##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION  FORM 10-K [X]
    
    Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year
ended December 31, 2003or[   ]
    
    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, Suite 200, Dearborn, MI
    
    48124(Address of principal executive office)
    
    (Zip code)
 (313) 565-5700(Registrants telephone number, including area code)
 Securities registered pursuant to section 12(d) of the Act: Name of each exchange onTitle of each class
    
    which registeredNone
    
    None
 Securities registered pursuant to section 12(g) of the Act: Common Stock Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No  [  ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the
Form 10-K. [X] Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2)
Yes [  ] No [X] The aggregate market value of the common equity held by non-affiliates of the
registrant computed by reference to the average bid and asked price of such
common equity, as of the last business day of the registrants most recently
completed second quarter, was approximately $49,420,900. As of March 1, 2004, 2,956,494 shares of common stock of the registrant were
outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the 2003 Annual Report to Stockholders of the Registrant are
incorporated in Parts I, II and IV of this report. Portions of the definitive
Proxy Statement of the Registrant dated April 16, 2004, to be filed pursuant to
Regulation 14A, are incorporated by reference in Part III of this report.




---



TABLE OF CONTENTS  PART IItem 1. BusinessItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Common Equity, and Related Stockholder MattersItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosure About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem9A. Controls and ProceduresPART IIIItem 10. Directors and Executive Officers of the RegistrantItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and ManagementItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits, Financial Statement Schedules and Reports on Form 8-KForm 10-K SignaturesEXHIBIT INDEX2003 Annual Report to ShareholdersCode of EthicsSubsidiaries of the RegistrantCertification of Chief Executive OfficerCertification of Chief Financial OfficerCertification Pursuant to 18 U.S.C. Section 1350Certification Pursuant to 18 U.S.C. Section 1350    Table of Contents  DEARBORN BANCORP, INC.
FORM 10-K 
 PART I Forward Looking Statements The following discussion contains forward-looking statements that are
based on managements beliefs, assumptions, current expectations, estimates and
projections about the financial services industry, the economy, and about the
Corporation and Bank. Words such as anticipates, believes, estimates,
expects, forecasts, intends, is likely, plans, projects, variations
of such words and similar expressions are intended to identify such forward-
looking statements. These statements are not guarantees of future performance
and involve certain risks, uncertainties and assumptions (Future Factors)
that are difficult to predict with regard to timing, extent, likelihood and
degree of occurrence. Therefore, actual results and outcomes may materially
differ from what may be expressed or forecasted in such forward-looking
statements. The Corporation undertakes no obligation to update, amend or
clarify forward-looking statements, whether as a result of new information,
future events (whether anticipated or unanticipated), or otherwise. Future Factors include changes in interest rates and interest rate
relationships; demand for products and services; the degree of competition by
traditional and non-traditional competitors; changes in banking regulation;
changes in tax laws; changes in prices, levies and assessments; the impact of
technological advances; governmental and regulatory policy changes; the
outcomes of contingencies; trends in customer behavior as well as their ability
to repay loans; and changes in the national and local economy. These are
representative of the Future Factors that could cause a difference between an
ultimate actual outcome and a preceding forward-looking statement. 
 Item 1. Business Dearborn Bancorp, Inc. (the Corporation), a Michigan corporation, is a
bank holding corporation owning all the common stock of the Community Bank of
Dearborn (the Bank), a Michigan banking corporation which commenced business
on February 28, 1994. The Bank is the only commercial bank headquartered in
Dearborn, Michigan and conducts business primarily in Wayne, Macomb and Oakland
Counties, Michigan. Background The liberalization of Michigans branch banking laws, together with the
expansion of interstate banking, has led to substantial consolidation of the
banking industry in Michigan, including within the county in which the Bank has
its executive offices. In the past, several of the financial institutions
within the primary market area of the Bank have either been acquired by or
merged with larger financial institutions or out-of-state financial
institutions. In some cases, when these consolidations occurred, local boards
of directors were dissolved and local management relocated or in some cases
terminated and has, in some cases, resulted in policy and credit decisions
being centralized away from local management. In the opinion of the Corporations management, this situation has created
a favorable opportunity for a local commercial bank with local management and
directors. Management of the Corporation believes that such a bank attracts
those customers who wish to conduct business with a locally managed institution
that demonstrates an active interest in their business and personal financial
affairs. The Corporation believes that a locally managed institution, in many
cases, will be able to deliver more timely responses to customer requests,
provide customized financial products and services and offer customers the
personal attention of the Banks senior banking officers. The Bank seeks to
take advantage of this opportunity by emphasizing in its marketing plan the
Banks local management and the Banks ties and commitment to its market area. The Corporation was incorporated as a Michigan business corporation on
September 30, 1992. The Corporation was formed to acquire all of the Banks
issued and outstanding stock and to engage in the business of a bank holding
corporation under the Bank Holding Company Act of 1956, as amended (the Act). The executive offices of the Corporation and the Bank are located at 1360
Porter Street, Suite 200, Dearborn, Michigan 48124, telephone number (313)
565-5700. 2




