<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q/A


                 [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2002

                                       OR

                 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the transition period from < > to < >

                         Commission file number: 0-20167

                       NORTH COUNTRY FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

              MICHIGAN                                 38-2062816
   (State or other jurisdiction of         (I.R.S. Employer Identification No.)
    incorporation or organization)

 1011 NOTEWARE DRIVE, TRAVERSE CITY, MI                  49686
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code:  (906) 341-8401


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 periods that 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
                                       -------      --------


Indicated by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                                    Yes           No   X
                                       -------      --------


As of October 31, 2002, there were outstanding 7,019,152 shares of the
registrant's common stock, no par value.




<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
                                      INDEX


<TABLE>
<CAPTION>
PART 1.       FINANCIAL INFORMATION                                                                    Page No.
                                                                                                       --------
<S>                                                                                                    <C>
     Item 1.      Financial Statements

                  Condensed Consolidated Balance Sheets -
                  September 30, 2002 (Unaudited) and December 31, 2001...............................        1

                  Condensed Consolidated Statements of Income (Loss) - Three
                    and Nine Months Ended September 30, 2002 (Unaudited) and
                    September 30, 2001 (Unaudited)...................................................        2

                  Condensed Consolidated Statements of Changes in Shareholders'
                    Equity - Three and Nine Months Ended September 30, 2002
                    (Unaudited) and September 30, 2001 (Unaudited)...................................        3

                  Condensed Consolidated Statements of Cash Flows -
                    Nine Months Ended September 30, 2002 (Unaudited) and
                    September 30, 2001 (Unaudited)...................................................      4-5

                  Notes to Condensed Consolidated Financial
                    Statements (Unaudited)...........................................................      6-9


     Item 2.      Management's Discussion and Analysis of Financial
                    Condition and Results of Operations..............................................    10-17


     Item 3.      Quantitative and Qualitative Disclosures About Market Risk.........................       18


     Item 4.      Controls and Procedures............................................................       19


PART II.      OTHER INFORMATION

     Item 1.      Legal Proceedings..................................................................       20


     Item 6.      Exhibits and Reports on Form 8-K...................................................       20


     SIGNATURE    ...................................................................................       21


     CERTIFICATION ..................................................................................       22
</TABLE>



<PAGE>


                       NORTH COUNTRY FINANCIAL CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

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

<TABLE>
<CAPTION>

                                                                                        September 30,  December 31,
                                                                                            2002           2001
                                                                                            ----           ----
                                                                                         (Unaudited)
<S>                                                                                     <C>             <C>
ASSETS
     Cash and due from banks                                                            $    22,352     $    25,163
     Federal funds sold                                                                       3,509          11,584
                                                                                        -----------     -----------
         Cash and cash equivalents                                                           25,861          36,747

     Interest-bearing deposits in other financial institutions                                    0             634

     Securities available for sale                                                           85,331          61,885
     Federal Home Loan Bank stock                                                             4,375           4,375

     Total loans                                                                            463,899         504,412
         Allowance for loan losses                                                          (17,982)        (10,444)
                                                                                        -----------     -----------
     Net loans                                                                              445,917         493,968
     Premises and equipment                                                                  17,755          18,637
     Other assets                                                                            28,064          20,383
                                                                                        -----------     -----------

         Total assets                                                                   $   607,303     $   636,629
                                                                                        ===========     ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
     Deposits:
         Non-interest-bearing                                                           $    47,631     $    46,342
         Interest-bearing                                                                   415,686         436,182
                                                                                        -----------     -----------
              Total deposits                                                                463,317         482,524
     Borrowings                                                                              88,236          88,549
     Other liabilities                                                                        4,942           5,217
                                                                                        -----------     -----------
         Total liabilities                                                                  556,495         576,290
                                                                                        -----------     -----------

     Guaranteed preferred beneficial interests in the Corporation's
       subordinated debentures                                                               12,450          12,450
                                                                                        -----------     -----------

     Shareholders' equity:
         Preferred stock, no par value, 500,000 shares authorized, no shares
           outstanding
         Common stock, no par value, 18,000,000 shares authorized,
         7,019,152 shares issued and outstanding                                             16,175          16,175
         Retained earnings                                                                   21,213          31,554
         Accumulated other comprehensive income                                                 970             160
                                                                                        -----------     -----------
              Total shareholders' equity                                                     38,358          47,889
                                                                                        -----------     -----------

         Total liabilities and shareholders' equity                                     $   607,303     $   636,629
                                                                                        ===========     ===========
</TABLE>



--------------------------------------------------------------------------------
     See accompanying notes to condensed consolidated financial statements.



                                       1.


<PAGE>


                       NORTH COUNTRY FINANCIAL CORPORATION
               CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                  (Dollars in thousands, except per share data)
                                   (Unaudited)


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                                    Three Months Ended     Nine Months Ended
                                                   ----September 30,---   ----September 30,---
                                                     2002        2001        2002       2001
                                                     ----        ----        ----       ----
<S>                                                <C>         <C>        <C>         <C>
Interest income:
     Interest and fees on loans:
         Taxable                                   $  7,130    $ 10,402   $ 23,199    $ 32,556
         Tax-exempt                                     561         862      1,735       2,759
     Interest on securities:
         Taxable                                        852       1,310      2,781       3,814
         Tax-exempt                                      68          60        200         248
     Other interest income                               66         163        144         460
                                                   --------    --------   --------    --------

         Total interest income                        8,677      12,797     28,059      39,837
                                                   --------    --------   --------    --------
Interest expense:
     Deposits                                         3,105       5,132      9,526      17,293
     Borrowings                                       1,283       1,235      3,831       3,580
     Subordinated debentures                            138         199        414         680
                                                   --------    --------   --------    --------

         Total interest expense                       4,526       6,566     13,771      21,553
                                                   --------    --------   --------    --------
Net interest income                                   4,151       6,231     14,288      18,284
Provision for loan losses                            13,001         825     17,051       1,900
                                                   --------    --------   --------    --------
Net interest income (loss) after provision for
     loan losses                                     (8,850)      5,406     (2,763)     16,384
                                                   --------    --------   --------    --------
Other income:
     Service fees                                       526         456      1,395       1,389
     Gain on sale of securities                         247           0        669         513
     Net gain on sale of branches                         0         501          0         501
     Other loan and lease income                        238       1,283        878       5,313
     Other                                              137         361        964         497
                                                   --------    --------   --------    --------

         Total other income                           1,148       2,601      3,906       8,213
                                                   --------    --------   --------    --------
Other expenses:
     Salaries, commissions, and related benefits      1,796       2,588      5,678       9,616
     Occupancy and equipment                            770         804      2,311       2,501
     Other                                            3,047       2,467      7,388       6,679
                                                   --------    --------   --------    --------

