SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

   
                                  FORM 10-Q/A
    


Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Quarterly period ended June 30, 1998.
                                           --------------

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                    (I.R.S. Employer
    incorporation or organization)                    Identification No.)


                22290 Michigan Avenue, Dearborn, MI 48123-2247
              --------------------------------------------------
              (Address of principal executive office) (Zip Code)

                                (313) 274-1000
                                --------------
             (Registrant's telephone number, including area code)

                                     N/A
                                     ---
             (Former name, former address and former fiscal year,
                        if changed since last report)

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 the number of shares outstanding for each of the issuer's classes of
common stock, as of July 31, 1997.

                       Class                              Shares Outstanding
                       -----                              ------------------
                    Common Stock                              2,424,924







<PAGE>

                            DEARBORN BANCORP, INC.


                              INDEX

Part I.  Financial Information:

Item 1.  Financial Statements

         The following consolidated financial statements of
         Dearborn Bancorp, Inc. and its subsidiary included in
         this report are: 
                                                                          Page
                                                                          ----
         Consolidated Balance Sheets - June 30, 1998, December 31,
         1997 and June 30, 1997                                            3

         Consolidated Statements of Income - For the Three Months
         Ended June 30, 1998 and 1997                                      4

         Consolidated Statements of Comprehensive Income - For the
         Three Months Ended June 30, 1998 and 1997                         5

         Consolidated Statements of Cash Flows - For the Three
         Months Ended June 30, 1998 and 1997                               6

         Notes to Consolidated Financial Statements                        7

Item 2.  Management's Discussion of Results of Operations
         and Analysis of Financial Condition, Liquidity and
         Capital                                                        7-19

Part II. Other Information:

         Pursuant to SEC rules and regulations, the following
         item(s) are included with the Form 10-Q Report:

             Item 4. Submission of Matters to a Vote of Security
                     Holders                                              20
             Item 6. Exhibits and Reports on Form 8-K                     20

         Pursuant to SEC rules and regulations, the following
         items are omitted from this Form 10-Q as inapplicable or
         to which the answer is negative:

             Item 1. Legal Proceedings
             Item 2. Changes in the Rights of the Corporation's
                     Security Holders 
             Item 3. Defaults by the Corporation on its Senior
                     Securities
             Item 5. Other Information

SIGNATURES                                                                21


                                2


<PAGE>
   
<TABLE>
<CAPTION>

                    DEARBORN BANCORP, INC. AND SUBSIDIARY

                         CONSOLIDATED BALANCE SHEETS

(In thousands)                                                     06/30/98      12/31/97      06/30/97
                                                                 (unaudited)     (audited)   (unaudited)
                                                                  ---------     ---------     ---------
<S>                                                               <C>           <C>           <C>      
ASSETS
Cash and cash equivalents
          Cash and due from banks                                 $   2,707     $   1,406     $   2,059
          Federal funds sold                                          6,143           254         1,300
                                                                  ---------     ---------     ---------
                    Total cash and cash equivalents                   8,850         1,660         3,359

Mortgage loans held for sale                                          5,214           347            61
Investment securities, available for sale                            51,500        29,780        19,479
Loans
          Loans                                                      56,223        52,139        43,136
          Allowance for possible credit losses                         (557)         (522)         (436)
                                                                  ---------     ---------     ---------
                    Net loans                                        55,666        51,617        42,700

Bank premises and equipment, net                                      2,297         2,296         2,098
Accrued interest receivable                                             981           723           549
Other assets                                                            281           230           140
                                                                  ---------     ---------     ---------

          Total assets                                            $ 124,789     $  86,653     $  68,386
                                                                  =========     =========     =========

LIABILITIES
Deposits
          Non-interest bearing deposits                           $  13,114     $   8,587     $   9,711
          Interest bearing deposits                                  83,381        66,810        49,362
                                                                  ---------     ---------     ---------
                    Total deposits                                   96,495        75,397        59,073

Other liabilities
          Federal funds purchased                                        --         1,500            --
          Mortgage payable                                              528           537           545
          Accrued interest payable                                      304           310           178
          Other liabilities                                             231           157           155
                                                                  ---------     ---------     ---------
                    Total liabilities                                97,558        77,901        59,951

STOCKHOLDERS' EQUITY
          Common stock - 5,000,000 shares authorized,
                 2,424,924 and 1,044,924 shares outstanding
                 in 1998 and 1997, respectively                      28,483        10,506         9,272
          Accumulated deficit                                        (1,258)       (1,689)         (807)
          Net unrealized gain (loss) on securities 
                 available for sale                                       6           (65)          (30)
                                                                  ---------     ---------     ---------
                    Total stockholders' equity                       27,231         8,752         8,435

                    Total liabilities and stockholders' equity    $ 124,789     $  86,653     $  68,386
                                                                  =========     =========     =========

<FN>
The accompanying notes are an integral part of these consolidated statements.
</TABLE>

                                      3



<PAGE>

<TABLE>
<CAPTION>

                    DEARBORN BANCORP, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(In thousands, except share data)                              Three Months Ended              Six Months Ended
                                                             06/30/98       06/30/97        06/30/98       06/30/97
                                                           -----------    -----------     -----------    -----------
<S>                                                        <C>            <C>             <C>            <C>        
Interest income
          Interest on loans                                $     1,249    $       958     $     2,454    $     1,827
          Interest on investment securities,
               available for sale                                  713            302           1,088            531
          Interest on federal funds and deposits
               with banks                                          152             36             267             61
                                                           -----------    -----------     -----------    -----------
                    Total interest income                        2,114          1,296           3,809          2,419

