FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



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

                 For the quarterly period ended: March 31, 1998

                         Commission file number: 0-20167

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

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

                  130 South Cedar Street, Manistique, MI 49854
               (Address of principal executive offices) (Zip Code)

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


                          FIRST MANISTIQUE CORPORATION
                                  (Former name)

                                   -----------


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 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 ____

As of May 12, 1998, there were outstanding  2,381,796 shares of the registrant's
common stock, no par value.

                                        1
<PAGE>
                                      INDEX




                                                                            Page
                                                                       Number(s)

Part I.           Financial Information (unaudited):

                  Item 1.
                  Consolidated Financial Statements                          3-6
                  Notes to Consolidated Financial Statements                   7

                  Item 2.
                  Management's Discussion and Analysis of
                  Financial Condition and Results of Operations             8-12

Part II.          Other Information

                  Item 6.
                  Exhibits and Reports on Form 8-K                            13


Signatures                                                                    14

                                        2
<PAGE>
                   PART I - FINANCIAL INFORMATION (Unaudited)

ITEM 1.  FINANCIAL STATEMENTS

Consolidated Condensed Balance Sheets
(In thousands of dollars)
<TABLE>

                                                                                   March 31,              December 31,
ASSETS                                                                               1998                    1997
                                                                                    ------                  -----
<S>                                                                             <C>                      <C>
     Cash and due from banks                                                    $       9,160            $       9,338
     Federal funds sold                                                                 7,890                    1,805
                                                                                 ------------             ------------
         Total cash and cash equivalents                                               17,050                   11,143

          Securities available for sale - stated at fair value                          9,351                   10,103

     Loans, net of unearned income                                                    382,926                  372,519
     Allowance for loan losses                                                        (5,572)                  (5,600)
                                                                                 ------------             ------------
         Net loans                                                                    377,354                  366,919

     Premises and equipment                                                            18,047                   17,477
     Other assets                                                                      12,241                   15,792
                                                                                 ------------             ------------

     TOTAL ASSETS                                                                 $   434,043              $   421,434
                                                                                  ===========              ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
     Deposits
         Noninterest bearing deposits                                            $     32,271             $     33,354
         Interest bearing deposits                                                    339,891                  327,195
                                                                                 ------------             ------------
               Total deposits                                                         372,162                  360,549

     Federal funds purchased and securities sold under
          agreement to repurchase                                                       2,551                    1,195
     Other borrowings                                                                  18,840                   19,628
     Other liabilities                                                                  3,019                    3,470
                                                                                 ------------             ------------

     TOTAL LIABILITIES                                                                396,572                  384,842
                                                                                 ------------             ------------

     Shareholders' Equity
         Common stock - No par value
              Authorized - 6,000,000 shares
              Issued and outstanding - 2,380,166 and 2,379,490
                  shares at March 31, 1998 and December 31, 1997
                   respectively                                                        19,958                   19,916
         Retained earnings                                                             17,519                   16,679
         Unrealized loss on securities available for sale - net of tax                    (6)                      (3)
                                                                                -------------            -------------
                 Total shareholders's equity                                           37,471                   36,592
                                                                                -------------            -------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                        $   434,043              $   421,434
                                                                                  ===========              ===========
</TABLE>

                                        3
<PAGE>
Consolidated Condensed Statements of Income (unaudited)
(In thousands of dollars)
<TABLE>
                                                                                        Three months ended
                                                                                             March 31
                                                                           1998                                 1997
                                                                          ------                               -----
<S>                                                                    <C>                              <C>
Interest Income
     Loans, including fees                                             $          8,861                 $          7,867
     Securities
         Taxable                                                                    219                              275
         Exempt from federal taxation                                                 1                                7
     Other                                                                          102                               69
                                                                       ----------------                 ----------------

Total interest income                                                             9,183                            8,218

Interest expense
     Deposits                                                                     3,977                            3,330
     Borrowed funds                                                                 276                              331
                                                                       ----------------                 ----------------

Total interest expense                                                            4,253                            3,661
                                                                       ----------------                 ----------------

Net interest income                                                               4,930                            4,557

Provision for loan losses                                                           250                              106
                                                                       ----------------                 ----------------

Net interest income after provision for loan losses                               4,680                            4,451

Noninterest income
     Service charges on deposit accounts                                            309                              238
     Gains on sale of loans                                                          23                                9
     Securities gains                                                                44                                0
     Other                                                                          166                              104
                                                                       ----------------                 ----------------

Total noninterest income                                                            542                              351

Noninterest expense
     Salaries and employee benefits                                               1,640                            1,501
     Furniture and equipment expense                                                325                              334
     Occupancy expense                                                              243                              260
     Other                                                                        1,450                            1,409
                                                                       ----------------                 ----------------

Total noninterest expense                                                         3,658                            3,504
                                                                       ----------------                 ----------------

Income before income tax                                                          1,564                            1,298

Provision for income tax                                                            414                             3 14
                                                                       ----------------                 ----------------

Net income                                                             $          1,150                 $            984
                                                                       ================                 ================

Weighted average common shares outstanding                                    2,379,675                        2,370,305
                                                                       ================                 ================
</TABLE>
<TABLE>
                                                                March 31, 1998                   March 31, 1997
                                                            Basic           Diluted           Basic          Diluted
<S>                                                         <C>             <C>              <C>             <C>
Earnings per common share                                   $ 0.48          $ 0.48           $ 0.42          $ 0.42
                                                            ======          ======           ======          ======
</TABLE>

                                       4
<PAGE>
Consolidated Statement of Changes in Shareholders' Equity (unaudited)
(In thousands of dollars)
<TABLE>

                                                                                   March 31,               December 31,
                                                                                      1998                     1997
<S>                                                                               <C>                      <C>
Balance - beginning of period                                                     $    36,592              $    32,386

Comprehensive income:
     Net income for period                                                              1,150                      984
     Net change in unrealized gain (loss) on
          securities available for sale                                                   (3)                    (148)
                                                                                  -----------              -----------

     Total comprehensive income                                                         1,147                      836

Cash dividends                                                                          (307)                    (285)

Issuance of common stock                                                                  152                    1,282

Common stock retired                                                                     -113                        0

                                                                                  $    37,471              $    34,219
                                                                                  ===========              ===========
</TABLE>

                                        5
<PAGE>
Consolidated Statements of Cash Flows (unaudited)
(In thousands of dollars)