         Total other expenses                         5,613       5,859     15,377      18,796
                                                   --------    --------   --------    --------
Income (loss) before provision (credit) for
  income taxes                                      (13,315)      2,148    (14,234)      5,801
Provision (credit) for income taxes                  (4,833)        261     (5,648)        700
                                                   --------    --------   --------    --------

Net income (loss)                                  $ (8,482)   $  1,887   $ (8,586)   $  5,101
                                                   ========    ========   ========    ========

Earnings (loss) per common share:
     Basic                                         $  (1.20)   $   0.27   $  (1.22)   $   0.73
                                                   ========    ========   ========    ========
     Diluted                                       $  (1.20)   $   0.27   $  (1.22)   $   0.73
                                                   ========    ========   ========    ========

Dividends declared per common share                $   0.00    $   0.10   $   0.25    $   0.30
                                                   ========    ========   ========    ========
</TABLE>

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

     See accompanying notes to condensed consolidated financial statements.


                                       2.


<PAGE>


                       NORTH COUNTRY FINANCIAL CORPORATION
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                             (Dollars in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
                                            Three Months Ended      Nine Months Ended
                                           ---September 30,----    ---September 30,----
                                             2002        2001        2002        2001
                                             ----        ----        ----        ----
<S>                                        <C>         <C>         <C>         <C>
Balance, beginning of period               $ 46,433    $ 45,912    $ 47,889    $ 44,617

Net income (loss) for period                 (8,482)      1,887      (8,586)      5,101
Net unrealized gain (loss) on securities
  available for sale                            407         699         810         (51)
                                           --------    --------    --------    --------
     Total comprehensive income (loss)       (8,075)      2,586      (7,776)      5,050

Dividends declared                                0        (702)     (1,755)     (2,107)
Issuance of common stock                          0           0           0         239
Common stock retired                              0         (90)          0         (93)
                                           --------    --------    --------    --------

Balance, end of period                     $ 38,358    $ 47,706    $ 38,358    $ 47,706
                                           ========    ========    ========    ========
</TABLE>


--------------------------------------------------------------------------------
     See accompanying notes to condensed consolidated financial statements.

                                       3.



<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                                                                              Nine Months Ended
                                                                            ----September 30,----
                                                                               2002        2001
                                                                               ----        ----
<S>                                                                        <C>           <C>
Increase (decrease) in cash and cash equivalents:

     Cash flows from operating activities:
         Net income (loss)                                                  $  (8,586)   $   5,101
         Adjustments to reconcile net income (loss) to
           net cash provided by operating activities:
              Provision for loan losses                                        17,051        1,900
              Depreciation and amortization                                     1,510        2,230
              Gain on sales of securities                                        (669)        (513)
              Loss on sale of premises, equipment, and other real estate          520           62
              Net gain on sale of branches                                          0         (501)
              Change in other assets                                           (5,317)      (1,544)
              Change in other liabilities                                        (275)        (479)
                                                                            ---------    ---------
     Net cash provided by operating activities                                  4,234        6,256
                                                                            ---------    ---------

     Cash flows from investing activities:
         Net (increase) decrease in interest-bearing deposits in other
           financial institutions                                                 634       (2,662)
         Purchase of securities available for sale                           (110,582)     (66,069)
         Proceeds from sales of securities available for sale                  81,280       37,651
         Proceeds from maturities of securities available for sale              7,635       18,821
         Net decrease in loans                                                 25,818       21,527
         Capital expenditures                                                    (933)      (2,227)
         Proceeds from sale of premises, equipment, and other real estate       2,303          177
         Net cash paid for sale of branches                                         0      (10,728)
                                                                            ---------    ---------
     Net cash provided by (used in) investing activities                        6,155       (3,510)
                                                                            ---------    ---------

     Cash flows from financing activities:
         Net decrease in deposits                                             (19,207)     (11,726)
         Net decrease in federal funds purchased                                    0       (1,800)
         Proceeds from borrowings                                                   0       20,000
         Principal payments on borrowings                                        (313)        (362)
         Proceeds from issuance of common stock                                     0          239
         Retirement of common stock                                                 0          (93)
         Dividends paid                                                        (1,755)      (2,107)
                                                                            ---------    ---------
     Net cash provided by (used in) financing activities                      (21,275)       4,151
                                                                            ---------    ---------

Net increase (decrease) in cash and cash equivalents                          (10,886)       6,897
Cash and cash equivalents at beginning of period                               36,747       20,829
                                                                            ---------    ---------

Cash and cash equivalents at end of period                                  $  25,861    $  27,726
                                                                            =========    =========

</TABLE>






--------------------------------------------------------------------------------
     See accompanying notes to condensed consolidated financial statements.

                                       4.


<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                             (Dollars in thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
                                                                Nine Months Ended
                                                                --September 30,--
                                                                  2002      2001
                                                                  ----      ----
<S>                                                             <C>       <C>
Supplemental cash flow information:

Cash paid for:
    Interest                                                    $13,872   $21,750
    Income taxes                                                    550     1,195

Noncash investing and financing activities:
    Transfers of foreclosures from loans to other real estate     5,181     1,899
    Assets and liabilities divested in branch sales:
         Loans                                                        0         8
         Premises and equipment, net                                  0       466
         Deposits                                                     0    11,683
         Other liabilities                                            0        34

</TABLE>





--------------------------------------------------------------------------------
     See accompanying notes to condensed consolidated financial statements.

                                       5.

<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

1.   BASIS OF PRESENTATION

     The unaudited condensed consolidated financial statements of North Country
     Financial Corporation (the "Corporation") have been prepared in accordance
     with generally accepted accounting principles for interim financial
     information and the instructions to Form 10-Q and Rule 10-01 of Regulation
     S-X. Accordingly, they do not include all of the information and footnotes
     required by generally accepted accounting principles for complete financial
     statements. In the opinion of management, all adjustments (consisting of
     normal recurring accruals) considered necessary for a fair presentation
     have been included. Operating results for the nine-month period ended
     September 30, 2002, are not necessarily indicative of the results that may
     be expected for the year ending December 31, 2002. The unaudited
     consolidated financial statements and footnotes thereto should be read in
     conjunction with the audited consolidated financial statements and
     footnotes thereto included in the Corporation's Annual Report on Form 10-K
     for the year ended December 31, 2001.

     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 revenue and expenses
     during the period. Actual results could differ from those estimates.

