<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 10549


                                  FORM 10-KSB

(Mark One)
{X} Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 (fee required) for the fiscal year ended December 31, 1996 or

{ } Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (no fee required) for the transition period from _______ to ________


                         Commission File Number 0-19181

                          HURON NATIONAL BANCORP, INC.
             (Exact name of registrant as specified in its charter)

                                    MICHIGAN
         (State or other jurisdiction of incorporation or organization)

                                   38-2855012
                       (IRS Employer Identification No.)

              200 East Erie Street, Rogers City, Michigan 49779
          (Address of principal executive offices including zip code)

                                 (517) 734-4734
              (Registrant's telephone number, including area code)

              Securities registered pursuant to 12(b) of the Act:

     Title of each class               Name of each exchange on which registered
             NONE                                         NONE
          Securities Registered Pursuant to Section 12(g) of the Act:
                    Common Stock, par value $10.00 per share
                                (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12 months  (or for such  shorter  period if the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes {X} No { }

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. Yes {X} No { }

The aggregate market value of the voting stock held by ""non-affiliates"" of the
Registrant  (for this purpose only, the  affiliates of the Registrant  have been
assumed to be the executive  officers and directors of the  Registrant and their
associates) as of March 14, 1997, was approximately $1,358,400,  based on market
price of $30.00 per share.

As of March 14, 1997, there were  outstanding  62,500 shares of the registrant's
common stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions  of  the  Registrant's  Proxy  Statement  for  its  Annual  Meeting  of
Shareholders to be held April 30, 1997, are  incorporated by reference into Part
III of this Form 10-KSB Report.



<PAGE>


                                     PART-I

ITEM 1 - BUSINESS

GENERAL

The Registrant,  Huron National Bancorp,  Inc.  (hereinafter  referred to as the
"Registrant"),  is a one-bank holding company  registered under the Bank Holding
Company Act of 1956, as amended.  The  Registrant  was formed for the purpose of
enabling Huron National Bank  (hereinafter  referred to as the "Bank") to form a
one-bank  holding  company.  The Bank became a  wholly-owned  subsidiary  of the
Registrant on May 8, 1990. The  Registrant's  only  subsidiary  and  significant
asset as of December 31, 1996 is the Bank.  The  Registrant  and its  subsidiary
operate in the Banking  industry,  which accounts for substantially all of their
assets, revenues and operating income.

The  Bank  was  organized  in 1980  under  the laws of the  United  States.  Its
deposits,  to the extent  allowed by law,  are  insured by the  Federal  Deposit
Insurance  Corporation.  The  Bank's  main  office is  located at 200 East Erie,
Rogers City, Michigan.

Further  discussion  of the  Registrant's  business is presented in the Business
section on page 9 in the 1996 Annual Report to Shareholders, incorporated herein
by reference.

REGULATION

The  Registrant  is  subject to  supervision  by the Board of  Governors  of the
Federal Reserve System. The Board of Governors must grant prior approval for the
acquisition by a banking  holding company of more than 5% of the voting stock or
substantially  all the assets of any bank or bank  holding  company or  non-bank
company.

In approving  proposed  acquisitions by the  Registrant,  the Board of Governors
considers a number of factors including  expected benefits to the public such as
greater  convenience,  increased  competition  or gains in  efficiency,  weighed
against the risk of possible  adverse  effects  such as undue  concentration  of
resources,  decreased or unfair competition,  conflicts of interest,  or unsound
banking  practices.  The Board of Governors  is empowered to give these  factors
different  weight in the case of  activities  commenced  de novo than it does in
considering the acquisition of a going concern.

The Bank is subject to regulation,  supervision  and regular  examination by the
Officer of the  Comptroller  of the  Currency.  The  regulations  of this agency
affect most aspects of the Bank's business and prescribed  permissible  types of
loans and investments, requirements for branch offices, the permissible scope of
the Bank's activities and impose various other requirements.

A holding  company,  and any of its subsidiary  banks, are also prohibited from
engaging in certain tie-in  arrangements  in connection  with the extension of
credit or  supplying of property or services.  For example,  the Bank  generally
may not extend credit on the condition that the customer obtain some additional
service from the Bank or the  Registrant or refrain from  obtaining such service
from a competitor.

The Bank is subject to certain  restrictions  imposed by the Federal Reserve Act
on "covered  transactions"  with the  Registrant or a  subsidiary.  The "covered
transactions"  that an insured bank and its subsidiaries are permitted to engage
in with their nonbank  affiliates are limited to the following  amounts:  (i) in
the  case  of  any  one  such  affiliate,   the  aggregate  amount  of  "covered
transactions" of the insured bank and its subsidiaries  cannot exceed 10% of the
capital  stock and  surplus  of the  insured  bank;  and (ii) in the case of all
affiliates,  the aggregate  amount of all "covered  transactions" of the insured
bank and its subsidiaries  cannot exceed 20% of the capital stock and surplus of
the insured  bank.  "Covered  transactions"  are defined by statute to include a
loan or extension of credit to the affiliate, a purchase of securities issued by
an affiliate, a purchase of assets from the affiliate (unless otherwise exempted
by the Federal Reserve), the acceptance of securities issued by the affiliate as
collateral for a loan, and the issuance of a guaranty,  acceptance, or letter of
credit  for the  benefit  of an  affiliate.  Covered  transactions  must also be
collateralized.  The  Federal  Reserve Act further  requires  that (i)  "covered
transactions" with affiliates; (ii) asset sales to affiliates; (iii) contractual
arrangements with affiliates; (iv) transactions in which an affiliate acts as an
agent or broker;  and (v) any  transaction in which an affiliate has a financial
interest  or  is  a   participant,   must  be  made:  (x)  on  terms  and  under
circumstances,  including credit  standards,  that are substantially the same as
those prevailing at the time for comparable transactions with or involving other
nonaffiliated  companies; or (y) in the absence of comparable  transactions,  on
terms and under  circumstances,  including credit standards,  that in good faith
would be  offered  to,  or would  apply  to,  nonaffiliated  companies.  Certain
limitations and reporting  requirements  are also placed on extensions of credit
by the Bank to its  directors  and  officers,  to directors  and officers of the
Registrant,  to  principal  shareholders  of the  Registrant,  and  to  "related
interests" of such directors,  officers and principal shareholders. In addition,
such  legislation  and  regulations  may  affect the terms upon which any person
becoming a director  or officer  of the  Registrant  or the Bank or a  principal
shareholder  of the  Registrant may obtain credit from banks with which the Bank
maintains a correspondent relationship.

On July 10,  1995,  the FDIC,  the  Office of Thrift  Supervision,  the  Federal
Reserve  and the  Office of the  Comptroller  of the  Currency  published  final
guidelines  implementing the Federal Deposit Insurance  Corporation  Improvement
Act (FDICIA) requirement that the federal banking agencies establish operational
and  managerial  standards  to promote  the safety and  soundness  of  federally
insured depository institutions.  The guidelines, which took effect on August 9,
1995, establish standards for internal controls,  information systems,  internal
audit systems, loan documentation,  credit underwriting, interest rate exposure,
asset growth, and compensation,  fees and benefits.  In general,  the guidelines
prescribe  the  goals to be  achieved  in each  area,  and each  institution  is
responsible  for  establishing  its own procedures to achieve those goals. If an
institution  fails  to  comply  with  any  of the  standards  set  forth  in the
guidelines,   the  institution's  primary  federal  regulator  may  require  the
institution  to submit a plan for  achieving  and  maintaining  compliance.  The
preamble  to the  guidelines  states that  the  agencies  expect  to  require  a
compliance  plan from an  institution  whose  failure to meet one or more of the
standards  is of such  severity  that it  could  threaten  the  safe  and  sound
operation of the institution.  Failure to submit an acceptable  compliance plan,
or  failure  to  adhere  to a  compliance  plan  that has been  accepted  by the
appropriate regulator,  would constitute grounds for further enforcement action.
The federal  banking  agencies have also  published for comment  proposed  asset
quality and earnings  standards which, if adopted,  would be added to the safety
and soundness guidelines.  This proposal, like the final guidelines,  would make
each depository  institution  responsible for establishing its own procedures to
meet such goals.

The Registrant and the Bank are currently in compliance with the minimum capital
requirements  applicable  to such  institutions.  Prompted by the  enactment  of
FDICIA,  the FDIC has  established  a system  of  risk-based  deposit  insurance
premiums.  Based on the Bank's prevailing capital ratios, the Bank is paying the
minimum rate of FDIC insurance for the  assessment  period that began January 1,
1996.


                                                                              1
<PAGE>
PART-I    ITEM 1 - BUSINESS (continued)

LENDING ACTIVITIES

The Bank is actively  engaged in originating  within the Bank's market area real
estate mortgage loans,  commercial loans and installment  loans. The Bank's loan
portfolio  totaled  $19,186,184 at December 31, 1996. This represents  63.34% of
its total assets.  At that date, 54.25% consisted of real estate mortgage loans,
33.23% consisted of installment loans" and 12.52% consisted of commercial loans.

Residential  Mortgage  Loans:  The Bank offers  residential  mortgage loans with
fixed rates of interest and loans with provision for periodic adjustments to the
interest rate with three-year balloon  provisions.  The Bank policy is to invest
in residential  mortgage loans in an original principal amount not to exceed 80%
of  the  market  value  of  the  mortgaged  real  estate  (referred  to  as  the
"loan-to-value ratio").

In the appraisal process, the Bank assesses both the borrower's ability to repay
the loan and the adequacy of the proposed security. In connection therewith, the
Bank obtains an appraisal of the secured property and information concerning the
income, financial condition, employment and credit history of the applicant. The
Bank  requires  title  insurance  insuring the priority of its lien and fire and
extended coverage  casualty  insurance in order to protect the property securing
its real estate loans.

Commercial  Mortgage  Loans:  The Bank makes mortgage  loans on commercial  real
estate  properties  such  as  office  buildings,   vacant  land  and  industrial
buildings, most of which are located in Presque Isle County.

In its underwriting of commercial  property real estate loans, the Bank may lend
up to 80% of the  securing  property's  appraised  value,  although  the  Bank's
loan-to-value  ratio on income producing property real estate loans is generally
75% or less.

Commercial real estate lending is generally  considered to involve a higher risk
than single family residential lending due to the financial  sensitivity of real
estate projects and developers to general  economic  conditions.  In originating
such real estate loans, the Bank endeavors to reduce the risk by considering the
credit of the borrower,  the location of the real estate, and the quality of the
management, construction and administration of the property.

Installment Loans: The Bank makes various types of installment loans,  including
automobile loans, marine loans,  recreational  vehicle loans, home equity loans,
loans to depositors secured by their deposit accounts, and secured and unsecured
personal loans.  The maturity of installment  loans varies depending on the type
of loan. Home equity, marine and recreational vehicle maturities can be up to 15
years.  Most other types of installment loans have maturities of less than eight
years. The interest rate on the majority of installment loans is fixed.