---



##### Table of Contents



Business of the Corporation The primary purpose of the Corporation is the ownership of the Bank. In
the future, the Corporation may form or acquire other subsidiaries as permitted
under the Act and the regulations of the Federal Reserve. There are no plans,
agreements, understandings or negotiations, either written or oral, at the
present time for any acquisitions by the Corporation. Business of the Bank 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. The date opened, location and office type of each office
is listed below: Date Opened
    
    Location
    
    Type of officeFebruary 1994
    
    22290 Michigan Avenue
    
    Full service retail branch with ATMDearborn, Michigan 48124
    
    Regional lending centerDecember 1995
    
    24935 West Warren Avenue
    
    Full service retail branchDearborn Heights, Michigan 48127August 1997
    
    44623 Five Mile Road
    
    Full service retail branch with ATMPlymouth, Michigan 48170May 2001
    
    1325 North Canton Center Road
    
    Full service retail branch with ATMCanton, Michigan 48187December 2001
    
    45000 River Ridge Drive, Suite 110
    
    Regional lending centerClinton Township, Michigan 48038November 2002
    
    19100 Hall Road
    
    Full service retail branch with ATMClinton Township, Michigan 48038February 2003
    
    12820 Fort Street
    
    Full service retail branch with ATMSouthgate, Michigan 48195May 2003
    
    3201 University Drive, Suite 180
    
    Full service retail branchAuburn Hills, Michigan 48326
    
    Regional lending center
 The Bank, through its main office, branch offices and regional lending centers,
emphasizes and offers highly personalized service to its customers. The customer service officers are well-trained, experienced bank officers
who fill the needs of the customers and handle the requests of their customers
in a professional manner. The management of the Corporation and the Bank
believe that it is important to the success of the Banks strategy to create
long-term relationships between customers and Bank employees. The Banks senior
management holds regular staff information meetings so that all employees are
given information regarding the Banks plans and objectives, and employees are
offered the opportunity to make suggestions to improve the Banks performance.
The management of the Bank believes that this approach creates a commitment by
all employees to the Banks success. The Bank offers a wide range of financial products and services. These
include checking accounts, savings accounts, money market accounts,
certificates of deposit, business checking, direct deposit, loan services
(commercial, consumer, real estate mortgages), travelers checks, cashiers
checks, wire transfers, safety deposit boxes, collection services, and night
depository services. In July of 2001, the Bank began operation of a voice
response, automated telephone banking service, available 24 hours a day. In
August 2001, the Bank installed a new proof of deposit and check imaging system
and began offering check imaging options including statements on CD ROM in
January of 2003. The Bank expects to offer internet banking to its customers
during the second quarter of 2004. The Bank does not have a trust department. 3




---



##### Table of Contents



On August 19, 1997, the Bank purchased a shell insurance agency from the
Burnham Insurance Group, Battle Creek, Michigan. Upon purchase, the Bank
renamed the agency to Community Bank Insurance Agency, Inc. Community Bank
Insurance Agencys primary functions are to act as the sales agent for the
Corporations own insurance policies and to hold a minority interest in
Michigan Bankers Title Company of East Michigan, LLC, a title insurance
company. On May 1, 2001, the Bank formed Community Bank Mortgage, Inc., a mortgage
company that originates, holds and sells commercial and residential mortgages. On March 26, 2002, the Bank formed Community Bank Audit Services, Inc., a
company that provides internal audit and compliance consulting to other small
community banks. Business Strategy Growth Through Branch Expansion.Since commencing operations, the Banks
growth has been accomplished through internal growth. The internal growth of
the Bank has been aided by creating a network of seven branch offices and two
regional lending centers. The Bank currently has four offices in western Wayne
County, one in the Downriver area of Wayne County and one office in Macomb
County and one office in Oakland County. The Bank also has a regional lending
center in Macomb County and a regional lending center in Oakland County. Emphasize Community Banking.The Bank strives to maintain a strong
commitment to community banking. The Banks goal is to attract small to
medium-sized businesses and individuals as customers who wish to conduct
business with a local commercial bank that demonstrates an active interest in
their business and personal affairs. Management believes that the Bank is
better able than its larger competitors to deliver more timely responses to
customer requests, provide customized financial products and services and offer
customers the personal attention of senior banking officers. Expand Lending in the Banks Primary Market.The Banks loan portfolio
currently consists of residential mortgage loans, indirect consumer loans
originated through a select list of local automobile dealers, commercial real
estate loans, small business commercial loans and other consumer loans.
Management intends to maintain its emphasis on these loan products. Grow Through Selected Acquisitions.Although the Corporation will
continue to pursue internal growth at the Bank, management believes that growth
opportunities may be found in acquisitions of community banks or branches in
Michigan to enhance the Corporations markets. As part of its normal business
operations, management maintains contact with financial institutions to discuss
various acquisition possibilities. However, the Corporation has made no bank
or branch acquisitions to date, and it presently has no agreements,
commitments, understandings or arrangements to acquire any other banks or
branches, and there is no assurance that the Corporation will be successful in
its acquisition strategy. Marketing Plan The Banks marketing plan focuses on the concepts of corporate citizenship
and personal interaction within the communities the Bank serves through
promotion of, and active participation in, a number of civic organizations and
ongoing community activities. Management believes that these efforts establish
the identity and philosophy of the Bank within the communities it serves and
allow Bank officers and employees to personally interact with local business
leaders and members of the public. The marketing plan also emphasizes direct
sales calls by Bank officers and specific telemarketing programs involving the
Banks branch managers and customer service representatives. The Bank has two primary target markets: consumer financial services, with
an emphasis on individual deposit accounts, single family residential lending
and home equity lending; and business financial services, with an emphasis on
deposit and loan products designed for small- to medium-sized businesses. 4