2.   CHANGE IN ACCOUNTING

     In June 2001, the Financial Accounting Standards Board (FASB) issued
     Statement of Financial Accounting Standards (SFAS) No. 141, "Business
     Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets."
     SFAS No. 141 supersedes Accounting Principles Board (APB) Opinion No. 16,
     "Business Combinations," and SFAS No. 38, "Accounting for Preacquisition
     Contingencies of Purchased Enterprises." SFAS No. 141 requires the use of
     the purchase method of accounting for business combinations initiated after
     June 30, 2001. SFAS No. 142 supersedes APB Opinion No. 17, "Intangible
     Assets." SFAS No. 142 addresses how intangible assets acquired outside of a
     business combination should be accounted for upon acquisition and how
     goodwill and other intangible assets should be accounted for after they
     have been initially recognized. SFAS No. 142 eliminates the amortization
     for goodwill and other intangible assets with indefinite lives. Other
     intangible assets with a finite life will be amortized over their useful
     life. Goodwill and other intangible assets with indefinite useful lives
     shall be tested for impairment annually or more frequently if events or
     changes in circumstances indicate that the asset may be impaired. SFAS No.
     142 is effective for fiscal years beginning after December 15, 2001. The
     Corporation's adoption of SFAS No. 142 on January 1, 2002, did not have a
     material impact on the consolidated financial statements as of the date of
     adoption. The elimination of goodwill amortization will result in a
     reduction of amortization expense of approximately $290,000 for the year
     ended December 31, 2002, compared to 2001.

3.   QUARTERLY FINANCIAL RESTATEMENT

     As a result of additional loan file reviews conducted in the fourth
     quarter, including those of the regulators and third party consultants,
     management determined an additional provision for loan losses should be
     provided for in the quarter ended September 30, 2002. The September 30,
     2002, Form 10-Q has been amended on this Form 10-Q/A to reflect an
     additional provision for loan losses of $2,310,000, net of taxes of
     $785,000, for an increase in the net loss of $1,525,000 from the previously
     reported financial statements.





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

                                       6.

<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

4.   EARNINGS (LOSS) PER SHARE

     The factors used in the earnings (loss) per common share computation
     follow.

<TABLE>
<CAPTION>

                                                            Three Months         Nine Months
                                                         Ended September 30,   Ended September 30,
                                                           2002       2001      2002       2001
                                                           ----       ----      ----       ----
                                                           (In thousands, except per share data)
<S>                                                      <C>        <C>        <C>        <C>
Basic earnings (loss) per common share:
  Net income (loss)                                       $(8,482)   $ 1,887   $(8,586)   $ 5,101
                                                          =======    =======   =======    =======
  Weighted average common shares outstanding                7,019      7,021     7,019      7,019
                                                          =======    =======   =======    =======

    Basic earnings (loss) per common share                $ (1.20)   $  0.27   $ (1.22)   $  0.73
                                                          =======    =======   =======    =======
Diluted earnings (loss) per common share:
  Net income (loss)                                       $(8,482)   $ 1,887   $(8,586)   $ 5,101
                                                          =======    =======   =======    =======

  Weighted average common shares outstanding
    for basic earnings (loss) per common share              7,019      7,021     7,019      7,019
  Add:  Dilutive effect of assumed exercise
    of stock options                                            2          3         3          3
  Add:  Dilutive effect of directors' deferred stock
    compensation                                                0          1         0          1
                                                          -------    -------   -------    -------
    Average shares and dilutive potential common shares     7,021      7,025     7,022      7,023
                                                          =======    =======   =======    =======

       Diluted earnings (loss) per common share           $ (1.20)   $  0.27   $ (1.22)   $  0.73
                                                          =======    =======   =======    =======
</TABLE>

5.   INVESTMENT SECURITIES

     The amortized cost and estimated fair value of investment securities
     available for sale as of September 30, 2002 and December 31, 2001, are as
     follows (in thousands):


<TABLE>
<CAPTION>
                                        ---September 30, 2002---       ---December 31, 2001-----
                                         Amortized    Estimated         Amortized     Estimated
                                           Cost       Fair Value          Cost        Fair Value
                                           ----       ----------          ----        ----------
<S>                                     <C>           <C>              <C>           <C>
U.S. Treasury securities and
  obligations of U.S. government
  agencies and corporations               $     0       $     0          $ 3,350       $ 3,128
Obligations of states and political
  subdivisions                              5,172         5,752            5,288         5,418
Corporate securities                       10,591        11,225            8,063         8,571
Mortgage-related securities                68,096        68,354           44,941        44,768
                                          -------       -------          -------       -------

  Total investment securities
    available for sale                    $83,859       $85,331          $61,642       $61,885
                                          =======       =======          =======       =======
</TABLE>

     The amortized cost and estimated fair value of investment securities
     pledged to Treasury, Tax and Loan and borrowings were $53,390,000 and
     $53,816,000 at September 30, 2002, respectively.




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

                                       7.


<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

6.   ALLOWANCE FOR LOAN LOSSES

     Activity in the allowance for loan losses for the nine months ended
     September 30, 2002 and 2001, is summarized as follows (in thousands):

<TABLE>
<CAPTION>

                                      September 30,   September 30,
                                          2002            2001
                                          ----            ----
     <S>                              <C>             <C>
       Balance at beginning of period   $ 10,444        $  9,454
       Charge-offs                        (9,746)         (2,445)
       Recoveries                            233             739
       Provision for loan losses          17,051           1,900
                                        --------        --------

       Balance at end of period         $ 17,982        $  9,648
                                        ========        ========
</TABLE>

     The allowance for loan losses includes specific allowances related to loans
     which have been judged to be impaired under current accounting standards. A
     loan is impaired when, based on current information, it is probable that
     the Corporation will not collect all amounts due in accordance with the
     contractual terms of the loan agreement. Management has determined that
     commercial, financial, and agricultural loans and commercial real estate
     loans that have a nonaccrual status or have had their terms restructured
     meet this definition. Large groups of homogeneous loans, such as mortgage
     and consumer loans and leases, are collectively evaluated for impairment.
     Specific allowances for impaired loans are based on discounted cash flows
     of expected future payments using the loan's initial effective interest
     rate or the fair value of the collateral if the loan is collateral
     dependent. Interest income on impaired loans is recognized on the cash
     basis.

     Information regarding impaired loans follows (in thousands):


<TABLE>
<CAPTION>
                                                        As of and        As of and
                                                      for the Nine     for the Year
                                                      Months Ended         Ended
                                                      September 30,     December 31,
                                                          2002              2001
                                                          ----              ----
<S>                                                   <C>              <C>
       Average investment in impaired loans           $    28,132       $    23,154
       Balance of impaired loans                           30,060            25,524

</TABLE>



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

                                       8.


