DEARBORN BANCORP INC /MI/
SB-2/A, 1998-03-19
STATE COMMERCIAL BANKS
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     As filed with the Securities and Exchange Commission on March 19, 1998
                                                     Registration No. 333-47227
    
===============================================================================

                   U.S. SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

   
                               Amendment No. 1
                                      to
    
                                  Form SB-2

                            REGISTRATION STATEMENT
                                    UNDER
                          THE SECURITIES ACT OF 1933

                            Dearborn Bancorp, Inc.

                (Name of small business issuer in its charter)

 Michigan                             6712                    38-3073622
(State or                 (Primary Standard Industrial        (I.R.S.
other jurisdiction of         Classification Code Number)        Employer
incorporation or                                           Identification
organization)                                                        No.)




                            22290 Michigan Avenue
                        Dearborn, Michigan 48123-2247
                                (313) 274-1000
             (Address and telephone number of principal executive
    offices and principal place of business or intended principal place of
                                  business)

                          MICHAEL J. ROSS, PRESIDENT
                            Dearborn Bancorp, Inc.
                            22290 Michigan Avenue
                        Dearborn, Michigan 48123-2247
                                (313) 274-1000
          (Name, address, and telephone number of agent for service)

                                  Copies to:

VERNE C. HAMPTON II                                         DONALD J. KUNZ
  Dickinson Wright                                          Honigman Miller
        PLLC                                               Schwartz and Cohn
    500 Woodward                                          2290 First National
 Avenue, Suite 4000                                            Building
 Detroit, Michigan                                         Detroit, Michigan
     48226-3425                                               48226-3583

      Approximate date of proposed sale to the public: As soon as practicable
after the Registration Statement becomes effective.

      If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

      If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

      If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.  [ ]

   
    


- -------------------------------------------------------------------------------

      The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.

===============================================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.


<PAGE>
                  SUBJECT TO COMPLETION, DATED MARCH , 1998

PROSPECTUS

                               1,000,000 Shares

                            DEARBORN BANCORP, INC.

                                 Common Stock

      Dearborn Bancorp, Inc., a Michigan corporation (the "Company"), is
offering for sale 1,000,000 shares of its Common Stock (the "Common Stock").
The Company is a bank holding company which owns all of the common stock of
Community Bank of Dearborn, a Michigan banking corporation, located in
Dearborn, Michigan (the "Bank"). There has been no public trading market for
the Common Stock. Roney & Co., L.L.C. (the "Underwriter") has advised the
Company that it anticipates making a market in the Common Stock following
completion of the offering, although there can be no assurance that an active
trading market will develop. It is currently expected that the public
offering price of the Common Stock will be between $13.00 and $14.00 per
share. See "Underwriting" for a discussion of the factors considered in
determining the public offering price. The Company expects that quotations
for the Common Stock will be reported on the Nasdaq Small-Cap Market under
the symbol "DEAR."

THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A SIGNIFICANT AMOUNT OF
    RISK. SEE "RISK FACTORS" COMMENCING ON PAGE 7 FOR CERTAIN
         CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE COMPANY'S
                                 COMMON STOCK.

 These securities are not savings accounts or savings deposits and they are not
                                 insured by the
     Federal Deposit Insurance Corporation or any other government agency.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
     EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
          SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
               COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
                    OF THIS PROSPECTUS. ANY REPRESENTATION
                         TO THE CONTRARY IS A CRIMINAL
                                    OFFENSE.

===============================================================================
   
<TABLE>
<CAPTION>
                Price to      Underwriting       Proceeds to
               Public (1)   Discounts (1)(2)    Company(1)(3)
               ----------   ----------------    -------------
  <S>         <C>             <C>              <C>             <C>
  Per Share   $__________     $                $
  Total(1)    $__________     $                $

===============================================================================
<FN>
(1) The Company has granted the Underwriter a 30-day option to purchase up to
    150,000 additional shares of its Common Stock solely to cover
    over-allotments, if any. If the Underwriter exercises such option in
    full, the Price to Public, Underwriting Discounts, and Proceeds to
    Company will be approximately $ , $ and $ , respectively. See
    "Underwriting." The Underwriter has agreed to limit the Underwriting
    Discounts to 4.0% of the Price to Public for up to             shares 
    sold by the Underwriter to officers and directors of the Company and 
    the Bank. See "Underwriting."

(2) The Company has agreed to indemnify the Underwriter against certain
    liabilities, including liabilities under the Securities Act of 1933, as
    amended (the "Securities Act"). See "Underwriting."

(3) Before deducting estimated offering expenses payable by the Company of $ .
</TABLE>

     The shares of Common Stock are offered by the Underwriter subject to
prior sale, when, as and if delivered to and accepted by the Underwriter, and
subject to the right of the Underwriter to withdraw, cancel or modify such
offer and to reject orders in whole or in part. It is expected that delivery
of the shares of Common Stock will be made through the facilities of The
Depository Trust Company in New York, New York on or about
                  , 1998 against payment therefor in immediately available 
funds.
    
                                 Roney & Co.

                    The date of this Prospectus is              , 1998.

<PAGE>
                          [ GRAPHIC: SERVICE AREA ]

                          FORWARD-LOOKING STATEMENTS

      This Prospectus contains statements which constitute forward-looking
statements. These statements appear in several places in this Prospectus and
include statements regarding intent, belief, outlook, estimate or
expectations of the Company, primarily with respect to future events and the
future financial performance of the Company. Prospective purchasers of the
Common Stock are cautioned that any such forward-looking statements are not
guarantees of future events or performance and involve risks and
uncertainties, and that actual results may differ materially from those in
the forward-looking statements.

      IN CONNECTION WITH THE OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. SEE
"UNDERWRITING."

                                      2

<PAGE>

                              PROSPECTUS SUMMARY

      The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.
Unless the context clearly suggests otherwise, references in this Prospectus
to the Company include the Bank. Except as otherwise indicated, all
information in this Prospectus assumes no exercise of the Underwriter's
over-allotment option. All information in this Prospectus with respect to the
Common Stock has been adjusted to reflect the 10% stock dividend paid on
January 30, 1998 to shareholders of record on December 16, 1997.
   
                              The Company
    
      Dearborn Bancorp, Inc. (the "Company"), a Michigan corporation, is a
bank holding company owning all of the common stock of 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
western Wayne County, Michigan.

      The Bank has a strong commitment to community banking and offers a wide
range of financial products and services, primarily for individuals as well
as small- to medium-sized businesses. The Bank's lending strategy focuses on
residential real estate lending and, to a lesser extent, commercial lending
and indirect consumer lending through a select list of local automotive
dealers. The Bank also offers a broad array of deposit products, including
checking, savings and money market accounts, business checking, direct
deposits and certificates of deposit.

      The Bank primarily serves western Wayne County and currently has
offices in Dearborn, Dearborn Heights and Plymouth Township, Michigan.
Western Wayne County has a diverse economy based primarily on manufacturing,
retail and service. The Bank has delineated its primary market area to
include the communities of Dearborn, Dearborn Heights, Northville, Plymouth
and Plymouth Township, Michigan. The Bank has identified the Metropolitan
Detroit Area as its secondary marketing area to promote and foster additional
banking and credit opportunities as they arise.

      At December 31, 1997, the Company had total assets of $86.7 million,
total loans of $52.1 million, total deposits of $75.4 million, a ratio of 
non-performing assets to total loans of 0.02%, and a ratio of allowance for
possible credit losses to total loans of 1.01%. For the year ended 
December 31, 1997, the Company reported net income of $610,000 or $0.58 per
share, basic and diluted, compared to net income of $27,000 or $0.04 per 
share, basic and diluted, for the same period in 1996. At December 31, 1997,
the Bank exceeded all applicable regulatory capital requirements.

Management and Board of Directors

      The Company has assembled a management team and a board of directors
that have many years of combined banking experience in the Bank's market area
and a shared vision and commitment to the future growth and success of the
Bank.

      Michael J. Ross, President and Chief Executive Officer of the Bank, has
over 26 years of banking experience. Prior to joining the Bank at its
formation in 1993, Mr. Ross worked as an independent consultant in the
banking industry during 1992, was President of Republic Bank -- South East
during 1991, and President of Republic Bank -- Flint from 1987 to 1990. From
1972 to 1986, Mr. Ross was with Manufacturers National Bank of Detroit (now
part of Comerica Bank) where he held various positions principally in
commercial lending.

      Jeffrey L. Karafa, Vice President and Cashier of the Bank, joined the
Bank in 1994 and has over 15 years of banking experience, 11 of which were
with Michigan National Bank, primarily in financial management positions.
Timothy J. Cuttle, Executive Vice President in charge of the Bank's lending
operations, has over 28 years of banking experience, 21 of which were with
Huntington Bank of Michigan and its predecessor. Jeffrey J. Wolber, Vice
President in charge of the Bank's branch operations, has over 23 years of
banking experience, 8 of which were with NBD Bank and 10 of which were with
Michigan National Bank.

                                      3

<PAGE>

      Four of the directors of the Company served as executive officers
and/or directors of Alliance Financial Corporation, the bank holding company
which owned Dearborn Bank and Trust Company, until its merger with Comerica
Incorporated ("Comerica") in December 1989. Two other directors served as
directors of Heritage Bankcorp, Inc., the thrift holding company which owned
Heritage Federal Savings Bank, prior to its merger with Standard Federal Bank
in 1994.

Business Strategy

Grow 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 the opening of two additional offices. The Dearborn
Heights office opened on December 20, 1995 and as of December 31, 1997 had
$15.7 million in total deposits, while the Plymouth Township office opened on
August 11, 1997 and as of December 31, 1997 had $5.4 million in total
deposits. In 1998, the Bank intends to open an additional office in western
Wayne 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 Company's Primary Market. The Company's initial lending
philosophy concentrated on single family residential lending but has grown to
include a more diverse group of loan products. The Company's loan portfolio
currently consists of residential loans, indirect consumer loans with 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 Company will continue to
pursue internal growth at the Bank, management believes that additional
growth opportunities may be found in acquisitions of community banks or
branches in southeastern Michigan to enhance the Company's markets. As part
of its normal business operations, management maintains contact with
financial institutions to discuss various acquisition possibilities. However,
the Company 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 Company will be
successful in its acquisition strategy. 

                                      4

<PAGE>

                                  The Offering

Securities Offered by
   the Company .......... 1,000,000 shares of Common Stock. In addition, the
                          Company has granted the Underwriter an option to
                          purchase up to an additional 150,000 shares to cover
                          over-allotments.

Common Stock Outstanding
   Before the Offering .. 1,044,924 shares

Common Stock Outstanding
   After the Offering ... 2,044,924 shares (2,194,924 shares if the
                          over-allotment option is exercised in full).

Use of Proceeds by the
   Company .............. Approximately $2 million of the net proceeds received
                          by the Company from the shares it is selling in the
                          offering will be contributed to the Bank to be used
                          for general corporate purposes and to provide
                          additional capital to the Bank. The remaining net
                          proceeds will be held by the Company for general
                          corporate purposes. See "Use of Proceeds."

Proposed Nasdaq
   Small-Cap Market
   Symbol ............... DEAR

                                      5

<PAGE>

                       SUMMARY OF SELECTED FINANCIAL DATA

      The following selected consolidated financial and other data as of and
for each of the four years in the period ended December 31, 1997 are derived
from the Company's audited consolidated financial statements. The information
set forth below should be read in conjunction with the Consolidated Financial
Statements and the Notes thereto and "Management's Discussion and Analysis of
Financial Condition and Results of Operations." The Consolidated Balance
Sheets as of December 31, 1997 and 1996, and the Consolidated Statements of
Operations for the years ended December 31, 1997, 1996 and 1995, are included
elsewhere in this Prospectus. 
<TABLE>
<CAPTION>
                                                          At or for the years ended December 31,
                                                          --------------------------------------
(In thousands, except share data)                          1997        1996       1995    1994(1)
- ---------------------------------                          ----        ----       ----    -------
<S>                                                        <C>         <C>         <C>       <C>
OPERATIONS
Interest income .....................................      $5,404      $3,314    $2,023      $674
Interest expense ....................................       2,998       1,706     1,004       266
                                                           ------      ------    ------     -----
Net interest income .................................       2,406       1,608     1,019       408
Provision for possible credit losses ................         164         164       114       100
                                                           ------      ------    ------     -----
Net interest income after provision for possible
  credit losses .....................................       2,242       1,444       905       308
Total non-interest income ...........................         312         284       210        93
Total non-interest expense ..........................       2,089       1,701     1,403     1,065
                                                           ------      ------    ------     -----
Net income (loss) before federal income tax benefit .         465          27      (288)     (664)
Income tax benefit ..................................         145          --        --        --
                                                           ------      ------    ------     -----
Net income (loss) ...................................        $610         $27     $(288)    $(664)
                                                           ======      ======    ======     =====
FINANCIAL CONDITION
Total assets ........................................     $86,653     $56,599   $35,130   $20,879
Loans ...............................................      52,139      36,263    19,945     9,907
Deposits ............................................      75,397      47,463    28,922    14,389
Other borrowings ....................................       2,037         554       569       584
Stockholders' equity ................................       8,752       8,190     5,458     5,626

SHARE INFORMATION
Net income (loss) per common share -- basic and
  diluted ...........................................       $0.58       $0.04    $(0.39)   $(0.90)
Book value per common share .........................       $8.38       $7.84     $7.36     $7.59
Average shares outstanding ..........................   1,055,861     742,178   741,346   741,346
Shares outstanding at end of period .................   1,044,924   1,044,924   741,346   741,346

OTHER DATA
Return on average assets ............................       0.86%       0.06%    (1.01%)   (5.12%)
Return on average equity ............................       7.23%       0.50%    (5.20%)  (11.62%)
Net interest margin .................................       3.60%       3.98%     3.92%     3.55%
Net interest spread .................................       2.54%       2.92%     2.65%     1.46%
Allowance for possible credit losses to total loans .       1.01%       1.01%     1.02%     1.00%
Nonperforming assets to total loans .................       0.02%       0.02%     0.21%     0.00%
Stockholders' equity to total assets ................      10.10%      14.47%    15.54%    26.95%
Total interest expense to interest income ...........      55.48%      51.48%    49.63%    39.47%
Number of offices ...................................           3           2         2         1
<FN>
- ----------------
(1) Bank operations began on February 28, 1994.
</TABLE>

                                      6

<PAGE>

                                 RISK FACTORS

      The Common Stock offered hereby involves significant risk. The
following constitute some of the potential risks of an investment in the
Common Stock and should be carefully considered by prospective investors
prior to purchasing shares of Common Stock. The order of the following is not
necessarily indicative of the relative importance of any described risk nor
is the following intended to be inclusive of all risks of investment in the
Common Stock.

Lending Risks

      The risk of nonpayment of loans is inherent in commercial banking, and
such nonpayment, if it occurs, would likely have a material adverse effect on
the Company's earnings and overall financial condition, as well as the value
of the Common Stock. Management attempts to minimize the Bank's credit
exposure by carefully monitoring the concentration of its loans within
specific industries and through prudent loan application and approval
procedures, but there can be no assurance that such monitoring and procedures
will reduce such lending risks. Credit losses can cause insolvency and
failure of a financial institution, and in such event, its shareholders could
lose their entire investment.

Impact of Interest Rates and Economic Conditions

      The results of operations for financial institutions, including the
Bank, may be materially and adversely affected by changes in prevailing
economic conditions, including declines in real estate market values, rapid
changes in interest rates and the monetary and fiscal policies of the federal
government. The Bank's profitability is in part a function of the spread
between the interest rates earned on investments and loans and the interest
rates paid on deposits and other interest-bearing liabilities. In the early
1990s, many banking organizations experienced historically high interest rate
spreads. More recently, interest rate spreads have generally narrowed due to
changing market conditions and competitive pricing pressure, and there can be
no assurance that such factors will not continue to exert such pressure or
that such high interest rate spreads will return. Although economic
conditions in the Bank's market area have been generally favorable, there can
be no assurance that such conditions will continue to prevail. Substantially
all the Bank's loans are to businesses and individuals in the Metropolitan
Detroit Area and any decline in the economy of this area could have an
adverse impact on the Bank. Like most banking institutions, the Bank's net
interest spread and margin will be affected by general economic conditions
and other factors that influence market interest rates and the Bank's ability
to respond to changes in such rates. At any given time, the Bank's assets and
liabilities will be such that they are affected differently by a change in
interest rates. As a result, an increase or decrease in rates could have a
material adverse effect on the Bank's net income, capital and liquidity.
While management takes measures to guard against interest rate risk, there
can be no assurance that such measures will be effective in minimizing the
exposure to such risk. See "Supervision and Regulation."

Competition

      The Company and the Bank face 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, recently
effective legislation regarding interstate branching and banking may increase
competition in the future from out-of-state banks.

                                      7

<PAGE>

Need for Technological Change

      The banking industry is undergoing rapid technological changes with
 frequent introductions of new technology-driven products and services.
In addition to better serving customers, the effective use of technology
increases efficiency and enables financial institutions to reduce costs. The
Company's future success will depend in part on its ability to address the
needs of its customers by using technology to provide products and services
that will satisfy customer demands for convenience as well as to create
additional efficiencies in the Bank's operations. Many of the Bank's
competitors have substantially greater resources to invest in technological
improvements. Such technology may permit competitors to perform certain
functions at a lower cost than the Bank. There can be no assurance that the
Bank will be able to effectively implement new technology-driven products and
services or be successful in marketing such products and services to its
customers.

Discretion in Use of Proceeds

      The purpose of the offering is to further strengthen the Company's
capital position in order to support the general expansion of the Company's
business, including, if opportunities arise, possible acquisitions of other
branches or expansion into other lines of business closely related to
banking. Management, however, will retain discretion in employing the
proceeds of the offering. At present there are no specific agreements,
arrangements, or understandings for any acquisition, and there is no
assurance that the Company's acquisition strategy will be successful. See
"Use of Proceeds."

Government Regulation and Monetary Policy

      The Company and the Bank are subject to extensive state and federal
government supervision and regulation. Existing state and federal banking
laws subject the Bank to substantial limitations with respect to loans,
purchase of securities, payment of dividends and many other aspects of its
banking business. There can be no assurance that future legislation or
government policy will not adversely affect the banking industry or the
operations of the Bank. Federal economic and monetary policy may affect the
Bank's ability to attract deposits, make loans and achieve satisfactory
interest spreads. See "Supervision and Regulation."

No Assurance of Cash Dividends

      Although the Company recently declared a stock dividend, the Company
has not paid cash dividends on its Common Stock, and it is anticipated that
no cash dividends will be paid on the Common Stock for the foreseeable
future. The Company is largely dependent upon dividends paid by the Bank for
funds to pay dividends on the Common Stock, if and when such dividends are
declared. No assurance can be given that future earnings of the Bank, and
resulting dividends to the Company, will be sufficient to permit the legal
payment of dividends to Company shareholders at any time in the future. Even
if the Company may legally declare dividends, the amount and timing of such
dividends will be at the discretion of the Company's Board of Directors. The
Board may in its sole discretion decide not to declare dividends. These
shares should not be purchased by persons who need or desire dividend income
from this investment. For a more detailed discussion of other regulatory
limitations on the payment of cash dividends by the Company, see "Dividend
Policy."

Anti-Takeover Provisions

      The Articles of Incorporation of the Company and Chapter 7B of the
Michigan Business Corporation Act ("MBCA") provide for certain supermajority
vote and other requirements on certain business combinations with interested
shareholders and limit voting rights of certain acquirers of control shares.
In addition, federal law requires the approval of the Board of Governors of
the Federal Reserve System (the "Federal Reserve") prior to acquisition of
"control" of a bank holding company. These 

                                      8

<PAGE>

provisions may have the effect of delaying or preventing a change in control
of the Company without action by the shareholders. As a result, these
provisions could adversely affect the price of the Common Stock by, among
other things, preventing a shareholder of the Company's Common Stock from
realizing a premium which might be paid as a result of a change in control of
the Company. See "Description of Common Stock -- Certain Charter Provisions."

Indemnification of Directors and Officers

      The Company's Articles of Incorporation provide for the indemnification
of its officers and directors and insulate its officers and directors from
liability for certain breaches of the duty of care. It is possible that the
indemnification obligations imposed under these provisions could result in a
charge against the Company's earnings and thereby affect the availability of
funds for payment of dividends to the Company's shareholders. See
"Description of Common Stock -- Indemnification of Directors and Officers."

Determination of Offering Price; Limited Trading Market Expected

      The public offering price of $ per share was determined by the Company
in consultation with the Underwriter. This price is not based upon earnings
or past operations and should not be construed as indicative of the present
or anticipated future value of the Common Stock. Prior to the offering, there
has been no public trading market for the Common Stock and shares have been
traded on an individual basis. The price at which these shares are being
offered to the public may be greater than the market price for the Common
Stock following the offering. The Underwriter has advised the Company that,
upon completion of the offering, it intends to use reasonable efforts to
initiate quotations of the Common Stock in the Nasdaq Small-Cap Market and to
act as a market maker in the Common Stock, subject to applicable laws and
regulatory requirements, although it is not obligated to do so. Making a
market in securities involves maintaining bid and ask quotations and being
able, as principal, to effect transactions in reasonable quantities at those
quoted prices, subject to various securities laws and other regulatory
requirements. The development of a public trading market depends, however,
upon the existence of willing buyers and sellers, the presence of which is
not within the control of the Company or any market maker. Even with a market
maker, factors such as the limited number of shares outstanding and the
absence of a reasonable expectation of dividends within the near future mean
that there can be no assurance of an active and liquid market for the Common
Stock developing in the foreseeable future. Even if a market develops, there
can be no assurance that a market will continue, or that shareholders will be
able to sell their shares at or above the price at which these shares are
being offered to the public. Purchasers of Common Stock should carefully
consider the limited liquidity of their investment in the shares being
offered hereby.

Dilution

      In the period following the offering, the offering may have a dilutive
effect on income per share and return on equity, because the proceeds
of the offering may be invested in short-term investments at comparatively
low interest rates. The Company's long-term strategy is to use the additional
equity raised through the offering as a base to support asset growth which
would enhance income per share and return on equity. However, there is no
assurance that the Company will be able to achieve such growth.

                               USE OF PROCEEDS

      The net proceeds to the Company from the sale of the 1,000,000 shares
of Common Stock offered hereby are estimated to be $ ($ if the Underwriter's
over-allotment option is exercised in full), after deduction of the
underwriting discounts, but before deducting estimated offering expenses of $
 . The Underwriter has agreed to limit the underwriting discounts to 4.0% of
the public offering price for up to shares sold by the Underwriter to
officers and directors of the Company and the Bank.

                                      9

<PAGE>

      The Company will contribute approximately $2 million of the net
proceeds of the offering to the Bank. It is anticipated that the net proceeds
received by the Bank will be used to fund investments in loans and securities
and for payment of operating expenses. The remaining net proceeds (plus any
net proceeds as a result of the exercise of the Underwriter's over-allotment
option) will initially be invested by the Company in investment grade
securities and otherwise held by the Company for general corporate purposes
and to pay operating expenses, as well as for possible future capital
contributions to the Bank. The funds will also be available to finance
possible acquisitions of other branches or expansion into other lines of
business closely related to banking, although the Company presently has no
plans to do so.

                               DIVIDEND POLICY

      The Company and Bank income, if any, will be retained to finance the
growth of the Company and the Bank. The Company does not anticipate that cash
dividends will be paid in the foreseeable future. The declaration of
dividends is at the discretion of the Board of Directors, and there is no
assurance that cash dividends will be declared at any time. If and when
dividends are declared, the Company will be largely dependent upon dividends
paid by the Bank for funds to pay dividends on the Common Stock.

      On December 16, 1997, the Company declared a 10% stock dividend payable
on January 30, 1998 to shareholders of record on December 16, 1997.

      Under Michigan law, the Bank is restricted as to the maximum amount of
cash dividends it may pay on its Common Stock. A Michigan state bank may not
declare cash dividends except out of net profits then on hand after deducting
its losses and bad debts, and then only if the bank will have a surplus
amounting to at least 20% of its capital after the payment of the dividend.
If the surplus of a Michigan state bank is at any time less than the amount
of its capital, before the declaration of a cash dividend or dividend in
kind, it must transfer to surplus not less than 10% of its net profits for
the preceding half-year (in the case of quarterly or semi-annual dividends)
or the preceding two consecutive half-year periods (in the case of annual
dividends). The ability of the Company and the Bank to pay cash dividends is
also affected by various regulatory requirements and policies, such as the
requirement to maintain adequate capital above regulatory guidelines. See
"Supervision and Regulation." Such requirements and policies may limit the
Company's ability to obtain dividends from the Bank for its cash needs,
including funds for acquisitions, payment of dividends by the Company, and
the payment of operating expenses.

                                CAPITALIZATION

      The following table sets forth the historical capitalization of the
Company and as it is projected to be immediately after the sale of the
1,000,000 shares of Common Stock offered hereby and the application of the
estimated net proceeds. See "Use of Proceeds."
<TABLE>
<CAPTION>
                                                          At December 31, 1997
                                                          --------------------
(In thousands, except share data)                       Historical   As Adjusted
                                                        ----------   -----------
<S>                                                     <C>          <C>
Long-term debt ......................................     $   537      $
Stockholders' equity:
  Common Stock, 3,000,000 shares authorized, 
   1,044,924 shares issued and outstanding; 2,044,924 
    shares issued and outstanding as adjusted (1)....      10,506        (2)
  Accumulated deficit ...............................      (1,689)
                                                           ------     ------
  Net unrealized loss on securities available for
    sale ............................................         (65)
Total stockholders' equity ..........................       8,752
                                                           ------     ------
Total capitalization ................................     $ 9,289      $
                                                           ======     ======
<FN>
- ----------------
(1) Excludes 87,400 shares reserved for issuance of options outstanding under
    the Company's Stock Option Plan.