Commercial  Loans:  The Bank  makes  commercial  loans  (other  than  commercial
mortgage  loans) to  manufacturers,  retailers,  and farmers for the purchase of
equipment,  for working capital and for renovations.  Commercial loans generally
have a higher degree of risk than do mortgage  loans.  While  mortgage loans are
secured  by real  estate  property  the  value  of  which  tends  to be  readily
ascertainable,  commercial  loans  typically  are  made  on  the  basis  of  the
borrower's  ability to make repayment from the cash flow of the business and are
either  unsecured or secured by business  assets,  such as accounts  receivable,
equipment  and  inventory.  As a  result,  the  availability  of  funds  for the
repayment of commercial loans may be substantially dependent upon the success of
the business itself.

COMPETITION

The Bank's primary  market area consists of Presque Isle County,  Michigan where
its sole office is located.  The Bank encounters strong  competition both in the
attraction  of  deposits  and the making of real estate and other  loans.  Huron
National Bank is the smaller of two banks located in Rogers City.  The other was
purchased by a Bank Holding Company and converted into a branch office. The Bank
also competes for loans and deposits with a savings and loan institution and two
credit  unions.  In addition,  a total of three other Banks operate  branches in
Presque  Isle  County,  and money  market funds also compete for deposits in the
Bank's service area. The principal  methods used by the Bank to attract  deposit
accounts include the variety of services offered,  the interest rate offered and
the convenience of office location.  The Bank's  competition for real estate and
other loans comes from these same financial institutions.  The Bank competes for
loans through  interest  rates,  loan  maturities,  loan fees and the quality of
service extended to borrowers.

                                                                              2
<PAGE>
PART-I    ITEM 1 - BUSINESS (continued)

COMPETITION (continued)

In addition to the  financial  institutions  which have  offices in Presque Isle
County,  the Bank competes with several  commercial  banks and savings and loans
institutions in surrounding counties, many of which are larger than the Bank.

Further  discussion  of the  Registrant's  business is presented in the Business
section on page 9 in the 1996 Annual Report to Shareholders  incorporated herein
by reference.

I.      STATISTICAL DISCLOSURE

         (A)   Distribution of Assets, Liabilities and Shareholders' Equity;

         (B)   Interest Rates and Interest Differential

A  table  and  discussion  of  the  Distribution  of  Assets,   Liabilities  and
Shareholders'  Equity  and  Interest  Rates  and  Interest  Differential  is  in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  on" pages 3 through 5 under Analysis of Net Interest  Income in the
1996 Annual Report to Shareholders.  Such information is incorporated  herein by
reference.


II.    INVESTMENT PORTFOLIO

         (A)   A table of book values of the investment portfolio as of December
               31,  1996 and  1995 is set  forth in Note 3 on pages 18 and 19 of
               the 1996  Annual  Report to  Shareholders.  Such  information  is
               incorporated herein by reference.

         (B)   The following  table shows the relative  maturities  and weighted
               yields of investments in debt securities at December 31, 1996:
<TABLE>
                                 1 Year or Less         1 Year - 5 Years           After 5 Years
                              Amount         Yield     Amount         Yield     Amount         Yield
<S>                           <C>            <C>       <C>            <C>       <C>            <C>
U.S. Treasury securities
 and obligations of U.S.
 Government, Corporations
 and Agencies                 $ 1,503,787    6.41%     $ 1,579,122    5.86%     $ 506,736      4.63%
Obligations of states and
 political subdivisions(1)         90,382    4.29%       1,703,730    4.63%       437,680      5.09%
Corporate securities              483,449    7.23%         838,433    5.94%
                              ___________    _____     ___________    _____     _________      _____
       Totals                 $ 2,077,618    6.51%     $ 4,121,285    5.44%     $ 944,416      4.84%
                              ===========    =====     ===========    =====     =========      =====
</TABLE>
     (1) Weighted  average yield adjusted to a taxable  equivalent basis using a
federal income tax rate of 34%.

III.  LOAN PORTFOLIO

         (A)   A table and  discussion of the loan  portfolio as of December 31,
               1996 and  1995 is in  Management's  Discussion  and  Analysis  of
               Financial  Condition  and Results of  Operations  on page 8 under
               Loans and Loan  Review  Process  and in Notes 1 and 4 on pages 17
               and 19, respectively,  in the 1996 Annual Report to Shareholders,
               incorporated herein by reference.

         (B)   The  following  table  sets  forth  the  remaining   maturity  of
               commercial  loans at December  31, 1996  according  to  scheduled
               repayments of principal.

<TABLE>
                               1 Year or Less     1 - 3 Years    After 3 Years       Total
<S>                            <C>                <C>            <C>                 <C>
Commercial loans(1)            $1,983,254         $ 345,044      $ 74,084            $2,402,382
</TABLE>

     (1) These loans are disclosed at their  contractual  maturity,  however,  a
significant  number of loans are rolled over at maturity.  These rollovers occur
because  contractual  maturity is short-term and provides management the ability
to frequently review the customers' credit worthiness.
                                                                             3
<PAGE>
PART-I    ITEM 1 - BUSINESS (continued)

III.  LOAN PORTFOLIO (continued)

     The  following  table  sets  forth  commercial  loans due after one year at
     December 31, 1996. All of the loans were issued at fixed interest rates.
<TABLE>
<S>                                          <C>
Due after one but within three years         $345,044 
Due after three years                          74,084 
                                             --------
Total                                        $419,128 
                                             ========
</TABLE>
         (C)   (1) Nonaccrual, Past Due and Restructured Loans

     The following table sets forth non-performing loans at December 31:
<TABLE>
                                                         1996           1995
<S>                                                     <C>            <C>
Loans accounted for on a nonaccrual basis               $36,952        $3,424 
Aggregate amount of loans ninety days 
 or more past due (excludes loans on
 nonaccrual status above)
Troubled debt restructuring where terms
 have been renegotiated to provide a
 reduction or deferral of interest
 or principal because of a deterioration
 in the financial position of the borrower
 (excludes nonaccrual and loans
 past due ninety days or more above)                                   9,531 
Total non-performing loans                              $36,952      $12,955 
</TABLE>

     The  accrual  of  interest  is  discontinued  at the point in time at which
     serious  doubt  exists  as to  the  collectibility  of  loan  principal  or
     interest.  Each loan is evaluated on its own merits;  therefore,  loans are
     not   automatically   classified  as  nonaccrual  based  upon  standardized
     criteria.

               (2)  There are no  material  loans  that are  current as to which
                    management  has  serious  doubts  as to the  ability  of the
                    borrower to comply with the loan repayment  terms,  or which
                    are expected to need  adjustments in their repayment  terms,
                    or which are believed to require  additional  provisions for
                    loan losses.

               (3)  There were no foreign loans  outstanding  as of December 31,
                    1996 and 1995.

               (4)  There are no  concentrations of loans exceeding 10% of total
                    loans  which are not  already  disclosed  as a  category  at
                    December 31, 1996.

         (D)   As of December  31,  1996,  there were no other  interest-bearing
               assets  that would be required  to be  disclosed  under Item III,
               Parts  (C)(1)  or (C)(2) of the Loan  Portfolio  listing  if such
               assets were loans.

IV.  SUMMARY OF LOAN LOSS EXPERIENCE

          (A)  The  following  table  sets forth  balances  and  summarizes  the
               changes in the  allowance  for loan  losses for each of the years
               ended December 31:
<TABLE>
                                               1996                1995
<S>                                          <C>                 <C>
Balance of allowance for loan losses
 at the beginning of year:                   $144,100            $147,729 
Charge-offs: Commercial loans                       0              16,472 
Real estate loans                                   0               8,935 
Installment loans                               6,526              14,643 
Total charge-offs                               6,526              40,050 

Recoveries: Commercial loans                        0                   0
Real estate loans                                   0               1,213 
Installment loans                               1,381               1,708 
Total recoveries                                1,381               2,921 
</TABLE>
                                                                              4
<PAGE>
PART-I    ITEM 1 - BUSINESS (continued)

IV.  SUMMARY OF LOAN LOSS EXPERIENCE (continued)
<TABLE>
                                               1996             1995
<S>                                          <C>             <C>
Net loans charged-off                             5,145          37,129 
Additions to allowance charged
 to operating expense                            36,000          33,500 
                                             ----------      ----------
Balance at end of year                        $ 174,955       $ 144,100
                                             ==========      ========== 
Average gross loans outstanding              18,386,000      17,442,000 
Percent of net charge-offs during
 the period to average
 gross loans outstanding                          0.03%           0.21%
</TABLE>

     Further  discussion  of the provision and allowance for loan losses as well
     as  non-performing  loans is  presented  in  "Management's  Discussion  and
     Analysis of Financial  Condition and Results of Operations" on page 8 under
     Loans and Loan  Review  Process and in Notes 1, 4 and 5 on pages 16, 19 and
     20 in the 1996  Annual  Report  to  Shareholders,  incorporated  herein  by
     reference.


          (B)  The following  table  presents an allocation of the allowance for
               loan losses to the various  loan  categories  for each year ended
               December 31:
<TABLE>
                                   1996                          1995
                          Allowance      % of Loans      Allowance      % of Loans 
                           Amount         to Total         Amount         to Total 
                                           Loans                           Loans
<S>                       <C>             <C>            <C>            <C>
Commercial                 $ 16,727        12.52%         $ 13,553       12.68%
Real estate                  33,236        54.25%           30,576       54.68%
Installment                  23,462        33.23%           21,649       32.64%
Unallocated                 101,530                         78,322 
                          ---------       -------        ---------      -------
Total                     $ 174,955       100.00%        $ 144,100      100.00%
                          =========       =======        =========      =======
</TABLE>

V.     DEPOSITS

          (A)  The following table sets forth average  deposit  balances and the
               weighted average rate paid for the years ended December 31:
<TABLE>
                                         1996                          1995
                                        Average                       Average
                                 Balance          Rate        Balance           Rate
<S>                              <C>              <C>         <C>               <C>
Demand Deposits                   $ 3,260,130     0.00%        $ 2,862,382      0.00%
Interest-bearing
demand deposits                     3,929,544     2.99%          3,921,507      2.99%
Savings                             6,368,156     2.75%          6,493,804      2.75%
Time deposits under $100,000       11,554,466     5.47%          9,087,933      5.31%
Time deposits over $100,000         1,917,968     5.87%          1,652,157      5.54%
                                 ------------     -----       ------------      -----
Total                            $ 27,030,264     3.84%       $ 24,017,783      3.62%
                                 ============     =====       ============      =====
</TABLE>
         (B)   The  following  table  summarizes  time  deposits  in  amount  of
               $100,000 or more by time remaining  until maturity as of December
               31, 1996:
<TABLE>
<S>                                          <C>
Three months or less                         $ 1,732,000 
Over three months through six months             211,000 
                                             -----------
Total                                        $ 1,943,000
                                             =========== 
</TABLE>
                                                                              5
<PAGE>


PART-I    ITEM 1 - BUSINESS (continued)


VI.    RETURN ON EQUITY AND ASSETS


     The  following  table  presents  the ratios  indicated  for the years ended
     December 31:

<TABLE>
                                                  1996           1995
<S>                                               <C>            <C>
Net Income to average assets                       1.03%          1.16%
Net Income to average shareholders' equity        12.99%         14.30%
Cash dividend payout ratio                        30.54%         25.51%
Average shareholders' equity to average
 total assets                                      7.97%          8.11%
</TABLE>

VII.  SHORT TERM BORROWING

     NONE

ITEM 2 - DESCRIPTION OF PROPERTY

     The Bank owns the land and building on which the Bank's  office is located,
     200  East  Erie  Street,  Rogers  City.  Michigan.  There  are no  liens or
     mortgages on the above property.

