SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).

[X] Definitive proxy statement.

[ ] Definitive additional materials.

[ ] Soliciting material pursuant to Rule 14a-12

Alpena Bancshares, Inc.
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(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of filing fee (check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction applies:

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

(2) Aggregate number of securities to which transaction applies:

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

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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

(4) Proposed maximum aggregate value of transaction:

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

(5) Total fee paid:

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

[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed: March 19, 2001

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2
[LETTERHEAD OF ALPENA BANCSHARES, INC.]

March 19, 2001

Dear Stockholder:

We cordially invite you to attend the 2001 Annual Meeting of Stockholders of
Alpena Bancshares, Inc. (the "Company"). The Annual Meeting will be held at the
Thunder Bay Recreational Center, 701 Woodward Avenue, Alpena, Michigan, at 1:00
p.m., Michigan time, on April 17, 2001.

The enclosed Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted. During the meeting we will also report on the
operations of the Company. Directors and officers of the Company, as well as a
representative of our independent auditors, will be present to respond to any
questions that stockholders may have.

The business to be conducted at the Annual Meeting includes the election of two
directors and the ratification of the appointment of Plante & Moran LLP as
auditors for the Company's 2001 fiscal year.

The Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interest of the Company and its
stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each matter to be considered.

On behalf of the Board of Directors, we urge you to sign, date and return the
enclosed proxy card as soon as possible even if you currently plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will assure
that your vote is counted if you are unable to attend the Annual Meeting. Your
vote is important, regardless of the number of shares that you own.

Sincerely,

Jerry A. Christensen
President and Chief Executive Officer

ALPENA BANCSHARES, INC.
100 S. Second Avenue,
Alpena, Michigan 49707
(517) 356-9041

NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On April 17, 2001

Notice is hereby given that the Annual Meeting of Alpena Bancshares,
Inc. (the "Company") will be held at the Thunder Bay Recreational Center, 701
Woodward Avenue, Alpena, Michigan, on April 17, 2001, at 1:00 p.m., Michigan
time.

A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed.

The Annual Meeting is for the purpose of considering and acting upon:

1. The election of two directors of the Company;

2. The ratification of the appointment of Plante & Moran LLP as
auditors for the Company for the fiscal year ending December 31,
2001; and

such other matters as may properly come before the Meeting, or any adjournments
thereof. The Board of Directors is not aware of any other business to come
before the Meeting.

Any action may be taken on the foregoing proposals at the Annual
Meeting on the date specified above, or on any date or dates to which the
Meeting may be adjourned. Stockholders of record at the close of business on
March 12, 2001, are the stockholders entitled to vote at the Meeting, and any
adjournments thereof.

EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE
REVOKED AT ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING
WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY
BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR
HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING.
HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN
NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE
PERSONALLY AT THE MEETING.

By Order of the Board of Directors

James I. Malaski
Secretary
Alpena, Michigan
March 19, 2001

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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
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4

PROXY STATEMENT

ALPENA BANCSHARES, INC.
100 S. Second Avenue,
Alpena, Michigan 49707
(517) 356-9041

ANNUAL MEETING OF STOCKHOLDERS
April 17, 2001

This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Alpena Bancshares, Inc. (the
"Company") to be used at the Annual Meeting of Stockholders of the Company (the
"Annual Meeting"), which will be held at the Thunder Bay Recreational Center,
701 Woodward Avenue, Alpena, Michigan, on April 17, 2001, at 1:00 p.m., Michigan
time, and all adjournments of the Annual Meeting. The accompanying Notice of
Annual Meeting of Stockholders and this Proxy Statement are first being mailed
to stockholders on or about March 19, 2001.

At the Annual Meeting, stockholders will vote on the election of two
directors of the Company and on the ratification of the appointment of the
Company's auditors for the fiscal year ending December 31, 2001.

REVOCATION OF PROXIES

Stockholders who execute proxies in the form solicited hereby retain
the right to revoke them in the manner described below. Unless so revoked, the
shares represented by such proxies will be voted at the Annual Meeting and all
adjournments thereof. Proxies solicited on behalf of the Board of Directors of
the Company will be voted in accordance with the directions given therein. WHERE
NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE VOTED "FOR" THE PROPOSALS SET
FORTH IN THIS PROXY STATEMENT FOR CONSIDERATION AT THE ANNUAL MEETING.

Proxies may be revoked by sending written notice of revocation to the
Secretary of the Company, at the address of the Company shown above. The
presence at the Annual Meeting of any stockholder who had given a proxy shall
not revoke such proxy unless the stockholder delivers his or her ballot in
person at the Annual Meeting or delivers a written revocation to the Secretary
of the Company prior to the voting of such proxy.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

Holders of record of the Company's common stock, par value $1.00 per
share (the "Common Stock") as of the close of business on March 12, 2001 (the
"Record Date") are entitled to one vote for each share then held. As of the
Record Date, the Company had 1,641,899 shares of Common Stock issued and
outstanding, 920,000 of which were held by Alpena Bancshares, M.H.C. (the
"Mutual Holding Company"), and 721,899 of which were held by stockholders other
than the Mutual Holding Company. The presence in person or by proxy of a
majority of the outstanding shares of Common Stock entitled to vote is necessary
to constitute a quorum at the Annual Meeting. Broker non-votes and abstentions
will be counted as shares present and entitled to vote for the purposes of
establishing a quorum.