<TABLE>
                                                                                  March 31,              December 31,
                                                                                     1998                    1997
<S>                                                                              <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES                                             $      5,907          $         1,730
                                                                                 ------------          ---------------
 CASH FLOWS FROM INVESTING ACTIVITIES
     Net change in interest bearing deposits with banks                                     0                      438
     Purchase of securities available for sale                                              0                     (830)
     Proceeds from sales of securities available for sale                                 752                    4,847
     Proceeds from maturities, calls, or payoffs of securities
          available for sale                                                                0                      246
     Net increase in loans                                                            (10,435)                 (12,192)
     Purchase of premises and equipment                                                  (914)                  (1,484)
     Net cash provided in acquisitions                                                      0                       32
                                                                                            -          ---------------

          Net cash used in investing activities                                       (10,597)                  (8,943)
                                                                                 ------------          ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
     Net increase in deposits                                                          11,613                   14,068
     Net decrease in federal funds purchased and securities
           sold under agreement to repurchase                                           1,355                   (4,100)
     Proceeds from notes payable                                                            0                    8,250
     Payment on notes payable                                                            (787)                  (1,788)
     Proceeds from issuance of common stock                                               152                    1,282
     Retirement of common stock                                                          (113)                       0
     Payment of dividends                                                                (307)                    (285)
                                                                                 ------------

         Net cash from financing activities                                            11,913                   17,427
                                                                                 ------------          ---------------

Net increase (decrease) in cash and cash equivalents                                    7,223                   10,214

Cash and cash equivalents at beginning of period                                       11,143                   12,164
                                                                                 ------------          ---------------

Cash and cash equivalents at end of period                                       $     17,050           $       22,378
                                                                                 ============          ===============
</TABLE>

                                        6
<PAGE>
                       NORTH COUNTRY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Note 1 - Basis of Presentation

The  unaudited  condensed  consolidated  financial  statements  of North Country
Financial  Corporation (the  "Registrant") 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 three month  period  ending  March 31, 1998 are not  necessarily
indicative  of the results that may be expected for the year ended  December 31,
1998. For further  information,  refer to the consolidated  financial statements
and footnotes  thereto included in the  Registrant's  Annual Report on Form 10-K
for the year ended December 31, 1997.

Note 2 - Accounting Changes

In June 1997, the FASB issued SFAS No. 130,  "Reporting  Comprehensive  Income."
This statement  establishes standards for reporting and display of comprehensive
income in a full set of  general-purpose  financial  statements.  This statement
requires  that all items that are  required to be  recognized  under  accounting
standards  as  components  of  comprehensive  income be  reported in a financial
statement  that is  displayed  with  the  same  prominence  as  other  financial
statements.  This  statement  requires  that an  enterprise  display  an  amount
representing total comprehensive income for the period in a financial statement,
but does not  require a  specific  format  for that  financial  statement.  This
statement  also  requires  that  an  enterprise  (a)  classify  items  of  other
comprehensive  income by their nature in a financial  statement  and (b) display
the accumulated balance of other  comprehensive  income separately from retained
earnings and additional  paid-in  capital in the equity section of the statement
of financial  position.  The statement is effective  for fiscal years  beginning
after December 15, 1997.  Reclassification  of financial  statements for earlier
periods  provided  for  comparative  purposes  is  required.   As  of  1/1/1998,
management  has adopted  this  standard.  The net effect on the  earnings of the
company is insignificant.

In June 1997,  the FASB issued SFAS No. 131,  "Disclosures  about Segments of an
Enterprise and Related  Information." This statement  establishes  standards for
the way that public  business  enterprises  report  information  about operating
segments in annual  financial  statements  and requires  that those  enterprises
report  selected  information  about  operating  segments  in interim  financial
reports  issued  to  shareholders.   This  statement  supersedes  SFAS  No.  14,
"Financial  Reporting  for Segments of a Business  Enterprise,"  but retains the
requirement to report information about major customers. It also amends SFAS No.
94,  "Consolidation of All  Majority-Owned  Subsidiaries," to remove the special
disclosure  requirements  for  previously   unconsolidated   subsidiaries.   The
statement is effective  for financial  statements  for periods  beginning  after
December 15, 1997. In the initial year of application,  comparative  information
for  earlier  years is to be  restated.  This  Statement  need not be applied to
interim  financial  statements  in the  initial  year  of its  application,  but
comparative  information  for interim periods in the initial year of application
is to be reported in financial statements for interim periods in the second year
of application. The statement is not expected to have an effect on the financial
position or  operating  results of the  Registrant,  but may require  additional
disclosures  in the financial  statements.  The  Registrant  will implement this
statement with the December 31, 1998 annual report.

                                        7
<PAGE>
Note 3 - Allowance for Loan Losses

Activity in the  allowance  for loan losses for the three months ended March 31,
1998 and 1997, are summarized as follows:
<TABLE>
(In thousands of dollars)
                                                                                  March 31,                  March 31,
                                                                                    1998                       1997
<S>                                                                           <C>                          <C>
Balance at beginning of period                                                      $  5,600                   $  4,591
Charge-offs                                                                            (284)                       (93)
Recoveries                                                                                 6                         49
Balance transferred from purchase of U.P. Financial                                        0                        298
Provision for loan loss                                                                  250                        106
    Total                                                                           $  5,572                   $  4,951
                                                                             ==========================================
</TABLE>
Information regarding impaired loans follows:
(In thousands of dollars)
<TABLE>
                                                                                     March 31,                December 31,
                                                                                       1998                       1997
<S>                                                                                 <C>                        <C>
Average investment in impaired loans                                                $  6,899                   $  6,710
Balance of impaired loans                                                           $  7,089                   $  6,933
</TABLE>

Note 4 - Other Borrowings

Other  borrowings  consists of the  following at March 31, 1998 and December 31,
1997 (In thousands of dollars)
<TABLE>

                                                                                    March 31,                 December 31,
                                                                                      1998                        1997
<S>                                                                              <C>                          <C>
Other Borrowings
     Federal Home Loan bank advances (6) at various
          rates with various maturities (see annual
          financial statements)                                                  $   16,115                  $   16,115
     Farmers Home Administration, $2,000,000 fixed
         rate line agreement maturing August 24, 2024,
         interest payable at 1%                                                       1,938                       1,938
     Notes payable to South Range State Bank's
          former stockholders, maturing in three equal
         annual installments beginning February 1,
         1997.  Interest payable at 5.2%                                                787                       1,575
                                                                              -------------                ------------
Total Other Borrowings                                                           $   18,840                  $   19,628
                                                                              =========================================
</TABLE>

The Federal Home Loan Bank borrowings are collateralized by a blanket collateral
agreement on the  Registrant's  residential  mortgage  loans.  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 December  31, 1997 and
March 31, 1998.  Borrowings other than Federal Home Loan Bank are not subject to
prepayment penalties.

