<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 For the Quarterly period ended  September 30, 2000.
                                        -------------------


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 Identification No.)
 incorporation or organization)

                 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 October 31, 2000.

                Class                         Shares Outstanding
                -----                         -------------------
             Common Stock                         2,335,644




<PAGE>   2



                             DEARBORN BANCORP, INC.
                                      INDEX


<TABLE>

<S>                                                                                       <C>
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
                                                                                          ----
                  Independent Accountants' Report                                           3

                  Consolidated Balance Sheets - September 30, 2000,
                  December 31, 1999  and September 30, 1999                                 4

                  Consolidated Statements of Income - For the Three and
                  Nine Months Ended September 30, 2000 and 1999                             5

                  Consolidated Statements of Comprehensive Income (Loss) - For
                  the Three and Nine Months Ended September 30, 2000 and 1999               6

                  Consolidated Statements of Cash Flows - For the
                  Nine Months Ended September 30, 2000 and 1999                             7

                  Notes to Consolidated Financial Statements                                8-10

Item 2.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations, Liquidity and Capital                11-23

Part II.          Other Information:

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

                  Item 6.   Exhibits and Reports on Form 8-K                                24

         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 Securities and Use of Proceeds
                  Item 3.   Defaults upon Senior Securities
                  Item 4.   Submission of Matters to a Vote of Security Holders
                  Item 5.   Other Information

SIGNATURES                                                                                  25
</TABLE>



                                       2


<PAGE>   3






                         INDEPENDENT ACCOUNTANTS' REPORT



Board of Directors and Shareholders
Dearborn Bancorp, Inc.
Dearborn, Michigan


We have reviewed the consolidated balance sheet of Dearborn Bancorp, Inc. as of
September 30, 2000, and the related consolidated statements of income and
comprehensive income for the three and nine month periods ended September 30,
2000 and 1999 and the related consolidated statements of cash flows for the nine
month periods ended September 30, 2000 and 1999. These financial statements are
the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.






                                        /s/ Crowe, Chizek and Company LLP

Grand Rapids, Michigan
October 31, 2000





                                       3


<PAGE>   4







                      DEARBORN BANCORP, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>


(Dollars, in thousands)

                                                                         09/30/00          12/31/99        09/30/99
                                                                        (unaudited)       (audited)      (unaudited)
                                                                       ------------       ----------    ------------
<S>                                                                    <C>                <C>           <C>
ASSETS
Cash and cash equivalents
      Cash and due from banks                                                $2,847           $2,446          $1,812
      Federal funds sold                                                        770            4,963           3,276
                                                                       ------------       ----------    ------------
            Total cash and cash equivalents                                   3,617            7,409           5,088

Mortgage loans held for sale                                                  2,488              783           1,128
Investment securities, available for sale                                    51,440           55,022          60,914
Federal Home Loan Bank stock                                                    381              381             ---
Loans
      Loans                                                                 113,943           85,390          75,624
      Allowance for possible credit losses                                  (1,127)            (781)           (750)
                                                                       -------------      ----------    ------------
           Net loans                                                        112,816           84,609          74,874

Premises and equipment, net                                                   2,827            2,388           2,388
Accrued interest receivable                                                   1,168            1,370           1,157
Other assets                                                                    392              736             822
                                                                       ------------       ----------    ------------

      Total assets                                                         $175,129         $152,698        $146,371
                                                                       ============       ==========    ============


LIABILITIES
Deposits
      Non-interest bearing deposits                                         $20,367          $14,859         $14,132
      Interest bearing deposits                                             119,147          104,016         103,440
                                                                       ------------       ----------    ------------
             Total deposits                                                 139,514          118,875         117,572

Other liabilities
      Federal funds purchased                                                   ---            3,000             ---
      Federal Home Loan Bank advances                                         6,000            2,000             ---
      Mortgage payable                                                          473              493             499
      Accrued interest payable                                                  646              469             371
      Other liabilities                                                         529              601             502
                                                                       ------------       ----------    ------------
             Total liabilities                                              147,162          125,438         118,944

STOCKHOLDERS' EQUITY
          Common   stock - 5,000,000 shares authorized,
             2,373,001, 2,442,740 and 2,473,295 shares
             outstanding at September 30, 2000, December
             31, 1999 and September 30, 1999, respectively                   28,340           28,822          29,015
          Accumulated earnings (deficit)                                        116            (740)         (1,010)
          Accumulated other comprehensive loss                                (489)            (822)           (578)
                                                                       ------------      -----------    ------------
             Total stockholders' equity                                      27,967           27,260          27,427
                                                                       ------------      -----------    ------------

             Total liabilities and stockholders' equity                    $175,129         $152,698        $146,371
                                                                       ============      ===========    ============
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.



