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, 1999.

Commission file number  000-24478.



DEARBORN BANCORP, INC.


(Exact name of registrant as specified in its charter)



|Michigan                                                      | 38-3073622                         
|------------------------------------------------------------- | -----------------------------------
|                                                             
|(State or other jurisdiction ofincorporation or organization) | (I.R.S. EmployerIdentification No.)




















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, 1999.



|Class        | Shares Outstanding
|------------ | ------------------
|            
|Common Stock | 2,473,295         



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DEARBORN BANCORP, INC.

INDEX

|                                                                                                                                                |                                                                                                                           | Page
|----------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------- | ----
|                                                                                                                                                |                                                                                                                           |     
|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: |     
|                                                                                                                                                |                                                                                                                           |     
|                                                                                                                                                | Consolidated Balance Sheets - September 30, 1999, December 31, 1998 and September 30, 1998                                | 3   
|                                                                                                                                               
|                                                                                                                                                |                                                                                                                           |     
|                                                                                                                                                | Consolidated Statements of Income - For the Three and Nine Months Ended September 30, 1999 and 1998                       | 4   
|                                                                                                                                               
|                                                                                                                                                |                                                                                                                           |     
|                                                                                                                                                | Consolidated Statements of Comprehensive Income (Loss) - For the Three and Nine Months Ended September 30, 1999 and 1998  | 5   
|                                                                                                                                               
|                                                                                                                                                |                                                                                                                           |     
|                                                                                                                                                | Consolidated Statements of Cash Flows - For the Nine Months Ended September 30, 1999 and 1998                             | 6   
|                                                                                                                                               
|                                                                                                                                                |                                                                                                                           |     
|                                                                                                                                                | Notes to Consolidated Financial Statements                                                                                | 7   
|                                                                                                                                                |                                                                                                                           |     
|Item 2.                                                                                                                                         | Management's Discussion and Analysis of Financial Condition and Results of Operations, Liquidity and Capital              | 7-20
|                                                                                                                                                |                                                                                                                           |     
|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                                                                                  | 21  
|                                                                                                                                                |                                                                                                                           |     
|Pursuant to SEC rules and regulations, the following items are omitted      from this Form 10-Q as inapplicable or to which the answer is none: |                                                                                                                          
|                                                                                                                                                |                                                                                                                           |     
|                                                                                                                                                | 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                                                                                                                                      | 22                                                                                                                       



2

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DEARBORN BANCORP, INC. AND SUBSIDIARYCONSOLIDATED BALANCE SHEETS





|(In thousands)                                                                                                                                                | 09/30/99(unaudited) | 12/31/98(audited) | 09/30/98(unaudited)
|------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------- | ----------------- | -------------------
|                                                                                                                                                             
|                                                                                                                                                             
|ASSETS                                                                                                                                                        |                     |                   |                    
|Cash and cash equivalents                                                                                                                                     |                     |                   |                    
|Cash and due from banks                                                                                                                                       | $1,812              |                   | $2,259             
|Federal funds sold                                                                                                                                            | 3,276               |                   | 3,995              
|                                                                                                                                                             
|Total cash and cash equivalents                                                                                                                               | 5,088               |                   | 6,254              
|                                                                                                                                                              |                     |                   |                    
|Mortgage loans held for sale                                                                                                                                  | 1,128               |                   | 1,211              
|Investment securities, available for sale                                                                                                                     | 60,914              |                   | 50,211             
|Loans, net                                                                                                                                                    |                     |                   |                    
|Gross loans                                                                                                                                                   | 75,624              |                   | 66,023             
|Allowance for possible credit losses                                                                                                                          | (750                | )                 | (627               
|                                                                                                                                                             
|Net loans                                                                                                                                                     | 74,874              |                   | 65,396             
|                                                                                                                                                              |                     |                   |                    
|Bank premises and equipment, net                                                                                                                              | 2,388               |                   | 2,378              
|Accrued interest receivable                                                                                                                                   | 1,157               |                   | 933                
|Other assets                                                                                                                                                  | 822                 |                   | 372                
|                                                                                                                                                             
|Total assets                                                                                                                                                  | $146,371            |                   | $126,755           
|                                                                                                                                                             
|                                                                                                                                                              |                     |                   |                    
|LIABILITIES                                                                                                                                                   |                     |                   |                    
|Deposits                                                                                                                                                      |                     |                   |                    
|Non-interest bearing deposits                                                                                                                                 | $  14,132           |                   | $  11,142          
|Interest bearing deposits                                                                                                                                     | 103,440             |                   | 86,468             
|                                                                                                                                                             
|Total deposits                                                                                                                                                | 117,572             |                   | 97,610             
|                                                                                                                                                              |                     |                   |                    
|Other liabilities                                                                                                                                             |                     |                   |                    
|Mortgage payable                                                                                                                                              | 499                 |                   | 517                
|Accrued interest payable                                                                                                                                      | 371                 |                   | 338                
|Other liabilities                                                                                                                                             | 502                 |                   | 559                
|                                                                                                                                                             
|Total liabilities                                                                                                                                             | 118,944             |                   | 99,024             
|                                                                                                                                                              |                     |                   |                    
|STOCKHOLDERS' EQUITY                                                                                                                                          |                     |                   |                    
|Common stock - 5,000,000 shares authorized,      2,473,295 shares outstanding      at September 30, 1999,      December 31, 1998 and
      September 30, 1998 | 29,015              |                   | 29,015             
|Accumulated deficit                                                                                                                                           | (1,010              | )                 | (1,270             
|Accumulated other comprehensive income (loss)                                                                                                                 | (578                | )                 | (14                
|                                                                                                                                                             
|Total stockholders' equity                                                                                                                                    | 27,427              |                   | 27,731             
|                                                                                                                                                              |                     |                   |                    
|Total liabilities and stockholders' equity                                                                                                                    | $146,371            |                   | $126,755           
|                                                                                                                                                             