                                        8
<PAGE>
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 consolidated condensed
financial statements of the Registrant and its wholly-owned subsidiaries through
the first quarter of 1998.  The discussion  should be read in  conjunction  with
those statements and their accompanying notes.

The Registrant is not aware of any market or institutional  trends,  events,  or
circumstances  that will have or are reasonably likely to have a material effect
on liquidity,  capital  resources,  or results of operations except as discussed
herein.  Also,  the  Registrant is not aware of any current  recommendations  by
regulatory authorities which will have such effect if implemented.

Highlights

Year to date  consolidated  net income was  $1,150,000  through  March 31,  1998
compared to $984,000 for the same period in 1997.  Earnings per share  increased
from $0.42  through the quarter  ending  March 31,  1997,  to $0.48 for the same
period in 1998.

Financial Condition

Loans

Through the first quarter of 1998, loan balances increased by $10.4 million. The
loan to deposit ratio has decreased  from 101.8% at December 31, 1997, to 101.4%
at March 31, 1998. Management believes loans provide the most attractive earning
asset yield available to the Registrant and that trained  personnel and controls
are in place to successfully manage a growing portfolio. Accordingly, management
intends to continue to maintain  loans at the highest  level which is consistent
with maintaining  adequate liquidity.  As shown in the table below, the loan mix
remains  relatively  constant for the quarter  ended March 31, 1998  compared to
December 31, 1997.

Management is aware of the risk associated with an increase in average  balances
of loans but feels that the current  level in the  allowance  for loan losses is
adequate.  At March 31, 1998 the allowance for loan losses was equal to 1.46% of
total loans outstanding compared to 1.50% at December 31, 1997.

Commercial  real estate loans have increased by $10.9 million  through the first
quarter of 1998 to $97,029,000  at March 31, 1998.  Through the first quarter of
1998,  loans  to  general  commercial  businesses  decreased  by  $3,098,000  to
$92,533,000.  Commercial  leases  increased $6.7 million to $17,779,000 at March
31,  1998  and  governmental  leases  decreased  $0.1  million  to  $46,386,000.
Residential,  1-4 family  mortgages  increased by $1.8  million to  $97,302,000.
Consumer loans have decreased $2.6 million  through the first quarter of 1998 to
$24,335,000.  Construction  loans have  decreased  $3.4 million to $7,562,000 at
March 31, 1998.
<TABLE>

                                                             March 31,                          December 31,
                                                               1998             % of Total         1997            % of Total
                                                              ------            ----------        ------           ----------
<S>                                                       <C>                    <C>          <C>                    <C>
Loans (in thousands)
Commercial real estate                                    $    97,029             25.3%       $    86,052             23.1%
Commercial, financial, and agricultural                        92,533             24.2%            95,631             25.7%
Leases:
     Commercial                                                17,779              4.6%            11,094              3.0%
     Governmental                                              46,386             12.1%            46,464             12.5%
1-4 family residential real estate                             97,302             25.4%            95,543             25.6%
Consumer                                                       24,335              6.4%            26,795              7.2%
Construction                                                    7,562              2.0%            10,940              2.9%
                                                        -------------          --------      ------------          --------
Total                                                      $  382,926            100.0%        $  372,519            100.0%
                                                        ===================================================================
</TABLE>

                                       9
<PAGE>
Credit Quality

Management  analyzes the  allowance for loan losses in detail on a monthly basis
to ensure that the losses inherent in the portfolio are properly recognized. The
Registrant's success in maintaining  excellent credit quality is demonstrated in
its historical  charge-off  percentage.  Charge-offs for the period ending March
31, 1998 have  increased  $162,000 from the same period in 1997.  This is mainly
the result of an increase in  commercial  and  industrial  loan  charge-offs  to
$208,000  for the  quarter.  Accordingly,  the  provision  for loan  losses  was
increased  from $106,000 in the period ending March 31, 1997 to $250,000 for the
same period in 1998.

The table  presented below shows the balances of nonaccrual  loans,  loans 90 or
more days past due, and  renegotiated  loans as of March 31, 1998,  and December
31, 1997.
<TABLE>
(In thousands of dollars)

                                                         March 31,                 December 31,
                                                          1998                        1997
<S>                                                    <C>                         <C>
Nonaccrual loans                                       $  1,630                    $  1,956
Loans 90 days or more past due                         $    408                    $    698
Renegotiated loans                                            0                           0
</TABLE>

Investments

Available for sale securities  decreased $0.75 million through the first quarter
of  1998  due to the  sale of  securities.  The  mix of the  portfolio  remained
relatively unchanged from December 31, 1997. The primary use of the portfolio is
to provide a source of  liquidity.  Most of the  portfolio  is  invested in U.S.
Treasury  and agency  securities  which have  little  credit risk and are highly
liquid. There are no securities classified as held to maturity.

Deposits

Total deposits through the first quarter have increased $11.6 million.  Interest
bearing deposit balances  increased  through March 31, 1998,  continuing a trend
from 1997. The increase in interest  bearing deposits came from an $11.9 million
increase in savings, money market and interest-bearing  checking, a $2.3 million
increase in time deposits  less than  $100,000,  and a $0.9 million  increase in
time  deposits  greater  than  $100,000.  The time  deposits of $100,000 or more
consist of stable, government balances and balances from retail customers.

Borrowings

The  Registrant's  branching  network  is a  relatively  high  cost  network  in
comparison  to peers.  Accordingly,  the  Registrant  uses  alternative  funding
sources to provide funds for lending activities.  Other borrowings  decreased by
$.8 million through the first quarter (refer to the table presented in Note 4 to
the  first  quarter  financial  statements  above  for  the  composition  of the
decrease).  At March 31, 1998,  $16.1 million of the total  borrowings were from
the Federal Home Loan Bank of Indianapolis.  Alternative  sources of funding can
be obtained at interest rates which are competitive  with, or lower than, retail
deposit rates and with inconsequential administrative costs.

