Dearborn Bancorp 10K 2010 Annual report

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K


þ		Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2010


o		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __________to __________


Commission file number 000-24478.

DEARBORN BANCORP, INC.

(Exact name of registrant as specified in its charter)


Michigan		38-3073622

(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)


1360 Porter Street, Dearborn, MI		48124

(Address of principal executive office)		(Zip code)

(313) 565-5700

(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act:


Title of each class		Name of each exchange on which registered

Common Stock		The Nasdaq Stock Market, LLC

Securities registered pursuant to section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yeso Noþ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yeso Noþ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesþ Noo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K.o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a small reporting company. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act


Large accelerated filero		Accelerated filero		Non-accelerated filero(Do not check if a smaller reporting company)		Small reporting companyþ

Indicate by check mark if the registrant is a shell company, as defined in Rule 12b-2 of the Exchange Act.

Yeso Noþ

The aggregate market value of the common equity held by non-affiliates of the registrant computed by reference to the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second quarter, was approximately $12,128,070.

As of March 18, 2011, 7,685,706 shares of common stock of the registrant were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 2010 Annual Report to Stockholders of the Registrant are incorporated in Parts I, II and IV of this report. Portions of the definitive Proxy Statement of the Registrant dated April 15, 2011, to be filed pursuant to Regulation 14A, are incorporated by reference in Part III of this report.

TABLE OF CONTENTS



PART I		3
Item 1.	Business	3
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	20
Item 2.	Properties	21
Item 3.	Legal Proceedings	22
Item 4.	Reserved	22

PART II		22
Item 5.	Market for Registrant’s Common Equity, and Related Stockholder Matters	22
Item 6.	Selected Financial Data	22
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	22
Item 7A.	Quantitative and Qualitative Disclosure about Market Risk.	22
Item 8.	Financial Statements and Supplementary Data	22
Items 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	22
Item 9A.	Controls and Procedures	22
Item 9B.	Other Information	23

PART III		23
Item 10.	Directors and Executive Officers of the Registrant	23
Item 11.	Executive Compensation	23
Item 12.	Security Ownership of Certain Beneficial Owners and Management	23
Item 13.	Certain Relationships and Related Transactions	24
Item 14.	Principal Accountant Fees and Services	24

PART IV		24
Item 15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K	24

Form 10-K Signatures		27
Exhibit Index		28
2010 Annual Report to Stockholders
Subsidiaries of the Registrant
Consent of Independent Registered Public Accounting Firm
Rule 13a-14(a) CEO Certification
Rule 13a-14(a) CFO Certification
CEO Certification Pursuant to Section 906
CFO Certification Pursuant to Section 906

DEARBORN BANCORP, INC.
FORM 10-K

PART I

Forward Looking Statements

The following discussion contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and about the Corporation and Bank. Words such as “anticipates”, “believes”, “estimates”, “expects”, “forecasts”, “intends”, “is likely”, “plans”, “projects”, variations of such words and similar expressions are intended to identify such forward- looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. The Corporation undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events (whether anticipated or unanticipated), or otherwise.

Future Factors include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices, levies and assessments; 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 changes in the national and local economy. These are representative of the Future Factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.

Item 1.Business

Dearborn Bancorp, Inc. (the “Corporation”), a Michigan corporation, is a bank holding corporation owning all the common stock of Fidelity Bank (the “Bank’) , a Michigan banking corporation which commenced business on February 28, 1994. Fidelity Bank was previously known as the Community Bank of Dearborn. The Bank is the only commercial bank headquartered in Dearborn, Michigan and conducts business primarily in Wayne, Macomb, Oakland and Washtenaw Counties, Michigan.

Background

The liberalization of Michigan’s branch banking laws, together with the expansion of interstate banking, has led to substantial consolidation of the banking industry in Michigan, including within the county in which the Bank has its executive offices. In the past, several of the financial institutions within the primary market area of the Bank have either been acquired by or merged with larger financial institutions or out-of-state financial institutions. In some cases, when these consolidations occurred, local boards of directors were dissolved and local management relocated or in some cases terminated and has, in some cases, resulted in policy and credit decisions being centralized away from local management.

In the opinion of the Corporation’s management, this situation has created a favorable opportunity for a local commercial bank with local management and directors. Management of the Corporation believes that such a bank attracts those customers who wish to conduct business with a locally managed institution that demonstrates an active interest in their business and personal financial affairs. The Corporation believes that a locally managed institution, in many cases, will be able to deliver more timely responses to customer requests, provide customized financial products and services and offer customers the personal attention of the Bank’s senior banking officers. The Bank seeks to take advantage of this opportunity by emphasizing in its marketing plan the Bank’s local management and the Bank’s ties and commitment to its market area.

The Corporation was incorporated as a Michigan business corporation on September 30, 1992. The Corporation was formed to acquire all of the Bank’s issued and outstanding stock and to engage in the business of a bank holding corporation under the Bank Holding Company Act of 1956, as amended (the “Act”).

The executive offices of the Corporation and the Bank are located at 1360 Porter Street, Dearborn, Michigan 48124, telephone number (313) 565-5700. The Bank’s the website address iswww.fidbank.com. The investor relations page of the website can be directly accessed atwww.dearbornbancorp.com.

Business of the Corporation

The primary purpose of the Corporation is the ownership of the Bank. In the future, the Corporation may form or acquire other subsidiaries as permitted under the Act and the regulations of the Federal Reserve.

Business of the Bank

Principal operations of the Bank commenced on February 28, 1994 when the Bank opened for business at its main office, located at 22290 Michigan Avenue, Dearborn, Michigan. The Bank, through its main office, branch offices and regional lending centers, emphasizes and offers highly personalized service to its customers. A listing of office locations is set forth under the caption “Fidelity Bank Locations” in the 2010 Annual Report to Stockholders and is incorporated herein by reference.

On January 4, 2007, the Corporation acquired Fidelity Financial Corporation of Michigan (Fidelity), a commercial bank with seven offices in Oakland County, Michigan. The acquisition significantly expands the Bank’s presence in Oakland County, Michigan. Management believes that the acquisition has been beneficial to the Bank’s customers and the Corporation’s shareholders.

The customer service officers are well-trained, experienced bank officers who fill the needs of the customers and handle the requests of their customers in a professional manner. The management of the Corporation and the Bank believe that it is important to the success of the Bank’s strategy to create long-term relationships between customers and Bank employees. The Bank’s senior management holds regular staff information meetings so that all employees are given information regarding the Bank’s plans and objectives, and employees are offered the opportunity to make suggestions to improve the Bank’s performance. The management of the Bank believes that this approach creates a commitment by all employees to the Bank’s success.

The Bank offers a wide range of financial products and services. These include checking accounts, savings accounts, money market accounts, certificates of deposit, business checking, direct deposit, loan services (commercial, consumer, real estate mortgages), travelers’ checks, cashiers’ checks, wire transfers, safety deposit boxes, online banking, telephone banking, collection services, and night depository services. The Bank offers check imaging options including statements on CD ROM and online banking services to its customers.. The Bank does not have a trust department.

On August 19, 1997, the Bank purchased a shell insurance agency and renamed the agency Community Bank Insurance Agency, Inc. Community Bank Insurance Agency’s primary functions are to act as the sales agent for the Corporation’s own insurance policies and to hold a minority interest in MBT Title Services, LLC, a title insurance company, which allows the Bank to offer title insurance to its customers.

On March 26, 2002, the Bank formed Community Bank Audit Services, Inc., a company that provides internal audit and compliance consulting to other small community banks.

Business Strategy

Maintain High Quality Operations.Since commencing operations, excellent customer service and strong underwriting of potential borrowers has been emphasized. We will continue to emphasize high asset quality and offer superior customer service. We will focus on improving loan quality by utilizing commercial lenders and loan workout professionals to manage our loan portfolio. We believe that the demographics and growth characteristics within the communities we serve should also provide significant opportunities for us to improve our loan and deposit relationships at our existing offices.

Emphasize Relationship Banking.We strive to maintain a strong commitment to relationship banking. Our goal is to attract small to medium-sized businesses, as well as individuals as customers who wish to conduct business with a local commercial bank that demonstrates an active interest in their business and personal affairs. We are becoming increasingly sophisticated in our ability to analyze our customer relationships, which increases our ability to recognize the opportunity to offer additional products and services that will expand each relationship. We believe our ability to deliver products and services in a highly personalized manner helps differentiate us from larger, regional banks operating in our market area.

Maintain Strong Level of Capital.A Bank’s level of capitalization is a primary factor in the level of the regulatory pressures faced by financial institutions. We should maintain sufficient levels of capital to be categorized as “Well-Capitalized”. When capital levels fall below this level due to business conditions, management will take actions necessary to improve capital levels. Maintenance of the level of capital required to be categorized as “well-capitalized” provides management with the flexibility to take advantage of business opportunities, reduces the cost of FDIC deposit insurance and limits regulatory restrictions.