                                       4


<PAGE>   5




                      DEARBORN BANCORP, INC. AND SUBSIDIARY

                  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


<TABLE>
<CAPTION>




(In thousands, except share data)                                   Three months ended           Nine months ended
                                                                   09/30/00    09/30/99        09/30/00     09/30/99
                                                                  ---------  ----------       ----------   ----------
<S>                                                               <C>        <C>              <C>          <C>
Interest income
       Interest on loans                                             $2,493      $1,624           $6,609       $4,538
       Interest on investment securities, available for sale            773         839            2,388        2,357
       Interest on federal funds and deposits with banks                 41          39              176          178
                                                                  ---------  ----------       ----------   ----------
                    Total interest income                             3,307       2,502            9,173        7,073

Interest expense
       Interest on deposits                                           1,693       1,231            4,619        3,472
       Interest on other borrowings                                      43           9              123           26
                                                                  ---------  ----------       ----------   ----------
                    Total interest expense                            1,736       1,240            4,742        3,498

                    Net interest income                               1,571       1,262            4,431        3,575
Provision for possible credit losses                                    145          40              385          707
                                                                  ---------  ----------       ----------   ----------

Net interest income after provision for possible credit losses        1,426       1,222            4,046        2,868
                                                                  ---------  ----------       ----------   ----------

Non-interest income
          Service charges on deposit accounts                            49          53              159          142
          Fees for other services to customers                           11           7               24           21
          Gain on the sale of loans                                      93          83              230          261
          Gain (loss) on sale of investment securities                 (47)         ---             (47)          ---
          Other income                                                    1           3                2            3
                                                                 -----------  ----------      ----------   ----------
                    Total non-interest income                           107         146              368          427

Non-interest expenses
          Salaries and employee benefits                                675         574            1,938        1,647
          Occupancy and equipment expense                               114         112              373          329
          Advertising and marketing                                      24          22               95           78
          Stationery and supplies                                        33          48              111          153
          Professional services                                          48         112              164          230
          Data processing                                                42          41              123          124
          FDIC insurance premiums                                         6           3               18            9
          Other operating expenses                                       97          72              300          264
                                                                -----------   ----------     -----------   ----------
                    Total non-interest expenses                       1,039         984            3,122        2,834

Income before income tax provision                                      494         384            1,292          461
Income tax provision                                                    163         161              435          201
                                                                -----------   ----------     -----------   ----------
Net income                                                             $331        $223             $857         $260
                                                                ===========   ==========     ===========   ==========

Per share data:
Net income - basic                                                    $0.14       $0.09           $0.36         $0.11
Net income - diluted                                                  $0.14       $0.09           $0.36         $0.10

Weighted average number of shares outstanding - basic             2,381,845   2,473,295       2,400,900     2,473,295
Weighted average number of shares outstanding - diluted           2,384,291   2,473,295       2,401,573     2,477,599
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.



                                       5


<PAGE>   6



                      DEARBORN BANCORP, INC. AND SUBSIDIARY

       CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

<TABLE>
<CAPTION>


                                                                        Three months ended      Nine months ended
(In thousands)                                                         09/30/00    09/30/99    09/30/00    09/30/99
                                                                      ----------  ----------  ----------  ----------

<S>                                                                   <C>         <C>         <C>         <C>
Net income                                                                  $331        $223        $857        $260
Other comprehensive income (loss), net of tax
     Unrealized gains (losses) on securities
          Unrealized holding gains (losses) arising during period            459        (248)        458        (855)
          Plus:  reclassification adjustment for losses included
             in net income                                                    47         ---          47         ---
          Tax effects                                                       (172)         84        (172)        291
                                                                       ----------  ----------  ----------  ----------
Other comprehensive income (loss)                                            334        (164)        333        (564)
                                                                       ----------  ----------  ----------  ----------

Comprehensive income (loss)                                                 $665         $59      $1,190       ($304)
                                                                       ==========  ==========  ==========  ==========


</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


























                                       6

<PAGE>   7




                      DEARBORN BANCORP, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>



(In thousands)                                                          Nine months ended        Nine months ended
                                                                            9/30/00                   9/30/99
                                                                     ---------------------     --------------------
<S>                                                                  <C>                       <C>
Cash flows from operating activities
          Interest and fees received                                                $9,375                   $6,849
          Interest paid                                                            (4,565)                  (3,464)
          Taxes paid                                                                 (322)                    (280)
          Proceeds from sale of mortgages held for sale                             17,712                   17,138
          Origination of mortgages held for sale                                  (19,187)                 (16,472)
          Cash paid to suppliers and employees                                     (2,624)                  (2,970)
                                                                     ---------------------     --------------------
          Net cash provided by operating activities                                    389                      801

Cash flows from investing activities
          Proceeds from maturities of securities available for sale                  4,000                   29,952
          Proceeds from sales of securities available for sale                       3,962                    2,400
          Purchases of securities available for sale                               (4,000)                 (44,015)
          Increase in loans, net of payments received                             (28,631)                 (10,047)
          Purchases of property and equipment                                        (649)                    (201)
                                                                     ---------------------     --------------------
          Net cash (used in) investing activities                                 (25,318)                 (21,911)

Cash flows from financing activities
          Net increase in non-interest bearing deposits                              5,508                    2,990
          Net increase in interest bearing deposits                                 15,131                   16,972
          Decrease in federal funds purchased                                      (3,000)                      ---
          Proceeds from Federal Home Loan Bank advances                             10,000                      ---
          Repayment in Federal Home Loan Bank advances                             (6,000)                      ---
          Principal payments on mortgage payable                                      (20)                     (18)
          Purchase of treasury stock                                                ( 482)                      ---
                                                                     ---------------------     --------------------
          Net cash provided by financing activities                                 21,137                   19,944