Liquidity

The Registrant's  sources of liquidity include  principal  payments on loans and
investments,  sales of securities  available for sale,  deposits from customers,
borrowings  from the  Federal  Home Loan Bank,  other bank  borrowings,  and the
issuance of common stock. The Registrant has ready access to significant sources
of liquidity on an almost immediate basis.  Management anticipates no difficulty
in  maintaining  liquidity at the levels  necessary to conduct the  Registrant's
day-to-day business activities.

                                       10
<PAGE>
Results of Operations

Net Interest Income

Net interest  income through March 31, 1998  increased by 8.2%,  compared to the
same period one year ago. The net  interest  margin,  on a fully tax  equivalent
basis at March  31,  1998 was  5.54%,  compared  to 5.64%  for all of 1997.  The
decrease in net yield on interest earning assets reflects the competitive nature
of the  Registrant's  market.  Interest income from loans  represented  96.5% of
total  interest  income  through the first quarter of 1998 compared to 95.7% for
the same period of 1997. In all cases,  the total amount of interest  income and
the yield on total earning assets is strongly influenced by lending activities.

Provision for Loan Losses

The  Registrant  maintains the allowance for loan losses at a level  adequate to
cover losses inherent in the portfolio.  The Registrant  records a provision for
loan losses necessary to maintain the allowance at that 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 has increased $144,000 through March 31, 1998 compared to the same period
in  1997  as a  result  of the  Registrant's  desire  to  maintain  an  adequate
percentage of allowance to loans.

Noninterest Income

Service charges on deposit accounts  increased $71,000 through the first quarter
of 1998 vs.  the  first  quarter  of 1997 due  mainly to an  increased  focus on
non-interest sources of income. Gains on sales of loans has increased to $23,000
through the first quarter of 1998 vs.  $9,000  through the first quarter of 1997
due to an increase in loan sale activity.  Securities gains were $44,000 through
the first  quarter of 1998.  There were no security  gains or losses in the same
period in 1997.  The proceeds from the security sales were used to fund loans in
the  Registrant's  growing loan portfolio.  Other  noninterest  income increased
$62,000  through  the first  quarter of 1998 vs.  the first  quarter of 1997 due
mainly to an increase in insurance commissions.

Noninterest Expenses

Noninterest  expense  showed an increase of 4.4% through March 31, 1998 compared
to the same period of 1997.  The increase is  consistent  with the  Registrant's
asset growth.  Salary  expense  increased by $139,000 from March 31, 1997 to the
same  period  in  1998.  Much  of  the  increase  in  salaries  was  due  to the
Registrant's  staffing of branches  that opened after March 31, 1998.  Occupancy
expense  decreased  by $28,000  from  March 31,  1997 to March 31,  1998.  Other
noninterest expense increased by $41,000 for this same period. While the changes
in non-interest  expense were expected,  a primary objective of management is to
hold the rate of increase in this category below future asset growth. Management
believes that  significant  efficiencies  can be obtained and is increasing  the
level of management emphasis in this area.

Federal Income Tax

The  provision  for income taxes was 26.5% of income  before  income tax through
March 31, 1998 compared to 24.2% through March 31, 1997. The difference  between
these rates and the federal corporate income tax rate of 34% is primarily due to
tax-exempt interest earned on loans, leases, and investments.  The effective tax
rate has  increased as tax-exempt  income has become a smaller  portion of total
interest income.

Interest Rate Risk

Management  actively manages the Registrant's  interest rate risk. In relatively
low  interest  rate  environments  which  have been in place the last few 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. Management writes commercial and real estate loans at variable
rates or, if necessary,  fixed rate loans for relatively short terms. Management
has also offered products that give customers an incentive to accept longer term
deposits.  Management can also manage interest rate risk with the  

                                       11
<PAGE>
maturity periods of securities purchased, selling securities available for sale,
and borrowing funds with targeted maturity periods.  The Registrant has remained
slightly liability sensitive in the cumulative net asset (liability) funding gap
for 1 - 365 days since December 31, 1997.

Capital Resources

It is the policy of the  Registrant  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 Registrant
exceed the regulatory  guidelines for well capitalized  institutions.  The table
below shows the  Registrant's  capital,  in  thousands  of dollars,  and capital
ratios at March 31, 1998 and 1997.
<TABLE>


                                                                                        March 31, 1998
                                                              Required           Required            Actual             Actual
                                                                 $                 %                  $                  %
<S>                                                           <C>                 <C>              <C>                  <C>
Tier 1 risk adjusted capital ratio                            13,064              4.00%             29,907              9.16%
Total risk adjusted capital ratio                             26,128              8.00%             31,365              9.60%
Tier 1 leverage ratio                                         17,031              4.00%             29,907              7.02%

Tier 1 capital                                                                                      29,907
Tier 2 capital                                                                                       4,033
Total risk based capital                                                                            33,940
Total risk weighted assets                                                                         326,599
Average total assets                                                                               425,787
</TABLE>


<TABLE>
                                                                                        March 31, 1997
                                                              Required           Required            Actual             Actual
                                                                  $                 %                  $                  %
<S>                                                           <C>                 <C>              <C>                 <C>
Tier 1 risk adjusted capital ratio                            12,258              4.00%             27,521              8.98%
Total risk adjusted capital ratio                             24,516              8.00%             31,365             10.23%
Tier 1 leverage ratio                                         15,451              4.00%             27,521              7.12%

Tier 1 capital                                                                                      27,521
Tier 2 capital                                                                                       3,844
Total risk based capital                                                                            31,365
Total risk weighted assets                                                                         306,449
Average total assets                                                                               386,276
</TABLE>

        
                                       12
<PAGE>
                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

At the date hereof, there were no material pending legal proceedings, other than
routine  litigation  incidental  to  the  business  of  banking,  to  which  the
Registrant  or  any  of its  subsidiaries  is a  party  of or  which  any of its
properties is the subject.


Item 2.  Changes in Securities.

None.


Item 3.  Defaults Upon Senior Securities.

There have been no defaults upon senior securities  relevant to the requirements
of this section.


Item 4.  Submission of Matters to a Vote of Security Holders.

No matters were  submitted  to a vote of  Registrant's  shareholders  during the
first quarter of 1998.


Item 5.  Other Information.

None.


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

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

Number                              Exhibit

3                 The Registrant's Restated Articles of Incorporation as amedned
                  to reflect change of the Registrant's  name.
27                Financial Data Schedule.  Filed herewith.



