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 for the fiscal year ended December 31, 1997 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. {X}

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 13, 1998, was approximately $1,580,145,  based on market
price of $35.00 per share.

As of March 13, 1997, there were  outstanding  62,500 shares of the registrant's
common stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the  Registrant's  Annual Report to  Shareholders  (the "1997 Annual
Report") for the year ended December 31, 1997 are incorporated by reference into
Parts I and II of this Form 10-KSB Report.  Portions of the  Registrant's  Proxy
Statement for its Annual Meeting of  Shareholders to be held April 29, 1998, 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, 1997 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 1997 Annual Report, 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
<PAGE>
PART-I    ITEM 1 - BUSINESS


REGULATION (continued)


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 has been
paying the minimum rate of FDIC insurance since the assessment period that began
January 1, 1996.

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  $19,853,701 at December 31, 1997. This represents  62.80% of
its total assets.  At that date, 53.32% consisted of real estate mortgage loans,
32.72% consisted of installment loans and 13.96% 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").
<PAGE>
PART-I ITEM 1 - BUSINESS (continued)

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.

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 1997 Annual Report incorporated herein by reference.
<PAGE>
PART-I ITEM 1 - BUSINESS (continued)

COMPETITION (continued)

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
1997 Annual Report which is incorporated herein by reference.

II.    INVESTMENT PORTFOLIO


     (A) A table of book values of the  investment  portfolio as of December 31,
     1997 and 1996 is set forth in Note 3 on pages 18 and 19 of the 1997  Annual
     Report which is incorporated herein by reference.


     (B) The following  table shows the relative  maturities and weighted yields
     of investments in debt securities at December 31, 1997:
<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            $1,293,444        5.99%        $503,714       6.13
States and Municipals (1)                                577,775        4.80%       2,129,238       5.28%     $92,232      5.08%
Mortgage-backed                                                                       209,713       6.40%
Corporate                                                625,754        5.66%       1,194,445       6.38%

     Totals                                           $2,496,973        6.07%      $4,037,110       5.80%     $92,232      5.08%
</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,
          1997 and 1996 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 1997 Annual Report which is incorporated herein by reference.

          (B)  The  following  table  sets  forth  the  remaining   maturity  of
          commercial   loans  at  December  31,  1997   according  to  scheduled
          repayments of  principal.  There were no  agricultural  or real estate
          construction loans at December 31, 1997.
<TABLE>
                                 1 Year or Less    1 - 3 Years         Total
     <S>                          <C>               <C>              <C>
     Commercial loans(1)          $2,716,858        $55,936          $2,772,794
</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.
<PAGE>
PART-I ITEM 1 - BUSINESS (continued)


III.  LOAN PORTFOLIO (continued)

          (C) (1) Nonaccrual, Past Due and Restructured Loans

          The following table sets forth non-performing loans at December 31:
<TABLE>
                                                                  1997            1996
<S>                                                              <C>            <C>
Loans accounted for on a nonaccrual basis                        $9,500         $36,952
Aggregate amount of loans ninety days or more past due
(excludes loans on nonaccrual status above)                      23,518

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)                                              18,333

Total non-performing loans                                      $51,351         $36,952
</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,
               1997 and 1996.

               (4) There are no  concentrations  of loans exceeding 10% of total
               loans which are not already  disclosed  as a category at December
               31, 1997.

     (D) As of December 31, 1997,  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>
                                                                        1997           1996
<S>                                                                   <C>            <C>
Balance of allowance for loan losses at the beginning of year:        $174,955       $144,100
Charge-offs: Commercial loans                                           27,428              0
Real estate loans                                                        3,000              0
Installment loans                                                        4,801          6,526
Total charge-offs                                                       35,229          6,526

Recoveries: Commercial loans                                             1,974              0
Real estate loans                                                            0              0
Installment loans                                                        2,931          1,381
Total recoveries                                                         4,905          1,381
</TABLE>
<PAGE>
PART-I    ITEM 1 - BUSINESS (continued)


IV.  SUMMARY OF LOAN LOSS EXPERIENCE (continued)
<TABLE>
                                                                 1997              1996
<S>                                                         <C>               <C>
Net loans charged-off                                            30,324            5,145
Additions to allowance charged to operating expense              36,000           36,000
Balance at end of year                                         $180,631         $174,955
Average gross loans outstanding                              19,744,000       18,386,000
Percent of net charge-offs during the period to average
gross loans outstanding                                           0.15%            1.03%
</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 1997 Annual
Report which is 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>
                                 1997                         1996
                         Allowance    % of Loans to   Allowance     % of Loans to
                          Amount       Total Loans      Amount       Total Loans
<S>                     <C>            <C>            <C>            <C>
Commercial               $17,932        13.96%         $16,727        12.52%
Real estate               18,637        53.32%          33,236        54.25%
Installment               18,618        32.72%          23,462        33.23%
Unallocated              125,444                       101,530

