BIRMINGHAM, MI — (Marketwire) — 01/28/13 — 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)
Contact:
Robert M. Farr
Chief Executive Officer
Birmingham Bloomfield Bancshares, Inc.
248-283-6430