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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-11(c) or Rule 14a-12

Commercial National Financial Corporation
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(Name of Registrant as Specified in Its Charter)

Commercial National Financial Corporation
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(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)(4) and 0-11.

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

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

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(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:

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, APRIL 28, 1998

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

The annual meeting of shareholders of Commercial National Financial
Corporation will be held at the Ithaca Community Center, 120 North Maple Street,
Ithaca, Michigan 48847, on Tuesday, April 28, 1998, at 7:00 P.M. to consider and
vote upon:

1. Election of Directors.

2. Adoption of an amendment to the Commercial National Financial Corporation
1991 Stock Option Plan increasing the number of shares available under the
Plan.

3. To transact any other business that may come before the meeting.

Shareholders of record at the close of business on March 13,1998, are
entitled to notice of and to vote at the meeting or any adjournment of the
meeting.

By Order of the Board of Directors,

Jeffrey S. Barker
President and Chief Executive Officer

March 24, 1998

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

It is important that your shares be represented at the
meeting. Even if you expect to attend the meeting,
PLEASE SIGN AND RETURN YOUR PROXY PROMPTLY.

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF
COMMERCIAL NATIONAL FINANCIAL CORPORATION
P.O. Box 280
101 North Pine River Street
Ithaca, Michigan 48847

This proxy statement is being furnished to holders of common stock, $1
par value ("Common Stock"), of Commercial National Financial Corporation (the
"Corporation") in connection with the solicitation of proxies by the
Corporation's board of directors for use at the annual meeting of shareholders
to be held on April 28, 1998, and at any adjournment of that meeting. The annual
meeting will be held at the Ithaca Community Center, 120 North Maple Street,
Ithaca, Michigan 48847, at 7:00 p.m. for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. This proxy statement and
form of proxy are first being sent to shareholders on or about March 24, 1998.

If a proxy in the form distributed by the Corporation is properly
executed and returned to the Corporation, the shares represented by that proxy
will be voted at the annual meeting of shareholders and at any adjournment of
that meeting. Where a shareholder specified a choice, the proxy will be voted as
specified. If no choice is specified, the shares represented by the proxy will
be voted for the election of all nominees to the board of directors and for the
approval of the amendment to the 1991 Stock Option Plan. Management does not
know of any other matters to be presented at the annual meeting. If other
matters are presented, all proxies will be voted in accordance with the judgment
of the persons named as proxies, who will consider management's recommendations.

A proxy may be revoked at any time prior to its exercise by written
notice delivered to the President of the Corporation, by a subsequent dated
proxy, or by voting the shares represented by the proxy at the annual meeting.

Solicitation of proxies will be made initially by mail. Officers,
directors and employees of the Corporation and its wholly owned subsidiary,
Commercial Bank (the "Bank"), may also solicit proxies in person or by telephone
without additional compensation. In addition, proxies may be solicited by
nominees and other fiduciaries, who may mail material to or otherwise
communicate with the beneficial owners of shares held by them.
All expenses of solicitation of proxies will be paid by the Bank.

ELECTION OF DIRECTORS

The board of directors of the Corporation has nominated the following
11 persons for election to the board of directors at the annual meeting:

Richard F. Abbott David A. Ferguson Russell M. Simmet
Jefferson P. Arnold Kenneth R. Luneack Joseph B. Simon
Jeffrey S. Barker Kim C. Newson Scott E. Sheldon
Don J. Dewey Howard D. Poindexter

Directors are to be elected at the annual meeting of shareholders to
serve until the next following annual meeting of shareholders. The proposed
nominees are willing to be elected and to serve. In the event that any nominee
is unable to serve or is otherwise unavailable for election, which is not now
contemplated, the incumbent Corporation board of directors may or may not select
a substitute nominee. If a substitute nominee is selected, all proxies will be
voted for the person so selected. If a substitute nominee is not so selected,
all proxies will be voted for the election of the remaining nominees. Proxies

will not be voted for a greater number of persons than the number of nominees
named.