---



##### Table of Contents



Community Club. At inception, the Bank established a Community Club
which has become an important marketing tool to increase the Banks total
deposits. The Community Club is targeted at individuals over the age of 50.
As of December 31, 2003, the Community Club had over 4,600 members who
accounted for total deposits of $159.4 million, or 42% of the Banks total
deposits. Among other things, membership in the Community Club entitles the customer
to increased personal attention and service by Bank staff and a 1⁄4% premium
on new certificate of deposit accounts with a minimum $1,000 balance and one
year maturity. The Bank also hosts local community events, educational
seminars and travel programs which have been well received by the Community
Club members. Management believes that the success of the Community Club and
the Banks continued efforts to expand the benefits of the program will foster
an increase in the number of Community Club members and deposit accounts. Business Financial Services.The Banks business marketing efforts are
directed by senior management, including Michael J. Ross, William T. LaRosa,
Warren R. Musson, H. Kristene Rautio, Stephen C. Tarczy and Jeffrey J. Wolber
with Mr. Wolber assigned as sales manager, whose duties include administering
and coordinating the business development efforts of the Bank. Each Bank officer, in addition to each branch manager, is responsible for
creating new business opportunities for the Bank. The targeted list of new
business customers represents a mix of industrial, manufacturing, professional
and retail clients with an emphasis on businesses with annual sales of $10
million or less. The Bank has developed an aggressive telemarketing program for new
business. Businesses are identified through listings provided by the various
Chambers of Commerce, local phone directories and other sources targeted to the
communities the Bank serves. Initial sales calls are introductory in nature
with follow-up calls made to determine whether a meeting can be arranged with
the targeted company to discuss the Banks products and services. The Bank
believes this strategy has been, and will continue to be, successful in
generating new business for the Bank. In addition to its telemarketing program, the Banks officers maintain
contact with local attorneys, accountants and other representatives in the
local community that may be in a position to refer business to the Bank. The
Bank also encourages and supports its officers and employees to join and
participate in various community organizations and events. Through their many years of business and community leadership, each of the
Corporations Directors has been, and will continue to be, a strong source of
referrals for the Bank. Consumer Financial Services.The Bank originates residential real estate
loans primarily through its retail branch facilities. Branch managers and
mortgage loan originators develop new residential mortgage applications from
several sources including real estate brokers, insurance agents, accountants,
attorneys, existing residential mortgage customers and other customers of the
Bank. An extensive telemarketing effort generates potential customers as a
result of these contacts. Additionally, the Bank has developed targeted real
estate newsletters that are mailed to an existing database composed of those
referral sources. The Bank also maintains an active role in several local real
estate boards offering product training to members. The Bank, as a result of its secondary market operations, is able to offer
a variety of loan products that serve the needs of first time home buyers.
Customers desiring to construct new homes are able to obtain financing as a
result of the Banks construction loan program that is offered in addition to
the permanent loan. Non-conforming loans, which include larger residential
loans, are also provided through the Banks secondary marketing efforts. The
Bank also provides loans that it holds in its own portfolio on those
transactions that evidence satisfactory credit quality and income but are
unable to be sold in the secondary market for various reasons. Management believes that cross-selling of the Banks products and services
to its existing customers is vital to expanding account relationships,
generating additional sales opportunities and increasing fee income. 5




