MARQUETTE, Mich. - Michigan Financial Corp. said it reached an agreement in principle to merge with Houghton Financial Inc., the parent company of Houghton National Bank of Houghton, Mich.

Financial terms were not disclosed.

Michigan said the agreement provides that Houghton shareholders receive Michigan common stock in exchange for their shares.

The transaction is expected to be completed by the second quarter of 1994.

35 Banking Offices Combined

Houghton operates four banking offices and has assets of $60 million. Michigan operates 31 banking offices and has assets of $715 million.

The agreement comes four years after D&N Financial. Corp.'s failed bid to acquire Houghton in a $4.5 million stock swap.

The agreement was terminated in January 1989 after consultants retained by Houghton advised the company that the offer was insufficient.

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