Dearborn Bancorp (DEAR) 11-K Annual report of employee stock purchases

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 11-K

ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One):

þ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. [NO FEE REQUIRED]

For the fiscal year ended December 31, 2006

OR

o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED].

For the transition period from                     to                     

Commission file number 000-24478

	A.	Full title of the plan and the address of the plan, if different from that of the issuer named below:
Community Bank of Dearborn 401(k) plan.
	B.	Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office:

DEARBORN BANCORP, INC.

1360 Porter Street
Dearborn, Michigan 48124

COMMUNITY BANK OF DEARBORN
401(K) PLAN

AUDITED FINANCIAL STATEMENTS

AND

SUPPLEMENTAL SCHEDULE

As of December 31, 2006 and 2005 and
For the year ended December 31, 2006

COMMUNITY BANK OF DEARBORN 401(K) PLAN

TABLE OF CONTENTS

	Page
Report of Independent Registered Public Accounting Firm	1
Financial Statements
Statements of Net Assets Available for Benefits	2
Statement of Changes in Net Assets Available for Benefits	3
Notes to Financial Statements	4
Supplemental Schedule
Schedule H — Item 4i — Schedule of Assets Held for Investment Purposes (Held at December 31, 2006)	11
Exhibit 23  Consent of Independent Registered Public Accounting Firm	13

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Administrative Committee of
Community Bank of Dearborn 401(K) Plan

We have audited the accompanying statements of net assets available for benefits of Community Bank of Dearborn 401(k) Plan (the “Plan”) as of December 31, 2006 and 2005 and the related statement of changes in net assets available for benefits for the year ended December 31, 2006. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of Community Bank of Dearborn 401(k) Plan as of December 31, 2006 and 2005, and the changes in net assets available for benefits for the year ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes at December 31, 2006 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ UHY LLP
Southfield, Michigan
June 29, 2007

COMMUNITY BANK OF DEARBORN 401(K) PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

	December 31,
	2006		2005
ASSETS
Investments at fair market value:
Common stock	$	2,238,903	$	2,329,128
Mutual funds		2,618,580		1,641,575
Money market funds		210		7,733
Total investments		4,857,693		3,978,436
Participant loans		28,159		7,129
Receivables:
Participant deferrals		22,501		18,939
Employer match		6,728		5,511
Net assets available for benefits	$	4,915,081	$	4,010,015

See notes to financial statements

Page 2

COMMUNITY BANK OF DEARBORN 401(K) PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

Year ended December 31, 2006

ADDITIONS TO NET ASSETS ATTRIBUTED TO
Investment income (loss)
Net depreciation of fair value of common stock	$	(621,663	)
Net appreciation of fair value of mutual funds		293,716
Dividend and interest income — stock		215,717
Dividend and interest income — cash		2,323
Net investment loss		(109,907	)
Contributions
Participants		625,393
Employer matching		169,833
Participant rollovers		339,277
Total contributions		1,134,503
Total additions		1,024,596
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO
Benefits paid to participants		119,530
NET INCREASE IN NET ASSETS		905,066
NET ASSETS AVAILABLE FOR BENEFITS — beginning of year		4,010,015
NET ASSETS AVAILABLE FOR BENEFITS — end of year	$	4,915,081

See notes to financial statements.

Page 3

COMMUNITY BANK OF DEARBORN 401(K) PLAN

NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005

NOTE 1 – DESCRIPTION OF THE PLAN

The following description of Community Bank of Dearborn 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.

General

The Plan was established by the Plan sponsor, Community Bank of Dearborn (the “Bank”). The Bank is owned by Dearborn Bancorp, Inc. The Plan was effective January 1, 1988 and amended and restated effective January 1, 2002. The Plan is a defined contribution plan which covers all employees who are at least 18 years of age and have completed at least six months of service. The Plan is primarily designed to allow participants to make elective contributions to the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

Trustees

Jeffrey L. Karafa and Michael J. Ross are the Plan’s trustees. Jeffrey L. Karafa and Michael J. Ross invest all employee and employer contributions, as well as earnings thereon, pursuant to the terms of the Plan.

Contributions

Elective deferrals by participants under the 401(k) provisions are based on a percentage of their compensation as defined in the Plan agreement and are subject to certain limitations. Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. The Bank may, at the sole discretion of the Board of Directors, contribute to each participant’s account a matching contribution, which is a percentage of the participant’s elective contribution for the year. For 2006 and 2005, the Bank made matching contributions equal to 50% of the first 6% of the compensation deferred by each participant subject to certain limitations as specified in the Plan agreement. Contributions are subject to certain limitations.