     The  Registrant  operates  its  business at the same  address as the Bank's
     office. No other properties are owned by the Registrant.

ITEM 3 - PENDING LEGAL PROCEEDINGS

     NONE

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters  submitted to a vote of security  holders  during the
     quarter ended December 31, 1996.


ADDITIONAL ITEM - EXECUTIVE OFFICERS

     Executive officers of the Registrant are appointed annually by the Board of
     Directors  at the  meeting of  Directors  following  the Annual  Meeting of
     Shareholders. There are no family relationships among these officers and/or
     Directors of the Registrant nor any  arrangement or  understanding  between
     any officer and any other person pursuant to which the officer was elected.


     The  following  sets  forth  certain   information   with  respect  to  the
     Registrant's executive officers as of December 31, 1996:


                                                                   First Elected
Name (age)                    Position with Registrant            Officer of the
                                                                      Registrant
Ervin Nowak (65)              Chairman                                     1990
Michael L. Cahoon (63)        President and Chief Executive Officer        1990
Paulette D. Kierzek (47)      Chief Financial Officer                      1990


          Mr. Nowak is a Director of the Registrant and Chairman of the Board of
          Directors of Huron National Bank, a position he has held for more than
          five years.

          Mr.  Cahoon  is a  Director  of the  Registrant,  President  and Chief
          Executive Officer.  He is also and has been a Director,  President and
          Chief Executive Officer of the Bank since 1984.

          Mrs.  Kierzek is the Chief  Financial  Officer of the  Registrant  and
          Cashier and  Secretary  to the Board of  Directors  of Huron  National
          Bank, a position she has held for more than five years.


                                                                              6
<PAGE>
                                    PART-II


     ITEM 5 - MARKET FOR THE REGISTRANT'S  COMMON EQUITY AND RELATED STOCKHOLDER
     MATTERS

                TWO YEAR SUMMARY OF COMMON STOCK DATA BY QUARTER

There is no established trading market in the Company's common stock. Such sales
as there are  generally  occur in Presque Isle County,  Michigan.  The following
table summarizes sales the Company has knowledge of occuring during the last two
years. Where know, the average sales price is given. Because the shares are sold
infrequently  and not on any exchange,  the numbers shown cannot  necessarily be
considered to be an accurate reflection of true market value.

<TABLE>
                          1996                         1995
                               Average                      Average
                    Number      Price            Number      Price
                  of Shares   Per share        of Shares    Per Share
<S>                 <C>       <C>                 <C>       <C>
First Quarter       560       Price Unknown       315       Price Unknown
                    152       $30.00
Second Quarter      300       Price Unknown       100       Price Unknown
                     13       $30.00
                    150       $32.00
Third Quarter       170       $30.00              175       $26.00
                     10       $32.00
                    605       Price Unknown
Fourth Quarter      300       Price Unknown       500       Price Unknown

</TABLE>

As of December 31, 1996, the Company's shareholder list reflected  approximately
640  shareholders  of record and there were 62,500 shares of common stock issued
and outstanding.

Dividends  declared  were $1.50 per share,  and $1.25 per share  during 1996 and
1995, respectively.
<PAGE>

     ITEM 6 - MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
     RESULTS OF OPERATIONS


This section presents  information  relevant to understanding  and assessing the
consolidated  financial  condition and results of  operations of Huron  National
Bancorp,  Inc.  and its  wholly-owned  subsidiary,  Huron  National  Bank.  This
discussion  should  be read  in  conjunction  with  the  consolidated  financial
statements and related footnotes contained elsewhere in this report.



SUMMARY

During 1996, the Company reported net income of $306,938  compared to net income
of $306,207 in 1995 and $271,544 in 1994. Net income per share was $4.91 in 1996
compared to $4.90 in 1995 and $4.34 in 1994. For 1996,  return on average assets
and average  equity  equaled  1.03% and 12.99%,  respectively.  This compares to
1.16% and 14.30% in 1995 and 1.07% and 14.22% in 1994.  The  improvement  in the
Company's  performance was driven by several factors as discussed in the Results
of Operations section below.


As of year-end, total assets were $30,292,270 an increase of $2,540,651 or 9.16%
over  December 31, 1995.  This  increase  followed an increase of  $2,202,189 in
1995's total assets over 1994's.  Total loans  increased  $1,465,281 at December
31,  1996 when  compared  to  December  31,  1995,  while  securities  increased
$1,580,679 and cash and cash cash  equivalents  decreased  $509,712 for the same
period.  These increases were funded by strong growth in customer time deposits.
In total, the Bank's deposits  increased from $25,277,065 in 1995 to $27,594,010
in 1996, with time deposit growth of $2,060,118  more than offsetting  decreases
in some other deposit  types.  Customers are now  committing  funds for extended
periods of time due to a slight increase in interest rates. The deposit increase
was influenced by changing service charge  structures of financial  institutions
in the Company's market area also.

Shareholders'  equity as a percent of assets  stayed at 8.05% for  December  31,
1996 and 1995.  This is the result of the Company's  earnings  keeping pace with
asset growth.



RESULTS OF OPERATIONS

Analysis of Net Interest Income

The  difference  between  interest  generated by the Bank's  earning  assets and
interest paid on  liabilities  is referred to as net interest  income,  the most
significant component of the Bank's earnings. In 1996, net interest income, on a
fully tax equivalent basis,  increased compared to 1995 following an increase of
$13,000  from 1994 to 1995.  The level of earning  assets and the  corresponding
interest earned increased in 1996. However, an increase in the level of interest
bearing  liabilities,  primarily time deposits,  and an increase in the interest
rates paid on those  liabilities  to a large extent offset the benefits  derived
from the increase in earning assets.



<PAGE>

The following table summarizes the increases in net interest income.
<TABLE>

Net Interest Income
(In thousands; fully taxable equivalent basis)
                                              1996           1995           1994
<S>                                          <C>            <C>            <C>
Interest Income                              $ 2,222        $ 2,003        $ 1,833 
Interest Expense                               1,076            870            713
                                             -------        -------        -------
Net Interest Income                          $ 1,146        $ 1,133        $ 1,120 
                                             =======        =======        =======
Increase in Net Interest Income              $    13        $    13        $    71
Percent Increase of Net Interest Income        1.15%          1.16%          6.77%

</TABLE>

The two variables that have the most significant effect on the change in the net
interest  income are volume and rate.  Below is a chart  which  illustrates  the
impact of changes in these two important variables for 1996 and 1995.
<TABLE>

Change in Net                                1996 Over 1995                1995 Over 1994
Interest Income                              Change Due to:                Change Due to:
(In thousands; fully taxable
 equivalent basis)                 Volume         Rate           Total          Volume         Rate           Total
<S>                                <C>            <C>            <C>            <C>            <C>            <C>
Interest Income
Loans                              $ 89           $ 8            $ 97           $ 123          $ 13           $ 136
Taxable securities                 $ 72            (2)           $ 70           $(100)         $ 77           $ (23)
Tax-exempt securities                44            (5)             39               9             0               9
Federal funds sold                   17            (5)             12              41             7              48
                                   ----           ----           ----           -----          ----           -----
Total Interest Income               222            (4)            218              73            97             170
                                   ----           ----           ----           -----          ----           -----
Interest Expense
Interest bearing DDA                  0              0              0             (19)            0             (19)
Savings                              (3)             0             (3)            (22)            0             (22)
Time deposits                       156             53            209             102            98             200
Federal funds purchased                                                            (1)           (1)             (2)
                                   ----           ----           ----           -----          ----           -----
Total Interest Expense              153             53            206              60            97             157
                                   ----           ----           ----           -----          ----           -----
Net Interest Income                $ 69          $ (57)          $ 12           $  13          $ -               13
                                   ====           ====           ====           =====          ====           =====
</TABLE>

     (1)  For  purposes of these  tables,  changes in interest due to volume and
          rate were  determined  as follows:  

          Volume  Variance-change  in volume  multiplied by the previous  year's
          rate.

          Rate Variance-change in rate multiplied by the previous year's volume.

          Rate/Volume  Variance-change  in volume  multiplied  by the  change in
          rate. This variance was allocated to volume variance and rate variance
          in proportion to the relationship of the absolute dollar amount of the
          change in each.

Analysis  of the  Bank's net yield on  earning  assets is also used to  evaluate
changes  in net  interest  income.  The net yield on earning  assets  employs an
effective  cost  of  funds  by   recognizing   interest-free   liabilities   and
shareholders'  equity which fund earning assets, and is computed by dividing net
interest income by earning assets.


<PAGE>

The  table  below   summarizes   the  Company's   average   balances,   interest
income/expense,  interest rates, net yield on earning assets,  and interest rate
spread.

