Exhibit 99.1
DEARBORN BANCORP, NOW A $1+ BILLION INSTITUTION,
REPORTS FIRST QUARTER 2007 EARNINGS.
DEARBORN, Michigan, April 18, 2007 ... Dearborn Bancorp, Inc. (Nasdaq: DEAR), the Holding Company for Community Bank of Dearborn, today reported that earnings for the three months ended March 31, 2007, were $1,618,000 or $0.18 per fully diluted common share. During the same period one year ago, the Company reported earnings of $1,946,000 or $0.31 per diluted share.
At the end of the First Quarter, the Company’s total assets were $1,045,985,000 while they had been $757,159,000 one year earlier. This growth was 38.15 percent. During the same 12-month period, the Company’s total deposits increased to $848,036,000 from $632,237,000, a 34.13 percent increase, and total loans grew to $938,510,000 from $676,233,000, a 38.79 percent increase. These increases in assets, deposits and loans reflect, in part, the acquisition on January 4, 2007, of Fidelity Financial Corporation of Michigan. Dearborn Bancorp’s previous financial statements have not been restated, as the transaction was accounted for as a purchase.
Total stockholders’ equity went up 67.97 percent over the previous year to $145,076,000 while it had been $86,369,000 at the end of the First Quarter in 2006. Much of this increase was due to the successful offering of approximately 2,900,000 new shares of common stock at $20 per share during the Fourth Quarter of 2006. The proceeds of the offering were used along with other corporate resources to pay for the Fidelity purchase.
Michael J. Ross, President and Chief Executive Officer of both the Holding Company and the Bank, issued his organization’s financial report. He commented, “Our growth represents, primarily, the Fidelity acquisition, the largest in our history. Our quarterly results were the consequence of three factors: the “disappearing” yield curve, economic weakness in our market area, and expenses associated with the Fidelity transaction.”
Ross went on, “The difference between short-term and long-term interest rates has been an ongoing problem for all banks. The situation has been made more difficult for community banks because many deposits, whose rates are linked to short-term rates, have been repricing upward. On the other hand, the yields on loans and investments, which are based on long-term rates, have not gone up to a corresponding degree. Consequently, our interest expense has gone up 63.73 percent over the last year while our interest income has only gone up 42.69 percent.”
Ross continued, “We also provided $617,000 for possible loan losses during the First Quarter. The economic weakness in Southeast Michigan has begun to affect some of our commercial and real estate loan customers. Prudence requires us to recognize the situation and deal with these problems as they become apparent. One of our principle objectives in the management of our business is the maintenance of strong asset quality. First Quarter, 2007, net charge-offs of $441,000 were primarily related to two loans where the value of the underlying collateral has decreased in a weakened real estate market.”
“Finally, the Fidelity acquisition caused a sharp increase in other expenses. Some of these costs will be non-recurring or, at least, less in future periods. Banking systems consolidation between Community Bank of Dearborn and Fidelity Bank will be complete in the second quarter of 2007 with additional operating efficiencies expected.”
Ross concluded, “This has been an exciting time for our Company. We have completed the largest expansion in our history and laid the foundation for substantial growth in the months and years ahead. We have dealt forthrightly with emerging problems in our loan portfolio. And we are finding ways to sustain our profitability in spite of a narrower yield curve. For these reasons, we look to the future with optimism.”
Dearborn Bancorp, Inc., is a registered bank holding company. Its sole subsidiary is Community Bank of Dearborn. The Bank operates 19 banking offices in Wayne, Oakland, Macomb and Washtenaw Counties in the State of Michigan. The acquisition of Fidelity Bank gave the company seven of its offices in Oakland County. Its common shares trade on the Nasdaq Global Market under the symbol DEAR.
Forward-Looking Statements
This press release 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 the 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 and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
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