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



3

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DEARBORN BANCORP, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF INCOME (Unaudited)




|(In thousands, except share and per share data)                  | Three Months Ended | Nine Months Ended
|---------------------------------------------------------------- | ------------------ | -----------------
|                                                                 | 09/30/99           | 09/30/98         
|                                                                
|Interest income                                                  |                    |                  
|Interest on loans                                                | $1,624             | $1,375           
|Interest on investment securities,      available for sale       | 839                | 773              
|Interest on federal funds      and deposits with banks           | 39                 | 121              
|                                                                
|Total interest income                                            | 2,502              | 2,269            
|                                                                 |                    |                  
|Interest expense                                                 |                    |                  
|Interest on deposits                                             | 1,231              | 1,162            
|Interest on other liabilities                                    | 9                  | 10               
|                                                                
|Total interest expense                                           | 1,240              | 1,172            
|                                                                 |                    |                  
|Net interest income                                              | 1,262              | 1,097            
|Provision for possible credit losses                             | 40                 | 37               
|                                                                
|Net interest income after provision   for possible credit losses | 1,222              | 1,060            
|                                                                
|Non-interest income                                             
|Service charges on deposit accounts                              | 53                 | 39               
|Fees for other services to customers                             | 7                  | 6                
|Gain on the sale of loans                                        | 83                 | 63               
|Gain on the sale of investment securities                        | --                 | 20               
|Other income                                                     | 3                  | 1                
|                                                                
|Total non-interest income                                        | 146                | 129              
|                                                                 |                    |                  
|Non-interest expenses                                           
|Salaries and employee benefits                                   | 574                | 471              
|Occupancy and equipment expense                                  | 112                | 101              
|Advertising and marketing                                        | 22                 | 17               
|Stationery and supplies                                          | 59                 | 26               
|Professional services                                            | 101                | 39               
|Data processing                                                  | 41                 | 35               
|FDIC insurance premiums                                          | 3                  | 3                
|Other operating expenses                                         | 72                 | 67               
|                                                                
|Total non-interest expenses                                      | 984                | 759              
|                                                                 |                    |                  
|Income before income tax provision                               | 384                | 430              
|Income tax provision                                             | 161                | 146              
|                                                                 |                    |                  
|                                                                
|Net income                                                       | $223               | $284             
|                                                                
|Share and per share data:                                        |                    |                  
|Net income - basic                                               | $0.09              | $0.11            
|Net income - diluted                                             | $0.09              | $0.11            
|                                                                
|Weighted average number of      shares outstanding - basic       | 2,473,295          | 2,473,295        
|Weighted average number of      shares outstanding - diluted     | 2,473,295          | 2,484,450        