(2) Offering expenses to be paid by the Company are expected to be $_______.
</TABLE>

                                      10

<PAGE>

                      SELECTED CONSOLIDATED FINANCIAL DATA

      The following selected consolidated financial and other data as of and
for each of the four years in the period ended December 31, 1997 are derived
from the Company's audited consolidated financial statements. The information
set forth below should be read in conjunction with the Consolidated Financial
Statements and the Notes thereto and "Management's Discussion and Analysis of
Financial Condition and Results of Operations." The Consolidated Balance
Sheets as of December 31, 1997 and 1996, and the Consolidated Statements of
Operations for the years ended December 31, 1997, 1996 and 1995, are included
elsewhere in this Prospectus. 
<TABLE>
<CAPTION>
                                                          At or for the years ended December 31,
                                                          --------------------------------------
(In thousands, except share data)                          1997        1996       1995    1994(1)
- ---------------------------------                          ----        ----       ----    -------
<S>                                                        <C>         <C>         <C>       <C>
OPERATIONS
Interest income .....................................      $5,404      $3,314    $2,023      $674
Interest expense ....................................       2,998       1,706     1,004       266
                                                            -----       -----     -----     -----
Net interest income .................................       2,406       1,608     1,019       408
Provision for possible credit losses ................         164         164       114       100
                                                            -----       -----     -----     -----
Net interest income after provision for possible
  credit losses .....................................       2,242       1,444       905       308
Total non-interest income ...........................         312         284       210        93
Total non-interest expense ..........................       2,089       1,701     1,403     1,065
                                                            -----       -----     -----     -----
Net income (loss) before federal income tax benefit .         465          27      (288)     (664)
Income tax benefit ..................................         145          --        --        --
                                                            -----       -----     -----     -----
Net income (loss) ...................................        $610         $27     $(288)    $(664)
                                                            =====       =====     =====     =====
FINANCIAL CONDITION
Total assets ........................................     $86,653     $56,599   $35,130   $20,879
Loans ...............................................      52,139      36,263    19,945     9,907
Deposits ............................................      75,397      47,463    28,922    14,389
Other borrowings ....................................       2,037         554       569       584
Stockholders' equity ................................       8,752       8,190     5,458     5,626
SHARE INFORMATION
Net income (loss) per common share -- basic and
  diluted ...........................................       $0.58       $0.04    $(0.39)   $(0.90)
Book value per common share .........................       $8.38       $7.84     $7.36     $7.59
Average shares outstanding ..........................   1,055,861     742,178   741,346   741,346
Shares outstanding at end of period .................   1,044,924   1,044,924   741,346   741,346
OTHER DATA
Return on average assets ............................       0.86%       0.06%    (1.01%)   (5.12%)
Return on average equity ............................       7.23%       0.50%    (5.20%)  (11.62%)
Net interest margin .................................       3.60%       3.98%     3.92%     3.55%
Net interest spread .................................       2.54%       2.92%     2.65%     1.46%
Allowance for possible credit losses to total loans .       1.01%       1.01%     1.02%     1.00%
Nonperforming assets to total loans .................       0.02%       0.02%     0.21%     0.00%
Stockholders' equity to total assets ................      10.10%      14.47%    15.54%    26.95%
Total interest expense to interest income ...........      55.48%      51.48%    49.63%    39.47%
Number of offices ...................................           3           2         2         1
<FN>
- ----------------
(1) Bank operations began on February 28, 1994.
</TABLE>

                                      11

<PAGE>

  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

General

      The Company was formed in 1992 and the Bank was formed in 1993.
Principal operations of the Bank commenced on February 28, 1994 when the Bank
opened for business at its main office, located at 22290 Michigan Avenue,
Dearborn, Michigan. On December 20, 1995, the Bank opened its second office,
located at 24935 West Warren Avenue, Dearborn Heights, Michigan. On August
11, 1997, the Bank opened its third office, located at 44623 Five Mile Road,
Plymouth Township, Michigan.

Results of Operations

      The Company reported net income of $610,000 in 1997 compared to net
income of $27,000 in 1996 and a net loss of $288,000 in 1995. The improvement
each year was primarily a function of growth in the volume of investments,
loans and deposits and the corresponding net interest income associated with
the increased volumes.

Net Interest Income

      1997 Compared to 1996. Net interest income for the period ended
December 31, 1997 was $2.4 million compared to $1.6 million for the period
ended December 31, 1996, an increase of $0.8 million or 50%. This increase
was caused primarily by an increase in average earning assets of $26.5
million between the periods while interest-bearing liabilities grew by $21.9
million. At the same time the Company's interest rate spread decreased to
2.54% in 1997 from 2.92% in 1996. The Company's net interest margin also
decreased in 1997 to 3.60% from 3.98% in 1996. However, the decreases in net
interest spread and net interest margin were offset by increases in the
volume of net earning assets. The Company's decrease in interest rate spread
and net interest margin was a direct result of aggressive time deposit
gathering at premium rates and the direct reinvestment of those funds into
investment securities with similar interest rates until the funds could be
redeployed into quality loans with higher yields.

      1996 Compared to 1995. Net interest income for the period ended
December 31, 1996 was $1.6 million compared to $1.0 million for the period
ended December 31, 1995, an increase of $0.6 million or 60%. This increase
was caused primarily by an increase in average earning assets of $14.6
million between the periods, while interest-bearing liabilities grew by $13.0
million. At the same time, the Company's interest rate spread increased to
2.92% in 1996 from 2.65% in 1995. The Company's net interest margin also
increased in 1996 to 3.98% from 3.95% in 1995.

      Average Balances, Interest Rates and Yields. Net interest income is
affected by the difference ("interest rate spread") between rates of interest
earned on interest-earning assets and rates of interest paid on
interest-bearing liabilities and the relative amounts of interest-bearing
liabilities and interest- earning assets. When the total of interest-earning
assets approximates or exceeds the total of interest- bearing liabilities,
any positive interest rate spread will generate net interest income.
Financial institutions have traditionally used interest rate spreads as a
measure of net interest income. Another indication of an institution's net
interest income is its "net yield on interest-earning assets" or "net
interest margin," which is net interest income divided by average
interest-earning assets.

                                      12

<PAGE>

      The following table sets forth certain information relating to the
Company's consolidated average interest-earning assets and interest-bearing
liabilities and reflects the average yield on assets and average cost of
liabilities for the periods indicated. Such yields and costs are derived by
dividing income or expense by the average daily balance of assets or
liabilities, respectively, for the periods presented. During the periods
indicated, non-accruing loans, if any, are included in the net loan category.
<TABLE>
<CAPTION>
                              Year Ended December 31, 1997   Year Ended December 31, 1996   Year Ended December 31, 1995
                              ----------------------------   ----------------------------   ----------------------------
                              Average              Average   Average              Average   Average              Average
(In thousands)                Balance   Interest    Rate     Balance   Interest    Rate     Balance   Interest    Rate
                              -------   --------    ----     -------   --------    ----     -------   --------    ----
<S>                           <C>       <C>         <C>      <C>       <C>         <C>      <C>       <C>         <C>
Assets
  Federal funds sold and
    interest bearing
    deposits with banks  ..   $ 3,351    $  188     5.61%    $ 2,137    $  115     5.38%    $ 3,184    $  188     5.90%
  Investment securities --
    available for sale  ...    20,031     1,235     6.17%     12,400       733     5.91%      8,240       466     5.66%
  Loans  ..................    43,533     3,981     9.14%     25,835     2,466     9.55%     14,345     1,369     9.54%
                               ------     -----     ----      ------     -----     ----      ------     -----     ---- 
    Sub-total earning
      assets...............    66,915     5,404     8.08%     40,372     3,314     8.21%     25,769     2,023     7.85%
  Other assets  ...........     4,361                          3,618                          2,711
                               ------                         ------                         ------
    Total assets  .........   $71,276                        $43,990                        $28,480
                               ======                         ======                         ======
Liabilities and
  stockholders'
  equity
    Interest bearing
      deposits  ...........   $53,559    $2,955     5.52%    $31,713    $1,662     5.24%    $18,748    $  959     5.12%
    Other borrowings  .....       582        43     7.39%        564        44     7.80%        576        45     7.75%
                               ------     -----     ----      ------     -----     ----      ------     -----     ---- 
      Sub-total interest
        bearing
        liabilities  ......    54,141     2,998     5.54%     32,277     1,706     5.29%     19,324     1,004     5.20%
    Non-interest bearing
      deposits  ...........     8,374                          6,142                          3,359
    Other liabilities  ....       322                            210                            256
    Stockholders' equity  .     8,439                          5,361                          5,541
                               ------                         ------                         ------
      Total liabilities
        and stockholders'
        equity  ...........   $71,276                        $43,990                        $28,480
                              =======                         ======                         ======
      Net interest income                $2,406                         $1,608                         $1,019
                                         ======                          =====                          =====
      Net interest rate
        spread  ...........                         2.54%                          2.92%                          2.65%
                                                    ====                           ====                           =====
      Net interest margin
        on earning assets                           3.60%                          3.98%                          3.95%
                                                    ====                           ====                           ====
</TABLE>

                                      13

<PAGE>

      Rate/Volume Analysis. The following table analyzes net interest income
in terms of changes in the volume of interest-earning assets and
interest-bearing liabilities and changes in yields and rates. The table
reflects the extent to which changes in the interest income and interest
expense are attributable to changes in volume (changes in volume multiplied
by prior year rate) and changes in rate (changes in rate multiplied by prior
year volume). Changes attributable to the combined impact of volume and rate
have been allocated proportionately to changes due to volume and changes due
to rate. 
<TABLE>
<CAPTION>
                                                                 1997/1996                    1996/1995
                                                        Change in Interest Due to:   Change in Interest Due to:
                                                        --------------------------   --------------------------
                                                        Average   Average     Net    Average   Average     Net
(In thousands)                                          Balance     Rate    Change   Balance     Rate    Change
- --------------                                          -------     ----    ------   -------     ----    ------
<S>                                                     <C>        <C>      <C>      <C>         <C>     <C>
Assets
  Federal funds sold and interest bearing deposits
    with banks ......................................    $   68    $   5    $   73    $  (56)    $(17)   $  (73)
  Investment securities -- available for sale .......       470       32       502       246       21       267
  Loans .............................................     1,619     (104)    1,515     1,097       --     1,097
                                                          -----     ----     -----     -----      ---     -----
Total earning assets ................................    $2,157    ($  67)  $2,090    $1,287     $  4    $1,291
                                                          =====     =====    =====     =====      ===     =====
Liabilities
  Interest bearing deposits .........................    $1,206    $  87    $1,293    $  679     $ 24    $  703
  Other borrowings ..................................         1       (2)       (1)       (1)      --        (1)
                                                          -----     ----     -----     -----      ---     -----
Total interest bearing liabilities ..................    $1,207    $  85    $1,292    $  678     $ 24    $  702
                                                          =====     ====     =====     =====      ===     =====
    Net interest income .............................                       $  798                       $  589
                                                                             =====                        =====
    Net interest rate spread ........................                        (0.38%)                       0.27%
                                                                             =====                        =====
    Net interest margin on earning assets ...........                        (0.39%)                       0.03%
                                                                             =====                        =====
</TABLE>

Provision for Possible Credit Losses

      1997 Compared to 1996. The provision for possible credit losses was
$164,000 in both 1997 and 1996. The provision for possible credit losses was
based upon management's assessment of relevant factors, including types and
amounts of non-performing loans, historical and anticipated loss experience
on such types of loans, and current and projected economic conditions. Refer
to Note C of the Notes to Consolidated Financial Statements for additional
information.

      1996 Compared to 1995. The provision for possible credit losses was
$164,000 in 1996 compared to $114,000 in 1995, an increase of $50,000 or 44%.
The increase in the provision for possible credit losses was based upon
management's assessment of relevant factors, including types and amounts of
non-performing loans, historical and anticipated loss experience on such
types of loans, and current and projected economic conditions. Refer to Note
C of the Notes to Consolidated Financial Statements for additional
information.

Non-interest Income

      1997 Compared to 1996. Non-interest income was $312,000 in 1997
compared to $284,000 in 1996, an increase of $28,000 or 10%. This increase
was primarily due to service charges on deposit accounts as a result of an
increase in the volume of these accounts.

      1996 Compared to 1995. Non-interest income was $284,000 in 1996
compared to $210,000 in 1995, an increase of $74,000 or 35%. This increase
was primarily due to service charges on deposit accounts as a result of an
increase in the volume of these accounts.

Non-interest Expense

      1997 Compared to 1996. Non-interest expense was $2.1 million in 1997
compared to $1.7 million in 1996, an increase of $0.4 million or 24%. The
largest components of non-interest expense were salaries and employee
benefits which amounted to $1.2 million and occupancy and equipment expense
which 

                                      14

<PAGE>

amounted to $267,000 in 1997. In 1996, salaries and employee benefits and
occupancy and equipment expense were $1.1 million and $198,000, respectively.
The primary factor for these increases was the opening of the Bank's office
in Plymouth Township, Michigan in August 1997. As of December 31, 1997, the
number of full time equivalent employees was 26 as compared to 23 as of
December 31, 1996.

      1996 Compared to 1995. Non-interest expense was $1.7 million in 1996
compared to $1.4 million in 1995, an increase of $0.3 million or 21%. The
largest components of non-interest expense were salaries and employee
benefits which amounted to $1.1 million and occupancy and equipment expense
which amounted to $198,000 in 1996. In 1995, salaries and employee benefits
and occupancy and equipment expense were $0.9 million and $147,000, 
respectively. The primary factor for these increases was the opening of the
Bank's office in Dearborn Heights, Michigan in late December 1995. As of 
December 31, 1996, the number of full time equivalent employees was 23 as 
compared to 24 as of December 31, 1995.

Income Tax Benefit

      1997 Compared to 1996. The income tax benefit was $145,000 in 1997
compared to $0 in 1996, an increase of $145,000. During 1997, the Bank
recognized a $145,000 tax benefit from the change in the valuation allowance
against a deferred tax asset related to net operating loss carryforwards.
Refer to Note H of the Notes to Consolidated Financial Statements for
additional information.

Comparison of Financial Condition at December 31, 1997 and December 31, 1996

      Assets. Total assets at December 31, 1997 were $86.7 million compared
to $56.6 million at December 31, 1996, an increase of $30.1 million or 53%.
The increase was primarily due to increases in investment securities --
available for sale and loans.

      Investment Securities -- Available for Sale. Total investment
securities -- available for sale, at December 31, 1997 were $29.8 million
compared to $10.5 million at December 31, 1996, an increase of $19.3 million
or 184%. During 1997, the Company purchased $41.4 million in securities, and
$19.5 million of securities were called or matured during the year. In
addition, the Company sold securities of $2.6 million and recognized gain on
such sales in the amount of $13,000. The increase in deposits has enabled the
Company to invest in investment securities -- available for sale until such
time as quality loan opportunities become available. All securities within
the Company's portfolio are U.S. treasury issues or U.S. government-sponsored
agency issues carrying AAA ratings. The Company does not hold any securities
in the "Held to Maturity" category, nor does the Company hold or utilize
derivatives. Refer to Note B of the Notes to Consolidated Financial
Statements for additional information.

      Loans. Total loans at December 31, 1997 were $52.1 million compared to
$36.3 million at December 31, 1996, an increase of $15.8 million or 44%. The
components of the outstanding balances and percentage increase in loans from
1996 to 1997 are as follows:
<TABLE>
<CAPTION>
                                                          December 31, 1997      December 31, 1996      Percent
                                                          ------------------   --------------------    Increase/
(In thousands)                                          Balance   Percentage   Balance   Percentage   (Decrease)
- --------------                                          -------   ----------   -------   ----------   ----------
<S>                                                     <C>       <C>          <C>       <C>          <C>
Consumer loans ......................................   $12,705        25%     $ 8,877        24%          43%
Commercial, financial, & other ......................    10,668        20        7,199        20           48
Commercial real estate construction .................     1,746         3        1,971         5          (11)
Commercial real estate mortgages ....................     9,796        19        6,384        18           53
Residential real estate mortgages ...................    17,224        33       11,832        33           46
                                                        -------       ---      -------       ---           ---
                                                        $52,139       100%     $36,263       100%          44%
                                                        =======       ===      =======       ===           == 
</TABLE>

      Refer to Note C of the Notes to Consolidated Financial Statements for
additional information.

      Allowance for Possible Credit Losses. The allowance for possible credit
losses at December 31, 1997 was $522,000 compared to $366,000 at December 31,
1996, an increase of $156,000 or 43%. The increase in the allowance for
possible credit losses was based upon management's assessment of relevant
factors, including types and amounts of non-performing loans, historical and
anticipated loss experience on such types of loans, and current and projected
economic conditions. Refer to Note C of the Notes to Consolidated Financial
Statements for additional information.

                                      15

<PAGE>

      Bank Premises and Equipment. Bank premises and equipment at December
31, 1997 was $2.3 million compared to $2.1 million at December 31, 1996, an
increase of $0.2 million or 10%. This increase reflects the Bank's investment
in technology as well as capital expenditures necessary to open the Bank's
Plymouth Township office.

      Accrued Interest Receivable. Accrued interest receivable at December
31, 1997 was $723,000 compared to $306,000 at December 31, 1996, an increase
of $417,000 or 136%. The increase was due to the increased volume of
investments securities -- available for sale, for which interest is
receivable semi-annually.

      Other Assets. Other assets at December 31, 1997 were $230,000 compared
to $94,000 at December 31, 1996, an increase of $136,000 or 145%. The
increase was due to the Bank's recognition of an income tax asset of $145,000
in 1997. Refer to Note H of the Notes to Consolidated Financial Statements
for additional information.

      Deposits. Total deposits at December 31, 1997 were $75.4 million
compared to $47.5 million at December 31, 1996, an increase of $27.9 million
or 59%. The components of the outstanding balances and percentage increase in
deposits from 1996 to 1997 are as follows:
<TABLE>
<CAPTION>
                                                        December 31, 1997   December 31, 1996
                                                        -----------------   -----------------     Percent
(In thousands)                                           Balance Percentage Balance  Percentage  Increase
- --------------                                           ------- ----------  ------- ----------  --------
<S>                                                      <C>         <C>     <C>         <C>    <C>
Non-interest bearing:
  Demand ............................................    $ 8,587      11%    $ 7,583      15%       13%
Interest bearing:
  Checking ..........................................      1,274       2         977       2        30
  Money market ......................................      6,787       9       5,977      13        14
  Savings ...........................................      1,529       2       1,240       3        23
  Time, under $100,000 ..............................     36,114      48      19,048      40        90
  Time, $100,000 and over
    Non-volatile priced .............................     12,055      16       5,265      11       129
    Volatile priced .................................      9,051      12       7,373      16        23
                                                         -------     ---     -------     ---       --- 
                                                         $75,397     100%    $47,463     100%       59%
                                                         =======     ===     =======     ===       === 
</TABLE>

      The increase in deposits was primarily due to growth in time deposits.
During 1997, the Bank completed two major marketing campaigns, an annual
birthday celebration in March and a grand opening celebration in August,
offering a premium rate of interest on time deposits. These campaigns raised
in excess of $7 million in new deposits per campaign in a period of
approximately two weeks each. Additional growth in all types of deposits was
achieved via routine marketing, telemarketing, referral and visitation
programs. The increase in deposits enabled the Company to invest the funds in
investment securities -- available for sale until such time as quality loan
opportunities became available.

      Federal Funds Purchased. Federal funds purchased at December 31, 1997
were $1.5 million compared to $0 at December 31, 1996. The increase in
federal funds purchased was a result of the Bank's need for liquidity to fund
an unanticipated $1.5 million outgoing wire transfer for a large customer
late in the day on December 31, 1997.

      Accrued Interest Payable. Accrued interest payable at December 31, 1997
was $310,000 compared to $127,000 at December 31, 1996. The increase was due
to the increase in the volume of time deposits during 1997.

Capital

      Stockholders' equity at December 31, 1997 was $8.8 million compared to
$8.2 million as of December 31, 1996, an increase of $0.6 million or 7%. In
addition, at December 31, 1997, the Bank exceeded all applicable regulatory
capital requirements. Refer to Note K of the Notes to Consolidated Financial
Statements for further information.

                                      16

<PAGE>

Liquidity and Asset and Liability Management

      Liquidity refers to readily available funds to meet the needs of
borrowers and depositors. Levels of liquidity are closely monitored in
conjunction with loan funding requirements and deposit outflows. Adequate
liquidity protects institutions from raising funds under duress at excessive
expense and provides a necessary cushion for occasional unpredictable
aberrations in demand. While adequate liquidity is imperative, excessive
liquidity in lower yielding cash investments or other easily marketable
assets reduces potential interest income. Thus, an appropriate balance must
be maintained to protect the institution, and at the same time, prudently
maximize income opportunities. Sources of liquidity from both assets and
liabilities includes federal funds sold, securities available for sale, loan
repayments, core deposits and a federal funds purchase credit facility.

      The Company has sought to manage its exposure to changes in interest
rates by matching more closely the effective maturities or repricing
characteristics of the Company's interest-earning assets and interest-bearing
liabilities. The matching of the assets and liabilities may be analyzed by
examining the extent to which the assets and liabilities are interest rate
sensitive and by monitoring the expected effects of interest rate changes on
net interest income.

      An asset or liability is interest rate sensitive within a specific time
period if it will mature or reprice within that time period. If the Company's
assets mature or reprice more quickly or to a greater extent that its
liabilities, then the Company's net portfolio value and net interest income
would tend to increase during periods of rising interest rates but decrease
during periods of falling interest rates. If the Company's assets mature or
reprice more slowly or to a lesser extent than its liabilities, then its net
portfolio value and net interest income would tend to decrease during periods
of rising interest rates but increase during periods of falling interest
rates.

      Interest Rate Sensitivity Analysis. The matching of assets and
liabilities may be analyzed by examining the extent to which such assets and
liabilities are "interest rate sensitive" and by monitoring an institution's
interest rate sensitivity "gap." An asset or liability is said to be interest
rate sensitive within a specific period if it will mature or reprice within
that period. The interest rate sensitivity "gap" is the difference between
the amount of interest-earning assets maturing or repricing within a specific
time period and the amount of interest-bearing liabilities maturing or
repricing within that time period. A gap is considered positive when the
amount of interest rate sensitive assets exceeds the amount of interest rate
sensitive liabilities, and is considered negative when the amount of interest
rate sensitive liabilities exceed the amount of interest rate sensitive
assets. During a period of rising interest rates, a negative gap would be
expected to adversely affect net interest income while a positive gap would
be expected to result in an increase in net interest income; conversely,
during a period of declining interest rates, a negative gap would be expected
to result in an increase in net interest income and a positive gap would be
expected to adversely affect net interest income.

      Different types of assets and liabilities with the same or similar
maturities may react differently to changes in overall market rates or
conditions, and thus changes in interest rates may affect net interest income
positively or negatively even if an institution were perfectly matched in
each maturity category. Additionally, the gap analysis does not consider the
many factors as banking interest rates move. While the interest rate
sensitivity gap is a useful measurement and contributes toward effective
asset and liability management, it is difficult to predict the effect of
changing interest rates solely on that measure, without accounting for
alterations in the maturity or repricing characteristics of the balance sheet
that occur during changes in market interest rates. During periods of rising
interest rates, the Company's assets tend to have prepayments that are slower
than those in an interest rate sensitivity gap and would increase the
negative gap position. Conversely, during a period of falling interest rates,
the Company's assets would tend to prepay faster than originally expected
thus decreasing the negative gap position. In addition, some of the Company's
assets, such as adjustable rate mortgages, have caps on the amount by which
their interest rates can change in any single period, and therefore may not
reprice as quickly as liabilities in the same maturity category. 

                                      17

<PAGE>

      The following table set forth the amounts of interest-earning assets
and interest-bearing liabilities outstanding at December 31, 1997 which are
expected to mature or reprice in each of the time periods shown.
<TABLE>
<CAPTION>
                                                                Interest Rate Sensitivity Period
                                                        -----------------------------------------------
                                                          1-90     91-365      1-5       Over
(In thousands)                                            Days      Days      Years    5 Years    Total
                                                          ----      ----      -----    -------    -----
<S>                                                     <C>       <C>        <C>       <C>       <C>
Earning assets
  Federal funds sold ................................   $   254   $     --   $    --   $    --   $   254
  Mortgage loans held for sale ......................       347         --        --        --       347
  Securities available for sale .....................       999      1,000    27,781        --    29,780
  Total loans, net of non-accrual ...................    11,600      7,963    32,072       493    52,128
                                                         ------      -----    ------       ---    ------
Total earning assets ................................    13,200      8,963    59,853       493    82,509
                                                         ======    =======    ======    ======    ======
Interest bearing liabilities
  Total interest bearing deposits ...................    11,060     33,303    22,447        --    66,810
  Federal funds purchased ...........................     1,500         --        --        --     1,500
  Mortgage payable ..................................        --         --        --       537       537
                                                         ------    -------    ------    ------    ------
Total interest bearing liabilities ..................    12,560     33,303    22,447       537    68,847
Net asset (liability) funding gap ...................       640    (24,340)   37,406       (44)  $13,662
                                                         ------    -------    ------    ------    ======
Cumulative net asset (liability) funding gap ........   $   640   $(23,700)  $13,706   $13,662
                                                        =======     ======   =======    ======
</TABLE>

Effects of New Accounting Standards

      In June 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement No. 130, "Reporting of Comprehensive Income" ("SFAS 130"),
which establishes standards for reporting and display of comprehensive income
and its components (revenues, expense, gains, and losses) in a full set of
financial statements. This statement also requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements. This statement is
effective for fiscal years beginning after December 15, 1997. Earlier
application is permitted. Reclassification of financial statements for
earlier periods provided for comparative purposes is required. The Company
does not anticipate that the adoption of SFAS 130 will have a material effect
on its financial statements.

      In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131"), which establishes
standards for the manner in which public business enterprises report
information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to stockholders. This statement
also establishes standards for related disclosures about products and
services, geographic areas, and major customers. This statement requires the
reporting of financial and descriptive information about an enterprise's
reportable operating segments. This statement is effective for financial
statements for periods beginning after December 15, 1997. In the initial year
of adoption, comparative information for earlier years is to be restated. The
Company does not anticipate that the adoption of SFAS 131 will have a
material effect on its financial statements.

Impact of Inflation and Changing Prices

      The Consolidated Financial Statements and Notes thereto presented
herein have been prepared in accordance with generally accepted accounting
principles, which require the measurement of financial position and operating
results in terms of historical dollars without considering the changes in the
relative purchasing power of money over time due to inflation. The impact of
inflation is reflected in the increased cost of the Company's operations.
Unlike most industrial companies, nearly all the assets and liabilities of
the Company are monetary in nature. As a result, interest rates have a
greater impact on the Company's performance than do the effects of general
levels of inflation. Interest rates do not necessarily move in the same
direction or to the same extent as the prices of goods and services.

