Though credit costs are subsiding at Dearborn Bancorp Inc. in Michigan, its bank has been undercapitalized for six straight quarters.

The $915 million-asset company said late Friday that it narrowed its fourth-quarter loss by 58% from a year earlier, to $2.4 million. It attributed the improvement to a 71% reduction of its loan-loss provision, to $3.5 million.

For 2010, Dearborn posted a loss of $14.3 million, down 77%.

Dearborn remains in a troubled condition. At Dec. 31 its bank's total risk-based capital was 6.16% and its leverage ratio was 3.94%. A February 2010 consent order called for the bank to have a leverage ratio of 9% and a total risk-based capital ratio of 12%.

Dearborn maintained steady credit quality in 2010, ending the year with nonperforming assets of $136.6 million, up 3% from a year earlier, or 14.9% of total assets. Nonperforming assets peaked at $138.5 million in the first quarter of 2010.

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