A vote of shareholders holding a plurality of shares is required to
elect directors. For the purpose of counting votes on this proposal,
abstentions, broker non-votes, and other shares not voted will not be counted as
shares voted, and the number of votes of which a plurality is required will be
reduced by the number of shares not voted.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES
AS DIRECTORS

VOTING SECURITIES

Holders of record of Common Stock, at the close of business on March
13, 1998, will be entitled to vote at the annual meeting of shareholders on
April 28, 1998, and any adjournment of that meeting. As of March 13, 1998, there
were 959,396 shares of Common Stock issued and outstanding. Each share of Common
Stock entitles its holder to one vote upon each matter to be voted upon at the
meeting.

The following table shows certain information concerning the number of
shares of Common Stock held as of March 13, 1998, by shareholders known to
management to have been the beneficial owner of more than 5% of the outstanding
shares as of that date:

Amount and Nature of
Beneficial Ownership (1)
---------------------------------
Sole Voting or Shared Voting or Total Percent
Name and Address of Investment investment Beneficial of
Beneficial Owner Power Power(2) Ownership Class
---------------- ----- -------- --------- -----

Robert M. Sheldon
1055 Riverview
Alma, Michigan 48801 47,340 3,666 51,006 5.32%

Kenneth R. Luneack
9333 N. Union Road
St. Louis, Michigan 48880 56,826 2,074 58,900 6.14%

The following table sets forth information concerning the number of
shares of Common Stock held as of December 31, 1997, by each of the
Corporation's directors and nominees, the named executive officers of the
Corporation, and by all directors and executive officers of the Corporation as a
group:

Amount and Nature of Beneficial Ownership (1)

Sole
Voting and Shared Voting Total
Investment or Investment Stock Beneficial Percent
Power Power(2) Options(3) Ownership of Class
----- -------- ---------- --------- --------

Richard F. Abbott - 25,484 1,085 26,569 2.77%
Jefferson P. Arnold 9,677 14,123 710 24,510 2.55%
Jeffrey S. Barker (4)1,400 1,209 5,519 8,128 .85%
Don J. Dewey 1,049 2,422 699 4,170 .43%
Patrick G. Duffy - 479 787 1,266 .13%
David F. Ferguson 5,660 884 711 7,255 .76%
Kenneth R. Luneack 56,826 2,074 - 58,900 6.14%
Dean E. Milligan(5) 16,421 - - 16,421 1.71%
Kim C. Newson 2,216 1,934 711 4,861 .51%
Howard D. Poindexter 18,277 17,029 - 35,306 3.68%
Scott E. Sheldon 8,388 - 707 9,095 .95%
Russell M. Simmet - 18,110 - 18,110 1.89%
Joseph B. Simon - 7,176 650 7,826 .82%
-------- ------ ------ ------- -----
All Directors and executive
officers as a group 119,914 90,924 11,579 222,417 23.19%
======== ====== ====== ======= =====

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(1) The number of shares stated is based on information furnished by the
officers and directors and includes shares personally owned of record
by each person and shares which under applicable regulations are
deemed to be otherwise beneficially owned by each person. Under these
regulations, a beneficial owner of a security includes any person who,
directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has or shares voting power or
investment power with respect to the security. Voting power includes
the power to vote or to direct the voting of the security. Investment
power includes the power to dispose or to direct the disposition of
the security. A person is also considered to be the beneficial owner
of a security if the person has a right to acquire beneficial
ownership of the security within sixty days.

(2) These numbers include shares as to which the indicated person is
legally entitled to share voting or investment power by reason of
joint ownership, trust or other contract or property right, and shares
held by a family member over whom the indicated person may have
substantial influence by reason of relationship.

(3) These numbers include vested stock options, granted under the
Corporation's 1989 and 1991 Stock Option Plans, which entitle the
holder to acquire beneficial ownership of such shares within sixty
days.

(4) These numbers include shares that are allocated to the member's
individual account under the Commercial Bank Employee Savings and Stock
Ownership Plan.

(5) Mr. Milligan resigned as President and Chief Executive Officer of
the Corporation and the Bank on July 21, 1997.

