Pelican Financial, Inc.

Reports Q2 Net Loss.

Sixth Branch Opened For Immediate Release

ANN, ARBOR, Mich., NAPLES, Fla., Aug. XX, 2004 — Pelican Financial, Inc. (AMEX: PFI), the holding company for Pelican National Bank, posted a net loss for the second quarter and first half of 2004, Charles C. Huffman, Chairman and CEO, reported today.

Pelican National Bank, headquartered in Naples, Fla., is a full-service community bank serving the consumer and commercial segments from six branch offices in Naples, Bonita Springs, Cape Coral, Fort Myers, Fort Myers Beach, and San Carlos.

Pelican Financial, Inc. has completed its previously announced spin-off of Washtenaw Mortgage Company into a separate, publicly held corporation, The Washtenaw Group, Inc., trading under the symbol TWH. The spin-off was effective at the close of business December 31, 2003.

Operating Results

The Corporation posted a net loss of $71,000, or $0.02 per share, for the second quarter, comparable to the year-earlier net loss of $153,000, from continuing operations, or $0.03 per share. For the first half, the net loss was $232,000, or $0.05 per share, versus net income of $115,000, from continuing operations, or $0.02 per share, for the first half of 2003.

Net interest income and noninterest income were off in both reporting periods. In the main, the reductions resulted from margin compression from the low interest-rate environment, lower bank service charges and fees, reduced gains from loan sales, and higher expenses from branch-expansion activities. A sixth branch was opened last month in Cape Coral.

The balance sheet saw improvement. Compared with December 30, 2003, total assets rose 17% to $258,780,000; loans outstanding, net of loan-loss allowance, of $105,180,000 were off 4%, due to loan-refinancing run-off; and deposits jumped 20% to $230,518,000.

Mr. Huffman said, “Our team is doing a good job, despite the lukewarm operating results. We are building name recognition and franchise value. We are earning business and marketshare and building core deposits. We are adding quality loans and generating substantial loan production. Unfortunately, much of the new-loan generation has been

offset by loan refinancing run-off. We have successfully opened three new branches in the past year and half and we just opened our sixth branch office. We are optimistic about the markets that we are in and about our future in those markets.

“We are excited about PNB’s new president, Howard B. Montgomery, who joined us earlier this week. Mr. Montgomery has two decades of banking experience and is a former member of the Federal Reserve Bank’s 5^th District Operations Advisory Committee.”

Mr. Montgomery replaces Michael N. Clemens who retires September 30, 2004.

Safe Harbor. This news release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management’s current expectations and are subject to risks and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. Among these risks are regional and national economic conditions, competitive and regulatory factors, legislative changes, mortgage-interest rates, cost and availability of borrowed funds, our ability to sell mortgages in the secondary market, and housing sales and values. These risks and uncertainties are contained in the Corporation’s filings with the Securities and Exchange Commission, available via EDGAR. The Company assumes no obligation to update forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such forward-looking statements.

(financial statements follow)

PELICAN FINANCIAL, INC.

Consolidated Balance Sheets

	June 30, 2004			December 31, 2003
	(Unaudited)
ASSETS
Cash and cash equivalents
Cash and due from banks	$	7,366,929		$	6,354,416
Interest-bearing deposits	3,514,574			45,639,288
Federal funds sold	27,436,120			3,426,013
Total cash and cash equivalents	38,317,623			55,419,717
Accounts receivable, net	247,212			179,488
Securities available for sale	107,434,443			49,729,994
Federal Reserve & Federal Home Loan Bank Stock	1,192,200			949,000
Loans held for sale	—			141,200
Loans receivable, net	105,180,322			109,798,257
Other real estate owned	—			332,857
Premises and equipment, net	3,479,880			2,658,018
Other assets	2,928,350			2,307,104