As to the election of directors, the proxy card provided by the Board
of Directors enables the stockholder to vote "FOR" the election of the two
nominees proposed by the Board, or to "WITHHOLD AUTHORITY" to vote for the
nominees proposed. Directors are elected by a plurality of votes cast, without
regard to either broker non-votes or proxies as to which authority to vote for
the nominee being proposed is withheld.

As to the ratification of Plante & Moran LLP as independent auditors of
the Company, by checking the appropriate box, a stockholder may: (i) vote "FOR"
the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN"
5

from voting on such item. The ratification of this matter shall be determined by
a majority of the votes cast at the Meeting, in person or by proxy, without
regard to broker non-votes or proxies marked "ABSTAIN."

Management of the Company anticipates that shares of Common Stock owned
by the Mutual Holding Company will be voted in favor of the nominees for
director and in favor of the ratification of the Company's auditors for the
fiscal year ending December 31, 2001. The affirmative vote of such shares would
ensure the election of such nominees and the ratification of such auditors.

Persons and groups who beneficially own in excess of five percent of
the Common Stock are required to file certain reports with the Securities and
Exchange Commission ("SEC") regarding such ownership pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The following table sets
forth, as of the Record Date, the shares of Common Stock beneficially owned by
directors and nominees individually, by executive officers individually, by
executive officers and directors as a group and by each person who was the
beneficial owner of more than five percent of the Company's outstanding shares
of Common Stock.

AMOUNT OF SHARES
OWNED AND NATURE PERCENT OF SHARES
NAME AND ADDRESS OF OF BENEFICIAL OF COMMON STOCK
BENEFICIAL OWNERS OWNERSHIP (1)(4) OUTSTANDING
------------------- ------------------ ------------------

DIRECTORS AND EXECUTIVE OFFICERS (2)
Duane I. Dickey 24,813 1.51%

Gary Bensinger 966 0.06

James Rapin 8,364 0.51

Martin A. Thomson 12,362 0.75

Keith Wallace 7,715 0.47

Jerry A. Christensen 500 0.03

James I. Malaski 14,177 0.86

All Directors and Executive Officers
as a Group (7 persons) (3) 68,895 4.20

PRINCIPAL STOCKHOLDERS:
Alpena Bancshares, M.H.C. 920,000 56.03
100 S. Second Avenue
Alpena, Michigan 49707

Financial Investment Management Group, Ltd. 158,439 9.65
417 Saint Joseph's Street
Suttons Bay, Michigan 49682

- ------------------------------------
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is
deemed to be the beneficial owner for purposes of this table, of any
shares of Common Stock if he has shared voting or investment power with
respect to such security, or has a right to acquire beneficial
ownership at any time within 60 days from the Record Date. As used
herein, "voting power" is the power to vote or direct the voting of
shares and "investment power" is the power to dispose or direct the
disposition of shares. Includes all shares held directly as well as by
spouses and minor children, in trust and other indirect ownership, over
which shares the named individuals effectively exercise sole or shared
voting and investment power. (Footnotes continued on next page)

- ---------------------------
(2) The mailing address for each person listed is 100 S. Second Avenue,
Alpena, Michigan 49707.
(3) The Company's executive officers and directors are also executive
officers and directors of Alpena Bancshares, M.H.C.
(4) Includes shares of Common Stock allocated to the accounts of employees
pursuant to the Company's Employee Stock Ownership Plan ("ESOP"). Under
the terms of the ESOP, shares of Common Stock so allocated are voted in
accordance with the instructions of the respective employees, while
unallocated shares are voted by the ESOP trustee in the manner
calculated to most accurately reflect the instructions it has received
from the participants regarding the allocated shares, unless its
fiduciary duty requires otherwise.

PROPOSAL I--ELECTION OF DIRECTORS

The Company's Board of Directors is currently composed of six members. The
Company's bylaws provide that approximately one-third of the directors are to be
elected annually. Directors of the Company are generally elected to serve for a
three-year period or until their respective successors shall have been elected
and shall qualify. The Board of Directors has nominated to serve as director
Gary Bensinger and Keith Wallace, each of whom is currently a member of the
Board of Directors. Messrs. Bensinger and Wallace will be elected to serve for
three-year periods and until their successors shall have been elected and shall
qualify.

The table below sets forth certain information regarding the composition of
the Company's Board of Directors, including the terms of office of Board
members. It is intended that the proxies solicited on behalf of the Board of
Directors (other than proxies in which the vote is withheld as to one or more
nominees) will be voted at the Annual Meeting for the election of the nominees
identified below. If a nominee is unable to serve, the shares represented by all
such proxies will be voted for the election of such substitute as the Board of
Directors may recommend. At this time, the Board of Directors knows of no reason
why the nominees might be unable to serve, if elected. There are no arrangements
or understandings between any nominee and any other person pursuant to which
such nominees were selected.

