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SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the fiscal year
ended December 31, 2008
 or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
 for the transition period from  to
 Commission file number 000-24478.
 DEARBORN BANCORP, INC.
 
 Michigan
    
    38-3073622(State or other jurisdiction of
    
    (I.R.S. employer identification no.)incorporation or organization)1360 Porter Street, Dearborn, MI
    
    48124(Address of principal executive office)
    
    (Zip code)
 
  Name of each exchange onTitle of each class
    
    which registeredCommon Stock
    
    The Nasdaq Stock Market, LLC
   o þ
 o þ
 þ o
 o
  Large accelerated filer oAccelerated filer oNon-accelerated filer þ(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



PART I
    
    
    
    
    3Item 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    15Item 1B.
    
    Unresolved Staff Comments
    
    
    19Item 2.
    
    Properties
    
    
    19Item 3.
    
    Legal Proceedings
    
    
    20Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    20PART II
    
    
    
    
    20Item 5.
    
    Market for
Registrants Common Equity, and Related Stockholder Matters
    
    
    20Item 6.
    
    Selected Financial Data
    
    
    20Item 7
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    20Item 7A.
    
    Quantitative and Qualitative Disclosure about Market Risk
    
    
    21Item 8.
    
    Financial Statements and Supplementary Data
    
    
    21Items 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    21Item 9A.
    
    Controls and Procedures
    
    
    21Item 9B.
    
    Other Information
    
    
    21PART III
    
    
    
    
    21Item 10.
    
    Directors and Executive Officers of the Registrant
    
    
    21Item 11.
    
    Executive Compensation
    
    
    22Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
    
    
    22Item 13.
    
    Certain Relationships and Related Transactions
    
    
    22Item 14.
    
    Principal Accountant Fees and Services
    
    
    22PART IV
    
    
    
    
    23Item 15.
    
    Exhibits, Financial Statement Schedules and Reports on Form 8-K
    
    
    23EX-13EX-21EX-23EX-31.1EX-31.2EX-32.1EX-32.1
 Form 10-K Signatures
    
    
    25Exhibit Index
    
    
    262008 Annual Report to StockholdersConsent of Independent Registered Public Accounting FirmConsent of Independent Registered Public Accounting FirmRule 13a-14(a) CEO CertificationRule 13a-14(a) CFO CertificationCEO Certification Pursuant to Section 906CFO Certification Pursuant to Section 906
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##### Table of Contents



DEARBORN BANCORP, INC.
FORM 10-K
 
 PART I
 Forward Looking Statements
   
 Item 1. Business
  Background
    www.fidbank.com www.dearbornbancorp.com
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Business of the Corporation
  Business of the Bank
       4




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Business Strategy
 Grow Through Branch Expansion.
 Grow Through Selected Acquisitions.
 Emphasize Relationship Banking.
 Hire Experienced, Local Bankers.
 Capitalize on Consolidation in Our Market.
 Control Our Operating Costs.
 Focus on Commercial Real Estate Lending.
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Market Area
   Marketing Plan
   Community Club
 1 4
 6




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Business Financial Services.
     Consumer Financial Services.
   7




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Loan Policy
     8




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Lending Practices
 Commercial Loans.
    Residential Real Estate Loans.
 Consumer Loans.
  9




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Allowance for Loan Losses.
     Delinquent Loans, Non-performing Assets and Classified Assets.
    10




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December 31,
    
    
    December 31,Rating
    
    
    2008
    
    
    2007Watch credit
    
    
    5
    
    
    $
    47,969
    
    
    $
    35,161Special mention
    
    
    6
    
    
    
    44,540
    
    
    
    45,649Substandard
    
    
    7
    
    
    
    80,992
    
    
    
    38,633Doubtful
    
    
    8
    
    
    
    
    
    
    
    Loss
    
    
    9
    
    
    
    
    
    
    
    Total classified assets
    
    
    
    
    
    $
    173,501
    
    
    $
    119,443
   December 31,
    
    
    December 31,2008
    
    
    2007Loans delinquent30 to 89 days delinquent
    
    $
    7,049
    
    
    $
    5,07190 or more days and still accruing
    
    
    450
    
    
    
    884Non-accruing
    
    
    51,708
    
    
    