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



4

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DEARBORN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  (unaudited)




|(In thousands)                                                                | Three months ended | Nine months ended
|----------------------------------------------------------------------------- | ------------------ | -----------------
|                                                                              | 09/30/99           | 09/30/98         
|                                                                             
|                                                                              |                    |                  
|Net income                                                                    | $223               |                  
|Other comprehensive income, net of tax                                        |                    |                  
|Unrealized gains (losses) on      securities, available for sale              |                    |                  
|Unrealized holding gains (losses)            arising during period            | (248               | )                
|Less: reclassification adjustment            for gains included in net income | --                 |                  
|Tax effects                                                                   | 84                 |                  
|                                                                             
|Total other comprehensive            income (loss)                            | (164               | )                
|                                                                             
|Comprehensive income (loss)                                                   | $59                |                  
|                                                                             

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



5

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DEARBORN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS  (unaudited)




|(In thousands)                                                                                     | Nine Months Ended
|-------------------------------------------------------------------------------------------------- | -----------------
|                                                                                                   | 9/30/99          
|                                                                                                  
|Cash flows from operating activities                                                               |                  
|Interest and fees received                                                                         | $6,849           
|Interest paid                                                                                      | (3,464           
|Proceeds from sale of mortgages held for sale                                                      | 17,138           
|Origination of mortgages held for sale                                                             | (16,472          
|Participations purchased in mortgages held for sale                                                | --               
|Cash paid to suppliers and employees                                                               | (3,250           
|                                                                                                  
|Net cash provided by operating activities                                                          | 801              
|                                                                                                   |                  
|Cash flows from investing activities                                                               |                  
|Proceeds from maturities of      securities available for sale                                     | 29,952           
|Proceeds from sales of securities      available for sale                                          | 2,400            
|Purchases of securities available for sale                                                         | (44,015          
|Increase in loans, net of payments received                                                        | (10,047          
|Purchases of property and equipment                                                                | (201             
|                                                                                                  
|Net cash (used in) investing activities                                                            | (21,911          
|                                                                                                   |                  
|Cash flows from financing activities                                                               |                  
|Net increase in non-interest bearing deposits                                                      | 2,990            
|Net increase in interest bearing deposits                                                          | 16,972           
|Decrease in federal funds purchased                                                                | --               
|Principal payments on mortgage payable                                                             | (18              
|Sale of common stock, net of offerings costs                                                       | --               
|                                                                                                  
|Net cash provided by financing activities                                                          | 19,944           
|                                                                                                   |                  
|Increase (decrease) in cash and cash equivalents                                                   | (1,166           
|Cash and cash equivalents at the beginning of the period                                           | 6,254            
|                                                                                                   |                  
|                                                                                                  
|Cash and cash equivalents at the end of the period                                                 | $5,088           
|                                                                                                  
|                                                                                                   |                  
|Reconciliation of net income to net cash provided by      (used in) operating activities           |                  
|Net income                                                                                         | $260             
|Adjustments to reconcile net income to net cash


      provided by (used in) operating activities |                  
|Provision for possible credit losses                                                               | 707              
|Depreciation and amortization expense                                                              | 346              
|Accretion of discount on investment securities                                                     | (3               
|Amortization of premium on investment securities                                                   | 106              
|Gain on sale of investment securities                                                              | --               
|(Increase) decrease in mortgages held for sale                                                     | 83               
|(Increase) in accrued interest receivable                                                          | (224             
|Increase (decrease) in accrued interest payable                                                    | 33               
|(Increase) in other assets                                                                         | (450             
|Increase (decrease) in other liabilities                                                           | (57              
|                                                                                                  
|                                                                                                   |                  
|Net cash provided by (used in) operating activities                                                | $801             
|                                                                                                  

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



6

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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, 1999 and December 31, 1998 and for the three and nine month periods ended September 30, 1999 and 1998 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 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 1998 Annual Report to Stockholders on Form 10-K.

PART 1  -  FINANCIAL INFORMATION

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

The following discussion and analysis is 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 include 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.  Actual 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



7

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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.

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 $223,000 and $260,000 for the three month and nine month periods ended September 30, 1999, respectively, compared to net income of $284,000 and $714,000 for the three and nine month periods ended
September 30, 1998.  The Corporation's net income for the nine month period ended September 30, 1999 was negatively impacted by a charge-off of $543,000 during the second quarter due to the bankruptcy of a commercial borrower.

Net Interest Income

1999 Compared to 1998.  Net interest income for the three month period ended September 30, 1999 was $1,262,000 compared to $1,097,000 for the same period ended September 30, 1998, an increase of $165,000 or 15%.  The increase
was caused primarily by an increase in the Corporation's interest rate spread to 2.40% in 1999 from 2.16% in 1998.  At the same time, the Corporation's average earning assets increased by $18.8 million between the periods while average interest-bearing
liabilities grew by $16.3 million.  The Corporation's net interest margin decreased in 1999 to 3.62% from 3.64% in 1998.  The Corporation's increase in interest rate spread was a result of lowering the cost of deposits, while increasing loan volume.