                                      18

<PAGE>

Year 2000 Problem

      The Company is aware of the current concerns throughout the business
community of reliance upon computer software programs that do not properly
recognize the year 2000 in date formats, often referred to as the "Year 2000
Problem." The Year 2000 Problem is the result of software being written using
two digits rather than four digits to define the application year (i.e., "98"
rather than "1998"). A failure by a business to properly identify and correct
a Year 2000 Problem in its operations could result in system failures or
miscalculations. In turn, this could result in disruptions of operations,
including among other things a temporary inability to process transactions,
send invoices or otherwise engage in routine business transactions on a
day-to-day basis.

      Operations of the Company depend upon the successful operation on a
daily basis of its computer software programs. The Company relies upon
software purchased from third-party vendors rather than internally generated
software, and based upon its ongoing discussions with these vendors, the
Company believes that most of its software already reflects changes necessary
to avoid the Year 2000 Problem. The Company expects to update during 1998 any
remaining software that could be affected by the Year 2000 Problem to
eliminate remaining concerns. This update is not expected to have a material
adverse effect on the Company. 

                                      19

<PAGE>

                                   BUSINESS

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
is located. 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 was relocated or terminated. These actions 
have, in some cases, resulted in policy and credit decisions being centralized
away from local management.

      In the opinion of the Company's management, this situation has created
a favorable opportunity for a local commercial bank with local management and
directors. Management of the Company 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 Company 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 Company was incorporated as a Michigan business corporation on
September 30, 1992. The Company was formed to acquire all of the Bank's
issued and outstanding stock and to engage in the business of a bank holding
company under the Bank Holding Company Act of 1956, as amended (the "Act").
In connection with the formation of the Company, during 1993 the Company sold
741,346 shares of its Common Stock at a price of $9.09 per share. As of
December 31, 1996, the Company sold an additional 303,578 shares of its
Common Stock at a price of $9.09 per share to its shareholders pursuant to a
rights offering.

      The executive offices of the Company and the Bank are located at 22290
Michigan Avenue, Dearborn, Michigan 48123-2247, telephone number (313)
274-1000.

Business of the Company

      The primary purpose of the Company is the ownership of the Bank. In the
future, the Company 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 Company.

Business of the Bank

      The Bank is a commercial bank organized under Michigan law which
commenced business on February 28, 1994. The Bank, through its main office
and two branch offices, 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 Company 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 

                                      20

<PAGE>

services (commercial, consumer, real estate mortgages), travelers' checks,
cashiers' checks, wire transfers, safety deposit boxes, collection services
and night depository services. The Bank does not have a trust department.

Business Strategy

      Grow 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 the opening of two additional offices. The
Dearborn Heights office opened on December 20, 1995 and as of December 31,
1997 had $15.7 million in total deposits, while the Plymouth Township office
opened on August 11, 1997 and as of December 31, 1997 had $5.4 million in
total deposits. In 1998, the Bank intends to open an additional office in
western Wayne 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 Company's Primary Market. The Company's initial
lending philosophy concentrated on single family residential lending but has
grown to include a more diverse group of loan products. The Company's loan
portfolio currently consists of residential loans, indirect consumer loans
with 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 Company will continue
to pursue internal growth at the Bank, management believes that greater
growth opportunities may be found in acquisitions of community banks or
branches in southeastern Michigan to enhance the Company's markets. As part
of its normal business operations management maintains contact with financial
institutions to discuss various acquisition possibilities. However, the
Company 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 Company 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 indirect automobile lending; and business financial services,
with an emphasis on small- to medium-sized businesses.

      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, 1996, the Community Club had over 400 members who accounted
for total deposits of $17.0 million, or 36% of the Bank's total deposits, 
while as of December 31, 1997, the Community Club had over 1,000 members who
accounted for total deposits of $36.4 million, or 48% 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,

                                      21

<PAGE>

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 Messrs. Ross, Cuttle and 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.

      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 data base
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 by providing five percent down payment loans and loans with no points.
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 are 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 excellent credit quality and income but are unable to be sold
in the secondary market for other reasons.

      The Bank originates indirect consumer loans primarily from its main
office in Dearborn, Michigan. A consumer loan officer purchases loans from a
select list of automobile dealers located in the Metropolitan Detroit
Area through an extensive direct calling program. The Bank intends to target
additional automobile dealers in its market area in an effort to broaden and
diversify its indirect consumer loan portfolio.

      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.

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
twofold: 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 

                                      22

<PAGE>

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, only the President, Executive Vice President
and Chief Lending Officer currently have lending authority.

      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 lending limits for certain officers up to a
maximum of $50,000 for unsecured loans and $100,000 for secured loans, with
loans from $100,000 to $250,000 requiring approval by a loan committee.
Larger loans up to the legal maximum authorized by law requires 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 -- 70%
loan to value; U.S. Government securities -- 90% loan to value; and insured
bank deposits -- 100% loan to value. As to loans secured principally by real
estate, the policy requires appraisal 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 the western Wayne County area of southeastern
Michigan. Commercial loans are originated by the officer group with the
assistance of the President and the Executive Vice President, who have over
55 years of combined commercial lending experience. 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 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 a U.S. Treasury index.

      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.

      Commercial real estate lending involves more risk than residential
lending, because loan balances are greater and repayment is dependent upon
the borrower's operation. 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.

                                      23

<PAGE>

      Single-Family Residential Real Estate Loans. The Bank 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. The Bank from time to time may elect
to underwrite certain residential real estate loans to be held in its own
loan portfolio. These loans are generally underwritten with the same
standards that apply to the secondary market. The majority of these loans 
have an interest rate that is indexed to the one-year treasury rate and
adjust annually.

      Consumer Loans. The Bank originates consumer loans for a wide variety
of personal financial requirements. Consumer loans include home equity lines
of credit, new and used automobiles, boat loans and overdraft protection for
checking account customers. The Bank also purchases retail installment loans
from a select list of automobile dealerships located in the Bank's primary
market.

      Consumer loans generally have shorter terms and higher interest rates
than residential mortgage loans and, except for home equity lines of credit,
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
potential 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 chargeoffs, current economic conditions, recent
regulatory examinations and other factors.

Employees

      As of March 2, 1998, the Bank had 31 employees, including 8 officers
and 23 customer service, operations and other support persons. Management
believes that the Bank's relations with its employees are excellent.

Competition

      The Company and the Bank face 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

                                      24

<PAGE>

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, recently
effective legislation regarding interstate branching and banking may increase
competition in the future from out-of-state banks.

Properties

      The main office of the Company and the Bank is located in a single
story building containing 8,400 square feet at 22290 Michigan Avenue,
Dearborn, Michigan which is owned by the Company and leased to the Bank.

      On December 20, 1995, the Bank opened a branch office located in a
single story commercial/retail office building at 24935 W. Warren Avenue,
Dearborn Heights, Michigan which is also owned by the Company. 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.

      On August 11, 1997, the Bank opened a branch office located at 44623
Five Mile, Plymouth Township, Michigan in a leased 1,595 square foot building
in a retail shopping center anchored by a regional grocery store.

                                      25

<PAGE>

                                  MANAGEMENT

      The following table sets forth certain information about directors and
executive officers of the Company and the Bank:
<TABLE>
<CAPTION>
                                                                                  Year in which
                                                                                 term of office
                                                             Position with         as Director           Position with
                         Name                                 the Company          will expire             the Bank
                         ----                          -------------------       -------------           -------------
<S>                                                     <C>                        <C>            <C>
John E. Demmer ......................................   Chairman of the Board         1998        Chairman of the Board
                                                          and Chief Executive
                                                          Officer
Richard Nordstrom ...................................   Vice Chairman and             1998        Director
                                                          Director
Michael J. Ross .....................................   President and Director        2000        President, Chief Executive
                                                                                                    Officer and Director
Jeffrey L. Karafa ...................................   Vice President and             --         Vice President and Cashier
                                                          Treasurer
Donald G. Karcher ...................................   Vice President and            1998        Director
                                                          Director
Wilber M. Brucker, Jr. ..............................   Secretary and                 1999        Director
                                                          Director
Margaret I. Campbell ................................   Director                      1998        Director
Timothy J. Cuttle ...................................   --                             --         Executive Vice President
Michael V. Dorian, Jr. ..............................   Director                      1998        Director
David Himick ........................................   Director                      2000        Director
Bradley F. Keller ...................................   Director                      1999        Director
Steven M. Kirkpatrick ...............................   Director                      1999        Director
William E. Kreger ...................................   Director                      2000        Director
Jeffrey G. Longstreth ...............................   Director                      2000        Director
Robert C. Schwyn ....................................   Director                      1998        Director
Ronnie J. Story .....................................   Director                      1999        Director
Jeffrey J. Wolber ...................................   --                             --         Vice President
</TABLE>

      The members of the Board of Directors are divided into three classes,
each class to be as nearly equal in number as possible, with each class to
serve a three-year term. The entire Board of Directors of the Bank is elected
annually by its shareholder, the Company. Officers of the Company and the
Bank are elected annually by their respective Boards of Directors and perform
such duties as are prescribed in the bylaws or by the Board of Directors.

      The principal occupation and other information for each director and
executive officer of the Company and the Bank is set forth below:

      John E. Demmer, age 74, has served as Chairman of the Board and Chief
Executive Officer of the Company and Chairman of the Board of the Bank since
1992. Mr. Demmer has been a Ford Motor Company dealer since 1957. He became a
director of Dearborn Bank and Trust Company in 1981 and was made Chairman of
the Board in 1985. In 1983, he became a director of Alliance Financial
Corporation, the bank holding company that owned Dearborn Bank and Trust
Company. He remained in both capacities until the merger with Comerica
Incorporated ("Comerica") in December, 1989. Mr. Demmer is Chairman of the
Board and Chief Executive Officer of Jack Demmer Ford, Inc. and Jack Demmer
Leasing, located in Wayne, Michigan.

      Richard Nordstrom, age 71, has served as Vice Chairman and a director
of the Company since 1998. From 1992 to 1997, Mr. Nordstrom served as
President and a director of the Company. Mr. Nordstrom was Chairman of
Nordstrom Samson Associates, a Dearborn architectural and engineering firm
which he co-founded in 1960 until 1996 when he retired. He also served on the
Board of Directors of Dearborn Bank and Trust Company and Alliance Financial
Corporation from 1987 until its merger with Comerica.

                                      26

<PAGE>

      Michael J. Ross, age 47, has served as a director of the Company since
1994, President of the Company since January 1998 and as a director,
President and Chief Executive Officer of the Bank since 1993. Mr. Ross has
been in banking since 1972 when he joined Manufacturers National Bank in
Detroit (now part of Comerica Bank) where he gained experience in lending,
operations and administrative planning. He was promoted to Vice President in
1984. In 1987, Mr. Ross became President, Republic Bank -- Flint; and in
1991, President of Republic Bank -- South East. In 1992 he resigned to open
Mike Ross and Associates, Inc., a bank consulting firm that served smaller
and mid-size independent banks in Michigan. Mr. Ross is a member of the
Goodwill Industries Foundation, University of Michigan- Dearborn Advisory
Council, Henry Ford Community College Foundation, Dearborn Goodfellows and
Dearborn Chamber of Commerce.

     Jeffrey L. Karafa, age 33, has served as Vice President and Cashier of
the Bank since 1996 and as a Vice President and Treasurer of the Company
since January 1998. From 1994 to 1996, he was Assistant Vice President of the
Bank, Mr. Karafa joined Michigan National Bank in 1983 and served as a Second
Vice President from 1992 to 1994.

      Donald G. Karcher, age 68, has served as a Vice President and director of
the Company since 1992. Mr. Karcher is Chairman of Karcher Agency, Inc., a
family insurance business, which was established in Dearborn in 1934. He was a
director of Dearborn Bank and Trust Company from 1986 to 1989. Mr. Karcher has
served as President of the Dearborn Chamber of Commerce and the Dearborn Rotary
Club.

      Wilber M. Brucker, Jr., age 72, has served as a director of the Company
since 1992. Mr. Brucker is licensed to practice law in the State of Michigan.
In 1986, he was elected President and Chief Executive Officer of Alliance
Financial Corporation. He served on the Board of Alliance Financial
Corporation from its inception in 1983 until its merger with Comerica in
December, 1989. Following the Comerica merger, Mr. Brucker joined the law
firm of Riley and Roumell, as of counsel, where he served until 1995.

      Margaret I. Campbell, age 58, has served as a director of the Company
since 1992. Mrs. Campbell was a member of the Board of Alliance Financial
Corporation and Dearborn Bank and Trust Company until the merger with
Comerica. Mrs. Campbell is President of Kean Manufacturing Corporation, a
family owned automotive supply business. She is a past president of the
Dearborn Chamber of Commerce and a member of the Board of Oakwood Hospital
and the Citizens Advisory Board of the University of Michigan-Dearborn.

      Timothy J. Cuttle, age 52, has served as Executive Vice President of
the Bank since 1996. Mr. Cuttle has been in banking since 1970 when he joined
the commercial lending division of Michigan National Bank. In 1975, Mr.
Cuttle joined First Macomb Bank, which was merged into Huntington Bankshares
in 1989, where he served as Senior Vice President of the bank and President
and Chief Operating Officer of First Macomb Leasing Corporation and First
Macomb Mortgage Company, Inc.

      Michael V. Dorian, Jr., age 38, who has served as a director of the
Company since 1994, is a Vice President of Mike Dorian Ford, an automobile
dealer.

      David Himick, age 72, who has served as a director of the Company since
1995, is a financial consultant. He served as a director of Heritage
Bankcorp, Inc. ("Heritage") from 1982 to 1993 prior to its merger with
Standard Federal Bank in 1994. In 1994, he served as a director of Standard
Federal Bank. Mr. Himick is also a director of Bio-Plexus,Inc. which
manufactures and sells retractable hypodermic needles.

      Bradley F. Keller, age 56, has served as a director of the Company since
1992. Mr. Keller is President of Braden Associates, Inc., a business consulting
company, and prior thereto served as President of MultiGard Security Systems.
Mr. Keller has served as President of the Detroit College of Business
Foundation, the Burglar and Fire Alarm Association of Michigan, the Dearborn
Rotary Foundation and the Dearborn Rotary Club.

      Steven M. Kirkpatrick, age 50, has served as a director of the Company
since 1994. He is President and Chief Executive Officer of The Bancorp Group,
Inc., a leasing company, and President and Chief Executive Officer of Capital
Mortgage Funding, L.L.C, a residential mortgage origination company.

                                      27

<PAGE>

      William E. Kreger, age 82, has served as a director of the Company
since 1994. He is a retired real estate investor. Mr. Kreger served as a
director of Heritage from 1965 to 1993 prior to its merger with Standard
Federal Bank in 1994. He was Chairman of the Board of Heritage from 1983 to
1989.

      Jeffrey G. Longstreth, age 55, has served as a director of the Company
since 1992. He is President of Prudential Christie Real Estate, Inc., a real
estate company in Dearborn, Michigan. Mr. Longstreth was a director of the
Dearborn Board of Realtors for seven years, a past President of such Board
and previously selected as Realtor of the Year. He also served as a director
on the Metro Multi-List for four years.

      Robert C. Schwyn, age 59, has served as a director of the Company since
1994. He is a physician.

      Ronnie J. Story, age 51, has served as a director of the Company since
1994. He is President and Chief Executive Officer of Story Development
Corporation, a real estate building company.

      Jeffery J. Wolber, age 42, has served as a Vice President of the Bank
since 1994. From 1990 to 1993, he served as a banking officer and branch
manager of NBD Bank. From 1985 to 1990, Mr. Wolber served as Senior Vice
President and operations officer of Guaranty Federal Savings Bank, which
merged into NBD Bank in 1990. He was also Branch Administrator for Michigan
National Bank from 1975 to 1984.

      Except as otherwise indicated above, each director and executive
officer has had the same occupation during the past five years.

Executive Compensation

      The Chairman of the Board and Chief Executive Officer of the Company,
John E. Demmer, received no compensation in 1997. The following table sets
forth information with respect to the Chief Executive Officer of the Bank.
There were no executive officers of the Company or the Bank whose total
compensation exceeded $100,000 during 1997 other than the Chief Executive
Officer of the Bank.

                           Summary Compensation Table
<TABLE>
<CAPTION>
                                                 Annual Compensation
                                         -----------------------------------
                                                                     Options
Name and Principal Position              Year    Salary     Bonus    Granted
- ---------------------------              ----    ------     -----    -------
<S>                                      <C>    <C>        <C>       <C>
Michael J. Ross                          1997   $122,916   $25,000    22,000
President and Chief Executive Officer,   1996    106,734    17,000        --
Community Bank of Dearborn               1995    101,529    12,000        --
</TABLE>

      On January 21, 1997 Mr. Ross was granted an option for 22,000 shares
(49% of the total options granted during 1997) under the Stock Option Plan at
an option price of $9.09 per share. The option expires on January 21, 2007.

Directors Fees

      The Company does not pay annual directors fees. However, the Bank pays
directors fees in the amount of $100 for each board meeting attended and $50
for each committee meeting attended. Mr. Ross does not receive directors
fees.

Stock Option Plan

      In 1994 the Board of Directors of the Company adopted, and the
shareholders approved a Stock Option Plan (the "Plan"). The Board of
Directors believes that its ability to grant options is of assistance in
attracting and retaining highly qualified associates to the benefit of the
Company and its shareholders. Under the terms of the Plan, options to
purchase an aggregate of 165,000 shares of Common Stock of the Company may be
granted.

Summary of Plan

      The following is a summary of the principal provision of the Plan:

                                      28

<PAGE>

      Administration. The Plan is administered by the Stock Option Plan
Committee of the Board of Directors of the Company comprised of directors who
are not eligible to participate in the Plan. The Committee makes
determinations with respect to which officers and other key employees of the
Company or a subsidiary who shall participate in the Plan and the extent of
their participation.

      Options grated under the Plan may be either incentive stock options or
non-qualified stock options. The Committee may not grant an employee
incentive stock options which in the aggregate are first exercisable during
any one calendar year with respect to Common Stock the aggregate fair market
value of which (determined as of the time of grant) exceeds $100,000.

      Option Agreement. Each option granted under the Plan is evidenced by an
agreement in such form as the Committee shall from time to time approve,
which agreement must comply with and be subject to certain conditions set
forth in the Plan.

      Option Price. The option price shall not be less than the fair market
value of the shares of Common Stock on the date the option is granted. Fair
market value is defined as the price established and determined by the Board
of Directors, provided, however, if the Common Stock is traded in the
over-the-counter market, fair market value shall mean the closing price of
the Common Stock, in such market rounded, if necessary, to the next full one
cent, or if there is no such price published, then on the most recent
preceding date on which such prices are published.

      Duration and Exercise of Options. The period during which each option
may be exercised is determined by the Committee, except that the maximum
duration may not exceed ten years from the date of grant. The Committee
determines at the time of grant whether the option will be exercisable in
full or in cumulative installments.

      Generally under the Plan, an option may be exercised by an optionee
only while such optionee is in the employ of the Company or a subsidiary. In
the event that the employment of an optionee to whom an option has been
granted under the Plan is terminated (except as set forth below), such option
may be exercised, to the extent that the option was exercisable on the date
of termination of employment, only until the earlier of three (3) months
after such termination or the original expiration date of the option;
provided, however, that if termination of employment results from death or
total and permanent disability, such three (3) month period shall be extended
to twelve (12) months; and provided, further, that any optionee whose
employment shall be terminated either (i) for cause or (ii) voluntarily by
the optionee and without the consent of the Company shall, to the extent not
theretofore exercised, forthwith terminate. In the event of a change in
control (as defined in the Plan) unless the Committee determines otherwise,
all outstanding options become immediately exercisable in full.

      Payment of Option Price. The option price shall be paid in cash or at
the discretion of the Committee through (i) the delivery of previously owned
shares of the Company's Common Stock or (ii) by a combination of cash and
Common Stock.

      Adjustments. The Committee shall make appropriate adjustments in the
number of shares of Common Stock for which options may be granted or which
may be issued under the Plan and the price per share of each option if there
is any change in the Common Stock as a result of a stock dividend, stock
split, recapitalization or otherwise.

      Termination of Plan and Amendments. An option may not be granted
pursuant to the Plan after May 16, 2004. The Board of Directors may from time
to time terminate the Plan or amend the Plan subject to shareholder approval
to the extent necessary to satisfy the requirements of Section 16 under the
Exchange Act, or any successor rule.

      Federal Income Tax Consequences. The Company is advised by counsel that
the grant of a non-qualified option or incentive stock option has no tax
consequences for the optionee or the Company. Upon the exercise of a
non-qualified option, the optionee is deemed to realize taxable income to the
extent that the fair market value of the shares of Common Stock exceeds the
option price. The Company 

                                      29

<PAGE>

is entitled to a tax deduction for such amounts at the date of exercise. If
any stock received upon the exercise of a non-qualified option is later sold,
any excess of the sale price over the fair market value of the stock at the
date of exercise is taxable to the optionee.

      The exercise of an incentive stock option will not result in income to
the optionee if the optionee (a) does not dispose of the shares within two
years after the date of grant or one year after exercise and (b) is an
employee from the date of the grant until three months before the exercise.
If these requirements are met, the basis of the shares upon later disposition
will be the option price. Any gain will be taxed to the optionee as a
long-term capital gain, and the Company will not be entitled to a deduction.
The excess of the market value on the exercise date over the option price is
an item of tax preference, potentially subject to the alternative minimum
tax. If the optionee disposes of the shares prior to the expiration of either
of the holding periods in (a) above, the optionee will generally recognize
compensation income, and the Company will be entitled to a deduction equal to
the fair market value of the shares on the exercise date minus the option
price. Any gain in excess of the compensation income portion will be treated
as a long-term or short-term capital gain.

      As of March 2, 1998, options were outstanding under the Plan to
purchase an aggregate of 77,600 shares of Common Stock (45,100 shares at an
exercise price of $9.09 and 32,500 shares at an exercise price of $13.00 per
share), and 87,400 shares are available for grant of options under the Plan.

                          RELATED PARTY TRANSACTIONS

      Certain directors and officers of the Company, their associates and
members of their immediate families were customers of, and had transactions
including loans and commitments to lend with, the Bank in the ordinary course
of business during 1997. All such loans and commitments were made by the Bank
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons
and did not involve more than the normal risk of collectibility or present
other unfavorable features. Similar transactions may be expected to take
place in the ordinary course of business in the future. 

                                      30

<PAGE>

                               SECURITY OWNERSHIP

      The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of February 20, 1998 prior to the
offering and as adjusted to reflect the sale of 1,000,000 shares of Common
Stock by the Company in the offering, (i) by directors and executive officers
of the Company, (ii) by each person who is known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock, and
(iii) by all directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
                                   Prior to Offering                                  After Offering
                             -----------------------------                     ----------------------------
                                 Number of                      Shares of         Number of
                                 Shares of                    Common Stock        Shares of
                               Common Stock     Percentage        Being         Common Stock     Percentage
                                   Owned        of Common       Purchased           Owned        of Common
Name                          Beneficially(1)     Stock     in the Offering(2) Beneficially(1)     Stock
- ----                          ---------------   ----------  ----------------   ---------------   ----------
<S>                           <C>                 <C>        <C>               <C>                 <C>
Wilber M. Brucker, Jr.  ...        10,209(3)           *
Margaret I. Campbell  .....        13,175          1.26
Timothy J. Cuttle  ........            --(4)           *
John E. Demmer  ...........        72,939(5)       6.98
Michael V. Dorian, Jr.  ...        15,499          1.48
David Himick  .............        65,679(6)       6.29
Jeffrey L. Karafa  ........         9,012(4)           *
Donald G. Karcher  ........        14,026          1.34
Bradley F. Keller  ........        38,308(7)       3.67
Steven M. Kirkpatrick  ....        43,340(8)       4.15
William E. Kreger  ........        41,846(9)       4.00
Jeffrey G. Longstreth  ....         7,946              *
Richard Nordstrom  ........        32,143(10)      3.08
Michael J. Ross  ..........        24,640(4)       2.31
Robert C. Schwyn  .........        12,399(11)      1.19
Ronnie J. Story  ..........        53,608          5.13
Jeffrey J. Wolber  ........         9,127(4)           *
All directors and
  executive officers as a
  group (12)
  (17 persons)  ...........       463,896         42.77
<FN>
- ----------------
 * Less than one percent

 (1) Beneficial ownership of shares, as determined in accordance with
     applicable Securities and Exchange Commission rules, includes shares as
     to which a person has or shares voting power and/or investment power.

 (2) Based on non-binding commitments received from these individuals.

 (3) Includes 775 shares owned by Mr. Brucker's wife.

 (4) The number of shares shown in the table includes shares issuable upon
     the exercise of stock options by the following executive officers:
     Jeffrey L. Karafa -- 8,800 shares; Michael J. Ross -- 22,000 shares; and
     Jeffrey J. Wolber -- 8,800 shares. The table excludes the
     following stock options granted by the Company on January 20, 1998:
     Timothy J. Cuttle -- 7,500 shares; Jeffrey L. Karafa -- 4,000 shares;
     Michael J. Ross -- 10,000 shares; and Jeffrey J. Wolber -- 4,000 shares.

 (5) Includes 24,024 shares held by Mr. Demmer's wife as Trustee of a Trust.

 (6) Includes 62,580 shares held in an individual retirement account for the
     benefit of Mr. Himick.

 (7) Includes 2,200 shares owned by Mr. Keller's wife.

 (8) These shares are owned of record by The Bancorp Group, Inc., of which
     company Mr. Kirkpatrick serves as President and Chief Executive Officer.

 (9) Includes 3,099 shares owned by Mr. Kreger's wife.

(10) Includes 8,250 shares held for Mr. Nordstrom's benefit in a profit
     sharing trust.

(11) These shares are held for the benefit of Mr. Schwyn in a defined benefit
     plan trust.

(12) Includes 39,600 shares issuable upon the exercise of stock options.

</TABLE>

                                      31

<PAGE>

                          SUPERVISION AND REGULATION

      The Company is a registered bank holding company and is subject to the
supervision of the Federal Reserve. The Company is required to file with the
Federal Reserve annual reports and such other information as the Federal
Reserve may require under the Act. The Company 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 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 or
furnishing services to 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
limitations imposed by the regulations.

      Federal law prohibits acquisition of "control" of a bank or bank
holding company without prior notice to certain federal bank regulators.
"Control" may include the acquisition of as little as 5% of outstanding
capital stock.