Hire Experienced, Local Bankers.Our strategy has revolved around the hiring of experienced, local banking professionals and relationship managers to run our offices, call on customers and originate loans and deposits. We encourage our employees to be active in community affairs and business, trade and service organizations. Our senior loan officers have an average of over 20 years of experience in the financial services industry and have operated in our market area through a wide range of economic cycles and lending market conditions. We believe that the recruitment of banking professionals with significant experience in, and knowledge of, our markets facilitates our growth and partially mitigates the credit risk associated with our loan portfolio.

Capitalize on Consolidation in Our Market.Several of the financial institutions within our market area have either been acquired by, or merged with, larger or out-of-state financial institutions. These acquisitions have included: Royal Bank of Scotland Group, Plc’s acquisition of Charter One Financial, Inc., J.P. Morgan Chase & Co.’s acquisition of Bank One Corporation, Fifth Third Bancorp’s acquisition of Old Kent Financial Corporation and Bank of America’s acquisition of Lasalle Bank. In some cases, when these consolidations occurred, the ensuing employee and customer disruptions created opportunities for us to attract experienced personnel and establish relationships with customers wishing to conduct business with a locally-managed institution with strong ties to the community. We have positioned ourselves to capitalize on business opportunities that may result from customer dislocation associated with these and future consolidations.

Control Our Operating Costs.Our practice of employing fewer, but highly qualified and productive individuals at all levels of the organization is key to maintaining a decentralized management structure. These individuals are able to manage large loan portfolios, which increases interest income while controlling personnel costs. Additionally, we continue to enhance our operating procedures and in 2004 we opened an operations center in Allen Park, Michigan that consolidated many of our administrative and support functions. This facility houses our data processing, accounting, auditing, compliance and customer support activities.

Focus on Commercial Real Estate Lending.While we offer a full range of consumer and commercial loan products, our primary lending focus will continue to be providing local businesses with loans secured by owner-occupied real estate. Typically, we seek commercial real estate lending relationships with customers borrowing from $500,000 to $4 million. Although our legal lending limit was approximately $9 million as of December 31, 2010, our Board of Directors has set our current in-house lending limit at $6 million. Our in-house limit accommodates the vast majority of lending opportunities we encounter. If local businesses have credit needs beyond the scope of our in-house lending capacity, we may participate out a portion of the credit with other financial institutions in order to accommodate our customers’ needs. As of December 31, 2010, commercial real estate loans comprised 75% of our loan portfolio.

Market Area

Our current market area includes Wayne, Oakland, Macomb and Washtenaw Counties, which are all located in southeastern Michigan. We currently have offices in the following communities: Ann Arbor, Auburn Hills, Bingham Farms, Birmingham, Bloomfield Township, Canton Township, Clinton Township, Dearborn, Dearborn Heights, Plymouth Township, Saline, Shelby Township, Southfield and Southgate, Michigan. Our market area has a diverse economy based primarily on manufacturing, retail and service businesses and contains the headquarters for twenty-three Fortune 500 companies. According to 2000 U.S. Census Data, the populations of Wayne (excluding the City of Detroit), Oakland, Macomb and Washtenaw Counties totaled 3,414,967, while median household incomes for such counties were $50,848, $69,794, $58,598 and $59,069, respectively.

Our market area represents a significant banking market in the State of Michigan. According to the FDIC, total deposits in Wayne (excluding the City of Detroit), Macomb, Washtenaw, and Oakland Counties, including those of banks and thrifts, were approximately $72.7 billion as of June 30, 2010, which accounted for approximately 46.7% of the total deposit market share in the State of Michigan and has increased approximately 44.0% from $50.5 billion in deposits as of June 30, 2000.

Marketing Plan

The Bank’s marketing plan emphasizes direct sales calls by Bank officers and branch managers and specific telemarketing programs involving branch personnel. The marketing plan also focuses on the concepts of corporate citizenship and personal interaction within the communities the Bank serves through promotion of, and active participation in a number of civic organizations and ongoing community activities. Management believes that these efforts establish the identity and philosophy of the Bank within the communities it serves and allows bank officers and employees to personally interact with local business leaders and members of the public.

The Bank has two primary target markets: personal banking services, with an emphasis on individual deposit accounts and single-family residential lending; and business banking services, with an emphasis on deposit and loan products designed for small- to medium-sized businesses.

Community Club. At inception, the Bank established a “Community Club” which has become an important marketing initiative to increase the Bank’s total deposits. The Community Club is targeted at individuals 50 years of age or older. As of December 31, 2010, the Community Club had over 6,700 members who accounted for total deposits of $597.6 million, or 73% of the Bank’s total deposits.

Among other things, membership in the Community Club entitles the customer to increased personal attention and service by Bank staff. The Bank also hosts local community events and educational seminars which have been well-received by the Community Club members. Management believes that the success of the Community Club and the Bank’s continued efforts to expand the benefits of the program will foster an increase in the number of Community Club members and deposit accounts.

Business Financial Services.The Bank’s business marketing efforts are directed by senior management, including Michael J. Ross, Warren R. Musson and Jeffrey J. Wolber. Lee Freeland as Vice President of Sales Administration is responsible for administering and coordinating the retail business development efforts of the Bank.

The Bank has developed a one-on-one marketing approach for existing and prospective customers alike. Utilizing the Bank’s database, existing clients are identified to determine their current banking products, services provided, and for additional cross selling opportunities to enhance the account relationship. With the calling efforts of our branch managers, business development and lending officers, bank personnel conduct on-site client interviews with the responsibility of creating new business opportunities for the Bank.

In addition to its marketing program, the Bank’s officers maintain contact with existing customers, local attorneys, accountants and other representatives in the local community that may be in a position to refer business to the Bank. The Bank also encourages and supports its officers and employees to join and participate in various community organizations and events.

Through their many years of business and community leadership, each of the Corporation’s Directors has been, and will continue to be, a strong source of referrals for the Bank.

Consumer Financial Services.The Bank originates residential real estate loans primarily through its retail branch facilities. Branch managers and mortgage loan originators develop new residential mortgage applications from several sources including real estate brokers, insurance agents, accountants, attorneys, existing residential mortgage customers and other customers of the Bank. An extensive telemarketing effort generates potential customers as a result of these contacts.

The Bank, as a result of its secondary market operations, is able to offer a variety of loan products that serve the needs of its customers. The Bank also provides loans that it holds in its own portfolio on those transactions that evidence satisfactory credit quality and income but are unable to be sold in the secondary market for various reasons. The Bank does not originate sub-prime mortgages for its portfolio.

Management believes that cross-selling of the Bank’s products and services to its existing customers is vital to expanding account relationships, generating additional sales opportunities and increasing fee income.

Loan Policy

As a routine part of the Bank’s business, the Bank makes loans to individuals and businesses located within the Bank’s market area. The loan policy of the Bank states that the function of the lending operation is two-fold: to provide a means for the investment of funds at a profitable rate of return with an acceptable degree of risk, and to meet the credit needs of the responsible businesses and individuals who are customers of the Bank. However, the Board of Directors of the Bank recognizes that in the normal business of lending, some losses on loans will be inevitable and should be considered a part of the normal cost of doing business. Under the loan policy, individual lending authority for loans in excess of $100,000 is granted to a limited number of officers, each of whom has over 25 years of banking experience. Currently this group includes Michael J. Ross and Warren R. Musson. They are authorized to lend up to $100,000 unsecured and $1,000,000 for collateralized loans. Historically, these authorities have been used sparingly.

The Bank’s loan policy anticipates that priorities in extending loans will change from time to time as interest rates, market conditions and competitive factors change. The policy sets forth guidelines on a nondiscriminatory basis for lending in accordance with applicable laws and regulations. The policy describes various criteria in granting loans, including the ability to pay; the character of the customer; evidence of financial responsibility; purpose of the loan; knowledge of collateral and its value; terms of repayment; source of repayment; payment history; and economic conditions.

The loan policy specifies individual lending limits for certain officers up to a maximum of $25,000 for unsecured loans and $100,000 for secured loans. When certain officers have the approval of certain other officers, these limits may be increased to $100,000 for unsecured loans and $500,000 for secured loans. Loans of greater than $500,000 normally require the approval of our Loan Committee unless approved by Michael J. Ross or Warren R. Musson up to their authorized limits and loans greater than $1,000,000 require the approval of our Executive Loan Committee, which requires the attendance of at least three outside members of the Bank’s Board of Directors for a quorum. Loans in excess of $6,000,000 up to the legal maximum authorized by law require the approval of our Board of Directors.

The loan policy also limits the amount of funds that may be loaned against specified types of collateral including: listed securities with a share price greater than $10 — not greater than 80% loan to value; listed securities with a share price less that or equal to $10 — not greater than 50% loan to value; U.S. Government securities — not greater than 90% loan to value; Municipal securities — not greater that 80% loan to value; and insured bank deposits — not greater than 100% loan to value. As to loans secured principally by real estate, the policy complies with the FIRREA Act of 1989 and subsequent interagency appraisal and evaluation guidelines regarding appraisals of the property offered as collateral by licensed independent appraisers. The loan policy also provides general guidelines as to collateral, provides for environmental reviews, contains specific limitations with respect to loans to employees, executive officers and directors, provides for problem loan identification, establishes a policy for the maintenance of a loan loss reserve, provides for loan reviews and sets forth policies for mortgage lending and other matters relating to the Bank’s lending business.

