SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
X Annual report pursuant to Section 13 or 15(d) of the Securities
-------Exchange Act of 1934 for the fiscal year ended December 31, 1996 or
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
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
22290 Michigan Avenue, Dearborn, MI 48123-2247
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(Address of principal executive office) (Zip code)
(313) 274-1000
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(Registrant's telephone number, including area code)
Securities registered pursuant to section 12(d) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
None None
Securities registered pursuant to section 12(g) of the Act:
Common Stock
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. Yes_X__ No ______
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. [X]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant as of March 15, 1997: Common Stock, $8,301,350.
Indicate the number of shares outstanding of each of the registrant's classes
of common stock as of January 31, 1997: Common Stock, 950,000 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1996 Annual Report to Stockholders of Registrant are
incorporated in Parts I, II and IV of this report. Portions of the definitive
Proxy Statement of the Registrant dated April 18, 1997, to be filed pursuant
to Regulation 14A, are incorporated by reference in Part III of this report.
DEARBORN BANCORP, INC.
FORM 10-K
PART I
Item 1. Business
Dearborn Bancorp, Inc. (the "Holding Company" or the "Registrant")
was incorporated as a Michigan corporation on September 30, 1992. Initially,
the primary purpose of the Holding Company was to form, own and operate,
Community Bank of Dearborn (the "Bank").
The Bank
The Bank is a commercial bank organized under Michigan law that
commenced business on February 28, 1994. 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,
collection services, and night depository services. The Bank does not have a
trust department.
As a normal part of the Bank's business, the Bank makes loans to
individuals and businesses located within the Bank's market area. The loan
policy for the Bank states that the function of the lending operation is
twofold: 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.
The Bank's loan policy 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 Bank's primary market area is the cities of Dearborn and Dearborn
Heights, Michigan located approximately 15 miles southwest of Detroit in
Wayne County, Michigan, with a combined population of approximately 148,000.
The Dearborn economy is anchored by its largest employer, World
Headquarters of Ford Motor Company. Dearborn is also supported by more than
150 other manufacturers and has over 11 million square feet of major office
facilities. Dearborn also is served by Fairlane Shopping Center, 3,000 area
hotel rooms, and Oakwood Health Services Corporation which employs over 2,200
people.
Competition
The Holding Company and the Bank compete with numerous existing bank
holding companies, commercial banks, savings and loan associations and credit
unions that have an established business and customer base in the market area
served by the Bank. Other businesses which also compete with the Holding
Company and the Bank include finance companies, factors, mortgage brokers,
insurance companies, securities brokerage firms, money market mutual funds
and private lenders. Most competitors have substantially greater resources
than the Holding Company and the Bank.
Supervision and Regulation
The Holding Company is a registered bank holding company and subject
to the supervision of the Federal Reserve System ("Federal Reserve"). The
Holding Company 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 Holding Company and
the Bank are each subject to examination by the Federal Reserve.
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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 that 5% of
the voting shares of such bank holding company or bank. The Federal Reserve
may in its discretion approve the acquisition by the Holding Company 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 Holding Company 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 Financial Institutions Bureau. 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 a
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 1996 Annual Report to Stockholders and is incorporated herein by
reference.
Item 2. Properties
Dearborn Bancorp, Inc. owns a single story commercial / retail office
building located at 22290 Michigan Avenue, Dearborn, Michigan. Approximately
74% of the 8,400 square foot building is leased to Community Bank of Dearborn
and the remaining space is leased to a non-affiliated tenant.
Dearborn Bancorp, Inc. also owns a single story commercial / retail
office building located at 24935 W. Warren Avenue, Dearborn Heights,
Michigan. Approximately 79% of the 3,240 square foot building is leased to
Community Bank of Dearborn and the remaining space is leased to a
non-affiliated tenant.
Item 3. Legal Proceedings
There are no legal proceedings pending against the Holding Company or
the Bank.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
fourth quarter of 1996.
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Executive Officers of the Holding Company and Bank
Set forth below are the names and ages of the executive officers of
the Holding Company and the Bank, positions held and the years from
which held. There are no family relationships among such persons.
John E. Demmer, 73
Chairman of the Board, Dearborn Bancorp, Inc. and Community Bank of
Dearborn Chairman of the Board and Director of the Parent Company
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. President and Chief Executive Officer
of Jack Demmer Ford, Inc. from 1957 to 1994.
Richard Nordstrom, 69
President, Dearborn Bancorp, Inc.
President and Director of the Parent Company since 1992. Director of
the Bank since 1993. Chairman of the Board of Nordstrom Samson
Associates from 1960 to 1996.
Donald G. Karcher, 67
Vice President and Treasurer, Dearborn Bancorp, Inc. Vice President,
Treasurer, and Director of the Parent Company since 1992. Director of
the Bank since 1993. Chairman of the Board of Karcher Agency, Inc.
since 1994. President of Karcher Agency, Inc. from 1965 to 1994.
Wilber M. Brucker, Jr., 71
Secretary, Dearborn Bancorp, Inc. and Community Bank of Dearborn
Secretary and Director of the Parent Company since 1992. Secretary
and Director of the Bank since 1993. Of Counsel, Law Firm of Riley
and Roumell from 1989 to 1995.
Michael J. Ross, 46
Vice President, Dearborn Bancorp, Inc. President and Chief Executive
Officer, Community Bank of Dearborn Vice President and Director of
the Parent Company since 1993. President, Chief Executive Officer,
and Director of the Bank since 1993. President of Mike Ross and
Associates, Inc. from 1992 to 1993.