---



##### Table of Contents



Loan Policy As a routine part of the Banks business, the Bank makes loans to
individuals and businesses located within the Banks market area. The loan
policy of the Bank states that the function of the lending operation is
two-fold: to provide a means for the investment of funds at a profitable rate
of return with an acceptable degree of risk, and to meet the credit needs of
the responsible businesses and individuals who are customers of the Bank.
However, the Board of Directors of the Bank recognizes that in the normal
business of lending, some losses on loans will be inevitable and should be
considered a part of the normal cost of doing business. Under the loan policy,
lending authority for loans in excess of $50,000 is granted to a limited number
of officers, each of whom has over 20 years of banking experience. Currently
this group includes Michael J. Ross, Warren R. Musson, Stephen C. Tarczy,
Daniel P. Brophy and William T. LaRosa, The Banks loan policy anticipates that priorities in extending loans will
change from time to time as interest rates, market conditions and competitive
factors change. The policy sets forth guidelines on a nondiscriminatory basis
for lending in accordance with applicable laws and regulations. The policy
describes various criteria in granting loans, including the ability to pay; the
character of the customer; evidence of financial responsibility; purpose of the
loan; knowledge of collateral and its value; terms of repayment; source of
repayment; payment history; and economic conditions. The loan policy specifies individual lending limits for certain officers
up to a maximum of $50,000 for unsecured loans and $100,000 for secured loans.
When certain officers have the approval of certain other officers, these limits
may be increased to $500,000. Loans of greater than $500,000 require the
approval of the Banks Loan Committee and loans greater than $1,000,000 require
the approval of the Banks Executive Loan Committee. Loans in excess of
$4,000,000 up to the legal maximum authorized by law require the approval of
the Board of Directors of the Bank. The loan policy also limits the amount of funds that may be loaned against
specified types of collateral including: listed securities  not greater than
80% loan to value; U.S. Government securities  not greater than 90% loan to
value; and insured bank deposits  not greater than 100% loan to value. As to
loans secured principally by real estate, the policy complies with the FIRREA
Act of 1989 regarding appraisals of the property offered as collateral by
licensed independent appraisers. The loan policy also provides general
guidelines as to collateral, provides for environmental reviews, contains
specific limitations with respect to loans to employees, executive officers and
directors, provides for problem loan identification, establishes a policy for
the maintenance of a loan loss reserve, provides for loan reviews and sets
forth policies for mortgage lending and other matters relating to the Banks
lending business. Lending Practices Commercial loans. The Banks commercial lending group originates
commercial loans primarily in Wayne, Macomb and Oakland Counties in
southeastern Michigan. Commercial loans are originated by a group of lending
officers with the assistance of Michael J. Ross and Warren R. Musson. Loans
are originated for general business purposes, including working capital,
accounts receivable financing, machinery and equipment acquisition, and
commercial real estate financing including new construction and land
development. Working capital loans are often structured as a line of credit and are
reviewed periodically in connection with the borrowers year-end financial
reporting. These loans generally are secured by all of the assets of the
borrower, a personal guaranty of the owners and have an interest rate plus a
margin tied to the national prime rate. Loans for machinery and equipment
purposes typically have a maturity of five to seven years and are fully
amortizing. Commercial real estate loans are usually written with a five-year
maturity and are amortized over a fifteen to twenty-year period. Commercial
real estate loans may have an interest rate that is fixed to maturity or float
with a margin over the prime rate or another index. Fixed rate loans typically
contain a pre-payment premium. The Bank evaluates all aspects of a commercial loan transaction in order
to minimize credit and interest rate risk. Underwriting includes an assessment
of management, products, markets, cash flow, capital, income and collateral.
The analysis includes a review of historical and projected financial results.
Appraisals are obtained by licensed independent appraisers who are well known
to the Bank on transactions involving real estate and, in some cases,
equipment. 6




---



##### Table of Contents



Commercial real estate lending involves more risk than residential
lending, because loan balances are greater and repayment is dependent upon the
borrowers operations. The Bank attempts to minimize risk associated with
these transactions by limiting its exposure to existing well-known customers
and new customers with an established profitable history. Risk is further
reduced by limiting the concentration of credit to any one borrower as well as
the type of commercial real estate financed. Single-Family Residential Real Estate Loans.The Banks subsidiary,
Community Bank Mortgage, Inc. originates residential real estate loans in its
market area according to secondary market underwriting standards. These loans
provide borrowers with a fixed interest rate with terms up to thirty years.
Loans are sold on a servicing released basis in the secondary market with all
interest rate risk and credit risk passed to the purchaser. Community Bank
Mortgage, Inc. from time to time may elect to underwrite certain residential
real estate loans to be held in its own loan portfolio. These loans are
generally underwritten with the same standards that apply to the secondary
market. The majority of the portfolio loans have a fixed rate of interest for
first five years, then the interest rate is indexed to the one-year treasury
rate and adjusts annually. Consumer Loans. The Bank originates consumer loans for a wide variety of
personal financial requirements. Consumer loans include home equity lines of
credit, and loans secured by new and used automobiles, boats, savings accounts
as well as overdraft protection for checking account customers. The Bank also
purchases retail installment loans from a select list of automobile dealerships
located primarily in the Banks market. Consumer loans, except for home equity lines of credit, generally have
shorter terms and higher interest rates than residential mortgage loans and
usually involve more credit risk than mortgage loans because of the type and
nature of the collateral. While the Bank does not utilize a formal credit
scoring system, the Bank believes its loans are underwritten carefully, with a
strong emphasis on the amount of the down payment, credit quality, employment
stability, and monthly income. These loans are generally repaid on a monthly
repayment schedule with the source of repayment tied to the borrowers periodic
income. In addition, consumer lending collections are dependent on the
borrowers continuing financial stability, and are thus likely to be adversely
affected by job loss, illness and personal bankruptcy. In many cases,
repossessed collateral for a defaulted consumer loan will not provide an
adequate source of repayment of the outstanding loan balance because of
depreciation of the underlying collateral. The Bank believes that the
generally higher yields earned on consumer loans compensate for the increased
credit risk associated with such loans and that consumer loans are important to
its efforts to serve the credit needs of the communities and customers that it
serves. Allowance for Loan Losses.An allowance for loan losses is maintained at
a level that management of the Bank considers adequate to provide for losses in
the loan portfolio. Allowances for loan losses are based upon the Banks
experience and estimates of the net realizable value of collateral in each loan
portfolio. The Board of Directors and senior management review the allowance
quarterly. The Banks evaluation takes into consideration experience, the
level of classified assets, non-performing loans, the current level of the
allowance as it relates to the total loan portfolio, projected charge-offs,
current economic conditions, recent regulatory examinations and other factors. Employees As of March 1, 2004, the Bank had 125 employees, including 39 officers and
86 customer service, operations and other support persons. Management believes
that the Banks relations with its employees are excellent. 7