Total                   $180,631       100.00%        $174,955       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>
                                              1997                               1996
                                             Average                            Average
                                    Balance            Rate            Balance            Rate
<S>                               <C>                  <C>           <C>                  <C>
Demand Deposits                    $3,684,452          0.00%          $3,260,130          0.00%
Interest-bearing
  demand deposits                   4,021,178          2.80%           3,929,544          2.99%
Savings                             6,545,513          2.56%           6,368,156          2.75%
Time deposits under $100,000       12,311,297          5.51%          11,554,466          5.47%
Time deposits over $100,000         1,812,760          5.79%           1,917,968          5.87%
Total                             $28,375,200          3.75%         $27,030,264          3.84%
</TABLE>
<PAGE>
PART-I    ITEM 1 - BUSINESS (continued)

     (B) The following  table  summarizes time deposits in amount of $100,000 or
more by time remaining until maturity as of December 31, 1997:
<TABLE>
<S>                                     <C>
Three months or less                    $1,822,000
Over three months through six months       217,000
Total                                   $2,039,000
</TABLE>
<TABLE>
                                                            1997           1996
<S>                                                         <C>            <C>
Net Income to average assets                                1.08%          1.03%
Net Income to average shareholders' equity                 13.56%         12.99%
Cash dividend payout ratio                                 29.59%         30.54%
Average shareholders' equity to average total assets        7.98%          7.97%
</TABLE>

VII.  SHORT TERM BORROWING

         NONE

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, 1997:
<TABLE>
                                                                                First Elected
Name (age)                    Position with Registrant                     Officer of the Registrant
<S>                           <C>                                                    <C>
Ervin Nowak (66)              Chairman                                               1990
Michael L. Cahoon (64)        President and Chief Executive Officer                  1990
Paulette D. Kierzek (48)      Chief Financial Officer                                1990
</TABLE>

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.
<PAGE>
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, 1997.


                                    PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

     Information for this item  appears on page 2 of the 1997 Annual  Report and
     is incorporated herein by reference.

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

     Information  for this item  appears on pages 3 through 9 of the 1997 Annual
     Report and is incorporated herein by reference.

ITEM 7 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The following consolidated financial statements appear on pages 11 to 25 in
     the  1997  Annual  Report  for the year  ended  December  31,  1997 and are
     incorporated herein by reference:

                     Report of Independent Auditors
                     Consolidated Balance Sheets
                     Consolidated Statements of Income
                     Consolidated Statements of Changes in Shareholders' Equity
                     Consolidated Statements of Cash Flows
                     Notes to the Consolidated Financial Statements

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

     NONE
<PAGE>
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"  1998 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  1998 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 1998 Proxy Statement as filed with the Commission,
incorporated herein by reference.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information for this item appears under the heading of "Other  Transactions"  in
the Registrant's 1998 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.

ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

     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 16, 1998.


                          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 16, 1997.



/s/ Ervin Nowak                                   /s/ Lynwood Lamb
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                                /s/ Louis Dehring
Donald Hampton                                    Louis Dehring
Director                                          Director


/s/ John Tierney
John Tierney
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).

             13     Annual Report for the year ended December 31, 1997.

                    The  consolidated  financial  statements  and notes  related
                    thereto  appear  on  pages  11  through  25,  and the  other
                    financial  information  on  pages 1  through  9 in the  1997
                    Annual  Report are  incorporated  by  reference in this Form
                    10-KSB  Report.  With the exception of these  statements and
                    information,  the Annual Report to Shareholders for the year
                    ended December 31, 1997, is not deemed filed as part of this
                    Form 10-KSB Report.

             21    List of Subsidiary.

             27    Financial Data Schedule.
<PAGE>
EXHIBIT 13

                          Huron National Bancorp, Inc.









                           Annual Shareholder Report
                                      1997
<PAGE>
                          HURON NATIONAL BANCORP, INC.

                                    CONTENTS


         SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . 1

         TWO YEAR SUMMARY OF COMMON STOCK DATA BY QUARTER. . . . . . . . . . . 2

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

              CONDITION AND RESULTS OF OPERATIONS. . . . . . . . . . . . . . . 3


         BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9


         DIRECTORS AND EXECUTIVE OFFICERS. . . . . . . . . . . . . . . . . . .10


         FINANCIAL STATEMENTS:

              Report of Independent Auditors. . . . . . . . . . . . . . . . . 11

              Consolidated Balance Sheets  . . . . . . . . . . . . . . . . . .12

              Consolidated Statements of Income  . . . . . . . . . . . . . . .13

              Consolidated Statements of Changes in Shareholders' Equity . . .14

              Consolidated Statements of Cash Flows  . . . . . . . . . . . . .15

              Notes to the Consolidated Financial Statements . . . . . . 16 - 25
<PAGE>
                          HURON NATIONAL BANCORP, INC.

