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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, 2009
 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 
incorporation or organization)
    
    (I.R.S. employer identification no.)1360 Porter Street, Dearborn, MI
    
    48124(Address of principal executive office)
    
    (Zip code)
  
  Title of each class
    
    Name of each exchange on
which registeredCommon Stock
    
    The Nasdaq Stock Market, LLC
   o þ
 o þ
 þ o
 o
 o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Small reporting company þ  o þ




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##### 



PART I
    
    
    
    
    
    
    3Item 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    16Item 1B.
    
    Unresolved Staff Comments
    
    
    22Item 2.
    
    Properties
    
    
    22Item 3.
    
    Legal Proceedings
    
    
    23Item 4.
    
    Reserved
    
    
    23PART II
    
    
    
    
    
    
    23Item 5.
    
    Market for Registrants Common Equity, and Related Stockholder Matters
    
    
    23Item 6.
    
    Selected Financial Data
    
    
    23Item 7
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
    
    
    23Item 7A.
    
    Quantitative and Qualitative Disclosure about Market Risk.
    
    
    23Item 8.
    
    Financial Statements and Supplementary Data
    
    
    23Items 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
    
    
    24Item 9A.
    
    Controls and Procedures
    
    
    24Item 9B.
    
    Other Information
    
    
    24PART III
    
    
    
    
    
    
    24Item 10.
    
    Directors and Executive Officers of the Registrant
    
    
    24Item 11.
    
    Executive Compensation
    
    
    24Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
    
    
    24Item 13.
    
    Certain Relationships and Related Transactions
    
    
    25Item 14.
    
    Principal Accountant Fees and Services
    
    
    25PART IV
    
    
    
    
    
    
    26Item 15.
    
    Exhibits, Financial Statement Schedules and Reports on Form 8-K
    
    
    26EX-13EX-21EX-23EX-31.1EX-31.2EX-32.1EX-32.2EX-99
  
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DEARBORN BANCORP, INC.
FORM 10-K
 
 PART I
 Forward Looking Statements
   
 Item 1. Business
  Background
    3




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www.fidbank.com www.dearbornbancorp.com
 Business of the Corporation
  Business of the Bank
       4




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Business Strategy
 Maintain High Quality Operations.
 Emphasize Relationship Banking.
 Maintain Strong Level of Capital.
 Hire Experienced, Local Bankers.
 Capitalize on Consolidation in Our Market.
 Control Our Operating Costs.
 Focus on Commercial Real Estate Lending.
 5




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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.
 9




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Consumer Loans.
  Allowance for Loan Losses.
      10




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Delinquent Loans, Non-performing Assets and Classified Assets.
       December 31,
    
    
    December 31,Rating
    
    
    2009
    
    
    2008Watch credit
    
    
    5
    
    
    $
    75,306
    
    
    $
    47,969Special mention
    
    
    6
    
    
    
    64,987
    
    
    
    44,540Substandard
    
    
    7
    
    
    
    135,017
    
    
    
    80,992Doubtful
    
    
    8
    
    
    
    6,520
    
    
    
    Loss
    
    
    9
    
    
    
    
    
    
    
    Total classified assets
    
    
    
    
    
    $
    281,830
    
    
    $
    173,501
  11




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December 31,
    
    
    December 31,2009
    
    
    2008Loans delinquent30 to 89 days delinquent
    
    $
    9,714
    
    
    $
    7,04990 or more days and still accruing
    
    
    
    
    
    
    450Non-accruing
    
    
    49,341
    
    
    
    51,708Total delinquent loans
    
    $
    59,055
    
    
    $
    59,207Ratio of total delinquent loans to total loans
    
    
    7.09
    %
    
    
    6.34
    %
   Number ofLoans
    
    
    BalanceConsumer Loans
    
    
    12
    
    
    $
    787Commercial Loans
    
    
    31
    
    
    
    8,375Land Development  Residential
    
    
    10
    
    
    
    5,740Land Development  Non Residential
    
    
    2
    
    
    
    1,548Commercial Construction Loans  Residential
    
    
    9
    
    
    
    3,230Commercial Construction Loans  Non Residential
    
    
    3
    
    
    
    3,559Commercial Mortgage Loans
    
    
    25
    
    
    
    9,672Residential Mortgages Loans
    
    
    9
    
    
    