Shares of
Common Stock
Positions Beneficially
Held in the Director Current Term Owned on Percent
Name (1) Age Company Since (2) to Expire Record Date (3) Of Class
-------- --- ----------- ---------- ------------- --------------- --------

NOMINEES

Gary Bensinger 58 Director 1985 2001 966 *
Keith Wallace 59 Director 1988 2001 7,715 *

DIRECTORS CONTINUING IN OFFICE

Duane I. Dickey 68 Chairman of the Board 1976 2003 24,813 1.51%
Jerry A. Christensen 51 President and 1999 2003 500 *
Chief Executive Officer
James Rapin 60 Director 1985 2002 8,364 *
Martin A. Thomson 52 Director 1986 2002 12,362 *

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

* Less than 1%.
(1) The mailing address for each person listed is 100 S. Second Avenue,
Alpena, Michigan 49707. Each of the persons listed is also a director
of First Federal of Northern Michigan, the Company's savings
association subsidiary (the "Bank"), as well as Alpena Bancshares,
M.H.C., which owns the majority of the Company's issued and outstanding
shares of Common Stock.
(2) Except for Mr. Christensen, reflects initial appointment to the Board
of Directors of the Bank's mutual predecessor.
(3) See definition of "beneficial ownership" in the table under the heading
"Voting Securities and Principal Holders Thereof."

The principal occupation during the past five years of each director
and executive officer of the Company and the Bank is set forth below. References
to the Company include, where applicable, the Bank, which reorganized to form
the Company as its holding company in November 2000. All directors and executive
officers have held their present positions for five years unless otherwise
stated.

Directors -

Gary W. Bensinger is owner of Bensinger's Western Auto Store in Alpena,
Michigan. Mr. Bensinger has been a director of the Company since 1985.

Keith D. Wallace is the senior partner of the law firm of Isackson and
Wallace, located in Alpena, Michigan. Mr. Wallace has acted as general counsel
to the Bank since 1988. Mr. Wallace has been a director of the Company since
1988.

James C. Rapin is a pharmacist with LeFave Pharmacy, Alpena, Michigan.
Mr. Rapin has been a director of the Company since 1985.

Martin A. Thomson is Executive Vice President and General Manager of
Presque Isle Electric and Gas Cooperative, Inc., Onaway, Michigan. Mr. Thomson
has been a director of the Company since 1986.

Duane I. Dickey is Chairman of the Board of Directors of the Company
and the Bank. Mr. Dickey was made Chairman of the Board of Directors of the Bank
in 1988. Mr. Dickey retired from his position as Chief Executive Officer of the
Bank on November 9, 1998 and as President as of December 31, 1998. Mr. Dickey
joined the Bank in 1970. He has been a member of the Board of Directors since
1976.

Jerry A. Christensen was named Chief Executive Officer of the Bank in
November 1998 and President, effective January 1, 1999. Mr. Christensen became
President and Chief Executive Officer of the Company upon its formation. Prior
to this appointment, Mr. Christensen served as President and Chief Executive
Officer of Homestead Savings Bank, Albion, Michigan, a position he held since
1992.

Executive Officers -

James I. Malaski is Executive Vice President of the Company and the
Bank and has served in this position at the Bank since 1988. In November 1998,
Mr. Malaski was made Chief Operations Officer of the Bank as well. Also, Mr.
Malaski was made Secretary of the Bank in October 1999. Mr. Malaski joined the
Bank in 1983.

Thomas S. Davis joined the Bank and was named Vice President of
Operations in July 1999. Prior to joining the Bank, Mr. Davis served as the
Chief Financial Officer of Bank of Ann Arbor. Mr. Davis also previously held
operations and financial officer positions at other banks since 1987.

Jerome W. Tracey joined the Bank and was named Vice President of
Commercial Services in November 1999. Prior to this appointment, Mr. Tracey
served as Vice President of Commercial Lending for National City Bank, Alpena,
Michigan, a position he held since 1996. Mr. Tracey has been in the banking
profession since 1981.

James D. Hubinger was named Chief Financial Officer of the Bank in
February 2001 after serving as the Controller since joining the Bank in November
of 1999. Prior to joining the Bank, Mr Hubinger served as Assistant Vice
President - External Reporting Manager with the former Mutual Savings Bank, Bay
City, Michigan, a position he held since 1993. Mr. Hubinger has been in the
banking industry since 1978.

OWNERSHIP REPORTS BY OFFICERS AND DIRECTORS

The Common Stock of the Company is registered pursuant to Section 12(g)
of the Exchange Act. The officers and directors of the Company and beneficial
owners of greater than 10% of the Company's Common Stock ("10% beneficial
owners") are required to file reports on Forms 3, 4 and 5 with the SEC
disclosing beneficial ownership and changes in beneficial ownership of the
Common Stock. SEC rules require disclosure in the Company's Proxy Statement and
Annual Report on Form 10-KSB of the failure of an officer, director or 10%
beneficial owner of the Company's Common Stock to file a Form 3, 4 or 5 on a
timely basis. During the year ended December 31, 2000, no officer or director
failed to timely file any Forms 3, 4, or 5.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The business of the Company's Board of Directors is conducted through
meetings and activities of the Board and its committees. During the year ended
December 31, 2000, the Board of Directors held 12 regular meetings and three
special meetings. During the year ended December 31, 2000, no director attended
fewer than 75% of the total meetings of the Board of Directors and committees on
which such director served.

The Company has established an Executive Committee, which is comprised
of the full Board of Directors and James I. Malaski, Executive Vice President of
the Company. The Executive Committee meets as necessary in the intervals between
meetings of the full Board of Directors. The Committee has authority to act on
all matters of the Company's business between Board meetings, subject to the
ratification by the Board of Directors at its next meeting. The Executive
Committee met eight times in 2000.

The Company's Personnel Committee meets periodically to review the
performance of officers and to determine compensation of officers to be
recommended to the Board. It is comprised of the full Board of Directors. The
Personnel Committee met three times during 2000.