Net interest income for the nine month period ended September 30, 1999 was $3,575,000 compared to $2,776,000 for the same period ended September 30, 1998, an increase of $799,000 or 29%.  This increase was caused primarily by an increase
in average earning assets of $24.7 million between the periods while average interest-bearing liabilities grew by $16.3 million. Additionally, the Corporation's average cost of deposits decreased to 4.77% in 1999 from 5.40% in 1998.  At the same time the
Corporation's interest rate spread increased to 2.32% in 1999 from 2.08% in 1998. The Corporation's net interest margin also increased in 1999 to 3.55% from 3.43% in 1998.  The Corporation's increase in interest rate spread was a result of lowering the
cost of deposits, while increasing loan volume.



8

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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.



|                                                                 | Three Months ended   September 30, 1999 | Three Months ended   September 30, 1998
|---------------------------------------------------------------- | --------------------------------------- | ---------------------------------------
|                                                                
|(In thousands)                                                   | Average   Balance                       | Interest                               
|                                                                
|                                                                 |                                         |                                        
|Assets                                                           |                                         |                                        
|Federal funds sold and interest      bearing deposits with banks | $3,103                                  | $39                                    
|Investment securities, available for sale                        | 60,584                                  | 839                                    
|Loans                                                            | 75,694                                  | 1,624                                  
|                                                                
|Sub-total earning assets                                         | 139,381                                 | 2,502                                  
|Other assets                                                     | 6,059                                   |                                        
|                                                                
|                                                                 |                                         |                                        
|Total assets                                                     | $145,440                                |                                        
|                                                                
|                                                                 |                                         |                                        
|Liabilities and stockholders' equity                             |                                         |                                        
|Interest bearing deposits                                        | $103,230                                | $1,231                                 
|Other borrowings                                                 | 510                                     | 9                                      
|                                                                
|Sub-total interest bearing liabilities                           | 103,740                                 | 1,240                                  
|Non-interest bearing deposits                                    | 13,570                                  |                                        
|Other liabilities                                                | 857                                     |                                        
|Stockholders' equity                                             | 27,273                                  |                                        
|                                                                 |                                         |                                        
|                                                                
|Total liabilities and stockholders' equity                       | $145,440                                |                                        
|                                                                
|                                                                 |                                         |                                        
|Net interest income                                              |                                         | $1,262                                 
|                                                                
|                                                                 |                                         |                                        
|Net interest rate spread                                         |                                         |                                        
|                                                                
|                                                                 |                                         |                                        
|Net interest margin on earning assets                            |                                         |                                        
|                                                                



9

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|                                                                 | Nine Months ended   September 30, 1999 | Nine Months ended   September 30, 1998
|---------------------------------------------------------------- | -------------------------------------- | --------------------------------------
|                                                                
|(In thousands)                                                   | Average   Balance                      | Interest                              
|                                                                
|                                                                 |                                        |                                       
|Assets                                                           |                                        |                                       
|Federal funds sold and interest      bearing deposits with banks | $4,423                                 | $178                                  
|Investment securities, available for sale                        | 56,530                                 | 2,357                                 
|Loans                                                            | 71,800                                 | 4,538                                 
|                                                                
|Sub-total earning assets                                         | 132,753                                | 7,073                                 
|Other assets                                                     | 5,672                                  |                                       
|                                                                
|                                                                 |                                        |                                       
|Total assets                                                     | $138,425                               |                                       
|                                                                
|                                                                 |                                        |                                       
|Liabilities and stockholders' equity                             |                                        |                                       
|Interest bearing deposits                                        | $97,033                                | $3,472                                
|Other borrowings                                                 | 511                                    | 26                                    
|                                                                
|Sub-total interest bearing liabilities                           | 97,544                                 | 3,498                                 
|Non-interest bearing deposits                                    | 12,507                                 |                                       
|Other liabilities                                                | 845                                    |                                       
|Stockholders' equity                                             | 27,529                                 |                                       
|                                                                
|                                                                 |                                        |                                       
|Total liabilities and stockholders' equity                       | $138,425                               |                                       
|                                                                
|                                                                 |                                        |                                       
|Net interest income                                              |                                        | $3,575                                
|                                                                
|                                                                 |                                        |                                       
|Net interest rate spread                                         |                                        |                                       
|                                                                
|                                                                 |                                        |                                       
|Net interest margin on earning assets                            |                                        |                                       
|                                                                