Lending Practices

Commercial Loans.Our commercial lending group originates commercial loans primarily in Wayne, Oakland, Macomb and Washtenaw Counties in southeastern Michigan. Commercial loans are originated by a group of lending officers with the assistance of Michael J. Ross and Warren R. Musson. Loans are originated for general business purposes, including working capital, accounts receivable financing, machinery and equipment acquisition, and commercial real estate financing including new construction.

Working capital loans are often structured as a line of credit and are reviewed periodically in connection with the borrower’s year-end financial reporting. These loans generally are secured by all of the assets of the borrower, a personal guaranty of the owners and have an interest rate plus a margin tied to the Fidelity Bank prime rate. Loans for machinery and equipment purposes typically have a maturity of five to seven years and are fully amortizing. Commercial real estate loans are usually written with a five-year maturity and are amortized over a fifteen to twenty-year period. Commercial real estate loans may have an interest rate that is fixed to maturity or float with a margin over the prime rate or another index. All loans typically contain a pre-payment premium and many floating rate loans contain interest rate floors to protect the Bank’s net interest margin.

We evaluate all aspects of a commercial loan transaction in order to minimize credit and interest rate risk. Underwriting includes an assessment of management, products, markets, cash flow, capital, income and collateral. The analysis includes a review of historical and projected financial results. Appraisals are normally obtained by licensed independent appraisers who are well known to us on transactions involving real estate and, in some cases, equipment.

Commercial real estate lending has historically involved more risk than residential lending, because loan balances are greater and repayment is dependent upon the borrower’s operations. We attempt to minimize risk associated with these transactions by limiting our exposure to existing well-known customers and new customers with an established profitable history. Risk is further reduced by limiting the concentration of credit to any one borrower as well as the type of commercial real estate financed.

The Bank has established a Special Assets Group within the Lending Department. This group consists of a Group Manager and five workout officers. Two of these workout officers are attorneys licensed to practice law in the State of Michigan. These professionals are responsible for the management of non-performing loans and the disposal of non-performing assets. Additionally, the Bank has formed a Special Assets Committee that meets bi-weekly. This Committee consists of the Head of Lending, Head of Credit and the Special Assets Manager and workout officers. This Committee discusses the status of these non-performing assets and strategies and actions concerning these assets that would further the Bank’s interests.

Residential Real Estate Loans.We originate residential real estate loans in our market area according to secondary market underwriting standards. These loans provide borrowers with a fixed interest rate with terms up to thirty years. Loans are sold on a servicing released basis in the secondary market with all interest rate risk and credit risk passed to the purchaser. The Bank from time to time may elect to underwrite certain residential real estate loans to be held in its own loan portfolio. These loans are generally underwritten with the same standards that apply to the secondary market. The majority of the portfolio loans have a fixed rate of interest for the first five years, then the interest rate is indexed to the one-year treasury rate and adjusts annually. Underwriting standards include verifying the income of potential borrowers and confirming their ability to repay. It has not been our practice to make “no document” loans or other sub-prime loans.

Consumer Loans.We originate consumer loans for a wide variety of personal financial requirements. Consumer loans include home equity lines of credit, and loans secured by new and used automobiles, boats, savings accounts as well as overdraft protection for checking account customers. We also purchase retail installment loans from a select list of automobile dealerships located primarily in our market.

Consumer loans, except for home equity lines of credit, generally have shorter terms and higher interest rates than residential mortgage loans and usually involve more credit risk than mortgage loans because of the type and nature of the collateral. While we do not utilize a formal credit scoring system, we believe our loans are underwritten carefully, with a strong emphasis on the amount of the down payment, credit quality, employment stability, and monthly income. These loans are generally repaid on a monthly repayment schedule with the source of repayment tied to the borrower’s periodic income. In addition, consumer lending collections are dependent on the borrower’s continuing financial stability, and are thus likely to be adversely affected by job loss, illness and personal bankruptcy. In many cases, repossessed collateral for a defaulted consumer loan will not provide an adequate source of repayment of the outstanding loan balance because of depreciation of the underlying collateral. We believe that the generally higher yields earned on consumer loans compensate for the increased credit risk associated with such loans and that consumer loans are important to our efforts to serve the credit needs of the communities and customers that we serve.

Allowance for Loan Losses.An allowance for loan losses is maintained at a level that we consider adequate to provide for losses in the loan portfolio. Allowances for loan losses are based upon our experience and estimates of the net realizable value of collateral in each loan portfolio. Our Board of Directors and senior management review the allowance quarterly. Our evaluation takes into consideration experience, the level of classified assets, non-performing loans, the current level of the allowance as it relates to the total loan portfolio, current economic conditions, recent regulatory examinations and other factors.

In determining the allowance for loan losses, we consider three principal elements: (i) specific allocations based on probable losses identified during the review of the loan portfolio, (ii) allocations based principally on the likelihood that the status of performing loans will decline to non-performing status, and (iii) additional allowances based on subjective factors, including local and general economic business factors and trends and portfolio concentrations.

The first element reflects our estimate of probable losses based upon our systematic review of specific loans. These estimates are based upon a number of objective factors, such as payment history, financial condition of the borrower, and discounted collateral exposure.

As further discussed below, we have developed a risk rating system that is applied to our commercial loan portfolio. Loans rated 5 or 6 are deemed “Criticized”, while loans rates 7 or higher are deemed “Classified”. Classified loans with a balance of $500,000 or greater that are classified as non-accrual are considered to be impaired, as defined by ASC 310-40 (formerly known as SFAS 114). A collateral analysis is performed on these loans to determine if the collateral is sufficient to secure these loans. If there is a collateral shortfall, the loan is charged down to the level of the collateral value. If applicable, portions of our allowance are assigned to individual loans based on this analysis.

Loans classified as Troubled Debt Restructuring (“TDR loans”) are also classified as impaired loans. A TDR loan occurs when a borrower is granted a temporary concession to enable the borrower to fulfill the debt service obligations with the Bank. Once the term of the TDR loan has concluded, the loan will return to its previous contractual terms. These loans are analyzed on a cash flow or collateral value basis to determine if an allocation in the allowance for loan losses is necessary. If necessary, portions of our allowance are assigned to individual TDR loans based on this analysis.

Commercial loans not classified as impaired, homogeneous mortgage and consumer loans are provided for in the allowance for loan losses computation by allocations based upon loan grade and type. These allocations include consideration of a variety of objective and subjective factors including our historical loss experience, delinquent status, the purpose and size of the loan, its collateral type, the current economic environment and other business factors and trends that we believe impact the ability of our borrowers to repay their obligations.

Delinquent Loans, Non-performing Assets and Classified Assets.When a borrower fails to make a required payment on a loan, our Bank attempts to cause the deficiency to be cured by contacting the borrower. In many cases, deficiencies are cured as a result of these collection efforts.

When a borrower fails to make a timely payment, the borrower will receive a delinquency notice within 5 days of the due date. When the payment reaches 15 days past due, a second notice will be sent and a phone call will be made. This process is repeated if the account remains delinquent at 25 days. In many cases, delinquencies are paid promptly. Generally, if a real estate loan becomes 90 days delinquent, the borrower and collateral will be assessed to determine whether foreclosure action is required. When deemed appropriate by management, a foreclosure action will be instituted or a deed in lieu of foreclosure, short sale or loan modification will be pursued.

Loans that are 90 days past due and are not well secured and in the process of collection will be placed on non-accrual status. Under-collateralized loans that are 90 days past due will be fully or partially charged-off. The amount charged-off will be charged against the loan loss allowance.

Our Bank has developed a risk-rating system to quantify loan quality. The system assigns a risk rating from 1 to 9 for each loan. Loans graded 1 to 4 are rated “Pass”, while loans graded 5 and 6 are rated “Criticized”. Classified loans are those with a risk rating of 7 or higher. Each loan rating is determined by analyzing the borrowers’ management, financial ability, sales trends, operating results, financial conditions, asset protection, contingencies, payment history, financial flexibility, credit enhancements and other relevant factors. Loans that fall into the classified categories are monitored on a regular basis and proper action is taken to minimize our Bank’s exposure. Losses or partial losses will be taken when they are recognized.

The Bank’s risk rating system is similar to that used by regulatory agencies. Problem assets are classified as “substandard” (risk rating 7), “doubtful” (risk rating 8) or “loss” (risk rating 9). “Substandard” assets have one or more defined weaknesses and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. “Doubtful” assets have the same weaknesses as “substandard” assets, with the additional characteristics that (i) the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable and (ii) there is a high possibility of loss. An asset classified “loss” is considered uncollectible and of such little value that its continuance as an asset of the institution is not warranted. The regulations also contain “special mention” (risk rating 6) and “watch credit” (risk rating 5) categories, consisting of assets which do not currently expose an institution to a sufficient degree of risk to warrant classification but which possess credit deficiencies or potential weaknesses deserving management’s close attention.