The full Board of Directors acts as the Company's Nominating Committee.
The Nominating Committee selects nominees to the Board of Directors of the
Company. The Nominating Committee met once during 2000.

The Company's Audit Committee is comprised of the nonemployee members
of the Board of Directors. The Committee meets as needed in order to examine and
approve the audit report prepared by the Company's independent auditors. During
2000, the Audit Committee met two times. Each member of the Audit Committee is
"independent" as defined in the listing standards of the National Association of
Securities Dealers. The Company's Board of Directors adopted an Audit Committee
charter in July 2000; the charter is attached to this proxy statement as Exhibit
A.

AUDIT FEES

The independent auditor of the Company and the Bank during the year
ended December 31, 2000 was Plante & Moran LLP. The aggregate fees and expenses
billed by Plante & Moran LLP in connection with the audit of the Company's
annual financial statements as of and for the year ended December 31, 2000 and
for the required review of the Company's financial information included in its
Form 10-QSB filings for the year 2000 was $46,000.

ALL OTHER FEES

The aggregate fees and expenses billed by Plante & Moran LLP for all
other services rendered to the Company for the year ended December 31, 2000 was
approximately $17,800. The services consisted of the preparation of an executive
performance study, consultation with respect to the Bank's mortgage banking
operations, and examination of the Company's compliance review function. The
Audit Committee, after consideration of the matter, does not believe the
rendering of these services by Plante & Moran LLP to be incompatible with
maintaining Plante & Moran LLP's independence as the Company's principal
accountant.

AUDIT COMMITTEE REPORT

In accordance with rules established by the SEC, the Audit Committee of
the Company has prepared the following report for inclusion in this proxy
statement:

As part of its ongoing activities, the Audit Committee has:

- Reviewed and discussed with management the Company's audited
consolidated financial statements for the year ended December 31,
2000;

- Discussed with the independent auditors of the Company the matters
required to be discussed by Statement on Auditing Standards No.
61, Communications with Audit Committees, as amended; and

- Received the written disclosures and the letter from the
independent auditors required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees,
and has discussed with the independent auditors their
independence.

Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements be included in the Company's Annual Report on Form 10-KSB
for the year ended December 31, 2000.

This report has been provided by the Audit Committee:

Duane I. Dickey
Gary Bensinger
Keith Wallace
James Rapin
Martin A. Thomson

DIRECTORS' COMPENSATION

In 2000, each director of the Bank received a $600 monthly meeting fee,
payable only if the director attended the meeting. Each director is paid for one
excused absence. The Chairman of the Board received $850 for each regular
meeting attended and each director received $600 for each special Board meeting
attended.

In addition to the foregoing, during the year ended December 31, 2000,
Jerry A. Christensen, Duane I. Dickey, Gary W. Bensinger, James C. Rapin, Martin
A. Thomson and Keith D. Wallace received $1,600, $1,800, $2,200, $2,100, $2,200
and $2,400, respectively, for their services as members of the Bank's Executive,
Personnel and Audit committees. The Bank paid a total of $69,900 in director and
committee fees to members of the Board of Directors during the year ended
December 31, 2000.

No separate fees are paid to members of the Board of Directors of the
Company, or for service on committees of the Company's Board of Directors.

EXECUTIVE COMPENSATION

The following table sets forth for the years ended December 31, 2000,
1999, and 1998, certain information as to the total remuneration paid by the
Bank or the Company to the Chief Executive Officer of the Bank and the Company
(the "Named Executive Officer"). No other executive officer of the Company
received total annual compensation in excess of $100,000 during the year ended
December 31, 2000.

SUMMARY COMPENSATION TABLE

==========================================================================================================================
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
- ----------------------------------------------------------------------- ------------------------------------------------

YEARS OTHER RESTRICTED
ENDED ANNUAL STOCK OPTIONS/ ALL OTHER
NAME AND DECEMBER SALARY BONUS COMPENSATION AWARD(S) SARS COMPENSATION
PRINCIPAL POSITION (1) 31, ($)(2) ($) ($)(3) ($) (#) PAYOUTS ($)
- ------------------------ ---------- ---------- ---------- -------------- ----------- ---------- ---------- ---------------

Jerry A. Christensen (4) 2000 $119,639 $ -0- $10,500 $ -0- -0- $ -0- $ -0-
President and Chief 1999 110,000 -0- 9,300 -0- -0- -0- -0-
Executive Officer 1998 20,223 -0- 1,400 7,250 2,000 -0- -0-
=================================== ========== ========== ============== =========== ========== ========== ===============

(1) No other executive officer received salary and bonuses that in the
aggregate exceeded $100,000.
(2) Amount shown is gross earnings. Includes amounts deferred under the Bank's
Deferred Compensation Plan for Executive Officers.
(3) Includes fees for services on the Board of Directors and Board Committees
of the Bank and the Company, and the Bank's service corporation subsidiary.
The Bank also provides the Chief Executive Officer with the use of an
automobile, membership dues, insurance and other personal benefits that are
not included in the Cash Compensation Table because such benefits do not
exceed $50,000 or 10% of the officer's cash compensation for the year ended
December 31, 2000.
(4) Mr. Christensen was appointed as President of the Bank as of December 31,
1998 and as Chief Executive Officer of the Bank on November 9, 1998.