Interest expense
          Interest on deposits                                   1,133            690           2,109          1,268
          Interest on other liabilities                             10             11              22             21
                                                           -----------    -----------     -----------    -----------
                    Total interest expense                       1,143            701           2,131          1,289
                                                           -----------    -----------     -----------    -----------

                    Net interest income                            971            595           1,678          1,130
Provision for possible credit losses                                20             34              42             73
                                                           -----------    -----------     -----------    -----------

Net interest income after provision for
     possible credit                                               951            561           1,636          1,057
                                                           -----------    -----------     -----------    -----------

Non-interest income
          Service charges on deposit accounts                       32             29              63             59
          Fees for other services to customers                       5              5              12             12
          Gain on the sale of loans                                 66             34              93             68
          Gain on the sale investment securities                     3             --              16             --
          Other income                                               1              2               4              3
                                                           -----------    -----------     -----------    -----------
                    Total non-interest income                      107             70             188            142

Non-interest expenses
          Salaries and employee benefits                           399            310             761            590
          Occupancy and equipment expense                           95             47             191             97
          Advertising and marketing                                 22             26              45             56
          Stationery and supplies                                   43             13              68             30
          Professional services                                     25             26              62             43
          Data processing                                           25             24              53             44
          FDIC insurance premiums                                    2              3               4              3
          Other operating expenses                                  59             72             127            138
                                                           -----------    -----------     -----------    -----------
                    Total non-interest expenses                    670            521           1,311          1,001
                                                           -----------    -----------     -----------    -----------

Income before income provision                                     388            110             513            198
Income tax provision (benefit)                                     132            (35)             82            (60)
                                                           -----------    -----------     -----------    -----------

Net income                                                 $       256    $       145     $       431    $       258
                                                           ===========    ===========     ===========    ===========

Per share data:
Net income - basic and diluted                             $      0.11    $      0.14     $      0.26    $      0.25

Weighted average number of shares outstanding - basic        2,318,770      1,044,924       1,685,366      1,044,924
Weighted average number of shares outstanding - diluted      2,338,455      1,052,806       1,700,914      1,052,806

<FN>
The accompanying notes are an integral part of these consolidated statements.
</TABLE>

                                      4

<PAGE>
<TABLE>
<CAPTION>

                    DEARBORN BANCORP, INC. AND SUBSIDIARY

         CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

(In thousands)                                          Three Months Ended  Six Months Ended
                                                         06/30/98  06/30/97 06/30/98  06/30/97
                                                         --------  -------- --------  --------
<S>                                                       <C>       <C>      <C>       <C>  
Net income                                                $ 256     $ 145    $ 431     $ 258
Other comprehensive income, net of tax
   Unrealized gains (losses) on securities
      Unrealized holding gains (losses)
        arising during period                                75        86       89       (12)
          Less:  reclassification adjustment for gains
             included in net income                          (3)       --      (16)       --
                                                          -----     -----    -----     -----
Other comprehensive income                                   72        86       73       (12)
                                                          -----     -----    -----     -----

Comprehensive income                                      $ 328     $ 231    $ 504     $ 246
                                                          =====     =====    =====     =====
<FN>
The accompanying notes are an integral part of these consolidated statements.
</TABLE>

                                      5

<PAGE>
<TABLE>
<CAPTION>

                    DEARBORN BANCORP, INC. AND SUBSIDIARY

              CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(In thousands)                                                            Six Months Ended
                                                                        06/30/98    06/30/97
                                                                        --------    --------
<S>                                                                    <C>         <C>     
Cash flows from operating activities
          Interest and fees received                                   $  3,630    $  2,250
          Interest paid                                                  (2,137)     (1,238)
          Proceeds from sale of mortgages held for sale                   8,205       4,720
          Origination of mortgages held for sale                         (7,925)     (4,410)
          Participations purchased in mortgages held for sale            (5,054)       --
          Cash paid to suppliers and employees                           (1,266)     (1,025)
                                                                       --------    --------
          Net cash provided by (used in) operating activities            (4,547)        297

Cash flows from investing activities
          Proceeds from maturities of securities available for sale      17,350       5,000
          Proceeds from sales of securities available for sale           19,908         595
          Purchases of securities available for sale                    (58,883)    (14,598)
          Increase in loans, net of payments received                    (4,091)     (6,876)
          Purchases of property and equipment                              (113)        (86)
                                                                       --------    --------
          Net cash (used in) investing activities                       (25,829)    (15,965)

Cash flows from financing activities
          Net increase in non-interest bearing deposits                   4,527       2,128
          Net increase in interest bearing deposits                      16,571       9,482
          Decrease in federal funds purchased                            (1,500)       --
          Principal payments on mortgage payable                             (9)         (9)
          Sale of common stock, net of offerings costs                   17,977        --
                                                                       --------    --------
          Net cash provided by financing activities                      37,566      11,601

Increase (decrease) in cash and cash equivalents                          7,190      (4,067)
Cash and cash equivalents at the beginning of the period                  1,660       7,426
                                                                       --------    --------
Cash and cash equivalents at the end of the period                     $  8,850    $  3,359
                                                                       ========    ========

Reconciliation of net income to net cash provided by
  (used in) operating activities
Net income                                                             $    431    $    258
          Adjustments to reconcile net income to net cash
                    provided by (used in) operating activities
                    Provision for possible credit losses                     42          73
                    Depreciation and amortization expense                   115          71
                    Accretion of discount on investment securities           (9)         (4)
                    Amortization of premium on investment securities          1           8
                    Gain on sale of investment securities                   (16)       --
                    (Increase) decrease in mortgages held for sale       (4,867)        242
                    (Increase) in interest receivable                      (258)       (243)
                    Increase (decrease) in interest payable                  (6)         51
                    (Increase) in other assets                              (54)        (49)
                    Increase (decrease) in other liabilities                 74        (110)
                                                                       --------    --------
Net cash provided by (used in) operating activities                    ($ 4,547)   $    297
                                                                       ========    ========
<FN>
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
    
                                      6

<PAGE>

DEARBORN BANCORP, INC.
FORM 10-Q  (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.   Accounting and Reporting Policies

     The financial statements of Dearborn Bancorp, Inc. (the "Corporation")
     include the consolidation of its only subsidiary, Community Bank of
     Dearborn (the "Bank"). The accounting and reporting policies of the
     Corporation are in accordance with generally accepted accounting
     principles and conform to practice within the banking industry.