<TABLE>
Interest Rate Spread and Net                 1996                          1995                          1994
Yield on Earning Assets
(In Thousands)                    Average                        Average                       Average
Assets                            Balance   Interest   Rate      Balance   Interest  Rate      Balance   Interest  Rate
<S>                               <C>       <C>        <C>       <C>       <C>       <C>       <C>       <C>       <C>
Loans(1) ......................   $18,386   $ 1,725    9.38%     $17,442   $ 1,628   9.33%     $16,127   $ 1,492   9.25%
Taxable securities ............     5,602       348    6.22%       4,439       278   6.27%       6,237       301   4.82%
Tax-exempt securities (fully
taxable equivalent basis)           1,101        75    6.85%         460        36   7.82%         352        27   7.80%
Federal funds sold ............     1,342        72    5.27%       1,030        59   5.76%         277        11   3.91%
Other .........................        38         2    5.92%          38         2   5.92%          38         2   6.00%
                                   ------    ------    -----     -------    ------   -----      ------     -----   -----
Total interest earning assets .    26,469     2,222    8.39%      23,409     2,003   8.56%      23,031     1,833   7.96%
                                   ------    ------              -------    ------              ------     -----               
Cash and due from banks .......     2,642                          2,385                         1,785

 Other assets, net ............       550                            601                           615
                                   ------                        -------                       -------
Total Assets ..................   $29,661                        $26,395                      $ 25,431
                                   ======                        =======                       =======
Liabilities
Interest bearing DDA's ........   $ 3,930       118    2.99%     $ 3,922       117   2.99%      $4,540       136   2.99%
Savings .......................     6,368       175    2.75%       6,494       179   2.75%       7,307       201   2.75%
Time deposits .................    13,472       783    5.81%      10,740       574   5.34%       8,645       374   4.33%
Federal funds purchased .......         0         0    0.00%           0         0   0.00%          55         2   4.70%
                                   ------     -----    -----     -------     -----   -----      ------     -----   -----
Total interest bearing
   liabilities ................    23,770     1,076    4.52%      21,156       870   4.11%      20,547       713   3.47%
                                   ------     -----    -----     -------     -----   -----      ------     -----   -----
DDA's .........................     3,260                          2,862                         2,697
Other liabilities .............       268                            236                           278
Shareholders' equity ..........     2,363                          2,141                         1,909
                                   ------                        -------                        ------
Total liabilities and equity ..   $29,661                        $26,395                      $ 25,431
                                   ======                        =======                        ======
Net Interest Income (fully ....             $ 1,146                        $ 1,133                       $ 1,120
taxable equivalent basis)                    ======                         ======                        ======

Net yield on interest 
   earning assets..............                        4.33%                         4.84%                         4.86%
                                                       =====                         =====                         =====
Net interest spread............                        3.87%                         4.45%                         4.49%
                                                       =====                         =====                         =====
Interest earning assets/
interest bearing liabilities...                        1.11x                         1.11x                          1.12x

</TABLE>

    (1)   Average balances for loans include impaired loans in 1996 and 1995 and
          nonaccrual  and  restructured  loans in 1994.  The  inclusion of these
          loans does not have a material effect on either the average balance or
          the  interest  income.  As  indicated  in  Note 1 to the  accompanying
          consolidated  financial statements of Huron National Bancorp, Inc., as
          of January 1, 1995 the Company began  following  guidance  provided by
          SFAS No. 114 to recognize impaired loans. Prior years' information has
          not been  revised to  consider  SFAS No. 114  concepts,  however,  the
          nature of impaired loans is considered  generally  comparable to prior
          years' nonaccrual and restructured loan information.


<PAGE>

Non-Interest Income

During 1996, the Company recorded  noninterest  income of $147,347 a decrease of
$33,911 or (18.71%)  from  $181,258" "in 1995.  This  decrease was  attributable
primarily to a premium on the sale of the student loan  portfolio of $15,460 and
an  increase  in volume of charges for  customer  non-sufficient  fund and other
returned checks in 1995.

Non-Interest Expense

During 1996,  noninterest  expense decreased $37,153 or (4.51%) from $823,719 in
1995 to  $786,566  in 1996.  The  decreases  included  $20,521 in  premises  and
equipment due to older items  becoming  fully  depreciated  and $17,882 in other
operating expenses primarily due to a reduction in FDIC premiums.

Provision for Income Taxes

The  provision  for income  taxes was  $138,507 in 1996  compared to $138,618 in
1995, a decrease of $111 or (0.08%). The effective tax rate, derived by dividing
applicable income tax expense by income before taxes, was 31% in 1996, unchanged
from 1995.


FINANCIAL CONDITION

Liquidity and Interest Rate Sensitivity

The  Bank's  principal   asset/liability   management   objectives  include  the
maintenance  of adequate  liquidity and  appropriate  interest rate  sensitivity
while maximizing net interest income.

Liquidity  is generally  defined as the ability to meet cash flow  requirements.
For a bank,  meeting cash flow  requirements  means  having  funds  available to
satisfy  customer  credit  needs  as  well as  having  funds  available  to meet
depositor  withdrawal requests.  For the parent company,  liquidity means having
funds available to pay cash dividends and other operating expenses.

The Bank's primary sources of short-term  liquidity are its securities available
for sale and ability to raise money through federal funds purchased.  Its longer
term sources of liquidity are maturities of securities, loan repayments,  normal
deposit growth and  negotiable  certificates  of deposit.  The primary source of
funds for the parent company is the upstream of dividends from the Bank.

Management  believes  the Bank has  adequate  sources of  liquidity  to meet its
anticipated requirements.

As previously noted,  interest income and interest expense are also dependent on
changing  interest rates. The relative impact of changing  interest rates on net
interest  income  depends  on  the  rate  sensitivity  to  such  changes.   Rate
sensitivity generally depends on maturity structures, call provisions, repayment
penalties etc. of the respective financial  instruments.  The Bank's exposure or
sensitivity   to   changing   interest   rates  is  measured  by  the  ratio  of
rate-sensitive  assets to rate-sensitive  liabilities.  Management believes that
the Bank's  rate  sensitive  position  is  adequate  in a normal  interest  rate
movement environment.

<PAGE>

GAP Analysis


The following  table as of December 31, 1996 reflects how management has matched
assets  to  liabilities  that  mature  or have the  ability  to  reprice  in the
following time frame:

<TABLE>

Assets                    0-90 Days       91-180 Days     181-365 Days    1 - 3 Years     3 Years +      Total
<S>                       <C>             <C>             <C>             <C>             <C>            <C>
Loans .................   $  1,392,443    $    793,668    $    785,158    $  4,185,882    $ 11,992,081   $ 19,149,232
Investments ...........        878,932          70,382       1,142,304       3,669,564       1,382,137      7,143,319
Federal Funds .........        900,000               0               0               0               0        900,000
                          ------------    ------------    ------------     -----------    ------------    -----------
Total .................      3,171,375         864,050       1,927,462       7,855,446      13,374,218     27,192,551
                          ------------    ------------    ------------     -----------    ------------    -----------
Liabilities
Interest-bearing
transaction accounts ..      3,769,530               0               0               0               0      3,769,530
Savings ...............      6,498,161               0               0               0               0      6,498,161
Certificates of Deposit      5,494,678       2,882,003         942,613       2,354,365       2,303,545     13,977,204
                         -------------    ------------    ------------     -----------     -----------    -----------
Total .................     15,762,369       2,882,003         942,613       2,354,365       2,303,545     24,244,895

Asset/(Liabilities) GAP    (12,590,994)     (2,017,953)        984,849       5,501,081      11,070,673      2,947,656
                         =============     ===========    ============     ===========     ===========     ==========
Cumulative GAP ........   $(12,590,994)   $(14,608,947)   $(13,624,098)   $ (8,123,017)   $  2,947,656
                         =============     ===========    ============     ===========     ===========     
</TABLE>


Not included in the above totals are  nonaccrual  loans of $36,952,  and matured
certificates of deposit of $15,884.

Interest-bearing transaction and savings accounts are classified as repricing in
0-90 days as these instruments  provide management with the discretion to adjust
their rates.  Further,  because this category has no maturity  schedule or early
withdrawal penalty, depositors are free to move their funds based on rate alone.
Therefore, management recognizes that these categories, although generally lower
costing funds, are rate sensitive to the extent of interest rate movements.

The Bank's  cumulative  1 year GAP  position  increased  from  ($12,191,032)  at
December 31, 1995 to  ($13,624,098) at December 31, 1996 principally as a result
of the shortening of liability  maturities in the certificates of deposits area.
Management believes that the GAP overstates true interest sensitivity.  Interest
exposure is not as  significant  as expressed in the above  schedule as rates on
interest-bearing transaction and savings accounts may not reprice on an "instant
basis".  Management  believes  liabilities do not need to be repriced as soon as
rates  begin to move  which  gives  them a "lag  time" in the market and for the
assets  to  reprice.  It is also  their  belief  that  they are in a  sufficient
position to minimize any adverse effect to the Bank's financial  position due to
interest rate changes.

Capital

Management  attempts to maintain  sufficient capital to take advantage of market
opportunities, yet provide a fair return to its shareholders.

The National Bank Act places  limitations  on the ability of the Bank to declare
and pay dividends.  As a general matter,  the Bank may not pay dividends greater
than the  total of the  Bank's  net  profits  for that  year  combined  with its
retained net profits of the two preceding years. Further, the Comptroller of the
Currency may prohibit the payment of cash  dividends  where it deems the payment
to be an unsafe and unsound banking practice.  Under the most restrictive of the
dividend  restrictions,  in 1997 the Bank  could  pay  additional  dividends  of
approximately $450,000 plus 1997 net income to the Holding Company.



<PAGE>


Management believes that a strong capital position is paramount to its continued
profitability and continued depositor and investor confidence.  It also provides
Huron National Bank flexibility to take advantage of growth opportunities and to
accommodate larger Bank loan customers. Regulators have established "risk-based"
capital  guidelines  for  banks  and  bank  holding  companies.  Because  of the
Company's and Bank's size,  regulatory  capital  requirements  apply only to the
Bank.

Under the guidelines,  minimum capital levels are established for risk based and
total  assets.  For the  risk  based  computation,  the  ratio  is  based on the
perceived risk in asset categories and certain  off-balance-sheet items, such as
standby  letters of credit.  The  guidelines  define  Tier 1 capital  and Tier 2
capital.  Tier 1 capital  includes  common  shareholders'  equity,  while Tier 2
Capital adds the allowance for loan losses.  Tier 1 Capital cannot exceed Tier 2
Capital.  Banks are  required to have ratios of Tier 1 Capital to risk  weighted
assets of 4% and total capital (Tier 1 plus Tier 2) of 8%. At December 31, 1996,
Huron  National  Bank had  capital  ratios  well  above the  minimum  regulatory
guidelines as noted within footnote 14 of the Consolidated Financial Statements.

Loans and Loan Review Process

Maintaining  high asset  quality  is a key  determinant  of the Bank's  success.
Therefore,   management   continually  monitors  impaired,   non-performing  and
delinquent loans and reports them monthly to the Board of Directors.

Non-accrual and loans past due 90 days or more approximated  $36,952 or 0.19% of
total loans at December 31, 1996  compared to  approximately  $12,955 or 0.07% a
year earlier.

The  provision  for loan losses was $36,000 in 1996  compared to $33,500 in 1995
and $30,000 in 1994. For the same years,  charge-offs,  net of recoveries,  were
$5,145, $37,129 and $1,521, respectively.

The  allowance  for loan  losses is at  $174,955,  or 0.91% of total  loans,  at
December  31, 1996  compared to $144,100,  or 0.81% of total loans,  at year-end
1995. The allowance is consistent with management's recognition of problem loans
along with management's strategy to emphasize the quality of the loan portfolio.
The  allowance is  considered  adequate by  management.  (see also Note 1 to the
Consolidated Financial Statements)

Effects of Inflation

Inflation  can have a  significant  effect on the reported  financial  operating
results of all  industries.  This is especially  true in industries  with a high
proportion of fixed assets and inventory.  Inflation has an impact on the growth
of total assets in the banking  industry and the need to maintain a proper level
of equity capital.