Decrease in cash and cash equivalents                                              (3,792)                  (1,166)
Cash and cash equivalents at the beginning of the period                             7,409                    6,254
                                                                     ---------------------     --------------------

Cash and cash equivalents at the end of the period                                  $3,617                   $5,088
                                                                     =====================     ====================

Reconciliation of net income to net cash provided by
  operating activities
Net income                                                                            $857                     $260
          Adjustments to reconcile net income to net cash
                    provided by operating activities
                    Provision for possible credit losses                               385                      707
                    Depreciation and amortization expense                              248                      346
                    Accretion of discount on investment securities                     (5)                      (3)
                    Amortization of premium on investment securities                    83                      106
                    Loss on sale of investment securities                               47                      ---
                    (Increase) decrease in mortgages held for sale                 (1,705)                       83
                    (Increase) decrease in interest receivable                         202                    (224)
                    Increase in interest payable                                       177                       33
                    (Increase) decrease in other assets                                172                    (450)
                    (Decrease) in other liabilities                                   (72)                     (57)
                                                                     ---------------------     --------------------

Net cash provided by  operating activities                                            $389                     $801
                                                                     =====================     ====================
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                       7



<PAGE>   8



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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.   Accounting and Reporting Policies

     The consolidated 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 consolidated financial statements of the Corporation as of September
     30, 2000 and December 31, 1999 and for the three and nine month periods
     ended September 30, 2000 and 1999 reflect all adjustments, consisting of
     normal recurring items which are in the opinion of management, necessary
     for a fair presentation 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 as of September 30, 2000 and for the
     three and nine months ended September 30, 2000 and 1999 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 interim 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
     1999 Annual Report to Stockholders on Form 10-K.







                                       8




<PAGE>   9





B.   Adoption of New Accounting Standards

     In June 1998, the Financial Accounting Standards Board (the FASB) issued
     Statement No. 133 Accounting for Derivative Instruments and Hedging
     Activities (SFAS 133), subsequently amended by SFAS No. 137 and 138, which
     the company is required to adopt effective January 1, 2001. SFAS 133 will
     require the company to record all derivatives on the balance sheet at fair
     value. Changes in derivative fair values will either be recognized in
     earnings as offsets to the fair value of related hedged assets, liabilities
     and firm commitments or, for forecasted transactions, deferred and recorded
     as a component of other stockholders' equity until the hedged transactions
     occur and are recognized in earnings. The inneffective portion of a hedging
     derivative's change in fair value will be immediately recognized in
     earnings. The impact of SFAS 133 on the company's financial statements will
     depend on a variety of factors, including future interpretive guidance from
     the FASB, the future level of forecasted and actual foreign currency
     transactions, the extent of the company's hedging activities, the types of
     hedging instruments used and the effectiveness of such instruments.
     However, the company does not believe the effect of adopting SFAS 133 will
     be material to its financial position.

C.   Stock Option Plan

     Options to buy common stock are granted to officers and employees under a
     Stock Option Plan which provides for issue of up to 500,000 shares.
     Exercise price is the market price at date of grant. The maximum option
     term is ten years, and options vest fully after six months from the date of
     grant. If an option expires or terminates without having been exercised,
     such option becomes available for future grant under the Plan.

     A summary of the option activity is as follows:

<TABLE>
<CAPTION>


                                                                                                          Weighted
                                                                                             Weighted   Average Fair
                                                         Available                           Average      Value of
                                                            for            Options           Exercise     Options
                                                           Grant         Outstanding          Price       Granted
                                                       -----------       -----------       -----------  ------------
<S>                                                    <C>               <C>               <C>          <C>
         Outstanding at January 1, 1998                    208,998            46,002            $ 8.91
         Granted                                          (33,150)            33,150             12.75        6.28
                                                       -------------     -------------     -------------
         Outstanding at December 31, 1998                  175,848            79,152             10.52
         Granted                                          (71,000)            71,000             11.23        4.01
                                                       -------------     -------------     -------------
         Outstanding at December 31, 1999                  104,848           150,152             10.85
         Authorized for Future Grant                       245,000               ---               ---
         Granted                                          (69,500)            69,500              6.93        3.15
         Forfeited                                           2,000           (2,000)              9.22
                                                       -------------     -------------     -------------
         Outstanding at September 30, 2000                 282,348           217,652             $9.61
                                                       =============     =============     =============
</TABLE>


         For the options outstanding at September 30, 2000, the range of
         exercise prices was $6.81 to $12.75 per share with a weighted-average
         remaining contractual term of 8.1 years. At September 30, 2000, 208,652
         options were exercisable at weighted average exercise prices of $9.69
         per share.




                                       9

<PAGE>   10




         Had compensation cost for stock options been measured using the fair
         value method of FASB Statement No. 123, net income and earnings per
         share would have been the pro forma amounts indicated below for the
         nine months ended September 30, 2000 and 1999 (in thousands, except
         per share data). The pro forma effects may increase in the future if
         more options are granted.



<TABLE>
<CAPTION>

                                                        For the Nine Months Ended September 30,
                                                             2000                   1999
                                                     -------------------    ------------------------
<S>                                                  <C>                   <C>
         Net income
               As reported                                          $857                        $260
               Pro forma                                             669                        (13)
         Basic income per share
               As reported                                         $0.36                       $0.11
               Pro forma                                            0.28                      (0.01)
         Diluted income per share
               As reported                                          0.36                        0.10
               Pro forma                                            0.28                      (0.01)
</TABLE>

         The pro forma effects are computed with option pricing models, using
         the following weighted average assumptions as of grant date.