     The unaudited financial statements of the Corporation for the three and
     six month periods ended June 30, 1998 and 1997 reflect all adjustments,
     consisting of normal recurring items which are, in the opinion of
     management, necessary to present a fair statement of the results for the
     interim period. The operating results for the quarter are not
     necessarily indicative of results of operations for the entire year.

     The consolidated financial statements included herein have been prepared
     by the Corporation, without an audit, pursuant to the rules and
     regulations of the Securities and Exchange Commission. Certain
     information and footnote disclosures normally included in financial
     statements prepared in accordance with generally accepted accounting
     principles have been condensed or omitted pursuant to such rules and
     regulations. These financial statements should be read in conjunction
     with the financial statements and notes thereon included in the
     Corporation's 1997 Annual Report to Stockholders.


PART 1 - FINANCIAL INFORMATION

ITEM 2. - MANAGEMENT'S DISCUSSION OF RESULTS OF OPERATIONS AND
          ANALYSIS OF FINANCIAL CONDITION

The following discussion and analysis are intended to address significant
factors affecting the financial condition and results of operations of the
Corporation. The discussion provides a more comprehensive review of the
financial position and operating results than can be obtained from a reading
of the financial statements and footnotes presented elsewhere in this report.

Certain information contained in Management's Discussion and Analysis of
Financial Condition and Results of Operations may be deemed to be
forward-looking statements within the meaning of The Private Securities
Litigation Reform Act of 1995 and are subject to the Act's safe harbor
provisions. These statements are based on current expectations and involve a
number of risks and uncertainties. Active results could differ materially and
adversely from those described in the forward-looking statements as a result
of various factors outside the control of the Corporation, including but not
limited to the following: the risk of non-payment of loans, changes in
prevailing economic conditions causing declines in real estate market values,
rapid changes in interest rates and the monetary and fiscal policies of the
federal government, and strong competition for deposits, loans and other
financial services from competitors.




                                      7


<PAGE>

General

The Corporation was formed in 1992 and the Bank was formed in 1993. 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. On December 20, 1995, the Bank opened its second office, located at
24935 West Warren Avenue, Dearborn Heights, Michigan. On August 11, 1997, the
Bank opened its third office, located at 44623 Five Mile Road, Plymouth
Township, Michigan.

   
Results of Operations

The Corporation reported net income of $256,000 and $431,000 for the three
and six month periods ended June 30, 1998, respectively, compared to net
income of $145,000 and $258,000 for the three and six month periods ended
June 30, 1997. The improvement was a factor of growth in the volume of loans
and deposits and the corresponding net interest income associated with the
increased volumes. In addition, the Corporation completed an initial stock
offering of common stock on April 8, 1998 that netted the Corporation $18.0
million in new capital which was invested in securities available for sale at
an average rate of 5.80%. See the "Capital" section of this report for
further information.
    

Net Interest Income

1998 Compared to 1997. Net interest income for the three month period ended
June 30, 1998 was $971,000 compared to $595,000 for the same period ended
June 30, 1997, an increase of $376,000 or 63%. This increase was caused
primarily by an increase in average earning assets of $53.3 million between
the periods while interest-bearing liabilities grew by $33.3 million. At the
same time the Corporation's interest rate spread decreased to 1.82% in 1998
from 2.66% in 1997. The Corporation's net interest margin also decreased in
1998 to 3.32% from 3.74% in 1997. However, the decreases in net interest
spread and net interest margin were offset by increases in the volume of net
earning assets. The Corporation's decrease in interest rate spread and net
interest margin was a result of selling additional shares of common stock and
investing the funds into investment securities, available for sale, until
which time the Corporation can deploy the capital into other investments or
acquisitions.

Net interest income for the six month period ended June 30, 1998 was
$1,678,000 compared to $1,130,000 for the same period ended June 30, 1997, an
increase of $548,000 or 48%. This increase was caused primarily by an
increase in average earning assets of $41.5 million between the periods while
interest-bearing liabilities grew by $30.2 million. At the same time the
Corporation's interest rate spread decreased to 2.06% in 1998 from 2.71% in
1997. The Corporation's net interest margin also decreased in 1998 to 3.32%
from 3.79% in 1997. However, the decreases in net interest spread and net
interest margin were offset by increases in the volume of net earning assets.
The Corporation's decrease in interest rate spread and net interest margin
was a result of selling additional shares of common stock and investing the
funds into investment securities, available for sale, until which time the
Corporation can deploy the capital into other investments or acquisitions. In
addition, the Corporation's decrease in interest rate spread and net interest
margin was a result of aggressive time deposit gathering at premium rates and
the direct reinvestment of those funds into investment securities with
similar interest rates until the funds could be deployed into quality loans
with higher yields.