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DIRECTORS AND EXECUTIVE OFFICERS

Biographical information concerning executive officers and directors
who are nominated for election to the board of directors at the annual meeting
is presented below. Except as otherwise indicated, all directors and executive
officers have had the same principal employment for over 5 years and have held
their positions with the Corporation since January, 1993. All eleven nominees
are incumbent directors. Ten nominees were last elected to the Corporation's
board of directors at the last annual meeting of shareholders that was held on
April 22, 1997. Jeffrey S. Barker was appointed to the Corporation's board of
directors on November 12, 1997.

Richard F. Abbott (age 63) has been a director of the Corporation and
the Bank since 1989. He had been interim president and chief executive
officer of the Bank from September 15, 1993, until March 16, 1994, and
of the Corporation from September 15, 1993 until May 18, 1994. From
May, 1990 to September 15, 1993, and from March 16, 1994 until
December 31, 1996, Mr. Abbott served as executive vice president of
the Bank and of the Corporation.

Jefferson P. Arnold (age 58) has been a director of the Corporation
since May 18, 1994. Mr. Arnold is an attorney at law and has practiced
law with the Arnold Law Offices for over 30 years.

Jeffrey S. Barker (age 49) is president and chief executive officer of
the Corporation and the Bank. He has been a director of the Corporation
and the Bank since November 12, 1997. He has been president and chief
executive officer of the Bank and the Corporation since November 12,
1997. Prior to becoming the president of the Corporation, he was Senior
Vice President-Lending of the Bank from July, 1995 to November, 1997.
From May 1990 to July 1995 he served as Vice President-Lending of the
Bank.

Don J. Dewey (age 60) has been a director of the Corporation since 1988
and a director of the Bank since 1987. He is a funeral director and the
owner and president of Dewey Funeral Homes, Inc.

David A. Ferguson (age 48) has been a director of the Corporation since
1988 and a director of the Bank since 1985. He is vice president of
Ashcraft's Market, Inc., a regional retail grocery store chain.

Kenneth R. Luneack (age 66) has been a director of the Corporation and
of the Bank since May, 1991. He is owner and operator of Ken Luneack
Construction, Inc., a building materials manufacturer.

Kim C. Newson (age 47) has been director of the Corporation since 1988
and a director of the Bank since 1987. He is president of Alma Hardware
Company and general manager of Alma True Value Hardware, both of which
are in the retail hardware business.

Howard D. Poindexter (age 62) has been chairman of the board of the
Corporation since February of 1993. He has been a director of the
Corporation since 1988 and a director of

the Bank since 1973. He is manager of Poindexter Farms, an independent
farming business. From 1954 until his retirement in 1992, he was a soil
conservationist for the U.S. Department of Agriculture.

Scott E. Sheldon (age 40) He has served as Chairman of Board of the
Bank since July of 1997. He has been a director of the Corporation
since 1988 and a director of the Bank since 1985. He is the owner of
Kernen-Sheldon Agency, Shepherd Insurance Agency and Ladu-Brundage
Agency, which are insurance agencies.

Russell M. Simmet (age 63) has been a director of the Corporation since
1988 and a director of the Bank since 1976. He is the owner of Simmet
Insurance Agency, an insurance agency.

Joseph B. Simon (age 69) has been a director of the Corporation since
1988 and a director of the Bank since 1987. He is chairman of Alma
Iron & Metal Company, Inc., a scrap metal processor.

Jeffrey S. Barker and Patrick G. Duffy serve as the executive officers
of the Corporation. Biographical information for Mr. Barker is presented above.
Biographical information for Mr. Duffy is presented below:

Patrick G. Duffy (age 34) is vice president and chief financial officer
of the Corporation and the Bank. He has been vice president and chief
financial officer of the Bank and the Corporation since February 19,
1997. Prior to joining the Corporation, he served as assistant
controller and compliance officer for Shoreline Financial Corporation
from January 1996 through February 1997. He previously served in the
following positions with Shoreline Financial Corporation: compliance
officer from January 1995 through January 1996, branch administration
from June 1993 through January 1995.

The Corporation's executive officers serve in their capacity without
receiving specific compensation for their services from the Corporation. The
Corporation's executive officers continue to serve as executive officers of the
Bank. All officers serve at the pleasure of the boards of directors of the
Corporation and the Bank respectively.