BENEFITS

DEFINED BENEFIT PLAN. The Bank maintains a noncontributory defined
benefit plan ("Retirement Plan"). All employees age 21 or older who have worked
at the Bank for a period of one year and have been credited with 1,000 or more
hours of employment with the Bank during the year are eligible to accrue
benefits under the Retirement Plan. The Bank annually contributes an amount to
the Retirement Plan necessary to satisfy the actuarially determined minimum
funding requirements in accordance with the Employee Retirement Income Security
Act of 1974, as amended ("ERISA").

At the normal retirement age of 65, the Retirement Plan is designed to
provide a life annuity. The retirement benefit provided is an amount equal to
2.5% of a participant's average annual salary based on the average of the five
consecutive years during the participant's years of employment which provides
the highest average annual salary multiplied by the participant's years of
credited service to the normal retirement date. Retirement benefits are also
payable upon retirement due to early and late retirement. Benefits are also paid
from the Retirement Plan upon a participant's disability or death. A reduced
benefit is payable upon early retirement at or after age 55. Upon termination of
employment other than as specified above, a participant who was employed by the
Bank for a minimum of five years is eligible to receive his or her accrued
benefit reduced for early retirement or a deferred retirement benefit commencing
on such participant's normal retirement date. Benefits are payable in various
annuity forms as well as in the form of a single lump sum payment. For the plan
year ended June 30, 2000, the Bank made contributions to the Retirement Plan of
$129,858.

The following table indicates the annual retirement benefit that would
be payable under the Retirement Plan upon retirement at age 65 in plan year
1998, expressed in the form of a single life annuity for the final average
salary and benefit service classification specified below. As of December 31,
2000, Mr. Christensen had one year credited service (i.e., benefit service) with
the Bank.

11
YEARS OF BENEFIT SERVICE AT RETIREMENT

===========================================================================================================================
HIGH 5-YEAR
AVERAGE SALARY 10 15 20 25 30
- -------------------------------- ----------------- --------------- ----------------- ---------------- ----------------

$15,000 $3,750 $5,625 $7,500 $9,375 $11,250
$25,000 $6,250 $9,375 $12,500 $15,625 $18,750
$50,000 $12,500 $18,750 $25,000 $31,250 $37,500
$75,000 $18,750 $28,125 $37,500 $46,875 $56,250
$100,000 $25,000 $37,500 $50,000 $62,500 $75,000
$150,000 $37,500 $56,250 $75,000 $93,750 $112,500
================================ ================= =============== ================= ================ ================

DEFERRED COMPENSATION PLAN FOR EXECUTIVE OFFICERS. The Bank maintains a
non-qualified deferred compensation plan for executive officers. Such officers
may annually elect to defer a portion of their annual salary. The arrangement is
funded by the purchase of annuity contracts and/or insurance contracts on the
life of the employee. The Bank is the owner and beneficiary of the life
insurance contract. Upon retirement or separation of service with the Bank, the
employee will be paid an amount equivalent to the cash surrender value of the
life insurance contract. Upon the employee's death, the employee's beneficiary
will receive an amount equivalent to the death benefit provided under the life
insurance contract on the life of the employee.

As of December 31, 2000, the Plan had not purchased a life insurance
contract on the life of Mr. Christensen.

EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST. The Bank has established an
Employee Stock Ownership Plan and Related Trust for eligible employees. The ESOP
is a tax-qualified plan subject to the requirements of ERISA and the Code.
Employees with a 12-month period of employment with the Bank during which they
worked at least 1,000 hours and who have attained age 21 are eligible to
participate. The ESOP borrowed funds from an unrelated third party lender and
used the funds to purchase 48,000 shares of the common stock issued in the
Bank's initial stock offering. Collateral for the loan was the Common Stock
purchased by the ESOP. The loan was being repaid principally from the Bank's
contributions to the ESOP and was fully paid during 1999.

Contributions to the ESOP and shares released from the suspense account
in an amount proportional to the repayment of the ESOP loan are allocated among
participants on the basis of compensation in the year of allocation, up to an
annual adjusted maximum level of compensation. Benefits generally become 100%
vested after five years of credited service. Forfeitures will be reallocated
among remaining participating employees in the same proportion as contributions.
Benefits are payable upon death, retirement, early retirement, disability or
separation from service. The Bank's contributions to the ESOP are not fixed, so
benefits payable under the ESOP cannot be estimated.

401(K) PLAN. The Bank established a 401(k) Plan for Bank employees in
May 1999. The Plan is tax qualified and permits participants to elect to defer
up to 15% of their salary into the Plan. During 1999, the Bank made a matching
contribution of 25% of the participant contribution to the Plan, up to 1% of the
participant's total compensation for 1999. After 1999, the Bank makes matching
contributions of 50% of the participant's contribution, up to 3% of the
participant's total compensation for the year. All current employees at the time
of the establishment of the Plan in May 1999 were 100% vested in their
contributions and in matching contributions. In subsequent years, employees
generally become 100% vested after five years of credited service in matching
contributions. Employees are 100% vested in their elective deferral amounts at
all times under the Plan. Participants will be credited for years of service
with the Bank prior to the effective date of the Plan. Forfeitures of
discretionary contributions will be used to reduce the Bank's contributions in
succeeding plan years.