---



##### Table of Contents



Competition The Bank faces strong competition for deposits, loans and other financial
services from numerous banks, savings banks, thrifts, credit unions and other
financial institutions as well as other entities which provide financial
services, including consumer finance companies, securities brokerage firms,
mortgage brokers, insurance companies, mutual funds, and other lending sources
and investment alternatives. Some of the financial institutions and financial
services organizations with which the Bank competes are not subject to the same
degree of regulation as the Bank. Many of the financial institutions and
financial services organizations aggressively compete for business in the
Banks market area. Most of these competitors have been in business for many
years, have established customer bases, are larger, have substantially higher
lending limits than the Bank, and are able to offer certain services that the
Bank does not currently provide, including more extensive branch networks,
trust services, and international banking services. In addition, most of these
entities have greater capital resources than the Bank, which, among other
things, may allow them to price their services at levels more favorable to the
customer and to provide larger credit facilities than could the Bank.
Additionally, legislation regarding interstate branching and banking may
increase competition in the future from out-of-state banks. Supervision and Regulation The Corporation is a registered bank holding company and subject to the
supervision of the Federal Reserve System (Federal Reserve). The Corporation
is required to file with the Federal Reserve annual reports and such other
information as the Federal Reserve may require under the Bank Holding Company
Act of 1956, as amended (the Act). The Corporation and the Bank are each
subject to examination by the Federal Reserve. The Act requires every bank holding company to obtain prior approval of
the Federal Reserve before it may merge with or consolidate into another bank
holding company, acquire substantially all assets of any bank, or acquire
ownership or control of any voting shares of any bank, if after such
acquisition, it would own or control, directly or indirectly, more than 5% of
the voting shares of such bank holding company or bank. The Federal Reserve
may in its discretion approve the acquisition by the Corporation of the voting
shares or substantially all assets of a bank located in Michigan and, subject
to certain restrictions, located in any other state. The Act also prohibits a bank holding company, with certain exceptions,
from acquiring direct or indirect ownership or control of more than 5% of the
voting shares of any company that is not a bank, and from engaging in any
business other than that of banking, managing and controlling banks and their
subsidiaries. Holding companies may engage in, and may own shares of companies
engaged in, certain businesses found by the Federal Reserve to be closely
related to banking or the management or control of banks. Under current
regulations of the Federal Reserve, a holding company and its non-bank
subsidiaries are permitted to engage in investment management, sales and
consumer finance, equipment leasing, data processing, discount securities
brokerage, mortgage banking and brokerage, and other activities. These
activities are subject to certain limitation imposed by the regulations. Transactions between the Corporation and the Bank are subject to various
restrictions imposed by state and federal law. Such transactions include loans
and other extensions of credit, purchases of securities, any payments of fees
and other distributions. Federal law places restrictions on the amount and
nature of loans to executive officers, directors and controlling persons of
banks insured by the Federal Deposit Insurance Corporation and holding
companies controlling such banks. The Bank is a state chartered bank and subject to regulation and
examination by the Michigan Office of Financial and Insurance Services. The
Bank also is subject to certain provisions of the Federal Deposit Insurance Act
and regulations issued under that act. The regulations affect many activities
of the Bank, including the permissible types and amounts of loans, investments,
capital adequacy, branching, interest rates payable on deposits, required
reserves, and the safety and soundness of the Banks practices. The Bank is
not a member bank of the Federal Reserve System and is regulated and examined
by the Federal Deposit Insurance Corporation. A summary of consolidated net interest income, consolidated net interest
income volume / rate analysis, rate sensitivity analysis / gap analysis and
capital ratios is set forth under the caption Managements Discussion and
Analysis of Financial Condition and Results of Operations in the 2003 Annual
Report to Stockholders and is incorporated herein by reference. 8