The Corporation's board has two standing committees, the human
resources committee and the audit committee. The human resources committee
includes Messrs. Ferguson, Arnold, Abbott, Luneack, Poindexter and Sheldon. The
human resources committee makes compensation recommendations. The human
resources committee met 5 times in 1997. A sub-committee of the human resources
committee consisting of Messrs. Ferguson, Luneack, and Poindexter administers
the 1989 and 1991 Stock Option Plans.

The audit committee recommends to the board the employment of
independent certified public accountants to examine the financial statements of
the Corporation and its subsidiary, makes such additional examinations as the
committee deems advisable, reviews reports of examination of the Corporation and
its subsidiary received from regulatory authorities, reports to the board at
least once each calendar year on the results of examinations made and offers
such conclusions and recommendations as the committee deems appropriate. Messrs.
Dewey, Newson, Simmet, Poindexter, Sheldon and Abbott serve on the audit
committee. The audit committee met 5 times during 1997.

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The Corporation's entire board of directors performs the functions of
nominating and compensation committees.

The Corporation's board of directors will consider the nomination of
candidates for election as directors of the Corporation at any meeting of
shareholders called for the purpose of electing directors submitted by any
shareholder entitled to vote at that meeting. Any shareholder desiring to
nominate a candidate for director must deliver a notice to the Secretary of the
Corporation, not less than 14 nor more than 50 days prior to the meeting,
setting forth: the name, age, business address and residence address of the
nominee; the principal occupation or employment of the nominee; the number of
shares of Common Stock beneficially owned by the nominee; the total number of
shares of Common Stock that will be voted for each nominee; the name, business
address and residence address of the nominating shareholder; the number of
shares of Common Stock owned by the nominating shareholder; a statement that the
nominee is willing to be nominated; and such other information regarding the
nominee as would be required under the rules of the Securities and Exchange
Commission to be included in proxy statement soliciting proxies for the election
of the nominee.

The board of directors of the Corporation held 13 meetings during 1997.
All incumbent directors attended at least 75% of the aggregate number of
meetings of the board of directors and meetings of committees on which they
served while they served in such capacities.

COMPENSATION OF EXECUTIVE OFFICERS

The following table shows certain information concerning the
compensation of the named executive officers of the Corporation and the Bank for
the three years ended December 31, 1997. For the same period, the annual salary
and bonus of no other executive officer of the Corporation or Bank exceeded
$100,000.

SUMMARY COMPENSATION TABLE

Long Term
Compensation
Awards
Securities
Annual Compensation(1) Underlying
----------------------------------- Options All Other
Year Salary Bonus (No. Shares)(2) Compensation(3)
---- ------ ----- --------------- --------------

Jeffrey S. Barker* 1997 $89,769 $24,000 3,149 $ 5,005
President and
Chief Executive Officer
of the Corporation and
Bank

Dean E. Milligan (4) 1997 $127,256 - 273 $ 719
Former President 1996 $116,710 $16,400 3,431 $10,287
and Chief Executive 1995 $111,878 $30,810 3,550 $ 9,871
Officer of the
Corporation and
Bank

* Not a named executive officer prior to 1997

(1) Includes compensation deferred under the Commercial Bank Employee
Savings and Stock Ownership Plan and directors' fees.

(2) Shares have been adjusted for 5% stock dividend paid in
November of 1997.

(3) All other compensation for Mr. Milligan includes the Corporation
matching and base contributions under the Commercial Bank Employee
Savings and Stock Ownership Plan ($- for 1997, $9,354 for 1996 and
$9,028 for 1995) and the amount paid by the Corporation for his life
insurance ($719 for 1997, $933 for 1996 and $843 for 1995). All other
compensation for Mr. Barker includes Corporation matching and base
contributions under the Commercial Bank Employee Savings and Stock
Ownership Plan ($4,214) and the amount paid by the Corporation for his
life insurance ($791).

(4) Mr. Milligan resigned as President and Chief Executive Officer of
the Corporation and the Bank on July 21, 1997.