<TABLE>
<CAPTION>

                                                              2000                   1999
                                                       -----------------   -------------------
<S>                                                  <C>                   <C>
          Risk-free interest rate                                 6.73%                 4.94%
          Expected option life                                  9 years               9 years
          Dividend yield                                          0.00%                 0.00%
          Expected volatility of stock price                     33.45%                33.45%

</TABLE>

           All share and per share amounts have been adjusted for stock
dividends.











                                       10



<PAGE>   11





PART I  -  FINANCIAL INFORMATION

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

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.

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

Future Factors include changes in interest rates and interest rate
relationships; demand for products and services; the degree of competition by
traditional and non-traditional competitors; changes in banking regulation;
changes in tax laws; changes in prices, levies and assessments; the impact of
technological advances; governmental and regulatory policy changes; the outcomes
of contingencies; trends in customer behavior as well as their ability to repay
loans; and changes in the national and local economy. These are representative
of the Future Factors that could cause a difference between an ultimate actual
outcome and a preceding forward-looking statement.











                                       11


<PAGE>   12



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. The Bank is in the process of constructing an office,
located at 1325 N. Canton Center Road, Canton Township, Michigan, which is
expected to open in the first quarter of 2001.

RESULTS OF OPERATIONS

The Corporation reported net income of $331,000 and $857,000 for the three and
nine month periods ended September 30, 2000, compared to net income of $223,000
and $260,000 for the three and nine month periods ended September 30, 1999. The
increase in net income was primarily due to the positive impact of net interest
income due primarily to significant growth in the volume of loans, partially
offset by growth in deposits. The reported net income for the nine month period
ended September 30, 1999 was negatively impacted by a charge-off in the amount
of $543,000 due to the bankruptcy of a commercial borrower. Management expects
net income to continue to increase in 2001 due to the continued growth in net
interest income and partially offset by the start-up costs of a new branch
office in Canton Township, Michigan.

NET INTEREST INCOME

2000 Compared to 1999. Net interest income for the three month period ended
September 30, 2000 was $1,571,000 compared to $1,262,000 for the same period
ended September 30, 1999, an increase of $309,000 or 24%. This increase was
caused primarily by an increase in average earning assets of $24.2 million
between the periods while interest-bearing liabilities grew by $19.3 million. At
the same time the Corporation's interest rate spread increased to 2.43% in 2000
from 2.40% in 1999. The Corporation's net interest margin increased in 2000 to
3.82% from 3.62% in 1999. The Corporation's increase in interest rate spread and
net interest margin was primarily a result of growth in the loan portfolio in an
increasing interest rate environment. The net interest margin was also
positively affected by the increase in non-interest bearing deposits.

Net interest income for the nine month period ended September 30, 2000 was
$4,431,000 compared to $3,575,000 for the same period ended September 30, 1999,
an increase of $856,000 or 24%. This increase was caused primarily by an
increase in average earning assets of $24.3 million between the periods while
interest-bearing liabilities grew by $21.4 million. At the same time the
Corporation's interest rate spread increased to 2.48% in 2000 from 2.32% in
1999. The Corporation's net interest margin increased in 2000 to 3.77% from
3.55% in 1999. The Corporation's increase in interest rate spread and net
interest margin was primarily a result of growth in the loan portfolio in an
increasing interest rate environment. The net interest margin was also
positively affected by the increase in non-interest bearing deposits.


                                       12


<PAGE>   13




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 loan category.


<TABLE>
<CAPTION>



                                                                Three months ended September 30,   Three  months ended September 30,
                                                                            2000                               1999
                                                                --------------------------------   --------------------------------
                                                                 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                            $2,613       $41       6.24%       $3,103       $39       5.03%
     Investment securities, available for sale                    53,005       773       5.80%       60,584       839       5.54%
     Loans                                                       107,961     2,493       9.19%       75,694     1,624       8.58%
                                                                --------  --------  ----------   ----------  --------   ---------

           Sub-total earning assets                              163,579     3,307       8.04%      139,381     2,502       7.18%
     Other assets                                                  7,775                              6,059
                                                                --------                          ---------
           Total assets                                         $171,354                           $145,440
                                                                ========                          =========


Liabilities and stockholders' equity
     Interest bearing deposits                                  $120,602    $1,693       5.58%     $103,230    $1,231       4.77%
     Other borrowings                                              2,437        43       7.02%          510         9       7.06%
                                                                --------   -------   ---------    ---------   -------   ---------
           Sub-total interest bearing liabilities                123,039     1,736       5.61%      103,740     1,240       4.78%
     Non-interest bearing deposits                                19,643                             13,570
     Other liabilities                                             1,028                                857
     Stockholders' equity                                         27,644                             27,273
                                                                --------                          ---------
           Total liabilities and  stockholders' equity          $171,354                           $145,440
                                                                ========                          =========



           Net interest income                                              $1,571                             $1,262
                                                                           =======                            =======


           Net interest rate spread                                                      2.43%                              2.40%
                                                                                     =========                          =========
           Net interest margin on earning assets                                         3.82%                              3.62%
                                                                                     =========                          =========