STOCK OPTION PLAN. Certain employees and nonemployee directors of the
Bank and the Company are eligible to participate in the Bank's 1996 Stock Option
Plan (the "Stock Option Plan"). The Stock Option Plan authorizes the grant of
stock options and limited rights to purchase 69,000 shares, or 10% of the shares
of common stock issued to minority stockholders in the initial public offering
by the Bank. Upon the formation of the Company as the Bank's holding company in
November 2000, the shares of common stock subject to the Stock Option Plan
became the shares of Common Stock of the Company. Pursuant to the Stock Option
Plan, grants may be made of (i) options to purchase Common Stock intended to
qualify as incentive stock options under Section 422 of the Code, (ii) options
that do not so qualify ("nonstatutory options") and (iii) limited rights
(described below) that are exercisable only upon a change in control of the Bank
or the Company. Nonemployee directors are only eligible to receive nonstatutory
options.

The Stock Option Plan is administered by a committee consisting of
certain nonemployee directors of the Board of Directors (the "Committee"). In
granting options, the Committee considers factors such as salary, length of
employment with the Bank, and the employee's overall performance. All stock
options are exercisable in five equal annual installments of 20% commencing one
year from the date of grant; provided, however, that all options will be 100%
exercisable in the event the optionee terminates his service due to normal
retirement, death or disability, or in the event of a change in control of the
Company or the Bank. Options must be exercised within 10 years from the date of
grant. Stock options may be exercised up to one year following termination of
service or such later period as determined by the Committee. The exercise price
of the options will be at least 100% of the fair market value of the underlying
Common Stock at the time of the grant. The exercise price may be paid in cash or
Common Stock.

Incentive stock options will only be granted to employees of the Bank
and/or the Company. Nonemployee directors will be granted nonstatutory stock
options. No incentive stock option granted in connection with the Stock Option
Plan may be exercisable more than three months after the date on which the
optionee ceases to perform services for the Bank and/or the Company, except that
in the event of death, disability, normal retirement, or a change in control of
the Bank or the Company, incentive stock options may be exercisable for up to
one year; provided, however, that if an optionee ceases to perform services for
the Bank or the Company due to retirement or following a change in control (as
defined in the Stock Option Plan), any incentive stock options exercised more
than three months following the date the optionee ceases to perform services
shall be treated as a nonstatutory stock option as described above.

Upon the exercise of "limited rights" in the event of a change in
control, the optionee will be entitled to receive a lump sum cash payment, or in
certain cases, Common Stock, equal to the difference between the exercise price
of the option and the fair market value of the shares of Common Stock subject to
the option on the date of exercise of the right in lieu of purchasing the stock
underlying the option. In the event of death or disability, the Bank and/or the
Company, if requested by the optionee or beneficiary, may elect, in exchange for
the option, to pay the optionee, or beneficiary in the event of death, the
amount by which the fair market value of the Common Stock exceeds the exercise
price of the option on the date of the optionee's termination of service for
death or disability.

Pursuant to the Stock Option Plan, each nonemployee director (except
Duane I. Dickey) of the Bank has been granted an option to purchase 6,037 shares
of Common Stock. All options were granted at an exercise price of $10.00 per
share. No options have been reserved for future issuance under the Plan. Mr.
Dickey was granted options for 11,212 shares as an employee of the Bank. No
options were granted to the Named Executive Officer under the Stock Option Plan
during the year ended December 31, 2000.

Set forth below is certain information concerning options outstanding
to the named individual at December 31, 2000. No options were exercised by the
Named Executive Officer during 2000.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES

=========================================================================================================================

NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS AT THE-MONEY OPTIONS AT
SHARES YEAR-END YEAR-END
ACQUIRED -----------------------------------------------------------------
UPON VALUE EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME EXERCISE REALIZED (#) ($)
- -------------------------- -------------- ------------ ------------------------------- ---------------------------------

Jerry A. Christensen -- -- 800/1,200 N/A
========================== ============== ============ =============================== =================================

RECOGNITION AND RETENTION PLAN. Certain employees and nonemployee
directors of the Bank and the Company are eligible to participate in the Bank's
Recognition and Retention Plan, which was adopted in 1996 (the "Recognition
Plan"). A Committee of the Board of Directors composed of "disinterested"
directors (the "Recognition Plan Committee") administers the Recognition Plan
and makes awards to executive officers and employees. Participants in the
Recognition Plan earn (become vested in) shares of Restricted Stock covered by
an award and all restrictions lapse over a period of time commencing from the
date of the award; provided, however, that the Recognition Plan Committee may
accelerate or extend the earnings rate on any awards made to officers and
employees under the Recognition Plan. Awards to nonemployee directors vest at
the rate of 20% of the amount initially awarded commencing one year from the
date of the award. Awards to executive officers and employees become fully
vested upon termination of employment or service due to death, disability or
normal retirement or following a termination of employment or service in
connection with a change in the control of the Bank or the Company. Upon
termination of employment or service for any other reason, unvested shares are
forfeited. Awards to nonemployee directors fully vest upon a nonemployee
director's disability, death, normal retirement, or following termination of
service in connection with a change in control of the Bank or the Company.
Unvested shares of Restricted Stock will be forfeited by a nonemployee director
upon failure to seek reelection, failure to be reelected, or resignation from
the Board (other than in connection with normal retirement, as defined by the
Recognition Plan).