It is the Corporation's practice to award stock options annually to key
policy making members of management. Stock options have been an important
component of the Corporation's executive compensation program for several years.
Stock options are believed to help align the interests of senior management with
the interests of shareholders by promoting stock ownership by senior executive
officers and by rewarding them for appreciation in the price of the
Corporation's Common Stock. Stock options which were granted, exercised, or
outstanding during 1997 were granted under either the 1989 Stock Option Plan or
the 1991 Stock Option Plan. Both Stock Option Plans have been approved by the
Corporation's shareholders.

The Corporation's 1989 and 1991 Stock Option Plans provide that stock
options, stock appreciation rights, and tax benefit rights may be issued to
directors, officers, and key employees. Stock options entitle a participant to
buy shares of Common Stock of the Corporation during a specified time period at
a specified price. Subject to restrictions imposed by the Plans, the stock
option committee in its discretion determines who will be granted options, how
many shares will be subject to options, and the form of consideration that may
be paid upon exercise of an option. As of December 31, 1997, a maximum of 17,138
authorized shares are subject to the exercise of options under the plans. As of
December 31, 1997, no stock appreciation rights had been granted under either
plan. By its terms, the 1989 Stock Option Plan will terminate on April 26, 1999.
The 1991 Stock Option Plan will terminate by its terms on April 22, 2001.

The following tables set forth information concerning stock options
granted to and exercised or retained by the named executive officers of the
Corporation and Bank during 1997. In 1997, the Corporation granted options only
under the 1991 Stock Option Plan. As indicated in the following table, some
options awarded in 1997 are exercisable for two years while the remaining
options are exercisable for five years.

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OPTION GRANTS IN LAST FISCAL YEAR(1)

Potential Realizable
Percent of Value at Assumed Annual
No. of Total Options rates of Stock Price
Securities Granted To Appreciation for Option
Underlying Employees Exercise Term
Options In Fiscal Price Expiration
Granted Year ($/Shr) Date 0% 5% 10%
------- ---- ------- ---- ---- ---- -----

Dean E. Milligan 273 2.68% 26.19 6/1/1999 0 $ 1,091 $ 1,894

Jeffrey S. Barker 3,149 30.89% 26.19 6/1/2004 0 $33,574 $78,242

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

Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Number of Year End Year End
Shares Acquired Value Exercisable/ Exercisable/
on Exercise Realized Unexercisable Unexercisable
----------- -------- ------------- -------------

Dean E. Milligan 9,397 $56,537 0/0 0/0

Jeffrey S. Barker - - 5,519/5,519 38,348/0

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

(1) The per share exercise price of each option is equal to the market
value of the Common Stock on the date each option was granted. The
option information has been adjusted to reflect the 5% stock dividend
in November of 1997. All outstanding options were granted for a term of
ten or fewer years. Options terminate, subject to certain limited
exercise provisions, in the event of death, retirement, or other
termination of employment. In the event of a change in control of the
Corporation, a participant may exercise tax benefit rights granted in
tandem with the options. Such tax benefit rights would entitle an
optionee to cash payments at the time of exercise to partially
reimburse the optionee for tax liability.

COMPENSATION OF DIRECTORS

The board of directors of the Bank holds regular monthly meetings. The
Bank compensates its directors at the rate of $550 per month. The Chairman of
the board is paid $1,100 per month. Directors of the Bank who are not executive
officers are paid $100 for each committee meeting attended. The Corporation's
board of directors meetings customarily coincide with Bank board of directors
meetings.

No separate cash compensation is paid to directors for Corporation
board of directors meetings.

The directors of the Corporation and Bank may receive stock options
under the Corporation's 1991 Stock Option Plan. The number of shares of Common
Stock covered by each option equals the number of shares the director could
purchase if he had purchased shares with the directors fees that the director
earned during the year. The options awarded to the directors are exercisable
after six months from the date of grant and expire two years from the date of
grant.

CERTAIN RELATIONSHIPS

Directors and officers of the Corporation and members of their
immediate families and businesses controlled by them were customers of and had
certain transactions with the Bank in the ordinary course of business since
January 1, 1997. It is anticipated that such transactions will take place in the
future in the ordinary course of business. All loans and commitments included in
such transactions were made on substantially the same terms, including interest
rates, fees, and collateral, as those prevailing at the time for comparable
transactions with other persons and did not involve more than normal risk of
collectibility or present any unfavorable features.