</TABLE>


                                       13




<PAGE>   14




<TABLE>
<CAPTION>


                                                                Nine months ended September 30,   Nine months ended September 30,
                                                                            2000                                1999
                                                               --------------------------------  --------------------------------
                                                                 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                        $3,880      $176       6.06%      $4,423      $178       5.37%
          Investment securities, available for sale                54,732     2,388       5.83%      56,530     2,357       5.56%
          Loans                                                    98,396     6,609       8.97%      71,800     4,538       8.43%
                                                                 --------   -------   ---------   ---------  --------  ----------
                Sub-total earning assets                          157,008     9,173       7.80%     132,753     7,073       7.10%
          Other assets                                              7,281                             5,672
                                                                 --------                         ---------


                Total assets                                     $164,289                          $138,425
                                                                 ========                         =========


Liabilities and stockholders' equity
         Interest bearing deposits                               $116,374    $4,619       5.30%     $97,033    $3,472       4.77%
         Other borrowings                                           2,554       123       6.43%         511        26       6.78%
                                                                 --------   -------   ---------   ---------  --------  ----------
                Sub-total interest bearing liabilities            118,928     4,742       5.33%      97,544     3,498       4.78%

          Non-interest bearing deposits                            16,954                            12,507
          Other liabilities                                         1,094                               845
          Stockholders' equity                                     27,313                            27,529
                                                                 --------                         ---------

                Total liabilities and stockholders' equity       $164,289                         $ 138,425
                                                                 ========                         =========



                Net interest income                                          $4,431                            $3,575
                                                                            =======                           =======


                Net interest rate spread                                                  2.47%                             2.32%
                                                                                      =========                        ==========

                Net interest margin on earning assets                                     3.77%                             3.60%
                                                                                      =========                        ==========
</TABLE>



                                       14



<PAGE>   15






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.

<TABLE>
<CAPTION>


                                                  Three months ended                   Nine  months ended
                                                September 30, 2000/1999              September 30, 2000/1999
                                                 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             ($7)        $9        $2          ($17)        $15        ($2)
    Investment securities, available for sale     (106)        40      (66)           (48)         79          31

    Loans                                           755       114       869          1,874        197       2,071
                                              ---------   -------    ------       --------   --------    --------
Total earning assets                               $642      $163      $805         $1,809       $291      $2,100
                                              =========   =======    ======       ========   ========    ========

Liabilities
    Interest bearing deposits                      $252      $210      $462           $889       $258      $1,147
    Other borrowings                                 34       ---        34             98        (1)         $97
                                              ---------   -------    ------       --------   --------    --------
Total interest bearing liabilities                 $286      $210      $496           $987       $257      $1,244
                                              =========   =======    ======       ========   ========    ========

           Net interest income                                         $309                                  $856
                                                                     ======                              ========

           Net interest rate spread                                   0.03%                                 0.15%
                                                                     ======                              ========

           Net interest margin on earning assets                      0.20%                                 0.17%
                                                                     ======                              ========
</TABLE>





PROVISION FOR POSSIBLE CREDIT LOSSES

2000 Compared to 1999. The provision for possible credit losses was $145,000 and
$385,000 for the three and nine month periods ended September 30, 2000, compared
to $40,000 and $707,000 for the same periods in 1999, an increase of $105,000 or
263% for the three month period and a decrease of $322,000 or 46% for the nine
month period. The provision for possible credit losses for the three month
period and nine month period ended September 30, 2000 reflects loan growth of
$11.3 million and $28.6 million for the three and nine month periods ended
September 30, 2000, respectively. The provision for possible credit losses for
the nine month period ended September 30, 1999 includes provision for the
bankruptcy of a borrower, with whom the Corporation participated in a lending
relationship with a number of other Michigan banks. 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.



                                       15




<PAGE>   16




NON-INTEREST INCOME

2000 Compared to 1999. Non-interest income was $107,000 and $368,000 for the
three and nine month periods ended September 30, 2000, compared to $146,000 and
$427,000 for the same periods in 1999, a decrease of $39,000 or 27% for the
three month period and a decrease of $59,000 or 14% for the nine month period.
The decrease during the three and nine month periods was primarily due to a loss
of $47,000 on the sale of U. S. government agency securities. These securities
were sold in order to provide funding for additional commercial lending demand
during the period.

NON-INTEREST EXPENSE

2000 Compared to 1999. Non-interest expense was $1,039,000 and $3,122,000 for
the three and nine month periods ended September 30, 2000, compared to $984,000
and $2,834,000 for the same periods in 1999, an increase of $55,000 or 6% for
the three month period and $288,000 or 10% for the nine month period. The
largest components of non-interest expense were salaries and employee benefits
which amounted to $675,000 and $1,938,000 and occupancy and equipment expense
which amounted to $114,000 and $373,000 for the three and nine month periods
ended September 30, 2000. For the same periods in 1999, salaries and employee
benefits was $574,000 and $1,647,000 and occupancy and equipment expense was
$112,000 and $329,000. The primary factor for the increase in salaries and
employee benefits was the expansion of the commercial lending and residential
lending departments. As of September 30, 2000, the number of full time
equivalent employees was 46 compared to 40 as of September 30, 1999. The
increase in occupancy and equipment expense was the result of general building
maintenance in the first quarter of 2000 and additional depreciation expense on
equipment purchased as a result of Year 2000 concerns during 1999.