                            SELECTED FINANCIAL DATA
<TABLE>
                                                             For the Year Ended December 31,
SUMMARY OF OPERATIONS                      1997           1996           1995           1994             1993
<S>                                     <C>            <C>            <C>            <C>            <C>    
Total interest income                   $2,308,579     $2,195,890     $1,990,838     $1,823,975     $1,831,430
Total interest expense                   1,117,854      1,075,226        870,052        713,398        805,976
Net interest income                      1,190,725      1,120,664      1,120,786      1,110,577      1,025,454
Provision for loan losses                   36,000         36,000         33,500         30,000         29,000
Net interest income after provision
for loan losses                          1,154,725      1,084,664      1,087,286      1,080,577        996,454
Noninterest income                         135,432        147,347        181,258        119,869        123,534
Noninterest expense                        818,870        786,566        823,719        793,527        780,633

Income before income tax                   471,287        445,445        444,825        406,919        339,355
Provision for income tax                   133,356        138,507        138,618        135,375        109,744

NET INCOME                                $337,931       $306,938       $306,207       $271,544       $229,611

AVERAGE SHARES OUTSTANDING                  62,500         62,500         62,500         62,500         62,500

PER SHARE DATA
Basic earnings                               $5.41          $4.91          $4.90          $4.34          $3.67
Cash dividends                                1.60           1.50           1.25           1.00           0.90
Book value, end of year                      42.85          39.03          35.76          31.81          28.86

TOTAL AVERAGE EQUITY (000's)                $2,493         $2,363         $2,141         $1,909         $1,703

TOTAL AVERAGE ASSETS (000's)               $31,238        $29,661        $26,395        $25,431        $25,049

RATIOS
Return on average total assets                1.08%          1.03%          1.16%          1.07%          0.92%
Average shareholders' equity to average
total assets                                  7.98%          7.97%          8.11%          7.51%          6.80%
Return on average shareholders' equity       13.56%         12.99%         14.30%         14.22%         13.48%
Dividend payout ratio (dividends divided
by net income)                               29.59%         30.54%         25.51%         23.02%         24.50%

PERIOD END TOTALS (000's)

Total assets                               $31,615        $30,292        $27,752        $25,549        $25,434
Total loans and leases                      19,854         19,186         17,721         17,031         15,682
Total deposits                              28,712         27,594         25,277         23,280         23,354
Shareholders' equity                         2,678          2,440          2,235          1,988          1,804
</TABLE>
<PAGE>
                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 occurring  during the last
two years. Where known, 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>
                              1997                               1996
                   Number of     Average Price        Number of      Average Price
                    Shares         Per Share           Shares         Per Share
<S>                 <C>            <C>                 <C>             <C>
First Quarter       100            $32.00              560            Price Unknown
                                                       152            $30.00
Second Quarter       26            $32.00              300            Price Unknown
                                                        13            $30.00
                                                       150            $32.00
Third Quarter        50            $34.00              170            $30.00
                    150            $36.00               10            $32.00
                                                       605            Price Unknown
Fourth Quarter      None                               300            Price Unknown
</TABLE>

As of December 31, 1997, 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  per  share  were  $1.60  and  $1.50  during  1997 and 1996,
respectively.
<PAGE>
               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
Net income of $337,931 was  reported in 1997  compared to net income of $306,938
in 1996 and  $306,207  in 1995.  Basic  earnings  per  share  was  $5.41 in 1997
compared to $4.91 in 1996 and $4.90 in 1995. For 1997,  return on average assets
and average  equity  equaled  1.08% and 13.56%,  respectively.  This compares to
1.03% and 12.99% in 1996 and 1.16% and 14.30% in 1995.

As of year-end,  total assets were  $31,615,138,  an increase of  $1,322,868  or
4.37% over December 31, 1996.  This increase  followed an increase of $2,540,651
in 1996's total assets over 1995's.  Total loans increased  $667,517 at December
31, 1997 when compared to December 31, 1996, while securities decreased $516,630
and cash and cash equivalents increased by $1,053,036 for the same period. These
increases  were  funded by growth in  customer  deposits.  In total,  the Bank's
deposits  increased from  $27,594,010 in 1996 to $28,712,049 in 1997,  with time
deposits growth of $321,617 and non-interest  bearing  transactions  accounts of
$532,436. Customers are now committing funds for extended periods of time.

Shareholders'  equity as a percent of assets  increased to 8.47% at December 31,
1997  compared  to 8.05%  for  December  31,  1996.  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 1997, net interest income, on a
fully tax equivalent  basis increased by $90,284  compared to 1996. The increase
in the level of deposits to a small  extent  offset the  positive  impact on net
interest income from the increase in interest earning assets.

The following table summarizes the increases in net interest income.
<TABLE>
Net Interest Income
(In thousands; fully taxable equivalent basis)   1997      1996     1995
<S>                                             <C>       <C>       <C>
Interest Income                                 $2,354    $2,222    $2,003
Interest Expense                                 1,118     1,076       870

Net Interest Income                             $1,236    $1,146    $1,133

Increase in Net Interest Income                    $90       $13       $13
Percent Increase of Net Interest Income           7.88%     1.16%     1.16% 
</TABLE>
<PAGE>
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 1997 and 1996.
<TABLE>
Change in Net                            1997 Over 1996              1996 Over 1995
Interest Income (1)                       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                            $126       $(6)     $120       $89        $8       $97
Taxable securities                (47)       (5)      (52)       72        (2)       70
Tax-exempt securities              60         0        60        44        (5)       39
Federal funds sold and other        2         2         4        18        (5)       13
Total Interest Income             141        (9)      132       223        (4)      219

Interest Expense

Interest bearing DDA                3        (8)       (5)        0         0         0
Savings                             4       (12)       (8)       (3)        0        (3)
Time deposits                      38        17        55       156        53       209
Total Interest Expense             45        (3)       42       153        53       206