---



##### Table of Contents



Executive Officers of the Corporation and Bank  Set forth below are the names and ages of the executive officers of the
Corporation and the Bank, positions held and the years from which held.
There are no family relationships among such persons.John E. Demmer, 80Chairman of the Board, Dearborn Bancorp, Inc. and Community Bank of
Dearborn
Chairman of the Board and Director of the Corporation since 1992.
Chairman of the Board and Director of the Bank since 1993. Chairman of
the Board and Chief Executive Officer of Jack Demmer Ford, Inc. since
1994. Chairman of the Board and Chief Executive Officer of Jack Demmer
Lincoln Mercury, Inc since 1999.Richard Nordstrom, 76Vice Chairman, Dearborn Bancorp, Inc.
Vice Chairman and Director of the Corporation since 1998. President and
Director of the Corporation from 1992 to 1997. Director of the Bank
since 1993. Chairman of the Board of Nordstrom Samson Associates from
1960 to 1996.Michael J. Ross, 53President and Chief Executive Officer, Dearborn Bancorp, Inc.President and Chief Executive Officer, Community Bank of Dearborn
President and Chief Executive Officer of the Corporation since 2003.
President and Director of the Corporation since 1998. Vice President and
Director of the Corporation from 1993 to 1997. President, Chief
Executive Officer, and Director of the Bank since 1993.Jeffrey L. Karafa, 39Vice President, Treasurer and Secretary, Dearborn Bancorp, Inc.Senior Vice President, CFO and Secretary, Community Bank of Dearborn
Vice President and Treasurer of the Corporation since 1998. Secretary of
the Corporation since 1999. Senior Vice President and CFO of the Bank
since 2000. Secretary of the Bank since 1999. Vice President of the
Bank since 1996. Assistant Vice President of the Bank from 1994 to 1996.Donald G. Karcher, 74Vice President, Dearborn Bancorp, Inc.
Vice President and Director of the Corporation since 1992. Director of
the Bank since 1993. Chairman of the Board of Karcher Agency, Inc. since
1994.William T. LaRosa, 55Oakland Regional President, Community Bank of Dearborn
Oakland Regional President of the Bank since 2002. Market Executive of
Citizens Bank from 2000 to 2002. Community President of Citizens Bank
from 1996 to 2000. Chairman and CEO of National Bank of Royal Oak from
1993 to 1996.Warren R. Musson, 47Senior Vice President, Head of Lending, Community Bank of Dearborn
Senior Vice President of the Bank since 2000. Vice President of the Bank
since 1999. Senior Vice President and Senior Loan Officer of Peoples
State Bank from 1993 to 1999.Stephen C. Tarczy, 54Northeast Regional President, Community Bank of Dearborn
Northeast Regional President of the Bank since 2001. President and CEO
of Macomb Community Bank from 1995 to 2001.Jeffrey J. Wolber, 48Senior Vice President, Branch Operations, Community Bank of Dearborn
Senior Vice President of the Bank since 2000. Vice President of the Bank
since 1994. 9




---



##### Table of Contents



Item 2. Properties The main office of the Corporation and the Bank is located in a single
story building containing 11,400 square feet at 22290 Michigan Avenue,
Dearborn, Michigan, which is owned by the Corporation and leased to the Bank. The Banks Dearborn Heights, Michigan branch office is located in a single
story commercial/retail office building at 24935 W. Warren Avenue at the corner
of Silvery Lane, which is also owned by the Corporation. Approximately 79% of
the 3,240 square foot building is leased to the Bank and the remaining space is
leased to a non-affiliated tenant. The Banks Plymouth Township, Michigan branch office is located at 44623
Five Mile at the corner of Sheldon Road and contains 1,595 square feet of
leased space in a retail shopping center anchored by a regional grocery store. The Banks Canton Township, Michigan branch office is located in a 6,056
square foot single story commercial/retail office building at 1325 N. Canton
Center near the corner of Saltz Road and is owned by the Bank. The retail
branch office occupies approximately 50% of this building. The remaining 50%
of the building houses the Banks Mortgage Operations Department. The Banks Clinton Township, Michigan regional lending center is located
at 45000 River Ridge Drive, Suite 110, along Hall Road (M-59) near the corner
of Romeo Plank Road. The Bank leases 7,426 of space in the River Ridge
Corporate Office Center Building. The Banks Clinton Township, Michigan branch office is located at 19100
Hall Road near Romeo Plank Road. The Bank leases a 3,750 square foot single
story commercial/retail office building. The Banks Executive and Administrative Center is located at 1360 Porter
Street, Suite 200 in Dearborn, Michigan. The Bank currently leases 4,420
square feet of this commercial office building. The Bank will purchase this
10,000 square foot, two story building in April 2004. The additional 5,580
square feet will house the Banks Commercial Loan Department. The Banks Southgate, Michigan branch office is located in a 2,035 square
foot single story building, which is located at 12820 Fort Street and is owned
by the Bank. The Banks Auburn Hills, Michigan regional lending center and branch
office is located at 3201 University Drive, Suite 180. The Bank currently
leases 2,037 square feet of this commercial office building. The Banks future Bank Operations Center is located in a 56,820 square
foot three story building, which is located at 4000 Allen Road in Allen Park,
Michigan and is owned by the Bank. 
 Item 3. Legal Proceedings From time to time, the Corporation and its subsidiaries are parties to
legal proceedings incidental to their business. At December 31, 2003, there
were no legal proceedings which management anticipates would have a material
adverse effect on the Corporation. 
 Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of security holders during the fourth
quarter of 2003. 10