Generally, our Bank classifies as “substandard” all loans that are delinquent more than 90 days and non-accruing, unless management believes the delinquency status is short-term due to unusual circumstances. Loans delinquent fewer than 90 days may also be classified if the loans have the characteristics described above rendering classification appropriate.

The aggregate amounts of our Bank’s criticized and classified assets at December 31, 2010, and December 31, 2009 were as follows (dollars in thousands):


				December 31,		December 31,
	Rating		2010		2009
Watch Credit		5	$	77,119	$	74,560
Special Mention		6		77,025		64,987
Substandard		7		171,378		134,839
Doubtful		8		85		6,381
Loss		9		—		—

Total classified assets			$	325,607	$	280,767

Criticized and classified assets increased $14.6 million and $30.2 million, respectively, during the year ended December 31, 2010. The economic slowdown in our market area has resulted in an increase in the number and dollar amount of classified loans. At December 31, 2010, criticized and classified assets had a specific allocation of the allowance to loan losses of $10.8 million.

The following table reflects the amount of loans in delinquent status as of December 31, 2010 and 2009 (dollars in thousands):


	December 31,			December 31,
	2010			2009
Loans delinquent
30 — 89 days		18,302			9,713
90 or more days and still accruing		—			—
Non-accruing		66,563			49,341
Total delinquent loans		84,865			59,054


Ratio of total delinquent loans to total loans		11.53	%		7.09	%

The increase in non-accruing loans during the year ended December 31, 2010 is primarily due to downgrading 110 loans with a balance of $48,140,000 to non-accrual status. The primary cause of the increase in non-accruing loans is primarily related to the Bank’s commercial and commercial real estate loans as well as loans financing the development and construction of residential property. The downturn in economic activity experienced during 2008 — 2010 continues to impact the residential real estate market during 2011 as well as to significantly impact the Bank’s commercial and commercial real estate mortgage portfolios. This downturn has also led to a significant decline in collateral values of all types of real property. However, the local economy has begun to shows signs of improvement during 2010. We have seen modest improvements in the quality of our loan portfolio as the level of delinquencies and non-performing loans have stabilized during the last half of 2010. These positive trends have not yet materialized into an improvement in the level of valuations of real estate in the Bank’s market area.

The distribution of loans downgraded to non-accrual status during 2010 (dollars, in thousands) is as follows:


	Number of
	Loans		Balance
Consumer loans		15	$	1,497
Commercial, financial, & other		30		8,912
Commercial real estate construction — residential property		10		9,613
Commercial real estate construction — non residential property		—		—
Land development loans — residential property		4		5,391
Land development loans — non residential property		1		317
Commercial real estate mortgages		41		21,721
Residential real estate mortgages		9		689


Total loans downgraded to non-accrual status		110	$	48,140

Deposits and Other Services

Deposits.We offer a broad range of deposit services, including checking, savings, and money market accounts, certificates of deposit and direct deposit services. Transaction accounts and certificates of deposit are tailored to our primary market area at rates competitive with those offered in our area. All deposit accounts are insured by the FDIC up to the maximum amount permitted by law. We acquire deposit accounts from individuals, businesses, associations, financial institutions and government entities.

Other Services.We offer a courier service for the deposit convenience of our business customers. We also offer online banking and a voice response, automated telephone banking service, available 24 hours a day and check imaging options including statements on CD ROM.

Investments

Our principal investments are our investment in the common stock of our Bank and the common securities of the trust. Our funds may be invested from time to time in various debt instruments, including obligations of or guaranteed by the United States, general obligations of a state or political subdivision or an agency of a state or political subdivision, banker’s acceptances or certificates of deposit of United States commercial banks, or commercial paper of United States issuers rated in the highest category by a nationally-recognized investment rating service. We are permitted to make unlimited portfolio investments in equity securities and to make equity investments in subsidiary corporations engaged in certain non-banking activities, including real estate-related activities such as mortgage banking, community development, real estate appraisals, arranging equity financing for commercial real estate, and owning and operating real estate used substantially by our Bank or acquired for its future use. However, we have no present plans to make any of these equity investments.

Our Bank may invest its funds in a wide variety of debt instruments and may participate in the federal funds market with other depository institutions. Subject to certain exceptions, our Bank is prohibited from investing in equity securities. Under one exception, in certain circumstances and with the prior approval of the FDIC, our Bank could invest up to 10% of its total assets in the equity securities of a subsidiary corporation engaged in the acquisition and development of real property for sale, or the improvement of real property by construction or rehabilitation of residential or commercial units for sale or lease. Our Bank has no present plans to make such an investment. Real estate acquired by our Bank in satisfaction of or foreclosure upon loans may be held by our Bank. Our Bank is also permitted to invest in such real estate as is necessary for the convenient transaction of its business. Our Bank’s Board of Directors may alter the investment policy without stockholder approval at any time.

Employees

As of December 31, 2010, the Bank had 191 employees, including 71 officers and 120 customer service, operations and other support persons. Management believes that the Bank’s relations with its employees are excellent.

Competition

The Bank faces strong competition for deposits, loans and other financial services from numerous banks, savings banks, thrifts, credit unions and other financial institutions as well as other entities which provide financial services, including consumer finance companies, securities brokerage firms, mortgage brokers, insurance companies, mutual funds, and other lending sources and investment alternatives. Some of the financial institutions and financial services organizations with which the Bank competes are not subject to the same degree of regulation as the Bank. Many of the financial institutions and financial services organizations aggressively compete for business in the Bank’s market area. Most of these competitors have been in business for many years, have established customer bases, are larger, have substantially higher lending limits than the Bank, and are able to offer certain services that the Bank does not currently provide, including more extensive branch networks, trust services, and international banking services. In addition, most of these entities have greater capital resources than the Bank, which, among other things, may allow them to price their services at levels more favorable to the customer and to provide larger credit facilities than could the Bank. Additionally, legislation regarding interstate branching and banking may increase competition in the future from out-of-state banks.

Supervision and Regulation

The Corporation is a registered bank holding company and subject to the supervision of the Federal Reserve System (“Federal Reserve”). The Corporation is required to file with the Federal Reserve annual reports and such other information as the Federal Reserve may require under the Bank Holding Company Act of 1956, as amended (the “Act”). The Corporation and the Bank are each subject to examination by the Federal Reserve.

The Act requires every bank holding company to obtain prior approval of the Federal Reserve before it may merge with or consolidate into another bank holding company, acquire substantially all assets of any bank, or acquire ownership or control of any voting shares of any bank, if after such acquisition, it would own or control, directly or indirectly, more than 5% of the voting shares of such bank holding company or bank. The Federal Reserve may in its discretion approve the acquisition by the Corporation of the voting shares or substantially all assets of a bank located in Michigan and, subject to certain restrictions, located in any other state.

The Act also prohibits a bank holding company, with certain exceptions, from acquiring direct or indirect ownership or control of more than 5% of the voting shares of any company that is not a bank, and from engaging in any business other than that of banking, managing and controlling banks and their subsidiaries. Holding companies may engage in, and may own shares of companies engaged in, certain businesses found by the Federal Reserve to be closely related to banking or the management or control of banks. Under current regulations of the Federal Reserve, a holding company and its non-bank subsidiaries are permitted to engage in investment management, sales and consumer finance, equipment leasing, data processing, discount securities brokerage, mortgage banking and brokerage, and other activities. These activities are subject to certain limitation imposed by the regulations.

Transactions between the Corporation and the Bank are subject to various restrictions imposed by state and federal law. Such transactions include loans and other extensions of credit, purchases of securities, any payments of fees and other distributions. Federal law places restrictions on the amount and nature of loans to executive officers, directors and controlling persons of banks insured by the Federal Deposit Insurance Corporation and holding companies controlling such banks.

The Bank is a state chartered bank and subject to regulation and examination by the Michigan Office of Financial and Insurance Services. The Bank also is subject to certain provisions of the Federal Deposit Insurance Act and regulations issued under that act. The regulations affect many activities of the Bank, including the permissible types and amounts of loans, investments, capital adequacy, branching, interest rates payable on deposits, required reserves, and the safety and soundness of the Bank’s practices. The Bank is not a member bank of the Federal Reserve System and is regulated and examined by the Federal Deposit Insurance Corporation.

A summary of consolidated net interest income, consolidated net interest income volume / rate analysis, rate sensitivity analysis / gap analysis and capital ratios is set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2010 Annual Report to Stockholders and is incorporated herein by reference.