Net Interest Income               $96       $(6)      $90       $70      $(57)       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
Yield on Earning Assets                       1997                          1996                       1995
(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)                          $19,744    $1,845    9.35%     $18,386   $1,725    9.38%     $17,442   $1,628    9.33%
Taxable securities                   4,837       296    6.13%       5,602      348    6.22%       4,439      278    6.27%
Tax-exempt securities (fully
taxable equivalent basis)            1,974       135    6.84%       1,101       75    6.85%         460       36    7.82%
agreement to resell Federal
 funds sold                          1,387        76    5.44%       1,342       72    5.27%       1,030       59    5.76%
Other                                   38         2    6.00%          38        2    6.00%          38        2    6.00%
Total interest earning              27,980     2,354    8.41%      26,469    2,222    8.39%      23,409    2,003    8.56%

Cash and due from banks              2,635                          2,642                         2,385
Other assets, net                      623                            550                           601
Total Assets                       $31,238                        $29,661                       $26,395

Liabilities
Interest bearing DDA's              $4,021       113    2.80%      $3,930      118    2.99%      $3,922      117    2.99%
Savings                              6,546       167    2.56%       6,368      175    2.75%       6,494      179    2.75%
Time deposits                       14,124       838    5.93%      13,472      783    5.81%      10,740      574    5.34%
Total interest bearing              24,691     1,118    4.53%      23,770    1,076    4.52%      21,156      870    4.11%

DDA's                                3,684                          3,260                         2,862
Other liabilities                      370                            268                           236
Shareholders' equity                 2,493                          2,363                         2,141

Total liabilities and equity       $31,238                        $29,661                       $26,395

Net Interest Income (fully                    $1,236                        $1,146                        $1,133
taxable equivalent basis)

Net yield on interest
 earning assets                                         4.42%                        4.33%                          4.84%

Net interest spread                                     3.88%                        3.87%                          4.45%

Interest earning assets/
interest bearing liabilities                            1.13x                        1.11x                          1.11x
</TABLE>
(1) Average  balances for loans include  impaired loans in 1997,  1996 and 1995.
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.
<PAGE>
Non-Interest Income

The Company recorded  noninterest  income of $135,432,  a decrease of $11,915 or
(8.09)% from $147,347 in 1996. This decrease was  attributable to a reduction in
service charges on returned checks and non-sufficient funds in 1997.

Non-Interest Expense

During 1997,  noninterest expense increased by $32,304 or 4.11% from $786,566 in
1996 to $818,870 in 1997. The increases  included $20,709 in salaries & benefits
which  included  contributions  to the SEP  Plan  and  the  normal  increase  in
salaries.  The other increases include $8,223 in Premises & Equipment and $8,163
in Legal & Accounting Fees.

Provision for Income Taxes

The  provision  for income  taxes was  $133,356 in 1997  compared to $138,507 in
1996,  a  decrease  of  $5,151  or  (3.72)%.  This was a result  of  non-taxable
municipal  investment  securities.  The effective tax rate,  derived by dividing
applicable income tax expense by income before taxes, was 28% in 1997 and 31% in
1996.

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, 1997 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      91-365 Days    1 - 3 Years    3 - 5 Years    5 Years +      Total
<S>                           <C>            <C>            <C>            <C>            <C>            <C>
Loans                         $1,513,000     $1,957,000     $4,927,000     $6,334,000     $5,123,000     $19,854,000
Investments                      241,000      2,274,000      3,095,000        931,000         92,000       6,633,000
Federal Funds                  2,000,000                                                                   2,000,000
Total                          3,754,000      4,231,000      8,022,000      7,265,000      5,215,000      28,487,000

Liabilities
Interest-bearing
transaction accounts           3,872,000                                                                   3,872,000
Savings                        6,659,000                                                                   6,659,000
Certificates of Deposit        5,029,000      3,562,000      4,022,000      1,702,000                     14,315,000
Total                         15,560,000      3,562,000      4,022,000      1,702,000              0      24,846,000

Asset/(Liabilities) GAP      (11,806,000)       669,000      4,000,000      5,563,000      5,215,000       3,641,000

Cumulative GAP              $(11,806,000)  $(11,137,000)   $(7,137,000)   $(1,574,000)    $3,641,000
</TABLE>
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  decreased  from  ($13,624,000)  at
December  31,  1996 to  ($11,137,000)  at  December  31,  1997 as a result of an
increase of asset  maturities in the investment 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 1998 the Bank  could  pay  additional  dividends  of
approximately  $465,000 plus 1998 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, 1997,
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  $33,018 or 0.17% of
total loans at December 31, 1997  compared to  approximately  $36,952 or 0.19% a
year earlier.

The  provision for loan losses was $36,000 in 1997 and 1996 and $33,500 in 1995.
For the same years,  charge-offs,  net of recoveries,  were $30,324,  $5,145 and
$37,129, respectively.

The allowance for loan losses is at $180,631 or 0.91% of total loans at December
31, 1997  compared to  $174,955  or 0.91% of total loans at year-end  1996.  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  affect 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.
<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 largest 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  $1,832,000  and
$1,422,000 as of December 31, 1997 and 1996 in  outstanding  lines of credit and
commitments to make loans of which $770,142 and $588,022 were still available to
the  respective  borrower.  Furthermore,  the Bank had issued  letters of credit
totaling $244,901 as of December 31, 1997.

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,  1997,  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, 1997.

