SecProbe.io

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20549-0408

                           January 7, 2005

Martin A. Thomson
President
First Federal of Northern Michigan Bancorp, Inc.
100 South Second Avenue
Alpena, Michigan  49707

Re: First Federal of Northern Michigan Bancorp, Inc.
            Currently filing as Alpena Bancshares, Inc.
       Form SB-2, filed December 10, 2004
       File Number 333-121178

Dear Mr. Thomson:

      We have reviewed your Form SB-2, as well as the Form 10-KSB
and
related filings of Alpena Bancshares, Inc., and have the following
comments.  Where indicated, we think you should revise your
documents
in response to these comments.  If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary.  Please be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure.  After reviewing this information we may have
additional
comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Prospectus Cover Page

1. You repeatedly refer to First Federal being a Maryland
corporation.  Please delete this from the cover and explain it
just
once in the summary so that your reader can focus on the most
important issues.

2. In the bulleted section you refer to the subscription offering
by
reference to "priority rights," the "subscription offering," and
"priority orders."  It would appear that these terms are being
used
interchangeably.  Please revise to clarify.

3. The third paragraph is potentially confusing.  Please revise to
clearly set out the 2 transactions which you are conducting
simultaneously.

4. Be sure that your text is easily readable.  Use adequately
sized
text and appropriate spacing.  Note for example on the cover and
on
pages 35, 40 and 42.  Also, some of your paragraphs are very long
and
dense.  Throughout the filing use short paragraphs that are easier
to
read.  Note for example the last on page 13.

About this Prospectus - page iv

5. Please delete this legend.  The terms you use need to be clear
from context.

Business Strategy - page 7

6. Please describe your business operations so that the bullet
items
have some context.  Also consider providing quantification and
more
explanation for each bullet.

7. Consider describing your historical focus on traditional
mortgage
lending, the current percentage of your portfolio represented by
such
loans and your shift to commercial lending.  Quantify the current
percentage of lending origination between commercial and
traditional
mortgage lending and quantify the level of commercial loans you
hold
currently and that you would like to reach.

8. Currently it is unclear what the interrelationship is between
the
negative and positive trends that occur in your historical
operating
figures, the economics of your market area, your management
objectives and your operations.  Please revise the summary to
provide
an overview of this situation and discuss it in detail in the body
of
the text.

9. For the past several years indicate when you made significant
operating changes.  Note also in the body of the text.

10. Either here or in the risk factor on page 20, describe the
population and economics of your market area.  Also discuss the
trends in these numbers.

11. Quantify your total assets and indicate the number of branches
that you have.

The Exchange of Existing Shares... - page 11

12. Either here or under separate subheading discuss the
availability
of dissenters rights and what this means for current shareholders.
Provide a complete discussion of this matter in the body of the
text.

Issuance of Shares...to the Charitable Foundation - page 12

13. Please give examples of the size and type of disbursements the
foundation will make.  Also, indicate that you do not plan to make
any further contributions to the foundation in the future.

14. To provide context, please disclose Alpena`s charitable
contributions in 2003 and 2004.

How We Intend to Use the Proceeds... - page 14

15. Given the lack of any specific use of the proceeds, discuss
your
ability to place these funds into productive use.  As warranted,
discuss the level of demand for loans at your bank.  Indicate the
amount of time you feel it will take to put these funds to use.
Note
also in the body of the text and in the risk factor bridging pages
22
and 23.

Benefits to Management... - page 16

16. Please expand the stock awards disclosure to include a range
of
values based upon after- market performance.  We note similar
disclosure in several recent thrift conversions including Clifton
Savings, PSB Holdings, and Home Federal.

Market for Common Stock - page 17

17. Disclose the consequences of not having four market makers.

Changes in Market Interest Rates... - page 21

18. Please reconcile the notion that "value" would increase and
book
value would decrease in an increasing interest rate environment.

Our Failure to Utilize Effectively the Net Proceeds... - page 22

19. At the top of page 23 quantify your current return on equity
and
disclose how this relates to the national average.

The Ownership Interest of Management... - page 23

20. Quantify the expected ownership level of officers and
directors
after this offering.  Please ensure that each risk factor is
quantified to the extent feasible.