The Recognition Plan Committee has granted 500 shares of Common Stock
to Mr. Christensen and 2,415 shares of Common Stock to each of the nonemployee
members of the Board of Directors, except Mr. Dickey, who retired as an employee
on December 31, 1999. All of Mr. Dickey's 4,485 awarded shares have been
allocated pursuant to the provisions of the Plan. A total of 26,980 shares of
Common Stock have been awarded pursuant to the Recognition Plan as of December
31, 2000 and 620 shares are reserved for future issuance.

TRANSACTIONS WITH CERTAIN RELATED PERSONS

Under current federal law, except for loans or extensions of credit to
executive officers and directors under Company-wide employee benefit plans, all
loans or extensions of credit to executive officers and directors must be made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with the general public
and must not involve more than the normal risk of repayment or present other
unfavorable features. In addition, loans made to a director or executive officer
in excess of the greater of $25,000 or 5% of the Bank's capital and surplus (up
to a maximum of $200,000) must be approved in advance by a majority of the
disinterested members of the Board of Directors. At December 31, 2000, the
Bank's directors and executive officers had loans outstanding totaling $653,329
in the aggregate.

The Bank intends that all transactions between the Bank and its
executive officers, directors, holders of 10% or more of the shares of any class
of its common stock and affiliates thereof, will contain terms no less favorable
to the Bank than could have been obtained by it in arm's-length negotiations
with unaffiliated persons and will be approved by a majority of independent
nonemployee directors of the Bank not having an interest in the transaction.

PROPOSAL II--RATIFICATION OF APPOINTMENT OF AUDITORS

The Board of Directors of the Company has approved the engagement of
Plante & Moran LLP to be the Company's auditors for the year ending December 31,
2001, subject to the ratification of the engagement by the Company's
stockholders. At the Annual Meeting, stockholders will consider and vote on the
ratification of the engagement of Plante & Moran LLP for the Company's fiscal
year ending December 31, 2001. A representative of Plante & Moran LLP is
expected to attend the Annual Meeting to respond to appropriate questions and to
make a statement if he so desires.

On June 29, 2000, the Company dismissed the Company's previous
independent auditor, Straley, Ilsley & Lamp, P.C. ("Straley"). The reports of
Straley on the Company's financial statements for the two years ended December
31, 1999 did not contain any adverse opinion or a disclaimer of opinion and were
not qualified or modified as to uncertainty or audit scope accounting
principles. The decision to change accountants was approved by the Company's
Board of Directors. The Company and Straley have not, in connection with the
audit of the Company's financial statements for each of the two years ended
December 31, 1999, or for any subsequent interim period prior to and including
March 31, 2000, had any disagreement on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreement, if not resolved to Straley's satisfaction, would have caused
Straley to make reference to the subject matters of the disagreement in
connection with its reports.

In order to ratify the selection of Plante & Moran LLP as the auditors
for the year ending December 31, 2001, the proposal must receive at least a
majority of the votes cast, either in person or by proxy, in favor of such
ratification. The Board of Directors recommends a vote "FOR" the ratification of
Plante & Moran LLP as auditors for the 2001 fiscal year.

STOCKHOLDER PROPOSALS

In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive office, 100
S. Second Avenue, Alpena, Michigan 49707, no later than November 21, 2001. Any
such proposal shall be subject to the requirements of the proxy rules adopted
under the Exchange Act.

OTHER MATTERS

The Board of Directors is not aware of any business to come before the
Annual Meeting other than the matters described above in the Proxy Statement.
However, if any matters should properly come before the Annual Meeting, it is
intended that holders of the proxies will act as directed by a majority of the
Board of Directors, except for matters related to the conduct of the Annual
Meeting, as to which they shall act in accordance with their best judgment.

The Bylaws of the Company provide an advance notice procedure for new
business to be taken up at the Annual Meeting. In order for a stockholder to
properly bring business before the Annual Meeting, the stockholder must state
the new business in writing and file the description of the new business with
the Secretary of the Company at least five days prior to the date of the Annual
Meeting. A stockholder may make any other proposal at the Annual Meeting itself,
and the proposal may be discussed and considered, but unless stated in writing
and filed with the Secretary at least five days prior to the Annual Meeting, the
proposal will be laid over for action at an adjourned, special or annual meeting
of the stockholders taking place 30 days or more thereafter.

MISCELLANEOUS

The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.

A copy of the Company's report on Form 10-KSB for the year ended
December 31, 2000 will be furnished without charge upon written request to James
I. Malaski, Secretary, Alpena Bancshares, Inc., 100 S. Second Avenue, Alpena,
Michigan 49707.

BY ORDER OF THE BOARD OF DIRECTORS

James I. Malaski
Secretary

Alpena, Michigan
March 19, 2001

EXHIBIT A

AUDIT COMMITTEE CHARTER

ADOPTED: JULY 19, 2000

ALPENA BANCSHARES, INC.

CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

I. AUDIT COMMITTEE PURPOSE

The Audit Committee is appointed by the Board of Directors to assist
the Board in fulfilling its oversight responsibilities. The Audit
Committee's primary duties and responsibilities are to:

- Monito the integrity of the Company's financial reporting process
and systems of internal controls regarding finance, accounting,
and legal compliance.

- Monitor the independence and performance of the Company's
independent auditors.

- Provide an avenue of communication among the independent auditors,
management, and the Board of Directors.

The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct
access to the independent auditors as well as anyone in the
organization. The Audit Committee has the ability to retain, at the
Company's expense, special legal, accounting, or other consultants or
experts it deems necessary in the performance of its duties.