      Transactions between the Company and the Bank will be subject to
various restrictions imposed by state and federal law. Such transactions
include loans and other extensions of credit, purchases of securities, and
payment 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 Company is subject to other regulations under the Act, including
those described in "Risk Factors", and the Company and the Bank are subject
to numerous other federal and state statutes and regulations which govern the
conduct of enterprises in the financial services industry.

      The Bank which is a state chartered bank is subject to regulation and
examination by the Michigan Financial Institutions Bureau. 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
regulations are intended primarily for the protection of the Bank's
depositors and customers, and not the shareholders of the Bank or the
Company. The Bank is a non-member bank of the Federal Reserve System and is
regulated and examined by the Federal Deposit Insurance Corporation.

      The Federal Reserve's capital guidelines establish the following
minimum regulatory capital requirements for bank holding companies: (i) a
leverage capital requirement expressed as a percentage of total assets, (ii)
a risk-based requirement expressed as a percentage of total risk-weighted
assets, and (iii) a Tier 1 leverage requirement expressed as a percentage of
total assets. The leverage capital requirement consists of a minimum ratio of
total capital to total assets of 6%, with an expressed expectation that
banking organizations generally should operate above such minimum level. The
risk-based requirement consists of a minimum ratio of total capital to total
risk-weighted assets of 8%, of which at least one-half must be Tier 1 capital
(which consists principally of shareholders' equity). The Tier 1 leverage
requirement consists of a minimum ratio of Tier 1 capital to total assets of
3% for the most highly rated companies, with minimum requirements of 4% to 5%
for all others.

                                      32

<PAGE>

      The Federal Reserve Board's regulations provide that the foregoing
capital requirements will generally be applied on a bank-only (rather than a
consolidated) basis in the case of a bank holding company with less than $150
million in total consolidated assets. Refer to Note K of the Notes to
Consolidated Financial Statements for further information.

      There has been significant legislative and regulatory change relating
to the financial services industry in recent years. Non-bank financial
institutions, such as securities brokerage firms, insurance companies and
money market funds, have been permitted to engage in activities that directly
compete with traditional bank business. The services that banks are permitted
to provide and the types of accounts banks may offer to depositors have been
expanded, and restrictions on the rates of interest that may be paid by
financial institutions on deposits have been reduced. These trends probably
will continue.

      The Bank is also subject to limitations on the dividends it may pay to
the Company described in "Risk Factors -- No Assurance of Cash Dividends".

                         DESCRIPTION OF COMMON STOCK

      The Company's authorized capital stock consists of 3,000,000 shares of
Common Stock. As of the date of this Prospectus, there are 1,044,924 shares
of Common Stock issued and outstanding.

      Michigan law allows the Company's Board of Directors to issue
additional shares of stock up to the total amount of Common Stock authorized
without obtaining the prior approval of the shareholders.

   Dividend Rights

      The holders of the Common Stock are entitled to cash dividends when, as
and if declared by the Company's Board of Directors out of funds legally
available therefor. Under Michigan law, cash dividends may be legally
declared or paid only if after the distribution the corporation can pay its
debts as they come due in the usual course of business and the corporation's
total assets equal or exceed the sum of its liabilities.

      Funds for the payment of cash dividends by the Company are expected to
be obtained primarily from dividends of the Bank. There can be no assurance
that the Company will have funds available for cash dividends, or that if
funds are available, that dividends will be declared by the Company's Board
of Directors. The Company does not expect to declare cash dividends at any
time in the foreseeable future.

   Voting Rights

      All voting rights are vested in the holders of shares of Common Stock.
Each share of Common Stock entitles the holder thereof to one vote on all
matters, including the election of directors. Shareholders of the Company do
not have cumulative voting rights.

   Preemptive Rights

      Holders of Common Stock do not have preemptive rights.

   Liquidation Rights

      Holders of Common Stock are entitled to share on a pro rata basis in
the net assets of the Company which remain after satisfaction of all
liabilities.

   Transfer Agent

                  serves as the transfer agent of the Company's Common Stock.

Certain Charter Provisions

      The following provisions of the Company's Articles of Incorporation may
delay, defer, prevent, or make it more difficult for a person to acquire the
Company or to change control of the Company's Board of Directors, thereby
reducing the Company's vulnerability to an unsolicited takeover attempt.

                                      33

<PAGE>

      Classification of the Board and Filling Board Vacancies. The Articles
of Incorporation divide the Board into three classes with staggered terms;
each director is elected for a three (3) year term. Approximately one-third
of the Board positions are filled by a shareholder vote each year. Any
vacancies in the Board, or newly created director positions, may be filled
only by a 66-2/3% vote of the directors in office, and a majority of the
Continuing Directors as hereinafter defined.

      Board Evaluation of Certain Offers and Proposed Business Combinations.
The Board of Directors is required by the Articles of Incorporation to
consider a number of factors before it approves any offer to acquire shares
of Common Stock of the Company, any offer to merge or consolidate the Company
with any other entity or to sell all or substantially all assets of the
Company. These factors include the adequacy and fairness of the consideration
to be received, the potential social and economic impact of the transaction
on the Company, its employees, customers and vendors and the communities in
which the Company and its subsidiaries operate.

      Certain Business Combinations, as defined in the Company's Articles of
Incorporation, may require a super majority approval by the shareholders.
These Business Combinations include transactions such as a merger or
consolidation of the Company or a subsidiary, a sale, lease, exchange,
mortgage, transfer or other disposition of assets of the Company in excess of
10% of its net worth, the issuance or transfer of equity securities of the
Company or a subsidiary having an aggregate fair market value in excess of 5%
of the market value of the outstanding shares of the Company, the adoption of
any plan of liquidation or dissolution of the Company, or any
reclassification of securities or recapitalization which increases the
proportionate share of any class of outstanding securities.

      Super majority approval of the shareholders is required for any of
these Business Combinations in which an "Interested Shareholder" is involved.
An Interested Shareholder includes a person who owns, and in some cases a
person who owned, directly or indirectly, 10% or more of the voting power of
the outstanding shares of Common Stock. If a Business Combination is subject
to these provisions, it would require the approval of shareholders owning at
least 66-2/3% of the voting power of the outstanding shares of Common Stock.
In addition, shareholders holding not less than two-thirds of the outstanding
shares not owned directly or indirectly by the Interested Shareholder must
approve the Business Combination.

      A super majority vote is not required if the Business Combination is
approved by a majority of Directors who are unaffiliated with the Interested
Shareholder and were members of the Board before the Interested Shareholder
owned 10% of the Company's shares. Such a Director is defined in the Articles
as a "Continuing Director."

      A super majority vote also will not be required when the aggregate
amount of cash and the fair market value of consideration other than cash to
be received per share by the shareholders exceeds a stated amount. This
amount is the higher of the fair market value per share or the highest price
per share paid by the Interested Shareholder. There are certain additional
requirements contained in the Articles of Incorporation that must be met to
avoid the super majority vote requirement.

      It is the duty of a majority of the Continuing Directors to determine
the facts necessary for evaluating compliance with the Articles of
Incorporation. These facts include whether a person is an "Interested
Shareholder", the number of shares owned by each shareholder, the proposed
purchase price of shares, and the corporation's net worth. The good faith
determination of the Continuing Directors on such matters shall be conclusive
and binding for all purposes.

      The Articles of Incorporation expressly provide that nothing contained
in the provisions dealing with Business Combinations shall be construed to
relieve any member of the Board of Directors or any Interested Shareholder
from any fiduciary duty imposed by law upon them. In addition, the Articles
expressly provide that the Company shall not be governed by the provisions of
the MBCA dealing with regulation of Business Combinations. The Articles of
Incorporation may be amended to expressly adopt such provisions only by a
majority vote of the Continuing Directors of the Company.

                                      34

<PAGE>

      Shareholder Equity Provisions of the Michigan Business Corporation Act.
In addition to the foregoing provisions contained in the Articles of
Incorporation, the MBCA conditions the acquisition of voting control of
certain Michigan business corporations on the approval by the majority of the
pre-existing disinterested shareholders. In general, these provisions deny
voting rights to those persons who make purchase offers or investors who
increase their holdings above any of the "Control Share" levels (described
below), unless they are granted voting rights by a majority vote of all
disinterested shareholders (shareholders excluding the bidders or owners of
Control Shares and the corporation's officers and employee-directors).
Control Shares are shares that, when added to shares already owned by that
person, give the person voting power in the election of directors over any
one of three thresholds: one-fifth, one-third and a majority. If the
shareholders do not elect to grant voting rights to Control Shares, under
certain circumstances, the Control Shares may become subject to redemption by
the corporation. The Board of Directors may amend the Bylaws of the Company
before a Control Share acquisition occurs to provide that these provisions do
not apply to the Company.

Indemnification of Directors and Officers

      The Company's Articles of Incorporation provide that the Company shall
indemnify its directors, officers, and such other persons as the Board of
Directors may authorize, to the fullest extent permitted by law.

      Federal Deposit Insurance Corporation regulations impose limitations on
indemnification payments which could restrict, in certain circumstances,
payments by the Company or the Bank to their respective directors or officers
otherwise permitted under the MBCA or the Michigan Banking Code,
respectively.

      Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions discussed above or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable.

Limitation of Director Liability

      The MBCA permits corporations to limit the personal liability of their
directors in certain circumstances, and the Company's Articles of
Incorporation contain such a provision. A director of the Company shall not
be personally liable to the Company or its shareholders for money damages for
any action taken or any failure to take any action as a director, except
liability for any of the following: (i) the amount of a financial benefit
received by a director to which he or she is not entitled, (ii) the
intentional infliction of harm by the director on the Company or the
shareholders of the Company, (iii) a violation of Section 551 of the MBCA
(certain unlawful actions), or (iv) an intentional criminal act committed by
the director.

                       SHARES ELIGIBLE FOR FUTURE SALE

      The shares of the Company's Common Stock sold in the offering have been
registered with the Commission under the Securities Act and may generally be
resold without registration under the Securities Act unless they were
acquired by directors, executive officers, or other affiliates of the Company
(collectively, "Affiliates"). Affiliates of the Company may generally only
sell shares of the Common Stock pursuant to Rule 144 under the Securities
Act.

      In general, under Rule 144 as currently in effect, an affiliate (as
defined in Rule 144) of the Company may sell shares of Common Stock within
any three-month period in an amount limited to the greater of 1% of the
outstanding shares of the Company's Common Stock or the average weekly
trading volume in the Company's Common Stock during the four calendar weeks
preceding such sale. Sales under Rule 144 are also subject to certain
manner-of-sale provisions, holding periods for restricted shares, notice
requirements, and the availability of current public information about the
Company.
   
      The Company, and the directors and officers of the Company, have
agreed, or will agree, that (a) they will not issue, offer for sale, sell,
transfer, grant options to purchase or otherwise dispose of any 

                                      35

<PAGE>

shares of Common Stock without the prior written consent of the Underwriter
for a period of 150 days from the date of this Prospectus (the "Lock-Up"),
except that (i) the Company may issue shares upon the exercise of options
under the Company's Stock Option Plan and (ii) the directors and officers may
give Common Stock owned by them to others who have agreed in writing to be
bound by the same agreement. Approximately 424,296 shares of Common Stock are
subject to the Lock-Up. The balance of the outstanding shares of Common Stock
are subject to immediate resale under Rule 144, although certain of such
shares may be subject to manner of sale and volume restrictions.
    
      Prior to the offering, there has been no public trading market for the
Common Stock, and no predictions can be made as to the effect, if any, that
sales of shares or the availability of shares for sale will have on the
prevailing market price of the Common Stock after completion of the offering.
Nevertheless, sales of substantial amounts of Common Stock in the public
market could have an adverse effect on prevailing market prices.

                                 UNDERWRITING

      The Underwriter has agreed, subject to the terms and conditions of the
Underwriting Agreement, that it will purchase from the Company, on a firm
commitment basis, 1,000,000 shares of Common Stock. The Underwriting
Agreement provides that the obligations of the Underwriter thereunder are
subject to certain conditions and provides for the Company's payment of
certain expenses incurred in connection with the review of the underwriting
arrangements for the offering by the National Association of Securities
Dealers, Inc. (the "NASD"). The Underwriter is obligated to purchased all
1,000,000 of the shares of Common Stock offered hereby, excluding shares
covered by the over-allotment option granted to the Underwriter, if any are
purchased.

      If the Underwriting Agreement is terminated, except in certain limited
cases, the Underwriting Agreement provides that the Company will reimburse
the Underwriter for all accountable out-of-pocket expenses and the
Underwriter's legal fees incurred by it in connection with the proposed
purchase and sale of the Common Stock, up to a maximum of $40,000. The
Company has advanced $10,000 to the Underwriter in connection with such
expense reimbursement. The Underwriting Agreement provides that in the event
the expenses to be reimbursed upon such termination total an amount less than
$40,000, the Underwriter shall pay such difference to the Company.
   
      The Company and the Underwriter have agreed that the Underwriter will
purchase the 1,000,000 shares of Common Stock offered hereunder at a price to
the public of $ per share less underwriting discounts of $ per share.
However, the Underwriter has agreed to limit the underwriting discounts to
4.0% of the public offering price ($      per share) for up to shares to be 
sold to officers and directors of the Company and the Bank. The Underwriter
proposes to offer the Common Stock to selected dealers who are members of the
NASD at a price of $ per share less a concession not in excess of $ per
share. The Underwriter may allow, and such dealers may re-allow, concessions
not in excess of $ per share to certain other brokers and dealers. After the
Common Stock is released for sale to the public, the offering price and other
selling terms may from time to time be varied by the Underwriter.
    
      The Company and the directors and officers of the Company have agreed
to be subject to certain lock-up restrictions as described under "Shares
Eligible for Future Sale."

      The Underwriter has informed the Company that it does not intend to
make sales to any accounts over which the Underwriter exercises discretionary
authority.

      The Company has granted the Underwriter an option, exercisable within
30 days after the date of the offering, to purchase up to an additional
150,000 shares of Common Stock from the Company to cover over-allotments, if
any, at the same price per share as is to be paid by the Underwriter for the
other shares offered hereby. The Underwriter may purchase such shares only to
cover over-allotments, if any, in connection with the offering.

      The Underwriting Agreement contains indemnity provisions between the
Underwriter and the Company and the controlling persons thereof against
certain liabilities, including liabilities arising under the Securities Act.
The Company is generally obligated to indemnify the Underwriter and its
respective 

                                      36

<PAGE>

controlling persons in connection with losses or claims arising out of any
untrue statement of a material fact contained in this Prospectus or in
related documents filed with the Commission or with any state securities
administrator, or any omission of certain material facts from such documents.

      There has been no public trading market for the Common Stock. The price
at which the shares are being offered to the public was determined by
negotiations between the Company and the Underwriter. This price is not based
upon earnings or past operations and should not be construed as indicative of
the present or anticipated future value of the Common Stock. Several factors
were considered in determining the offering price of the Common Stock, among
them the size of the offering, the desire that the security being offered be
attractive to individuals and the Underwriter's experience in dealing with
public offerings for financial institutions.

                            AVAILABLE INFORMATION

      The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information filed by the Company with the
Commission can be inspected and copied at public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, or at its Regional Offices located at Suite 1400, 500
West Madison Street, Chicago, Illinois 60661, and Suite 1300, Seven World
Trade Center, New York, New York 10048, and copies of such materials can be
obtained from the Public Reference Section of the Commission, at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates or accessed
electronically on the Commission's Web Site at http://www.sec.gov.

      This Prospectus constitutes a part of a registration statement filed by
the Company with the Commission under the Securities Act. This Prospectus
omits certain of the information contained in the Registration Statement, and
reference is hereby made to the Registration Statement and related exhibits
for further information with respect to the Company and the securities
offered hereby. Any statements contained herein concerning the provisions of
any document are not necessarily complete, and in such instance reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.

               INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
   
      The Company's Annual Report on Form 10-K for the fiscal year ended 
December 31, 1997, filed by the Company with the Commission, is
incorporated by reference in the Prospectus.
    
      Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus
to the extent that a statement contained herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any document incorporated by reference in this Prospectus (other than
exhibits unless such exhibits are expressly incorporated by reference in such
documents). Requests should be directed to Jeffrey L. Karafa, Vice President
and Treasurer, Dearborn Bancorp, Inc., 22290 Michigan Avenue, Dearborn,
Michigan 48123-2247, telephone (313) 274-1000.

                                      37

<PAGE>

                                LEGAL MATTERS

      The legality of the Common Stock offered hereby will be passed upon for
the Company by Dickinson Wright PLLC, Detroit, Michigan. Honigman Miller
Schwartz and Cohn, Detroit, Michigan, is acting as counsel for the
Underwriter in connection with certain legal matters relating to the shares
of Common Stock offered hereby.

                                   EXPERTS

      The consolidated financial statements of the Company as of December 31,
1997 and 1996 and for each of the three years in the period ended December
31, 1997 included in this Prospectus have been audited by Grant Thornton LLP,
independent certified public accountants, and are included herein in reliance
upon the authority of said firm as experts in accounting and auditing.

                                      38

<PAGE>
                     DEARBORN BANCORP, INC. AND SUBSIDIARY

                   Index to Consolidated Financial Statements

                                                                        Page
                                                                        ----
Report of Independent Certified Public Accountants  ................    F-2

Consolidated Balance Sheets as of December 31, 1997 and 1996  ......    F-3

Consolidated Statements of Operations for the Years ended
  December 31, 1997, 1996 and 1995  ................................    F-4

Consolidated Statements of Stockholders' Equity for the Years ended
  December 31, 1997, 1996 and 1995  ................................    F-5

Consolidated Statements of Cash Flows for the Years ended
  December 31, 1997, 1996 and 1995  ................................    F-6

Notes to Consolidated Financial Statements  ........................    F-7



















                                     F-1


<PAGE>

               Report of Independent Certified Public Accountants

Board of Directors
Dearborn Bancorp, Inc.

We have audited the accompanying consolidated balance sheets of Dearborn
Bancorp, Inc. and subsidiary as of December 31, 1997 and 1996, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1997.
These financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Dearborn Bancorp, Inc. and subsidiary as of December 31, 1997 and 1996,
and the results of their operations and their consolidated cash flows for
each of the three years in the period ended December 31, 1997, in conformity
with generally accepted accounting principles.

/s/ Grant Thornton LLP

Detroit, Michigan
January 28, 1998











                                     F-2


<PAGE>

                     DEARBORN BANCORP, INC. AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
(In thousands, except share data)                          December 31,
                                                          --------------
                                                          1997      1996
                                                          ----      ----
<S>                                                     <C>       <C>
ASSETS
Cash and cash equivalents
  Cash and due from banks ...........................   $ 1,406   $ 2,126
  Federal funds sold ................................       254     5,300
                                                        -------   -------
      Total cash and cash equivalents ...............     1,660     7,426
Mortgage loans held for sale ........................       347       303
Investment securities -- available for sale .........    29,780    10,493
Loans
  Loans .............................................    52,139    36,263
Allowance for possible credit losses ................      (522)     (366)
                                                        -------   -------
      Net loans .....................................    51,617    35,897
Bank premises and equipment, net ....................     2,296     2,080
Accrued interest receivable .........................       723       306
Other assets ........................................       230        94
                                                        -------   -------
      Total assets ..................................   $86,653   $56,599
                                                        =======   =======
LIABILITIES
Deposits
  Non-interest bearing deposits .....................   $ 8,587   $ 7,583
  Interest bearing deposits .........................    66,810    39,880
                                                        -------   -------
      Total deposits ................................    75,397    47,463
Other liabilities
  Federal funds purchased ...........................     1,500        --
  Mortgage payable ..................................       537       554
  Accrued interest payable ..........................       310       127
  Other liabilities .................................       157       265
                                                        -------   -------
      Total liabilities .............................    77,901    48,409

STOCKHOLDERS' EQUITY
  Common stock -- 3,000,000 shares authorized,
    1,044,924 and 742,178 shares outstanding in 1997
    and 1996, respectively ..........................    10,506     6,521
  Common stock subscribed but unissued, 303,578
    shares in 1996 ..................................        --     2,752
  Accumulated deficit ...............................    (1,689)   (1,065)
  Net unrealized gain (loss) on securities available
    for sale ........................................       (65)      (18)
                                                        -------   -------
      Total stockholders' equity ....................     8,752     8,190
                                                        -------   -------
      Total liabilities and stockholders' equity ....   $86,653   $56,599
                                                        =======   =======
</TABLE>

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


                                     F-3


<PAGE>

                     DEARBORN BANCORP, INC. AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
(In thousands, except share data)                           Years Ended December 31,
                                                           ---------------------------
                                                           1997        1996       1995
                                                           ----        ----       ----
<S>                                                     <C>          <C>        <C>
Interest income
  Interest on loans .................................   $    3,981   $  2,466   $  1,369
  Interest on investment securities -- available for
    sale ............................................        1,235        733        466
  Interest on federal funds and deposits with banks .          188        115        188
                                                        ----------   --------   -------- 
      Total interest income .........................        5,404      3,314      2,023
Interest expense
  Interest on deposits ..............................        2,955      1,662        959
  Interest on other liabilities .....................           43         44         45
                                                        ----------   --------   -------- 
      Total interest expense ........................        2,998      1,706      1,004
      Net interest income ...........................        2,406      1,608      1,019
Provision for possible credit losses ................          164        164        114
                                                        ----------   --------   -------- 
Net interest income after provision for possible
    credit losses ...................................        2,242      1,444        905
                                                        ----------   --------   -------- 
Non-interest income
  Service charges on deposit accounts ...............          124         92         38
  Fees for other services to customers ..............           26         19         16
  Gain on the sale of loans .........................          144        130        126
  Gain on the sale of investment securities .........           13         37         19
  Other income ......................................            5          6         11
                                                        ----------   --------   -------- 
      Total non-interest income .....................          312        284        210
Non-interest expense
  Salaries and employee benefits ....................        1,218      1,060        877
  Occupancy and equipment expense ...................          267        198        147
  Advertising and marketing .........................          105         93         63
  Stationery and supplies ...........................           80         56         62
  Professional services .............................           99         63         79
  Data processing ...................................           90         71         47
  FDIC insurance premiums ...........................            7          2         16
  Other operating expenses ..........................          223        158        112
                                                        ----------   --------   -------- 
      Total non-interest expense ....................        2,089      1,701      1,403
Income (loss) before federal income tax benefit .....          465         27       (288)
Income tax benefit ..................................         (145)        --         --
                                                        ----------   --------   -------- 
Net income (loss) ...................................   $      610   $     27   $   (288)
                                                        ==========   ========   ========
Per share data:
Net income (loss) -- basic and diluted ..............   $     0.58   $   0.04   $  (0.39)
Weighted average number of shares outstanding --
  basic .............................................    1,044,924    742,178    741,346
Weighted average number of shares outstanding --
  diluted ...........................................    1,055,861    742,178    741,346
</TABLE>

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


                                     F-4


<PAGE>

                     DEARBORN BANCORP, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                  Years Ended December 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>
                                                                                                 Net
                                                                                              Unrealized
                                                                    Common                   Gain (Loss)
                                                                     Stock                        on
                                                                  Subscribed                  Securities       Total
                                                         Common       but      Accumulated    Available    Stockholders'
(In thousands, except share data)                        Stock     Unissued      Deficit       For Sale        Equity
                                                         ------   ---------    -----------   -----------   -------------
<S>                                                     <C>        <C>           <C>           <C>             <C>
Balance, January 1, 1995 ............................   $ 6,521    $     --      $  (804)        $(91)         $5,626
  Net loss ..........................................        --          --         (288)          --            (288)
  Net change in unrealized gain (loss) on securities         --          --           --          120             120
                                                        -------     -------      -------         ----          ------
Balance, December 31, 1995 ..........................     6,521          --       (1,092)          29           5,458
  303,578 shares of common stock subscribed (net of
    offering costs of $8), but unissued .............        --       2,752           --           --           2,752
  Net income ........................................        --          --           27           --              27
  Net change in unrealized gain (loss) on securities         --          --           --          (47)            (47)
                                                        -------     -------      -------         ----          ------
Balance, December 31, 1996 ..........................     6,521       2,752       (1,065)         (18)          8,190
  303,578 shares of subscribed common stock issued
    (net of additional offering costs of $1) ........     2,751      (2,752)          --           --              (1)
  10% stock dividend declared December 16, payable
    January 30, 1998 ................................     1,234          --       (1,234)          --              --
Net income ..........................................        --          --          610           --             610
  Net change in unrealized gain (loss) on securities         --          --           --          (47)            (47)
                                                        -------     -------      -------         ----          ------
Balance, December 31, 1997 ..........................   $10,506     $    --      $(1,689)        $(65)         $8,752
                                                        =======     =======      =======         ====          ======
                                                                                                                     
</TABLE>


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







                                     F-5


<PAGE>

                     DEARBORN BANCORP, INC. AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
(In thousands)                                             Years Ended December 31,
                                                          --------------------------
                                                          1997       1996       1995
                                                          ----       ----       ----
<S>                                                     <C>        <C>        <C>
Cash flows from operating activities
  Interest and fees received ........................   $  5,142   $  3,415   $  1,959
  Interest paid .....................................     (2,815)    (1,671)    (1,040)
  Proceeds from sale of mortgages held for sale .....     11,209      7,648      8,251
  Origination of mortgages held for sale ............    (11,109)    (7,413)    (8,493)
  Cash paid to suppliers and employees ..............     (2,032)    (1,330)    (1,435)
                                                        --------   --------   --------
  Net cash provided by (used in) operating activities        395        649       (758)

Cash flows from investing activities
  Proceeds from the sale of securities available for
    sale ............................................      2,613      8,735      3,249
  Proceeds from maturities of securities available
    for sale ........................................     19,500      9,250      4,050
  Purchases of securities available for sale ........    (41,438)   (18,514)   (10,091)
  Increase in loans, net of payments received .......    (15,884)   (16,320)   (10,048)
  Purchases of property and equipment ...............       (369)      (194)      (483)
                                                        --------   --------   --------
  Net cash used in investing activities .............    (35,578)   (17,043)   (13,323)

Cash flows from financing activities
  Net increase in non-interest bearing deposits .....      1,004      3,510      1,706
  Net increase in interest bearing deposits .........     26,930     15,031     12,827
  Increase in federal funds purchased ...............      1,500         --         --
  Principal payments on mortgage payable ............        (17)       (15)       (15)
  Common stock subscriptions received ...............         --      2,752         --
  Net cash provided by financing activities .........     29,417     21,278     14,518
Increase (decrease) in cash and cash equivalents ....     (5,766)     4,884        437
Cash and cash equivalents at the beginning of the
  period ............................................      7,426      2,542      2,105
                                                        --------   --------   --------
Cash and cash equivalents at the end of the period ..   $  1,660   $  7,426   $  2,542
                                                        ========   ========   ======== 
Reconciliation of net income (loss) to net cash
  provided by (used in) operating activities
Net income (loss) ...................................   $    610   $     27   $   (288)
  Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities
    Provision for possible credit losses ............        164        164        114
    Depreciation and amortization expense ...........        158        133        104
    Accretion of discount on investment securities ..         (6)       (11)       (54)
    Amortization of premium on investment securities          10         72         38
    (Gain) on the sale of investment securities .....        (13)       (37)       (19)
    (Increase) decrease in mortgages held for sale ..        (44)       105       (368)
    (Increase) in interest receivable ...............       (417)       (16)      (129)
    Increase in interest payable ....................        183         35         36
    (Increase) decrease in other assets .............       (142)         1        (57)
    Increase (decrease) in other liabilities ........       (108)       176       (135)
                                                        --------   --------   --------
Net cash provided by (used in) operating activities .   $    395   $    649   $   (758)
                                                        ========   ========   ======== 
</TABLE>

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


                                     F-6


<PAGE>

                     DEARBORN BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1997, 1996 and 1995

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      A summary of the significant accounting policies consistently applied
in the preparation of the accompanying consolidated financial statements
follows.