<PAGE>


                       NORTH COUNTRY FINANCIAL CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

7.   BORROWINGS

     Borrowings consist of the following at September 30, 2002 and December 31,
     2001 (in thousands):

<TABLE>
<CAPTION>
                                                                                        September 30,   December 31,
                                                                                            2002           2001
                                                                                            ----           ----
<S>                                                                                     <C>             <C>
       Federal Home Loan Bank advances at rates ranging from 4.35% to 7.59% with
         maturities from less than one year to ten years                                $    86,554     $    86,867

       Farmers Home Administration, fixed rate note payable, maturing
         August 24, 2024, interest payable at 1%                                              1,682           1,682
                                                                                        -----------     -----------

                                                                                        $    88,236     $    88,549
                                                                                        ===========     ===========
</TABLE>

     As of September 30, 2002, the Federal Home Loan Bank borrowings are
     collateralized by a blanket collateral agreement on the Corporation's
     residential mortgage loans of $49,864,000; U.S. government and agency
     securities with an estimated fair value of $52,779,000; and Federal Home
     Loan Bank stock of $4,375,000. Prepayment of the advances is subject to the
     provisions and conditions of the credit policy of the Federal Home Loan
     Bank of Indianapolis in effect as of September 30, 2002. Borrowings other
     than Federal Home Loan Bank advances are not subject to prepayment
     penalties.







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

                                       9.


<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and results of
operations provides additional information to assess the condensed consolidated
financial statements of the Corporation and its subsidiaries through the third
quarter of 2002. The discussion should be read in conjunction with those
statements and their accompanying notes.

The Corporation's subsidiary, North Country Bank & Trust ("Bank"), is currently
undergoing a regularly scheduled examination by its regulators. Following this
examination, it is anticipated that the Corporation will be subject to an
increased level of regulatory supervision and restrictions which could affect
the results of operations, liquidity, future growth, and capital resources.
Special attention should be paid to the discussion herein on credit quality,
liquidity, and regulatory matters.

The Corporation has determined that a possible affiliation with a larger banking
organization would benefit the long-term future of the Corporation. Management
is evaluating the options of such an affiliation; however, no affiliation
agreement presently exists with any specific organization.

FORWARD-LOOKING STATEMENTS:

This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Corporation intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Reform Act of
1995, and is including this statement for purposes of these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions
and describe future plans, strategies or expectations of the Corporation, are
generally identifiable by use of the words "believe," "expect," "intend,"
"anticipate," "estimate," "project," or similar expressions. The Corporation's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain. Factors that could cause actual results to differ from the
results in forward-looking statements include, but are not limited to:

         -        General economic conditions, either nationally or in the state
                  in which the Corporation does business;
         -        Legislation or regulatory changes which affect the business in
                  which the Corporation is engaged;
         -        Changes in the interest rate environment which increase or
                  decrease interest rate margins;
         -        Changes in securities markets with respect to the market value
                  of financial assets and the level of volatility in certain
                  markets such as foreign exchange;
         -        Significant increases in competition in the banking and
                  financial services industry resulting from industry
                  consolidation, regulatory changes and other factors, as well
                  as action taken by particular competitors;
         -        The ability of borrowers to repay loans;
         -        The effects on liquidity of unusual decreases in deposits;
         -        Changes in consumer spending, borrowing, and saving habits;
         -        Technological changes;
         -        Acquisitions and unanticipated occurrences which delay or
                  reduce the expected benefits of acquisitions;
         -        Hiring and retaining qualified management personnel;
         -        The Corporation's ability to increase market share and control
                  expenses;
         -        The effect of compliance with legislation or regulatory
                  changes;
         -        The effect of changes in accounting policies and practices;
         -        The costs and effects of unanticipated litigation and of
                  unexpected or adverse outcomes in such litigation; and
         -        The factors discussed in Item 1 in this Report and in the
                  Management's Discussion and Analysis in Item 2, as well as
                  those discussed elsewhere in this Report.

These risks and uncertainties should be considered in evaluating forward-looking
statements. Further information concerning the Corporation and its business,
including additional factors that could materially affect the Corporation's
financial results, is included in the Corporation's filings with the Securities
and Exchange Commission.





                                       10.


<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (Continued)

FINANCIAL OVERVIEW:

Year-to-date consolidated net loss was $8.6 million through September 30, 2002,
compared to net income of $5.1 million for the same period in 2001. Diluted loss
per share was $1.22 for the nine months ended September 30, 2002, compared to
earnings of $0.73 for the same period in 2001. The provision for loan losses
increased on a year-to-date basis from $1.9 million for the nine months ended
September 30, 2001 to $17.1 million for the nine months ended September 30,
2002. Total assets declined $29.3 million from December 31, 2001 to September
30, 2002. The loan portfolio continued to experience declines through the third
quarter of 2002, decreasing $40.5 million from December 31, 2001 to September
30, 2002. Deposits have decreased $19.2 million since December 31, 2001.

FINANCIAL CONDITION:

Cash and Cash Equivalents: Cash and cash equivalents decreased $10.9 million
through the third quarter of 2002. This was due to a reduced need for liquidity
and management's decision to invest available cash in securities.

Investment Securities: Available-for-sale securities increased $23.4 million, or
37.9%, from December 31, 2001 to September 30, 2002, with the balance on
September 30, 2002 totaling $85.3 million. Investment securities are utilized in
an effort to manage interest rate risk and liquidity. As of September 30, 2002,
$53.4 million of the investment securities were pledged. The increase in
investment securities is attributable to funds available from the reductions in
the loan portfolio and cash and cash equivalents, offset by the reduction in the
deposits.

Loans: Through the third quarter of 2002, loan balances decreased by $40.5
million or 8.0%. As planned, the Bank continues to decrease certain segments of
its loan portfolio through tightened underwriting and credit practices and
controls. The particular industry segments that have decreased are gaming and
forestry, as well as loans to governmental entities. The Corporation is
attempting to reduce the level of loans to the hotel and tourism industry.
Historically this has been an area of growth in the loan portfolio, however, as
a result of curtailing new credit relationships in this industry, the overall
loan balances outstanding remained unchanged in the third quarter. It is
expected that the outstanding loan balances will further reduce in the near term
as management continues to tighten credit policies and reduce exposure in the
hotel and tourism industry. Enhancements to the loan approval process and
exception reporting further provide for a more effective management of risk in
the loan portfolio. Management continues to actively manage the loan portfolio
seeking to identify and resolve problem assets at an early stage. Management
believes a properly positioned loan portfolio provides the most attractive
earning asset yield available to the Corporation and, with changes to the loan
approval process and exception reporting, controls are in place to more
effectively manage the risk in the loan portfolio. As shown in the table below,
the decrease in the loan portfolio between December 31, 2001 and September 30,
2002, resulted mainly from declines in commercial, commercial real estate, and
residential real estate loans.