INCOME TAX PROVISION

2000 Compared to 1999. The income tax expense was $163,000 and $435,000 for the
three and nine month periods ended September 30, 2000, compared to $161,000 and
$201,000 for the same periods in 1999, an increase of $2,000 or 1% for the three
month period and an increase of $234,000 or 116% for the nine month period. The
increase was primarily a result of increased pre-tax income.

COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2000 AND DECEMBER 31, 1999

Assets. Total assets at September 30, 2000 were $175.1 million compared to
$152.7 million at December 31, 1999, an increase of $22.4 million or 15%. The
increase was primarily due to increases in loan volume.

Federal Funds Sold. Total federal funds sold at September 30, 2000 were $770,000
compared to $5.0 million at December 31, 1999, a decrease of $4.2 million or
84%. The decrease was primarily due to the funding of new consumer, residential
real estate and commercial real estate loans.




                                       16

<PAGE>   17



Mortgage Loans Held for Sale. Total mortgage loans held for sale at September
30, 2000 were $2.5 million compared to $783,000 at December 31, 1999, an
increase of $1.7 million or 218%. This increase was a result of timing
differences in secondary market funding.

Investment Securities - Available for Sale. Total investment securities -
available for sale, at September 30, 2000 were $51.4 million compared to $55.0
million at December 31, 1999, a decrease of $3.6 million or 7%. The decrease in
investment securities - available for sale was due to the sale of U. S.
Government agency securities during the period. The funds from the sale of these
securities were utilized to fund additional commercial loan demand. All
securities within the Corporation's portfolio are U.S. Treasury issues, U.S.
Government sponsored agency issues, corporate debt securities carrying ratings
of Aa2 or better or municipal obligations carrying ratings of Aaa 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>


                                                                     September 30, 2000
                                          -------------------------------------------------------------------------
                                                                   Gross             Gross            Estimated
                                              Amortized          Unrealized        Unrealized          Market
                                                Cost               Gains             Losses             Value
                                          ------------------  ----------------- -----------------  ----------------
<S>                                       <C>                 <C>               <C>                <C>
US Treasury securities                               $2,246               $---             ($21)            $2,225
US Government agency securities                      49,809                ---             (718)            49,091
Municipal bonds                                         125                ---               (1)               124
                                          -----------------   ----------------  ----------------   ---------------

          Totals                                    $52,180               $---            ($740)           $51,440
                                          =================   ================  ================   ===============

<CAPTION>
                                                                     December 31, 1999
                                          -------------------------------------------------------------------------
                                                                   Gross             Gross            Estimated
                                              Amortized          Unrealized        Unrealized          Market
                                                Cost               Gains             Losses             Value
                                          ------------------  ----------------- -----------------  ----------------
<S>                                       <C>                 <C>               <C>                <C>
US Treasury securities                               $2,320               $---             ($76)            $2,244
US Government agency securities                      53,822                ---           (1,167)            52,655
Municipal bonds                                         125                ---               (2)               123
                                          -----------------   ----------------  ----------------   ---------------

          Totals                                    $56,267               $---          ($1,245)           $55,022
                                          =================   ================  ================   ===============

</TABLE>


Federal Home Loan Bank Stock. Federal Home Loan Bank stock was valued at
$381,000 at September 30, 2000 and December 31, 1999.






                                       17

<PAGE>   18


Loans. Total loans at September 30, 2000 were $113.9 million compared to $85.4
million at December 31, 1999, an increase of $28.6 million or 33% and $75.6
million at September 30, 1999, an increase of $38.3 million or 51%. Major
categories of loans included in the loan portfolio are as follows (in
thousands):

<TABLE>
<CAPTION>

                                                            09/30/00            12/31/99            09/30/99
                                                        ------------------  ------------------  ------------------
<S>                                                     <C>                 <C>                 <C>
Consumer loans                                                    $17,204             $10,967             $10,566
Commercial, financial, & other                                     26,129              20,563              19,701
Commercial real estate construction                                 2,471               3,656               3,100
Commercial real estate mortgages                                   38,218              23,103              16,873
Residential real estate mortgages                                  29,921              27,101              25,384
                                                        -----------------   -----------------   -----------------

                                                                  113,943              85,390              75,624
Allowance for possible credit losses                              (1,127)               (781)               (750)
                                                        -----------------   -----------------   -----------------

                                                                 $112,816             $84,609             $74,874
                                                        =================   =================   =================

</TABLE>



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

<TABLE>
<CAPTION>


                                                            09/30/00            12/31/99            09/30/99
                                                        ------------------  ------------------  ------------------
<S>                                                     <C>                 <C>                 <C>
Over 90 days past due and still accruing                             $202                $190                 $66
Non-accrual loans                                                     491                 105                 154
Renegotiated loans                                                    ---                 ---                 ---
Other real estate owned                                               ---                 ---                 ---
                                                        -----------------   -----------------   -----------------

                                                                     $693                $295                $220
                                                        =================   =================   =================

</TABLE>


Non-accrual loans at September 30, 2000 were $491,000, of which, $344,000 were
well secured by residential real estate. The increase in non-accrual loans
consisted of a $286,000 slow paying residential mortgage, a $65,000 residential
mortgage in bankruptcy proceedings and a $59,000 SBA-guaranteed commercial loan.