Selected Consolidated Financial and Other Data - page 27

21. Please revise this information to disclose the amount of cash
dividends declared per share in each period presented.  Refer to
Item
301 of Regulation S-K.

How We Intend to Use the Proceeds... - page 30

22. We note from the second page of the appraisal that you intend
to
contribute funds to the bank as required to achieve a 10%
regulatory
core capital ratio.  If correct, please reflect this in this
subsection.

Overview of Financial Condition... page 44

23. Please reconcile the first and second reasons given towards
the
end of the first paragraph.

Management`s Discussion and Analysis - page 44

General

24. Please revise to include a discussion of 2002 financial
results
as compared to 2001.

Critical Accounting Policies - page 45

25. Please revise to clarify why you do not consider all the
material
estimates disclosed in Note 1 as critical or address each of them
in
this section.

26. Refer to Section V of Release Nos. 33-8350/34-48960 and revise
this section to address the following for each critical accounting
policy:
* Specifically identify why each policy is considered critical by
management.
* Discuss why you could have selected estimates in the current
period
that would have had a materially different impact on your
financial
presentation.

* Discuss why your accounting estimates bear the risk of change
and
describe the potential impact on your financial statements.
* Discuss how accurate your estimates and assumptions have been in
the past and how much they have changed in the past.
* Include quantitative disclosure of your sensitivity to change
based
on other outcomes that are reasonably likely to occur and that
would
have a material effect on the company.
Management Strategy - page 46

27. Please provide an historical context for your current
operating
strategy by discussing the reasons for the underlying interest
rate
problems you have had in the past and continue to have.  We note
that
despite the changes you have made your interest rate spread is
declining, you face a decline in NPV from both an increase and
decrease in interest rates and you are holding "high levels of
liquid
assets" to invest in "higher yielding securities" rather than
making
relatively high rate, adjustable commercial loans while your
return
on assets and equity is below par.  Please explain how this
situation
came to be and how you want your company to be positioned in the
future, with quantification.

28. Where appropriate, discuss your traditional mortgage loan
operations as a separate line of business.  Explain why you are
continuing to make these loans and discuss your plans.  We note
that
you have expanded the staffing in this area.  Where appropriate,
as
material, discuss and quantify mortgage loan origination, funding,
warehousing, loan sales, servicing, the profitability of this line
of
business and the extent of risk, including retained risk on sale
of
loans.

Increasing and Diversifying Our Sources of Non-Interest Income -
page
47

29. Please revise the Business section to thoroughly discuss the
business and operations of all subsidiaries, including the
InsuranCenter of Alpena.  Identify material contracts and discuss
their terms.  Similarly revise the footnotes to the financial
statements to disclose all material accounting polices applied to
these operations.

Management of Interest Rate Risk - page 47

30. Please revise this section to include disclosure of your
cumulative gap analysis.

Comparison of Operating Results for the Nine Months Ended
September
30, 2004 and September 30, 2003

Non-Interest Income - page 55

31. Please revise to expand your discussion of the decrease in
non-
interest income to explain why the drop in mortgage banking
activities was so significant and whether you expect this trend to
continue.

Comparison of Operating Results for the Years Ended December 21,
2003
and December 31, 2002

Non-Interest Expense - page 58

32. Please revise here and in the footnotes to the financial
statements, as applicable, to discuss in more detail how imputed
interest on the acquisition of ICA arose and how it was
calculated.

Recent Accounting Standards - page 60

33. Please revise your discussion of the exposure draft relating
to
stock based compensation to include an analysis of the recently
issued 123(R), and your assessment of the potential impact on
operations.

Business of Alpena Bancshares, Inc. and First Federal of Northern
Michigan - page 62

General

34. Please revise to exclude loans held for sale from your
Industry
Guide 3 disclosures since those disclosures relate only to
portfolio
loans.
Market Area - page 62

35. Provide a more thorough description of the economic aspects of
your market area.  Give unemployment and average income
information
and discuss trends.  Explain the reason for any material trends or
differences from state and national figures.  We note the related
tables in Chapter 2 of the appraisal.

Lending Activities - page 63

36. Please reconcile your tabular disclosure of loan maturities on
page 68 to the loan portfolio outstanding as of December 31, 2003
on
page 67.