II. AUDIT COMMITTEE COMPOSITION AND MEETINGS

Audit Committee members shall meet the requirements of the National
Association of Securities Dealers (NASD). The Audit Committee shall be
comprised of three or more directors as determined by the Board, each
of whom shall be independent nonexecutive directors, free from any
relationship that would interfere with the exercise of his or her
independent judgment. All members of the Committee shall have a basic
understanding of finance and accounting and be able to read and
understand fundamental financial statements, and at least one member of
the Committee shall have accounting or related financial management
expertise.

Audit Committee members shall be appointed by the Board. If an Audit
Committee Chair is not designated or present, the members of the
Committee may designate a Chair by majority vote of the Committee
membership.

The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Audit Committee Chair shall
prepare and/or approve an agenda in advance of each meeting. The
Committee should meet privately in executive session at least annually
with management and the independent auditors, and as a committee to
discuss any matters that the Committee or each of these groups believe
should be discussed. In addition, the Committee, or at least its Chair,
should communicate with management and the independent auditors
quarterly to review the Company's financial statement and significant
findings based upon the auditors limited review procedures.

III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES

Review Procedures

1. Review and reassess the adequacy of this Charte at least annually.
Submit the charter to the Board of Directors for approval and have
the document published at least every three years in accordance
with SEC regulations.

2. Review the Company's annual audited financial statements prior to
filing or distribution. Review should include discussion with
management and independent auditors of significant issues
regarding accounting principles, practices, and judgments.

3. In consultation with management and the independent auditors, the
Committee will consider the integrity of the Company's financial
reporting processes and controls. Discuss significant financial
risk exposures and the steps management has taken to monitor,
control, and report such exposures. Review significant findings
prepared by the independent auditors together with management's
responses.

4. Review with financial management and the independent auditors the
Company's quarterly financial results prior to the release of
earnings and/or the Company's quarterly financial statements prior
to filing or distribution. Discuss any significant changes to the
Company's accounting principles and any items required to be
communicated by the independent auditors in accordance with SAS 61
(see item 9). The Chair of the Committee may represent the entire
Audit Committee for purposes of this review.

Independent Auditors

5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall
review the independence and performance of the auditors and
annually recommend to the Board of Directors the appointment of
the independent auditors or approve any discharge of auditors when
circumstances warrant.

6. Approve the fees and other significant compensation to be paid to
the independent auditors.

7. On an annual basis, the Committee should review and discuss with
the independent auditors, all significant relationships they have
with the Company that could impair the auditors' independence.

8. Review the independent auditors audit plan, discuss scope,
staffing, locations, reliance upon management, and internal audit
and general audit approach.

9. Prior to releasing the year-end earnings, discuss the results of
the audit with the independent auditors. Discuss certain matters
required to be communicated to audit committees in accordance with
AICPA SAS 61.

10. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied
in its financial reporting.

Other Audit Committee Responsibilities

11. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report should be included
in the Company's annual proxy statement.

12. Perform any other activities consistent with this Charter, the
Company's by-laws, and governing law, as the Committee or the
Board deems necessary or appropriate.

13. Maintain minutes of meetings and periodically report to the Board
of Directors on significant results of the foregoing activities.

REVOCABLE PROXY

ALPENA BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
APRIL 17, 2001

The undersigned hereby appoints the official proxy committee consisting
of the entire Board of Directors with full powers of substitution to act as
attorneys and proxies for the undersigned to vote all shares of Common Stock of
the Company which the undersigned is entitled to vote at the Annual Meeting of
Stockholders ("Annual Meeting") to be held at the Thunder Bay Recreational
Center, 701 Woodward Avenue, Alpena, Michigan, on April 17, 2001, at 1:00 p.m.
The official proxy committee is authorized to cast all votes to which the
undersigned is entitled as follows:

VOTE
FOR WITHHELD
1. The election as directors of all the nominees listed [ ] [ ]
below

Gary Bensinger
Keith Wallace

INSTRUCTIONS: TO WITHHOLD YOUR VOTE FOR ONE
OR MORE NOMINEES, WRITE THE NAME OF THE
NOMINEE(S) ON THE LINE BELOW

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

FOR AGAINST ABSTAIN

2. The ratification of the appointment of Plante & Moran [ ] [ ] [ ]
LLP as auditors for the Company for the year ending
December 31, 2001.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.

- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED ABOVE. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THE MAJORITY
OF THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF
NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
- --------------------------------------------------------------------------------

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

Should the undersigned be present and elect to vote at the Annual Meeting or at
any adjournment thereof and after notification to the Secretary of the Company
at the Annual Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect. This proxy may also be revoked by sending written
notice to the Secretary of the Company at the address set forth on the Notice of
Annual Meeting of Stockholders, or by the filing of a later dated proxy prior to
a vote being taken on a particular proposal at the Annual Meeting.

The undersigned acknowledges receipt from the Company prior to the execution of
this proxy of notice of the Annual Meeting, a proxy statement dated March 19,
2001, and audited financial statements.

Dated: , 2001 [ ] CHECK BOX IF YOU PLAN TO
----------------- ATTEND THE ANNUAL MEETING

- ------------------------------------- -----------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER

- -------------------------------------- -----------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER

Please sign exactly as your name appears on this proxy. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.

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

PLEASE COMPLETE AND DATE THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.

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