10

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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.



|                                                                 | Three months ended   September 30, 1999/1998   Change in interest due to | Nine months ended   September 30, 1999/1998   Change in interest due to
|---------------------------------------------------------------- | ------------------------------------------------------------------------ | -----------------------------------------------------------------------
|                                                                
|(In thousands)                                                   | Volume                                                                   |                                                                        
|                                                                
|                                                                 |                                                                          |                                                                        
|Assets                                                           |                                                                          |                                                                        
|Federal funds sold and interest      bearing deposits with banks | ($73                                                                     | )                                                                      
|Investment securities, available for sale                        | 130                                                                      |                                                                        
|Loans                                                            | 326                                                                      |                                                                        
|                                                                
|                                                                
|Total interest earning assets                                    | $383                                                                     |                                                                        
|                                                                
|                                                                 |                                                                          |                                                                        
|Liabilities                                                      |                                                                          |                                                                        
|Interest bearing deposits                                        | $195                                                                     |                                                                        
|Other borrowings                                                 | ---                                                                      |                                                                        
|                                                                
|Total interest bearing liabilities                               | $195                                                                     |                                                                        
|                                                                
|                                                                 |                                                                          |                                                                        
|Net interest income                                              |                                                                          |                                                                        
|                                                                
|                                                                 |                                                                          |                                                                        
|Net interest rate spread                                         |                                                                          |                                                                        
|                                                                
|                                                                 |                                                                          |                                                                        
|Net interest margin on earning assets                            |                                                                          |                                                                        
|                                                                

Provision for Possible Credit Losses

1999 Compared to 1998.  The provision for possible credit losses was $40,000 and $707,000 for the three and nine month periods ended September 30, 1999, respectively, compared to $37,000 and $79,000 for the same periods in 1998,
an increase of $3,000 for the three month period and $628,000 for the nine month period.  This significant increase in the nine month period was necessary, due primarily to the bankruptcy of a borrower, with whom the Corporation participated in a lending
relationship along with a number of other Michigan banks.  Management felt the need to charge-off the majority of the loan relationship due to the uncertainty to collect from the borrower, resulting in the need to increase the the provision for credit
losses accordingly to insure the allowance for credit losses is maintained at a balance considered appropriate to cover losses inherent in the portfolio.  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

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Non-interest Income

1999 Compared to 1998.  Non-interest income was $146,000 and $427,000 for the three and nine month periods ended September 30, 1999, respectively, compared to $129,000 and $316,000 for the same periods in 1998, an increase of
$17,000 or 13% for the three month period and $111,000 or 35% for the nine month period.  This increase was primarily due to gains on loans held for sale and increases in service charges on deposit accounts.

Non-interest Expense

1999 Compared to 1998.  Non-interest expense was $984,000 and $2,834,000 for the three and nine month periods ended September 30, 1999, respectively,  compared to $759,000 and $2,071,000 for the same periods in 1998, an increase
of $225,000 or 30% for the three month period and $763,000 or 37 % for the nine month period.  The largest components of non-interest expense were salaries and employee benefits which amounted to $574,000 and $1,647,000 and occupancy and equipment expense
which amounted to $112,000 and $329,000 for the three and nine month periods ended September 30, 1999, respectively.  For the same periods in 1998, salaries and employee benefits were $471,000 and $1,259,000 and occupancy and equipment expense were
$101,000 and $292,000, respectively.  The primary factor for these increases was the expansion of the operations and lending departments of the Bank in 1998 and 1999.  As of  September 30, 1999, the number of full time equivalent employees was 40 as
compared to 35 as of  September 30, 1998.

Income Taxes

1999 Compared to 1998.  The income tax expense was $161,000 and $201,000 for the three and nine month periods ended September 30, 1999, respectively, compared to an income tax expense of $146,000 and $228,000 for the same
periods in 1998.  The decrease was primarily due to the decreased income before income taxes in 1999.

Comparison of Financial Condition at September 30, 1999 and December 31, 1998

Assets.  Total assets at September 30, 1999 were $146.4 million compared to $126.8 million at December 31, 1998, an increase of $19.6 million or 15%.  The increase was primarily due to increases in deposits, which were then
deployed into loans and investment securities - available for sale.