                                      8


<PAGE>

Average Balances, Interest Rates and Yields. Net interest income is affected
by the difference ("interest rate spread") between rates of interest earned
on interest-earning assets and rates of interest paid on interest-bearing
liabilities and the relative amounts of interest-bearing liabilities and
interest-earning assets. When the total of interest-earning assets
approximates or exceeds the total of interest-bearing liabilities, any
positive interest rate spread will generate net interest income. Financial
institutions have traditionally used interest rate spreads as a measure of
net interest income. Another indication of an institution's net interest
income is its "net yield on interest-earning assets" or "net interest
margin," which is net interest income divided by average interest-earning
assets.

The following table sets forth certain information relating to the
Corporation's consolidated average interest-earning assets and
interest-bearing liabilities and reflects the average yield on assets and
average cost of liabilities for the periods indicated. Such yields and costs
are derived by dividing income or expense by the average daily balance of
assets or liabilities, respectively, for the periods presented. During the
periods indicated, non-accruing loans, if any, are included in the net loan
category.


<TABLE>
<CAPTION>
                                          Three months ended June 30,       Three months ended June 30,
                                                    1998                                1997
                                         ----------------------------      -----------------------------
                                         Average              Average       Average              Average
(In thousands)                           Balance   Interest    Rate         Balance   Interest    Rate
                                         -------   --------   -------      --------   --------   -------

<S>                                      <C>        <C>         <C>        <C>         <C>        <C>
Assets
     Federal funds sold and interest
       bearing deposits with banks       $ 11,597   $    152    5.24%      $  2,499    $   36     5.76%
     Investment securities, available
       for sale                            50,266        713    5.67%        19,420       302     6.22%
     Loans                                 55,123      1,249    9.06%        41,771       958     9.17%
                                         --------   --------    ----       --------    ------     ----
         Sub-total earning assets         116,986      2,114    7.23%        63,690     1,296     8.14%
     Other assets                           5,868                             3,646
                                         --------                          --------

Total assets                             $122,854                          $ 67,336
                                         ========                          ========

Liabilities and stockholders' equity
     Interest bearing deposits           $ 83,989   $  1,133    5.40%      $ 50,650    $  690     5.45%
     Other borrowings                         530         10    7.55%           541        11     8.13%
                                         --------   --------    ----       --------    ------     ----
         Sub-total interest bearing
           liabilities                     84,519      1,143    5.41%        51,191       701     5.48%
      Non-interest bearing deposits        11,050                             7,700
      Other liabilities                       390                               264
      Stockholders' equity                 26,895                             8,181
                                         --------                          --------

Total liabilities and stockholders'
  equity                                 $122,854                          $ 67,336
                                         ========                          ========

         Net interest income                        $    971                           $  595
                                                    ========                           ======
         Net interest rate spread                               1.82%                             2.66%
                                                                ====                              ====

         Net interest margin on 
           earning assets                                       3.32%                             3.74%
                                                                ====                              ====
</TABLE>


                                      9


<PAGE>

<TABLE>
<CAPTION>
                                           Six months ended June 30,         Six months ended June 30,
                                                    1998                                1997
                                         ----------------------------      -----------------------------
                                         Average              Average       Average              Average
(In thousands)                           Balance   Interest    Rate         Balance   Interest    Rate
                                         -------   --------   -------      --------   --------   -------

<S>                                      <C>        <C>         <C>        <C>         <C>        <C>
Assets
     Federal funds sold and interest
       bearing deposits with banks       $  9,941   $    267    5.37%      $  2,150    $   61     5.67%
     Investment securities, available
       for sale                            37,139      1,088    5.86%        17,452       531     6.09%
     Loans                                 53,992      2,454    9.09%        40,000     1,827     9.14%
                                         --------   --------    ----       --------    ------     ----
         Sub-total earning assets         101,072      3,809    7.54%        59,602     2,419     8.12%
     Other assets                           6,374                             3,950
                                         --------                          --------

Total assets                             $106,405                          $ 63,552
                                         ========                          ========

Liabilities and stockholders' equity
     Interest bearing deposits           $ 77,339   $  2,109    5.45%      $ 47,133    $1,268     5.38%
     Other borrowings                         540         22    8.15%           549        21     7.65%
                                         --------   --------    ----       --------    ------     ----
         Sub-total interest bearing
           liabilities                     77,879      2,131    5.47%        47,682     1,289     5.41%
      Non-interest bearing deposits        10,713                             7,402
      Other liabilities                       405                               256
      Stockholders' equity                 17,408                             8,212
                                         --------                          --------

Total liabilities and stockholders'
  equity                                 $106,405                          $ 63,552
                                         ========                          ========

         Net interest income                        $  1,678                           $1,130
                                                    ========                           ======
         Net interest rate spread                               2.06%                             2.71%
                                                                ====                              ====

         Net interest margin on 
           earning assets                                       3.32%                             3.79%
                                                                ====                              ====
</TABLE>


                                      10




<PAGE>

Rate/Volume Analysis. The following table analyzes net interest income in
terms of changes in the volume of interest-earning assets and
interest-bearing liabilities and changes in yields and rates. The table
reflects the extent to which changes in the interest income and interest
expense are attributable to changes in volume (changes in volume multiplied
by prior year rate) and changes in rate (changes in rate multiplied by prior
year volume). Changes attributable to the combined impact of volume and rate
have been allocated proportionately to changes due to volume and changes due
to rate.