Timothy J. Cuttle, 51
Executive Vice President, Community Bank of Dearborn
Executive Vice President and Chief Lending Officer of the Bank since
1996. Vice President of Huntington Banks of Michigan from 1990 to
1995.
Jeffrey L. Karafa, 32
Vice President and Cashier, Community Bank of Dearborn
Vice President and Cashier of the Bank since 1996. Assistant Vice
President of the Bank from 1994 to 1996. Second Vice President of
Michigan National Bank from 1992 to 1994.
Jeffrey J. Wolber, 41
Vice President, Community Bank of Dearborn Vice President of the Bank
since 1994. Banking Officer and Branch Manager of NBD Bank. from 1990
to 1993.
PART II
Item 5. Market for Registrant's Common Equity, and Related Stockholder
Matters
The information required by this item appears on page 4 of the
Corporation's 1996 Annual Report to Stockholders under the caption "Dearborn
Bancorp, Inc., Common Stock" and is incorporated by reference herein.
4
Item 6. Selected Financial Data
The information required by this item appears on page 5 of the
Corporation's 1996 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 on pages 29 through 34
of the Corporation's 1996 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 8. Financial Statements and Supplementary Data
The financial statements included on pages 8 through 28 of the
Corporation's 1996 Annual Report to Stockholders are incorporated by
reference herein.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There are no changes in or disagreements with accountants on
accounting and financial disclosure.
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" on pages 3 through 5 of the definitive
Proxy Statement of the Corporation dated April 18, 1997 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.
Item 11. Executive Compensation
The information set forth under the caption "Executive Compensation"
on page 6 of the definitive Proxy Statement of the Corporation dated April
18, 1997 is incorporated by reference herein.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information set forth under the caption "Security Ownership" on
pages 2 through 3 of the definitive Proxy Statement of the Corporation dated
April 18, 1997 is incorporated by reference herein.
Item 13. Certain Relationships and Related Transactions
The information set forth under the caption "Related Transactions" on
page 7 of the definitive Proxy Statement of the Corporation dated April 18,
1997 is incorporated by reference herein.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) Financial Statements
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The following financial statements of the Corporation appear
on the indicated pages of the Corporation's 1996 Annual Report
to Stockholders and are incorporated by reference in item 8.
Report of Independent Certified Public Accountants
on 1996 and 1995 consolidated financial statements page 8
Consolidated Balance Sheets page 9
Consolidated Statements of Operations page 10
Consolidated Statements of Stockholder's Equity page 11
Consolidated Statements of Cash Flows page 12
Notes to Consolidated Financial Statements pages 13-28
(2) Financial Statement Schedules
No schedules are required under this item.
(3) Exhibits
The Exhibits marked with one asterisk below were filed as
Exhibits to the Registration Statement of the Registrant on
Form S-18 (Registration Number 33-55808) are incorporated
herein by reference. Exhibits marked with two asterisks below
were filed as Exhibits to the Form 10-K Report of the
Registrant for the fiscal year ended December 31, 1993 are
incorporated herein by reference. Exhibits marked with three
asterisks below were filed as Exhibits to the Form 10-K Report
of the Registrant for the fiscal year ended December 31, 1994
are incorporated herein by reference. Exhibits marked with
four asterisks below were filed as Exhibits to the Form 10-K
Report of the Registrant for the fiscal year ended December
31, 1995 are incorporated herein by reference, the Exhibit
numbers in brackets being those in such Registration
Statements.
(3)(a)* Articles of Incorporation of Registrant. [3(a)]
(3)(b)* By-Laws of the Registrant. [3(b)]
(3)(b)**** By-Laws of the Registrant, As Amended. [3(b)]
(10)(a)* Letter re employment of Michael J. Ross
by Registrant. [10(a)]
(10)(b)*** 1994 Stock Option Plan. [10(b)]
(13) 1996 Annual Report to Stockholders.
(21)** Subsidiaries of the Registrant. [21]
(23)** Consent of McEndarffer, Hoke & Bernhard, P.C. [23]
(b) Reports on Form 8-K
The Corporation filed no reports on Form 8-K during the
quarter ended December 31, 1996.
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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 25,
1997.
Dearborn Bancorp, Inc.
/s/ John E. Demmer
By ----------------------------------------
(John E. Demmer, Chairman of the Board)
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 25, 1997.
/s/ John E. Demmer Chairman of the Board, Chief Executive Officer
- ------------------- and Director
(John E. Demmer) (Principal Executive Officer)
/s/ Donald G. Karcher
- ---------------------- Vice President, Treasurer and Director
(Donald G. Karcher) (Principal Financial and Accounting Officer)
/s/ Margaret I. Campbell
- ------------------------ Director
(Margaret I. Campbell)
- --------------------- Director
(Michael V. Dorian)
- --------------------- Director
(David Himick)
/s/ Bradley F. Keller
- ---------------------- Director
(Bradley F. Keller)
- ------------------------- Director
(Steven M. Kirkpatrick)
/s/ William E. Kreger
- ---------------------- Director
(William E. Kreger)
/s/ Jeffrey G. Longstreth
- ------------------------- Director
(Jeffrey G. Longstreth)
/s/ Richard Nordstrom
- ---------------------- President
(Richard Nordstrom) and Director
/s/ Michael J. Ross
- --------------------- Vice President
(Michael J. Ross) and Director
- --------------------- Director
(Dr. Robert C. Schwyn)
/s/ Ronnie J. Story
- --------------------- Director
(Ronnie J. Story)
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