    18,117Total delinquent loans
    
    $
    59,207
    
    
    $
    24,072Ratio of total delinquent loans to total loans
    
    
    6.34
    %
    
    
    2.53
    %
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Number ofLoans
    
    
    BalanceConsumer Loans
    
    
    9
    
    
    $
    953Commercial Loans
    
    
    39
    
    
    
    5,085Land Development  Residential
    
    
    7
    
    
    
    9,844Land Development  Non Residential
    
    
    2
    
    
    
    4,068Commercial Construction Loans  Residential
    
    
    7
    
    
    
    3,707Commercial Construction Loans  Non Residential
    
    
    1
    
    
    
    1,615Commercial Mortgage Loans
    
    
    35
    
    
    
    20,370Residential Mortgages Loans
    
    
    9
    
    
    
    468Total loans downgraded to non-accrual status
    
    
    109
    
    
    $
    46,110
 Deposits and Other Services
 Deposits.
 Other Services.
 Investments
  12




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Employees
  Competition
  Supervision and Regulation
     13




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Executive Officers of the Corporation and Bank
  John E. Demmer, 85  Chairman of the Board, Dearborn Bancorp, Inc. and Fidelity Bank
 Michael J. Ross, 58  President and Chief Executive Officer, Dearborn Bancorp, Inc.  President and Chief Executive Officer, Fidelity Bank
 Jeffrey L. Karafa, 44  Vice President, Treasurer and Secretary, Dearborn Bancorp, Inc.  Senior Vice President, CFO and Secretary, Fidelity Bank
 John A Lindsey, 59  Oakland Regional President, Fidelity Bank
 Warren R. Musson, 52  Senior Vice President, Head of Lending, Fidelity Bank
 Stephen C. Tarczy, 59  Northeast Regional President, Fidelity Bank
 Jeffrey J. Wolber, 53  Senior Vice President, Branch Operations, Fidelity Bank
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Item 1A. Risk Factors
  Adverse economic conditions in the automobile manufacturing and related service industries may
impact our banking business.
  Adverse changes in economic conditions or interest rates may negatively affect our earnings,
capital and liquidity.
  Difficult market conditions will continue to adversely affect the financial services industry.
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Our credit losses could increase and our allowance for loan losses may not be adequate to cover
actual loan losses resulting in a decrease in our net income and earnings per share and a possible
decline in our stock price.
  Our commercial real estate loans involve higher principal amounts than other loans, and repayment
of these loans may be dependent on factors outside our control or the control of our borrowers.
  We rely heavily on our management and other key personnel, and the loss of any of them may
adversely affect our operations.
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There can be no assurance that recently enacted legislation will stabilize the U. S. financial
system.
  Our future success is dependent on our ability to compete effectively in the highly competitive
banking industry.
  Growth and stockholder returns may be adversely affected if sources of capital are not available to
help us meet them.
  We are subject to significant government regulation, and any regulatory changes may adversely
affect us.
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We continually encounter technological change, and we may have fewer resources than our competitors
to continue to invest in technological improvements.
  Our Articles of Incorporation and Bylaws and the laws of Michigan contain provisions that may
discourage or prevent a takeover of the Corporation and reduce any takeover premium.
   There is a limited trading market for our common stock.
   18




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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
                19




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Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  FOR
    
    AGAINST
    
    ABSTAINED4,620,612
    
    1,539,945
    
    140,690
 
 PART II
 
 Item 5. Market for Registrants Common Equity, and Related Stockholder Matters
   
 Item 6. Selected Financial Data
  
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
  20




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Item 7A. Quantitative and Qualitative Disclosure About Market Risk
  
 Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item9A. Controls and Procedures
  
 Item 9B. Other Information
  
 PART III
 
 Item 10. Directors and Executive Officers of the Registrant
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Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management
   Number of Securities to
    
    
    Weighted average
    
    
    Number of securitiesbe issued upon exercise
    
    
    exercise price of
    
    
    remaining available forof outstanding options,
    
    
    outstanding options,
    
    
    future issuance underwarrants and rights
    
    
    warrants and rights
    
    
    equity compensation plansPlan Category
    
    ( a )
    
    
    ( b )
    
    
    ( c )Equity Compensation
Plans approved by
security holders ( 1 )
    
    
    618,076
    
    
    $
    7.00
    
    
    
    89,570Equity Compensation
Plans not approved by
security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    618,076
    
    
    $
    7.00
    
    
    