David A. Ferguson, a director of the Corporation, is Vice President of
Ashcraft's Market, Inc. Mr. Ferguson is also related by marriage to the owners
of Ashcraft's Market, Inc. During 1995, Ashcraft's entered into two lease
agreements with the Corporation with respect to the Corporation's Alma
Ashcraft's Supermarket Branch and the Midland Ashcraft's Supermarket Branch. The
lease payments payable under these leases are comparable to payments that would
have been paid to non-affiliated persons for similar facilities. During 1997,
the Bank elected to close both supermarket branches. The termination of the
leases with Ashcraft involved a lease termination payment deemed by the Bank to
be reasonable compared to normal market practice.

Russell M. Simmet, a director of the Corporation, is owner of Simmet
Insurance Agency, Inc. The Corporation purchases fleet coverage, property and
casualty, and workmen's compensation insurance through Simmet Insurance Agency,
Inc. The premiums paid for these policies are comparable to premiums that would
have been paid to non-affiliate persons for similar policies.

During 1997, the Bank retained the services of Mr. Arnold, an attorney,
for routine legal matters. These fees were billed at the regular rates charged
by Mr. Arnold for services rendered to all of his firm's clients. The fees paid
by the Bank did not exceed 5% of the firm's gross revenues for its last fiscal
year.

AMENDMENT TO THE COMMERCIAL NATIONAL FINANCIAL CORPORATION 1991 STOCK OPTION
PLAN

The Board of Directors has unanimously approved an amendment to the
Commercial National Financial Corporation 1991 Stock Option Plan (the "Plan") to
increase the maximum number of shares of Commercial National Financial
Corporation common stock which may be issued under the Plan by 50,000 shares and
unanimously recommends to the shareholders that they approve such amendment. The
Plan was approved by shareholders at the annual meeting of shareholders held on
April 23, 1991. An amendment to the Plan authorizing an additional 30,000 shares
was approved by shareholders at the annual meeting of Shareholders held on April
25, 1995. After the 1995 amendment to the Plan was approved, 60,388 shares were
authorized for issuance under the Plan. Through the issuance of stock dividends
by the Corporation, the number of shares authorized under the Plan reached
69,906 as of December 31, 1997.

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Pursuant to action by the stock option committee, options to purchase
61,773 of the 69,906 shares of Commercial National Financial Corporation common
stock authorized for issuance under the Plan have been granted to qualified
directors, officers and key employees of Commercial Bank. Consequently, there
are currently only 8,133 shares of Commercial National Financial Corporation
common stock available for option grants under the Plan. The Board of Directors
would like to increase the number of shares available under the Plan so that
options may be granted to a greater number of key employees. The Board of
Directors believes that additional shares should be available under the Plan in
order to achieve this goal and the other purposes behind the Plan.

DESCRIPTION OF THE PLAN

The following description of the Plan is a summary of its terms and is
qualified in its entirety by the Plan, a copy of which is available by
contacting Patrick Duffy. The following description incorporates the proposed
amendment to the Plan.

Purpose. The Purpose of the Plan is to attract and retain qualified
directors, officers, and key employees, and to recognize their contribution to
the long-term performance and growth of the Corporation and the Bank.

Shares Subject to the Plan. The Plan would permit stock options, stock
appreciation rights, and tax benefit rights to be issued with respect to an
aggregate of 119,906 shares of the Corporation's Common Stock (subject to
adjustment for stock dividends, stock splits, etc.).

Administration. The Plan is administered by the stock option committee
(the "Committee"). The Committee determines the persons to be granted options,
stock appreciation rights, and tax benefit rights; the amount of options or
rights to be granted to each such participant; the time at which options would
be granted; the terms of each option and right; the duration of each option and
any exercise limitations; and all other determinations necessary or advisable
for administration of the Plan.

The board of directors may terminate or amend the Plan at any time
provided that no amendment could, without the approval of the shareholders,
materially increase either the benefits to participants or the number of shares
that may be issued under the Plan, materially modify the eligibility
requirements, or reduce the option price, except pursuant to the adjustments
provided or in the Plan. Unless previously terminated by the board of directors,
the Plan will terminate on April 22, 2001.