The Bank does not offer commercial, consumer, international, trust, or municipal
trading services.
<PAGE>
                        DIRECTORS AND EXECUTIVE OFFICERS


ERVIN R. NOWAK                             EUGENE MCLEAN
Chairman of the Board of:                  Director of:
     Huron National Bancorp, Inc. and             Huron National Bancorp, Inc.
     Huron National Bank                          Huron National Bank
President of Builders Mart, Inc.           Retired Shipping Captain


MARVIN C. BEATTY                           LYNWOOD LAMB
Vice-Chairman of:                          Director of:
     Huron National Bancorp, Inc.                 Huron National Bancorp, Inc.
     Huron National Bank                          Huron National Bank
Owner StateWide Real Estate                Investment Advisor


LOUIS DEHRING                              MICHAEL L. CAHOON
Director of:                               President and Chief Executive Officer
     Huron National Bancorp, Inc.          and Director of:
     Huron National Bank                          Huron National Bancorp, Inc.
Owner Paull Investments                           Huron National Bank

DONALD A. HAMPTON                          LEON DELEKTA
Director of:                               Director of:
     Huron National Bancorp, Inc.                 Huron National Bancorp, Inc.
     Huron National Bank                          Huron National Bank
President of The Buoy, Inc. and            Retired Potato Farmer and
Hampton IGA, Inc.                          Truck Transportation

JOHN A. TIERNEY                            PAULETTE D. KIERZEK
Director of:                               Cashier of Huron National Bank
     Huron National Bancorp, Inc.          Chief Financial Officer of:
     Huron National Bank                         Huron National Bancorp, Inc.
Owner of Tierney & Williams, Inc.,         Secretary to the Board of:
President of 211 Bar & Restaurant and            Huron National Bancorp, Inc.
Partner of Knost Cottages                        Huron National Bank

DALE L. BAUER
Vice-President of:
     Huron National Bank
<PAGE>
                          HURON NATIONAL BANCORP, INC.
                          CONSOLIDATED BALANCE SHEETS
                           December 31, 1997 and 1996
<TABLE>
ASSETS                                                 1997              1996
<S>                                                <C>                <C>
Cash and due from banks (Note 2)                   $2,391,051         $2,438,015
Federal Funds Sold                                  2,000,000            900,000
Cash and cash equivalents                           4,391,051          3,338,015

Securities available for sale (Note 3)              1,979,375          1,746,701
Securities held to maturity (Note 3)
(Fair value of $4,693,000 in 1997
and $5,450,000 in 1996)                             4,653,385          5,402,689

Loans (Note 4)                                     19,853,701         19,186,184

Allowance for loan losses (Note 5)                   (180,631)          (174,955)
Net loans                                          19,673,070         19,011,229

Bank premises and equipment - net (Note 6)            516,773            488,598
Accrued interest receivable                           270,662            234,632
Other real estate owned                                23,448
Other assets                                          107,374             70,406

Total Assets                                      $31,615,138        $30,292,270

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities
Deposits (Note 7)
Non interest-bearing transaction accounts          $3,865,667         $3,333,231
Interest-bearing transaction accounts               3,872,456          3,769,530
Savings                                             6,659,221          6,498,161
Time                                               14,314,705         13,993,088
Total deposits                                     28,712,049         27,594,010
Accrued interest payable                               62,289             63,216
Other liabilities (Note 8)                            162,950            195,371

Total liabilities                                  28,937,288         27,852,597

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)                         1,423,597          1,185,666
Net unrealized gain on securities available
 for sale, net of tax of ($2,191) in 1997 
 and ($2,064) in 1996                                   4,253              4,007
Total shareholders' equity                          2,677,850          2,439,673

Total liabilities and shareholders' equity        $31,615,138        $30,292,270
</TABLE>

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

<PAGE>
                          HURON NATIONAL BANCORP, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
              For the years ended December 31, 1997, 1996 and 1995
<TABLE>
                                      1997            1996          1995
Interest Income
<S>                                <C>            <C>            <C>
Loans, including fees              $1,845,367     $1,724,683     $1,627,379
Federal funds sold                     75,557         70,650         59,274
Securities available for sale:
U.S. Treasury                          90,103         63,100         27,218
U.S. Agencies                          16,311         61,977         63,301
Corporate                              12,231
Securities held to maturity:

U.S. Agencies                          59,675        137,273        115,865
State and Municipals                  124,028         49,827         23,748
Corporate                              83,057         86,130         71,803
Other                                   2,250          2,250          2,250
Total interest income               2,308,579      2,195,890      1,990,838

Interest Expense
Deposits (Note 7)                   1,117,854      1,075,226        870,052

Net Interest Income                 1,190,725      1,120,664      1,120,786

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

Net Interest Income After
Provision for Loan Losses           1,154,725      1,084,664      1,087,286

Non-Interest Income
Service charges                        89,426        101,577        111,810
Gain on sales of student loans                                       15,460
Other                                  46,006         45,770         53,988
Total non-interest income             135,432        147,347        181,258

Non-Interest Expense
Salaries and benefits (Note 12)       408,008        387,299        382,305
Premises and equipment                126,685        118,462        138,983
Legal and accounting fees              57,915         49,752         53,496
Other operating expense (Note 9)      226,262        231,053        248,935
Total non-interest expense            818,870        786,566        823,719

