  
                             
Non-interest Income                            
    Service charge income     19,912     16,074       78,622     55,443  
    Mortgage banking activities     81,525     267,193       355,557     434,338  
    SBA loan sales     215,618     14,704       537,466     701,588  
    Other income     30,603     10,973       271,336     41,399  
  Total non-interest income     347,658     308,944       1,242,981     1,232,768  
                             
Non-interest Expense                            
    Salaries and employee benefits     631,181     800,178       2,686,254     2,755,204  
    Occupancy expense     124,336     129,655       481,140     518,634  
    Equipment expense     50,886     47,364       201,115     180,674  
    Advertising     100,618     81,057       272,798     191,076  
    Data Processing     79,730     56,227       259,949     223,179  
    Professional fees     125,918     110,035       504,547     473,438  
    Loan origination expense     40,312     138,051       195,459     224,324  
    Regulatory Assessments     31,377     12,010       105,622     127,941  
    Other expense     111,165     109,302       391,528     396,805  
  Total non-interest expense     1,295,523     1,483,879       5,098,412     5,091,275  
                             
  Net Income Before Income Taxes     525,661     100,444       1,614,356     1,049,453  
    Income tax expense (benefit)     177,417     (2,884,715 )     538,768     (2,884,715 )
  Net Income     348,244     2,985,159       1,075,588     3,934,168  
    Dividend and accretion on preferred stock     11,553     19,732       56,489     184,092  
  Net Income applicable to common shareholders   $ 336,691   $ 2,965,427     $ 1,019,099   $ 3,750,076  
                             
Income per share - basic   $ 0.18   $ 1.64     $ 0.56   $ 2.08  
                             
                             
   
Birmingham Bloomfield Bancshares, Inc.  
Financial Summary and Selected Ratios (Unaudited)  
(Dollars in thousands except per share data)  
                           
      Year to Date  
      December 31,     Change  
      2012     2011     Amount     Percentage  
INCOME STATEMENT                              
    Interest Income   $ 6,856     $ 6,365     $ 491     7.7 %
    Interest Expense     917       1,223       (307 )   -25.1 %
  Net Interest Income     5,940       5,142       798     15.5 %
    Provision for loan loss     470       234       236     100.9 %
    Non-interest income     1,243       1,233       10     0.8 %
    Non-interest expense     5,098       5,091       7     0.1 %
  Net Income before Income Taxes     1,614       1,049       565     53.8 %
    Income tax expense (benefit)     539       (2,885 )     3,423     118.7 %
  Net Income     1,076       3,934       (2,859 )   -72.7 %
    Dividend and accretion on preferred stock     56       184       (128 )   -69.3 %
  Net Income - common shareholders   $ 1,019     $ 3,750     $ (2,731 )   -72.8 %
                                 
  Income per share - basic & diluted   $ 0.56     $ 2.08     $ (1.52 )   -73.1 %
                                 
BALANCE SHEET DATA                              
  Total assets     152,773       124,397       28,376     22.8 %
  Average Assets     140,400       119,347       21,053     17.6 %
  Total loans     128,277       106,298       21,980     20.7 %
  Allowance for loan loss (ALLL)     2,044       1,574       470     29.9 %
  Total deposits     134,902       107,678       27,224     25.3 %
  Other borrowings     -       -       -     0.0 %
  Shareholders' equity     17,004       15,965       1,039     6.5 %
  Average Equity     16,543       12,196       4,347     35.6 %
                                 
ASSET QUALITY                              
  Other real estate owned (OREO)     -       298       (298 )   -100.0 %
  Net charge-offs     -       108       (108 )   -100.0 %
  Non-accrual loans     764       -       764     0.0 %
(2) Non-performing assets (NPA)     764       298       466     156.3 %
  Non-accrual loans / total loans     0.60 %     0.00 %     0.60 %   0.0 %
  Allowance for loan loss / total loans     1.59 %     1.48 %     0.11 %   7.6 %
                                 
PERFORMANCE MEASUREMENTS                              
  Net interest margin (tax equivalent)     4.73 %     4.51 %     0.22 %   4.9 %
(1) Return on average assets (annualized)     0.77 %     3.30 %     -2.53 %   -76.6 %
(3) Return on average assets (annualized)     1.48 %     1.08 %     0.40 %   37.6 %
(1) Return on average common equity (annualized)     9.02 %     47.59 %     -38.57 %   -81.0 %
(3) Return on average common equity (annualized)     17.48 %     15.52 %     1.96 %   12.6 %
  Efficiency ratio     71.0 %     79.9 %     -8.89 %   -11.1 %
  Total loans / Total deposits     95.1 %     98.7 %     -3.63 %   -3.7 %
  Tier 1 Leverage Ratio (Bank only)     9.03 %     9.94 %     -0.91 %   -9.15 %
  Equity / Assets     11.13 %     12.83 %     -1.70 %   -13.3 %
  Tangible common equity / Total assets     8.11 %     9.12 %     -1.01 %   -11.1 %
                                 