Federal Funds Sold.  Total federal funds sold at September 30, 1999 were $3.3 million compared to $4.0 million at December 31, 1998, a decrease of $0.7 million or 18%.  The decrease was due to the deployment of funds into loans and
investment securities - available for sale.

Mortgage Loans Held for Sale.  Total mortgage loans held for sale at September 30, 1999 were $1,128,000 compared to $1,211,000 at December 31, 1998, a decrease of $83,000 or 7%.  This decrease was primarily related to a decrease in
demand for mortgage loans as a result of the increasing interest rate environment.



12

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Investment Securities - Available for Sale. Total investment securities - available for sale, at September 30, 1999 were $60.9 million compared to $50.2 million at December 31, 1998, an increase of $10.7 million or 21%.  An increase
in 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, corporate debt securities carrying ratings of Aa2 or better or munipal 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):

|                               
|-------------------------------
|                               
|                               
|                               
|                               
|                               
|US Treasury securities         
|US Government agency securities
|Municipal Bonds                
|Corporate debt securities      
|                               
|                               
|Totals                         
|                               
|                               
|                               
|                               
|                               
|                               
|                               
|                               
|                               
|US Treasury securities         
|US Government agency securities
|Corporate debt securities      
|                               
|                               
|Totals                         
|                               



13

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Loans.  Total loans at September 30, 1999 were $75.6 million compared to $66.0 million at December 31, 1998, an increase of $9.6 million or 15%.  Major categories of loans included in the loan portfolio are as follows  (in thousands):

|                                     | 09/30/99 |   | 12/31/98 |   | 09/30/98 |  
|------------------------------------ | -------- | - | -------- | - | -------- | -
|                                    
|                                     |          |   |          |   |          |  
|Consumer loans                       | $10,566  |   | $12,434  |   | $13,262  |  
|Commercial, financial, & other       | 19,701   |   | 14,843   |   | 13,178   |  
|Commercial real estate construction  | 3,100    |   | 2,619    |   | 1,888    |  
|Commercial real estate mortgages     | 16,873   |   | 12,478   |   | 11,954   |  
|Residential real estate mortgages    | 25,384   |   | 23,649   |   | 20,966   |  
|                                    
|                                     |          |   |          |   |          |  
|                                     | 75,624   |   | 66,023   |   | 61,248   |  
|Allowance for possible credit losses | (750     | ) | (627     | ) | (594     | )
|                                    
|                                     |          |   |          |   |          |  
|                                     | $74,874  |   | $65,396  |   | $60,654  |  
|                                    





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



|                                         | 09/30/99 |  | 12/31/98 |  | 09/30/98
|---------------------------------------- | -------- |  | -------- |  | --------
|                                        
|                                         |          |  |          |  |         
|Over 90 days past due and still accruing | $66      |  | $2       |  | $---    
|Non-accrual loans                        | 154      |  | 410      |  | 37      
|Renegotiated loans                       | ---      |  | ---      |  | ---     
|Other real estate owned                  | ---      |  | ---      |  | ---     
|                                        
|                                         |          |  |          |  |         
|                                         | $220     |  | $412     |  | $37     
|                                        



14

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Allowance for Possible Credit Losses.  The allowance for possible credit losses at September 30, 1999 was $750,000 compared to $627,000 at December 31, 1998,  an increase of $123,000 or 20%. 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.

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

|                                           | 09/30/99 |   | 12/31/98 |   | 09/30/98 |  
|------------------------------------------ | -------- | - | -------- | - | -------- | -
|                                          
|                                           |          |   |          |   |          |  
|Balance, beginning of year                 | $627     |   | $522     |   | $522     |  
|                                           |          |   |          |   |          |  
|Charge-offs:                               |          |   |          |   |          |  
|Consumer Loans                             | (55      | ) | (15      | ) | (7       | )
|Commercial Loans                           | (543     | ) | ---      |   | ---      |  
|                                           |          |   |          |   |          |  
|Recoveries:                                |          |   |          |   |          |  
|Consumer Loans                             | 14       |   | ---      |   | ---      |  
|                                          
|                                           |          |   |          |   |          |  
|Net charge-offs                            | (584     | ) | (15      | ) | (7       | )
|                                           |          |   |          |   |          |  
|Additions charged to operations            | 707      |   | 120      |   | 79       |  
|                                          
|                                           |          |   |          |   |          |  
|Balance, September 30                      | $750     |   | $627     |   | $594     |  
|                                          
|                                           |          |   |          |   |          |  
|Allowance to total loans                   | 0.99     | % | 0.95     | % | 0.97     | %
|                                          
|                                           |          |   |          |   |          |  
|Net charge-offs to average loans           | 0.81     | % | 0.03     | % | 0.01     | %
|                                          
|                                           |          |   |          |   |          |  
|                                           |          |   |          |   |          |  
|Average allowance for possible loan losses | 659      |   | 564      |   | 549      |  
|Average total loans, gross                 | 71,800   |   | 59,355   |   | 56,453   |  
|Average allowance to average total loans   | 0.92     | % | 0.95     | % | 0.97     | %
|                                           |          |   |          |   |          |  