Interest rates are significantly  affected by inflation,  but it is difficult to
assess the impact since  neither the timing nor the  magnitude of the changes in
the consumer price index coincide with changes in interest  rates.  There is, of
course, an impact on longer-term earning assets;  however, this effect continues
to diminish as investment  maturities are shortened and interest-earning  assets
and   interest-bearing   liabilities   shift  from   fixed-rate   long-term   to
rate-sensitive short-term.

ISSUED BUT NOT YET ADOPTED ACCOUNTING STANDARDS

Information  for  this  item  appears  in Note 1 of the  Consolidated  Financial
Statements.





<PAGE>


BUSINESS

Huron National  Bancorp,  Inc.,  along with its wholly-owned  subsidiary,  Huron
National  Bank,  provides its customers  with a full line of commercial  banking
services  with its only  office  located in Rogers  City,  Michigan.  The Bank's
customer base consists of individuals, agricultural concerns, resort and related
businesses and small to medium-sized manufacturing companies. The Bank's service
area consists  primarily of Presque Isle County in the  northeastern  portion of
Michigan's lower peninsula.

Huron  National  Bank is the smaller of two banks  located in Rogers  City.  The
other was  purchased  by a bank  holding  company  and  converted  into a branch
office.  The Bank also  competes for loans and deposits  with a savings and loan
institution,  and two credit unions.  In addition,  a total of three other Banks
operate branches in Presque Isle County, and money market funds also compete for
deposits in the Bank's service area.

The Bank regularly makes  commitments for secured term loans and commitments for
lines of credit.  These lines of credit are  reviewed on an annual  basis by the
Bank's  Board of  Directors.  However,  these  commitments  are firm only to the
extent that the respective  borrower maintains a satisfactory credit history and
does not  represent  any  unusual  "credit  risk.  The Bank had  $1,422,000  and
$1,348,819 as of December 31, 1996 and 1995 in  outstanding  lines of credit and
commitment to make loans of which $588,022 and $620,582 were still  available to
the respective borrower. Further, the Bank had issued letters of credit totaling
$247,179 as of December 31, 1996.

A  portion  of  the  Bank's  deposits  are  obtained  from  and  loans  made  to
agricultural  concerns  and resort and  related  businesses.  There are no other
material  concentrations  of credit to, nor have other material  portions of the
deposits been received from, a single person, persons, industry or group.

The economy of the market area served by the Bank is significantly influenced by
the seasonal effects of the tourist and agricultural industries. The business of
the Bank  has  been  only  mildly  affected  by the  seasonal  aspects  of these
components of the local economy.

As of  December  31,  1996,  the  Bank  did not  have  any  foreign  sources  or
applications of funds.

Compliance with federal, state, and local statutes and/or ordinances relating to
the protection of the  environment  is not expected to have any material  effect
upon the Bank's capital expenditures, earnings, or competitive position.

The Bank employed 14 full-time  employees and 4 part-time  employees at December
31, 1996.

The Bank does not offer commercial, consumer, international, trust, or municipal
trading services.



<PAGE>

     ITEM 7 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




                                  CROWE CHIZEK


                         REPORT OF INDEPENDENT AUDITORS


Shareholders and Board of Directors
Huron National Bancorp, Inc.
Rogers City, Michigan

We have audited the accompanying  consolidated  balance sheets of Huron National
Bancorp,  Inc. as of December  31, 1996 and 1995,  and the related  consolidated
statements of income,  shareholders' equity and cash flows for each of the three
years in the period ended December 31, 1996. These financial  statements are the
responsibility of the Company'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  financial  position of Huron  National
Bancorp,  Inc.  as of  December  31,  1996  and  1995,  and the  results  of its
operations  and its cash flows for each of the three  years in the period  ended
December  31,  1996  in  conformity  with  the  generally  accepted   accounting
principles.


                                        /s/Crowe, Chizek and Company LLP
                                           Crowe, Chizek and Company LLP

Grand Rapids, Michigan
January 23, 1997


<PAGE>
<TABLE>
                          HURON NATIONAL BANCORP, INC.
                          CONSOLIDATED BALANCE SHEETS
                           December 31, 1996 and 1995



ASSETS                                    1996            1995
<S>                                       <C>             <C>
Cash and due from banks (Note 2) ......   $  2,438,015    $  2,847,727
Federal Funds Sold ....................        900,000       1,000,000

Cash and cash equivalents .............      3,338,015       3,847,727

Securities available for sale (Note 3)       1,746,701       1,773,025
Securities held to maturity (Note 3)
 (Fair value - $5,450,000 in 1996
 and $3,856,000 in 1995) ..............      5,402,689       3,795,686

Loans (Note 4) ........................     19,186,184      17,720,903

Allowance for loan losses (Note 5) ....       (174,955)       (144,100)
Net loans .............................     19,011,229      17,576,803

Bank premises and equipment
   - net (Note 6) .....................        488,598         421,508
Accrued interest receivable ...........        234,632         227,277
Other assets ..........................         70,406         109,593
Total Assets ..........................   $ 30,292,270    $ 27,751,619


LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities
Deposits (Note 7)
Non interest-bearing
  transaction accounts ................   $  3,333,231    $  3,045,265
Interest-bearing transaction
  accounts ............................      3,769,530       3,786,097
Savings ...............................      6,498,161       6,512,733
Time ..................................     13,993,088      11,932,970
Total deposits ........................     27,594,010      25,277,065
Accrued interest payable ..............         63,216          55,568
Other liabilities (Note 8) ............        195,371         184,064
Total liabilities .....................     27,852,597      25,516,697

Commitments (Note 10)

Shareholders' Equity
 Common stock, $10 par value:
 100,000 shares authorized
 and 62,500 outstanding ...............        625,000         625,000
Additional paid in capital ............        625,000         625,000
Retained earnings (Note 11) ...........      1,185,666         972,478
 Net unrealized gain on securities
  available for sale, net of tax of
  ($2,064) in 1996 and ($6,411) in 1995          4,007          12,444
Total shareholders' equity ............      2,439,673       2,234,922

Total liabilities and
 shareholders' equity .................   $ 30,292,270    $ 27,751,619

</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.



<PAGE>
<TABLE>

                          HURON NATIONAL BANCORP, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
              For the years ended December 31, 1996, 1995 and 1994


                                    1996         1995         1994
<S>                                 <C>          <C>          <C>
Interest Income
Loans, including fees ...........   $1,724,683   $1,627,379   $1,492,365
Federal funds sold ..............       70,650       59,274       10,812
Securities available for sale:
U.S. Treasury ...................       63,100       27,218      103,233
U.S. Government Agencies ........       61,977       63,301
Securities held to maturity:
U.S. Government agencies ........      137,273      115,865      149,959
Municipal bonds and notes .......       49,827       23,748       18,130
Corporate notes .................       86,130       71,803       47,226
Other ...........................        2,250        2,250        2,250
Total interest income ...........    2,195,890    1,990,838    1,823,975

Interest Expense
Deposits (Note 7) ...............    1,075,226      870,052      710,817
Federal Funds Purchased .........                                  2,581
Total interest expense ..........    1,075,226      870,052      713,398

Net Interest Income .............    1,120,664    1,120,786    1,110,577

Provision for Loan
  Losses (Note 5) ...............       36,000       33,500       30,000

Net Interest Income After
Provision for Loan Losses .......    1,084,664    1,087,286    1,080,577

Non-Interest Income
Service charges .................      101,577      111,810       83,312
Gain on sales of student loans ..                    15,460
Other ...........................       45,770       53,988       36,557
Total non-interest income .......      147,347      181,258      119,869

Non-Interest Expense
Salaries and benefits (Note 12) .      387,299      382,305      356,666
Premises and equipment ..........      118,462      138,983      135,687
Legal and accounting fees .......       49,752       53,496       44,484
Other operating expense (Note 9)       231,053      248,935      256,690
Total non-interest expense ......      786,566      823,719      793,527

Income Before Income Tax ........      445,445      444,825      406,919

Provision for Income Tax (Note 8)      138,507      138,618      135,375

Net Income ......................   $  306,938   $  306,207   $  271,544

Net Income Per Share (Note 1)....       $ 4.91       $ 4.90       $ 4.34



The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</TABLE>


<PAGE>




                          HURON NATIONAL BANCORP, INC.
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
             For the years ended December 31, 1996, 1995, and 1994

<TABLE>
                                                                             Net Unrealized
                                                                               Gain (Loss)
                                                    Additional                On Securities       Total
                                       Common        Paid In       Retained     Available      Shareholders'
                                       Stock         Capital       Earnings     For Sale         Equity
<S>                                    <C>           <C>           <C>          <C>           <C>        
BALANCE AT JANUARY 1, 1994 .........   $  625,000    $  625,000    $  535,352   $   18,299    $1,803,651

Net income for the year ............                                  271,544                    271,544

Cash dividends ($1.00 per share) ...                                  (62,500)                   (62,500)

Unrealized gain (loss) on securities
  available for sale, net of tax ...                                               (24,500)      (24,500)

BALANCE AT DECEMBER 31, 1994 .......      625,000       625,000       744,396       (6,201)    1,988,195

Net income for the year ............                                  306,207                    306,207

Cash dividends ($1.25 per share) ...                                  (78,125)                   (78,125)

Unrealized gain (loss) on securities
 available for sale, net of tax ....                                                18,645        18,645

BALANCE AT DECEMBER 31, 1995 .......      625,000       625,000       972,478       12,444     2,234,922

Net income for the year ............                                  306,938                    306,938

Cash dividends ($1.50 per share) ...                                  (93,750)                   (93,750)

Unrealized gain (loss) on securities
      available for sale, net of tax                                                (8,437)       (8,437)

BALANCE AT DECEMBER 31, 1996 .......   $  625,000    $  625,000    $1,185,666   $    4,007    $2,439,673





</TABLE>



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



<PAGE>
<TABLE>
                          HURON NATIONAL BANCORP, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the years ended December 31, 1996, 1995 and 1994


CASH FLOWS FROM OPERATING ACTIVITIES
                                          1996           1995           1994
<S>                                       <C>            <C>            <C>
Net income ............................   $   306,938    $   306,207    $   271,544
Adjustments to reconcile
 net income to net cash
 from operating activities
Depreciation and amortization .........        40,233         61,545         62,174
Net premium amortization and
 discount accretion on securities .....        50,399         48,732        186,153
Provision for loan losses .............        36,000         33,500         30,000
Gain on sales of student loans ........                      (15,460)
Gain on sale of security held
 to maturity ..........................                       (2,664)
Increase/(decrease) in cash from
 change in assets
 and liabilities:
Interest receivable ...................        (7,355)       (39,157)        44,988
Other assets and other real estate ....        39,187        (17,864)        27,627
Interest payable ......................         7,648         17,164          3,341
Other liabilities .....................        15,654        (67,920)        14,082
Net cash from operating activities ....       488,704        324,083        639,909