Consent Order

Due to our financial condition, the Federal Deposit Insurance Corporation (“FDIC”) and the Office of Financial and Insurance Regulation for the State of Michigan (“OFIR”) required that our board of directors sign a formal enforcement action (“Consent Order”) with the FDIC and OFIR which conveys specific actions needed to address certain findings from their examination and to address our current financial condition. While management disagreed with a number of conclusions of the exam and was disappointed with the management of the exam, the Bank’s Management Team and Board of Directors agreed to the stipulations of the Consent Order. On February 12, 2010, the Bank received this an executed copy of this Consent Order, which became effective February 22, 2010. The stipulations of this Consent Order include the following:

•

Completion of a senior management study by an independent consultant

•

Plans for the reduction of delinquencies and classified assets

•

Plans for lending and collection policies

•

Plans for the reduction of loan concentrations

•

The revision and implementation of a comprehensive strategic plan

•

The revision of its Liquidity Plan and the submission of weekly liquidity reports to the FDIC and OFIR

The Consent Order also includes a capital directive, which requires us to achieve and maintain tier 1 capital as a percentage of total assets of 9% or higher and total capital as a percentage of risk-weighted assets of 12% or higher within 120 days from the effective date of the order. These ratios are in excess of the statutory minimums to be well-capitalized. The Bank submitted a Capital Restoration Plan (“CRP”) to the FDIC and OFIR on December 15, 2009, due to our undercapitalized status based on our September 30, 2009 regulatory report of condition and income. The CRP addresses, among other things, the steps management will take to cause our capital levels to return to the minimum level to be adequately capitalized.

This CRP was rejected because capital has not been successfully raised within the 120 days of the issuance of the consent order. An amended CRP was submitted on May 24, 2010. This CRP was also rejected because capital has not been successfully raised.

Our bank is currently undercapitalized. Failure to meet the minimum ratios set forth in the Consent Order could result in regulators taking additional enforcement action against us. With the exception of raising additional capital, management believes that it has met all of the provisions of the consent order.

Executive Officers of the Corporation and Bank

Set forth below are the names and ages of the executive officers of the Corporation and the Bank, positions held and the years from which held. There are no family relationships among such persons.

John E. Demmer, 87

Chairman of the Board, Dearborn Bancorp, Inc. and Fidelity Bank

Chairman of the Board and Director of the Corporation since 1992. Chairman of the Board and Director of the Bank since 1993. Chairman of the Board and Chief Executive Officer of Jack Demmer Ford, Inc. since 1994. Chairman of the Board and Chief Executive Officer of Jack Demmer Lincoln Mercury, Inc since 1999.

Michael J. Ross, 60

President and Chief Executive Officer, Dearborn Bancorp, Inc.

President and Chief Executive Officer, Fidelity Bank

President and Chief Executive Officer of the Corporation since 2003. President and Director of the Corporation since 1998. Vice President and Director of the Corporation from 1993 to 1997. President, Chief Executive Officer, and Director of the Bank since 1993.

Jeffrey L. Karafa, 46

Vice President, Treasurer and Secretary, Dearborn Bancorp, Inc.

Senior Vice President, CFO and Secretary, Fidelity Bank

Vice President and Treasurer of the Corporation since 1998. Secretary of the Corporation since 1999. Senior Vice President and CFO of the Bank since 2000. Secretary of the Bank since 1999. Vice President of the Bank from 1996 to 1999. Assistant Vice President of the Bank from 1994 to 1996.

Warren R. Musson, 53

Senior Vice President, Head of Lending, Fidelity Bank

Senior Vice President of the Bank since 2000. Vice President of the Bank during 1999. Senior Vice President and Senior Loan Officer of Peoples State Bank from 1993 to 1999.

Jeffrey J. Wolber, 54

Senior Vice President, Branch Operations, Fidelity Bank

Senior Vice President of the Bank since 2000. Vice President of the Bank from 1994 to 1999.

Item 1A. Risk Factors

The following risk factors could affect our business, financial conditions or results of operations. These risk factors should be considered in connection with evaluating the forward-looking statements contained in this Annual Report because they could cause the actual results and conditions to differ materially from those projected in forward-looking statements. The risks that are highlighted are not the only ones we face. If the adverse matters referred to in any of the risks actually occur, our business, financial condition or operations could be adversely affected.

The Corporation may not be able to meet federal regulatory requirements regarding the restoration of capital of the Bank.

As of December 31, 2010, the Bank is “undercapitalized” by regulatory capital standards. As a result, the Bank has submitted a detailed, written Capital Restoration Plan, specifying the steps the Bank and the Corporation will take to bring the Bank’s capital ratios back into compliance with minimum applicable capital ratios. The plan must also include a statutorily-required guarantee of the Bank’s performance of the plan by its sole shareholder, the Corporation, which guarantee may require assurances, such as a pledge of the Corporation’s assets. The Capital Restoration Plan (“CRP”) has been be submitted to the Bank’s federal bank regulator, the FDIC, for approval. This CRP was rejected because capital has not been successfully raised within the 120 days of the issuance of the consent order. An amended CRP was submitted on May 24, 2010. This CRP was also rejected because capital has not been successfully raised.

The Bank’s ability to comply with the requirements of the Capital Restoration Plan that was submitted, are uncertain. Although the Corporation is actively considering alternatives for raising capital, no adequate and satisfactory source of additional capital has been found. The Corporation’s ability to raise additional capital is significantly restricted by several factors, and there is a meaningful possibility the Corporation will not be successful in raising additional capital and meeting the regulatory requirements.

We are currently under a Consent Order which includes a capital directive that requires the Bank to have and maintain its level of tier 1 capital as a percentage of total assets (capital ratio) at a minimum of 9% and its level of qualifying total capital as a percentage of risk-weighted assets (total risk-based capital ratio) at a minimum of 12%. These ratios are in excess of the statutory minimums to be well-capitalized. At December 31, 2010, the Bank’s capital ratio was 3.95% and the Bank’s total risk-based capital ratio was 6.17%. Additionally, the Bank is prohibited from declaring or paying any cash dividends without prior consent of the FDIC.

The Bank’s capital may not be sufficient to support the risk inherent in its loan portfolio.

The Bank maintains capital as a means of absorbing losses resulting from the Bank’s operations. The recent losses incurred by the Bank have significantly depleted the Bank’s capital, resulting in the Bank being considered “undercapitalized” pursuant to regulatory capital standards. Among other things, a continuing decline in the collectability of the Bank’s loans, a continuing decline in the value of the collateral supporting those loans, or both, would require the Bank to increase its allowance for loan and lease losses, which would further deplete existing capital. Because of the difficult economic conditions in the areas where the Bank operates, it is reasonable to assume the Bank will continue to incur operating losses. The Bank’s current capital may be insufficient to absorb future operating losses and, unless the Bank is successful in raising additional capital or taking other steps meaningfully to reduce the risk in its loan portfolio, this lack of capital is likely to have a material adverse effect on the Corporation’s business, results of operations, and financial condition and, in extreme circumstances, could result in the closure or liquidation of the Bank.

Further deterioration of the real estate market and the economy would further materially adversely affect the Corporation’s business, liquidity and financial results.

The Bank’s loan portfolio is concentrated in loans secured by commercial real estate. As a result, the significant downturn in the real estate market has had a substantial negative effect on the Bank’s business and has contributed to increased levels of delinquent and non-accruing assets, charge-offs and loss reserves. These events, if they continue or worsen, will have a further material adverse effect on the business, financial condition and results of operation of the Bank and the Corporation.

The Bank will be subject to higher deposit insurance premiums as a result of its capital position.

As a member of the FDIC, the Bank pays assessments to the FDIC quarterly for insurance of the deposits of its customers to the extent and in the manner set forth in the Federal Deposit Insurance Act, as amended, and regulations of the FDIC. The amount of the deposit insurance assessment is determined by multiplying an assessment rate, established for each institution by the FDIC on a risk-adjusted basis, times the institution’s assessment base, as determined from its quarterly report of condition. The risk-adjustment to the assessment rate involves the assignment by the FDIC of each insured institution to one of four risk categories, which reflect the institution’s capital position and supervisory evaluations. An initial assessment rate is determined on the basis of the assigned risk category, and then adjusted further (either up or down) for other characteristics of the institution, including outstanding unsecured and secured debt, and for some institutions, reliance on brokered deposits. The resulting total assessment rates currently may range from 7-24 basis points for well-capitalized banks having the best supervisory evaluations, to 40-77.5 basis points for banks presenting the greatest risk to the Deposit Insurance Fund (“DIF”) of the FDIC. The assessment rate range possible for an undercapitalized institution such as the Bank currently is 40-77.5 basis points.

A segment of the Bank’s loans are construction loans which involve the additional risk that a project may not be completed, increasing the risk of loss.

Approximately 7.5% of our real estate loan portfolio as of December 31, 2010 was comprised of construction and land development loans. Repayment of such loans is dependent upon the successful completion of the construction project, on time and within budget, and the successful sale of the completed project. If a borrower is unable to complete a construction project or if the marketability of the completed development is impaired, proceeds from the sale of the subject property may be insufficient to repay the loan. Further deterioration in any of the real estate markets the Bank serves is likely to further damage the marketability of these projects; as a result, the Bank may incur further loan losses which will adversely affect its results of operations.