The following documents are filed as part of Part I, Item 1 of this report:

       Consolidated Balance Sheets - March 31, 1998 (Unaudited) and December 31,
                  1997 (Audited)

       Consolidated  Statements  of Income - Three months ended March 31, 1998
                  and 1997 (Unaudited)

       Consolidated  Statement  of  Changes  in  Shareholders'  Equity - Three
       months ended March 31, 1998 and 1997 (Unaudited)

       Consolidated  Statement  of Cash Flows - Three  months  ended March 31,
       1998 and 1997 (Unaudited)

        Notes to consolidated financial statements - March 31, 1998


                                       13
<PAGE>
                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly caused this  Quarterly  Report on Form 10-Q for the quarter
ended March 31, 1998 to be signed on its behalf by the undersigned hereunto duly
authorized.


                                         NORTH COUNTRY FINANCIAL CORPORATION


                                         /s/ Ronald G. Ford
                                         Ronald G. Ford
                                         (Chief Executive Officer)


                                         /s/ Michael L. Roarty
                                         Michael L. Roarty
                                         (Executive Vice President and Chief 
                                         Financial Officer)


Dated:  May 14, 1998

                                       14
<PAGE>
Exhibit 3, Page 1


                            CERTIFICATE OF AMENDMENT
                        TO THE ARTICLES OF INCORPORATION


     Pursuant to the provisions of Act 284, Public Acts of 1972, as amended, the
undersigned corporation executes the following Certificate:

         1.      The present name of the corporation is:

                 First Manistique Corporation

         2.      The identification number assigned by the Bureau is:  063 316

         3.      The location of the registered office is:

                 130 South Cedar
                 Manistique, MI 49854

         4.      The following  amendments to the Articles of Incorporation were
duly adopted  on the 14th day of April,  1998.  The amendment  was duly  adopted
in accordance  with  Section 611(2) of the Act by the vote of the  shareholders.
The necessary votes were cast in favor of the amendment.

         Article I is hereby amended to read as follows:

                                    ARTICLE I

         The name of the Corporation is North Country Financial Corporation.

                                            Signed this 18th day of April, 1998.



                                            By:  /s/Ronald G. Ford
                                            Ronald G. Ford, President and
                                            Chief Executive Officer


Return to:
Donald L. Johnson
Varnum, Riddering, Schmidt & Howlett LLP
P.O. Box 352
Grand Rapids, MI 49501-0352
<PAGE>
Exhibit 3, Page 2


                            CERTIFICATE OF AMENDMENT
                        TO THE ARTICLES OF INCORPORATION


     Pursuant to the provisions of Act 284, Public Acts of 1972, as amended, the
undersigned corporation executes the following Certificate:

         1.       The present name of the corporation is:

                  First Manistique Corporation

         2.       The identification number assigned by the Bureau is:  063 316

         3.       The location of the registered office is:

                  130 South Cedar
                  P.O. Box 369
                  Manistique, MI 49854

         4.       The following amendments to the Articles of Incorporation were
duly adopted on the 23rd day of April,  1996.  The  amendments were duly adopted
in accordance  with  Section 611(2) of the Act by the vote of the  shareholders.
The necessary votes were cast in favor of the amendments.

               Article III of the  Corporation's  Articles of  Incorporation  is
          hereby amended to read as follows:

                                   ARTICLE III

               The total  number of shares  of all  classes  of stock  which the
          corporation  shall have  authority  to issue is 6,500,000  shares,  of
          which 6,000,000  shares shall be of a single class of common stock and
          500,000 shares shall be series preferred stock.

               The  authorized  shares of common stock are all of one class with
          equal voting power,  and each such share shall be equal to every other
          such share.  The Board of Directors of the  corporation  may cause the
          corporation  to issue  preferred  shares in one or more  series,  each
          series to bear a  distinctive  designation  and to have such  relative
          rights and  preferences  as shall be  prescribed  by resolution of the
          Board. Such resolutions,  when filed,  shall constitute  amendments to
          these Articles of Incorporation.
<PAGE>
Exhibit 3, Page 3


     A new Article VII is added to the  Corporation's  Articles of Incorporation
and reads as follows:

                                   ARTICLE VII

                               BOARD OF DIRECTORS

               Section 1. Authority and Size of Board.  The business and affairs
          of the  corporation  shall be managed by or under the direction of the
          Board of Directors.  The number of directors of the  corporation  that
          shall  constitute the Board of Directors shall be determined from time
          to time by resolution adopted by the affirmative vote of:

                    A. At least eighty  percent (80%) of the Board of Directors,
               and

                    B. A majority of the  Continuing  Directors (as  hereinafter
               defined).

               Section 2.  Classification  of Board and  Filling  of  Vacancies.
          Subject to applicable  law, the directors  shall be divided into three
          (3)  classes,  each class to be as nearly equal in number as possible.
          At each annual meeting of shareholders, the successors to the class of
          directors whose term shall then expire shall be elected to hold office
          for a term expiring at the third  succeeding  annual meeting and until
          their  successors  shall  be  duly  elected  and  qualified  or  their
          resignation  or removal.  Any  vacancies in the Board of Directors for
          any reason,  and any newly created  directorships  resulting  from any
          increase in the number of  directors,  may be filled only by the Board
          of  Directors,  acting by an  affirmative  vote of a  majority  of the
          Continuing  Directors (as  hereinafter  defined) and an eighty percent
          (80%) majority of all of the directors  then in office,  although less
          than a quorum,  and any director so chosen shall hold office until the
          next election of the class for which the director was chosen and until
          his successor  shall be duly elected and qualified or his  resignation
          or removal.  No decrease in the number of directors  shall shorten the
          term of any incumbent director.

               Section  3.  Removal  of  Directors.  Notwithstanding  any  other
          provisions  of these  Articles of  Incorporation  or the Bylaws of the
          corporation (and  notwithstanding the fact that some lesser percentage
          may be specified by law or by these Articles of  Incorporation  or the
          Bylaws  of  the  corporation),  any  one  or  more  directors  of  the
          corporation  may be removed at any time,  with or without  cause,  but
          only by either (i) the affirmative vote of a majority of the

                                        2
<PAGE>
Exhibit 3, Page 4



         Continuing  Directors and at least eighty percent (80%) of the Board of
         Directors  or  (ii)  the   affirmative   vote,  at  a  meeting  of  the
         shareholders called for that purpose, of the holders of at least eighty
         percent  (80%) of the voting  power of the then  outstanding  shares of
         capital  stock of the  corporation  entitled to vote  generally  in the
         election of directors (the "Voting  Stock") voting together as a single
         class.