Eligibility. Options may be issued to directors, and both options and
rights may be issued to officers, and other individuals identified as key
employees of the Corporation and the Bank. Grants of options to directors of the
Corporation and the Bank are made only on June 1 of each year, in an amount
equal to the amount of the director's total cash compensation from the
Corporation reported on IRS Form 1099 for the preceding calendar year. While it
is not possible to indicate the number, names or positions of directors,
officers or employees who may be selected for the grant of options and rights,
in 1997 options were granted to 5 key management employees and 11 directors. It
is likely that grants in the future will be to the same number of directors and
to a greater number of officers and other key employees.

Stock Options. Certain options that may be granted to employees under
the Plan may qualify as incentive stock options as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). Options may also be
granted that do not qualify for incentive stock option treatment.

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13

No participant may be granted incentive stock options that would result
in the aggregate fair market value of the stock (determined at the time of
grant) with respect to which participant's incentive stock options are
exercisable for the first time during any calendar year to exceed $100,000.
There is no specified maximum for options which are not incentive stock options.

The per share option price is the market value of the Common Stock at
the time the option is granted. There is no established market for the Common
Stock, and no published information with respect to its market value.
Accordingly, market value is the mean between the bid and asked prices obtained
from an independent broker for the date of grant, or for the last preceding date
(within 30 days) for which such information was available. If such information
is not available, or if the Committee determines that such information is for
any reason not a reliable determination of the fair market value of the
Corporation's Common Stock, the Committee determines the market value of the
Common Stock as of the date of grant. As of March 13, 1998, the market value of
Common Stock so determined was $36 per share.

The term of each option is determined by the Committee, but no option
may be exercisable after 15 years from the date granted, but no option
designated as an incentive stock option may be exercisable after the expiration
of 10 years from the date of grant. Options generally terminate in the event of
retirement, death, or any other termination of employment. Options granted to
participants under the Plan cannot be transferred except by will or the laws of
descent and distribution.

Appreciation and Tax Benefit Rights. Under the Plan, the Corporation
may grant stock appreciation rights or tax benefit rights with respect to
specific stock options to eligible participants other than directors. A stock
appreciation right would allow the participant to surrender the related option,
in whole or part, or cash, shares of Common Stock, or a combination of cash and
shares, in an amount not exceeding the excess of the market value of the shares
covered by the related option at exercise over the option price of the shares. A
tax benefit right provides the participant a cash payment upon exercise of an
option. The payment will not exceed the amount determined by multiplying the
participant's income realized upon exercise of an option by the maximum federal
income tax rate for corporations. The participant may use the cash realized from
a tax benefit right to pay a portion of the option price unless the Committee
provides otherwise.

When exercising all or a portion of an option, a participant may, with
the Committee's consent, pay for stock with cash, shares of Common Stock, or
other consideration equivalent to cash. The Committee may also permit payment of
all or a portion of the option price through promissory notes or other
installment payments, with or without interest or security.

Federal Income Tax Consequences. A participant exercising an incentive
stock option would not recognize income at exercise. The difference between the
market value and the exercise price would be, however, a preference item for
calculating alternative minimum tax. Upon sale of the stock, so long as the
participant holds the stock for at least 1 year after the exercise of the option
and at least 2 years after the grant of the option, the participant's basis
would equal the option price, the participant would be taxed on the difference
between the sales proceeds and the option price as capital gain, and the
Corporation would receive no federal tax deduction.

If, prior to the expiration of either of the above holding periods, the
participant sells shares acquired under an incentive stock option, the tax
deferral would be lost and the participant would realize compensation income
equal to the difference between the option price and the fair market value as of
the

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sale. The Corporation would receive a corresponding deduction for federal
income tax purposes. If the participant exercises options which are not
incentive stock options, he or she would have compensation income in the year of
exercise equal to the difference between the option price and the fair market
value at the time of exercise, and the Corporation would receive a corresponding
deduction for federal income tax purposes.