Following is a summary of the loan mix at September 30, 2002 and December 31,
2001 (in thousands):


<TABLE>
<CAPTION>
                                              September 30,     % of       December 31,      % of
                                                  2002          Total          2001          Total
                                                  ----          -----          ----          -----
   <S>                                        <C>              <C>         <C>              <C>
   Commercial real estate                       $ 67,439         14.5        $ 77,892         15.4
   Commercial, financial, and agricultural       218,738         47.2         236,961         46.9
   Leases:
       Commercial                                 54,088         11.7          45,195          9.0
       Governmental                               33,021          7.1          37,247          7.4
   1-4 family residential real estate             81,233         17.5          93,574         18.6
   Consumer                                        6,777          1.5           9,516          1.9
   Construction                                    2,603          0.5           4,027          0.8
                                                --------        -----        --------        -----

       Total loans                              $463,899        100.0        $504,412        100.0
                                                ========        =====        ========        =====
</TABLE>

Credit Quality: The allowance for loan losses is maintained by management at a
level considered to be adequate to cover probable losses related to specifically
identified loans, as well as losses inherent in the balance of the loan
portfolio. At September 30, 2002, the allowance for loan losses increased to
3.88% of total loans outstanding from 2.07% at December 31, 2001.



                                       11.


<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (Continued)

Management analyzes the allowance for loan losses in detail on a quarterly basis
to ensure that the losses inherent in the portfolio are properly reserved for.
Net charge-offs to gross loans outstanding increased to 2.05% from 0.33% for the
nine months ended September 30, 2002 and 2001, respectively. Net charge-offs for
the nine-month period ended September 30, 2002, were $9,513,000 compared to
$1,706,000 for the same period in 2001. The provision for loan losses was
increased $15.2 million from $1.9 million for the nine months ended September
30, 2001 to $17.1 million for the nine months ended September 30, 2002.

Following is the allocation of the allowance for loan losses as of September 30,
2002 and December 31, 2001 (in thousands):

<TABLE>
<CAPTION>
                                             September 30,    December 31,
                                                 2002             2001
                                                 ----             ----
<S>                                          <C>              <C>
       Commercial loans and leases           $    14,511       $     8,327
       Real estate and mortgages                   2,072             1,191
       Consumer                                      248               152
       Unallocated                                 1,151               774
                                             -----------       -----------

       Total                                 $    17,982       $    10,444
                                             ===========       ===========
</TABLE>

The following ratios assist management in the determination of the Corporation's
credit quality:

<TABLE>
<CAPTION>
                                                    September 30,   December 31,
                                                        2002            2001
                                                        ----            ----
<S>                                                 <C>             <C>
    Allowance to total loans                             3.9%            2.1%
    Net charge-offs to average outstanding loans         2.0%            0.5%
    Nonperforming loans to gross loans                   4.7%            2.0%
</TABLE>

The table presented below shows the balance of nonperforming loans - which
include nonaccrual loans and loans 90 or more days past due and still accruing -
at September 30, 2002 and December 31, 2001 (in thousands):

<TABLE>
<CAPTION>
                                                     September 30,  December 31,
                                                          2002          2001
                                                          ----          ----
<S>                                                  <C>            <C>
  Nonaccrual loans                                    $  20,450      $  4,015
  Loans 90 days or more past due and still accruing       1,250         6,101
</TABLE>

Total nonperforming loans have increased $11.6 million since December 31, 2001,
after the net charge-offs of $9.5 million which have been recognized through
September 30, 2002. The weakness in the overall economy has persisted longer
than originally anticipated. As a result, consumer confidence, and spending, has
continued to drop. This, coupled with the events of September 11, 2001, has
continued to have a negative effect on the hotel and tourism industry. In
response to this trend, management increased the percentage applied to
classified loans in this industry and has also been aggressive in charging off
potential shortfalls in related collateral value.

During the current quarter, the Corporation began to recognize deterioration in
other segments of its commercial loan portfolio, as well as the real estate
portfolio. To some extent, these downgrades can be attributed to the impact of
the drop in tourism on the local economy. However, a general slowdown in the
commercial and construction segments has also contributed to the increase in
charge-offs and the required allowance for loan losses as of September 30, 2002.

During the current quarter the ongoing review of loan documentation, collateral,
and the risk ratings assigned to loans was performed internally and by the
Bank's regulators. This review resulted in a substantial increase in internally
classified assets. Included in the classified assets were $17.5 million in loans
to current and former directors, officers, and employees of the Bank and their
related entities. Management is currently addressing both those classified
assets and the Bank's credit underwriting procedures for loans to directors,
officers, employees, and their related entities, in order to take appropriate
action.



                                       12.
<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (Continued)

As a result of the increased level of internally classified assets, the
Corporation has tightened its underwriting standards for all types of loans,
strengthened collection and workout procedures, and enhanced the monitoring of
collateral value. Additional staffing and external resources were added to the
collection and loan underwriting process. Executive Administrator positions have
now been established for the Upper and Lower Peninsula branches. Their primary
function will be to work with the lenders in the branches to assist lenders and
customers with effective handling and proper structuring of the credits. All
lenders report to these executives and will be responsible for adherence to the
Corporation's loan policy and underwriting standards.

As a result of these changes, in addition to controlling the growth of the
Corporation, management believes that credit problems will be identified earlier
when there may be more opportunities for a favorable resolution.

As part of the process of resolving problem credits, the Corporation may acquire
ownership of collateral which secured such credits. The Corporation carries this
collateral in other real estate which is grouped with other assets on the
balance sheet. The following table represents the activity in other real estate
(in thousands):


<TABLE>
        <S>                                                  <C>
         Balance at January 1, 2001                          $  908
         Other real estate transferred from loans             4,413
         Other real estate purchased                            763
         Other real estate sold                              (1,873)
                                                             ------

         Balance at December 31, 2001                         4,211
         Other real estate transferred from loans             5,181
         Write downs of other real estate                      (299)
         Other real estate sold                              (2,439)
                                                             -------

         Balance at September 30, 2002                       $6,654
                                                              =====
</TABLE>

During the first nine months of 2002, the Corporation received real estate in
lieu of loan payments of $5.2 million. Other real estate is initially valued at
the lower of cost or the fair value less selling costs. After the initial
receipt, management periodically re-evaluates the recorded balance. Any
additional reductions in the fair value result in a write-down of other real
estate. In the first nine months of 2002, the Corporation recorded write-downs
of $299,000. Additional write-downs on other real estate may be recorded based
on future re-evaluations of current realizable fair values.