                                       18



<PAGE>   19



Allowance for Possible Credit Losses. The allowance for possible credit losses
at September 30, 2000 was $1.1 million compared to $781,000 at December 31,
1999, an increase of $346,000 or 44%. The increase in the allowance for possible
credit losses was based upon management's assessment of relevant factors,
including loan growth, types and amounts of non-performing loans, historical and
anticipated loss experience on such types of loans, and current and projected
economic conditions.

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

<TABLE>
<CAPTION>

                                             Nine Months Ended           Year Ended           Nine Months Ended
                                                 09/30/00                 12/31/99                09/30/99
                                          ------------------------ ----------------------- ------------------------
<S>                                       <C>                      <C>                     <C>
Balance, beginning of year                                   $781                    $627                     $627

Charge-offs:
     Consumer loans                                          (21)                    (55)                     (55)
     Commercial loans                                        (20)                   (584)                    (543)
Recoveries:
     Consumer loans                                             2                      21                       14
                                          -----------------------  ----------------------  -----------------------

Net charge-offs                                              (39)                   (618)                    (584)

Additions charged to operations                               385                     772                      707
                                          -----------------------  ----------------------  -----------------------

Balance, end of period                                     $1,127                    $781                     $750
                                          =======================  ======================  =======================

Allowance to total loans                                    0.99%                   0.91%                    0.99%
                                          =======================  ======================  =======================

Allowance to nonperforming assets                         162.63%                 264.75%                  340.91%
                                          =======================  ======================  =======================

Net charge-offs to average loans                            0.04%                   0.84%                    0.81%
                                          =======================  ======================  =======================

</TABLE>


Premises and Equipment. Bank premises and equipment at September 30, 2000 was
$2.8 million compared to $2.4 million at December 31, 1999, an increase of
$439,000 or 18%. The increase in premises and equipment was due to the purchase
of land and work in progress for the Bank's Canton Township office.

Accrued Interest Receivable. Accrued interest receivable at September 30, 2000
was $1.2 million compared to $1.4 million at December 31, 1999, a decrease of
$202,000 or 15%. The decrease was primarily due to a decrease in the Bank's
holdings of investment securities - available for sale.

Other Assets. Other assets at September 30, 2000 were $392,000 compared to
$736,000 at December 31, 1999, a decrease of $344,000 or 47%. The decrease was
primarily due to changes in deferred tax assets.




                                       19


<PAGE>   20


Deposits. Total deposits at September 30, 2000 were $139.5 million compared to
$118.9 million at December 31, 1999, an increase of $20.6 million or 17% and
$117.6 million at September 30, 1999, an increase of $21.9 million or 19%. The
following is a summary of the distribution of deposits (in thousands):

<TABLE>
<CAPTION>


                                                            09/30/00            12/31/99            09/30/99
                                                        ------------------  ------------------  ------------------
<S>                                                     <C>                 <C>                 <C>
Non-interest bearing:
     Demand                                                       $20,367             $14,859             $14,132
                                                        =================   =================   =================


Interest bearing:
          Checking                                                 $5,758              $5,391              $4,995
          Money market                                             16,809              13,013              14,644
          Savings                                                   4,404               3,109               3,972
          Time, under $100,000                                     43,176              40,984              42,809
          Time, $100,000 and over                                  49,000              41,519              37,020
                                                        -----------------   -----------------   -----------------

                                                                 $119,147            $104,016            $103,440
                                                        =================   =================   =================
</TABLE>


The increase in deposits was primarily due to normal business development,
marketing, telemarketing, referral programs and growth strategies which included
an annual birthday celebration and major marketing campaign in March 2000 and a
targeted deposit campaign in April 2000. The increase in deposits was used to
repay borrowed funds and to fund loans.

Federal Home Loan Bank Advances. Federal Home Loan Bank advances at September
30, 2000 were $6.0 million compared to $2.0 million at December 31, 1999, an
increase of $4.0 million or 200%. Federal Home Loan Bank advances were utilized
to fund increased loan demand during the period.

Mortgage Payable. Mortgage payable at September 30, 2000 was $473,000 compared
to $493,000 at December 31, 1999, a decrease of $20,000 or 4%. The decrease in
mortgage payable was a result of making standard monthly payments.

Accrued Interest Payable. Accrued interest payable at September 30, 2000 was
$646,000 compared to $469,000 at December 31, 1999, an increase of $177,000 or
38%. The increase was primarily due to the increase in the volume of time
deposits.

Other Liabilities. Other liabilities at September 30, 2000 were $529,000
compared to $601,000 at December 31, 1999, a decrease of $72,000 or 12%. The
decrease was primarily due to changes in deferred tax liabilities.






                                       20



<PAGE>   21





CAPITAL

Stockholders' equity at September 30, 2000 was $28.0 million compared to $27.3
million as of December 31, 1999, an increase of $707,000 or 3%. In November of
1999, the Corporation announced that it would repurchase up to 125,000 shares of
its outstanding common stock at a price range of $5.00 to $13.00 per share,
which represents approximately five percent of the outstanding common stock.
Through September 30, 2000, the Corporation was able to repurchase 99,514 shares
within Securities and Exchange Commission guidelines primarily related to the
volume of market activity. Considering that the Corporation's stock closed at
$7.880 per share on September 30, 2000, representing a 67 percent market to book
ratio, management believes that its stock is undervalued. The Corporation will
continue to repurchase shares during 2000.