The Bank may not pay any capital distribution or management fees to the Corporation.

Without the prior approval of the FDIC, the Bank is prohibited from paying any dividend, or making any other capital distribution to, the Corporation. The Bank is also forbidden to pay any management fee to the Corporation. These restrictions may materially adversely affect the cash flow of the Corporation.

Because the Bank is less than well-capitalized, its ability to accept certain types of deposits is limited, which may adversely affect its business, liquidity and financial results.

The Bank is prohibited from accepting funds obtained, directly or indirectly, by or through any deposit broker. The Bank currently has substantial amounts of such deposits. There can be no assurance that the Bank will be able to replace such brokered deposits from other sources. Further, the Bank may not accept employee benefit plan deposits. These restrictions may adversely affect the Bank’s ability to continue to fund its assets at current levels.

The Bank’s ability to grow, to offer new products, or to engage in new lines of business, is subject to regulatory restrictions.

Unless consistent with an approved capital restoration plan and accompanied by a proportionate improvement in its capital ratios, the Bank may not permit any increase, from quarter to quarter, in its average total assets. Further, unless the FDIC finds the proposed action is consistent with the capital restoration plan, the Bank may not, directly or indirectly, acquire any company, depository institution or additional branch office, or engage in any new line of business.

Adverse economic conditions in the automobile manufacturing and related service industries may impact our banking business.

The automobile manufacturing industry has experienced significant economic difficulties over the past several years, which, in turn, has adversely impacted a number of related industries that serve the automobile manufacturing industry, including automobile parts suppliers. The conditions have improved during the past year and conditions in this industry are expected to continue to improve. However, we cannot assure you that the economic conditions in the automobile manufacturing and related service industries will continue to improve at any time or when this improvement in the economic conditions in these industries will impact our Bank.

Adverse changes in economic conditions or interest rates may negatively affect our earnings, capital and liquidity.

The results of operations for financial institutions, including our bank, may be materially and adversely affected by changes in prevailing local and national economic conditions, including declines in real estate market values and the related declines in value of our real estate collateral, rapid increases or decreases in interest rates and changes in the monetary and fiscal policies of the federal government. Our profitability is heavily influenced by the spread between the interest rates we earn on investments and loans and the interest rates we pay on deposits and other interest-bearing liabilities. Substantially all our loans are to businesses and individuals in southeastern Michigan, and any decline in the economy of this area could adversely affect our customers’ ability to repay such loans and our ability to make new loans to credit worthy borrowers. Like most banking institutions, our net interest spread and margin will be affected by general economic conditions and other factors that influence market interest rates and our ability to respond to changes in these rates. At any given time, our assets and liabilities will be such that they will be affected differently by a given change in interest rates.

Difficult market conditions will continue to adversely affect the financial services industry.

Dramatic declines in the housing market during 2008 and 2009, with falling home prices and increasing foreclosures, unemployment and under-employment, have negatively impacted the credit performance of real estate related loans and resulted in significant write-downs of asset values by financial institutions. While market conditions have improved in 2010, the real estate market values have not yet recovered. The write-downs, initially of asset-backed securities but spreading to other securities and loans, have caused many financial institutions to seek additional capital, to merge with larger and stronger institutions and, in some cases to fail. Reflecting concern about the stability of the financial markets generally and the strength of counterparties, many lenders and institutional investors have reduced or ceased providing funding to borrowers, including to other financial institutions. This market turmoil and tightening of credit have led to an increased level of commercial and consumer delinquencies, declines in asset values, lack of consumer confidence, increased market volatility and widespread reduction of business activity generally. The resulting economic pressure on consumers and lack of confidence in the financial markets has adversely affected our business, financial condition and results of operations. Market developments may affect levels of consumer confidence and may cause changes in payment patterns, causing increases in delinquencies and default rates, which may impact out charge-offs and provision for loan loss. A worsening of these conditions would likely exacerbate the adverse effects of these difficult market conditions for us and others in the financial institutions industry.

Our credit losses could increase and our allowance for loan losses may not be adequate to cover actual loan losses resulting in a decrease in our net income and earnings per share and a possible decline in our stock price.

The risk of non-payment of loans is inherent in all lending activities, and non-payment, if it occurs, may have a materially adverse effect on our earnings and overall financial condition as well as the value of our common stock. Our focus on commercial lending may result in an increased concentration of loans to small businesses. As a result, we may assume greater lending risks than other banks. We make various assumptions and judgments about the collectibility of our loan portfolio and provide an allowance for losses based on several factors. If our assumptions are wrong, our allowance for loan losses may not be sufficient to cover our losses, which would have an adverse effect on our operating results. Due to the significant increase in loans originated since we began operations we cannot assure you that we will not experience an increase in delinquencies and losses as these loans continue to mature. The actual amount of future provisions for loan losses cannot be determined at this time and may exceed the amount of past provisions. Additions to our allowance for loan losses decrease our net income and earnings per share and may have an adverse effect on our stock price.

Our commercial real estate loans involve higher principal amounts than other loans, and repayment of these loans may be dependent on factors outside our control or the control of our borrowers.

Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans generally is dependent, in large part, on sufficient income from the properties securing the loans to cover operating expenses and debt service. Because payments on loans secured by commercial real estate often depend upon the successful operating and management of the properties, repayment of these loans may be affected by factors outside the borrower’s control, including adverse conditions in the real estate market or the economy. If the cash flow from the property is reduced, the borrower’s ability to repay the loan and the value of the security for the loan may be impaired. At December 31, 2010, commercial real estate loans totaled $551 million, or 75% of our total loan portfolio. Because our loan portfolio contains a number of commercial real estate loans with relatively large balances, the deterioration of one or a few of these loans could cause a significant increase in our percentage of non-performing loans. An increase in non-performing loans could result in a loss of earnings from these loans, an increase in the provision for loan losses and an increase in charge-offs, all of which could have a material adverse effect on our financial condition and results of operations.

We rely heavily on our management and other key personnel, and the loss of any of them may adversely affect our operations.

We are and will continue to be dependent upon the services of our management team, including our President and Chief Executive Officer and our other senior managers. Losing one or more key members of the management team could adversely affect our operations.

In addition, we will continue to depend on our key commercial loan officers. We have several commercial loan officers who are responsible, or share responsibility, for generating and managing a significant portion of our commercial loan portfolio. Our success can be attributed in large part to the relationships these officers as well as members of our management team have developed and are able to maintain with our customers as we continue to implement our community banking philosophy. The loss of any of these commercial loan officers could adversely affect our loan portfolio and performance, and our ability to generate new loans.

Some of the other financial institutions in our market require their key employees to sign agreements that preclude or limit their ability to leave their employment and compete with them or solicit their customers. These agreements make it more difficult for us to hire loan officers with experience in our market who can immediately solicit their former or new customers on our behalf.

Our future success is dependent on our ability to compete effectively in the highly competitive banking industry.

We face substantial competition in all phases of our operations from a variety of different competitors. Our future growth and success will depend on our ability to compete effectively in this highly competitive environment. We compete for deposits, loans and other financial services with numerous Michigan-based and out-of-state banks, thrifts, credit unions and other financial institutions as well as other entities that provide financial services. Some of the financial institutions and financial service organizations with which we compete are not subject to the same degree of regulation as we are. Most of our competitors have been in business for many years, have established customer bases, are larger, have substantially higher lending limits than we do and offer other services which we do not, including trust services, brokerage, mutual funds and international banking services. The primary competitors in our market area are JPMorganChase, Charter One Bank, N.A., Comerica Incorporated, Fifth Third Bancorp, National City Corporation and Bank of America. Under the Gramm-Leach-Bliley Act of 1999, effective March 11, 2000, securities firms and insurance companies that elect to become financial holding companies may acquire banks and other financial institutions. The financial services industry is also likely to become more competitive as further technological advances enable more companies to provide financial services. These technological advances may diminish the importance of depository institutions and other financial intermediaries in the transfer of funds between parties.

Growth and stockholder returns may be adversely affected if sources of capital are not available to help us meet them.

Since inception, we have sought to maximize stockholder returns by leveraging our capital. While we believe that earnings from our operations will enable us to continue to grow, if earnings do not meet our current estimates, if we incur unanticipated losses or expenses, or if we grow faster than expected, we may need to obtain additional capital through borrowing, additional issuances of debt or equity securities, or otherwise. If we do not have continued access to sufficient capital, we may be required to reduce our level of assets or reduce our rate of growth in order to maintain regulatory compliance. Under those circumstances our net income and the rate of growth of our net income may be adversely affected.

We are subject to significant government regulation, and any regulatory changes may adversely affect us.

The banking industry is heavily regulated under both federal and state law. These regulations are primarily intended to protect customers, not our creditors or stockholders. As a bank holding company, we are also subject to extensive regulation by the Federal Reserve Board, in addition to other regulatory and self- regulatory organizations. Our ability to establish new facilities or make acquisitions is conditioned upon the receipt of the required regulatory approvals from these organizations. Regulations affecting banks and financial services companies undergo continuous change, and we cannot predict the ultimate effect of these changes, which could have a material adverse effect on our profitability or financial condition.