                   DEARBORN BANCORP, INC. AND SUBSIDIARY

           CONSOLIDATED NET INTEREST INCOME VOLUME / RATE ANALYSIS

   
<TABLE>
<CAPTION>
                                             Three months ended            Six months ended
                                             June 30, 1998/1997             June 30, 1998/1997
                                         Change in interest due to      Change in interest due to 
                                         ---------------------------    ---------------------------
                                         Average    Average    Net      Average    Average    Net
(In thousands)                           Balance     Rate     Change    Balance     Rate     Change
                                         -------    -------   ------    -------    --------  ------

<S>                                       <C>       <C>      <C>        <C>        <C>      <C>
Assets                                                       
     Federal funds sold and interest                         
       bearing deposits with banks          119     $(13)    $ 116      $  209     $ (3)    $  206
     Investment securities, available                        
       for sale                             438      (27)      411         577      (20)       577
     Loans                                  303      (12)      291         636       (9)       727
                                          -----     ----     -----      ------     ----      -----
Total earning assets                      $ 859     $(51)    $ 818      $1,422     $(32)    $1,390
                                          =====     ====     =====      ======     ====     ======
                                                             
Liabilities                                                  
     Interest bearing deposits            $ 450     $ (7)    $ 443      $  824     $ 17     $  841
     Other borrowings                      --         (1)       (1)       --          1          1
                                          -----     ----     -----      ------     ----      -----
Total interest bearing liabilities        $ 450     $ (8)    $ 442      $  824     $ 18     $  842
                                          =====     ====     =====      ======     ====     ======
                                                            

         Net interest income                                 $ 376                          $  548
                                                             =====                          ======
         Net interest rate spread                            (0.84)%                         (0.65)%
                                                             =====                          ======

         Net interest margin on 
           earning assets                                    (0.42)%                         (0.47)%
                                                             =====                          ======
</TABLE>


Provision for Possible Credit Losses

1998 Compared to 1997. The provision for possible credit losses was $20,000
and $42,000 for the three and six month periods ended June 30, 1998,
respectively, compared to $34,000 and $73,000 for the same periods in 1997.
The provision for possible credit losses was based upon management's
assessment of relevant factors, including types and amounts of non-performing
loans, historical and anticipated loss experience on such types of loans, and
current and projected economic conditions.


                                     11


<PAGE>


Non-interest Income

1998 Compared to 1997. Non-interest income was $107,000 and $188,000 for the
three and six month periods ended June 30, 1998, respectively, compared to
$70,000 and $142,000 for the same periods in 1997, an increase of $37,000 or
53% for the three month period and an increase of $46,000 or 32% for the six
month period.. This increases were primarily due to gains on loans held for
sale and gains recognized on the sale of investment securities.

Non-interest Expense

1998 Compared to 1997. Non-interest expense was $670,000 and $1,311,000 for
the three and six month periods ended June 30, 1998, respectively, compared
to $521,000 and $1,001,000 for the same periods in 1997, an increase of
$149,000 or 29% for the three month period and an increase of $310,000 or 31%
for the six month period. The largest components of non-interest expense were
salaries and employee benefits which amounted to $399,000 and $761,000 and
occupancy and equipment expense which amounted to $95,000 and $191,000 for
the three and six month periods ended June 30, 1998, respectively. For the
same period in 1997, salaries and employee benefits were $310,000 and
$590,000 and occupancy and equipment expense were $47,000 and $97,000,
respectively. The primary factor for these increases was the opening of the
Bank's office in Plymouth Township in August 1997 and additions to staffing
in the lending department of the Bank in 1998. As of June 30, 1998, the
number of full time equivalent employees was 35 as compared to 26 as o
June 30, 1997.

   
Income Tax Benefit

1998 Compared to 1997. The income tax expense was $132,000 and $82,000 for
the three and six month periods ended June 30, 1998 compared to an income tax
benefit of $35,000 and $65,000 for the same periods in 1997. The changes were
due to the change in the valuation allowance against a deferred tax asset
related to net operating loss carryforwards. As of June 30, 1998 the
Corporation had released all available valuation allowances against deferred
tax assets.
    

Comparison of Financial Condition at June 30, 1998 and June 30, 1997

Assets. Total assets at June 30, 1998 were $124.8 million compared to $68.4
million at June 30, 1997, an increase of $56.4 million or 82%. The increase
was primarily due to increases in federal funds sold, investment securities -
available for sale and loans.

Federal Funds Sold. Total federal funds sold at June 30, 1998 were $6.1
million compared to $1.3 million at June 30, 1997, an increase of $4.8
million or 369%. The increase was primarily due to the increase in deposits.

Mortgage Loans Held for Sale. Total mortgage loans held for sale at June 30,
1998 were $5.2 million compared to $61,000 at June 30, 1997, an increase of
$5.1 million. The increase was due to the Bank purchasing participations in
mortgage loans held for sale on June 30, 1998 in the amount of $5.1 million.
By July 15, 1998, all of the purchased participations were paid-off.


                                     12


<PAGE>

Investment Securities - Available for Sale. Total investment securities -
available for sale, at June 30, 1998 were $51.5 million compared to $19.5
million at June 30, 1997, an increase of $32.0 million or 164%. An increase
in the common stock and deposits has enabled the Corporation to invest in
investment securities - available for sale until such time as quality loan
opportunities or other higher yielding investments become available. All
securities within the Corporation's portfolio are U.S. treasury issues, U.S.
government sponsored agency issues or corporate debt securities carrying
ratings of Aa2 or better. The Corporation does not hold any securities in the
"Held to Maturity" category nor does the Corporation hold or utilize
derivatives.