A majority of the votes cast at the annual meeting of shareholders is
required to approve the Plan amendment. For the purpose of counting votes on
this proposal, proxies marked as abstaining will be treated as present for
purposes of determining a quorum at the meeting, and will be counted as present
and entitled to vote. Proxies returned by brokers as "non-votes" will be treated
as present for purposes of determining a quorum for the meeting, but will not be
counted as voting on this proposal.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PLAN AMENDMENT

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors appointed Crowe, Chizek and Company LLP as
independent auditors for the Corporation for the year ending December 31, 1997.
Crowe, Chizek and Company LLP has also been appointed to serve as the
Corporation's independent auditors for the year ending December 31, 1998.

A representative of Crowe, Chizek and Company LLP is expected to be
present at the annual meeting, will have an opportunity to make a statement, and
will be available to respond to appropriate questions.

PROPOSALS OF SHAREHOLDERS

Proposals of shareholders intended to be presented at the annual
meeting scheduled to be held April 27, 1999, must be received by the Corporation
for inclusion in its proxy statement and form of proxy relating to that meeting
by November 24, 1998. Proposals of shareholders should be made in accordance
with Securities and Exchange Commission Rule 14a-8.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and certain officers and persons who own more than ten
percent of the Corporation's common stock, to file with the SEC initial reports
of ownership and reports of changes in ownership of the Corporation's common
stock. These officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Corporation with copies of these
reports.

To the Corporation's knowledge, based solely on review of the copies of
such reports furnished to the Corporation during the fiscal year ended December
31, 1997, all Section 16(a) filing requirements were satisfied, with respect to
the applicable officers, directors and greater than ten percent beneficial
owners.

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PROXY COMMERCIAL NATIONAL FINANCIAL CORPORATION PROXY
ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 1998

The undersigned acknowledges receipt of notice of and a proxy statement
for the annual meeting of shareholders of Commercial National Financial
Corporation to be held on April 28, 1998, and hereby appoints Edward Hooper and
Richard S. Prestage, and each of them, proxies of the undersigned, each with
full power of substitution, to vote all shares of the undersigned in Commercial
National Financial Corporation at the annual meeting of its shareholders to be
held on April 28, 1998, and at any adjournment thereof, with all powers which
the undersigned would have if personally present. The undersigned hereby
instructs Commercial National Financial Corporation to vote any and all shares
held for the account of the undersigned under the Commercial National Financial
Corporation Dividend Reinvestment Plan in accordance with the specifications, if
any, made in this proxy.

1. Election of Directors:
[ ] VOTE FOR all nominees (except as [ ] WITHHOLD AUTHORITY to vote
marked to the contrary). for all nominees listed below.

Richard F. Abbott, Jefferson P. Arnold, Jeffrey S. Barker, Don J.
Dewey, David A. Ferguson, Kenneth R. Luneack, Kim C. Newson, Howard D.
Poindexter, Scott E. Sheldon, Russell M. Simmet, and Joseph B. Simon.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.

(INSTRUCTION: To withhold authority to vote for any individual nominee
write that nominee's name in the space below.)

2. Amendment to the Commercial National Financial Corporation 1991 Stock Option
Plan:

[ ] VOTE FOR Plan [ ] VOTE AGAINST Plan [ ] ABSTAIN
Amendment Amendment

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PLAN AMENDMENT.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
COMMERCIAL NATIONAL FINANCIAL CORPORATION. IF THIS PROXY IS PROPERLY EXECUTED
AND DELIVERED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED.
IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR ELECTION OF ALL
NOMINEES NAMED ON THIS PROXY. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
IN THE DISCRETION OF THE PROXIES ON ANY OTHER MATTERS WHICH MAY COME BEFORE THE
MEETING.

Number of Shares:_______________ Dated:____________, 1998

X__________________________
Signature

X_________________________
Signature, if held jointly

Please sign exactly as your name(s)
appear(s). Joint owners should each sign
personally. Executors, administrators,
trustees and persons signing for
corporations or partnerships should give
their title as such. If a corporation,
please sign in full corporate name by
president or authorized officer. If
partnership, please sign in partnership
name by properly authorized person.

PLEASE SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE TO:
COMMERCIAL NATIONAL FINANCIAL CORPORATION
P.O. BOX 280
101 NORTH PINE RIVER STREET
ITHACA, MICHIGAN 48847