Income Before Income Tax              471,287        445,445        444,825

Provision for Income Tax (Note 8)     133,356        138,507        138,618

Net Income                           $337,931       $306,938       $306,207

Basic Earnings Per Share (Note 1)       $5.41          $4.91          $4.90
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
                          HURON NATIONAL BANCORP, INC.
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
             For the years ended December 31, 1997, 1996, and 1995

<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, 1995              $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

Net income for the year                                                337,931                         337,931

Cash dividends ($1.60 per share)                                      (100,000)                       (100,000)

Unrealized gain (loss) on securities
available for sale, net of tax
                                                                                         246              246

BALANCE AT DECEMBER 31, 1997          $625,000        $625,000      $1,423,597        $4,253       $2,677,850
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
<PAGE>
                          HURON NATIONAL BANCORP, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the years ended December 31, 1997, 1996 and 1995
<TABLE>

CASH FLOWS FROM OPERATING ACTIVITIES
                                               1997            1996           1995
<S>                                          <C>            <C>            <C>
Net income                                   $337,931       $306,938       $306,207
Adjustments to reconcile net 
 income to net cash
 from operating activities

Depreciation and amortization                  45,815         40,233         61,545
Net premium amortization and discount
 accretion on securities                      133,489         50,399         48,732
Provision for loan losses                      36,000         36,000         33,500
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                           (36,030)       (7,355)        (39,157)
Other assets and other real estate            (36,968)       39,187         (17,864)
Interest payable                                 (927)        7,648          17,164
Other liabilities                             (32,548)       15,654         (67,920)
Net cash from operating activities            446,762       488,704         324,083

CASH FLOWS FROM INVESTING ACTIVITIES

Available-for-sale securities:

Purchases                                    (988,751)      (989,086)    (1,765,823)
Maturities                                    750,000      1,000,000        850,000
Held-to-maturity securities:

Purchases                                  (1,216,735)    (3,437,776)    (2,475,906)
Sales                                                                       295,125
Maturities                                  1,839,000      1,783,000      2,358,000
Net increase in loans                        (721,289)    (1,470,426)    (1,436,707)
Proceeds from sales of student loans                                        623,074
Proceeds from sale of other real estate                                     102,000
Purchase of property and equipment            (73,990)      (107,323)       (28,062)
Net cash used in investing activities        (411,765)    (3,221,611)    (1,478,299)

CASH FLOWS FROM FINANCING ACTIVITIES

Net increase in deposit accounts            1,118,039      2,316,945      1,996,613
Dividends paid                               (100,000)       (93,750)       (78,125)
Net cash from financing activities          1,018,039      2,223,195      1,918,488

NET INCREASE/(DECREASE) IN CASH AND

CASH EQUIVALENTS                            1,053,036       (509,712)       764,272
CASH AND CASH EQUIVALENTS AT:

BEGINNING OF PERIOD                         3,338,015      3,847,727      3,083,455
END OF PERIOD                              $4,391,051     $3,338,015     $3,847,727

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION

Cash paid during the period for:
Interest                                   $1,118,781     $1,067,578       $852,888
Federal income tax                            169,413         91,025        236,709
</TABLE>
Non cash investing activities
A loan in the amount of $23,448 was transferred to other real estate in 1997 and
loans in the amount of $102,000 were transferred 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, 1997, 1996 and 1995


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 days or more 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.

     EARNINGS PER SHARE ~ On March 3, 1997, the Financial  Accounting  Standards
Board (FASB) issued  Statement 128,  Earnings Per Share,  which is effective for
financial  statements beginning with year end 1997. Statement 128 simplifies the
calculation  of earnings per share by  replacing  primary EPS with basic EPS. It
also requires dual  presentation  of basic EPS and diluted EPS for entities with
complex  capital  structures.  Basic EPS includes no dilution and is computed by
dividing net income by the  weighted-average  common shares  outstanding for the
period.  Diluted EPS reflects the potential  dilution of  securities  that could
share in  earnings,  such as stock  options,  warrants  or  other  common  stock
equivalents.  The Company  expects  Statement  128 to have little  impact on its
earnings per share calculations in future years, other than changing terminology
to basic EPS.  All prior  period EPS data is  restated  to conform  with the new
presentation.  Basic earnings per share is computed  using the weighted  average
number of shares  outstanding.  The number of shares used in the  computation of
basic earnings per share was 62,500 for all years presented.

     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, 1997,  the Bank was required to maintain  cash  balances
with the Federal Reserve Bank in the amount of $75,000.