   Basis of Presentation and Operations

      Dearborn Bancorp, Inc. (the Corporation) was incorporated in Michigan
on September 30, 1992. The Corporation's subsidiary, Community Bank of
Dearborn (the Bank), began operations on February 28, 1994. The Bank operates
three community banking offices in Dearborn, Dearborn Heights and Plymouth,
Michigan, offering a full range of banking services to individuals and
businesses.

   Principles of Consolidation

      The consolidated financial statements include the accounts of Dearborn
Bancorp, Inc. and its wholly-owned subsidiary, Community Bank of Dearborn.
All significant intercompany transactions are eliminated in consolidation.

   Cash Equivalents

      For purposes of the consolidated statements of cash flows, the
Corporation considers cash on hand, cash due from banks, and federal funds
sold to be cash equivalents.

   Mortgages Held for Sale

      Mortgages held for sale are carried at the lower of cost or market.
Market value is determined on the basis of existing forward delivery
contracts.

   Investment Securities

      When securities are purchased and the Corporation intends to hold the
securities for an indefinite period of time but not necessarily to maturity,
they are classified as available for sale and carried at market value. Any
decision to sell a security available for sale would be based on various
factors, including significant movements in interest rates, changes in the
maturity mix of the Corporation's assets and liabilities, liquidity demands,
regulatory capital considerations, and other similar factors. Cost is
adjusted for amortization of premiums and accretion of discounts to maturity.
Unrealized gains and losses for available for sale securities are excluded
from income and recorded as an amount, net of tax, in a separate component of
stockholders' equity until realized. All of the Corporation's securities are
classified as available for sale.

   Interest Income on Loans

      Interest on loans is accrued and credited to income based upon the
principal amount outstanding. The accrual of interest on loans is
discontinued when, in the opinion of management, there is an indication that
the borrower may be unable to meet payments as they become due. Upon such
discontinuance, all unpaid interest accrued is reversed. Interest accruals
are generally resumed when all delinquent principal and interest has been
brought current or the loan becomes both well secured and in the process of
collection.

   Allowance for Possible Credit Losses

      The allowance is maintained at a level considered by management to be
adequate to provide for reasonably foreseeable loan losses based on an
evaluation of the loan portfolio, loan loss experience and the economic
environment.


                                     F-7


<PAGE>


   Loan Impairment

      A loan is identified as impaired when it is probable in the opinion of
management that interest and principal may not be collected according to the
contractual terms of the loan agreement.

   Bank Premises and Equipment

      Bank premises and equipment are stated at cost less accumulated
depreciation. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets as follows:

         Building and improvements -- 5 to 30 years 
         Furniture and equipment -- 5 to 10 years

   Income Taxes

      The Corporation files a consolidated federal income tax return. The
Corporation uses the asset and liability method of accounting for income
taxes. Deferred tax assets and liabilities are recorded based on the
difference between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes. Tax planning strategies are
utilized in the computation of deferred federal income taxes. In addition,
the current or deferred tax consequences of a transaction is measured by
applying the provisions of enacted tax laws to determine the amount of taxes
receivable or payable, currently or in future years.

   Stock Options

      The Financial Accounting Standards Board (the "FASB") issued Statement
No. 123, "Accounting for Stock Based Compensation" ("SFAS No. 123") effective
for transactions entered into during 1996 and thereafter. The statement
establishes a fair market value method of accounting for employee stock
options and similar equity instruments such as warrants, and encourages all
companies to adopt that method of accounting for all their employee stock
option plans. However, the statement allows companies to continue measuring
compensation cost for such plans using accounting guidance in place prior to
SFAS No. 123. Companies that elect to remain with the former method of
accounting must make pro forma disclosures of net income and income per share
as if the fair value method provided for in SFAS No. 123 had been adopted.
The Corporation has not adopted the fair value provisions of SFAS No. 123 but
has disclosed the pro forma effects in accordance with the pronouncement.

   Stock Dividends

      The Corporation accounts for stock dividends by capitalizing retained
earnings in an amount equal to the fair value of the additional shares
issued. All share and per share amounts are retroactively adjusted for stock
dividends.

      The Corporation declared a 10% stock dividend payable January 30, 1998,
to shareholders of record as of December 16, 1997. Accordingly, per share
amounts for 1997, 1996 and 1995 have been adjusted to reflect the dividend.

   Income Per Share

      The FASB has issued Statement No. 128, "Earnings Per Share" ("SFAS No.
128") which is effective for financial statements issued after December 15,
1997. The new standard eliminates primary and fully diluted income per share
and requires presentation of basic and diluted income per share together with
disclosure of how the per share amounts were computed. Basic income per share
excludes dilution and


                                     F-8


<PAGE>

is computed by dividing income available to common shareholders by the
weighted average common shares outstanding for the period. Diluted income per
share reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised and converted into common
stock or resulted in the issuance of common stock that then shared in the
income of the entity. The Corporation adopted SFAS No. 128 at December 31,
1997. All per share data has been restated to reflect application of this new
pronouncement.

   Use of Estimates

      In the preparation of financial statements, management is required to
make estimates and assumptions that affect reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the
date of the financial statements and revenues and expenses during the
reporting period. Actual results could differ from those estimates. Estimates
that are more susceptible to change in the near term include the allowance
for possible credit losses and fair value of certain financial instruments.

NOTE B -- INVESTMENT SECURITIES -- AVAILABLE FOR SALE

      The amortized cost and estimated market value of investment securities
- -- available for sale are as follows (in thousands):
<TABLE>
<CAPTION>
                                                        December 31, 1997
                                         ----------------------------------------------
                                                        Gross        Gross     Estimated
                                         Amortized   Unrealized   Unrealized     Market
                                            Cost        Gains       Losses       Value
                                         ---------   ----------   ----------     ------
<S>                                       <C>            <C>         <C>        <C>
US Treasury securities ................   $ 2,001        $ 2         $ --       $ 2,003
US Government agency securities .......    27,844         --          (67)       27,777
                                          -------        ---         -----      -------
      Totals ..........................   $29,845        $ 2         $(67)      $29,780
                                          =======        ===         =====      =======
</TABLE>

<TABLE>
<CAPTION>
                                                        December 31, 1996
                                         ----------------------------------------------
                                                        Gross        Gross     Estimated
                                         Amortized   Unrealized   Unrealized     Market
                                            Cost        Gains       Losses       Value
                                         ---------   ----------   ----------     ------
<S>                                       <C>            <C>         <C>        <C>
US Treasury securities ................   $ 2,009        $--         $(10)      $ 1,999
US Government agency securities .......     8,502          4          (12)        8,494
                                          -------        ---         -----      -------
      Totals ..........................   $10,511        $ 4         $(22)      $10,493
                                          =======        ===         ====       =======
</TABLE>

      The amortized cost and estimated market value of investment securities
- -- available for sale at December 31, 1997 by contractual maturity, are shown
below (in thousands):
<TABLE>
<CAPTION>
                                                                    Estimated
                                                        Amortized     Market
                                                           Cost       Value
                                                        ---------   --------
<S>                                                      <C>         <C>
Due in three months or less .........................    $ 1,000     $   999
Due in three months through one year ................        999       1,000
Due in one year through five years ..................     27,846      27,781
                                                         -------     -------
      Totals ........................................    $29,845     $29,780
                                                         =======     =======
</TABLE>


                                     F-9


<PAGE>

      Securities having a carrying value of $2,001,000 and a market value of
$2,003,000 were pledged to secure public deposits. Securities having a
carrying value of $1,000,000 and a market value of $999,000 were pledged to
secure treasury, tax and loan payments with the Federal Reserve Bank of
Chicago.

NOTE C -- LOANS

      Major categories of loans included in the portfolio at December 31 are
as follows (in thousands):
<TABLE>
<CAPTION>
                                                          1997      1996
                                                          ----      ----
<S>                                                     <C>       <C>
Consumer loans ......................................   $12,705   $ 8,877
Commercial, financial, & other ......................    10,668     7,199
Commercial real estate construction .................     1,746     1,971
Commercial real estate mortgages ....................     9,796     6,384
Residential real estate mortgages ...................    17,224    11,832
                                                        -------   -------
                                                         52,139    36,263
Allowance for possible credit losses ................      (522)     (366)
                                                        -------   -------
                                                        $51,617   $35,897
                                                        =======   =======
</TABLE>

      Final loan maturities and rate sensitivity of the loan portfolio at
December 31, 1997 are as follows (in thousands):
<TABLE>
<CAPTION>
                                                Within   Three to    One to   After
                                                Three     Twelve      Five     Five
                                                Months    Months     Years    Years    Total
                                                ------    ------     -----    -----    -----
<S>                                            <C>        <C>       <C>       <C>     <C>
Consumer loans .............................   $ 1,779    $  605    $10,166    $144   $12,694
Commercial, financial & other ..............     6,006       678      3,984      --    10,668
Commercial real estate construction ........     1,486        53        207      --     1,746
Commercial real estate mortgages ...........       486       693      8,337     280     9,796
Residential real estate mortgages ..........     1,843     5,934      9,378      69    17,224
                                               -------    ------    -------    ----    ------
                                               $11,600    $7,963    $32,072    $493    52,128
                                               =======    ======    =======    ====
Non-accrual loans ..........................                                               11
                                                                                      -------
      Total loans ..........................                                          $52,139
                                                                                      =======
Loans at fixed interest rates ..............   $   778    $1,446    $23,000    $493   $25,717
Loans at variable interest rates ...........    10,822     6,517      9,072      --    26,411
                                               -------    ------    -------    ----   -------
                                               $11,600    $7,963    $32,072    $493    52,128
                                               =======    ======    =======    ====
Non-accrual loans ..........................                                               11
                                                                                      -------
      Total loans ..........................                                          $52,139
                                                                                      =======
</TABLE>

      Certain directors of the Corporation, including their related
interests, were loan customers of the Bank during 1997. Such loans were made
in the ordinary course of business at the Bank's normal credit terms and
interest rates, and do not represent more than a normal risk of collection.
Total loans to these persons at December 31, 1997 amounted to $1,989,000.
During 1997, $1,664,000 of new loans were made and repayments totaled
$1,525,000. These loans aggregated to 23% of consolidated stockholders'
equity as of December 31, 1997.


                                     F10


<PAGE>

      Transactions in the allowance for possible credit losses for the years
ended December 31 are as follows (in thousands):
<TABLE>
<CAPTION>
                                                   1997   1996   1995
                                                   ----   ----   ----
<S>                                               <C>    <C>    <C>
Balance, beginning of year .....................   $366   $204   $100
Charge-offs:
  Consumer loans ...............................     (8)    (4)   (10)
Recoveries:
  Consumer loans ...............................     --      2     --
                                                  -----  -----  -----
Net charge-offs ................................     (8)    (2)   (10)
Additions charged to operations ................    164    164    114
Balance at end of period .......................  $ 522  $ 366  $ 204
                                                  =====  =====  =====
Allowance to total loans .......................   1.01%  1.01%  1.02%
                                                  =====  =====  =====
Net charge-offs to average loans ...............   0.02%  0.01%  0.07%
                                                  =====  =====  =====
</TABLE>

      The allocation of the allowance for possible credit losses as of
December 31, are as follows (in thousands):
<TABLE>
<CAPTION>
                                                     1997                1996                1995
                                              -----------------   -----------------   -----------------
                                                        Percent             Percent             Percent
                                                       of loans            of loans            of loans
                                                        in each             in each             in each
                                                       category            category            category
                                                       to total            to total            to total
                                              Amount     loans    Amount     loans    Amount     loans
                                              ------   --------   ------   --------   ------   --------
<S>                                           <C>       <C>       <C>       <C>       <C>       <C>
Consumer loans ............................    $ 15      24.37%    $  8      24.48%    $ 10      23.16%
Commercial, financial & other .............       7      20.46%       5      19.85%       4      26.95%
Commercial real estate construction .......       1       3.35%       1       5.44%       1       4.82%
Commercial real estate mortgages ..........       7      18.79%       4      17.60%       2      13.42%
Residential real estate mortgages .........      12      33.03%       8      32.63%       4      31.65%
Unallocated ...............................     480       N/A       340       N/A       183       N/A
                                               ----     ------     ----     ------     ----     ------
                                               $522     100.00%    $366     100.00%    $204     100.00%
                                               ====     ======     ====     ======     ====     ====== 
</TABLE>

      The aggregate balances on non-accrual loans and the reduction of
interest income associated with these loans at December 31, are as follows
(in thousands): 
<TABLE> 
<CAPTION>
                                                         1997    1996    1995
                                                         ----    ----    ----
<S>                                                     <C>     <C>     <C>
Non-accrual loans ...................................   $  11   $   8   $  43
                                                        =====   =====   =====
As a percentage of total loans ......................    0.02%   0.02%   0.21%
                                                        =====   =====   =====
Income in accordance with original loan terms .......   $   2   $   1   $   2
Income recognized ...................................      --      --      --
                                                        -----   -----   -----
Reduction in interest income ........................   $   2   $   1   $   2
                                                        =====   =====   =====
</TABLE>


                                    F-11


<PAGE>

NOTE D -- BANK PREMISES AND EQUIPMENT

      Bank premises and equipment are comprised of the following at December
31 (in thousands):
<TABLE>
<CAPTION>
                                                         1997     1996
                                                         ----     ----
<S>                                                     <C>      <C>
Land and improvements ...............................   $  394   $  394
Building and improvements ...........................    1,579    1,469
Furniture and equipment .............................      742      484
                                                        ------   ------
                                                         2,715    2,347
Less accumulated depreciation .......................      419      267
                                                        ------   ------
                                                        $2,296   $2,080
                                                        ======   ======
</TABLE>

      Depreciation expense for 1997, 1996 and 1995 amounted to $152,000,
$127,000, and $98,000, respectively.

NOTE E -- DEPOSITS

      The following is a summary of the distribution and weighted average
interest rate of deposits at December 31 (in thousands):
<TABLE>
<CAPTION>
                                              1997                 1996
                                        -----------------    -----------------
                                                 Weighted             Weighted
                                                  Average              Average
                                        Amount     Rate      Amount     Rate
                                        ------   --------    ------   --------
<S>                                    <C>         <C>      <C>         <C>
Non-interest bearing:
  Demand ...........................   $ 8,587       --     $ 7,583       --
                                       =======     ====     =======     ====
Interest bearing:
  Checking .........................   $ 1,274     2.92%    $   977     2.02%
  Money market .....................     6,787     3.98%      5,977     4.22%
  Savings ..........................     1,529     2.50%      1,240     2.50%
  Time, under $100,000 .............    36,114     6.01%     19,048     5.83%
  Time, $100,000 and over
    Non-volatile priced ............    12,055     6.00%      5,265     5.74%
    Volatile priced ................     9,051     5.84%      7,373     5.69%
                                       -------              -------
                                       $66,810              $39,880
                                       =======              =======
</TABLE>

      Final maturities of time deposits of $100,000 and greater at 
December 31, 1997 are as follows (in thousands):
<TABLE>
<CAPTION>
                                             Non-volatile   Volatile
                                                priced       priced     Total
                                             ------------   --------    -----
<S>                                            <C>          <C>        <C>
Due in three months or less ..............     $ 1,545      $4,115     $ 5,660
Due in three months through one year .....       7,739       4,818      12,557
Due in one year through five years .......       2,771         118       2,889
                                               -------      ------     -------
      Totals .............................     $12,055      $9,051     $21,106
                                               =======      ======     =======
</TABLE>

      Time deposits of $100,000 and greater that are non-volatile priced are
time deposits that are priced using retail rates and would be considered by
the Bank as core deposits except for the fact that they are issued in
denominations of $100,000 or more. Volatile priced time deposits of $100,000
and greater are time deposits that are priced using wholesale rates and are
typically referred to as jumbo time deposits.


                                    F-12


<PAGE>

NOTE F -- MORTGAGE PAYABLE

      The mortgage payable with a bank matures September 1, 2013 and requires
monthly installments of $4,925 including interest at 7.75% per annum.
Effective September, 1998 the interest rate will be computed annually at 2.5%
plus the five year treasury rate. The note is collateralized by a first real
estate mortgage on a building and land.

      Aggregate maturities for the five years following December 31, 1997 and
thereafter are as follows (in thousands):
<TABLE>
<CAPTION>
<S>                                    <C>
1998 ...............................   $ 18
1999 ...............................     20
2000 ...............................     21
2001 ...............................     23
2002 ...............................     25
Thereafter .........................    430
                                       ----
                                       $537
                                       ====
</TABLE>

NOTE G -- FEDERAL FUNDS PURCHASED

      The Bank has entered into a federal funds credit line with another bank
in the amount of $1,500,000 to provide additional flexibility in the daily
management of liquidity. The outstanding balance of the federal funds credit
line at December 31, 1997 was $1,500,000 and was repaid on January 5, 1998.

NOTE H -- INCOME TAXES

      The federal tax provision consists of the following (in thousands):
<TABLE>
<CAPTION>
                                   1997   1996   1995
                                   ----   ----   ----
<S>                               <C>     <C>    <C>
Current .......................   $  --   $ --   $ --
Deferred ......................    (145)    --     --
                                  -----   ----   ----
                                  $(145)    --     --
                                  =====   ====   ====
</TABLE>

      The deferred tax benefit in 1997 consisted of a reduction of the
beginning of the year valuation allowance of $293,000 offset by a deferred
tax expense of $148,000. Deferred tax benefits for 1996 and 1995 were
eliminated by increases in the valuation allowance of $7,000 and $48,000,
respectively.

      The reconciliation of the effective income tax rate to the federal
statutory tax rate is as follows:
<TABLE>
<CAPTION>
                                                        1997   1996   1995
                                                        ----   ----   ----
<S>                                                     <C>    <C>    <C>
Federal income tax rate .............................    34%    34%   (34)%
Effect of net operating loss carryforward and
  valuation allowance ...............................   (63)   (26)    31
Effect of graduated tax rates .......................    --    (18)     1
Other ...............................................    (2)    10      2
                                                        ---    ---    ---
Effective tax rate ..................................   (31)%   --%   --%
                                                        ===    ===    ===
</TABLE>


                                    F-13


<PAGE>

      The details of the net deferred tax asset are as follows at 
December 31, (in thousands):

<TABLE>
<CAPTION>
                                                         1997    1996
<S>                                                     <C>     <C>
Deferred tax assets
  Provision for possible credit losses ..............   $ 163   $ 110
  Unrealized losses on securities available for sale       23       8
  Net operating loss carryforwards ..................     282     400
  Other .............................................       4       1
                                                        -----   -----
        Total deferred tax assets ...................     472     519
Deferred tax liabilities
  Accretion of discounts on securities available for
    sale ............................................      (4)     (1)
  Deferred loan fees ................................     (72)    (59)
  Premises and equipment ............................     (72)    (56)
  Accrual to cash conversion ........................    (115)    (46)
  Unrealized gain on securities available for sale ..      (1)     (1)
                                                        -----   -----
Total deferred tax liabilities ......................    (264)   (163)
                                                        -----   -----
Net deferred tax asset before valuation allowance ...     208     356
Valuation allowance .................................     (63)   (356)
                                                        -----   -----
Net deferred tax asset ..............................   $ 145   $  --
                                                        =====   =====
</TABLE>

      The tax benefit of the unrealized losses on securities available for
sale, net of the valuation allowance, was charged directly to its related
component of stockholders' equity.

      At December 31, 1997 the Corporation had net operating loss
carryforwards of approximately $829,000 expiring in 2009 through 2011. These
losses are available to reduce otherwise taxable income in future periods.








                                     F14


<PAGE>

NOTE I -- FINANCIAL INSTRUMENTS

   Fair Value of Financial Instruments

      The estimated fair value of the Corporation's financial instruments at
December 31, are as follows (in thousands):

<TABLE>
<CAPTION>
                                           1997                   1996
                                   --------------------   --------------------
                                              Estimated              Estimated
                                   Carrying     Fair      Carrying     Fair
                                    Amount      Value      Amount      Value
                                   --------   ---------   --------   ---------
<S>                                 <C>        <C>         <C>        <C>
Assets:
  Cash and cash equivalents .....   $ 1,660    $ 1,660     $ 7,426    $ 7,426
  Loans held for sale ...........       347        349         303        307
  Securities ....................    29,780     29,780      10,493     10,493
  Loans .........................    51,617     51,020      35,897     35,332
Liabilities:
  Deposits ......................    75,397     75,507      47,463     47,444
  Federal funds purchased .......     1,500      1,500          --         --
  Mortgage Payable ..............       537        537         554        554
</TABLE>

      The following methods and assumptions were used by the Corporation in
estimating its fair value disclosure for financial instruments:

      Cash and cash equivalents: The carrying amounts reported in the balance
sheet for cash and short-term instruments approximate those assets' fair
values.

      Loans held for sale: The market value of these loans represents
estimated fair value. The market value is determined in the aggregate on the
basis of existing forward delivery commitments.

      Investment securities: Fair values for investment securities are based
on quoted market prices, where available. If quoted market prices are not
available, fair values are based on quoted market prices of comparable
instruments.

      Loans: For variable rate loans that reprice frequently and with no
significant change in credit risk, fair values are based on carrying values.
The fair values for other loans are estimated using discounted cash flow
analysis, using interest rates currently being offered for loans with similar
terms to borrowers of similar credit quality. The carrying amount of accrued
interest receivable approximates its fair value.

      Off-balance-sheet instruments: The Corporation's off-balance-sheet
instruments approximate their fair values.

      Deposit liabilities: The fair values disclosed for demand deposits are,
by definition, equal to the amount payable on demand at the reporting date.
Fair values for fixed rate certificates of deposit are estimated using a
discounted cash flow calculation that applies interest rates currently being
offered on similar certificates. The carrying amount of accrued interest
payable approximates its fair value.

      Mortgage payable: The fair value of the Corporation's mortgage payable
is estimated using discounted cash flow analysis, based on the Corporation's
current incremental borrowing rate for similar types of borrowing
arrangements.

      Limitations: Fair value estimates are made at a specific point in time,
based on relevant market information and information about the financial
instrument. These estimates do not reflect any premium or discount that could
result from offering for sale, at one time, the Corporation's entire holdings
of a 


                                    F-15


<PAGE>

particular financial instrument. Because no market exists for a significant
portion of the Corporation's financial instruments, fair value estimates are
based on management's judgments regarding future expected loss experience,
current economic conditions, risk characteristics and other factors. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.

   Off-Balance-Sheet Risk

      The Corporation is party to financial instruments with off-balance-
sheet risk in the normal course of business to meet the financing needs of
its customers and to reduce its own exposure to fluctuations in interest
rates. These financial instruments include commitments to extend credit and
financial guarantees. These instruments involve, to varying degrees, elements
of credit and interest rate risk that are not recognized in the consolidated
statements of operations.

      Exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to extend credit and
financial guarantees written is represented by the contractual notational
amount of those items. The Corporation generally requires collateral to
support such financial instruments in excess of the contractual notational
amount of those instruments and, therefore, is in a fully collateralized
position.

      The Corporation has outstanding loan commitments aggregating $5,150,000
and outstanding financial standby letters of credit aggregating $147,000 at
December 31, 1997.

      Commitments to extend credit are agreements to lend to a customer as
long as there are no violations of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require a payment of a fee. Since portions of the commitments
are expected to expire without being drawn upon, the total commitments do not
necessarily represent future cash requirements. The Corporation evaluates
each customer's creditworthiness on a case by case basis. The amount of
collateral obtained upon extension of credit is based on management's credit
evaluation of the customer.

      The Corporation originates primarily residential and commercial real
estate loans, commercial loans, and installment loans. The Corporation
estimates that 67% of the loan portfolio is based in Wayne County, 18% in
Oakland County, and the remainder distributed throughout Michigan.

      At December 31, 1997, the Corporation has consumer loans secured by
real estate aggregating approximately $2,790,000 and construction loans
relating to commercial, residential, and land development properties of
$1,746,000.

NOTE J -- EMPLOYEE BENEFIT PLANS

      On January 1, 1996, the Bank established a 401(k) plan for its
employees. All employees are eligible to participate in the 401(k) after
completion of age and service requirements. An employee can be enrolled as a
participant on the first "Enrollment Date" after reaching age 18 and
completing six months of service. Contributions to the plan by the Bank are
discretionary. As of December 31, 1997 the Corporation has elected not to
match any portion of employee contributions to the plan.


                                    F-16


<PAGE>

NOTE K -- REGULATORY MATTERS

      The Bank is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory -- and possibly additional
discretionary -- actions by regulators that, if undertaken, could have a
direct material effect on the Bank's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve
quantitative measures of the Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices.
The Bank's capital amounts and classifications are also subject to
qualitative judgments by the regulators about components, risk weightings,
and other factors.

      Quantitative measures established by regulation to ensure capital
adequacy require the Bank to maintain minimum amounts and ratios (set forth
in the table below) of total and Tier 1 capital (as defined in the
regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as
defined) to average assets (as defined).