CASH FLOWS FROM INVESTING ACTIVITIES

Available-for-sale securities:
Purchases .............................      (989,086)    (1,765,823)
Maturities ............................     1,000,000        850,000      2,000,000
Held-to-maturity securities:
Purchases .............................    (3,437,776)    (2,475,906)    (1,809,211)
Sales .................................                      295,125
Maturities ............................     1,783,000      2,358,000      2,255,000
Net increase in loans .................    (1,470,426)    (1,436,707)    (1,350,626)
Proceeds from sales of student loans ..                      623,074
Proceeds from sale of other real estate                      102,000
Purchase of property and equipment ....      (107,323)       (28,062)       (56,129)
Net cash used in investing activities .    (3,221,611)    (1,478,299)     1,039,034

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase/(decrease) in
 deposit accounts .....................     2,316,945      1,996,613        (73,903)
Dividends paid ........................       (93,750)       (78,125)       (62,500)
Net cash from financing activities ....     2,223,195      1,918,488       (136,403)

NET INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS ......................      (509,712)       764,272      1,542,540
CASH AND CASH EQUIVALENTS AT:
BEGINNING OF PERIOD ...................     3,847,727      3,083,455      1,540,915
END OF PERIOD .........................   $ 3,338,015    $ 3,847,727    $ 3,083,455

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash paid during the period for:
Interest ..............................   $ 1,067,578    $   852,888    $   711,938
Federal income tax ....................        91,025        236,709        101,000

</TABLE>
Non cash investing activities
Loans in the amount of $102,000 were transferred to other real estate in 1995.


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



<PAGE>
                          HURON NATIONAL BANCORP, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNT POLICIES


     NATURE OF OPERATIONS ~ The consolidated  financial  statements  include the
accounts of Huron National

     Bancorp,  Inc.  (the  "Company")  and its  wholly-owned  subsidiary,  Huron
National Bank (the "Bank"). All material  intercompany balances and transactions
are eliminated in consolidation.

     The Company is engaged in the business of  commercial  and retail  banking,
with operations  conducted through its office located in Rogers City,  Michigan.
The surrounding communities are the source of substantially all of the Company's
deposit and loan  activities.  The majority of the  Company's  income is derived
from  commercial and retail lending  activities.  Primarily all  installment and
residential loans are secured by real and personal  property.  Approximately 90%
of commercial loans are secured by real estate.


     USE  OF  ESTIMATES  IN  THE  PREPARATION  OF  FINANCIAL  STATEMENTS  ~  The
preparation  of financial  statements  in  conformity  with  generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent assets and liabilities at the date of the financial  statements,  and
the reported  amounts of revenues and expenses during the reporting  period,  as
well as affecting the  disclosures  provided.  Actual  results could differ from
those  estimates.   Areas  involving  the  use  of  management's  estimates  and
assumptions  include the allowance for loan losses,  the realization of deferred
tax assets, fair values of financial instruments, the determination and carrying
value of impaired loans, and  depreciation of premises and equipment.  Estimates
that are more  susceptible  to change in the near term include the allowance for
loan losses and the fair values of financial instruments.

     SECURITIES ~ Securities  are  classified as held to maturity and carried at
amortized cost when  management has the positive intent and ability to hold them
to maturity.  Securities are classified as available for sale when they might be
sold before maturity.  Securities  available for sale are carried at fair value,
with unrealized  holding gains and losses reported  separately in  shareholders'
equity,  net of tax.  Securities  are  classified as trading when held for short
term periods in  anticipation  of market  gains,  and are carried at fair value.
Securities  are  written  down to fair value when a decline in fair value is not
temporary.

Gains and  losses  on sales  are  determined  using  the  amortized  cost of the
specific  security  sold.  Interest  income  includes  amortization  of purchase
premiums and discounts.

     ALLOWANCE  FOR LOAN LOSSES ~ Because  some loans may not be repaid in full,
an  allowance  for loan  losses is  recorded.  Increases  to the  allowance  are
recorded by a provision for loan losses charged to expense.  Estimating the risk
of  loss  and  the  amount  of  loss  on any  loan  is  necessarily  subjective.
Accordingly,  the allowance is  maintained  by management at a level  considered
adequate  to cover  losses  that are  currently  anticipated  based on past loss
experience,  general economic  conditions,  information  about specific borrower
situations  including their financial  position and collateral values, and other
factors and estimates  which are subject to change over time.  While  management
may  periodically  allocate  portions of the allowance for specific problem loan
situations,  the whole allowance is available for any charge-offs  that occur. A
loan is  charged-off  against the  allowance by management as a loss when deemed
uncollectible,  although  collection  efforts may continue and future recoveries
may occur.

Statements  of  Financial  Accounting  Standards  (SFAS)  Nos.  114 and 118 were
effective  January  1, 1995 and  require  recognition  and  disclosures  of loan
impairment. Loans are considered impaired if full principal or interest payments
are not anticipated. Impaired loans are carried at the present value of expected
cash flows discounted at the loan's effective interest rate or at the fair value
of the  collateral  if the  loan  is  collateral  dependent.  A  portion  of the
allowance for loan losses is allocated to impaired loans. The effect of adopting
these  standards is included in the 1995 provision for loan losses,  and was not
material.
<PAGE>


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)


Smaller-balance  homogeneous  loans are evaluated for impairment in total.  Such
loans include  residential  first mortgage  loans secured by one-to-four  family
residences,  residential  construction  loans,  and automobile,  home equity and
second  mortgage  loans.  Commercial  loans and mortgage  loans secured by other
properties are evaluated individually for impairment.  When analysis of borrower
operating results and financial  condition  indicates that underlying cash flows
of  the  borrower's   business  are  not  adequate  to  meet  its  debt  service
requirements,  the loan is evaluated  for  impairment.  Often this is associated
with a delay or  shortfall in payments of 30 days or more.  Loans are  generally
moved to nonaccrual  status when 90 days or more past due. These loans are often
also considered  impaired.  Impaired loans, or portions thereof, are charged off
when deemed  uncollectible.  This typically  occurs when the loan is 120 or more
days past due.

     LOANS ~ Loans are reported at the  principal  balance  outstanding,  net of
deferred loan fees and costs,  the allowance for loan losses,  and  charge-offs.
Interest income is reported on the interest method and includes  amortization of
net deferred loan fees and costs over the loan term.

Interest income is not reported when full loan repayment is in doubt, typically
when payments are past due over 120 days.  Payments  received on such loans are
reported as principal reductions.


     BANK  PREMISES AND  EQUIPMENT ~ Bank  premises and  equipment are stated at
cost  less  accumulated  depreciation.   Depreciation  is  computed  using  both
straight-line  and  accelerated  methods  over  their  estimated  useful  lives.
Maintenance,  repairs and minor alterations are charged to current operations as
expenditures  occur, and major  improvements  are capitalized.  These assets are
reviewed for  impairment  when events  indicate  the carrying  amount may not be
recoverable.

     OTHER  REAL  ESTATE  ~ Real  estate  acquired  in  settlement  of  loans is
initially reported at estimated fair value at acquisition.  After acquisition, a
valuation  allowance  reduces  the  reported  amount to the lower of the initial
amount  or fair  value  less  costs to  sell.  Expenses,  gains  and  losses  on
disposition,  and changes in the valuation allowance are reported in net loss on
other real estate.

     INCOME TAXES ~ Income tax expense is the sum of the current year income tax
due or  refundable  and the  change in  deferred  tax  assets  and  liabilities.
Deferred tax assets and liabilities are the expected future tax  consequences of
temporary  differences  between the carrying amounts and tax bases of assets and
liabilities, computed using enacted tax rates. A valuation allowance, if needed,
reduces deferred tax assets to the amount expected to be realized.

     STATEMENT OF CASH FLOWS ~ Cash and cash  equivalents  is defined to include
cash on hand,  demand  deposits in other  institutions  and federal  funds sold.
Federal  funds are  generally  sold for one days  periods.  The Company  reports
customer loan transactions and deposit transactions on a net cash flow basis.

     NET INCOME PER SHARE ~ Net income per share is computed  using the weighted
average  number  of  shares  outstanding.  The  number  of  shares  used  in the
computation of net income per share was 62,500 for all years presented.

     ISSUED BUT NOT YET ADOPTED ACCOUNTING  STANDARDS ~ SFAS No.125,  Accounting
for  Transfers  and  Servicing  of  Financial  Assets  and   Extinguishment   of
Liabilities,  was issued by the Financial Accounting Standards Board in 1996. It
revises the  accounting  for  transfers of financial  assets,  such as loans and
securities,  and the  criteria  for  distinguishing  between  sales and  secured
borrowings.  It is  effective  for some  transactions  in 1997 and for others in
1998. The effect on the financial statements has not yet been determined.

     RECLASSIFICATIONS  ~ Some  items in prior  financial  statements  have been
reclassified to conform with the current presentation.





<PAGE>

NOTE 2 - CASH AND DUE FROM BANKS



     As of December 31, 1996,  the Bank was required to maintain  cash  balances
with the Federal Reserve Bank in the amount of $27,000.



NOTE 3 - SECURITIES


     Securities have been classified in the Consolidated Balance Sheet according
to  management's  intent.  The amortized cost of securities and their  estimated
fair values at December 31 were as follows:

<TABLE>   
                                             Gross        Gross
                              Amortized   Unrealized    Unrealized
1996                             Cost        Gains        Losses      Fair Value
<S>                            <C>          <C>          <C>          <C>
Securities Available for Sale:
U.S. Treasury Securities ...   $1,239,342   $    4,408   $     --     $1,243,750
U.S. Agency Securities .....      501,288        1,663         --        502,951
                               $1,740,630   $    6,071   $     --     $1,746,701

Securities Held to Maturity:

U.S. Agency Securities .....   $1,849,015   $    1,305   $     --     $1,850,320
Obligations of States and
 political subdivisions ....    2,231,791       40,486         --      2,272,277
Corporate Securities .......    1,321,883        5,461         --      1,327,344
                               $5,402,689   $   47,252   $     --     $5,449,941



</TABLE>
<TABLE>

                                              Gross       Gross
                              Amortized    Unrealized   Unrealized
1995                             Cost         Gains       Losses      Fair Value
<S>                            <C>          <C>          <C>          <C>
Securities Available for Sale:
U.S. Treasury Securities ...   $  498,831   $    4,919   $     --     $  503,750
U.S. Agency Securities .....    1,255,339       13,936         --      1,269,275
                               $1,754,170   $   18,855   $     --     $1,773,025

Securities Held To Maturity:
U.S. Agency Securities .....   $1,983,926   $   19,292   $     --     $2,003,218
Obligations of States and
political subdivisions .....      675,746       28,931         --        704,677
Corporate Securities .......    1,136,014       12,077         --      1,148,091
                               $3,795,686   $   60,300   $     --     $3,855,986


</TABLE>

There were no sales of securities  classified as available for sale during 1996,
1995 or 1994.  There  were no  transfers  of  securities  classified  as held to
maturity  during  1996,  1995 or 1994.  During 1995,  Management  sold a held to
maturity security as permitted by the safe harbor rules of SFAS No. 115.