The amortized cost and estimated market value of investments in debt
securities available for sale are as follows (in thousands):

<TABLE>
<CAPTION>
                                             June 30, 1998
                              ---------------------------------------------
                                           Gross       Gross      Estimated
                              Amortized  Unrealized  Unrealized    Market
                                 Cost       Gains      Losses       Value
                              ---------  ----------  ----------   ---------

<S>                            <C>         <C>         <C>        <C>    
US Treasury securities         $ 2,001     $   6       $ --       $ 2,007
US Government agency
  securities                    39,243        13          (13)     39,243
Corporate debt securities       10,250      --           --        10,250
                               -------     -----       ------     -------

          Totals               $51,494     $  19       $  (13)    $51,500
                               =======     =====       ======     =======

<CAPTION>
                                             June 30, 1997
                              ---------------------------------------------
                                           Gross       Gross      Estimated
                              Amortized  Unrealized  Unrealized    Market
                                 Cost       Gains      Losses       Value
                              ---------  ----------  ----------   ---------

<S>                            <C>         <C>         <C>        <C>    

US Treasury securities         $ 3,006    $    8       $   (9)   $ 3,005
US Government agency
  securities                    16,503         8          (37)    16,474
Corporate debt securities         --        --           --         --
                               -------    ------       ------    -------

          Totals               $19,509    $   16       $  (46)   $19,479
                               =======    ======       ======    =======
</TABLE>



                                     13


<PAGE>

Loans. Total loans at June 30, 1998 were $56.3 million compared to $43.1
million at June 30, 1997, an increase of $13.2 million or 31%. Major
categories of loans included in the loan portfolio are as follows (in
thousands):

<TABLE>
<CAPTION>
                                       06/30/98    12/31/97    06/30/97
                                       --------    --------    --------
<S>                                    <C>         <C>         <C>     
Consumer loans                         $ 12,846    $ 12,705    $ 11,159
Commercial, financial, & other           11,015      10,668       7,032
Commercial real estate construction       1,623       1,746       2,490
Commercial real estate mortgages         12,425       9,796       8,122
Residential real estate mortgages        18,314      17,224      14,333
                                       --------    --------    --------

                                         56,223      52,139      43,136
Allowance for possible credit losses       (557)       (522)        436
                                       --------    --------    --------

                                       $ 55,666    $ 51,617    $ 42,700
                                       ========    ========    ========
</TABLE>


The following is a summary of non-performing assets and 
problems loans (in thousands):

<TABLE>
<CAPTION>
                              06/30/98    12/31/97   06/30/97
                              --------    --------   --------
<S>                             <C>         <C>        <C> 
Non-accrual loans               $ 44        $ 11       $  5
Renegotiated loans               --          --         --
Other real estate owned          --          --         --
                                ----        ----       ----
                                $ 44        $ 11       $  5
                                ====        ====       ====
</TABLE>

Allowance for Possible Credit Losses. The allowance for possible credit
losses at June 30, 1998 was $557,000 compared to $436,000 at June 30, 1997,
an increase of $121,000 or 28%. The increase in the allowance for possible
credit losses was based upon management's assessment of relevant factors,
including types and amounts of non-performing loans, historical and
anticipated loss experience on such types of loans, and current and projected
economic conditions.


                                     14


<PAGE>

The following is an analysis of the allowance for possible
credit losses (in thousands):

<TABLE>
<CAPTION>
                                                    06/30/98     06/30/97
                                                    --------     --------
<S>                                                 <C>          <C>    
Balance, beginning of year                          $   522      $   366

Charge-offs:

     Consumer Loans                                       7            3
                                                    -------      -------

Net charge-offs                                           7            3

Additions charged to operations                          42           73
                                                    -------      -------

Balance, June 30                                    $   557      $   436
                                                    =======      =======

Allowance to total loans                               0.99%        1.01%
                                                    =======      =======

Net charge-offs to average loans                       0.01%        0.01%
                                                    =======      =======

     Average allowance for possible loan losses         539          398
     Average total loans, gross                      53,992       40,000
     Average allowance to average total loans          1.00%        1.00%
</TABLE>


Bank Premises and Equipment. Bank premises and equipment at June 30, 1998 was
$2.3 million compared to $2.1 million at June 30, 1997, an increase of $0.2
million or 10%. This increase reflects the Bank's investment in technology as
well as capital expenditures necessary to open the Bank's Plymouth Township
Office.

Accrued Interest Receivable. Accrued interest receivable at June 30, 1998 was
$981,000 compared to $549,000 at June 30, 1997, an increase of $432,000 or
79%. The increase was primarily due to semi-annual interest payments accrued
on investments securities available for sale.

Other Assets. Other assets at June 30, 1998 were $281,000 compared to
$140,000 at June 30, 1997, an increase of $141,000 or 100%. The increase was
due to the Bank's recognition of income tax assets.




                                     15


<PAGE>

Deposits. Total deposits at June 30, 1998 were $96.5 million compared to
$59.1 million at June 30, 1997, an increase of $37.4 million or 63%. The
following is a summary of the distribution of deposits (in thousands):


<TABLE>
<CAPTION>
                                        06/30/98  12/31/97  06/30/97
                                        --------  --------  --------
<S>                                      <C>       <C>       <C>
Non-interest bearing:
          Demand                         $13,114   $ 8,587   $ 9,711
                                         =======   =======   =======

Interest bearing:
          Checking                       $ 2,120   $ 1,274   $   738
          Money market                    10,656     6,787     5,487
          Savings                          1,859     1,529     1,375
          Time, under $100,000            42,661    36,114    24,672
          Time, $100,000 and over
               Non-volatile priced        15,265    12,055     8,098
               Volatile priced            10,820     9,051     8,992
                                         -------   -------   -------

                                         $83,381   $66,810   $49,362
                                         =======   =======   =======
</TABLE>


The increase in deposits was primarily due to normal business development,
marketing, telemarketing, referral programs and growth strategies which
included two major marketing campaigns, an annual birthday celebration in
March each year and a grand opening celebration of the Bank's Plymouth
Township branch in August, 1997. The increase in deposits enabled the
Corporation to invest the funds in loans, federal funds sold and investment
securities - available for sale.