               Section 4. Certain Definitions.  For the purposes of this Article
          VII:

                    A. A "person" shall mean any individual,  firm,  corporation
               or other entity.

                    B.  "Interested  Shareholder"  shall mean any person,  other
               than the corporation or any Subsidiary, who or which:

                         (i) is the beneficial owner, directly or indirectly, of
                    ten  percent  (10%)  or  more  of the  voting  power  of the
                    outstand ing Voting Stock; or

                         (ii) is an Affiliate of the corporation and at any time
                    within the two (2) year period immediately prior to the date
                    in  question   was  the   beneficial   owner,   directly  or
                    indirectly, of ten percent (10%) or more of the voting power
                    of the then outstanding Voting Stock; or

                         (iii) is an assignee of or has  otherwise  succeeded to
                    any shares of Voting Stock which were at any time within the
                    two  (2)  year  period  immediately  prior  to the  date  in
                    question  beneficially owned by any Interested  Shareholder,
                    if such assignment or succession  shall have occurred in the
                    course  of a  transaction  or  series  of  transactions  not
                    involving  a  public  offering  within  the  meaning  of the
                    Securities Act of 1933.

                    C. A person  shall be a  "beneficial  owner"  of any  Voting
               Stock:

                         (i)  which  such  person  or any of its  Affiliates  or
                    Associates  (as  hereinafter  defined)   beneficially  owns,
                    directly or indirectly; or

                         (ii)  which  such  person or any of its  Affiliates  or
                    Associates has (a) the right to acquire  (whether such right
                    is

                                        3
<PAGE>
Exhibit 3, Page 5



                    exercisable  immediately or only after the passage of time),
                    pursuant to any agreement,  arrangement or  understanding or
                    upon the exercise of  conversion  rights,  exchange  rights,
                    warrants or options, or otherwise,  or (b) the right to vote
                    pursuant to any agreement, arrangement or understanding; or

                         (iii)  which are  beneficially  owned,  directly  or in
                    directly,  by any other person with which such person or any
                    of  its   Affiliates  or  Associates   has  any   agreement,
                    arrangement or  understanding  for the purpose of acquiring,
                    holding, voting or disposing of any shares of Voting Stock.

                    D. For the  purposes of  determining  whether a person is an
               Interested Shareholder pursuant to paragraph B of this Section 4,
               the  number of shares of Voting  Stock  deemed to be  outstanding
               shall  include   shares  deemed  owned  through   application  of
               paragraph  C of this  Section 4 but shall not  include  any other
               shares of Voting  Stock  which may be  issuable  pursuant  to any
               agreement,  arrangement  or  understanding,  or upon  exercise of
               conversion rights, warrants or options, or otherwise.

                    E.  "Affiliate"  or  "Associate"  shall have the  respective
               meanings  ascribed  to such  terms in Rule  12b-2 of the  General
               Rules and Regulations under the Securities  Exchange Act of 1934,
               as in  effect  on  the  date  this  Article  of the  Articles  of
               Incorporation  is filed  with  the  Corporation  Division  of the
               Michigan Department of Commerce.

                    F. "Subsidiary" means any corporation of which a majority of
               any class of equity security is owned, directly or indirectly, by
               the corporation;  provided, however, that for the purposes of the
               definition of Interested  Shareholder set forth in paragraph B of
               this  Section  4,  the  term  "Subsidiary"   shall  mean  only  a
               corporation of which a majority of each class of equity  security
               is owned, directly or indirectly, by the corporation.

                    G.  "Continuing  Director"  means any member of the Board of
               Directors of the  corporation  (the "Board") who is  unaffiliated
               with the  Interested  Shareholder  and was a member  of the Board
               prior  to the time  that the  Interested  Shareholder  became  an
               Interested  Shareholder,   and  any  successor  of  a  Continuing
               Director who is unaffiliated with the Interested  Shareholder and
               is recommended to succeed a Continuing  Director by a majority of
               Continuing Directors then on the Board.

                                        4
<PAGE>
Exhibit 3, Page 6



               Section 5.  Powers of  Continuing  Directors.  A majority  of the
          Continuing  Directors of the corporation shall have the power and duty
          to  determine,  on the  basis  of  information  known  to  them  after
          reasonable inquiry,  all facts necessary to determine  compliance with
          this Article VII, including without limitation (i) whether a person is
          an Interested  Shareholder,  (ii) the number of shares of Voting Stock
          beneficially  owned by any  person  and  (iii)  whether a person is an
          Affiliate or Associate of another; and the good faith determination of
          a  majority  of the  Continuing  Directors  on such  matters  shall be
          conclusive and binding for all the purposes of this Article VII.

               Section 6. Nominations for Board. Nominations for the election of
          directors  may be made by the Board of Directors  or by a  shareholder
          entitled to vote in the election of directors.  A shareholder entitled
          to vote  in the  election  of  directors,  however,  may  make  such a
          nomination only if written notice of such  shareholder's  intent to do
          so has been  given,  either by personal  delivery or by United  States
          mail,  postage  prepaid,  and  received  by the  corporation  (a) with
          respect  to  an  election   to  be  held  at  an  annual   meeting  of
          shareholders, not later than sixty (60) nor more than ninety (90) days
          prior to the first  anniversary of the preceding year's annual meeting
          (or, if the date of the annual  meeting is changed by more than twenty
          (20) days from such anniversary  date,  within ten (10) days after the
          date the  corporation  mails or otherwise  gives notice of the date of
          such  meeting),  and (b) with  respect to an  election to be held at a
          special  meeting of  shareholders  called for that purpose,  not later
          than the close of business on the tenth (10th) day  following the date
          on which  notice  of the  special  meeting  was  first  mailed  to the
          shareholders by the corporation.