      The following is a presentation of the Bank's regulatory capital ratios
(in thousands):

<TABLE>
<CAPTION>
                                                          Minimum For Capital          Minimum
                                               Actual      Adequacy Purposes:  To Be Well Capitalized:
                                           -------------  -------------------  -----------------------
                                           Amount  Ratio    Amount    Ratio       Amount     Ratio
                                           ------  -----    ------    -----       ------     -----
<S>                                        <C>      <C>     <C>        <C>        <C>        <C>
As of December 31, 1997
  Total capital
    (to risk weighted assets) ..........   $7,963   16.1%   $3,964     8.0%       $4,955     10.0%
  Tier I capital
    (to risk weighted assets) ..........    7,441   15.0%    1,982     4.0%        2,972      6.0%
  Tier I capital
    (to average assets) ................    7,441    9.1%    3,282     4.0%        4,102      5.0%
As of December 31, 1996
  Total capital
    (to risk weighted assets) ..........    4,586   14.4%    2,548     8.0%        3,185     10.0%
  Tier I capital
    (to risk weighted assets) ..........    4,220   13.2%    1,279     4.0%        1,918      6.0%
  Tier I capital
    (to average assets) ................    4,220    8.5%    1,986     4.0%        2,482      5.0%
</TABLE>

      Based on the respective regulatory capital ratios at December 31, 1997
and 1996, the Bank is well capitalized.

NOTE L -- COMMON STOCK SUBSCRIBED

      On November 15, 1996, the Corporation issued an offering memorandum,
which included an over-subscription privilege, to those stockholders who were
residents of the State of Michigan. The offering memorandum gave those
stockholders the right to subscribe to 303,578 shares of common stock at a
price of $9.09 per share. All rights expired on December 31, 1996.

      At the close of business on December 31, 1996, the Corporation had
received requests to purchase approximately 319,600 shares of common stock.
In accordance with the Corporation's offering memorandum $2,760,000 was
recorded as common stock subscribed, representing 303,578 shares of common
stock and $145,490 was recorded as an oversubscription rights payable in
other liabilities. On January 21, 1997, the common stock subscribed was
formally issued.


                                     F17


<PAGE>

NOTE M -- STOCK OPTION PLAN

      On June 21, 1994, the Corporation adopted a stock option plan to enable
key employees of the Corporation and its subsidiaries to participate in the
Corporation's future growth and profitability by the granting of long-term
performance-based incentive compensation. As of December 31, 1996, 55,000
shares of common stock were authorized with no options granted.

      During 1997, the stock option plan was amended to allow up to 165,000
shares to be granted. Also in 1997, the Corporation issued 45,100 options at
an exercise price of $9.09. No options were exercised, expired or terminated
during 1997.

      Granted options expire no later than ten years after the date of grant,
may not be exercised for six months after the date of grant and are granted
at a price of not less than the fair market value of the Corporation's share
price on the date of grant. If an option expires or terminates without having
been exercised, such option will be available for future grant under the
plan.

      The Corporation accounts for the stock option plan under Accounting
Principles Board Option No. 25, "Accounting for Stock Issued to Employees."
No compensation costs have been recognized for the plan. Had compensation
costs for the plan been determined based on the fair value of the options at
the grant date consistent with the method of SFAS No. 123, the Corporation's
net income per share for the year ended December 31, 1997 would have been as
follows (in thousands, except per share data):

<TABLE>
<CAPTION>
<S>                                                     <C>
Net income
  As reported .......................................   $ 610
  Pro forma .........................................     419
Basic and diluted income per share
  As reported .......................................    0.58
  Pro forma .........................................    0.40
</TABLE>

      The fair value of each option grant is estimated on the date of grant
using the Black-Scholes options-pricing model with the following
weighted-average assumptions used for grants in 1997: dividend yield of
0.00%; expected volatility of 51.23%; risk-free interest rate of 6.67%; and
expected lives of ten years. All information presented with respect to stock
options has been adjusted for the effects of the stock dividend.

NOTE N -- INCOME PER SHARE

      The following is a reconciliation of the numerator and denominator of
the basic and diluted income per share calculation for the year ended
December 31, 1997 (in thousands, except share data);

<TABLE>
<CAPTION>
                                           Income       Shares       Per Share
                                        (Numerator)  (Denominator)     Amount
                                        -----------  -------------   ---------
<S>                                         <C>        <C>             <C>
Basic income per share
  Net income available ...............      $610       1,044,924       $0.58
Effect of dilutive options
  Options ............................        --          10,937          --
                                            ----       ---------       -----
Diluted income per share
  Net income to stockholders plus
     assumed conversions..............      $610       1,055,861       $0.58
                                            ====       =========       =====
</TABLE>


                                    F-18


<PAGE>

NOTE O -- ISSUED BUT NOT YET ADOPTED ACCOUNTING STANDARDS

      In June 1997, the FASB issued SFAS No. 130, "Reporting of Comprehensive
Income" ("SFAS 130"), which establishes standards for reporting and display
of comprehensive income and its components (revenues, expense, gains, and
losses) in a full set of financial statements. This statement also requires
that all items that are required to be recognized under accounting standards
as components of comprehensive income be reported in a financial statement
that is displayed with the same prominence as other financial statements.
This statement is effective for fiscal years beginning after December 15,
1997. Earlier application is permitted. Reclassification of financial
statements for earlier periods provided for comparative purposes is required.
The Corporation does not anticipate that the adoption of SFAS 130 will have a
material effect on its financial statements.

      In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131"), which establishes
standards for the manner in which business enterprises report information
about operating segments in annual financial statements and requires that
those enterprises report selected information about operating segments in
interim financial reports issued to stockholders. This statement also
establishes standards for related disclosures about products and services,
geographic areas, and major customers. This statement requires the reporting
of financial and descriptive information about an enterprise's reportable
operating segments. This statement is effective for financial statements for
periods beginning after December 15, 1997. In the initial year of adoption,
comparative information for earlier years is to be restated. The Corporation
does not anticipate that the adoption of SFAS 131 will have a material effect
on its financial statements.











                                    F-19


<PAGE>

NOTE P -- PARENT ONLY CONDENSED FINANCIAL INFORMATION

      The condensed financial information that follows presents the financial
condition of the parent company, Dearborn Bancorp, Inc., along with the
results of its operations and its cash flows.

                           CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
(In thousands)                                            December 31,
                                                         -------------
                                                         1997     1996
                                                         ----     ----
<S>                                                     <C>      <C>
ASSETS
  Cash and cash equivalents .........................   $  181   $2,901
  Investment in subsidiary ..........................    7,376    4,203
  Other assets ......................................    1,741    1,792
                                                        ------   ------
                                                        $9,298   $8,896
                                                        ======   ======
LIABILITIES AND STOCKHOLDERS' EQUITY
  Mortgage payable ..................................   $  537   $  554
  Other liabilities .................................        9      152
  Stockholders' equity ..............................    8,752    8,190
                                                        ------   ------
                                                        $9,298   $8,896
                                                        ======   ======
</TABLE>

                      CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
(In thousands)                                      Years Ended December 31,
                                                    ------------------------
                                                     1997     1996     1995
                                                     ----     ----     ----
<S>                                                  <C>      <C>      <C>
Dividends from subsidiary bank ..................    $ --     $ --     $  --
Operating income ................................      58       35        87
Operating expenses ..............................     (68)     (60)      (77)
                                                     ----     ----     ----- 
Net income (loss) before equity in 
  undistributed income (loss) of subsidiary .....     (10)     (25)       10
Equity in undistributed income (loss) of 
  subsidiary ....................................     620       52      (298)
                                                     ----     ----     ----- 
    Net income (loss) ...........................    $610     $ 27     $(288)
                                                     ====     ====     ===== 
</TABLE>


                                    F-20


<PAGE>


                      CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
(In thousands)                                        Years Ended December 31,
                                                      ------------------------
                                                       1997     1996     1995
                                                       ----     ----     ----
<S>                                                  <C>       <C>      <C>
Cash flows from operating activities
    Net income (loss) .............................  $   610   $   27   $ (288)
    Adjustments to reconcile net income (loss) to
       net cash provided by operating activities
        Equity in undistributed (income) loss of
          subsidiary ..............................     (620)     (52)     298
        Other .....................................       66       61       37
                                                     -------   ------   ------
Net cash flows provided by operating activities ...       56       36       47
Cash flows from investing activities
    Investment in subsidiary ......................   (2,600)    (850)    (500)
    Investment in securities ......................   (1,000)      --     (698)
    Maturity of securities ........................    1,000       --    1,600
    Sale of securities ............................       --      703       --
    Property and equipment acquired ...............      (14)    (101)    (361)
                                                     -------   ------   ------
Net cash flows provided by (used in) investing
  activities ......................................   (2,614)    (248)      41
Cash flows from financing activities
    Proceeds from sale of common stock ............       --    2,752       --
    Proceeds due stockholders on oversubscription
      of stock ....................................     (145)     145       --
    Reduction of mortgage payable .................      (17)     (15)     (15)
    Dividends paid ................................       --       --       --
                                                     -------   ------   ------
Net cash flows provided by (used in) financing
  activities ......................................     (162)   2,882      (15)
Increase (decrease) in cash and cash equivalents ..   (2,720)   2,670       73
Cash and cash equivalents at beginning of year ....    2,901      231      158
                                                     -------   ------   ------
Cash and cash equivalents at end of year ..........  $   181   $2,901   $  231
                                                     =======   ======   ======
</TABLE>


                                    F-21












<PAGE>
========================  
                                           
      No dealer, salesperson or            
other person has been authorized           
to give any information or make            
any representations other than             
those contained in this Prospectus         
in connection with the offer made          
by this Prospectus, and if given           
or made, such information or
representations must not be relied
upon as having been authorized by
the Company or any Underwriter.
Neither the delivery of this
Prospectus nor any sale made
hereunder shall, under any
circumstances, create any
implication that the information
herein is correct as of any time
subsequent to the date hereof.
This Prospectus does not
constitute an offer to sell or a
solicitation of an offer to buy
any securities offered hereby by
anyone in any jurisdiction in
which such offer or solicitation
is not authorized or in which the
person making such offer or
solicitation is not qualified to
do so or to anyone to whom it is
unlawful to make such offer or
solicitation.

         TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                      Page
<S>                                   <C>
Forward-Looking Statements  .......      2
Prospectus Summary  ...............      3
Risk Factors  .....................      7
Use of Proceeds  ..................      9
Dividend Policy  ..................     10
Capitalization  ...................     10
Selected Consolidated Financial
Data  .............................     11
Management's Discussion and
  Analysis of Financial Condition
  and Results of Operations  ......     12
Business  .........................     20
Management  .......................     26
Related Party Transactions  .......     30
Security Ownership  ...............     31
Supervision and Regulation  .......     32
Description of Common Stock  ......     33
Shares Eligible for Future Sale  ..     35
Underwriting  .....................     36
Available Information  ............     37
Incorporation of Certain Documents
  by Reference  ...................     37
Legal Matters  ....................     38
Experts  ..........................     38
Index to Financial Statements  ....    F-1
</TABLE>

       Until          , 1998 (25
days after the effective date of
the offering), all dealers
effecting transactions in the
Common Stock, whether or not
participating in this
distribution, may be required to 
deliver a Prospectus. This   
delivery requirement is in       
addition to the obligation of 
dealers to deliver a Prospectus  
when acting as underwriter and   
with respect to their unsold     
allotments or subscriptions.     

========================  


   <PAGE>
========================

          1,000,000 Shares

       DEARBORN BANCORP, INC.

            Common Stock

             Prospectus

            Roney & Co.

                       , 1998

========================

<PAGE>

                                   PART II

                    INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers.

      The Registrant's Articles of Incorporation and the Michigan Business
Corporation Act permit the Registrant's officers and directors to be
indemnified under certain circumstances for expenses and, in some instances,
for judgments, fines or amounts paid in settlement of civil, criminal,
administrative and investigative suits or proceedings, including alleged
violations of the Securities Act of 1933, as amended (the "Act"). In
addition, the Registrant maintains directors and officers liability insurance
which, under certain circumstances, would cover alleged violations of the
Act. Insofar as indemnification for liabilities arising under the Act may be
permitted to officers and directors pursuant to the foregoing provisions, the
Registrant has been informed that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. Therefore, in the
event that a claim for such indemnification is asserted by an officer or
director, the Registrant (except insofar as such claim seeks reimbursement by
the Registrant of expenses paid or incurred by an officer or director in the
successful defense of any action, suit or proceeding) will, unless the matter
has theretofore been adjudicated by precedent deemed by the Registrant to be
controlling, submit to a court of appropriate jurisdiction the question of
whether or not indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.

Item 25. Other Expenses of Issuance and Distribution.

      The following table sets forth the various expenses in connection with
the sale and distribution of the Common Stock being registered, other than
underwriting discounts and commissions. All amounts shown are estimates,
except the SEC registration fee, the NASD filing fee and the Nasdaq listing
fee, and assume sale of 1,150,000 shares in the offering.

<TABLE>
<CAPTION>
<S>                                                     <C>
SEC registration fee ................................   $
NASD filing fee .....................................
Printing and mailing expenses .......................
Nasdaq listing fee ..................................
Fees and expenses of counsel ........................
Accounting and related expenses .....................
Blue Sky fees and expenses (including counsel fees) .
Transfer Agent fees .................................
Miscellaneous .......................................
Total ...............................................   $
</TABLE>

Item 26. Recent Sales of Unregistered Securities.

      On November 15, 1996 the Registrant offered to the holders of its
Common Stock who were residents of the State of Michigan the right to
subscribe for additional shares of Common Stock at a price of $9.09 per
share. Pursuant to the offering 303,578 shares of Common Stock were
subscribed by the shareholders with the Registrant receiving the proceeds of
$2,760,000. The shares of Common Stock issued were not registered under the
Act inasmuch as the shares were issued under the exemption from registration
provided by Section 3(a)(9) of the Act as an offering and sale to persons
resident within a singe state where the issuer is a person incorporated and
doing business within such state.

                                     II-1

<PAGE>

Item 27. Exhibits.

<TABLE>
<CAPTION>
Exhibit No.                        Description
<S>           <C>
 1            Form of Underwriting Agreement
 3.1  *       Articles of Incorporation of Dearborn Bancorp, Inc.
              [3(a)]
 3.1(a)****   Amendment to Articles of Incorporation of Dearborn
              Bancorp, Inc. [1]
 3.2  ***     Bylaws of Dearborn Bancorp, Inc. [3(b)]
 5            Opinion of Dickinson Wright PLLC
10.1  ****    Stock Option Plan, as amended  [2]
21    **      Subsidiaries of Dearborn Bancorp, Inc. [2]
23.1          Consent of Dickinson Wright PLLC (included in opinion
              filed as Exhibit 5)
3.2           Consent of Grant Thornton LLP
27            Financial Data Schedule
</TABLE>

      The Exhibit marked with one asterisk was filed as an Exhibit to the
Registration Statement of the Registrant on Form S-18 (Registration Number
33-55808) and is incorporated herein by reference. The Exhibit marked with
two asterisks was filed as an Exhibit to the Form 10-K Report of the
Registrant for the fiscal year ended December 31, 1993 and is incorporated
herein by reference. The Exhibit marked with three asterisks 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. The Exhibits marked
with four asterisks were filed as Exhibits to the Form 10-Q Report for the 
quarter ended June 30, 1997 and are incorporated herein by reference, the 
Exhibit numbers in brackets being those in such Registration Statement or 
Report.

Item 28. Undertakings.

      The undersigned Registrant hereby undertakes as follows:

      (1) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

      (2) The Registrant will:

             (i) For determining any liability under the Securities Act,
      treat the information omitted from the form of prospectus filed as part
      of this Registration Statement in reliance upon Rule 430A and contained
      in a form of prospectus filed by the Registrant under Rule 424(b)(1),
      or (4) or 497(h) under the Securities Act as part of this Registration
      Statement as of the time the SEC declared it effective; and

            (ii) For determining any liability under the Securities Act,
      treat each post-effective amendment that contains a form of prospectus
      as a new registration statement for the securities offered in the
      registration statement, and that offering of the securities at that
      time as the initial bona fide offering of those securities.

                                     II-2

<PAGE>
                                   SIGNATURES

      In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and authorized this
Registration Statement to be signed on its behalf by the undersigned, in the
City of Dearborn, State of Michigan, on March 3, 1998.

                           DEARBORN BANCORP, INC.
                           By: /s/ John E. Demmer
                           John E. Demmer, Chairman
                           of the Board and Chief
                           Executive Officer

      In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities
indicated on March 3, 1998.

<TABLE>
<CAPTION>

 Signatures                             Title                          Signature                           Title
 ----------                             -----                          ---------                           -----
<S>                                      <C>                            <C>                                 <C>
 /s/ Wilber M. Brucker, Jr               Director                      /s/ Steven M. Kirkpatrick            Director
 ------------------------                                              -------------------------
 Wilber M. Brucker, Jr.                                                    Steven M. Kirkpatrick

 /s/ Margaret I. Campbell                Director                      /s/ William E. Kreger                Director
- -------------------------                                              ---------------------
 Margaret I. Campbell                                                      William E. Kreger
 
 /s/ John E. Demmer                      Chairman of the Board,        /s/ Jeffrey G. Longstreth            Director
- ------------------                       Chief Executive Officer       -------------------------
 John E. Demmer                          and Director (Principal       Jeffrey G. Longstreth 
                                         Executive Officer)

 /s/ Michael V. Dorian, Jr               Director                      /s/ Richard Nordstrom                Director
- --------------------------                                             ---------------------
 Michael V. Dorian, Jr.                                                    Richard Nordstrom

 /s/ David Himick                        Director                      /s/ Michael J. Ross                  Director and 
- --------------------------                                             -------------------                  President
 David Himick                                                              Michael J. Ross
                                                          
 /s/ Jeffrey L. Karafa                   Vice President and Treasurer  /s/ Robert C. Schwyn                 Director
 --------------------------              (Principal Financial              -----------------                   
 Jeffrey L. Karafa                        and Accounting Officer)          Robert C. Schwyn

 /s/ Donald G. Karcher                   Director                        /s/ Ronnie J. Story                Director
- ----------------------                                                  --------------------
 Donald G. Karcher                                                       Ronnie J. Story

 /s/ Bradley F. Keller                   Director
- ----------------------
 Bradley F. Keller
</TABLE>

                                     II-3

<PAGE>
             CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

      We have issued our report dated January 28, 1998, accompanying the
consolidated financial statements of Dearborn Bancorp, Inc. contained in the
Registration Statement and Prospectus. We consent to the use of the
aforementioned report in the Registration Statement and Prospectus, and to
the use of our name as it appears under the caption "Experts".

Grant Thornton LLP

Detroit, Michigan
March 2, 1998




                                                               Draft: 3/3/98
                               1,000,000 SHARES

                            DEARBORN BANCORP, INC.

                                 COMMON STOCK


                            UNDERWRITING AGREEMENT


                              ___________, 1998

RONEY & CO., L.L.C.
One Griswold
Detroit, Michigan 48226

Dear Sirs:

         The undersigned, Dearborn Bancorp, Inc., a Michigan corporation (the
"Company"), hereby confirms its agreement with you as follows:

         1.    Introduction. The Company proposes to issue and sell to Roney &
Co., L.L.C. ("Roney & Co.") 1,000,000 shares of Common Stock (the "Common 
Stock"), of the Company. In addition, solely for the purpose of covering 
over-allotments, the Company proposes to grant to Roney & Co. the option to
purchase an additional 150,000 shares of Common Stock. The shares of Common
Stock to be sold by the Company subject to the over-allotment option are 
herein called the "Additional Stock." The Common Stock to be sold by the 
Company, excluding the Additional Stock, is herein called the "Firm Stock,"
and the Firm Stock and the Additional Stock are sometimes collectively 
referred to herein as the "Stock." The Stock is more fully described in the
Prospectus referred to below. 

         2.    Representations and Warranties of the Company.

         The Company represents and warrants to Roney & Co. that:

               (a) The Company has filed with the Securities and Exchange
         Commission (the "Commission") a registration statement, and an
         amendment or amendments thereto, on Form SB-2 (Registration No.
         333-______), including any related preliminary prospectus
         ("Preliminary Prospectus"), for the registration of the Stock under
         the Securities Act of 1933, as amended (the "Act"). The Company
         meets all of the requirements for registering the Stock with the
         Commission on a registration statement on Form SB-2. The Company
         expects to file on or prior to the effective date of this Agreement
         an amendment to said registration statement in the form heretofore
         delivered to you and will not, before the registration statement
         becomes effective, file any other amendment thereto to which you
         shall reasonably object in writing after being furnished with a copy
         thereof. Except as


<PAGE>


         the context may otherwise require, such registration statement, as
         amended, on file with the Commission at the time the registration
         statement becomes effective (including the prospectus, financial
         statements, schedules, exhibits, and all other documents
         incorporated by reference therein or filed as a part thereof) is
         herein called the "Registration Statement," and the prospectus, in
         the form filed with the Commission pursuant to Rule 424(b) of the
         General Rules and Regulations of the Commission under the Act (the
         "Regulations"), is herein called the "Prospectus." The term
         "Preliminary Prospectus" means each prospectus included in such
         registration statement, or amendments thereof, before it becomes
         effective under the Act and any prospectus filed by the Company with
         the consent of Roney & Co. pursuant to Rule 424(a) of the
         Regulations. Reference made herein to any Preliminary Prospectus or
         to the Prospectus shall be deemed to refer to and include any
         documents incorporated by reference therein and any document
         attached as an exhibit thereto, as of the date of such Preliminary
         Prospectus or the Prospectus, as the case may be.

               (b) Each Preliminary Prospectus, at the time of filing
         thereof, contained all material statements which were required to be
         stated therein in accordance with the Act and the Regulations, and
         conformed in all material respects with the requirements of the Act
         and the Regulations, and did not include any untrue statement of a
         material fact or omit to state any material fact required to be
         stated therein or necessary to make the statements therein, in light
         of the circumstances under which they were made, not misleading;
         provided that the documents attached thereto as an exhibit are
         subject to subparagraph (e), below. All contracts and other
         documents required to be filed as exhibits to the Registration
         Statement have been filed with the Commission as exhibits to the
         Registration Statement. The Commission has not issued any order
         suspending or preventing the use of any Preliminary Prospectus. The
         Registration Statement at the time it becomes effective and the
         Prospectus at the time it is filed or mailed for filing with the
         Commission pursuant to Rule 424(b) of the Regulations and on the
         Closing Date as defined herein, as then amended or supplemented,
         will contain all material statements which are required to be stated
         therein, respectively, in accordance with the Act and the
         Regulations and will conform to the requirements of the Act and the
         Regulations, and the Registration Statement and the Prospectus will
         not, on such dates (as then amended or supplemented), include any
         untrue statement of a material fact or omit to state any material
         fact required to be stated therein or necessary to make the
         statements therein, in light of the circumstances under which they
         were made, not misleading; provided, however, that no
         representations or warranties under this paragraph (b) are made with
         respect to statements or omissions made in reliance upon and in
         conformity with written information furnished to the Company by you
         with respect to Roney & Co. expressly for use in connection with any
         Preliminary Prospectus, the Registration Statement or Prospectus, or
         any amendment thereof or supplement thereto.

               (c) The Company and its subsidiary, Community Bank of
         Dearborn, a Michigan banking corporation (the "Subsidiary"), have
         good and marketable title in fee simple to, or valid and enforceable
         leasehold estates in, all items of real and personal

                                      2

<PAGE>


         property which are stated in the Registration Statement and
         Prospectus to be owned or leased by them, in each case free and
         clear of all liens, encumbrances, claims, security interests and
         defects, other than those which are referred to in the Registration
         Statement and the Prospectus and other than those which do not have
         a material adverse effect on the business, condition or prospects of
         the Company and the Subsidiary, taken as a whole.

               (d) There is no litigation or governmental proceeding
         pending or threatened against, or involving the assets, properties
         or business of, or the franchises, permits, grants, approvals,
         orders, or licenses of, the Company or the Subsidiary which might in
         the aggregate materially and adversely affect the value or the
         operations of any such properties, business or assets of the Company
         and the Subsidiary, taken as a whole, except as referred to in the
         Registration Statement and the Prospectus.

               (e) The documents incorporated by reference in the
         Registration Statement and the Prospectus, when they were filed with
         the Commission, conformed in all material respects to the
         requirements of the Securities Exchange Act of 1934, as amended (the
         "Exchange Act"), and the rules and regulations of the Commission
         thereunder, and none of such documents contained or, except as
         modified or superseded by the Prospectus, contains an untrue
         statement of a material fact or omitted or, except as modified or
         superseded by the Prospectus, omits or will omit to state a material
         fact therein or necessary to make the statements therein not
         misleading.

               (f) Except as otherwise disclosed in the notes thereto or
         the reports thereon, the combined consolidated financial statements
         and related schedules of the Company and its Subsidiary included in
         the Registration Statement and Prospectus fairly present the
         financial position and the consolidated results of operations of the
         Company and its Subsidiary at the respective dates and for the
         respective periods to which they apply; and such financial
         statements and related schedules have been prepared in conformity
         with generally accepted accounting principals, consistently applied
         throughout the periods involved.

               (g) Grant Thornton LLP, whose reports with respect to the
         Company and its Subsidiary are filed with the Commission as a part
         of the Registration Statement and the Prospectus, are independent
         certified public accountants as required by the Act and the 
         Regulations.

               (h) The Company has been duly organized and is validly
         existing as a corporation in good standing under the laws of the
         State of Michigan and the Subsidiary has been duly incorporated and
         is validly existing as a banking corporation in good standing under
         the laws of the State of Michigan. The Company owns, directly or
         indirectly, all of the outstanding capital stock of the Subsidiary
         and all such shares of stock so owned are validly issued and
         outstanding, fully paid and nonassessable and are owned free and
         clear of any liens, encumbrances or other restrictions. The Company
         and the Subsidiary have been duly qualified as foreign corporations
         for the transaction of business and are in good standing under the
         laws of each other jurisdiction in which they

                                      3


<PAGE>



         are required to be qualified, in light of the character or location
         of their properties (owned or leased) or the nature of their
         businesses, except for such jurisdictions where the failure to so
         qualify does or would not subject the Company or the Subsidiary to
         any material liability or disability as a result thereof. The
         Company and the Subsidiary have all requisite corporate power and
         authority, and all necessary authorizations, consents, approvals,
         orders, licenses, grants, certificates, and permits of and from all
         governmental regulatory officials and bodies, to own their
         properties and to conduct their businesses as described in the
         Prospectus, or are subject to no material liability or disability by
         reason of the failure to have any such authorization, consent,
         approval, order, license, grant, certificate or permit, and the
         Company has all such power, authority, authorizations, consents,
         approvals, orders, licenses, certificates, and permits appropriate
         or desirable to enter into this Agreement and to carry out the
         provisions and conditions hereof and the transactions contemplated
         hereby. The Company and the Subsidiary own, or possess adequate
         rights to use, all patents, trademarks, service marks, copyrights,
         trademarks, trade secrets and rights necessary for the conduct of
         their businesses as described in the Prospectus and none of them has
         received any notice and is not otherwise aware of any conflict with
         the asserted rights of others, and the Company knows no basis
         therefor. The Company has no directly or indirectly held subsidiary
         other than the Subsidiary.