37. We note from your disclosures on page 69 that you defer loan
origination fees and costs as required by SFAS 91; however, your
loan
portfolio disclosures on page 67 indicate that there are no
deferred
amounts at the end of all periods presented.  Please revise this
section and in the footnotes to the financial statements, as
applicable, to further clarify your accounting policy, to disclose
where the deferred costs are recorded and to disclose the method
used
to amortize them.

Commercial Loans - page 65

38. Given the significant increase in these loans, discuss the
vulnerability of the company to their mostly unseasoned nature.

Classification of Assets- page 72

39. Please revise here and in the footnotes to the financial
statements to disclose how you account for investments in
subsidiaries, including Financial Services and Mortgage
Corporation
(FSMC) and your related policies.  Revise here to disclose why you
classified your investment in FSMC as sub-standard, clarifying if
the
nature of your investment was a loan.

 Investment Activities - page 76

40. Please revise your tabular disclosure of investment maturities
on
page 79 to also include the investment portfolio outstanding as of
December 31, 2003.  Refer to Item II.B of Industry Guide 3.

Legal Proceedings - page 83

41. Please revise to disclose managements` assessment of
threatened
and pending litigation on your cash flows.

Change in Control Agreements - page 100

42. Quantify the value of the change in control agreements were
payments made as of a recent date.

Material Income Tax Consequences - page 124

43. Clarify that the opinion disclosed in the first partial
paragraph
on page 126 is that of Luse Gorman Pomerenk.  Also revise this
text
to reflect the language in the opinion.

Consolidated Financial Statements

General

44. Please revise the table of contents to disclose why the
financial
statements in this registration statement are not those of the
registrant.

45. Please revise the consolidated statement of financial position
to
separately disclose non-interest bearing and interest bearing
deposits.  Refer to Article 9-03.12 of Regulation S-X.

46. Please revise the footnotes to the financial statements to
clarify the authoritative basis for classifying real estate held
for
sale as an investing activity in the consolidated statement of
cash
flows.

Note 1 - Summary of Significant Accounting Policies

General

47. Please revise to clarify how you applied SFAS 131 to your
financial statements.  It appears your subsidiaries represent
operating segments under that standard.  Consider the guidance set
forth in paragraph 16.

Principles of Consolidation and Organization - page F-8

48. Please revise to disclose how you identified and valued the
customers lists and the exclusive health care contract acquired
from
ICA, how you determined the amortization periods and terms of the
exclusive health care contract.

49. Please revise to disclose how you accounted for the premium
paid
in the branch acquisitions.

50. Please revise MD&A to discuss the effects of the contribution
to
the foundation of operations and to identify the period in which
it
is expected to occur.

Securities - page F-11

51. Please revise to describe how you determine the fair value of
your investment securities and how the cost of securities sold or
the
amount reclassified out of accumulated other comprehensive income
into earnings was determined.

Property and Equipment - page F-14

52. Please revise to disclose the range of depreciable lives used
for
each asset category.

Core Deposit Intangibles - page F-14

53. Please revise to clarify how you determine and apply the range
of
lives assigned to these assets.  Also, disclose the method used to
amortize them.

Servicing - page F-14

54. Please revise here and in the Business section to disclose the
nature and terms of transactions resulting in purchased servicing
assets, including quantification of purchased servicing assets and
how your accounting complies with SFAS 140.

Stock Compensation Plan - page F-15

55. Please revise your disclosure to report the pro forma effects
of
the stock compensation plan as required by paragraph 45(c) of SFAS
123 and paragraph 2(e) of SFAS 148; otherwise, provide us your SAB
Topic 1:M analysis documenting how you determined the amounts are
immaterial.  We believe that, in the absence of accounting for
stock
based compensation under the fair value model SFAS 123, the pro
forma
presentation is meaningful disclosure.

Earnings Per Share - page F-16

56. Please revise to include the disclosure requirements of
paragraph
40(c) of SFAS 128.

Note 2 - Investment Securities - page F-21

57. Please revise to include the tabular disclosures required by
EITF
03-1.

Note 4 - Real Estate Held for Sale - page F-24

58. Please revise your footnote to more clearly describe the real
estate held for sale so readers can determine if further declines
in
value are likely.  See also our comments on the consolidated
statement of cash flows on the Busine