	$	258,780,030		$	221,515,635

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest-bearing	$	72,475,879		$	74,004,969
Interest-bearing	158,041,948			117,907,625
Total deposits	230,517,827			191,912,594
Note payable	—			291,665
Federal Home Loan Bank borrowings	12,000,000			12,000,000
Other liabilities	316,829			421,088
Total liabilities	242,834,656			204,625,347

Shareholders’ equity
Preferred stock, 200,000 shares authorized; none outstanding	—			—
Common stock, $.01 par value 10,000,000 shares authorized; 4,488,351 utstanding at March 31, 2004 and December 31, 2003	44,884			44,884
Additional paid in capital	15,568,593			15,568,593
Retained earnings	951,905			1,183,546
Accumulated other comprehensive income (loss), net of tax	(620,008		)	93,265
Total shareholders’ equity	15,945,374			16,890,288

	$	258,780,030		$	221,515,635

PELICAN FINANCIAL, INC.

Consolidated Statements of Income and Comprehensive Income (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
Interest income
Loans, including fees	$	1,902,121		$	2,468,711		$	3,901,826		$	4,885,101
Investment securities, taxable	771,950			125,779			1,271,182			204,261
Federal funds sold and overnight accounts	82,288			145,002			171,828			245,017
Total interest income	2,756,359			2,739,492			5,344,836			5,334,379
Interest expense
Deposits	990,771			548,019			1,867,230			1,132,734
Other borrowings	162,814			267,374			325,856			533,044
Total interest expense	1,153,585			815,393			2,193,086			1,665,778
Net interest income	1,602,774			1,924,099			3,151,750			3,668,601
Provision for loan losses	—			290,000			75,000			370,000
Net interest income after provision for loan losses	1,602,774			1,634,099			3,076,750			3,298,601
Noninterest income
Gain on sales of securities, net	529			57,708			2,859			129,360
Service charges on deposit accounts	35,961			47,615			66,490			100,209
Gain on sale of loans, net	10,117			46,427			19,758			70,804
Net gain (loss) on foreclosed assets and other income	10,425			23,041			69,395			60,522
Total noninterest income	57,032			174,791			158,502			360,895
Noninterest expense
Compensation and employee benefits	929,236			1,136,682			1,866,910			1,883,490
Occupancy and equipment	316,393			252,735			587,199			475,765
Legal	57,825			157,507			107,450			202,359
Accounting and auditing	31,028			34,500			91,150			65,944
Data processing	43,430			28,506			91,632			57,667
Marketing and advertising	25,452			37,503			57,605			90,857
Loan and other real estate owned	78,360			176,313			201,639			306,499
Other noninterest expense	284,895			215,212			581,359			400,885
Total noninterest expense	1,766,619			2,038,958			3,584,944			3,483,466
Income (loss) from continuing operations before income taxes	(106,823		)	(230,068		)	(349,692		)	176,030
Income tax expense (benefit)	(35,596		)	(77,457		)	(118,051		)	60,779
Income (loss) from continuing operations	$	(71,217	)	$	(152,611	)	$	(231,641	)	$	115,251
Discontinued operations:
Income from operations of discontinued mortgage subsidiary	—			5,198,287			—			9,239,406
Income tax	—			1,788,555			—			3,166,508
Income from discontinued operations	—			3,409,732			—			6,072,898
Net income (loss)	$	(71,217	)	$	3,257,121		$	(231,641	)	$	6,188,149
Basic earnings (loss) per share from continuing operations	$	(0.02	)	$	(0.03	)	$	(0.05	)	$	0.03
Diluted earnings (loss) per share from continuing operations	(0.02		)	(0.03		)	(0.05		)	0.03

Per share effect of discontinued operations	—			0.76			—			1.36
Basic earnings (loss) per share	$	(0.02	)	$	0.73		$	(0.05	)	$	1.39
Diluted earnings (loss) per share	$	(0.02	)	$	0.73		$	(0.05	)	$	1.39
Comprehensive income	$	(1,141,236	)	$	3,394,568		$	(944,914	)	$	6,179,632