               (i) There has been no material adverse change in the
         condition, prospects or business of the Company and the Subsidiary
         taken as a whole, financial or otherwise, from that on the latest
         dates as of which such condition, prospect or business is set forth
         in the Registration Statement and the Prospectus except as referred
         to therein; and the capitalization, prospects and the business of
         the Company conform to the descriptions thereof contained in the
         Registration Statement and Prospectus.

               (j) No material default exists, and no event has occurred
         which, with notice or lapse of time, or both, would constitute a
         material default or result in an acceleration in the due performance
         and observance of any material term, covenant or condition of any
         indenture, mortgage, deed of trust, note, bank loan or credit
         agreement or any other agreement, understanding or instrument to
         which the Company or the Subsidiary is a party or by which any of
         them or any of their properties may be bound or affected (which
         breach or default would have a material adverse effect on the
         Company or its Subsidiary or on the transactions contemplated
         hereby).

               (k) Neither the Company nor the Subsidiary is in violation
         of any term or provision of its articles of incorporation or bylaws,
         or in violation of any franchise, license, grant, permit, judgment,
         decree, order, statute, rule or regulation, which violation would
         have a material adverse effect on the Company or the Subsidiary or
         on the transactions contemplated hereby.

               (l) Neither the execution and delivery of this Agreement,
         the consummation of the transactions herein contemplated, nor
         compliance with the terms and provisions hereof, will conflict with,
         result in a material breach of, or constitute a default under any

                                      4


<PAGE>



         of the terms, provisions or conditions of, the articles of
         incorporation or bylaws of the Company or the articles of
         incorporation or bylaws of the Subsidiary or any material agreement
         or instrument to which any of them is a party or by which any of
         them is bound or violate any franchise, license, permit, grant,
         judgment, decree, order, statute, rule or regulation of any
         government, governmental instrumentality or court.

               (m) The Company has authorized capital stock as set forth
         in the Prospectus. No shares of preferred stock of the Company are
         issued and outstanding. All of the issued shares of Common Stock of
         the Company are duly and validly authorized, issued and outstanding,
         fully paid and nonassessable, and free of preemptive rights, and the
         Stock, when issued and delivered in accordance with this Agreement,
         will be duly and validly authorized, issued and outstanding, fully
         paid and nonassessable, and free of preemptive rights. The Company's
         Common Stock and other securities conform to all statements in
         relation thereto contained in the Registration Statement and
         Prospectus.

               (n) Subsequent to the respective dates as of which
         information is given in the Registration Statement and the
         Prospectus, and except as may otherwise be indicated or contemplated
         herein or therein, neither the Company nor the Subsidiary, has (i)
         issued any securities or incurred any liability or obligation,
         direct or contingent, for borrowed money, other than in the ordinary
         course of business, (ii) entered into any transaction not in the
         ordinary course of business, (iii) entered into any transaction with
         an affiliate of the Company required to be disclosed in the
         Registration Statement, or (iv) declared or paid any dividend on its
         shares of Common Stock.

               (o) The Company has obtained from all of its officers,
         directors and holders of 5% or more of the Company's Common Stock
         their written agreement that for a period of 150 days from the date
         of the Prospectus they will not, without your prior written consent,
         sell, contract to sell or grant any option for the sale of or
         otherwise dispose of, directly or indirectly, of any shares of
         Common Stock of the Company (or any securities convertible into or
         exercisable for such shares of Common Stock) owned by them, except
         as provided herein or in the Registration Statement, and except for
         bona fide gifts to persons who agree in writing with you to be bound
         by this clause.

               (p) No person holds a right (which has not been waived, in
         writing), to (i) require or participate in the registration under
         the Act of the Stock to be affected by the Registration Statement,
         or (ii) require any other registration statement to be filed in
         connection with any capital stock of the Company within 150 days
         from the date of the Prospectus without your prior written consent.

               (q) This Agreement has been duly and validly authorized,
         executed and delivered by the Company.


                                      5


<PAGE>



               (r) Neither the Company nor the Subsidiary is involved in
         any labor dispute which would have a material adverse effect on the
         Company or the Subsidiary or on the transactions contemplated
         hereby, and no such dispute is threatened.

               (s) The Company and the Subsidiary have filed all Federal,
         state, local and foreign tax returns which are required to be filed
         by any of them or have requested extensions thereof and have paid
         all taxes shown on such returns and all assessments received by any
         of them to the extent that the same have become due.

               (t) Except for the order of the Commission declaring the
         Registration Statement effective and permits and similar
         authorizations required under the securities or Blue Sky laws of
         certain jurisdictions, no consent, authorization, or approval is
         required from any Federal, state or local governmental agency or
         body in connection with this Agreement and the transactions
         contemplated hereby other than such consents, authorizations or
         approvals as have been obtained.

               (u) Neither the Company, its Subsidiary nor any officer,
         director or employee of the Company or its Subsidiary has made any
         payment of funds of the Company or its Subsidiary or purchased any
         property with funds of the Company or its Subsidiary in a manner
         prohibited by law, and no funds of the Company or its Subsidiary or
         property purchased with funds of the Company or its Subsidiary have
         been set aside to be used for any payment prohibited by law.

               (v) The Company has made an application to list the Stock
         on the Nasdaq SmallCap Market (the "Market") and the Company has
         reasonable assurance from the Market that such Common Stock,
         including without limitation the Stock, will be approved for listing
         thereon.

               (w) Neither the Company nor the Subsidiary nor any
         affiliate of either of them has taken, and they will not take,
         directly or indirectly, any action designed to cause or result in,
         or which has constituted or which might reasonably be expected to
         constitute, the stabilization or manipulation of the price of the
         Company's Common Stock in order to facilitate the sale or resale of
         the Stock.

               (x) Neither the Company nor the Subsidiary owns any shares
         of stock or any securities of any corporation or has any equity
         interest in any firm, partnership, association or other entity
         except as referred to in the Registration Statement and the
         Prospectus.

               (y) The Company has filed all reports, proxy statements and
         other information, and all amendments to previously filed reports,
         proxy statements and other information, required to be filed by it
         pursuant to Sections 13, 14 or 15(d) of the Exchange Act.


                                      6


<PAGE>



               (z) The Company is not and will not after the offering be
         an "investment company," or a company "controlled" by an "investment
         company" within the meaning of the Investment Company Act of 1940,
         as amended.

         3.    Purchase, Sale and Delivery of the Stock. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to Roney & Co., and
Roney & Co. agrees to purchase from the Company, the Firm Stock at the
purchase price of $_______ per share, except as set forth in the next
paragraph.

         On the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, the policies of the
National Association of Securities Dealers, Inc. (the "NASD"), and pursuant
to directions from the Company, Roney & Co. will offer to sell to each of the
persons listed on Exhibit A (who may purchase alone or with family members to
the extent permitted by the Free-Riding and Withholding Interpretation (the
"Interpretation") under the Rules of Fair Practice of the NASD) the number of
shares of Common Stock set forth opposite their respective names on Exhibit
A. To the extent such persons (alone or with such family members) offer to
buy such shares of Common Stock, Roney & Co. agrees to purchase up to
_____________ of such shares of Common Stock at a purchase of $________ per
share. The parties agree that the securities purchased and sold under this
paragraph shall constitute "issuer directed securities" sold to the issuer's
employees or directors or other persons under the Interpretation.

         Payment for the Firm Stock shall be made by [certified or official
bank check payable in Detroit Clearing House (next day) funds,] to the
Company at the offices of Honigman Miller Schwartz and Cohn, 2290 First
National Building, Detroit, Michigan 48226 or at such other place as shall be
agreed upon among us, upon delivery of the Firm Stock to you for the account
of Roney & Co. Such delivery and payments shall be made at 10:00 A.M.,
Detroit Time, on the third business day following the commencement of the
initial public offering of the Stock or at such other time as shall be agreed
upon among us. The hour and date of such delivery and payment are herein
called the "Closing Date."

         Certificates for the Firm Stock shall be registered in such name or
names and in such authorized denominations as you may request in writing at
least two full business days prior to the Closing Date. The Company will make
said certificates available to you at the place of closing (or at such other
place as shall be acceptable to you), for examination and packaging at least
one full business day prior to the Closing Date.

         In addition, on the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth,
the Company grants to Roney & Co. the options to purchase up to 150,000
shares of the Additional Stock as may be necessary to cover over-allotments,
at the same purchase prices to be paid by Roney & Co. to the Company for the
Firm Stock as set forth in the first paragraph of this Section 3. These
options may be exercised at any time (but not more than once) on or before
the thirtieth day following the effective date

                                      7


<PAGE>



of the Registration Statement by written notice by you to the Company. Such
notice shall set forth the aggregate number of shares of Additional Stock as
to which the options are being exercised, the name or names in which the
shares of Additional Stock are to be registered, the denominations in which
the Additional Stock are to be issued, and the date and time, as reasonably
determined by you, when the Additional Stock is to be delivered (such date
and time being herein sometimes referred to as the "Additional Closing
Date"); provided, however, that the Additional Closing Date shall not be
earlier than the Closing Date nor earlier than the second business day after
the date on which the option shall have been exercised nor later than the
eighth business day after the day on which the option shall have been
exercised.

         Payment for the Additional Stock shall be made by [certified or
official bank check payable in Detroit Clearing House (next day) funds] to
the Company at the offices of Honigman Miller Schwartz and Cohn, 2290 First
National Building, Detroit, Michigan 48226, or at such other place as shall
be agreed upon among us, upon delivery of the Additional Stock to you.

         Certificates for the Additional Stock shall be registered in such
name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing Date.
The Company will make said certificates available to you at the place of such
additional closing (or at such other place as shall be acceptable to you),
for examination and packaging, at least one full business day prior to the
Additional Closing Date.

         The Company shall not be obligated to sell or deliver any shares of
Firm Stock or Additional Stock except upon tender of payment by you for all
the Firm Stock or Additional Stock, as the case may be, agreed to be
purchased by you hereunder.

         4.    Offering. Roney & Co. is to make a public offering of the Stock
as soon, on or after the effective date of the Registration Statement, as you
deem it advisable so to do. The Stock is to be initially offered to the
public at the initial public offering prices set forth on the cover page of
the Prospectus (such prices being herein called the "public offering
prices"). You may from time to time increase or decrease the public offering
prices after the initial public offering to such extent as you may determine.

         5.    Covenants of the Company.

         The Company covenants that it will:

               (a) Use every reasonable effort to cause the Registration
         Statement to become effective and will notify you immediately, and
         confirm the notice in writing, (i) when the Registration Statement
         and any post-effective amendment thereto becomes effective, (ii) of
         the issuance by the Commission of any stop order or of the
         initiation, or the threatening, of any proceedings for that purpose,
         and (iii) of the receipt of any comments from the Commission. The
         Company will make every reasonable effort to prevent the issuance of
         a stop order, and, if the Commission shall enter a stop order at any
         time, the Company

                                      8


<PAGE>



         will make every reasonable effort to obtain the lifting of such
         order at the earliest possible moment.

               (b) During the time when a prospectus is required to be
         delivered under the Act, comply so far as it is able with all
         requirements imposed upon it by the Act, as now and hereafter
         amended, and by the Regulations, as from time to time in force, so
         far as necessary to permit the continuance of sales of or dealings
         in the Stock in accordance with the provisions hereof and the
         Prospectus. If at any time when a prospectus relating to the Stock
         is required to be delivered under the Act any event shall have
         occurred as a result of which, in the opinion of counsel for the
         Company or counsel for Roney & Co., the Registration Statement or
         Prospectus as then amended or supplemented includes an untrue
         statement of a material fact or omits to state any material fact
         required to be stated therein or necessary to make the statements
         therein, in the light of the circumstances under which they were
         made, not misleading, or if it is necessary at any time to amend or
         supplement the Registration Statement or Prospectus to comply with
         the Act, the Company will notify you promptly and prepare and file
         with the Commission an appropriate amendment or supplement in form
         satisfactory to you. The cost of preparing, filing and delivering
         copies of such amendment or supplement shall be paid by the Company,
         unless such untrue statement or omission is made in reliance upon
         and in conformity with the written information furnished to the
         Company by you with respect to Roney & Co. expressly for use in
         connection with the Registration Statement or Prospectus.

               (c) Deliver to Roney & Co. such number of copies of each
         Preliminary Prospectus as it may reasonably request and, as soon as
         the Registration Statement, or any amendment or supplement thereto,
         becomes effective, deliver to you one signed copy of the
         Registration Statement, including exhibits, and all post-effective
         amendments thereto and deliver to you such number of copies of the
         Prospectus, the Registration Statement and supplements and
         amendments thereto, if any, as you may reasonably request for the
         purposes contemplated by the Act.

               (d) Endeavor in good faith, in cooperation with you, at or
         prior to the time the Registration Statement becomes effective, to
         qualify the Stock for offering and sale under the securities laws
         relating to the offering or sale of the Stock in such jurisdictions
         as you may reasonably designate; provided that no such qualification
         shall be required in any jurisdiction where, as a result thereof,
         the Company would be subject to service of general process or
         taxation or be required to qualify to do business as a foreign
         corporation where it is not now so qualified. In each jurisdiction
         where such qualification shall be affected, the Company will, unless
         you agree that such action is not at the time necessary or
         advisable, file and make statements or reports at such times as may
         reasonably be required by the laws of such jurisdiction.

               (e) Make generally available to its security holders as
         soon as practicable, but not later than the first day of the
         fifteenth full calendar month following the effective date of the
         Registration Statement (as defined in Rule 158(c) of the
         Regulations), an earning

                                      9


<PAGE>



         statement of the Company (which need not be certified by independent
         certified public accountants unless required by the Act or the
         Regulations, but which shall satisfy the provisions of Section 11(a)
         of the Act including, at the Company's option, Rule 158 of the
         Regulations).

               (f) For a period of 150 days after the date of the
         Prospectus, not issue, sell, contract to sell, grant any option for
         the sale of or otherwise dispose of, directly or indirectly, any
         shares of Common Stock of the Company (or securities convertible
         into or exercisable for such Common Stock) other than the Firm Stock
         and Additional Stock (if applicable) being sold by the Company
         without the prior written consent of Roney & Co., other than options
         and Common Stock granted and/or issued to officers, directors or
         employees from time to time in the ordinary course of business
         pursuant to employment agreements and stock option or stock bonus
         plans currently in effect.

               (g) For a period of five years from the effective date of
         the Registration Statement furnish you with the following:

                   (i) as soon as practicable after they have been sent to
               shareholders of the Company or filed with the Commission,
               three copies of each annual and interim financial and other
               report or communications sent by the Company to its
               shareholders or filed with the Commission;

                   (ii) as soon as practicable, three copies of every press
               release and every material news item and article in respect of
               the Company or the affairs of the Company which was released
               by the Company; and

                   (iii) such additional documents and information with
               respect to the Company as you may from time to time reasonably
               request, including without limitation, information to comply
               with Rule 15c2-11 of the Rules and Section 4 of Schedule H of
               the NASD By-laws, to the extent legally permissible.

               (h) Apply the net proceeds from the offering received by it in
         the manner set forth under "Use of Proceeds" in the Prospectus.

               (i) Furnish to you as early as practicable prior to the
         Closing Date, but not later than two full business days prior
         thereto, a copy of the latest available unaudited interim
         consolidated financial statements of the Company and its Subsidiary
         which have been read by the Company's independent public accountants
         as stated in their letters to be furnished pursuant to Section 7(f)
         hereof.

               (j) Not file any amendment or supplement to the Registration
         Statement or Prospectus after the effective date of the Registration
         Statement to which you shall reasonably object in writing after
         being furnished a copy thereof.


                                      10


<PAGE>



               (k) Use every reasonable effort to effect the listing of the
         Common Stock, including, without limitation, the Firm Stock and the
         Additional Stock, on the Market as promptly as practicable.

               (l) Comply with all registration, filing and reporting
         requirements of the Act or the Exchange Act which may from time to
         time be applicable to the Company or its Subsidiary.

         6.    Payment of Expenses. The Company hereby agrees to pay all
expenses in connection with (i) the preparation, printing, filing and mailing
of the Registration Statement and the Prospectus and the printing and mailing
of this Agreement and related documents, including the cost of all copies
thereof and of the Preliminary Prospectus and of the Prospectus and any
amendments thereof or supplements thereto supplied to you in quantities as
hereinabove stated, (ii) the printing, engraving, issuance, transfer and
delivery of the Stock, including any transfer or other taxes payable thereon,
(iii) the qualification of the Stock under state securities or Blue Sky laws,
including the costs of printing and mailing the "Blue Sky Survey" and
disbursements and fees of counsel in connection therewith, (iv) the filing
fee payable to the NASD, and (v) the listing of the Firm Stock and the
Additional Stock on the Market. Notwithstanding anything to the contrary
contained above, upon completion of the offering, the Company shall not have
any obligation for the fees and disbursements of counsel for Roney & Co. or
for any out-of-pocket expenses incurred by Roney & Co. relating to the
Registration Statement, including but not limited to road shows, syndicate
expenses, sales literature and advertising. Roney & Co. shall promptly
reimburse the Company for any amount paid or incurred by the Company in
connection with fees and disbursements of underwriter's counsel or
out-of-pocket expenses.

         7.    Conditions of Roney & Co.'s Obligations. The obligations of 
Roney & Co. to purchase and pay for the Stock, as provided herein, shall be
subject to the continuing accuracy of the representations and warranties of
the Company as of the date hereof and as of the Closing Date, to the
performance by the Company of its obligations hereunder and to the following
conditions:

               (a) The Registration Statement shall have become effective not
         later than 5:00 P.M., Detroit Time, on the date of this Agreement or
         such later date and time as shall be consented to in writing by you,
         and, at the Closing Date, no stop order shall have been issued or
         proceedings therefor initiated or threatened by the Commission.

               (b) At the Closing Date, you shall have received the opinion
         of Dickinson Wright PLLC, counsel for the Company, dated the Closing
         Date, addressed to Roney & Co. and in form and scope reasonably
         satisfactory to counsel for Roney & Co., to the effect that:

                   (i) the Company (A) is a corporation organized and
               validly existing as a corporation in good standing under the
               laws of the State of Michigan, (B) has full corporate power
               and authority to own its properties and to conduct its
               business

                                      11


<PAGE>



               as described in the Registration Statement and Prospectus, and
               (C) has been qualified as a foreign corporation for the
               transaction of business and is in good standing under the laws
               of each other jurisdiction in which it owns or leases
               properties, or conducts any business, where such qualification
               is required, or is subject to no material liability or
               disability by reason of failure to be so qualified in any such
               jurisdiction.

                   (ii) the Subsidiary (A) is a banking corporation organized
               and validly existing as a banking corporation in good standing
               under the laws of the State of Michigan, (B) has full
               corporate power and authority to own its properties and
               conduct its business as described in the Registration
               Statement and Prospectus, (C) has been qualified as a foreign
               corporation for the transaction of business and is in good
               standing under the laws of each other jurisdiction in which it
               owns or leases properties, or conducts any business, where
               such qualification is required, or is subject to no material
               liability or disability by reason of failure to be so
               qualified in any such jurisdiction, and (D) to the best of
               such counsel's knowledge, the Company has no directly or
               indirectly held subsidiary other than the Subsidiary;

                   (iii) the Company is the registered holder of all of the
               outstanding capital stock of the Subsidiary as described in
               the Prospectus and, to the best of such counsel's knowledge,
               all such shares of stock so owned are validly issued and
               outstanding, fully paid and nonassessable and are owned free
               and clear of any liens, encumbrances or other claims or
               restrictions whatsoever;

                   (iv) the Company has authorized and outstanding capital
               stock as set forth in the Prospectus; all of the issued shares
               of Common Stock, including without limitation the Stock (upon
               receipt by the Company of full payment therefor), have been
               duly and validly authorized and issued and are fully paid and
               nonassessable and are not subject to preemptive rights; and
               the Stock and any other capital stock of the Company conform
               to the description thereof contained under the caption
               "Description of Capital Stock" in the Registration Statement
               and the Prospectus;

                   (v) the statements in the Registration Statement and the
               Prospectus, insofar as they are descriptions of corporate
               documents, stock option plans, contracts or agreements or
               descriptions of laws, regulations, or regulatory requirements,
               or refer to compliance with law or to statements of law or
               legal conclusions, are correct in all material respects;

                   (vi) the certificates evidencing the Stock are in the form
               approved by the Board of Directors of the Company and the
               certificates evidencing the Stock comply with the articles of
               incorporation and the bylaws of the Company and the laws of
               the State of Michigan;

                                      12


<PAGE>




                   (vii) the Company is conveying to Roney & Co. good and
               valid title to the Stock that is issued in its name, free and
               clear of any adverse claims, except to the extent that Roney &
               Co. has notice of any adverse claim;

                   (viii) this Agreement has been duly authorized, executed
               and delivered by the Company, and is a valid and binding
               agreement of the Company enforceable in accordance with its
               terms;

                   (ix) there are, to the best of such counsel's knowledge,
               (A) no contracts or other documents applicable to the Company
               or the Subsidiary or to which the Company or the Subsidiary is
               a party which are required to be filed as exhibits to the
               Registration Statement other than those filed as exhibits
               thereto, and (B) no legal or governmental proceedings pending
               or threatened against, or involving the assets, properties or
               business of, the Company or the Subsidiary, except as
               disclosed and properly described in the Registration Statement
               and Prospectus;

                   (x) the execution and delivery of this Agreement, the
               consummation of the transactions herein contemplated and the
               compliance with the terms and provisions hereof will not
               conflict with or result in a breach of any of the material
               terms and provisions or conditions of, or constitute a
               material default (or an event which with notice or lapse of
               time, or both, would constitute a material default or
               acceleration) under, or result in the creation or imposition
               of any lien, charge or encumbrance upon the Stock being sold
               by the Company hereunder or any property or asset of the
               Company pursuant to the terms of any agreement or instrument
               known to such counsel (having made due inquiry with respect
               thereto) to which the Company or the Subsidiary is a party or
               by which the Company or the Subsidiary may be bound or to
               which any of the properties or assets of the Company or the
               Subsidiary is subject (which conflict, breach or default would
               have a material adverse effect on the Company or the
               Subsidiary or on the transactions contemplated hereby), nor
               will such actions result in any violation of the provisions of
               the articles of incorporation or bylaws of the Company or the
               Subsidiary, or to the best of such counsel's knowledge, any
               statute or any order, rule, or regulation applicable to the
               Company or the Subsidiary of any court or of any Federal,
               state, local or other regulatory authority or other
               governmental body having jurisdiction over the Company or the
               Subsidiary;

                   (xi) no consent, approval, authorization or order of any
               court or governmental agency or body, domestic or foreign, is
               required to be obtained by the Company or the Subsidiary in
               connection with the execution and delivery of this Agreement
               or the consummation of the transactions contemplated by this
               Agreement, except the registration under the Act of the Stock
               and such consents, approvals, authorizations, registrations or
               qualifications as may be required under the Act or state
               securities or Blue Sky laws;


                                      13


<PAGE>



                   (xii) to the best of such counsel's knowledge, (A) neither
               the Company nor the Subsidiary is in breach of, or in default
               (nor has an event occurred which, with notice or lapse of time
               or both, would constitute a default or acceleration) under the
               material terms and provisions or conditions of, any indenture,
               mortgage, deed of trust, bank loan or credit agreement or any
               other material agreement or instrument to which the Company or
               the Subsidiary is a party or by which any of them or any of
               their properties or assets may be bound or affected (which
               breach or default would have a material adverse effect on the
               Company and the Subsidiary or on the transactions contemplated
               hereby); and (B) neither the Company nor the Subsidiary is in
               violation of any term or provisions of its articles of
               incorporation or bylaws, or of any franchise, license, grant,
               permit, judgment, decree, order, statute, rule or regulation,
               except as referred to in the Prospectus; and (C) neither the
               Company nor the Subsidiary has received any notice of conflict
               with the asserted rights of others in respect of patents,
               trademarks, service marks, copyrights, trade names, trade
               secrets and rights necessary for the conduct of any material
               aspect of its business;

                   (xiii) the Registration Statement and the Prospectus and
               any amendments or supplements thereto (other than the
               financial statements, and other financial and statistical data
               included therein, as to which no opinion need be rendered)
               comply as to form in all material respects with the
               requirements of the Act and the Regulations; and

                   (xiv) the Registration Statement is effective under the
               Act, and, to the best of such counsel's knowledge, no
               proceedings for a stop order are pending or threatened under
               the Act.

               In addition, such counsel shall state that, although such
         counsel is not passing upon the accuracy, completeness or fairness
         of the statements contained in the Registration Statement and
         Prospectus (except to the extent stated in paragraph (x)), no facts
         have come to the attention of such counsel that lead them to believe
         that either the Registration Statement or any amendment thereto at
         the time such Registration Statement or amendment became effective
         contained an untrue statement of a material fact or omitted to state
         a material fact required to be stated therein or necessary to make
         the statements therein not misleading or that the Prospectus, as of
         its date, or any supplement thereto, as of its date, contained an
         untrue statement of a material fact or omitted to state a material
         fact necessary in order to make the statements therein, in the light
         of the circumstances under which they were made, not misleading (it
         being understood that such counsel need express no view with respect
         to the financial statements, schedules and other financial and
         statistical data included therein).