Other Assets: Other assets increased $7.7 million through the third quarter of
2002. The significant items reflected in the increase are the increase in other
real estate of $2.4 million and the increase in the federal tax asset of $5.0
million. The majority of the federal tax asset relates to the tax benefit
arising from the loss generated in the current year. The tax benefit of the loss
is anticipated to be realized by utilizing loss carrybacks.

Deposits: Total deposits through the third quarter have decreased $19.2 million,
or 4.0%. The decrease occurred in interest-bearing deposit balances throughout
the Bank's branch network. This decrease was particularly due to management's
decision to reduce the level of the loan portfolio. Also, the Bank underwent a
Bank-wide consumer demand deposit account merger and implemented the Generation
Gold product, which raised service charges on these accounts due to the
increased customer benefits from this product, resulting in a reduction of
consumer deposits.

Borrowings: In addition to deposits, the Corporation uses alternative funding
sources to provide funds for lending activities and to support the Bank's
investment portfolio. Alternative sources can be obtained at interest rates
which are competitive with retail deposit rates and with minimal administrative
costs. Borrowings have remained relatively stable from December 31, 2001 to
September 30, 2002. At September 30, 2002, $86.5 million of the total borrowings
were from the Federal Home Loan Bank of Indianapolis. These borrowings are
secured by a blanket collateral agreement on the Bank's residential mortgage
loans and specific assignment on investment securities.




                                       13.

<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (Continued)

Guaranteed Preferred Beneficial Interests in the Corporation's Subordinated
Debentures: In 1999, the Corporation completed a private offering of Capital, or
Trust Preferred, securities in the amount of $12,450,000. Under regulatory
guidelines, guaranteed preferred beneficial interests in the Corporation's
subordinated debentures are eligible as regulatory capital, as defined, subject
to certain limitations. Due to the present financial condition in the current
quarter, the Board of Directors adopted a resolution to apply for the deferment
of interest payments on the Trust Preferred securities. The trust document
allows for a deferral of interest payments for up to 20 quarters and it is
expected that interest will not be paid until the Board of Directors believes it
is prudent.

Shareholders' Equity: Total shareholders' equity decreased $9.5 million from
December 31, 2001 to September 30, 2002. The decrease is comprised of a net loss
of $8.6 million, combined with dividends declared of $1.8 million, offset by an
increase in the net unrealized gain on securities of $810,000. The Board of
Directors does not anticipate declaring any dividends in the near future.

RESULTS OF OPERATIONS:

Net Interest Income: Net interest income before provision for loan losses for
the quarter ended September 30, 2002, decreased by $2.1 million, or 33.4%,
compared to the same period one year ago. The decrease in loan volume offset by
the decrease in deposit volume during the past twelve months, combined with
decreases in interest rates, have resulted in the decline in net interest
income. The Corporation is asset sensitive, so assets will reprice more quickly
than liabilities and, therefore, in a falling rate environment net interest
income is negatively impacted. Net interest income before provision for loan
losses for the nine months ended September 30, 2002, decreased by $4.0 million,
or 21.9%, compared to the same period in 2001.

The prime interest rate declined .50% subsequent to September 30, 2002. The
decline in interest rates will adversely impact interest margin. The Corporation
had $263 million of variable rate loans and short term investments whose
contractual interest rate declined .50% when the prime rate declined. The
Corporation had approximately $200 million of variable rate deposits at
September 30, 2002. The interest rate on these deposits can be changed at
management's discretion. In consideration of a liquidity management strategy,
the Corporation has chosen to make de minimus changes to these deposit rates.

Provision for Loan Losses: The Corporation records a provision for loan losses
at a level it believes is necessary to maintain the allowance at an adequate
level after considering factors such as loan charge-offs and recoveries, changes
in the mix of loans in the portfolio, loan growth, and other economic factors.
The provision for loan losses increased by $12.2 million and $15.2 million for
the quarter ended and nine-month period ended September 30, 2002, respectively,
when compared to the same periods in 2001. The provision for loan losses was
increased during the current year due to increased charge-offs and factors
discussed above relative to the increase in the allowance for loan losses.
Management continues to monitor the loan portfolio for changes which may impact
the required allowance for loan losses. Additional provisions for loan losses
are possible.

Other Income: Other income decreased by $1.4 million for the quarter ended
September 30, 2002, compared to the quarter ended September 30, 2001. The
decrease was primarily due to a reduction of $1.0 million in fee income
generated by the Corporation's mortgage subsidiary for the quarter ended
September 30, 2002, and a $500,000 gain on sale of branches recorded in 2001.
The mortgage subsidiary ceased operations during the third quarter of 2001.

Other income decreased by $4.3 million for the nine months ended September 30,
2002, compared to the same period one year ago. The decrease was primarily due
to a reduction of $4.4 million in fee income generated by the Corporation's
mortgage subsidiary.

Other Expenses: Other expenses decreased $246,000 for the quarter ended
September 30, 2002, compared to the same period of 2001. Salaries, commissions,
and related benefits decreased by $792,000 during the third quarter of 2002
compared to the third quarter of 2001. The decrease in salaries, commissions,
and related benefits was primarily due to $579,000 in commissions paid by the
mortgage subsidiary in 2001, with none in 2002 due to the ceasing of operations
of the subsidiary during the third quarter of 2001. This decrease was offset by
an increase in other expenses of $546,000 during the third quarter of 2002.



                                       14.


<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (Continued)

Other expenses decreased $3.4 million for the nine months ended September 30,
2002, compared to the same period of 2001. Salaries, commissions, and related
benefits decreased by $3.9 million through the third quarter of 2002 compared to
the same period in 2001. This decrease was due to commission expense of $3.4
million paid by the Corporation's mortgage subsidiary in 2001, which was not
incurred in 2002 as described above.

Federal Income Tax: The current net loss for the quarter and nine month periods
ending September 30, 2002, created a credit for income taxes. The losses
generated for tax purposes will be carried back and offset against prior taxable
income. The difference between the effective tax rate and the federal corporate
income tax rate of 34% is primarily due to tax-exempt interest earned on loans,
leases, and investments. In addition, prior to 2000, the corporation provided
for additional taxes on open issues. These issues were resolved in 2001 with no
negative tax impact. Therefore, the additional provisions for these issues were
reversed in 2001 resulting in 2001 provision for income taxes below historical
and current rates.