  Book value per share   $ 6.79     $ 6.26     $ 0.53     8.4 %
  Stock price   $ 4.60     $ 3.00     $ 1.60     53.3 %
  Stock price / book value (%)     67.8 %     47.9 %     19.85 %   41.4 %
  Income (loss) per share - basic & diluted   $ 0.56     $ 2.08     $ (1.52 )   -73.1 %
  Price to earnings ratio (P/E)     8.2x       1.4x       6.8x     470.1 %
  Shares outstanding     1,824,662       1,812,662       12,000     0.7 %
  Average shares outstanding     1,822,376       1,803,608       18,768     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  
      December 31,   September 30,   June 30,   March 31,   December 31,  
      2012   2012   2012   2012   2011  
INCOME STATEMENT                                
    Interest Income   $ 1,771   $ 1,746   $ 1,719   $ 1,621   $ 1,630  
    Interest Expense     227     239     223     228     280  
  Net Interest Income     1,544     1,507     1,496     1,394     1,350  
    Provision for loan loss     70     330     50     20     75  
    Non-interest income     348     300     112     484     309  
    Non-interest expense     1,296     1,248     1,216     1,338     1,484  
  Net Income before Income Taxes     526     228     341     519     100  
    Income tax expense (benefit)     177     79     111     171     (2,885 )
  Net Income     348     150     230     348     2,985  
    Dividend and accretion on preferred stock     12     12     22     12     20  
  Net Income applicable to common shareholders   $ 337   $ 138   $ 208   $ 336   $ 2,965  
                                   
  Income per share - basic & diluted   $ 0.18   $ 0.08   $ 0.11   $ 0.19   $ 1.64  
                                   
BALANCE SHEET DATA                                
  Total assets     152,773     148,497     139,851     128,663     124,397  
  Average Assets     154,452     146,057     134,375     126,499     123,317  
  Total loans     128,277     118,440     113,074     106,628     106,298  
  Allowance for loan loss (ALLL)     2,044     1,974     1,644     1,594     1,574  
  Total deposits     134,902     131,147     122,650     111,774     107,678  
  Other borrowings     -     -     -     -     -  
  Shareholders' equity     17,004     16,682     16,546     16,297     15,965  
  Average Equity     16,822     16,728     16,410     16,206     13,584  
                                   
ASSET QUALITY                                
  Other real estate owned (OREO)     -     -     -     -     298  
  Net charge-offs     -     -     -     -     -  
  Non-accrual loans     764     708     -     -     -  
(2) Non-performing assets (NPA)     764     708     -     -     298  
  Non-accrual loans / total loans     0.60 %   0.60 %   0.00 %   0.00 %   0.00 %
  Allowance for loan loss / total loans     1.59 %   1.67 %   1.45 %   1.50 %   1.48 %
                                   
PERFORMANCE MEASUREMENTS                                
  Net interest margin (tax equivalent)     4.59 %   4.65 %   4.91 %   4.80 %   4.61 %
(1) Return on average assets (annualized)     0.90 %   0.41 %   0.69 %   1.11 %   9.60 %
(3) Return on average assets (annualized)     1.53 %   1.52 %   1.17 %   1.71 %   0.56 %
(1) Return on average common equity (annualized)     11.35 %   4.92 %   7.84 %   12.08 %   132.13 %
(3) Return on average common equity (annualized)     19.42 %   18.35 %   13.34 %   18.72 %   7.77 %
  Efficiency ratio     68.5 %   69.1 %   75.7 %   71.3 %   89.4 %
  Total loans / Total deposits     95.1 %   90.3 %   92.2 %   95.4 %   98.7 %
  Tier 1 Leverage Ratio (Bank only)     9.03 %   9.20 %   9.82 %   10.13 %   9.94 %
  Equity / Assets     11.13 %   11.23 %   11.83 %   12.67 %   12.83 %
  Tangible common equity / Total assets     8.11 %   8.12 %   8.53 %   9.07 %   9.12 %
                                   
  Book value per share   $ 6.79   $ 6.61   $ 6.54   $ 6.44   $ 6.26  
  Stock price   $ 4.60   $ 4.55   $ 3.30   $ 3.02   $ 3.00  
  Stock price / book value (%)     67.8 %   68.8 %   50.5 %   46.9 %   47.9 %
  Income (loss) per share - basic & diluted   $ 0.18   $ 0.08   $ 0.11   $ 0.19   $ 1.64  
  Shares outstanding     1,824,662     1,824,662     1,824,662     1,812,662     1,812,662  
  Average shares outstanding     1,824,662     1,824,662     1,816,222     1,812,662     1,812,662  
                                   
   
(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:

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

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