Accrued  Interest  Payable.  Accrued  interest  payable at June 30,  1998 was
$304,000  compared to $178,000 at June 30,  1997,  an increase of $126,000 or
70%. The increase was due to the increase in the volume of time deposits.


                                     16


<PAGE>

   
Capital

Stockholders' equity at June 30, 1998 was $27.4 million compared to $8.4
million as of June 30, 1997, an increase of $19.0 million or 226%. The
following is a presentation of the Bank's regulatory capital ratios (in
thousands):

<TABLE>
<CAPTION>
                                                                                           Minimum
                                                                                   To Be Well Capitalized
                                                             Minimum For Capital  Under Prompt Corrective
                                             Actual           Adequacy Purposes:      Action Provisions:
                                       ------------------    -------------------  -----------------------
                                       Amount       Ratio     Amount       Ratio      Amount      Ratio
                                       ------       -----     ------       -----      ------      -----
<S>                                    <C>          <C>        <C>          <C>       <C>         <C>  
As of June 30, 1998
    Total capital
         (to risk weighted assets)     10,264       16.8%      4,888        8.0%      6,110       10.0%
    Tier I capital
         (to risk weighted assets)      9,707       15.9%      2,442        4.0%      3,663        6.0%
    Tier I capital
         (to average assets)            9,707        9.3%      4,175        4.0%      5,219        5.0%

As of June 30, 1997
    Total capital
         (to risk weighted assets)      6,515       16.1%      3,237        8.0%      4,047       10.0%
    Tier I capital
         (to risk weighted assets)      6,079       15.0%      1,621        4.0%      2,432        6.0%
    Tier I capital
         (to average assets)            6,079       10.1%      2,408        4.0%      3,009        5.0%
</TABLE>
    

Based on the respective  regulatory capital ratios at June 30, 1998 and 1997,
the Bank is well capitalized.

On April 8, 1998, the Corporation completed an initial public offering of
common stock underwritten by Roney and Co. As a result of the offering, the
Corporation sold 1,380,000 shares of stock at a price of $14.00 per share and
received $18.0 million in new capital, net of offering costs. The Corporation
is also now trading on the NASDAQ Small-Cap Market under the symbol "DEAR".

Liquidity and Asset and Liability Management

Liquidity refers to readily available funds to meet the needs of borrowers
and depositors. Levels of liquidity are closely monitored in conjunction with
loan funding requirements and deposit outflows. Adequate liquidity protects
institutions from raising funds under duress at excessive expense and
provides a necessary cushion for occasional unpredictable aberrations in
demand. While adequate liquidity is imperative, excessive liquidity in lower
yielding cash investments or other easily marketable assets reduces potential
interest income. Thus, an appropriate balance must be maintained to protect
the institution and at the same time, prudently maximize income
opportunities. Sources of liquidity from both assets and liabilities includes
federal funds sold, securities available for sale, loan repayments, core
deposits and a federal funds purchase credit facility.


                                     17


<PAGE>

The Corporation has sought to manage its exposure to changes in interest
rates by matching more closely the effective maturities or repricing
characteristics of the Corporation's interest-earning assets and
interest-bearing liabilities. The matching of the asset and liabilities may
be analyzed by examining the extent to which the assets and liabilities are
interest rate sensitive and by monitoring the expected effects of interest
rate changes on net interest income.

An asset or liability is interest rate sensitive within a specific time
period if it will mature or reprice within that time period. If the
Corporation's assets mature or reprice more quickly or to a greater extent
that its liabilities, the Corporation's net portfolio value and net interest
income would tend to increase during periods of rising interest rates but
decrease during periods of falling interest rates. If the Corporation's
assets mature or reprice more slowly or to a lesser extent than its
liabilities, its net portfolio value and net interest income would tend to
decrease during periods of rising interest rates but increase during periods
of falling interest rates.

Interest Rate Sensitivity Analysis. The matching of assets and liabilities
may be analyzed by examining the extent to which such assets and liabilities
are "interest rate sensitive" and by monitoring an institution's interest
rate sensitivity "gap." An asset or liability is said to be interest rate
sensitive within a specific period if it will mature or reprice within that
period. The interest rate sensitivity "gap" is the difference between the
amount of interest-earning assets maturing or repricing within a specific
time period and the amount of interest-bearing liabilities maturing or
repricing within that time period. A gap is considered positive when the
amount of interest rate sensitive assets exceeds the amount of interest rate
sensitive liabilities, and is considered negative when the amount of interest
rate sensitive liabilities exceed the amount of interest rate sensitive
assets. During a period of rising interest rates, a negative gap would be
expected to adversely affect net interest income while a positive gap would
be expected to result in an increase in net interest income, while conversely
during a period of declining interest rates, a negative gap would be expected
to result in an increase in net interest income and a positive gap would be
expected to adversely affect net interest income.

Different types of assets and liabilities with the same or similar maturities
may react differently to changes in overall market rates or conditions, and
thus changes in interest rates may affect net interest income positively or
negatively even if an institution were perfectly matched in each maturity
category. Additionally, the gap analysis does not consider the many factors
as banking interest rates move. While the interest rate sensitivity gap is a
useful measurement and contributes toward effective asset and liability
management, it is difficult to predict the effect of changing interest rates
solely on that measure, without accounting for alterations in the maturity or
repricing characteristics of the balance sheet that occur during changes in
market interest rates. During periods of rising interest rates, the
Corporation's assets tend to have prepayments that are slower than those in
an interest rate sensitivity gap and would increase the negative gap
position. Conversely, during a period of falling interest rates, the
Corporation's assets would tend to prepay faster than originally expected
thus decreasing the negative gap position. In addition, some of the
Corporation's assets, such as adjustable rate mortgages, have caps on the
amount by which their interest rates can change in any single period, and
therefore may not reprice as quickly as liabilities in the same maturity
category.