Participant Accounts

Each participant’s account is credited with an allocation of (a) the Bank’s contributions; (b) the participant’s voluntary contributions, transfer contributions, and rollover contributions; and (c) Plan earnings. The accounts are charged for any withdrawals, distributions, and administrative expenses. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

Page 4

COMMUNITY BANK OF DEARBORN 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005

NOTE 1 – DESCRIPTION OF THE PLAN (Continued)

Vesting

The Plan provides that participants have no vested interest in the Bank matching contributions until they have completed one year of service, at which time participants become 20 percent vested. Vesting increases by 20 percent each year up to 100 percent for five years of service. Vesting in the Bank matching contributions are based on years of completed service, as defined by the Plan agreement. Participants are fully vested immediately with respect to participant contributions, rollovers and earnings thereon.

Forfeited Accounts

Forfeitures are used to reduce future employer matching contributions.

Investments

Participants direct the investment of their contributions under various options offered by the Plan. The Plan currently offers seven mutual funds and Dearborn Bancorp, Inc. common stock as investment options for participants. All matching contributions are invested in Dearborn Bancorp, Inc. common stock. At December 31, 2006 and 2005, approximately 46% and 58%, respectively, of the Plan’s assets were invested in Dearborn Bancorp, Inc. common stock.

Payment of Vested Benefits

Participants, or their beneficiaries, are entitled to receive the entire amount of their vested account balance in the Plan upon retirement, death, total or permanent disability, employment termination, or reaching the age of 59¹/2 as defined in the Plan. A participant or his or her beneficiaries receives the vested portion in the participant’s account in a lump-sum amount. A participant may receive the portion of his or her account invested in Dearborn Bancorp, Inc. stock as shares of common stock or in cash.

Participant Loans

Participant loans are permitted under the Plan. The rules are covered in a separate loan application form and promissory note form and loans must be applied for through the plan administrator. All loans are limited to 50% percent of the participant’s vested account balance, provided such loan does not exceed $50,000. The loans are secured by the balance in the participant’s account and bear interest at rates that range from 5.25% to 8.25% as of December 31, 2006. Principal and interest are paid ratably through payroll deductions.

Page 5

COMMUNITY BANK OF DEARBORN 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005

NOTE 1 – DESCRIPTION OF THE PLAN (Continued)

Plan Termination

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.

Administrative Expenses

The Plan’s administrative expenses, including salaries, accounting, record keeping, trustee fees, and legal fees, are paid by the Bank and qualify as party-in-interest transactions, which are exempt from prohibited transaction rules.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of certain accounting policies followed in the preparation of these financial statements.

Basis of Accounting

The financial statements of the Plan are prepared under the accrual method of accounting in accordance with U.S. generally accepted accounting principles.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results may differ from those estimates.

Payments of Benefits

Benefits are recorded when paid. Distributions are allowed upon retirement, upon disability, upon death of the employee, and upon termination of service.

Investment Valuation and Income Recognition

The Plan’s investments are stated at fair value. Mutual fund shares and Dearborn Bancorp, Inc. common stock are traded on national exchanges and are valued at the last sales price on the date of valuation. Participant loans are stated at cost which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Page 6

COMMUNITY BANK OF DEARBORN 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Mutual Funds

Mutual funds are valued at the market price on the date of the balance sheet. These funds are held and administered by professionally accredited brokerage firms.

Risks and Uncertainties

The Plan provides for various investment options in any combination of mutual funds and stocks. Investment securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statement of net assets available for plan benefits.

Concentration of Credit Risk

At December 31, 2006 and 2005 approximately 46% and 58%, respectively, of the Plan’s assets were invested in Dearborn Bancorp, Inc. common stock.

NOTE 3 – INVESTMENTS

The following represents investments that represent five percent of more of the Plan’s net assets available for benefits:

	December 31,
Investment	2006		2005
The Growth Fund of America	$	818,131	$	563,190
New Perspective Fund	$	545,832	$	316,612
The Investment Company of America	$	502,305	$	269,352
The American Balanced Fund	$	366,813	$	191,462
Dearborn Bancorp, Inc. common stock	$	2,238,903	$	2,329,128

Page 7

COMMUNITY BANK OF DEARBORN 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005

NOTE 3 – INVESTMENTS (Continued)

During 2006, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $327,947 as follows:

Investment	Amount
The Growth Fund of America	$	75,201
New Perspective Fund		81,970
The Investment Company of America		62,204
The Income Fund of America		28,754
The American Balanced Fund		36,109
The Bond Fund of America		9,478
Total mutual funds		293,716
Dearborn Bancorp, Inc. common stock		(621,663	)
	$	(327,947	)

NOTE 4 – TAX STATUS

The Plan uses a prototype plan sponsored by Watkins & Ross Company. Watkins & Ross Company received an opinion letter from the Internal Revenue Service (IRS), dated August 7, 2001, which states that the aforementioned prototype plan satisfies the applicable provisions of the Internal Revenue Code (IRC). The Plan itself is not required to and has not received a determination letter from the IRS. However, the Plan’s management believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

NOTE 5 – PARTY-IN-INTEREST TRANSACTIONS

Parties-in-interest are defined under the Department of Labor (DOL) regulations as any fiduciary of the Plan, any party rendering service to the Plan, the employer, and certain others. Professional fees for the administration and audit of the Plan are paid by the Bank.

