Dearborn Banc Corp fka DEAR

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Dearborn Bancorp Inc. Reports Operating Results (10-Q)

May. 13, 2011 | Filed Under: DEAR

Dearborn Bancorp Inc. (DEAR) filed Quarterly Report for the period ended 2011-03-31.

Dearborn Bancorp Inc. has a market cap of $10.2 million; its shares were traded at around $1.3301 with and P/S ratio of 0.2.

Highlight of Business Operations:
The Corporation reported provision for loan losses of $1,395,000 for the three month period ended March 31, 2011, compared to $100,000 for the same period in 2010, an increase of $1,295,000. The provision for loan losses were primarily due to net charge-offs during the three month ended March 31, 2011. Net charge-offs during the first quarter of 2011 amounted to $1,395,000. The charge-offs recorded during the first quarter of 2011 had allocations of $396,000 in the allowance for loan loss as of December 31, 2010. The difference between the charge-offs recorded during the three months ended March 31, 2011 and the allocation in the allowance for loan losses at December 31, 2010 was primarily due to full charge-offs taken on loans which are not specifically analyzed because the outstanding balance of those loans were less than $500,000. These loans were assigned an allocation based on historical charge-offs. The Corporation’s policy is to specifically analyze all impaired loans with a balance over $500,000. The Corporation also reported write-downs on real estate of $326,000 for the three months ended March 31, 2011 compared to $656,000 for the same period in 2010, a decrease of $330,000 or 50%.


2011 Compared to 2010. As noted on the chart on the following page, net interest income for the three month period ended March 31, 2011 was $8,569,000, compared to $8,055,000 for the same period in 2010, an increase of $514,000 or 6% for the period. This increase was caused primarily by the decline in the cost of liabilities. Similarly, the increase in the Corporation’s net interest spread and net interest margin was primarily due to the decline in the cost on interest bearing liabilities. The Corporation’s interest rate margin was 3.96% for the three month period ended March 31, 2011 compared to 3.47% for the same period in 2010. The Corporation’s interest rate spread was 3.84% for the three month period ended March 31, 2011 compared to 3.27% for the same period in 2010.


2011 Compared to 2010. The provision for loan losses was $1,395,000 for the three month period ended March 31, 2011, compared to $100,000 for the same period in 2010, an increase of $1,295,000 or 1295% for the period. The provision for loan losses were primarily due to net charge-offs during the period, which amounted to $1,395,000 for the period and was substantiated by management’s internal analysis of the adequacy of the allowance for loan losses.


Non-accrual loans were $71,953,000 at March 31, 2011 compared to $66,563,000 at December 31, 2010, an increase of $5,390,000 during the three months ended March 31, 2011. This increase was due to the migration of primarily previously identified classified loans. These loans have been identified as impaired loans and have been charged down to the value of the collateral or an appropriate reserve has been identified in the allowance for loan loss. Of this increase, all but approximately $1,183,000 were identified at December 31, 2010 as classified loans with reserves for losses established accordingly.


2011 Compared to 2010. Non-interest income was $75,000 for the three month period ended March 31, 2011 compared to a non-interest loss of ($59,000) for the same period in 2010. The increase in non-interest income was primarily due to the decline in the amount of write-downs on other real estate during 2011. During the three months ended March 31, 2011, the Corporation recorded write-downs on real estate in the amount of $326,000 compared to $656,000 during the same period in 2010.


When transactions related to other real estate and securities are excluded, non-interest income for the three month period ended March 31, 2011 amounted to $477,000 compared to $539,000 during the same period in 2010, a decrease of $62,000 or 11% for the period. This decrease is primarily caused by the decrease in the service charges on deposit accounts and the gain on the sale of loans during the period i


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