We continually encounter technological change, and we may have fewer resources than our competitors to continue to invest in technological improvements.

The banking industry is undergoing technological changes with frequent introductions of new technology-driven products and services. In addition to better serving customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs. Our future success will depend, in part, on our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience as well as creating additional efficiencies in our operations. Many of our competitors have substantially greater resources to invest in technological improvements. There can be no assurance that we will be able to effectively acquire and implement new technology-driven products and services or be successful in marketing these products and services to our customers.

Our Articles of Incorporation and Bylaws and the laws of Michigan contain provisions that may discourage or prevent a takeover of the Corporation and reduce any takeover premium.

Our Articles of Incorporation and Bylaws, and the corporate laws of the State of Michigan, include provisions which are designed to provide our board of directors with time to consider whether a hostile takeover offer is in our and our stockholders’ best interest. These provisions, however, could discourage potential acquisition proposals and could delay or prevent a change in control. The provisions also could diminish the opportunities for a holder of our common stock to participate in tender offers, including tender offers at a price above the then-current market price for our common stock. These provisions could also prevent transactions in which our stockholders might otherwise receive a premium for their shares over then-current market prices, and may limit the ability of our stockholders to approve transactions that they may deem to be in their best interests.

The Michigan Business Corporation Act contains provisions intended to protect stockholders and prohibit or discourage various types of hostile takeover activities. In addition to these provisions and the provisions of our Articles of Incorporation and Bylaws, federal law requires the Federal Reserve Board’s approval prior to acquiring “control” of a bank holding company. All of these provisions may delay or prevent a change in control without action by our stockholders, and could adversely affect the price of our common stock.

There is a limited trading market for our common stock.

The price of our common stock has been, and will continue to be, subject to fluctuations based on, among other things, economic and market conditions for bank holding companies and the stock market in general, as well as changes in investor perceptions of the Corporation. This issuance of new shares of our common stock also may adversely affect the market for our common stock.

Our common stock is traded on the Nasdaq Global Market under the symbol “DEAR”. The development and maintenance of an active public trading market depends upon the existence of willing buyers and sellers, the presence of which is beyond our control. While we are a publicly-traded company, the volume of trading activity in our stock is still relatively limited.

Item 1B.Unresolved Staff Comments

We have received no written comments regarding our periodic or current reports from the staff of the Securities and Exchange Commission that were issued 180 days or more before the end of our 2010 fiscal year and that remain unresolved.

Item 2.Properties

The Bank’s main office is located in a single story building containing 11,400 square feet at 22290 Michigan Avenue, Dearborn, Michigan, which is owned by the Corporation and leased to the Bank.

The Bank’s Dearborn Heights, Michigan branch office is located in a 3,240 square foot, single story commercial/retail office building at 24935 W. Warren Avenue at the corner of Silvery Lane, which is also owned by the Corporation. On March 15, 2005, the Bank acquired adjacent property at 24901 W. Warren Avenue in order to expand parking.

The Bank’s Plymouth Township, Michigan branch office is located at 44623 Five Mile at the corner of Sheldon Road and contains 1,595 square feet of leased space in a retail shopping center anchored by a regional grocery store.

The Bank’s Canton Township, Michigan branch office is located in a 6,056 square foot single story commercial/retail office building at 1325 N. Canton Center near the corner of Saltz Road and is owned by the Bank.

The Bank’s Clinton Township, Michigan regional lending center is located at 45000 River Ridge Drive, Suite 110, along Hall Road (M-59) near the corner of Romeo Plank Road. The Bank leases 7,426 of space in the River Ridge Corporate Office Center Building. This lease expires in 2011 and will not be renewed.

The Bank’s Clinton Township, Michigan branch office is located at 19100 Hall Road near Romeo Plank Road. The Bank leases a 3,750 square foot single story commercial/retail office building.

The Bank’s Southgate, Michigan branch office is located in a 2,035 square foot single story building, which is located at 12820 Fort Street and is owned by the Bank.

The Bank’s Auburn Hills, Michigan branch office is located at 3201 University Drive, Suite 180. The Bank currently leases 2,037 square feet of this commercial office building.

The Bank’s Saline, Michigan branch office is located at 450 East Michigan Avenue. The Bank currently leases 2,575 square feet of this single story office building.

The Bank’s Ann Arbor, Michigan regional lending center and branch office is located at 250 West Eisenhower. The Bank currently leases 4,523 square feet of this commercial office building.

The Bank’s Administrative and Wayne Regional Lending Center is located at 1360 Porter Street in Dearborn, Michigan and is owned by the Bank. This office is the executive headquarters of the Corporation. The Bank’s administrative, human resources and commercial lending departments currently occupy this 10,000 square foot, two story building.

The Bank’s Operations Center is located in a 56,820 square foot three story building, which is located at 4000 Allen Road in Allen Park, Michigan and is owned by the Bank.

The Bank’s Birmingham, Michigan branch office and regional lending center is located in a 12,616 square foot two story building at 1040 E. Maple and is owned by the Bank.

The Bank’s Bloomfield Township, Michigan branch office is located at 3681 W. Maple. The Bank leases this 4,320 square foot single story office building.

The Bank’s Bingham Farms, Michigan branch office is located at 30700 Telegraph Road. The Bank leases 1,106 square feet in the Bingham Office Center Complex.

The Bank’s Southfield/Twelve Mile branch office is located at 20000 Twelve Mile Road in Southfield, Michigan and is owned by the Bank.

The Bank’s Galleria branch office is located at 200 Galleria in Southfield, Michigan. The Bank currently leases 1,120 square feet in the Galleria Officenter.

The Bank’s Shelby Township, Michigan branch office is located in a 3,108 square foot single story building, which is located at 7755 23 Mile Road and is owned by the Bank.

The Bank’s Troy Operations center is located in 9,900 square foot office building at 2681 Industrial Row in Troy, Michigan and is owned by the Bank. This office building is no longer being utilized and is 100% leased to a non-affiliated third party tenant.

Item 3.Legal Proceedings

From time to time, the Corporation and its subsidiaries are parties to legal proceedings incidental to their business. At December 31, 2010, there were no legal proceedings which management anticipates would have a material adverse effect on the results of operations or financial position of the Corporation.

Item 4.Reserved

No matters were submitted to a vote of security holders during the fourth quarter of 2010.

PART II

Item 5.Market for Registrant’s Common Equity, and Related Stockholder Matters

The information required by this item appears in the Corporation’s 2010 Annual Report to Stockholders under the caption “Quarterly Common Stock Price Information” and is incorporated by reference herein.

At March 1, 2011, there were 336 record holders of the common stock. In addition, it is estimated that there were approximately 3,500 beneficial owners of common stock who own their shares through brokers or banks.

Item 6.Selected Financial Data

The information required by this item appears in the Corporation’s 2010 Annual Report to Stockholders under the caption “Summary of Selected Financial Data” and is incorporated by reference herein.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information required by this item appears in the Corporation’s 2010 Annual Report to Stockholders under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and is incorporated by reference herein.

Item 7A.Quantitative and Qualitative Disclosure About Market Risk

Item 8.Financial Statements and Supplementary Data

The financial statements included in the Corporation’s 2010 Annual Report to Stockholders are incorporated by reference herein.

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

The information set forth under the caption, “Independent Public Accountants”, in the definitive Proxy Statement of the Corporation dated April 15, 2011 is incorporated by reference herein.

Item 9A.Controls and Procedures

The Report by Dearborn Bancorp, Inc. and Subsidiary on Internal Controls over Financial Reporting in the Corporation’s 2010 Annual Report to Stockholders is incorporated by reference herein.

Item 9B.Other Information

There was no other information to disclose.

PART III

Item 10.Directors and Executive Officers of the Registrant

The information set forth under the caption “Information about Directors and Nominees for Directors” in the definitive Proxy Statement of the Corporation dated April 15, 2011 is incorporated by reference herein.

Reference is made to Part I of this report for information as to executive officers of the Corporation and Bank.

The Corporation has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The members of the Audit Committee consist of Margaret I. Campbell, William J. Demmer, Michael J. Dorian, Jr., Donald G. Karcher and Bradley F. Keller.

The Board of Directors has determined that Bradley F. Keller and Donald G. Karcher, members of the Audit Committee, are qualified as audit committee financial experts, as that term is defined in the rules of the Securities and Exchange Commission. Bradley F. Keller and Donald G. Karcher are independent, as independence for audit committee members is defined in the listing standards of the Nasdaq Stock Market and the rules of the Securities and Exchange Commission.

We have adopted a Code of Ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. The Code of Ethics and any amendments to or waivers from the Code of Ethics, to the extent applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions, are available upon request at no charge. Such requests should be made by writing or calling: Carolyn Wilkins, Corporate Services Officer, 4000 Allen Road, Allen Park, Michigan 48101; (313) 381-3200 or by E-mail at Carolyn.Wilkins @fidbank.com.