---



##### Table of Contents



PART II 
 Item 5. Market for Registrants Common Equity, and Related Stockholder Matters The information required by this item appears in the Corporations 2003
Annual Report to Stockholders under the caption Dearborn Bancorp, Inc., Common
Stock and is incorporated by reference herein. The Corporation approved 5%
stock dividends on May 21, 2003 and November 18, 2003 to all shareholders of
record as of June 6, 2003 and December 5, 2003, respectively. 
 Item 6. Selected Financial Data The information required by this item appears in the Corporations 2003
Annual Report to Stockholders under the caption Summary of Selected Financial
Data and is incorporated by reference herein. 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations The information required by this item appears in the Corporations 2003
Annual Report to Stockholders under the caption Managements Discussion and
Analysis of Financial Condition and Results of Operations and is incorporated
by reference herein. 
 Item 7A. Quantitative and Qualitative Disclosure About Market Risk The information required by this item appears in the Corporations 2003
Annual Report to Stockholders under the caption Managements Discussion and
Analysis of Financial Condition and Results of Operations and is incorporated
by reference herein. 
 Item 8. Financial Statements and Supplementary Data The financial statements included in the Corporations 2003 Annual Report
to Stockholders are incorporated by reference herein. 
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There are no changes in or disagreements with accountants on accounting and financial disclosure. 
 Item 9A. Controls and Procedures As of December 31, 2003, an evaluation was performed under the supervision
of and with the participation of the registrants management, including the
President and Chief Executive Officer and the Chief Financial Officer, of the
effectiveness of the design and operation of the registrants disclosure
controls and procedures. Based on that evaluation, the registrants
management, including the President and Chief Executive Officer and the Chief
Financial Officer, concluded that the registrants disclosure controls and
procedures were effective as of December 31, 2003. There have been no
significant changes in the registrants internal controls or in other factors
that could significantly affect internal controls subsequent to December 31,
2003. 11




---



##### Table of Contents



PART III 
 Item 10. Directors and Executive Officers of the Registrant The information set forth under the caption Information about Directors
and Nominees for Directors in the definitive Proxy Statement of the
Corporation dated April 16, 2004 is incorporated by reference herein. Reference is made to Part I of this report for information as to executive
officers of the Corporation and Bank. We have a separately-designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934.
The members of the Audit Committee consist of Margaret I. Campbell, Michael J.
Dorian, Jr., Donald G. Karcher and Bradley F. Keller. The Board of Directors
has determined that Bradley F. Keller and Donald G. Karcher, members of the
Audit Committee, are qualified as audit committee financial experts, as that
term is defined in the rules of the Securities and Exchange Commission.
Bradley F. Keller and Donald G. Karcher are independent, as independence for
audit committee members is defined in the listing standards of the Nasdaq Stock
Market and the rules of the Securities and Exchange Commission. We have adopted a Code of Ethics that applies to all of our directors,
officers and employees, including our principal executive officer, principal
financial officer, principal accounting officer or controller, and persons
performing similar functions. The Code of Ethics and any amendments to or
waivers from the Code of Ethics, of the type referred to in Item 10 of Form
8-K, to the extent applicable to our principal executive officer, principal
financial officer, principal accounting officer or controller, and persons
performing similar functions, are available upon request at no charge. Such
requests should be made by writing or calling: Carolyn Wilkins, Corporate
Services Officer, 1360 Porter Street, Dearborn, Michigan 48124; (313) 565-5700
or by E-mail at CarolynW @commbankdearborn.com. 
 Item 11. Executive Compensation The information set forth under the caption Executive Compensation and
Officer Agreements in the definitive Proxy Statement of the Corporation dated
April 16, 2004 is incorporated by reference herein. 12




---



##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management The information set forth under the captions Security Ownership in the
definitive Proxy Statement of the Corporation dated April 16, 2004 is
incorporated by reference herein. Equity Plan Compensation Information The
following table summarizes information, as of December 31, 2003,
relating to the registrants compensation plans under which its equity
securities are authorized for issuance. Number of securitiesremaining available forfuture issuance underNumber of Securities to
    
    Weighted average
    
    equity compensationbe issued upon exercise
    
    exercise price of
    
    plans (excludingof outstanding options,
    
    outstanding options,
    
    securities reflected inwarrants and rights
    
    warrants and rights
    
    column (a))Plan Category
    
    ( a )
    