    89,570
 
 (1)
    
    Column ( a ) includes 360,398 shares from the 1994 Stock Option Plan and 257,678 shares
from the 2005
Long-Term Incentive Plan. Shares in column ( c ) represent the shares that are available for
grant under the 2005 Long-Term Incentive Plan. 
 Item 13. Certain Relationships and Related Transactions
  
 Item 14. Principal Accountant Fees and Services
  22




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PART IV
 
 Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
 (a)(1)
    
    Financial StatementsThe following financial statements of the Corporation appear in the Corporations
2008 Annual Report to Stockholders and are incorporated by reference in item 8.Report of Independent Registered Public Accounting FirmConsolidated Balance Sheets as of December 31, 2008 and
2007
Consolidated Statements of Income for the years ended December 31, 2008, 2007 and 2006Consolidated Statements of Changes in Stockholders Equity for the years ended
December 31, 2008, 2007 and 2006Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006Notes to Consolidated Financial Statements(2)
    
    Financial Statement SchedulesNo schedules are required under this item.
  The Exhibit numbers in brackets being those in such Registration Statements, Form
10-K, Form 10-Q or Form 8-K Reports.
 (3)(a)
    
    Articles of Incorporation of Registrant, As Amended. [3(a)] was filed as an
Exhibit to the Form 10-Q Report of the Registrant for the quarter ended
December 9, 2008 and is incorporated herein by reference.(3)(b)
    
    By-Laws of the Registrant, As Amended. [3(b)] was filed as an Exhibit to the
Form 10-K Report of the Registrant for the fiscal year ended December 31, 1995
and is incorporated herein by reference.(3)(d)
    
    Amendment to the Bylaws of the Registrant was filed as an exhibit to report on Form 8-K
filed on December 18, 2007 and is incorporated herein by reference.(10)(a)
    
    1994 Stock Option Plan, As Amended. [10(a)] was filed as an Exhibit to the
Form 10-Q Report of the Registrant for the quarter ended June 30, 1997 and is
incorporated herein by reference. (X)(10)(a)
    
    2005 Long-Term Incentive Plan [10(a)] was filed as an Exhibit to the Form
10-Q Report of the Registrant for the quarter ended June 30, 2005 and is hereby
incorporated by reference. (X)(10)(b)
    
    Employment Agreement between the Registrant and Michael J. Ross. [10(b)] was
filed as an Exhibit to Form 10-Q of the Registrant for the quarter ended June
30, 2003 and is incorporated herein by reference.(10)(c)
    
    Change in Control Agreement between the Registrant and five officers.
[10(c)] was filed as an Exhibit to Form 10-Q of the Registrant for the quarter
ended June 30, 2003 and is incorporated herein by reference.
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(10.1)
    
    Form of Stock Option Agreement granted to various executive officers. (10.1)
was filed as an exhibit to Form 8-K of the Registrant, dated December 6, 2005.(10.2)
    
    Form of Restricted Stock Agreement granted to various officers. (10.2) was
filed as an exhibit to Form 8-K of the Registrant, dated December 6, 2005.(14)
    
    Code of Ethics of the Registrant (14) was filed as an Exhibit
to Form 10-K of the Registrant for the year ended December 31, 2003 and is
incorporated herein by reference.(21)
    
    Subsidiaries of the Registrant (21) was filed as an Exhibit to
Form 10-K of the Registrant for the year ended December 31, 2003 and is
incorporated herein by reference.Exhibit (13)
    
    2008 Annual Report to Stockholders.Exhibit (21)
    
    Subsidiaries of the RegistrantExhibit (23)
    
    Consent of Independent Registered Public Accounting FirmExhibit (23)
    
    Consent of Independent Registered Public Accounting FirmExhibit (31.1)
    
    Rule 13a-14(a) CEO Certification.Exhibit (31.2)
    
    Rule 13a-14(a) CFO Certification.Exhibit (32.1)
    
    CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.Exhibit (32.2)
    
    CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
 
 (X)
    