The amortized  cost and estimated fair value of securities at December 31, 1996,
by contractual  maturity,  are shown below.  Expected maturities may differ from
contractual  maturities  because  borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.



<PAGE>
NOTE 3 - SECURITIES (continued)

<TABLE>

                                          Available for Sale          Held to Maturity
                                         Amortized     Fair        Amortized     Fair
                                           Cost        Value         Cost        Value
<S>                                      <C>          <C>          <C>          <C>
Due in one year or less ..............   $  749,900   $  752,266   $1,327,718   $1,334,826
Due after one year through five years       990,730      994,435    3,130,555    3,163,349
Due after five years through ten years                                944,416      951,766
Totals ...............................   $1,740,630   $1,746,701   $5,402,689   $5,449,941
</TABLE>

Securities  available for sale with a carrying value of $499,539 at December 31,
1996 were pledged to secure public  deposits and for other purposes  required or
permitted by law.


At year end, the Company had the following concentrations of securities:

<TABLE>
                                         Amortized
Geographic:                               Cost         Fair Value
<S>                                      <C>           <C>
Rogers City, Michigan ................   320,638       321,059
Issuers:

Greater Rockford, IL Airport Authority   262,969       273,388
Branch County of Michigan ............   338,737       339,307
</TABLE>

NOTE 4 - LOANS


Loans consist of the following at December 31:

<TABLE>
                       1996          1995
<S>                 <C>           <C>
Commercial loans    $ 2,402,382   $ 2,246,982
Real estate loans    10,407,482     9,690,077
Installment loans     6,376,320     5,783,844
Total loans .....   $19,186,184   $17,720,903

</TABLE>
Certain directors and executive officers of the Company, including associates of
such  persons,  were also loan  customers.  The  following  is a summary  of the
balance and activity of loans to such parties.

<TABLE>
                           1996         1995
<S>                     <C>          <C>
Balance - January 1 .   $ 157,451    $ 147,501
New loans ...........      68,915      113,515
Repayments ..........    (118,846)    (103,565)
Balance - December 31   $ 107,520    $ 157,451
</TABLE>

NOTE 5 -  ALLOWANCE FOR LOAN LOSSES

An analysis of changes in the allowance for loan losses follows:
<TABLE>
                                             1996        1995         1994
<S>                                      <C>          <C>          <C>
Balance at beginning of year..........   $ 144,100    $ 147,729    $ 119,250
Additions (Deductions)
Provision for loan losses ............      36,000       33,500       30,000
Recoveries credited to allowance .....       1,381        2,921        1,648
Loans charged-off ....................      (6,526)     (40,050)      (3,169)
Balance at end of year ...............   $ 174,955    $ 144,100    $ 147,729

</TABLE>


<PAGE>



NOTE 5 - ALLOWANCE FOR LOAN LOSSES (continued)


During the year 1996,  there were no loans that were  considered to be impaired.
During the year  1995,  the  balance  of  impaired  loans was  considered  to be
immaterial.



NOTE 6 - BANK PREMISES AND EQUIPMENT - NET


Bank premises and equipment consist of the following at December 31:
<TABLE>

                                           Accumulated     Carrying
1996                             Cost      Depreciation     Value
<S>                              <C>         <C>          <C>
Land .........................   $  60,000                $  60,000
Bank building and improvements     481,509   $(185,803)     295,706
Furniture and equipment ......     428,427    (295,535)     132,892
Total ........................   $ 969,936   $(481,338)   $ 488,598


1995
Land .........................   $  60,000                $  60,000
Bank building and improvements     466,505   $(172,821)     293,684
Furniture and equipment ......     361,792    (293,968)      67,824
Total ........................   $ 888,297   $(466,789)   $ 421,508

</TABLE>

Provisions for depreciation of $40,233,  $57,510, and $52,501,  were included in
non-interest expense in 1996, 1995 and 1994, respectively.


NOTE 7 - DEPOSITS


The Bank had an aggregate of  approximately  $1,943,000  and  $1,600,000 in time
deposits issued in denominations of $100,000 or more as of December 31, 1996 and
1995, respectively. Interest expense on time deposits issued in denominations of
$100,000 or more was approximately $105,000,  $92,000, and $37,000 in 1996, 1995
and 1994, respectively.

At year-end 1996, stated maturities of time deposits were:
<TABLE>
                     <S>              <C>
                     1997              $9,140,521 
                     1998               1,423,542 
                     1999                 981,382 
                     2000               1,576,953 
                     2001                 796,900 
                     thereafter            73,790 
                                      $13,993,088 
</TABLE>

Related party deposits totalled $344,592 and $207,663 at year-end 1996 and 1995.



<PAGE>
NOTE 8 - INCOME TAX


The provision for federal income tax for the years ended December 31 consists of
the following:

<TABLE>
                               1996          1995         1994
<S>                          <C>          <C>         <C>
Current expense ..........   $ 171,073    $ 116,529   $ 147,226
Deferred expense (benefit)     (32,566)      22,089     (11,851)
Provision for income tax .   $ 138,507    $ 138,618   $ 135,375
</TABLE>

Included  in other  liabilities  are  deferred  tax  balances  arising  from the
following items:

<TABLE>

                                        December 31,
Deferred tax liabilities:          1996          1995
<S>                               <C>          <C>
Effects of preparing tax return
 on a cash basis ..............   $ (49,313)   $ (59,825)
Property and equipment ........     (99,249)     (99,328)
Unrealized gain on securities
 available for sale ...........      (2,064)      (6,411)
Other .........................     (16,587)     (31,674)
                                   (167,213)    (197,238)
Deferred tax assets:

Allowance for loan losses .....      37,587       27,096
Loan fees .....................       7,595       11,198
                                     45,182       38,294

Net deferred tax liability ....   $(122,031)   $(158,944)

</TABLE>
The difference between the financial  statement tax expense and amounts computed
by applying the statutory federal tax rate of 34% to pretax income is reconciled
as follows:
<TABLE>
                              1996           1995          1994
<S>                          <C>          <C>          <C>
Statutory rate applied to
 income before taxes .....   $ 151,451    $ 151,240    $ 145,101
Add (deduct)
Tax-exempt interest income     (12,988)      (7,090)      (7,728)
Surtax exemption and other          44       (5,532)      (1,998)

Provision for income tax .   $ 138,507    $ 138,618    $ 135,375

</TABLE>

NOTE 9 - OTHER OPERATING EXPENSE

Other  operating  expenses  for the  years  ended  December  31  consist  of the
following:
<TABLE>
                                   1996       1995       1994
<S>                              <C>        <C>        <C>
Office supplies ..............   $ 28,369   $ 30,836   $ 21,554
Directors fees ...............     48,000     44,000     36,000
General insurance ............     18,374     17,247     20,853
FDIC insurance ...............      2,000     26,610     52,227
Other expense ................    134,310    130,242    126,056
Total other operating expenses   $231,053   $248,935   $256,690

</TABLE>


<PAGE>


NOTE 10 - COMMITMENTS AND CONCENTRATIONS OF CREDIT RISK


The Bank is a party to financial  instruments with off-balance sheet risk in the
normal  course of  business  to meet  financing  needs of its  customers.  These
financial  instruments include letters of credit and unused lines of credit. The
Bank's  exposure  to  credit  loss in the event of  nonperformance  by the other
parties to the financial  instruments is presented by the contractual  amount of
those  instruments.  The  Bank  follows  the same  credit  policy  to make  such
financial  instruments  as is followed for those loans recorded in the financial
statements.

As of December 31, the Bank had  outstanding  letters of credit,  commitments to
make loans and unused lines of credit as follows:
<TABLE>
                                   1996      1995
<S>                             <C>        <C>
Outstanding letters of credit   $247,179   $210,098
Commitments to make loans
 and Unused lines of credit .   $588,022   $620,582

</TABLE>
All  commitments  above are at fixed rates and carry rates of interest from 8.5%
to 11% and generally expire within 1 year.

Since certain  commitments to make loans and fund lines of credit expire without
being used, the amount does not necessarily represent future cash commitments.

From time to time claims are made  against  the Company in the normal  course of
business. There were no material outstanding claims at December 31, 1996.

The  Company's  loan  and  deposit  relationships  are not  concentrated  in any
particular  industry,  nor is there significant  dependence on any one employer.
Noninterest-bearing  deposits  and  federal  funds  sold and held by NBD  Bank,"
amounted  to  $2,500,792   and   $3,129,903  at  December  31,  1996  and  1995,
respectively.

NOTE 11 - DIVIDENDS

Guidelines with respect to maintenance of capital adopted by federal banking law
limits the amount of cash  dividends the Bank can pay to the Holding  Company to
the extent of net retained  profits (as defined by the regulatory  agencies) for
the current and two preceding  years,  and is further limited by the requirement
that the Bank maintain positive retained earnings. Under the most restrictive of
the  above  regulations,  in 1997  the  Bank is  limited  to  paying  additional
dividends of approximately $450,000 plus 1997 net income.

NOTE 12 - PENSION PLAN

The Bank has a  Simplified  Employee  Pension  (SEP) Plan that became  effective
January 31, 1995. It is a defined  contribution plan.  Employees become eligible
to  participate  in the SEP Plan after two years of  service in the  immediately
preceding  five plan years and after  attaining the age of 21. In each plan year
the Bank may  contribute  to the Plan the lesser of $30,000 or a  percentage  of
each  participant's  compensation  as reported on Form W-2. The  contribution is
determined  annually by the Bank's Board of Directors.  Also,  participants  may
make contributions to the Plan subject to certain  requirements and limitations.
In all cases,  Bank and  participant  contributions  may not exceed  limitations
established by the Internal Revenue Service.  Expense  recognized by the Bank in
relation  to the SEP Plan  for the year  ended  December  31,  1996 and 1995 was
$7,314 and $7,008, respectively.



<PAGE>


NOTE 13 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS


The following  methods and  assumptions  were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value.

Carrying  amount is a  reasonable  estimate of fair value for cash  equivalents,
interest-bearing  deposits in financial  institutions,  Federal  Reserve  stock,
accrued interest receivable and payable, the allowance for loan losses,  demand"
deposits, savings accounts and money market deposits.

Fair value of other financial instruments is estimated as follows:

Fair values for  securities  are based on quoted market prices or dealer quotes.
If a quoted market price is not available,  fair value is estimated using quoted
market prices for similar instruments.

Fair  value  of fixed  and  variable  rate  loans is  principally  estimated  by
discounting  future cash flows using the current  rates at which  similar  loans
would  be made  to  borrowers  with  similar  credit  ratings  and for the  same
remaining maturities.

