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UPDATING and REPLACING -- Dearborn Bancorp Reports Fourth Quarter and Year End Results

DEARBORN, Mich., Feb. 4, 2011 (GLOBE NEWSWIRE) -- In a release published earlier today by Dearborn Bancorp, Inc. (Nasdaq:DEAR), please note that the second and third paragraphs have been updated.  Additionally, please note that no financial figures were adjusted in the process. The updated release follows:
/ Source: GlobeNewswire

DEARBORN, Mich., Feb. 4, 2011 (GLOBE NEWSWIRE) -- In a release published earlier today by Dearborn Bancorp, Inc. (Nasdaq:DEAR), please note that the second and third paragraphs have been updated.  Additionally, please note that no financial figures were adjusted in the process. The updated release follows:

Dearborn Bancorp, Inc. (Nasdaq:DEAR), the Holding Company for Fidelity Bank ("Bank"), today reported a net loss of $2,379,000 or $(0.31) per fully diluted common share for the three months ended December 31, 2010 compared to a net loss of $5,806,000 or $(0.76) per share for the three months ended December 31, 2009. For the year ended December 31, 2010, the Company's net loss was $14,249,000 or $(1.86) compared to a net loss of $61,175,000 or $(8.00) for the same period in 2009. The Company's Shareholders' Equity of $26,959,000 equates to a tangible book value of $3.51 per share compared to the market closing price of $1.65 on December 31, 2010. In accordance with regulatory capital guidelines, the Bank remains "undercapitalized" at December 31, 2010.

Historically, in 2009, the Company recorded a $25,851,000 valuation allowance against its entire deferred tax asset, recorded a $5,451,000 tax refund from the expansion of a net operating loss carryback from two years to five years, and wrote-off its remaining $3,997,000 intangible assets related to acquisitions completed in 2004 and 2007. Additionally, in March 2010, the Company recorded an additional $10,000,000 in provision for 2009 based on information that became available that was indicative of credit quality issues as of December 31, 2009. Regardless of the adjustments, 2010 was a substantial improvement over 2009 in terms of net loss, operating expenses, and net interest margin.

At December 31, 2010 the Company's total assets were $915,684,000 compared to $986,486,000 at December 31, 2009. Total loans were intentionally reduced from $833,136,000 to $735,851,000. Total deposits declined from $867,955,000 to $812,101,000. Cash and cash equivalents increased from $77,497,000 to $93,775,000, and securities available for sale increased from $45,964,000 to $54,561,000. During 2010, the Company focused on strategically reducing loan balances to conserve capital while increasing the liquidity of the balance sheet.

Michael J. Ross, President and Chief Executive Officer of both the Company and the Bank, announced the financial results and commented, "We continue to operate in a troubled condition; however, 2010 began to show some positive signs of improvement. Non-performing assets peaked in March of 2010 at $138,494,000 and have slowly declined each quarter thereafter to $136,592,000, but still remain at elevated levels at year end. Included in the year end non-performing assets was $48,527,000 in troubled debt restructured loans which were all current according to their restructured terms. Net charge-offs for 2010 were $23,132,000 compared to $30,190,000 for 2009, an improvement of 24%. Other real estate owned also dropped from $23,435,000 to $21,502,000, an 8% decline. During the fourth quarter of 2010, due to the efforts of our Special Assets team, we had significant sales of other real estate owned in the amount of $8,081,000. During the quarter we began to receive multiple bids on bank owned properties versus nominal bids on properties marketed a year ago. We anticipate improvement going forward, primarily as a result of fewer additions to non-performing assets as well as a higher level of sales of other real estate owned resulting from a marginally more active real estate market in Southeast Michigan."

Mr. Ross continued, "The core operations of the Company continue to produce income to offset the high cost of FDIC insurance premiums and the defaulted loan expense associated with resolving problem assets which were $4,125,000 and $4,372,000, respectively for 2010. The net interest margin grew to 3.93% for the quarter ended December 31, 2010 compared to 3.14% a year ago, primarily as a result of improved deposit pricing. Additionally, management continues to maintain tight control over operations and has reduced expenses in the areas of wages, occupancy, marketing, stationery and supplies, data processing as well as certain discretionary expenses during 2010.

Ross concluded, "While we have shown some positive signs in 2010, the determining factor as to whether the Company can be solidly profitable in future quarters remains dependent upon the appraised value of collateral and level of charge-offs and write-downs. Thus, our primary concerns for 2011 are the recovery of the Michigan economy, credit quality, and the stability or improvement of the underlying collateral values in our loan portfolio."

Dearborn Bancorp, Inc. is a registered bank holding company. Its sole banking subsidiary is Fidelity Bank. The Bank operates 17 offices in Wayne, Oakland, Macomb and Washtenaw Counties in the State of Michigan. Its common shares trade on the Nasdaq Global Market under the symbol DEAR.

Forward-Looking Statements

This press release contains forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations. 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. Actual results and outcomes may materially differ from what is expressed in forward-looking statements. Dearborn Bancorp 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; actions by bank regulators; availability of capital; changes in local real estate values; changes in the national and local economy; and other factors, including risk factors disclosed from time to time in filings made by Dearborn Bancorp with the Securities and Exchange Commission. These are representative of the Future Factors and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.

CONTACT: Michael J. Ross, President & CEO (313) 565-5700 Jeffrey L. Karafa, CFO (313) 381-3200