    A compensatory plan required to be filed as an exhibit.
  The Corporation filed five reports on Form 8-K during the quarter ended December 31,
2008.
 Form 8-K dated October 23, 2008, filing a press release announcing Dearborn
Bancorp Inc.s 2008 third quarter earnings.Form 8-K dated November 8, 2008, filing a press release announcing the approval
of a stock repurchase plan by the Corporations board of directors.Form 8-K dated December 10, 2008, announced the approval of an amendment to the
Corporations Articles of Incorporation.Form 8-K dated December 31, 2008, filing a press release announcing non-cash
charges for the impairment of goodwill and other intangible assets.Form 8-K dated December 31, 2008, announced the withdrawal of the Corporations
application for participation in the United States Department of Treasurys Capital
Purchase Program.
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Form 10-K Signatures
  Dearborn Bancorp, Inc.By
    /s/ John E. Demmer(John E. Demmer, Chairman of the Board and Director)  /s/ Michael J. Ross

(Michael J. Ross)
    
    President, Chief Executive Officer and Director
(Principal Executive Officer)/s/ Jeffrey L. Karafa

(Jeffrey L. Karafa)
    
    Vice President, Treasurer and Secretary
(Principal Financial and Accounting Officer)/s/ Margaret I. Campbell

(Margaret I. Campbell)
    
    Director/s/ Michael V. Dorian, Jr.

(Michael V. Dorian, Jr.)
    
    Director/s/ David Himick

(David Himick)
    
    Director/s/ Donald G. Karcher

(Donald G. Karcher)
    
    Director/s/ William J. Demmer

(William J. Demmer)
    
    Director/s/ Bradley F. Keller

(Bradley F. Keller)
    
    Director/s/ Jeffrey G. Longstreth

(Jeffrey G. Longstreth)
    
    Director/s/ Dr. Robert C. Schwyn

(Dr. Robert C. Schwyn)
    
    Director
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Exhibit Index
 Exhibit No.
    
    Description(3)(a)
    
    Articles of Incorporation of Registrant, As Amended. [3(a)] was filed as an
Exhibit to the Form 10-Q Report of the Registrant for the quarter ended
December 31, 2008 and is incorporated herein by reference.(3)(b)
    
    By-Laws of the Registrant, As Amended. [3(b)] was filed as an Exhibit to the
Form 10-K Report of the Registrant for the fiscal year ended December 31, 1995
and is incorporated herein by reference.(3)(d)
    
    Amendment to the Bylaws of the Registrant was filed as an exhibit to report on Form 8-K
filed on December 18, 2007 and is incorporated herein by reference.(10)(a)
    
    1994 Stock Option Plan, As Amended. [10(a)] was filed as an Exhibit to the
Form 10-Q Report of the Registrant for the quarter ended June 30, 1997 and is
incorporated herein by reference. (X)(10)(a)
    
    2005 Long-Term Incentive Plan [10(a)] was filed as an Exhibit to the Form
10-Q Report of the Registrant for the quarter ended June 30, 2005 and is hereby
incorporated by reference. (X)(10)(b)
    
    Employment Agreement between the Registrant and Michael J. Ross. [10(b)] was
filed as an Exhibit to Form 10-Q of the Registrant for the quarter ended June
30, 2003 and is incorporated herein by reference.(10)(c)
    
    Change in Control Agreement between the Registrant and five officers.
[10(c)] was filed as an Exhibit to Form 10-Q of the Registrant for the quarter
ended June 30, 2003 and is incorporated herein by reference.(10.1)
    
    Form of Stock Option Agreement granted to various executive officers. (10.1)
was filed as an exhibit to Form 8-K of the Registrant, dated December 6, 2005.(10.2)
    
    Form of Restricted Stock Agreement granted to various officers. (10.2) was
filed as an exhibit to Form 8-K of the Registrant, dated December 6, 2005.(14)
    
    Code of Ethics of the Registrant (14) was filed as an Exhibit
to Form 10-K of the Registrant for the year ended December 31, 2003 and is
incorporated herein by reference.Exhibit (13)
    
    2008 Annual Report to Stockholders.Exhibit (21)
    
    Subsidiaries of the RegistrantExhibit (23)
    
    Consent of Independent Registered Public Accounting FirmExhibit (23)
    
    Consent of Independent Registered Public Accounting FirmExhibit (31.1)
    
    Rule 13a-14(a) CEO Certification.Exhibit (31.2)
    
    Rule 13a-14(a) CFO Certification.Exhibit (32.1)
    
    CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.Exhibit (32.2)
    
    CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
 
 (X)
    
    A compensatory plan required to be filed as an exhibit. 26