The 117,837 and 94,098 shares of Dearborn Bancorp, Inc. common stock held by the Plan as of December 31, 2006 and 2005, respectively, represent approximately 1.31% and 1.73% of the Corporation’s outstanding shares as of December 31, 2006 and 2005, respectively.

Page 8

COMMUNITY BANK OF DEARBORN 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005

NOTE 5 – PARTY-IN-INTEREST TRANSACTIONS (Continued)

Two 5% stock dividends were declared and paid by Dearborn Bancorp, Inc. during 2006. As a result of this stock dividend, Dearborn Bancorp, Inc. issued 10,394 additional shares of Dearborn Bancorp, Inc. common stock to the Plan.

As of December 31, the Plan held the following party-in-interest investments (at fair value):

Description	2006		2005
Dearborn Bancorp, Inc. common stock	$	2,238,903	$	2,329,128
Participant loans	$	28,159	$	7,129

NOTE 6 – SEPARATED PARTICIPANT

At December 31, 2006, $171,744 has been allocated to the account of a participant who has been separated from the Bank but hasn’t withdrawn or rolled over to a different plan the funds in his or her account.

NOTE 7 – RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

The following is a reconciliation of net assets available for benefits per financial statements at December 31, 2006 and 2005 to Schedule H of Form 5500:

	2006			2005
Net assets available for benefits per the financial statements	$	4,915,081		$	4,010,015
Adjustment for participant contribution receivable		(22,501	)		(18,939	)
Adjustment for employer contribution receivable		(6,728	)		(5,511	)
Net assets available for benefits per Schedule H of Form 5500	$	4,885,272		$	3,985,565

Page 9

COMMUNITY BANK OF DEARBORN 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005

NOTE 7 – RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (Continued)

The following is a reconciliation of the net increase in net assets per the financial statements for the year ended December 31, 2006 to Schedule H of Form 5500:

Net increase in net assets per the financial statements	$	905,066
Change in participant contribution receivable		(3,562	)
Change in employer contribution receivable		(1,217	)
Net increase per Schedule H of Form 5500	$	900,287

Form 5500 has been prepared on the cash basis of accounting while this financial statement has been prepared on the accrual basis. Essentially the only difference related to the activity occurring in the last pay period of 2005. Form 5500 does not contemplate the effect this pay period has on employee and employer contributions and investments.

NOTE 8 – PROHIBITED TRANSACTIONS

During the year ended December 31, 2006, there were untimely deposits of participant deferrals and participant loan payments into the Plan.

Pursuant to Section 406(a) of ERISA, this constitutes a loan between the Plan sponsor and the Plan, which is a prohibited transaction.

The Plan has complied with the reporting requirements of this transaction on Form 5500 for the year ended December 31, 2006.

Page 10

COMMUNITY BANK OF DEARBORN 401(K) PLAN
EIN # 38-3262220
Plan # 001

Schedule H, Line 4i

SCHEDULE OF ASSETS HELD AT END OF YEAR
December 31, 2006

(a)	(b)	(c)	(e)
Party	Identity of issuer,
in	borrower, lessor	Description of investment including maturity date,
interest	or similar party	rate of interest, collateral, par or maturity value	Current value
	Common stock
*	Dearborn Bancorp, Inc.	Common stock, 117,837 shares	$	2,238,903
	Mutual funds
	American Funds	The Growth Fund of America		818,131
	American Funds	New Perspective Fund		545,832
	American Funds	The Investment Company of America		502,305
	American Funds	The Income Fund of America		193,224
	American Funds	American Balanced Fund		366,813
	American Funds	The Bond Fund of America		161,464
	American Funds	The Cash Management Trust of America		30,812
		Total mutual funds		2,618,580
	Money market funds
	Heritage funds	Heritage Cash Trust		210
		Total investments		4,857,693
*	Participant loans	Participant loans (interest rates from 5.25% to 8.25%) due at various dates		28,159
			$	4,885,852

(*) Denotes a party-in-interest

See report of independent auditors

Page 11

SIGNATURES

     The Plan . Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees of the Community Bank of Dearborn 401(k) Plan have caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

COMMUNITY BANK OF DEARBORN 401(K) PLAN
By:	/s/ Jeffrey L. Karafa
	Jeffrey L. Karafa, Trustee

Date: June 29, 2007