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
    1997                            Amortized          Unrealized     Unrealized
Securities Available for Sale:        Cost               Gains         Losses        Fair Value
<S>                                <C>                 <C>            <C>            <C>
U.S. Treasury                      $1,249,810           $4,877         $-             $1,254,687
U.S. Agency                           250,343              282                           250,625
Corporate                             472,779            1,284                           474,063
                                   $1,972,932           $6,443         $-             $1,979,375

Securities Held to Maturity:
U.S. Agency                          $297,005             $745         $-              $297,750
Mortgage-backed                       209,713              889                          210,602
State and Municipals                2,799,246           34,272                        2,833,518
Corporate                           1,347,421            4,443         (1,192)        1,350,672
                                   $4,653,385          $40,349        $(1,192)       $4,692,542
</TABLE>
<TABLE>
                                                         Gross          Gross
1996                                  Amortized        Unrealized     Unrealized       Fair
Securities Available for Sale:          Cost             Gains         Losses         Value
<S>                                <C>                 <C>            <C>            <C>
U.S. Treasury                      $1,239,342           $4,408           $-          $1,243,750
U.S. Agency                           501,288            1,663                          502,951
                                   $1,740,630           $6,071           $-          $1,746,701

Securities Held To Maturity:
U.S. Agency                        $1,849,015           $1,305           $-          $1,850,320
State and Municipals                2,231,791           40,486                        2,272,277
Corporate                           1,321,883            5,461                        1,327,344
                                   $5,402,689          $47,252           $-          $5,449,941
</TABLE>

There were no sales of securities  classified as available for sale during 1997,
1996 or 1995.  There  were no  transfers  of  securities  classified  as held to
maturity  during  1997,  1996 or 1995.  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, 1997,
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 Cost      Fair Value          Amortized Cost      Fair Value
<S>                                          <C>                 <C>                 <C>                 <C>
Due in one year or less                        $996,438            $997,969          $1,500,535          $1,501,982
Due after one year through five years           976,494             981,406           2,850,905           2,884,494
Due after five years through ten years                                                   92,232              95,464
Subtotal                                      1,972,932           1,979,375           4,443,672           4,481,940
Mortgage-backed securities                                                              209,713             210,602

Totals                                       $1,972,932          $1,979,375          $4,653,385          $4,692,542
</TABLE>

Securities  available for sale with a carrying value of $254,766 at December 31,
1997 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>

Geographic:                                  Amortized Cost   Fair Value
<S>                                          <C>              <C>
Rogers City, Michigan                        209,465          212,626
Issuers:
Greater Rockford, IL Airport Authority       255,940          261,533
Branch County of Michigan                    293,781          300,021
</TABLE>

NOTE 4 - LOANS

Loans consist of the following at December 31:
<TABLE>
                             1997               1996
<S>                      <C>               <C>
Commercial loans          $2,772,794         $2,402,382
Real estate loans         10,585,218         10,407,482
Installment loans          6,495,689          6,376,320
Total loans              $19,853,701        $19,186,184
</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>
                                1997              1996
<S>                           <C>              <C>
Balance - January 1           $107,520          $157,451
New loans                      302,891            68,915
Repayments                    (150,357)         (118,846)
Balance - December 31         $260,054          $107,520
</TABLE>
<PAGE>
NOTE 5 -  ALLOWANCE FOR LOAN LOSSES


An analysis of changes in the allowance for loan losses follows:
<TABLE>
                                          1997            1996           1995
<S>                                     <C>            <C>            <C>
Balance at beginning of year            $174,955       $144,100       $147,729
Additions (Deductions)
Provision for loan losses                 36,000         36,000         33,500
Recoveries credited to allowance           4,905          1,381          2,921
Loans charged-off                        (35,229)        (6,526)       (40,050)
Balance at end of year                  $180,631       $174,955       $144,100
</TABLE>

During the years 1997 and 1996,  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
1997                                    Cost           Depreciation       Value
<S>                                  <C>               <C>                <C>
Land                                    $60,000                            $60,000
Bank building and improvements          481,509        $(198,915)          282,594
Furniture and equipment                 502,417         (328,238)          174,179
Total                                $1,043,926        $(527,153)         $516,773

1996
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
</TABLE>

Provisions for depreciation of $45,815,  $40,233, and $57,510,  were included in
non-interest expense in 1997, 1996 and 1995, respectively.


NOTE 7 - DEPOSITS

The Bank had an aggregate of  approximately  $2,039,000  and  $1,943,000 in time
deposits issued in denominations of $100,000 or more as of December 31, 1997 and
1996, respectively. Interest expense on time deposits issued in denominations of
$100,000 or more was approximately $103,000, $105,000, and $92,000 in 1997, 1996
and 1995, respectively.

At year-end 1997, stated maturities of time deposits were:
<TABLE>
                       <S>              <C>
                       1998              $8,591,436
                       1999               1,797,725
                       2000               2,224,031
                       2001                 998,302
                       2002                 703,211
                                        $14,314,705
</TABLE>
Related party deposits totaled $411,365 and $344,592 at year-end 1997 and 1996.
<PAGE>
NOTE 8 - INCOME TAX


The provision for federal income tax for the years ended December 31 consists of
the following:
<TABLE>
1997 1996 1995
<S>                           <C>            <C>            <C>
Current expense               $109,543       $171,073       $116,529
Deferred expense (benefit)      23,813        (32,566)       22,089
Provision for income tax      $133,356       $138,507       $138,618
</TABLE>

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

                                                       December 31,
Deferred tax liabilities:                         1997           1996
<S>                                          <C>            <C>
Effects of preparing tax return
 on a cash basis                              $(67,752)      $(49,313)
Property and equipment                        (108,183)       (99,249)
Unrealized gain on securities
 available for sale                             (2,191)        (2,064)
Other                                           (7,416)       (16,587)
                                              (185,542)      (167,213)

Deferred tax assets:

Allowance for loan losses                       39,517         37,587
Loan fees                                                       7,595
Other                                               54
                                                39,571         45,182
Net deferred tax liability                   $(145,971)     $(122,031)
</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>

                                                    1997           1996           1995
<S>                                               <C>            <C>            <C>
Statutory rate applied to income before taxes     $160,238       $151,451       $151,240
Add (deduct)
Tax-exempt interest income                         (20,165)       (12,988)        (7,090)
Surtax exemption and other                          (6,717)            44         (5,532)
Provision for income tax                          $133,356       $138,507       $138,618
</TABLE>

NOTE 9 - OTHER OPERATING EXPENSE

Other  operating  expenses  for the  years  ended  December  31  consist  of the
following:
<TABLE>
                                          1997           1996           1995
<S>                                    <C>            <C>            <C>
Office supplies                         $28,827        $28,369        $30,836
Directors fees                           50,400         48,000         44,000
General insurance                        19,560         18,374         17,247
FDIC insurance                            3,025          2,000         26,610
Other expense                           124,450        134,310        130,242
Total other operating expenses         $226,262       $231,053       $248,935
</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>
                                      1997           1996
<S>                                <C>            <C>
Outstanding letters of credit      $244,901       $247,179
Commitments to make loans
and Unused lines of credit         $770,142       $588,022
</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, 1997.

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  $3,500,591   and   $2,500,792  at  December  31,  1997  and  1996,
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 1998  the  Bank is  limited  to  paying  additional
dividends of approximately $465,000 plus 1998 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, 1997, 1996 and 1995 was
$7,348, $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>
                                        1997                          1996
                              Carrying         Fair         Carrying         Fair
                                Value          Value          Value          Value
<S>                           <C>            <C>            <C>            <C>
Financial assets
Cash and cash equivalents     $4,391         $4,391         $3,338         $3,338
Securities                     6,632          6,672          7,149          7,197
Loans, net                    19,673         19,743         19,011         19,165
Federal Reserve Stock             38             38             38             38
Interest receivable              271            271            235            235

Financial liabilities
Deposits                      28,712         28,718         27,594         27,657
Interest payable                  62             62             63             63
</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.


At year-end, the Bank's 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
1997                                         Amount    Ratio     Amount    Ratio     Amount    Ratio
<S>                                          <C>       <C>       <C>       <C>       <C>       <C>
Total capital (to risk weighted assets)      $2.9      14.4%     $1.6      8.0%      $2.0      10.0%
Tier 1 capital (to risk weighted assets)     $2.7      13.5%     $0.8      4.0%      $1.2       6.0%
Tier 1 capital (to average assets)           $2.7       8.6%     $1.2      4.0%      $1.6       5.0%

1996

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%
</TABLE>

The Bank at year end 1997 and 1996 was categorized as well capitalized.


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                                                 1997          1996
<S>                                               <C>            <C>
Cash and cash equivalents                             $2,091        $11,939
Investment in Huron National Bank                  2,675,759      2,427,734

Total Assets                                      $2,677,850     $2,439,673

LIABILITIES                                            --             --

SHAREHOLDERS' EQUITY                               2,677,850     $2,439,673

Total liabilities and shareholders' equity        $2,677,850     $2,439,673
</TABLE>
<PAGE>
NOTE 15 - HURON NATIONAL BANCORP, INC. (PARENT COMPANY ONLY) CONDENSED FINANCIAL
          INFORMATION (continued)
<TABLE>
                         CONDENSED STATEMENTS OF INCOME

                                                               Years Ended December 31,
                                                         1997           1996           1995
<S>                                                   <C>            <C>            <C>
OPERATING INCOME
Dividends from Huron National Bank                    $100,000       $103,750        $83,125
OPERATING EXPENSES
Other expenses                                           9,848         15,590          5,204
Income before equity in undistributed
 net income of subsidiary                               90,152         88,160         77,921
Equity in undistributed net income of subsidiary       247,779        218,778        228,286
NET INCOME                                            $337,931       $306,938       $306,207
</TABLE>
<TABLE>
                       CONDENSED STATEMENTS OF CASH FLOWS

                                                      Years Ended December 31,
                                                1997           1996           1995
<S>                                          <C>            <C>            <C>
Cash Flows from Operating Activities
Net income                                   $337,931       $306,938       $306,207
Adjustments to reconcile net income to
cash from operating activities:
Net amortization                                                              4,035
Equity in undistributed net income
of subsidiary                                (247,779)      (218,778)      (228,286)
Change in other assets                              0         28,442        (28,444)
Change in other liabilities                         0        (15,537)        15,537

Net Cash From Operating Activities             90,152        101,065         69,049

Cash Flows from Financing Activities
Dividends Paid                               (100,000)       (93,750)       (78,125)
Net Cash from Financing Activities           (100,000)       (93,750)       (78,125)

Net Change in Cash and Cash Equivalents        (9,848)         7,315         (9,076)
Cash and Cash Equivalents
Beginning of the Period                        11,939          4,624         13,700

End of the Period                              $2,091        $11,939         $4,624
</TABLE>
<PAGE>
                                   EXHIBIT 21



                               LIST OF SUBSIDIARY



                NAME                                    INCORPORATED

      1.  Huron National Bank                             Michigan