    1,785Loans downgraded to non-accrual status
    
    
    101
    
    
    $
    34,695
 Deposits and Other Services
 Deposits.
 Other Services.
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Investments
   Employees
  Competition
  13




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Supervision and Regulation
       Consent Order
  
    
    Completion of a senior management study by an independent consultant
    
    Plans for the reduction of delinquencies and classified assets
    
    Plans for lending and collection policies
    
    Plans for the reduction of loan concentrations
    
    The revision and implementation of a comprehensive strategic plan
    
    The revision of its Liquidity Plan and the submission of weekly liquidity reports to
the FDIC and OFIR
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Executive Officers of the Corporation and Bank
  John E. Demmer, 86
 Chairman of the Board, Dearborn Bancorp, Inc. and Fidelity Bank
  Michael J. Ross, 59
 President and Chief Executive Officer, Dearborn Bancorp, Inc.
 President and Chief Executive Officer, Fidelity Bank
  Jeffrey L. Karafa, 45
 Vice President, Treasurer and Secretary, Dearborn Bancorp, Inc.
 Senior Vice President, CFO and Secretary, Fidelity Bank
  Warren R. Musson, 52
 Senior Vice President, Head of Lending, Fidelity Bank
  Jeffrey J. Wolber, 53
 Senior Vice President, Branch Operations, Fidelity Bank
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Item 1A. Risk Factors
  The Corporation may not be able to meet federal regulatory requirements regarding the restoration
of capital of the Bank.
    The Banks capital may not be sufficient to support the risk inherent in its loan portfolio.
  The Bank will be subject to higher deposit insurance premiums as a result of its capital position.
  16




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Further deterioration of the real estate market and the economy would further materially adversely
affect the Corporations business, liquidity and financial results.
  A segment of the Banks loans are construction loans which involve the additional risk that a
project may not be completed, increasing the risk of loss.
  The Bank may not pay any capital distribution or management fees to the Corporation.
  Because the Bank is less than well-capitalized, its ability to accept certain types of deposits is
limited, which may adversely affect its business, liquidity and financial results.
  The Banks ability to grow, to offer new products, or to engage in new lines of business, is
subject to regulatory restrictions.
  Adverse economic conditions in the automobile manufacturing and related service industries may
impact our banking business.
  17




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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.
  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.
  18




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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.
    There can be no assurance that recently enacted legislation will stabilize the U. S. financial
system.
  19




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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.
  We continually encounter technological change, and we may have fewer resources than our competitors
to continue to invest in technological improvements.
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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.
   21




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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
                 22




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Item 3. Legal Proceedings
  
 Item 4. Reserved
  
 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
  
 Item 7A. Quantitative and Qualitative Disclosure About Market Risk
  
 Item 8. Financial Statements and Supplementary Data
  23




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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
      
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management
  24




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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)
    
    
    592,774
    
    
    $
    6.98
    
    
    
    89,570Equity Compensation
Plans not approved by
security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    592,774
    
    
    $
    6.98
    
    
    
    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
  25




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PART IV
 
 Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
             (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.(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.
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(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)Exhibit (13)
    
    2009 Annual Report to Stockholders.Exhibit (21)
    
    Subsidiaries of the RegistrantExhibit (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.Exhibit (99)
    
    Consent Order with Federal Deposit Insurance Corporation and Office of
Financial and Insurance Regulation with the State of Michigan dated February
12, 2010
 
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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
    
    Director(Margaret I. Campbell)/s/ Michael V. Dorian, Jr.
    
    Director(Michael V. Dorian, Jr.)/s/ David Himick
    
    Director(David Himick)/s/ Donald G. Karcher
    
    Director(Donald G. Karcher)/s/ William J. Demmer
    
    Director(William J. Demmer)/s/ Bradley F. Keller
    
    Director(Bradley F. Keller)/s/ Jeffrey G. Longstreth
    
    Director(Jeffrey G. Longstreth)/s/ Dr. Robert C. Schwyn
    
    Director(Dr. Robert C. Schwyn)
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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)
    
    2009 Annual Report to Stockholders.Exhibit (21)
    
    Subsidiaries of the RegistrantExhibit (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.Exhibit 99
    
    Consent Order, dated February 12, 2010
 
  29