EXHIBIT 1.3






January 25, 2005



Mr. Martin A. Thomson
President & CEO
Alpena Bancshares, Inc.
100 South Second Avenue
Alpena, MI 49707

Mr. Martin A. Thomson
President & CEO
Alpena Bancshares, MHC
100 South Second Avenue
Alpena, MI 49707


                                  CONFIDENTIAL
                                  ------------


        Re:     PROPOSED SECOND STEP STOCK CONVERSION--ADVISORY, ADMINISTRATIVE
                AND MARKETING SERVICES

Dear Mr. Thomson:

The National Association of Securities Dealers, Inc. (the "NASD") has requested
an amendment to the engagement letter, dated November 1, 2004, setting forth the
terms of the proposed engagement between Ryan Beck & Co., Inc. ("RBCO"), Alpena
Bancshares, Inc. (the "Institution") and Alpena Bancshares, MHC (the "MHC") in
connection with the proposed elimination of the MHC and sale of the portion of
the common stock of the Institution currently held by the MHC (the "second step
stock offering"). Accordingly, Section 4(b), COMPENSATION, is amended to read as
follows (amended language underlined):

        "b.     A sales fee of one percent (1.00%) of the dollar amount of the
                Common Stock sold in the Offering, other than those shares sold
                pursuant to



                subparagraph c. below. No fee shall be payable pursuant to this
                subsection in connection with the sale of stock to officers,
                directors, employees or immediate family of such persons
                ("Insiders") and qualified and non-qualified employee benefit
                plans of the Institution or the Insiders. The $25,000 fee will
                be credited against the sales fee. IN THE EVENT THE OFFERING IS
                NOT CONSUMMATED, RBCO WILL BE ENTITLED ONLY TO THE REIMBURSEMENT
                OF ITS ACCOUNTABLE OUT-OF-POCKET EXPENSES AND PAYMENTS FOR
                CERTAIN SERVICES PERFORMED, AS OUTLINED IN SECTIONS 3(A) AND
                3(B) OF THIS ENGAGEMENT LETTER, AS OF THE DATE OF TERMINATION.
                ANY PORTION OF THE $25,000 FEE THAT HAS BEEN ADVANCED TO RBCO
                AND FOR WHICH SERVICES HAVE NOT BEEN PERFORMED AS DESCRIBED
                ABOVE SHALL BE RETURNED TO THE INSTITUTION."

All other sections and provisions in the engagement letter dated November 1,
2004 shall continue in full force and effect and are incorporated by reference
into this amendment.

RYAN BECK & CO., INC.




BY:     /s/ Michael A. Schechter
        --------------------------------------------
        Michael A. Schechter
        Vice President


Accepted and Agreed to This 25th Day of January, 2005




BY:      /s/ Martin A. Thomson
        --------------------------------------------
        Martin A. Thomson
        President and Chief Executive Officer
        Alpena Bancshares, Inc.




BY:      /s/ Martin A. Thomson
        --------------------------------------------
        Martin A. Thomson
        President & Chief Executive Officer
        Alpena Bancshares, MHC