Net charge-offs for the nine month period ended September 30, 1999 were $583,000, compared to $7,000 for the same period in 1998.  A charge-off of a commercial loan relationship in the amount of $543,000 during the three month period ended
June 30, 1999 was the largest single charge-off in the Bank's history.  Since the Bank's inception in 1994 through December 31, 1998,  net charge-offs were $35,000.

Bank Premises and Equipment.  Bank premises and equipment at September 30, 1999 was $2.4 million compared to $2.4 million at December 31, 1998.



15

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Accrued Interest Receivable. Accrued interest receivable at September 30, 1999 was $1,157,000 compared to $933,000 at December 31, 1998, an increase of $224,000 or 24%.  The increase was primarily due to increase in loans and
investments securities - available for sale.

Other Assets.  Other assets at September 30, 1999 were $822,000 compared to $372,000 at December 31, 1998, an increase of $450,000 or 121%.  The increase was primarily due to increases in prepaid federal income taxes and deferred
income tax benefit.

Deposits.  Total deposits at September 30, 1999 were $117.6 million compared to $97.6 million at December 31, 1998, an increase of $20.0 million or 20%.  The following is a summary of the distribution of deposits  (in thousands):

|                                  | 09/30/99 | 12/31/98 | 09/30/98
|--------------------------------- | -------- | -------- | --------
|                                 
|                                  |          |          |         
|Non-interest bearing:             |          |          |         
|Demand                            | $14,132  | $11,142  | $9,320  
|                                 
|                                  |          |          |         
|                                  |          |          |         
|Interest bearing:                 |          |          |         
|Checking                          | $4,995   | $3,630   | $2,646  
|Money market                      | 14,644   | 11,215   | 14,130  
|Savings                           | 3,972    | 2,079    | 1,884   
|Time, under $100,000              | 42,809   | 42,790   | 41,374  
|Time, $100,000 and over           |          |          |         
|Non-volatile priced               | 13,014   | 13,493   | 14,147  
|Volatile priced (negotiated rate) | 24,006   | 13,261   | 13,440  
|                                 
|                                  |          |          |         
|                                  | $103,440 | $86,468  | $87,621 
|                                 

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.  The increase
in deposits enabled the Corporation to invest the funds in loans and investment securities - available for sale.

Accrued Interest Payable.   Accrued interest payable at September 30, 1999 was $371,000 compared to $338,000 at December 31, 1998, an increase of $33,000 or 10%.  The increase was due to the increase in the volume of time deposits.

Other Liabilities.  Other liabilities at September 30, 1999 were $502,000 compared to $559,000 at December 31, 1998, an decrease of $57,000 or 10%.  The decrease was primarily due to the decrease in deferred taxes.



16

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Capital

Stockholders' equity at September 30, 1999 was $27.4 million compared to $27.7 million at December 31, 1998, a decrease of $0.3 million or 1%.  The following is a presentation of the Bank's regulatory capital ratios (in thousands):

|                                              | Actual | Minimum For Capital  Adequacy Purposes: | Minimum  To Be Well Capitalized  Under Prompt Corrective  Action Provisions:
|--------------------------------------------- | ------ | --------------------------------------- | ----------------------------------------------------------------------------
|                                             
|                                              | Amount | Ratio                                   | Amount                                                                      
|                                             
|                                              |        |                                         |                                                                             
|As of September 30, 1999                      |        |                                         |                                                                             
|Total capital      (to risk weighted assets)  | 11,667 | 14.49%                                  | 6,443                                                                       
|Tier 1 capital      (to risk weighted assets) | 10,917 | 13.55%                                  | 3,222                                                                       
|Tier 1 capital      (to average assets)       | 10,917 | 8.53%                                   | 5,120                                                                       
|                                              |        |                                         |                                                                             
|As of December 31, 1998                       |        |                                         |                                                                             
|Total capital      (to risk weighted assets)  | 10,622 | 16.20%                                  | 5,245                                                                       
|Tier 1 capital      (to risk weighted assets) | 9,995  | 15.20%                                  | 2,623                                                                       
|Tier 1 capital      (to average assets)       | 9,995  | 9.00%                                   | 4,438                                                                       