               Each  shareholder's  notice of intent to make a nomination  shall
          set forth:  (i) the name(s) and  address(es)  of the  shareholder  who
          intends  to make the  nomination  and of the  person or  persons to be
          nominated;  (ii) a representation that the shareholder (a) is a holder
          of  record  of  stock  of the  corporation  entitled  to  vote at such
          meeting,  (b) will  continue  to hold such stock  through  the date on
          which the  meeting is held,  and (c) intends to appear in person or by
          proxy at the meeting to nominate  the person or persons  specified  in
          the notice;  (iii) a description of all arrangements or understandings
          between  the  shareholder  and each  nominee  and any other  person or
          persons  (naming  such  person  or  persons)  pursuant  to  which  the
          nomination  is  to  be  made  by  the  shareholder;  (iv)  such  other
          information  regarding  each nominee  proposed by such  shareholder as
          would be required to be included in a proxy  statement  filed pursuant
          to  Regulation  14A  promulgated  under  Section 14 of the  Securities
          Exchange  Act of 1934,  as  amended,  as now in  effect  or  hereafter
          modified;  and (v) the consent of each  nominee to serve as a director
          of the corporation if so

                                        5
<PAGE>
Exhibit 3, Page 7



          elected.  The corporation may require any proposed  nominee to furnish
          such  other   information   as  may  reasonably  be  required  by  the
          corporation to determine the  qualifications  of such proposed nominee
          to serve as a director.

               No person  shall be eligible  for  election as a director  unless
          nominated  (i) by a  shareholder  in  accordance  with  the  foregoing
          procedure or (ii) by the Board of Directors.

     A new Article VIII is added to the Corporation's  Articles of Incorporation
and reads as follows:

                                  ARTICLE VIII

                      NOTIFICATION OF SHAREHOLDER PROPOSALS

          The  Board  of   Directors  of  the   corporation   shall  submit  for
     consideration  and vote by the  shareholders,  at  annual  meetings  of the
     shareholders,  only  those  proposals  that are first  brought  before  the
     meeting  by or at  the  direction  of the  Board  of  Directors,  or by any
     shareholder  entitled  to vote  at such  meeting  (a)  who  submits  to the
     corporation a timely Notice of Proposal in accordance with the requirements
     of this  Article  VIII and the  proposal is a proper  subject for action by
     shareholders  under  Michigan law, or (b) whose proposal is included in the
     corporation's  proxy materials in compliance with all the  requirements set
     forth  in the  applicable  rules  and  regulations  in the  Securities  and
     Exchange Commission.

          Each shareholder's Notice of Proposal shall set forth:

               (a) The  name  and  address  of the  shareholder  submitting  the
          proposal, as they appear on the corporation's books and records;

               (b) A  representation  that the  shareholder  (i) is a holder  of
          record of stock of the  corporation  entitled to vote at such meeting,
          (ii) will  continue  to hold such stock  through the date on which the
          meeting is held,  and (iii) intends to appear in person or by proxy at
          the meeting to submit the proposal for shareholder vote;

               (c) A brief  description of the proposal  desired to be submitted
          to the meeting  for  shareholder  vote and the reasons for  conducting
          such business at the meeting; and


                                        6
<PAGE>
Exhibit 3, Page 8



               (d) A  description  of any  financial  or other  interest of such
          shareholder in the proposal.

          A Notice of Proposal must be given,  either by personal delivery or by
     United States mail,  postage  prepaid,  and received by the corporation not
     less than  thirty (30) days prior to the date of the  originally  scheduled
     meeting,  regardless of any adjournments  thereof to a later date; provided
     that,  if less than forty (40) days' notice of the meeting of  shareholders
     is given by the corporation, the Notice of Proposal must be received by the
     corporation  not later than the close of business  on the tenth  (10th) day
     following the date on which the notice of the  scheduled  meeting was first
     mailed to the shareholders.

          The secretary of the corporation shall notify a shareholder in writing
     whether his or her Notice of Proposal has been made in accordance  with all
     the  requirements  of this  Article  VIII.  The chairman of the meeting may
     refuse  to  acknowledge  the  proposal  of  any  shareholder  not  made  in
     compliance with all such requirements.

     A new Article IX is added to the  Corporation's  Articles of  Incorporation
and reads as follows:

                                   ARTICLE IX

                      AMENDMENT OF ARTICLES VII, VIII OR IX

          Notwithstanding  anything contained in these Articles of Incorporation
     to the contrary,  the  affirmative  vote of at least 80% of the outstanding
     shares of voting stock of the corporation,  voting as a single class, shall
     be required to amend or repeal  Article VII,  Article VIII or Article IX of
     these  Articles of  Incorporation  or to adopt any  provision  inconsistent
     therewith,  unless, such amendment or repeal or inconsistent  provision has
     been recommended for approval by at least 80% of all directors then holding
     office and by a majority of the Continuing Directors.  The term "Continuing
     Directors" is defined in Article VII.


                                       7
<PAGE>
Exhibit 3, Page 9



     A new Article X is added to the Corporation's Articles of Incorporation and
reads as follows:

                                    ARTICLE X

                       BOARD EVALUATION OF CERTAIN OFFERS

          Section 1.  Matters to be  Evaluated.  The Board of  Directors of this
     corporation  shall not approve,  adopt or recommend any offer of any person
     or entity,  other than the corporation,  to make a tender or exchange offer
     for any  capital  stock of the  corporation,  to merge or  consolidate  the
     corporation  with any other entity or to purchase or otherwise  acquire all
     or  substantially  all of the assets or business of the corporation  unless
     and until the Board of Directors  shall have first  evaluated the offer and
     determined  that the offer would be in compliance  with all applicable laws
     and that the  offer is in the best  interests  of the  corporation  and its
     shareholders. In connection with its evaluation as to compliance with laws,
     the Board of Directors  may seek and rely upon an opinion of legal  counsel
     independent  from the offeror and it may test such  compliance with laws in
     any state or federal  court or before  any state or federal  administrative
     agency which may have  appropriate  jurisdiction.  In  connection  with its
     evaluation  as to the  best  interests  of the  corporation  and its  share
     holders,  the Board of Directors  shall consider all factors which it deems
     relevant,  including without  limitation:  (i) the adequacy and fairness of
     the consideration to be received by the corporation and/or its shareholders
     under the offer considering  historical trading prices of the corporation's
     stock,  the  price  that  might be  achieved  in a  negotiated  sale of the
     corporation  as a whole,  premiums  over  trading  prices  which  have been
     proposed or offered with respect to the  securities  of other  companies in
     the past in  connection  with similar  offers and the future  prospects for
     this  corporation and its business;  (ii) the potential social and economic
     impact of the  offer  and its  consummation  on this  corporation,  and its
     subsidiaries and their respective employees, depositors and other customers
     and vendors;  (iii) the potential  social and economic  impact of the offer
     and its  consummation  on the  communities in which the corporation and any
     subsidiaries  operate  or are  located;  (iv) the  business  and  financial
     condition and earnings prospects of the proposed acquiror or acquirors; and
     (v) the  competence,  experience and integrity of the proposed  acquiror or
     acquirors and its or their management.