                                     18


<PAGE>

The following table set forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at June 30, 1998 which are expected
to mature or reprice in each of the time periods shown (in thousands):

<TABLE>
<CAPTION>
                                                       Interest Rate Sensitivity Period
                                               --------------------------------------------------
(In thousands)                                   1-90     91-365       1-5      Over
                                                 Days      Days       Years    5 Years    Total
                                               -------   --------    -------   -------    -----
<S>                                            <C>       <C>         <C>       <C>       <C>
Earning assets
          Federal funds sold                   $ 6,143   $   --      $  --     $  --     $  6,143
          Mortgage loans held for sale           5,214       --         --        --        5,214
          Securities available for sale         10,250      1,002     40,248      --       51,500
          Total loans, net of non-accrual       12,247      6,289     36,561     1,082     56,179
                                               -------   --------    -------   -------   --------
Total earning assets                            33,854      7,291     76,809     1,082    119,036

Interest bearing liabilities
          Total interest bearing deposits       19,662     47,665     16,054      --       83,381
          Mortgage payable                        --         --         --         528        528
                                               -------   --------    -------   -------   --------
Total interest bearing liabilities              19,662     47,665     16,054       528     83,909

Net asset (liability) funding gap               14,192    (40,374)    60,755       554   $ 35,127
                                               -------   --------    -------   -------   ========

Cumulative net asset (liability) funding gap   $14,192   $(26,182)   $34,573   $35,127
                                               =======   ========    =======   =======
</TABLE>


Year 2000 Problem

The Corporation is aware of the current concerns throughout the business
community of reliance upon computer software programs that do not properly
recognize the year 2000 in date formats, often referred to as the "Year 2000
Problem." The Year 2000 Problem is the result of software being written using
two digits rather than four digits to define the application year (i.e., "98"
rather than "1998"). A failure by a business to properly identify and correct
a Year 2000 Problem in its operations could result in system failures or
miscalculations. In turn, this could result in disruptions of operations,
including among other things a temporary inability to process transactions,
send invoices or otherwise engage in routine business transactions on a
day-to-day basis.

Operations of the Corporation depend upon the successful operation on a daily
basis of its computer software programs. The Corporation relies upon software
purchased from third-party vendors rather than internally generated software,
and based upon its ongoing discussions with these vendors, the Corporation
believes that most of its software already reflects changes necessary to
avoid the Year 2000 Problem. The Corporation expects to update during 1998
any remaining software that could be affected by the Year 2000 Problem to
eliminate remaining concerns. This update is not expected to have a material
adverse effect on the Corporation.


                                     19


<PAGE>

DEARBORN BANCORP, INC.
FORM 10-Q  (continued)

PART 2  -  OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

           The Corporation held its regular annual meeting of stockholders on
           May 19,  1998.  At this  meeting,  an  election  was  held for six
           directors,  to serve two and three year terms expiring in 2000 and
           2001. The voting results for each nominee were as follows:

           Nominee                           Total For      Total Withheld
           -------                           ---------      --------------
           Dr. Robert C. Schwyn (2000)        747,570            None
           Margaret I. Campbell (2001)        747,570            None
           John E. Demmer (2001)              747,570            None
           Michael V. Dorian, Jr. (2001)      747,460            None
           Donald G. Karcher (2001)           747,570            None
           Richard Nordstrom (2001)           747,570            None

           In addition, the stockholders were asked to approve two proposals.

           A proposal to amend the articles of incorporation to increase the
           number of authorized shares of common stock from 3,000,000 to
           5,000,000 shares was approved as follows: voted yes 743,339; voted
           no 1,540; abstained none.

           A proposal to amend the 1994 stock option plan to make available
           an additional 85,000 shares of common stock for issuance under the
           plan was approved as follows: voted yes 681,545; voted no 21,067;
           abstained 3,383.

ITEM 6.  EXHIBITS AND REPORTS IN FORM 8-K.

(a)      Financial Statements:

         The following consolidated financial statements of Dearborn
         Bancorp, Inc. and its subsidiary included in this report are:

         Consolidated Balance Sheets - June 30, 1998, December 31, 1997 and
             June 30, 1997

         Consolidated Statements of Income - For the Three and Six Months
             Ended June 30, 1998 and 1997

         Consolidated Statements of Cash Flows - For the Three and
             Six Months Ended June 30, 1998 and 1997

         Notes to Consolidated Financial Statements

(b)      A Form 8-K Report was not filed during the three months ende
         June 30, 1998.


                                     20


<PAGE>

DEARBORN BANCORP, INC.
FORM 10-Q  (continued)


                                  SIGNATURES


Pursuant to the requirements 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.



                            Dearborn Bancorp, Inc.
                                 (Registrant)





                              /s/ John E. Demmer
                     ------------------------------------
                                John E. Demmer
                     Chairman and Chief Executive Officer



                             /s/ Michael J. Ross
                     ------------------------------------
                               Michael J. Ross
                                  President



                            /s/ Jeffrey L. Karafa
                    -------------------------------------
                              Jeffrey L. Karafa
                    Treasurer and Chief Financial Officer




Date:  August 3, 1998