Based on the respective regulatory capital ratios at September 30, 1999 and December 31, 1998, the Bank is considered 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 1,407,600 shares of stock, adjusted for a two percent stock dividend
issued in January 1999, at a price of $13.73 per share and received $18.0 million in new capital, net of offering costs.  The Corporation is also now trading on the NASDAQ National Market under the symbol "DEAR".



17

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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, a federal funds purchase credit facility and a relationship with borrowing capability with the Federal Home Loan Bank.

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.



18

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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, 1999 which are expected to mature or reprice in each of the time periods shown (in thousands):

|                                               | Interest Rate Sensitivity Period
|---------------------------------------------- | --------------------------------
|                                              
|(In thousands)                                 | 1-90Days                        
|                                              
|Earning assets                                 |                                 
|Federal funds sold                             | $3,276                          
|Mortgage loans held for sale                   | 1,128                           
|Securities available for sale                  | 2,466                           
|Total loans, net of non-accrual                | 19,428                          
|                                              
|Total earning assets                           | 26,298                          
|                                               |                                 
|Interest bearing liabilities                   |                                 
|Total interest bearing deposits                | 17,907                          
|Mortgage payable                               | ---                             
|                                              
|Total interest bearing liabilities             | 17,907                          
|                                               |                                 
|Net asset (liability) funding gap              | 8,391                           
|                                              
|                                               |                                 
|Cumulative net asset (liability)   funding gap | $8,391                          
|                                              
|                                               |                                 



19

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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., "99" rather than "1999").  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.

The Corporation began to prepare for the Year 2000 project in 1997.  The plan began with an internal evaluation of equipment, software applications and vendor supplied products. The Corporation's main data processing vendor has represented
that it is compliant at December 31, 1998, and regularly provides updates on its progress to the Corporation.  The Corporation has a written plan, which is regularly updated and reported to the Board of Directors.  The testing phase was essentially
complete on December 31, 1998.  The current phase of the plan is contingency planning and validation.  The Corporation has also been gathering information from significant borrowers and depositors, to help mitigate any risk posed to the Bank by their
non-compliance.

During 1998, the Corporation made expenditures of $313,000, of which $65,000 was charged to expense for depreciation, testing and employee wages to upgrade non-compliant personal computer workstations, software and local area networks.  In
1999, the Corporation expects to incur $99,000 in expenses related to depreciation, testing and employee wages.  In August 1998, the Corporation made a capital expenditure of $151,000 to purchase a new mainframe computer to accommodate the growth of the
Corporation.  The mainframe was certified Year 2000 Compliant at the time of delivery.  Additionally, if the Corporation (or its customers or vendors) are unable to remedy any potential Year 2000 problems in a timely manner, there could be a material
adverse effect on the Corporation's business.  The Corporation has a written contingency plan in place should testing fail on any given computer application.  Based on information that is currently available, the Corporation does not anticipate that the
cost of achieving Year 2000 compliance will have a material effect on its capital resources, results of operations, or liquidity as presented herein.



20

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

PART 2  -  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 subsidiaryincluded in this report are:   
|    |                                                                                                                            
|    | Consolidated Balance Sheets - September 30, 1999, December 31, 1998   and September 30, 1998                               
|    |                                                                                                                            
|    | Consolidated Statements of Income - For the Three and Nine Months Ended   September 30, 1999 and 1998                      
|    |                                                                                                                            
|    | Consolidated Statements of Comprehensive Income (Loss) - For the Three and Nine   Months Ended September 30, 1999 and 1998.
|    |                                                                                                                            
|    | Consolidated Statements of Cash Flows - For the Nine Months Ended   September 30, 1999 and 1998                            
|    |                                                                                                                            
|    | Notes to Consolidated Financial Statements                                                                                 
|    |                                                                                                                            
|(b) | There were no Form 8-K Reports filed during the three months ended September 30, 1999.                                     



21

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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. RossPresident /s/ Jeffrey L. Karafa _______________________________ Jeffrey L. Karafa Treasurer and Chief Financial Officer Date:  November 3, 1999