The fair  value of  fixed-maturity  certificates  of  deposit  is  estimated  by
discounting cash flows using the rates currently offered for deposits of similar
remaining maturities.

The fair value of commitments is estimated  using the fees currently  charged to
enter  similar  agreements,  taking  into  account  the  remaining  terms of the
agreements  and  the  present   creditworthiness  of  the  counterparties.   For
fixed-rate loan  commitments,  fair value also considers the difference  between
current  levels of interest  rates and the  committed  rates.  The fair value of
letters of credit is based on fees currently  charged for similar  agreements or
on the estimated cost to terminate them or otherwise settle the obligations with
the  counterparties  at the reporting  date.  The fair value of  commitments  to
extend  credit and standby  letters of credit were  immaterial  at the reporting
date presented.

The carrying values and fair values of the Company's  financial  instruments (in
thousands) are as follows as of year-end.

<TABLE>
                                   1996                1995
                           Carrying    Fair    Carrying    Fair
                            Value      Value    Value     Value
<S>                         <C>        <C>      <C>       <C>
Financial assets
Cash and cash equivalents   $ 3,338     3,338   $ 3,848   $ 3,848
Securities ..............     7,149     7,197     5,569     5,629
Loans, net ..............    19,011    19,165    17,577    17,327
Federal Reserve Stock ...        38        38        38        38
Interest receivable .....       235       235       227       227

Financial liabilities
Deposits ................    27,594    27,657    25,277    25,325
Interest payable ........        63        63        56        56

</TABLE>

NOTE 14 - REGULATORY MATTERS

The Company and Bank are subject to regulatory capital requirements administered
by federal banking agencies.  Capital adequacy  guidelines and prompt corrective
action regulations involve  quantitative  measures of assets,  liabilities,  and
certain   off-balance-sheet   items  calculated   under  regulatory   accounting
practices.  Capital amounts and  classifications are also subject to qualitative
judgments by regulators about components, risk weighting, and other factors, and
the  regulators  can lower  classifications  in certain  cases.  Failure to meet
various capital  requirements can initiate  regulatory  action that could have a
direct material effect on the financial statements.




<PAGE>

NOTE 14 - REGULATORY MATTERS (continued)


The prompt corrective action regulations provide five classifications, including
well  capitalized,  adequately  capitalized,   undercapitalized,   significantly
undercapitalized, and critically undercapitalized,  although these terms are not
used to  represent  overall  financial  condition.  If  adequately  capitalized,
regulatory   approval   is   required   to   accept   brokered   deposits.    If
undercapitalized,  capital  distributions  are  limited,  as is asset growth and
expansion,   and  plans  for  capital  restoration  are  required.  The  minimum
requirements are:

<TABLE>
                            Capital to risk-
                            weighted assets            Tier 1 capital
                            Total     Tier 1           to average assets
<S>                         <C>       <C>                <C>
Well capitalized .....      10%       6%                 5%
Adequately capitalized       8%       4%                 4%
Undercapitalized .....       6%       3%                 3%
</TABLE>

At year-end,  the Bank's  consolidated  actual  capital levels (in millions) and
minimum required levels were:
<TABLE>

                                                                   Minimum
                                                                   Required To
                                               Minimum Required    Be Well Capitalized
                                                  For Capital      Under Prompt Corrective
                              Actual           Adequacy Purposes   Action Regulations
1996                      Amount     Ratio     Amount     Ratio    Amount     Ratio
<S>                       <C>        <C>       <C>        <C>      <C>        <C>
Total capital (to risk
 weighted assets) .....   $  2.6     14.4%     $ 1.5      8.0%     $  1.8     10.0%
Tier 1 capital (to risk
 weighted assets) .....   $  2.4     13.3%     $ 0.7      4.0%     $  1.1      6.0%
Tier 1 capital (to
 average assets) ......   $  2.4      7.9%     $ 1.2      4.0%     $  1.5      5.0%

1995
Total capital (to risk
 weighted assets) .....   $  2.3     13.5%     $ 1.4      8.0%     $  1.7     10.0%
Tier 1 capital (to risk
 weighted assets) .....   $  2.2     12.9%     $ 0.7      4.0%     $  1.0      6.0%
Tier 1 capital (to
 average assets) ......   $  2.2      7.9%     $ 1.1      4.0%     $  1.4      5.0%
</TABLE>

NOTE 15 - HURON NATIONAL BANCORP, INC.  (PARENT COMPANY ONLY)

CONDENSED FINANCIAL INFORMATION

Presented below are condensed financial statements for the parent company:

<TABLE>

                       CONDENSED BALANCE SHEETS
                                         December 31,
ASSETS                                 1996         1995
<S>                                 <C>          <C>
Cash and cash equivalents .......   $   11,939   $    4,624
Investment in Huron National Bank    2,427,734    2,217,393
Other assets ....................                    28,442
Total Assets ....................   $2,439,673   $2,250,459

LIABILITIES
Due to Huron National Bank ......                $   15,537

SHAREHOLDERS' EQUITY ............    2,439,673   $2,234,922

Total liabilities and
 shareholders' equity ...........   $2,439,673   $2,250,459


</TABLE>
<PAGE>

NOTE 15 - HURON NATIONAL BANCORP, INC. (PARENT COMPANY ONLY)

CONDENSED FINANCIAL INFORMATION (continued)
<TABLE>
                         CONDENSED STATEMENTS OF INCOME

                                 Years Ended December 31,
                                1996       1995      1994
<S>                           <C>        <C>        <C>
OPERATING INCOME
     Dividends from Huron .   $103,750   $ 83,125   $ 62,500
      National Bank
OPERATING EXPENSES
     Other expenses .......   $ 15,590      5,204     13,118

Income before equity in
 undistributed net income
 of subsidiary ............     88,160     77,921     49,382

Equity in undistributed net
 income of subsidiary ...      218,778    228,286    222,162

NET INCOME ................   $306,938   $306,207   $271,544
</TABLE>

<TABLE>

                       CONDENSED STATEMENTS OF CASH FLOWS
                                                  Years Ended December 31,
                                              1996         1995         1994
<S>                                         <C>          <C>          <C>
Cash Flows from Operating Activities
Net income ..............................   $ 306,938    $ 306,207    $ 271,544
Adjustments to reconcile
 net income to cash from
 operating activities:
Net amortization ........................                    4,035        9,673
Equity in undistributed net
 income of subsidiary ...................    (218,778)    (228,286)    (222,162)
Change in other assets ..................      28,442      (28,444)      17,145
Change in other liabilities .............     (15,537)      15,537

Net Cash From Operating Activities ......     101,065       69,049       76,200

Cash Flows from Financing Activities
Dividends Paid ..........................     (93,750)     (78,125)     (62,500)
Net Cash from Financing Activities ......     (93,750)     (78,125)     (62,500)

Net Change in Cash and Cash Equivalents .       7,315       (9,076)      13,700
Cash and Cash Equivalents
Beginning of the Period .................       4,624       13,700            0

End of the Period .......................   $  11,939    $   4,624    $  13,700

</TABLE>
<PAGE>

     ITEM 8 - CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS ON ACCOUNTING AND
     FINANCIAL DISCLOSURE

     NONE

                                    PART-III


     ITEM 9 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information  for  this  item  appears  under  the  headings   "Election  of
     Directors"; "List of Directors and Nominees for Election as Directors"; and
     "Committees  of the Board of  Directors"  in the  Registrant's  1997  Proxy
     Statement as filed with the Commission,  incorporated  herein by reference.
     In addition,  reference is made to  "Additional  Item" under Part I of this
     Form 10-KSB Report on page 6.

     ITEM 10 - EXECUTIVE COMPENSATION

     Information   for  this  item   appears   under  the  heading  of  "Summary
     Compensation  Table" in the Registrant's 1997 Proxy Statement as filed with
     the Commission, incorporated herein by reference.

     ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information for this item appears under the headings of "Principal  Holders
     of  Securities";   and  "Voting  Securities  and  Beneficial  Ownership  of
     Directors and Officers" in the  Registrant's  1997 Proxy Statement as filed
     with the Commission, incorporated herein by reference.

<PAGE>

     ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information for this item appears under the heading of "Other Transactions"
     in the  Registrant's  1997" "Proxy  Statement as filed with the Commission,
     incorporated herein by reference. In addition,  reference is made to Note 4
     of the Companys' Financial Statements filed under Item 7 of this Report.



                                    PART-IV

     ITEM 13 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (a)  The following documents are filed as part of this report:

                   1.  Reference is made to the Index at the end of this Report.

                   2.  Financial Statement Schedules
                        None

                   3.  Exhibits
                        Reference  is  made to the  Exhibit  Index on page 10 of
                        this report.


         (b)  Report on Form 8-K
                No reports on Form 8-K were filed during the last quarter of the
                year covered by this report.



<PAGE>


SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 24, 1997.



                          HURON NATIONAL BANCORP, INC.




     /s/ Michael L. Cahoon                        /s/ Paulette D. Kierzek
     Michael L. Cahoon                            Paulette D. Kierzek
     President and Chief Executive Officer        Chief Financial Officer





Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been duly signed by the  following  persons in the  capacities  indicated on
March 24, 1997.



     /s/ Ervin Nowak                            
     Ervin Nowak                                  Lynwood Lamb
     Chairman of the Board                        Director


                                                  /s/ Leon Delekta
     Marvin Beatty                                Leon Delekta
     Vice Chairman of the Board                   Director


     /s/ Eugene McLean                            /s/ Michael L. Cahoon
     Eugene McLean                                Michael L. Cahoon
     Director                                     Director, President and CEO


     /s/ Donald Hampton                
     Donald Hampton                               Louis Dehring
     Director                                     Director


     /s/ Dale L. Bauer                            /s/ Paulette D. Kierzek
     Dale L. Bauer                                Paulette D. Kierzek
     Vice President                               Cashier


<PAGE>

                               INDEX TO EXHIBITS



The following  exhibits are filed or  incorporated  by reference as part of this
report:


     3(i)      Articles of  Incorporation  of the  Registrant  as  currently  in
               effect  and  any  amendments  thereto   (incorporated  herein  by
               reference   to  exhibit  3(A)  of  the   Registrant's   Form  S-4
               Registration Statement dated March 13, 1990, No. 33-33874).

    3(ii)      Bylaws  of  the   Registrant  as  currently  in  effect  and  any
               amendments thereto  (incorporated  herein by reference to exhibit
               3(B) of the Registrant's  Form S-4  Registration  Statement dated
               March 13, 1990, No. 33-33874).

      21       List of Subsidiary on page 11.

      27       Financial Data Schedule on page 12.



<PAGE>


                                   EXHIBIT 21


                               LIST OF SUBSIDIARY



      NAME                                                 INCORPORATED

 1.  Huron National Bank                                      Michigan




<PAGE>