               Such opinion shall be to such further effect with respect
         to other legal matters arising after the execution hereof relating
         to this Agreement and the sale of the Stock hereunder as counsel for
         you may reasonably request. In rendering the foregoing opinion,

                                      14


<PAGE>



         such counsel may rely as to matters not governed by Federal law or
         the laws of the State of Michigan on opinions of legal counsel
         satisfactory to such counsel and upon which, in such counsel's
         opinions, you are justified in relying, and as to matters of fact
         upon certificates of public officials and officers of the Company.
         Copies of all such opinions and certificates shall be furnished to
         your counsel on the Closing Date. Such counsel's opinions may be
         qualified to the extent that: (i) enforcement of any of the
         documents mentioned therein may be limited by Title 11 of the United
         States Code and other applicable bankruptcy, insolvency,
         reorganization or other laws affecting or limiting the rights of
         creditors (including, without limitation, laws pertaining to the
         avoidance and/or recovery of preferences or fraudulent conveyances);
         (ii) enforcement thereof may be subject to general principles of
         equity (regardless of whether such enforceability is considered to
         be in equity or at law); (iii) such counsel may express no opinion
         as to any provisions purporting to obligate any party to pay
         attorneys' fees or other costs of collection or relating to
         indemnification against liabilities arising under Federal or state
         securities laws; and (iv) the opinions of such counsel are not
         intended and shall not be construed to be an opinion on choice of
         law or conflicts of law, and such counsel may assume that the law of
         the State of Michigan and the federal law of the United States shall
         govern all matters which are the subject of this opinion.

               (c) On or prior to the Closing Date, you shall have been
         furnished such documents, certificates and opinions as you may
         require for the purpose of enabling you to review the matters
         referred to in subsection (b) of this Section 7, and in order to
         evidence the accuracy, completeness or satisfaction of any of the
         representations, warranties or conditions herein contained.

               (d) Prior to the Closing Date, (i) there shall have been no
         material adverse change in the condition or prospects or the
         business activities, financial or otherwise, of the Company and the
         Subsidiary from that as of the latest date as of which such
         condition is set forth in the Registration Statement and Prospectus;
         (ii) there shall have been no material transaction, not in the
         ordinary course of business, entered into by the Company from the
         latest date as of which the financial condition of the Company is
         set forth in the Registration Statement and Prospectus, other than
         transactions referred to or contemplated therein or to which you
         have given your written consent; (iii) neither the Company nor the
         Subsidiary shall be in default (nor shall an event have occurred
         which, with notice or lapse of time, or both, would constitute a
         default or acceleration) under any provision of any agreement,
         understanding or instrument relating to any outstanding
         indebtedness, which default could materially and adversely affect
         the business, operations, prospects or financial condition or income
         of the Company and the Subsidiary, taken as a whole; (iv) no
         material amount of the assets of the Company and the Subsidiary
         shall have been pledged or mortgaged, except as set forth in the
         Registration Statement and Prospectus; (v) no action, suit or
         proceeding, at law or in equity, shall have been pending or
         threatened against the Company or the Subsidiary or affecting any of
         their properties, assets or businesses before or by any court or
         Federal, state or other commission, board or other administrative
         agency having jurisdiction over the Company or the Subsidiary

                                      15


<PAGE>



         wherein an unfavorable decision, ruling or finding could materially
         adversely affect the business, operations, prospects or financial
         condition or income of the Company and the Subsidiary, taken as a
         whole, except as set forth in the Registration Statement and
         Prospectus; (vi) neither the Company nor the Subsidiary shall have
         been involved in any labor dispute nor, to the knowledge of the
         Company, shall any dispute be threatened which could have a material
         adverse effect on the Company and the Subsidiary, taken as a whole;
         and (vii) no stop order shall have been issued under the Act with
         respect to the Stock and no proceedings therefor shall have been
         initiated or threatened by the Commission.

               (e) At the Closing Date, you shall have received a
         certificate of the President and the principal financial and
         accounting officers of the Company, dated the Closing Date, to the
         effect that the conditions set forth in subsection (d) above have
         been satisfied and as to the accuracy, as of the Closing Date, of
         the representations and warranties of the Company set forth in
         Section 2 hereof.

               (f) At the time this Agreement is executed and at the
         Closing Date, you shall have received a letter, addressed to you and
         in form and substance satisfactory to you in all respects (including
         the non-material nature of the changes or decreases, if any,
         referred to in clause (iii) below), from Grant Thornton LLP, dated
         as of the date of this Agreement and as of the Closing Date:

                   (i) confirming that they are independent public
               accountants with respect to the Company and its subsidiary
               within the meaning of the Act and the applicable published
               Regulations and stating that the answer to Item 10 of the
               Registration Statement is correct insofar as it relates to
               them;

                   (ii) stating that, in their opinion, the consolidated 
               financial statements and schedules of the Company audited
               by them and the selected financial data to the extent 
               derived from financial statements examined by them included
               in the Registration Statement comply as to form in all material
               respects with the applicable accounting requirements of the
               Act and the related published Regulations;

                   (iii) stating that, on the basis of procedures (but not an
               examination made in accordance with generally accepted
               auditing standards) which included a reading of the latest
               available unaudited interim consolidated financial statements
               of the Company and its subsidiary (with an indication of the
               date of the latest available unaudited interim consolidated
               financial statements), a reading of the latest available
               minutes of the meetings of the shareholders and boards of
               directors of the Company and its subsidiary and committees
               of such boards and inquiries to certain officers and other
               employees of the Company and its subsidiary responsible for
               financial and accounting matters and other specified
               procedures and inquiries, nothing has come to their attention
               that would cause them to believe that (A) the unaudited
               consolidated financial statements of the

                                      16


<PAGE>



               Company and its subsidiary included in the Registration
               Statement and Prospectus (i) do not comply as to form in all
               material respects with the applicable accounting requirements
               of the Act and the related published Regulations, or (ii) were
               not fairly presented in conformity with generally accepted
               accounting principles applied on a basis substantially
               consistent with that of the audited consolidated financial
               statements included in the Registration Statement and
               Prospectus, (B) at a specified date not more than five
               business days prior to the date of such letter, there was any
               change in the capital stock long-term debt of the Company
               or decrease in shareholders' equity of the Company and its
               subsidiary as compared with the amounts shown on the
               consolidated balance sheet of the Company included in the
               Registration Statement and Prospectus, other than as set
               forth in or contemplated by the Registration Statement and
               Prospectus or, if there was any change or decrease, setting
               forth the amount of such change or decrease, and (C) during
               the period from January 1, 1998, to a specified date not more
               than the five business days prior to the date of such letter,
               there was any decrease in net interest income, net income or
               income per share of the Company, as compared with the
               corresponding period beginning January 1, 1997, other than as
               set forth in or contemplated by the Registration Statement 
               and Prospectus, or, if there was any such decrease, setting
               forth the amount of such decrease; and

                   (iv) stating that they have compared specific dollar
               amounts, numbers of shares, percentages of revenues and
               income and other financial information pertaining to the
               Company set forth in the Prospectus, which have been specified
               by you prior to the date of this Agreement, to the extent that
               such amounts, numbers, percentages and information may be
               derived from the general accounting records of the Company and
               its subsidiary, and excluding any questions requiring an
               interpretation by legal counsel, with the results obtained
               from the application of specific readings, inquiries and other
               appropriate procedures (which procedures do not constitute an
               audit in accordance with generally accepted auditing
               standards) set forth in the letter, and found them to be in
               agreement.

               (g) All proceedings taken in connection with the sale of
         the Stock as herein contemplated shall be reasonably satisfactory in
         form and substance to you and to counsel for you, and you shall have
         received from said counsel for you a favorable opinion, dated as of
         the Closing Date, with respect to such of the matters set forth
         under subsection (b) of this Section 7, and with respect to such
         other related matters arising after the date of execution hereof, as
         you may reasonably require.

               (h) There shall have been duly tendered to you certificates
         representing all the Stock agreed to be sold by the Company on the
         Closing Date.

               (i) No order suspending the sale of the Stock prior to the
         Closing Date in any jurisdiction designated by you pursuant to
         subsection (d) of Section 5 hereof shall have

                                      17


<PAGE>



         been issued on the Closing Date, and no proceedings for that purpose
         shall have been instituted or to your knowledge or that of the
         Company shall be contemplated.

               (j) the NASD, upon review of the terms of the public
         offering of the Stock, shall not as of the Closing Date have
         objections with respect to the fairness and reasonableness of the
         underwriting terms and arrangements.

         Any certificate signed by the president or chief financial officer
of the Company and delivered to you or to counsel for you shall be deemed a
representation and warranty by the Company to you as to the statements made
therein. If any condition to your obligations hereunder to be fulfilled prior
to or at the Closing Date is not so fulfilled, you may terminate this
Agreement or, if you so elect, waive any such conditions which have not been
fulfilled or extend the time for their fulfillment.

         8.    Representations of Roney & Co. Roney & Co. represents and
warrants to the Company that the information furnished to the Company in
writing by it expressly for use in the Registration Statement or the
Prospectus does not, and any amendments thereof or supplements thereto thus
furnished will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Company acknowledges that the
statements relating to the terms of the offering by Roney & Co. in the ____
paragraph on the cover of, or under the caption "Underwriting" in, any
Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of Roney & Co. for inclusion in any
Preliminary Prospectus and the Prospectus.

         9.    Indemnification.

               (a) Subject to the conditions set forth below, the Company
         agrees to indemnify and hold harmless Roney & Co., and each person,
         if any, who controls it within the meaning of Section 15 of the Act
         or Section 20(a) of the Exchange Act, against any and all loss,
         liability, claim, damage and expense whatsoever (including but not
         limited to any and all expense whatsoever reasonably incurred in
         investigating, preparing or defending against any litigation, or any
         claim whatsoever) arising out of or based upon any untrue statement
         or alleged untrue statement of a material fact contained (i) in any
         Preliminary Prospectus, the Registration Statement or the Prospectus
         (as from time to time amended and supplemented) or (ii) in any
         application or other document (in this Section 9 collectively called
         "application") executed by the Company or based upon written
         information furnished by or on behalf of the Company filed in any
         jurisdiction in order to qualify the Stock under the securities laws
         thereof or filed with the Commission, the Market or any securities
         exchange, or the omission or alleged omission therefrom of a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading; unless such statement or omission
         was made in reliance upon and in conformity with written information
         furnished to the Company with respect to Roney & Co. by or on behalf
         of it expressly for use in any Preliminary Prospectus, the
         Registration

                                      18


<PAGE>



         Statement or Prospectus, or any amendment or supplement thereof, or
         in any application or in any communication to the Commission, as the
         case may be. This indemnity agreement will be in addition to any
         liability which the Company may otherwise have.

               If any action or proceeding (including any governmental
         investigation) is brought against Roney & Co. or controlling person
         in respect of which indemnity may be sought against the Company
         pursuant to the foregoing paragraph, Roney & Co. shall promptly
         notify in writing the party or parties against whom indemnification
         is to be sought of the institution of such action and the Company
         shall assume the defense of such action, including the employment of
         counsel (satisfactory to Roney & Co. or such controlling person) and
         payment of expenses. Roney & Co. or such controlling person shall
         have the right to employ its or their own counsel in any such case,
         but the fees and expenses of such counsel shall be at the expense of
         Roney & Co. or such controlling person unless the employment of such
         counsel shall have been authorized in writing by the Company in
         connection with the defense of such action or the Company shall not
         have employed counsel to have charge of the defense of such action,
         or counsel for such indemnified party or parties shall have
         reasonably concluded that there may be defenses available to it or
         them which are different from or additional to those available to
         the Company (in which case the Company shall not have the right to
         direct the defense of such action on behalf of the indemnified party
         or parties), in any of which events such fees and expenses shall be
         borne by the Company (it being understood, however, that the Company
         shall not, in connection with any one such action or proceeding, be
         liable for the fees and expenses of more than one separate firm of
         attorneys, together with appropriate local counsel, at any time for
         all such indemnified parties, which firm shall be designated in
         writing by you). Anything in this paragraph to the contrary
         notwithstanding, the Company shall not be liable for any settlement
         of any such claim or action effected without its written consent.
         The Company agrees promptly to notify Roney & Co. of the
         commencement of any litigation or proceedings against the Company,
         any of its officers or directors in connection with the issue and
         sale of the Stock or in connection with such Preliminary Prospectus,
         Registration Statement or Prospectus, or any amendment or supplement
         thereof, or any such application.

               (b) Roney & Co. agrees to indemnify and hold harmless the
         Company, each of the directors of the Company, each of the officers
         of the Company who shall have signed the Registration Statement and
         each other person, if any, who controls the Company within the
         meaning of Section 15 of the Act or Section 20(a) of the Exchange
         Act to the same extent as the foregoing indemnity from the Company
         to Roney & Co., but only with respect to statements or omissions, or
         alleged statements or omissions, if any, made in any Preliminary
         Prospectus, Registration Statement or Prospectus, or any amendment
         or supplement thereto, or any application in reliance upon, and in
         conformity with, written information furnished to the Company by you
         by or on behalf of you expressly for use in any Preliminary
         Prospectus, the Registration Statement or Prospectus or any
         amendment or supplement thereto or in any application, as the case
         may be. In case any action shall be brought against the Company, or
         any other person so indemnified,

                                      19


<PAGE>



         based on any Preliminary Prospectus, the Registration Statement or
         Prospectus or any amendment or supplement thereto or any
         application, and in respect of which indemnity may be sought against
         Roney & Co., Roney & Co. shall have the rights and duties given to
         the Company, and the Company, and each other person so indemnified
         shall have the rights and duties given to Roney & Co., by the
         provisions of subsection (a) above. This indemnity will be in
         addition to any liability which Roney & Co. may otherwise have.

               (c) If the indemnification provided for in this Section 9 is
         unavailable to or insufficient to hold harmless an indemnified party
         under subsection (a) or (b) above in respect of any losses, claims,
         damages or liabilities (or actions in respect thereof) referred to
         therein, then each indemnifying party shall contribute to the amount
         paid or payable by such indemnified party as a result of such
         losses, claims, damages or liabilities (or actions in respect
         thereof) in such proportion as is appropriate to reflect the
         relative benefits received by the Company on the one hand and Roney
         & Co. on the other from the offering of the Stock. If, however, the
         allocation provided by the immediately preceding sentence is not
         permitted by applicable law, then each indemnifying party shall
         contribute to such amount paid or payable by such indemnified party
         in such proportion as is appropriate to reflect not only such
         relative benefits but also the relative fault of the Company on the
         one hand and Roney & Co. on the other in connection with the
         statements or omissions which resulted in such losses, claims,
         damages or liabilities (or actions in respect thereof), as well as
         any other relevant equitable considerations. The relative benefits
         received by the Company on the one hand and Roney & Co. on the other
         shall be deemed to be in the same proportion as the total net
         proceeds from the offering (before deducting expenses) received by
         the Company bear to the total underwriting discounts and commissions
         received by Roney & Co., in each case as set forth in the table on
         the cover page of the Prospectus. The relative fault shall be
         determined by reference to, among other things, whether the untrue
         or alleged untrue statement of a material fact or the omission or
         alleged omission to state a material fact relates to information
         supplied by the Company on the one hand or Roney & Co. on the other
         and the parties' relative intent, knowledge, access to information
         and opportunity to correct or prevent such statement or omission.
         The Company and Roney & Co. agree that it would not be just and
         equitable if contribution pursuant to this subsection (c) were
         determined by pro rata allocation or by any other method of
         allocation which does not take account of the equitable
         considerations referred to above in this subsection (c). The amount
         paid or payable by an indemnified party as a result of the losses,
         claims, damages or liabilities (or actions in respect thereof)
         referred to above in this subsection (c) shall be deemed to include
         any legal or other expenses reasonably incurred by such indemnified
         party in connection with investigating or defending any such action
         or claim. Notwithstanding the provisions of this subsection (c),
         Roney & Co. shall not be required to contribute any amount in excess
         of the amount by which the total price at which the Stock
         underwritten by it and distributed to the public was offered to the
         public exceeds the amount of any damages which Roney & Co. has
         otherwise been required to pay by reason of such untrue or alleged
         untrue statement or omission or alleged omission. No person guilty
         of fraudulent misrepresentation (within the meaning of Section 11(f)
         of the Act or Section

                                      20


<PAGE>



         10(b) of the Exchange Act) shall be entitled to contribution from
         any person who was not guilty of such fraudulent misrepresentations.

         10.   Representations and Agreements to Survive Delivery. Except as
the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the Closing Date, and such representations,
warranties and agreements of Roney & Co. and the Company, including the
indemnity and contribution agreements contained in Section 9 hereof, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of Roney & Co. or any controlling person, or by or on
behalf of the Company or any controlling person, and shall survive
termination of this Agreement and/or delivery of the Stock to Roney & Co. In
addition, the covenants contained in Section 5 hereof, the agreements
contained in this Section 10 and in Sections 6, 11, 13 and 14 hereof and the
indemnity and contribution agreements contained in Section 9 hereof shall
survive termination of this Agreement, whether before or after the Closing
Date.

         11.   Effective Date of This Agreement and Termination Thereof.

               (a) This Agreement shall become effective at the time of the
         initial public offering by Roney & Co. of the Stock. The time of the
         initial public offering, for the purposes of this Section 11, shall
         mean the time, after the Registration Statement becomes effective,
         of the release by you for publication of the first newspaper
         advertisement which is subsequently published relating to the Stock
         or the time, after the Registration Statement becomes effective,
         when the Stock is first released by you for offering by Roney & Co.
         or dealers by letter or facsimile, whichever shall first occur. You
         or the Company may prevent this Agreement from becoming effective
         without liability of any party to any other party, except as noted
         below, by giving the notice indicated below in Section 11(c) before
         the time this Agreement becomes effective.

               (b) You shall have the right to terminate this Agreement at
         any time prior to the Closing Date if: any domestic or international
         event or act or occurrence has materially disrupted, or in your
         opinion will in the immediate future materially disrupt, securities
         markets; or if trading on the New York Stock Exchange shall have
         been suspended, or minimum or maximum prices for trading shall have
         been fixed, or maximum ranges for prices for securities shall have
         been required, on the New York Stock Exchange by the New York Stock
         Exchange or by order of the Commission or any other governmental
         authority having jurisdiction; or if the United States shall have
         become involved in a war or major hostilities; or if a banking
         moratorium has been declared by a state or federal authority; or if
         a moratorium in foreign exchange trading by major international
         banks or persons has been declared; or if the Company shall have
         sustained a material or substantial loss by fire, flood, accident,
         hurricane, earthquake, theft, sabotage or other calamity or
         malicious act which, whether or not said loss shall have been
         insured, will in your opinion, make it inadvisable to proceed with
         the delivery of the Stock; or if there shall have been such material
         change in the condition, business operations or

                                      21


<PAGE>



         prospects of the Company or the market for its and similar
         securities as in your judgment would make it inadvisable to proceed
         with the offering, sale and delivery of the Stock; or if the Company
         shall have failed to comply with any of the provisions of this
         Agreement on its part to be performed on or before the Closing Date;
         or if any of the material conditions, agreements, representations or
         warranties in this Agreement shall not have been fulfilled within
         the respective times herein provided.

               (c) If you elect to prevent this Agreement from becoming
         effective or to terminate this Agreement as provided in this Section
         11, the Company shall be notified promptly by you by telephone or
         facsimile, confirmed by letter. If the Company elects to prevent
         this Agreement from becoming effective, you shall be notified
         promptly by the Company by telephone or facsimile, confirmed by
         letter.

               (d) If this Agreement is terminated pursuant to any of its
         provisions, except as otherwise provided in this Agreement, the
         Company shall not be under any liability to Roney & Co. (other than
         for obligations assumed in Section 5 hereof), and Roney & Co. shall
         not be under any liability to the Company; provided, however, that
         if this Agreement is terminated by Roney & Co. because of any
         failure, refusal or inability on the part of the Company to comply
         with the terms or to fulfill any of the conditions of this
         Agreement, or for any reason provided in subparagraph (b) above, the
         Company will reimburse Roney & Co. for all accountable out-of-pocket
         expenses (including, without limitation, road show expenses and fees
         and disbursements of counsel to Roney & Co.) up to a maximum of
         $40,000 (including the $10,000 advance below) incurred by it in
         connection with the proposed purchase and sale of the Stock or in
         contemplation the performing its obligations hereunder. Roney & Co.
         acknowledges receipt of a $10,000 advance from the Company. If this
         Agreement is terminated for any reason, Roney & Co. shall be
         entitled to retain such advance as reimbursement for its accountable
         out-of-pocket expenses; provided, however, in the event that the
         accountable out-of-pocket expenses to be reimbursed under this
         paragraph are less than $10,000, Roney & Co. shall pay the
         difference to the Company. If this Agreement is not terminated, the
         $10,000 shall be credited at closing against the underwriting
         discount.

         Notwithstanding any election hereunder or any termination of this
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Section 9 shall not be in any way affected by such election or
termination or failure to carry out the terms of this Agreement or any part
hereof.

         12.  Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be in writing and, if sent to you,
shall be mailed, delivered or telegraphed and confirmed to Roney & Co.,
L.L.C., One Griswold, Detroit, Michigan 48226 Attention: John C. Donnelly;
with a copy to Donald J. Kunz, Esq., Honigman Miller Schwartz and Cohn, 2290
First National Building, Detroit, Michigan 48226; if sent to the Company
shall be mailed, delivered or telegraphed and confirmed to Dearborn Bancorp,
Inc., 22290 Michigan Avenue, Dearborn,

                                      22

<PAGE>


Michigan 48123, Attention: President, with a copy to Verne C. Hampton II,
Esq., Dickinson Wright PLLC, 500 Woodward Avenue, Suite 4000, Detroit,
Michigan 48226-3425.

         13.  Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, you, the Company, and the controlling persons,
directors and officers referred to in Section 9 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained.

         14.  Construction. The laws of the State of Michigan shall govern
this Agreement, its construction, and the determination of any rights, duties
or remedies of the parties arising out of or relating to this Agreement. The
parties acknowledge that the United States District Court for the Eastern
District of Michigan or the Michigan Circuit Court for the County of Wayne
shall have exclusive jurisdiction over any case or controversy arising out of
or relating to this Agreement and that all litigation arising out of or
relating to this Agreement shall be commenced in the United States District
Court for the Eastern District of Michigan or in the Wayne County (Michigan)
Circuit Court.

         If the foregoing correctly sets forth the understanding among you
and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among us.

                                                  Very truly yours,

                                                  DEARBORN BANCORP, INC.


                                                  By: _______________________

                                                      Its: __________________

Accepted as of the date first above written.

RONEY & CO., L.L.C.


By: _____________________________
      John C. Donnelly,
      Director, Corporate Finance



                                      23









                   [ Letterhead of Dickinson Wright PLLC ]

March 3, 1998                                                    Exhibit 5

Securities and Exchange Commission
Judiciary Plaza
450 5th Street, N.W.
Washington, D.C. 20549

          Re:  Dearborn Bancorp, Inc. 

Gentlemen:

     We are acting as counsel to Dearborn Bancorp, Inc., a Michigan
corporation (the "Company") in connection with the proposed issuance and sale
by the Company of shares of its common stock ("Common Stock"). The Common
Stock is described in a registration statement on Form SB-2 (the
"Registration Statement") filed by the Company with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act").

     Based upon our examination of such corporate records and other documents
and certificates as we deemed it necessary to examine, it is our opinion 
that:

     1.   The Company is a corporation validly existing under the laws of the
          State of Michigan; and

     2.   The Common Stock, when issued and sold by the Company, will be
          legally issued, fully paid and non-assessable.

     We hereby consent to the use of this opinion as Exhibit 5 to the
Registration Statement and to the use of our firm name under the caption
"Legal Matters" in the related Prospectus. In giving such consent, we do not
concede that we are experts within the meaning of the Act or the rules or
regulations thereunder or that this consent is required by Section 7 of the
Act.



                                   Very truly yours,


                                   Dickinson Wright PLLC



<TABLE> <S> <C>

<ARTICLE>     9
<LEGEND>
   THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
   EXTRACTED FROM DEARBORN BANCORP, INC. AND SUBSIDIARY
   CONSOLIDATED BALANCE SHEETS AT SEPTEMBER 30, 1997 AND THE
   CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE
   MONTHS ENDED SEPTEMBER 30, 1997, AND IS QUALIFIED IN ITS 
   ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
       
<S>                                             <C>
<MULTIPLIER>                                          1,000
<PERIOD-TYPE>                                         9-MOS
<PERIOD-START>                                  JAN-01-1997
<FISCAL-YEAR-END>                               DEC-31-1997
<PERIOD-END>                                    SEP-30-1997
<CASH>                                           $    1,412
<INT-BEARING-DEPOSITS>                                    0
<FED-FUNDS-SOLD>                                      4,150
<TRADING-ASSETS>                                          0
<INVESTMENTS-HELD-FOR-SALE>                          23,942
<INVESTMENTS-CARRYING>                                    0
<INVESTMENTS-MARKET>                                      0
<LOANS>                                              47,106
<ALLOWANCE>                                             475
<TOTAL-ASSETS>                                       79,271
<DEPOSITS>                                           69,735
<SHORT-TERM>                                              0
<LIABILITIES-OTHER>                                     429
<LONG-TERM>                                             541
                                     0
                                               0
<COMMON>                                              9,272
<OTHER-SE>                                             (706)
<TOTAL-LIABILITIES-AND-EQUITY>                       79,271
<INTEREST-LOAN>                                       2,859
<INTEREST-INVEST>                                       844
<INTEREST-OTHER>                                        116
<INTEREST-TOTAL>                                      3,819
<INTEREST-DEPOSIT>                                    2,037
<INTEREST-EXPENSE>                                    2,069
<INTEREST-INCOME-NET>                                 1,750
<LOAN-LOSSES>                                           112
<SECURITIES-GAINS>                                        0
<EXPENSE-OTHER>                                       1,552
<INCOME-PRETAX>                                         315
<INCOME-PRE-EXTRAORDINARY>                              315
<EXTRAORDINARY>                                           0
<CHANGES>                                                 0
<NET-INCOME>                                            415
<EPS-PRIMARY>                                          0.44
<EPS-DILUTED>                                          0.44
<YIELD-ACTUAL>                                         3.49
<LOANS-NON>                                               9
<LOANS-PAST>                                              0
<LOANS-TROUBLED>                                          0
<LOANS-PROBLEM>                                           0
<ALLOWANCE-OPEN>                                        366
<CHARGE-OFFS>                                             0
<RECOVERIES>                                              0
<ALLOWANCE-CLOSE>                                       475
<ALLOWANCE-DOMESTIC>                                    475
<ALLOWANCE-FOREIGN>                                       0
<ALLOWANCE-UNALLOCATED>                                   0

</TABLE>


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