          Section 2. Amendment, Repeal, etc. Notwithstanding any other provision
     of these Articles of  Incorporation or the Bylaws of the corporation to the
     contrary  (and  notwithstanding  the fact that a lesser  percentage  may be
     specified by law, these Articles of Incorporation or the Bylaws of the

                                        8
<PAGE>
Exhibit 3, Page 10


     corporation),  the affirmative  vote of the holders of eighty percent (80%)
     or more of the outstanding shares of capital stock entitled to vote for the
     election of directors, voting together as a single class, shall be required
     to amend,  repeal or adopt any provision  inconsistent with this Article X;
     provided, however, that this Section 2 of Article X shall be of no force or
     effect  if  the  proposed  amendment,  repeal  or  other  action  has  been
     recommended  for approval by at least eighty percent (80%) of all directors
     then holding office.


                                            Signed this 25th day of April, 1996.



                                            By:  /s/Ronald G. Ford
                                                 Ronald G. Ford, President and
                                                 Chief Executive Officer




Return to:
Donald L. Johnson
Varnum, Riddering, Schmidt & Howlett
P.O. Box 352
Grand Rapids, MI 49501-0352



                                        9
<PAGE>
Exhibit 3, Page 11

                       RESTATED ARTICLES OF INCORPORATION

                                       OF

                          FIRST MANISTIQUE CORPORATION


     The  following  Restated  Articles  of  Incorporation  are  executed by the
undersigned corporation pursuant to the provisions of Sections 641-651, Act 284,
Public Acts of 1972, as amended.

          1. The present  name of the  corporation,  and its only name since its
     incorporation is First Manistique Corporation.

          2. The corporation  identification number (CID) assigned by the bureau
     is 063-316.

          3. All of the former names of the corporation are: None

          4. The date of filing  the  original  Articles  of  Incorporation  was
     December 6, 1974.

          5. The  following  Restated  Articles of  Incorporation  supersede the
     original Articles of Incorporation, as heretofore amended, and shall be the
     Articles of Incorporation of the corporation.

                                    ARTICLE I

     The name of the corporation is First Manistique Corporation.

                                   ARTICLE II

     The purpose or purposes for which the corporation is organized is to engage
in any  activity  within the purposes  for which  corporations  may be organized
under the Business  Corporation  Act of Michigan,  as amended from time to time,
and including  without  limitation the power to act as a bank holding company as
permitted  by the  Federal  Bank  Holding  Company Act of 1956,  as amended,  or
hereafter supplemented or amended.

                                   ARTICLE III

     The total authorized shares:

         1.       Common Shares                       2,000,000
                                                     ----------
                  Preferred Shares                       25,000
                                                    -----------
<PAGE>
Exhibit 3, Page 12

         2.       A statement of all or any of the relative rights,  preferences
                  and limitations of the shares of each class is as follows:

                           The Board of Directors may cause the  Corporation  to
                           issue  Preferred  Shares in one or more series,  each
                           series to bear a distinctive  designation and to have
                           such  relative  rights  and  preferences  as shall be
                           prescribed   by   resolution   of  the  Board.   Such
                           resolutions,  when filed, shall constitute amendments
                           to these Articles of Incorporation.

                                   ARTICLE IV

         1.       The  address of the  current  registered  office is: 130 South
Cedar  Street,  P.O. Box 369,  Manistique,  Michigan  49854, which  is  also the
mailing address of the current registered office.

         2.       The name of the current resident agent is:  Ronald G. Ford

                                    ARTICLE V

     When a  compromise  or  arrangement  or a plan  of  reorganization  of this
corporation is proposed  between this corporation and its creditors or any class
of them or between this corporation and its shareholders or any class of them, a
court  of  equity   jurisdiction  within  the  state,  on  application  of  this
corporation  or of a creditor or  shareholder  thereof,  or on  application of a
receiver appointed for the corporation,  may order a meeting of the creditors or
class  of  creditors  or of the  shareholders  or class  of  shareholders  to be
affected by the proposed  compromise or  arrangement  or  reorganization,  to be
summoned  in  such  manner  as  the  court  directs.  If a  majority  in  number
representing  3/4 in value of the  creditors  or class of  creditors,  or of the
shareholders or class of shareholders to be affected by the proposed  compromise
or arrangement,  agree to a compromise or arrangement,  or a  reorganization  of
this  corporation  as a  consequence  of  the  compromise  or  arrangement,  the
compromise or arrangement and the reorganization,  if sanctioned by the court to
which the  application  has been made,  shall be binding on all the creditors or
class of creditors, or on all the shareholders or class of shareholders and also
on this corporation.

                                   ARTICLE VI

     A  director  of the  Corporation  shall  not be  personally  liable  to the
Corporation or its  shareholders  for monetary damages for a breach of fiduciary
duty as a director,  except for liability:  (a) for any breach of the director's
duty  of  loyalty  to the  Corporation  or its  shareholders;  (b)  for  acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation  of law;  (c)  resulting  from a violation  ss.551(1)  of the Michigan
Business  Corporation  Act; or (d) for any  transaction  from which the director
derived  an  improper  personal  benefit.  In the  event the  Michigan  Business
Corporation Act is amended,  after approval by the  shareholders of this Article
VII, to authorize  corporate action further eliminating or limiting the personal
liability of  directors,  then the  liability  of a director of the  Corporation
shall be eliminated or limited to the fullest  extent  permitted by the Michigan
Business Corporation Act, as so amended. Any repeal, modification or adoption of
any provision in these Articles of Incorporation  inconsistent with this Article
VI shall not  adversely  affect any right or  protection  of a  director  of the
Corporation existing at the time of such repeal, modification or adoption.

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<PAGE>
Exhibit 3, Page 13

     These Restated Articles of incorporation  were duly adopted by the Board of
Directors  without a vote of the  shareholders in accordance with the provisions
of Section  642,  Act 284,  Public  Acts of 1972,  as  amended.  These  Restated
Articles of  Incorporation  only restate and  integrate and do not further amend
the provisions of the Articles of Incorporation as heretofore  amended and there
is no material  discrepancy between those provisions and the provisions of these
Restated Articles.


     Signed this 28th day of December, 1995.


                                         FIRST MANISTIQUE CORPORATION


                                         By:  /s/ Ronald G. Ford
                                                    (Name)

                                         Its:   President & CEO

                                     


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