    ( b )
    
    ( c )Equity Compensation
Plans approved by
security holders (1)
    
    
    562,816
    
    
    $
    9.95
    
    
    
    0Equity Compensation
Plans not approved by
security holders
    
    
    0
    
    
    
    0
    
    
    
    0Total
    
    
    562,816
    
    
    $
    9.95
    
    
    
    0
  (1)
    
    This plan is the registrants Stock Option Plan. 
 Item 13. Certain Relationships and Related Transactions The information set forth under the caption Related Transactions in the
definitive Proxy Statement of the Corporation dated April 16, 2004 is
incorporated by reference herein. 
 Item 14. Principal Accountant Fees and Services The information presented under the caption Fees Paid to Independent
Public Accountants in the definitive Proxy Statement of the Corporation dated
April 16, 2004 is incorporated by reference herein. 13




---



##### Table of Contents



PART IV 
 Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a)(1) Financial Statements  The following financial statements of the Corporation appear in the
Corporations 2003 Annual Report to Stockholders and are
incorporated by reference in item 8.Report of Independent AuditorsConsolidated Balance Sheets as of December 31, 2003 and 2002Consolidated Statements of Income for the years ended December 31, 2003,
2002 and 2001Consolidated Statements of Changes in Stockholders Equity for the
years ended December 31, 2003, 2002 and 2001Consolidated Statements of Cash Flows for the years ended December 31,
2003, 2002 and 2001Notes to Consolidated Financial Statements (2) Financial Statement Schedules  No schedules are required under this item. 14




---



##### Table of Contents



(3) Exhibits  The Exhibit marked with two asterisks below was filed as an Exhibit
to the Form 10-K Report of the Registrant for the fiscal year ended
December 31, 1995 is incorporated herein by reference. The
Exhibit marked with three asterisks below was filed as an Exhibit
to the Form 10-Q Report of the Registrant for the quarter ended
June 30, 1997 is incorporated herein by reference. The Exhibits
marked with four asterisks below were filed as Exhibits to Form
10-Q of the Registrant for the quarter ended June 30, 2003. The
Exhibit numbers in brackets being those in such Registration
Statements, Form 10-K or Form 10-Q Reports. (3)(a)***
    
    Articles of Incorporation of Registrant, As Amended. [3(a)](3)(b)**
    
    By-Laws of the Registrant, As Amended. [3(b)]10)(a)***
    
    1994 Stock Option Plan, As Amended. [10(a)] (X)(10)(b)****
    
    Employment Agreement between the Registrant and Michael J. Ross. [10(b)](10)(c)****
    
    Change in Control Agreement between the Registrant and
five officers. [10(c)]Exhibit (13)
    
    2003 Annual Report to Stockholders.Exhibit (14)
    
    Code of EthicsExhibit (21)
    
    Subsidiaries of the Registrant.Exhibit (31.1)
    
    Rule 13a-14(a) CEO CertificationExhibit (31.2)
    
    Rule 13a-14(a) CFO CertificationExhibit (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.
 (b) Reports on Form 8-K  The Corporation filed three reports on Form 8-K during the quarter
ended December 31, 2003.Form 8-K dated October 23, 2003, filing a press release
announcing Dearborn Bancorp, Inc.s 2003 third quarter earnings.Form 8-K dated November 17, 2003, announcing the death of
Wilber M. Brucker, a director of the Corporation and the Bank.Form 8-K dated November 25, 2003, filing a press release
announcing Dearborn Bancorp, Inc.s declaration of a stock
dividend. 15




---



##### Table of Contents



Form 10-K Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 26, 2003. Dearborn Bancorp, Inc. /s / John E. DemmerBy(John E. Demmer, Chairman of the Board and Director)
  Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 25, 2003. /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 / Bradley F. Keller

(Bradley F. Keller)
    
    Director/s / Michael V. Dorian, Jr.

(Michael V. Dorian, Jr.)
    
    Director
    
    /s / Jeffrey G. Longstreth

(Jeffrey G. Longstreth)
    
    Director/s / David Himick
(David Himick)
    
    Director
    
    /s / Richard Nordstrom
(Richard Nordstrom)
    
    Vice Chairman
and Director/s / Donald G. Karcher

(Donald G. Karcher)
    
    Vice President
and Director
    
    /s / Dr. Robert C. Schwyn

(Dr. Robert C. Schwyn)
    
    Director/s / Ronnie J. Story

(Ronnie J. Story)
    
    Director
 16




---



##### Table of Contents



EXHIBIT INDEX EXHIBIT NO.
    
    DESCRIPTIONEX-13
    
    2003 Annual Report to StockholdersEX-14
    
    Code of EthicsEX-21
    
    Subsidiaries of the RegistrantEX-31.1
    
    Certification of Chief Executive Officer pursuant to Section 302EX-31.2
    
    Certification of Chief Financial Officer pursuant to Section 302EX-32.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002EX-32.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002