The following is a presentation of the Corporation's and 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 September 30, 2000
    Total capital
     (to risk weighted assets)

           Consolidated              29,583    28.6%            8,266       8.0%           10,333        10.0%
           Bank                      14,762    14.5%            8,123       8.0%           10,154        10.0%
    Tier 1 capital
     (to risk weighted assets)

           Consolidated              28,456    27.5%            4,133       4.0%            6,200         6.0%
           Bank                      13,635    13.4%            4,061       4.0%            6,092         6.0%
    Tier 1 capital
     (to average assets)
           Consolidated              28,456    16.6%            6,854       4.0%            8,568         5.0%
           Bank                      13,635     8.7%            6,296       4.0%            7,870         5.0%

As of December 31, 1999
    Total capital
     (to risk weighted assets)

           Consolidated              28,864    32.1%            7,193       8.0%            8,992        10.0%
           Bank                      12,878    15.1%            6,824       8.0%            8,531        10.0%
    Tier 1 capital
     (to risk weighted assets)

           Consolidated              28,083    31.2%            3,597       4.0%            5,395         6.0%
           Bank                      12,097    14.2%            3,412       4.0%            5,118         6.0%
    Tier 1 capital
     (to average assets)
           Consolidated              28,083    19.2%            5,860       4.0%            7,325         5.0%
           Bank                      12,097     9.2%            5,255       4.0%            6,568         5.0%

</TABLE>


Based on the respective regulatory capital ratios at September 30, 2000 and
December 31, 1999, the Corporation and Bank are considered well capitalized.


                                       21


<PAGE>   22


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 include federal funds sold, securities
available for sale, loan repayments, core deposits and a federal funds purchase
credit facility.

The Corporation has sought to manage its exposure to changes in interest rates
by matching the effective maturities or repricing characteristics of the
Corporation's interest-earning assets and interest-bearing liabilities. The
matching of the assets 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.






                                       22


<PAGE>   23


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 declining 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.

The following table sets forth the amounts of interest earning assets and
interest bearing liabilities outstanding at September 30, 2000, which are
expected to mature or reprice in each of the time periods shown below. For the
purposes of this table, the maturity or repricing periods of other interest
bearing deposits are based upon industry experience as determined by the
Corporation's regulators. These rates are not the contractual repricing periods,
which are shorter than what is shown, as management has broad discretion in
repricing these deposits.

                      DEARBORN BANCORP, INC. AND SUBSIDIARY

                    RATE SENSITIVITY ANALYSIS / GAP ANALYSIS

<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                                  $770         $---        $---        $---        $770
      Mortgage loans held for sale                       2,488          ---         ---         ---       2,488
      Securities available for sale                        ---        3,968      47,472         ---      51,440
      Federal Home Loan Bank stock                         381          ---         ---         ---         381
      Total loans, net of non-accrual                   23,792        9,455      65,518      14,687     113,452
                                                    ----------   ----------   ---------   ---------   ---------
Total earning assets                                    27,431       13,423     112,990      14,687     168,531

Interest bearing liabilities
      Time deposits                                     24,461       43,858      23,857         ---      92,176
      Other interest bearing deposits                    3,030        9,089      14,852         ---      26,971
      Federal Home Loan Bank advances                    6,000          ---         ---         ---       6,000
      Mortgage payable                                     ---          ---         ---         473         473
                                                    ----------   ----------   ---------   ---------   ---------
Total interest bearing liabilities                      33,491       52,947      38,709         473     125,620

Net asset (liability) funding gap                      (6,060)     (39,524)      74,281      14,214     $42,911
                                                    ----------   ----------   ---------   ---------   =========

Cumulative net asset (liability) funding gap          ($6,060)    ($45,584)     $28,697     $42,911
                                                    ==========   ==========   =========   =========
</TABLE>



                                       23



<PAGE>   24
DEARBORN BANCORP, INC. AND SUBSIDIARY
FORM 10-Q  (continued)

PART II  -  OTHER INFORMATION

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 - September 30, 2000 (unaudited), December 31,
     1999 and September 30, 1999 (unaudited)

     Consolidated Statements of Income (unaudited) - For the Three and Nine
     Months Ended September 30, 2000 and 1999

     Consolidated Statements of Comprehensive Income (Loss) (unaudited) - For
     the Three and Nine Months Ended September 30, 2000 and 1999

     Consolidated Statements of Cash Flows (unaudited) - For the Nine Months
     Ended September 30, 2000 and 1999

     Notes to Consolidated Financial Statements

(b)  Exhibits

     Financial Data Schedule [27]

(c)  A Form 8-K Report was not filed during the three months ended September 30,
     2000.




















                                       24

<PAGE>   25






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:  November 10, 2000





                                       25

<PAGE>   26




                                 Exhibit Index
                                 -------------



<TABLE>
<CAPTION>
Exhibit No.                   Description
-----------                   -----------
<S>                           <C>
     27                       Financial Data Schedule

</TABLE>