LIQUIDITY:

Cash and cash equivalents have decreased $10.9 million for the nine months ended
September 30, 2002. This decrease is primarily a result of the decrease in
customer deposits of $19.2 million offset by the net decrease in investment
securities and loans of $4.2 million. Management anticipates the decrease in
deposits to continue for the near future, primarily as a result of the facts
discussed below. Management also anticipates that loans will continue to
decrease for the near future due to the tightening of credit underwriting
standards and the transition to new lenders. This decrease in loans is
anticipated to offset the cash outflow caused by the deposit decrease. The
Corporation's liquidity plan is discussed below.

During the first week in November 2002, and in conjunction with the announcement
of the third quarter results and negative publicity, the Corporation experienced
an unexpected decrease in deposits particularly from local government entities.
It is anticipated that further deposit decreases may occur. The Corporation, as
of November 7, 2002, still had approximately $32 million of municipal deposits.
The Corporation's capital remains above the regulatory minimum levels (as shown
below).

The Corporation previously had lines of credit with two correspondent banks
which have been discontinued. The Corporation currently operates without secured
or unsecured lines of credit from correspondent banks.

The Corporation is in the process of applying to the Federal Reserve Bank for a
secured line of credit collateralized by loans receivable.

To address possible liquidity issues, the Corporation is revising its liquidity
plan to provide both short-term and long-term strategies. The Corporation's
ability to increase its borrowings from the Federal Home Loan Bank and its
correspondent banks, is minimal. Therefore, short-term liquidity sources include
the sale of unencumbered investment securities available-for-sale, sale of
assets, and generating new deposits via the Internet CD network. In addition,
the trust preferred subordinated debenture agreement allows for the suspension
of payments for up to 20 quarters.

From a long-term perspective, the liquidity plan will include strategies to
increase core deposits in the Corporation's local markets, the sale of segments
of the commercial loan and lease portfolio to strategic buyers, and possible
sale and closure of the smaller operating locations.

The liquidity plan is intended to be designed to address potential short-term
liquidity demands. Some of the short-term aspects of the liquidity plan could
result in negative impacts on the Corporation's earnings.



                                       15.


<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (Continued)

REGULATORY MATTERS:

It is the policy of the Corporation to maintain capital at a level consistent
with both safe and sound operations and proper leverage to generate an
appropriate return on shareholders' equity. The capital ratios of the
Corporation exceed the regulatory minimum guidelines. The table below shows a
summary of the Corporation's capital position in comparison to regulatory
requirements.

<TABLE>
<CAPTION>
                                 Tier I          Tier I              Total
                               Capital to      Capital to         Capital to
                                 Average      Risk-Weighted      Risk-Weighted
                                 Assets          Assets             Assets
                                 ------          ------             ------
<S>                            <C>            <C>               <C>
     Regulatory minimum           4.0%            4.0%                8.0%

     The Corporation
         September 30, 2002       6.8%            9.0%               10.7%
         December 31, 2001        8.4%            11.1%              12.3%
</TABLE>

The capital levels include adjustment for the Capital, or Trust Preferred,
Securities issued in May 1999, subject to certain limitations. Federal Reserve
guidelines limit the amount of cumulative preferred securities which can be
included in Tier I capital to 25% of total Tier I capital. As of September 30,
2002, $10,486,000 of the $12,450,000 of Capital Securities were available as
Tier I capital of the Corporation.

In addition to the generally applicable regulatory capital requirements set
forth above, since January 2002, the Bank has been required by Federal and State
regulatory authorities to maintain its Tier 1 capital at a level equal to or
exceeding 6.5% of the Bank's total assets, and if such level is less than 6.5%
at June 30 or December 31 of any year while the requirement is in effect, to
submit to such regulatory authorities within 30 days thereafter a plan for
augmentation of the Bank's capital accounts to restore such ratio to 6.5%. At
June 30 and September 30, 2002, the Bank was in compliance with this
requirement. At the same time, the Federal and State regulatory authorities
required the Bank to take various other steps, among other things, to improve
asset quality, to reduce certain loan concentrations, and to improve loan
documentation, credit underwriting, and loan and lease loss provision
procedures.

The Corporation was recently examined by the Federal Reserve Bank of Chicago
("FRB") and the Bank is undergoing a regularly-scheduled examination by the
Federal Deposit Insurance Corporation ("FDIC") and the Michigan Office of
Financial and Insurance Services ("OFIS").

Since October 2001, the FDIC has required the Bank to provide 30 days' prior
written notice of the addition or replacement of any member of its board of
directors, and of the employment or change in responsibilities of any senior
executive officer. In addition, since the same time, the Bank has been required
to obtain the prior approval of the FDIC to enter into certain forms of
compensation, severance, or indemnification agreements with any director,
officer, employee or controlling shareholder of the Bank or the Corporation, or
certain other persons participating in the affairs of the Bank or the
Corporation, or to make any payment under such an agreement to any such person.

In connection with the current examination of the Bank by the FDIC and the OFIS,
certain recommendations have been made to the Bank by OFIS. These
recommendations have been verbally communicated to the Bank. The OFIS'
recommendations are:

         -        The Bank should limit interest rates offered by it to no more
                  than 75 basis points over market rates for new deposits.
         -        Prior approval should be obtained from OFIS for any asset
                  sales in excess of $10 million.
         -        Prior approval should be obtained from OFIS for any addition
                  or replacement of any senior executive officer or director.
         -        The Bank should declare and pay dividends only with prior
                  approval of OFIS.
         -        The Bank should furnish certain expanded financial information
                  to OFIS on a more frequent basis.






                                       16.


<PAGE>
                       NORTH COUNTRY FINANCIAL CORPORATION
       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS (Continued)

In addition to the OFIS recommendations, the FRB in a letter dated November 8,
2002, requested that the Corporation take the following actions only with the
prior approval of the FRB:

         -        Declare or pay dividends on the Corporation's stock.
         -        Redeem shares of the Corporation's stock.
         -        Increase borrowings or incur debt.

In addition, the FRB (i) recommended that the Corporation review its debt
service requirements on its outstanding trust preferred securities and preserve
its funds to increase its financial flexibility, and (ii) requested cash flow
projections from the Corporation through December, 2003.

The Board of Directors of the Corporation or the Bank have adopted resolutions
providing for prior regulatory approval of the declaration or payment of any
dividend by the Bank or the Corporation, and suspension of payments by the
Corporation in connection with its trust preferred securities.

The trust preferred subordinated debenture agreement allows for the suspension
of payments for up to 20 quarters. Therefore, the suspension of the interest
payments does not violate the agreement. However, while interest payments are
suspended, no dividends can be paid on the Corporation's common stock.