Item 11.Executive Compensation

The information set forth under the caption “Executive Compensation” and “Officer Agreements” in the definitive Proxy Statement of the Corporation dated April 15, 2011 is incorporated by reference herein.

Item 12.Security Ownership of Certain Beneficial Owners and Management

The information set forth under the captions “Security Ownership” in the definitive Proxy Statement of the Corporation dated April 15, 2011 is incorporated by reference herein.

The following table summarizes information, as of December 31, 2010, relating to the Corporation’s compensation plans under which its equity securities are authorized for issuance.

Number of Securities to

Weighted average

Number of securities

be issued upon exercise

exercise price of

remaining available for

of outstanding options,

outstanding options,

future issuance under

warrants and rights

equity compensation plans

Plan Category

( a )

( b )

( c )

Equity Compensation Plans approved by security holders ( 1 )

541,621

6.59

89,570

Equity Compensation Plans not approved by security holders

—

Total

541,621

6.59

89,570


(1)		Column ( a ) includes 242,991 shares from the 1994 Stock Option Plan and 298,630 shares from the 2005 Long-Term Incentive Plan. Shares in column ( c ) represent the shares that are available for grant under the 2005 Long-Term Incentive Plan.

Item 13.Certain Relationships and Related Transactions

The information set forth under the caption “Related Transactions” in the definitive Proxy Statement of the Corporation dated April 15, 2011 is incorporated by reference herein.

Item 14.Principal Accountant Fees and Services

The information presented under the caption “Fees Paid to Independent Public Accountants” in the definitive Proxy Statement of the Corporation dated April 15, 2011 is incorporated by reference herein.

PART IV

Item 15.Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)(1) Financial Statements

The following financial statements of the Corporation appear in the Corporation’s 2008 Annual Report to Stockholders and are incorporated by reference in item 8.

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2010 and 2009

Consolidated Statements of Income for the years ended December 31, 2010 and 2009

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2010 and 2009

Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules

No schedules are required under this item.

(3) Exhibits

The Exhibit numbers in brackets being those in such Registration Statements, Form 10-K, Form 10-Q or Form 8-K Reports.


(3)(a)		Articles of Incorporation of Registrant, As Amended. [3(a)] was filed as an Exhibit to the Form 10-Q Report of the Registrant for the quarter ended December 9, 2008 and is incorporated herein by reference.

(3)(b)		By-Laws of the Registrant, As Amended. [3(b)] was filed as an Exhibit to the Form 10-K Report of the Registrant for the fiscal year ended December 31, 1995 and is incorporated herein by reference.

(3)(d)		Amendment to the Bylaws of the Registrant was filed as an exhibit to report on Form 8-K filed on December 18, 2007 and is incorporated herein by reference.

(10)(a)		1994 Stock Option Plan, As Amended. [10(a)] was filed as an Exhibit to the Form 10-Q Report of the Registrant for the quarter ended June 30, 1997 and is incorporated herein by reference. (X)

(10)(a)		2005 Long-Term Incentive Plan [10(a)] was filed as an Exhibit to the Form 10-Q Report of the Registrant for the quarter ended June 30, 2005 and is hereby incorporated by reference. (X)

(10)(b)		Employment Agreement between the Registrant and Michael J. Ross. [10(b)] was filed as an Exhibit to Form 10-Q of the Registrant for the quarter ended June 30, 2003 and is incorporated herein by reference.

(10)(c)		Change in Control Agreement between the Registrant and five officers. [10(c)] was filed as an Exhibit to Form 10-Q of the Registrant for the quarter ended June 30, 2003 and is incorporated herein by reference.

(10.1)		Form of Stock Option Agreement granted to various executive officers. (10.1) was filed as an exhibit to Form 8-K of the Registrant, dated December 6, 2005 and is incorporated herein by reference.

(10.2)		Form of Restricted Stock Agreement granted to various officers. (10.2) was filed as an exhibit to Form 8-K of the Registrant, dated December 6, 2005 and is incorporated herein by reference.

(14)		Code of Ethics of the Registrant (14) was filed as an Exhibit to Form 10-K of the Registrant for the year ended December 31, 2003 and is incorporated herein by reference.

(21)		Subsidiaries of the Registrant (21) was filed as an Exhibit to Form 10-K of the Registrant for the year ended December 31, 2003 and is incorporated herein by reference.

Exhibit (13)		2010 Annual Report to Stockholders.

Exhibit (21)		Subsidiaries of the Registrant

Exhibit (23)		Consent of Independent Registered Public Accounting Firm

Exhibit (31.1)		Rule 13a-14(a) CEO Certification.

Exhibit (31.2)		Rule 13a-14(a) CFO Certification.

Exhibit (32.1)		CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit (32.2)		CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


Exhibit (99)		Consent Order with Federal Deposit Insurance Corporation and Office of Financial and Insurance Regulation with the State of Michigan dated February 12, 2010 was filed as an exhibit to Form 10-K of the Registrant for the year ended December 31, 2009 and is incorporated herein by reference.

(X) A compensatory plan required to be filed as an exhibit.

(b) Reports on Form 8-K

The Corporation filed one report on Form 8-K during the quarter ended December 31, 2010.

Form 8-K dated October 19, 2010, filing a press release announcing Dearborn Bancorp Inc.’s 2010 third quarter earnings.

Form 10-K Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 21, 2011.


	Dearborn Bancorp, Inc.
	By	/s / John E. Demmer
		(John E. Demmer, Chairman of the Board and Director)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 21, 2011.


/s/ Michael J. Ross (Michael J. Ross)	President, Chief Executive Officer and Director (Principal Executive Officer)

/s/ Jeffrey L. Karafa (Jeffrey L. Karafa)	Vice President, Treasurer and Secretary (Principal Financial and Accounting Officer)

/s/ Margaret I. Campbell (Margaret I. Campbell)	Director	/s/ William J. Demmer (William J. Demmer)	Director

/s/ Michael V. Dorian, Jr. (Michael V. Dorian, Jr.)	Director	/s/ Bradley F. Keller (Bradley F. Keller)	Director

/s/ David Himick (David Himick)	Director	/s/ Jeffrey G. Longstreth (Jeffrey G. Longstreth)	Director

/s/ Donald G. Karcher (Donald G. Karcher)	Director	/s/ Dr. Robert C. Schwyn (Dr. Robert C. Schwyn)	Director

Exhibit Index


Exhibit No.		Description

(3)(a)		Articles of Incorporation of Registrant, As Amended. [3(a)] was filed as an Exhibit to the Form 10-Q Report of the Registrant for the quarter ended December 31, 2008 and is incorporated herein by reference.

(3)(b)		By-Laws of the Registrant, As Amended. [3(b)] was filed as an Exhibit to the Form 10-K Report of the Registrant for the fiscal year ended December 31, 1995 and is incorporated herein by reference.

(3)(d)		Amendment to the Bylaws of the Registrant was filed as an exhibit to report on Form 8-K filed on December 18, 2007 and is incorporated herein by reference.

(10)(a)		1994 Stock Option Plan, As Amended. [10(a)] was filed as an Exhibit to the Form 10-Q Report of the Registrant for the quarter ended June 30, 1997 and is incorporated herein by reference. (X)

(10)(a)		2005 Long-Term Incentive Plan [10(a)] was filed as an Exhibit to the Form 10-Q Report of the Registrant for the quarter ended June 30, 2005 and is hereby incorporated by reference. (X)

(10)(b)		Employment Agreement between the Registrant and Michael J. Ross. [10(b)] was filed as an Exhibit to Form 10-Q of the Registrant for the quarter ended June 30, 2003 and is incorporated herein by reference.

(10)(c)		Change in Control Agreement between the Registrant and five officers. [10(c)] was filed as an Exhibit to Form 10-Q of the Registrant for the quarter ended June 30, 2003 and is incorporated herein by reference.

(10.1)		Form of Stock Option Agreement granted to various executive officers. (10.1) was filed as an exhibit to Form 8-K of the Registrant, dated December 6, 2005 and is incorporated herein by reference.

(10.2)		Form of Restricted Stock Agreement granted to various officers. (10.2) was filed as an exhibit to Form 8-K of the Registrant, dated December 6, 2005 and is incorporated herein by reference.

(14)		Code of Ethics of the Registrant (14) was filed as an Exhibit to Form 10-K of the Registrant for the year ended December 31, 2003 and is incorporated herein by reference.

Exhibit (13)		2010 Annual Report to Stockholders.

Exhibit (21)		Subsidiaries of the Registrant

Exhibit (23)		Consent of Independent Registered Public Accounting Firm

Exhibit (31.1)		Rule 13a-14(a) CEO Certification.

Exhibit (31.2)		Rule 13a-14(a) CFO Certification.

Exhibit (32.1)		CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit (32.2)		CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(X) A compensatory plan required to be filed as an exhibit.

Positive
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Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

Dearborn Bancorp (DEAR) Inactive 10-K2010 FY Annual report

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