In addition, the Corporation's Board of Directors has suspended the payment of
fees to the directors.

Management is working to comply with the above recommendations of the Federal
and State regulatory authorities. Upon completion of the current examination
process it is possible that additional restrictions could be placed on the
Corporation and the Bank by the regulators. The FDIC assesses deposit insurance
premiums based on various considerations. As a result of the Bank's current
status it is likely that the Bank's assessment will increase in 2003, though the
amount of the increase is unknown.

SUBSEQUENT EVENTS:

Subsequent to the release of the quarterly results and discussions with NASDAQ
regarding potential de-listing of the Corporation's stock, the traded value of
the Corporation's stock decreased significantly. The traded value of the
Corporation's stock is a key component of the analysis of the impairment of
goodwill. The decline in the market value of the Corporation's stock in the
fourth quarter resulted in the impairment of the entire balance of goodwill of
$3,647,000. This impairment charge will be recognized in the fourth quarter of
2002.

As discussed in the liquidity section above, the Corporation experienced an
unexpected decrease in deposits in the fourth quarter. In applying purchase
accounting to prior acquisitions, the Corporation had recorded a core deposit
premium asset. Maintaining deposit balances is a key component in computing
impairment. Due to the decrease in deposits, management expects to record an
impairment adjustment on the core deposit premium of approximately $114,000 in
the fourth quarter of 2002.






                                       17.


<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
       ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



INTEREST RATE RISK:

The Corporation has market risk exposure relative to interest rate risk, which
management actively manages. The Corporation has no market risk sensitive
instruments held for trading purposes. In relatively low interest rate
environments which have been experienced during the past several years,
borrowers have generally tried to extend the maturities and repricing periods on
their loans and place deposits in demand or very short-term accounts. Management
has taken various actions to offset the imbalance which those tendencies would
otherwise create. Commercial and real estate loans are written at variable rates
or, if necessary, fixed rates for relatively short terms. Management can also
manage interest rate risk with the maturity periods of securities purchased,
selling securities available for sale, and borrowing funds with targeted
maturity periods.

As of September 30, 2002, the Corporation had a cumulative asset repricing gap
position of $23.5 million within the one-year time frame. This position suggests
that if the market interest rates increase in the next twelve months, the
Corporation has the potential to earn more net interest income. Conversely, if
market interest rates decline in the next twelve months, the Corporation has the
potential to earn less net interest income. Management believes that it is
reasonably positioned against significant changes in rates without severely
altering operating results.

As of December 31, 2001, the Corporation had a cumulative liability sensitivity
GAP position of $8.6 million within the one-year timeframe. The Corporation's
cumulative liability sensitive GAP at December 31, 2001, suggested that if
market interest rates were to increase in the 12 months following December 31,
2001, the Corporation had the potential to earn less net interest income.
Conversely, if market interest rates were to continue to decrease in the 12
months following December 31, 2001, the December 31, 2001 GAP position suggested
the Corporation's net interest income would increase.

A limitation of the traditional GAP analysis is that it does not consider the
timing or magnitude of noncontractual repricing or expected prepayments. In
addition, the GAP analysis treats savings, NOW, and money market accounts as
repricing within 90 days, while experience suggests that these categories of
deposits are actually comparatively resistant to rate sensitivity. Considering
the limitations of the GAP analysis, and based on the results of other interest
rate risk management tools used by the Corporation, management believes the
Corporation is properly positioned against significant changes in interest rates
without significantly altering operating results.







                                       18.


<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
                         ITEM 4. CONTROLS AND PROCEDURES

As of November 8, 2002, an evaluation was performed under the supervision of and
with the participation of the Corporation's management, including the President
and Chief Executive Officer, of the effectiveness of the design and operation of
the Corporation's disclosure controls and procedures. Based on that evaluation,
the Corporation's management, including the President and Chief Executive
Officer, concluded that the Corporation's disclosure controls and procedures
were effective as of November 8, 2002. There have been no significant changes in
the Corporation's internal controls or in other factors that could significantly
affect internal controls subsequent to November 8, 2002.









                                       19.


<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

In the normal course of business, the Corporation is involved in various legal
proceedings. In the opinion of management, any liability resulting from such
proceedings would not have a material adverse effect on the consolidated
financial statements.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)  Exhibits:

     Exhibit 3.1   Articles of Incorporation, as amended, incorporated herein
                   by reference to exhibit 3.1 of the Registrant's Quarterly
                   Report on Form 10-Q for the quarter ended September 30, 1999.

     Exhibit 3.2   Amended and Restated Bylaws, incorporated herein by reference
                   to exhibit 3.1 of the Registrant's Quarterly Report on
                   Form 10-Q for the quarter ended September 30, 2001.

     Exhibit 99.1  Certification Pursuant to 18 U.S.C. Section 1350.

(b)  There was only one Form 8-K filed during the quarter ended September 30,
     2002. Form 8-K dated August 28, 2002 announced the change in the
     Registrant's certifying accountant from Wipfli Ullrich Bertelson LLP to
     Rehmann Robson.

     The following Form 8-K filings occurred during the fourth quarter of 2002.
     They are being disclosed here due to events and circumstances which
     necessitated the filing of this amended Form 10-Q:

     -    Form 8-K dated November 11, 2002, announced the resignation of Rehmann
          Robson as the Registrant's certifying accountant.
     -    Form 8-K dated December 16, 2002, announced the appointment of Plante
          & Moran as the Registrant's certifying accountant.





                                       20.


<PAGE>
                       NORTH COUNTRY FINANCIAL CORPORATION
                                    SIGNATURE

Pursuant to the requirements 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.



                                NORTH COUNTRY FINANCIAL CORPORATION
                                -----------------------------------
                                              (Registrant)



1/9/03                          By:  /s/Sherry L. Littlejohn
---------                         -------------------------------------------
Date                                 SHERRY L. LITTLEJOHN,
                                     PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                     (principal executive and financial officer)














                                       21.


<PAGE>

                       NORTH COUNTRY FINANCIAL CORPORATION
                                  CERTIFICATION

I, Sherry L. Littlejohn, President and Chief Executive Officer, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of North Country
     Financial Corporation;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


1/9/03                     /s/Sherry L. Littlejohn
---------                  -----------------------------------------------------
Date                       SHERRY L. LITTLEJOHN,
                           PRESIDENT AND CHIEF EXECUTIVE OFFICER
                           (chief executive officer and chief financial officer)








                                       22.


<PAGE>

                                 EXHIBIT INDEX



EXHIBIT NO.     DESCRIPTION

EX-99.1         Certification pursuant to 18 U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002