8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report: January 17, 2006

FENTURA FINANCIAL, INC.
(Exact Name of Registrant as Specified in Charter)

Michigan
(State or Other Jurisdiction
of Incorporation) 000-23550
(Commission
File Number) 38-2806518
(IRS Employer
Identification No.)

175 North Leroy Street
P.O. Box 725
Fenton, Michigan
(Address of principal executive office) 48430-0725
(Zip Code)

Registrant’s telephone number, including area code: (810) 629-2263

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[    ]      Written communications pursuant to Rule 425 under the Section Act (17 CFR 230.425)
[    ]      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
[     ]       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)).
[     ]       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Section 2.02    Results of Operations and Financial Conditions.

On January 17, 2006, Fentura Financial, Inc. issued a press release announcing results for the fourth quarter of 2005 and full year 2005 results. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K. 48430-0725

The information in this Form 8-K and the attached Exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Section 9.01    Financial Statements and Exhibits.

      (c)    Exhibit

                99.1    Press Release dated January 17, 2006.

2

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: January 18, 2006 FENTURA FINANCIAL, INC.
(Registrant)


By: /s/ Donald L. Grill
     Donald L. Grill
     President and Chief Executive Officer

3

EXHIBIT INDEX

      99.1      Press Release Dated January 17, 2006

4

EX-99

EXHIBIT 99.1

FENTURA FINANCIAL, INC.
P.O. BOX 725
FENTON, MI 48430-0725

Contact: Donald L. Grill
The State Bank
(810) 714-3985

January 17, 2006

For Immediate Release

FENTURA FINANCIAL, INC. NET INCOME UP 25.3% FOR 2005

        Fenton, Michigan---January 17, 2006---Fentura Financial, Inc. (trading symbol: FETM), the holding company for The State Bank of Fenton, Michigan, Davison State Bank of Davison, Michigan, and West Michigan Community Bank of Hudsonville, Michigan, today reported that continued strong loan growth and an improved net interest margin contributed to a 25.3% increase in net income for the year ended December 31, 2005. Net income for the year totaled $5,054,000 or $2.64 per diluted share, compared to $4,034,000, or $2.13 per diluted share for 2004.

        Financial highlights for 2005 compared to 2004 include:

        1. Revenues increased 22.1% driven by a 26.6% increase in net interest income.

        2. Non-interest income increased slightly when adjusted for non-recurring gains realized in connection with the 2004 sale of Small Business Administration guaranteed and credit card loans.

        3. Net interest margin improved 53 basis points to 4.23%.

        4. Total loans increased $45,926,000 or 11.7% to $439,356,000.

        5. Credit quality remains strong with non performing assets equaling just 0.56% of total assets.

        6. Return on average equity for the year was 11.09%.

        For the fourth quarter ended December 31, 2005, net income totaled $1,310,000, or $0.68 per diluted share, compared to $1,534,000, or $0.81 per share achieved during the fourth quarter of 2004. The 2004 results included $464,000 of non-recurring income resulting from the sale of certain credit card and Small Business Administration loans. Core revenues (net of the non-recurring charges) which are comprised of net interest income and non-interest income, grew 7.1% in the fourth quarter to $7.4 million, compared to $6.8 million in the fourth quarter of 2004. A growing balance sheet, improvement in the net interest margin, an increase in the gain on sale of loans, and improvement in trust and investment income all contributed to the quarterly improvement in revenues. Net interest income totaled $5.73 million for the fourth quarter compared to $5.16 million for the fourth quarter of 2004. Non interest expense increased 7.8% to $5.14 million for the fourth quarter from $4.77 million in the fourth quarter of 2004 due to a rise in salary and benefit expense and an increase in bonus and incentive payouts in connection with the improved performance for the quarter and the full year.

        2005 revenues grew 22.1% to $40.8 million compared to $33.4 million achieved during 2004. Net interest income increased 26.6% to $22.6 million compared to $17.8 million during 2004. Non-interest income declined 5.6% as a decline in deposit account charges and losses from repositioning the securities portfolio more than offset gains in fiduciary income and in the sale of residential mortgage loans. Non-interest expense increased 14.4% to $20.80 million compared to $18.18 million during 2004, due to annual salary and benefit expense increases, additional performance incentives and staff additions in preparation for new offices and support services to be added during 2006.

        Total loans were $439.4 million at December 31, 2005, an increase of 11.7% or $45.9 million compared to December 31, 2004. The year-to-year increase was primarily attributable to a 14.0% or $40.6 million dollar increase in commercial and construction loans. Total deposits increased 7.5% or $37.0 million while borrowings to fund loan growth decreased 25.5% to $25.8 million.

        According to President and CEO Donald L. Grill, "2005 was a record year for Fentura Financial, Inc. and its affiliate banks. Our record earnings generated an 11.09% return on average equity (ROE) for the year, up from 9.72% reported last year. We were particularly pleased with the operating results at both West Michigan Community Bank and The State Bank during 2005. Our efforts to generate new business, expand existing relationships and strengthen our alliance with other community bank partners contributed to the strong improvement in year-to-year financial performance."

        Fentura is a bank holding company headquartered in Fenton, Michigan. Subsidiary banks include The State Bank headquartered in Fenton with offices serving Fenton, Linden, Holly, Grand Blanc and Brighton; Davison State Bank headquartered in Davison, Michigan with offices serving Davison and Goodrich; and West Michigan Community Bank headquartered in Hudsonville, Michigan with offices serving Hudsonville, Holland, Jenison, and Grandville. Fentura Financial, Inc. shares are traded over the counter under the FETM trading symbol.

# # #

CAUTIONARY STATEMENT : This press release contains certain forward-looking statements that involve risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services pricing. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Further information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filing with the Securities and Exchange Commission.

Fentura Financial Inc.
Consolidated Balance Sheets
(Dollars in thousands)
UNAUDITED

	Dec 31 2005		Sep 30 2005		Jun 30 2005		Mar 31 2005		Dec 31 2004
ASSETS Cash and cash equivalents
Cash and due from banks	$      21,327		$      22,885		$      21,799		$      17,388		$      22,705
Short term investments	9,750		8,300		550		-		4,550
Total cash & cash equivalents	31,077		31,185		22,349		17,388		27,255
Securities:
Securities available for sale	99,108		94,705		99,910		103,881		110,391
Securities held to maturity	14,851		13,663		18,607		19,249		18,786
Total securities	113,959		108,368		118,517		123,130		129,177
Loans held for sale	1,042		2,442		3,722		3,278		1,587
Loans:
Commercial	254,498		241,190		235,823		237,099		229,012
Real estate - construction	76,386		81,156		76,658		70,265		61,278
Real estate - mortgage	37,627		39,529		37,605		32,055		32,705
Consumer	70,845		72,541		72,726		71,656		70,435
Total loans	439,356		434,416		422,812		411,075		393,430
Less: Allowance for loan losses	(6,301	)	(6,294	)	(5,996	)	(5,780	)	(5,501	)
Net loans	433,055		428,122		416,816		405,295		387,929
Bank owned life insurance	6,579		6,417		6,941		6,902		6,861
Bank premises and equipment	14,617		14,245		14,279		14,607		13,812
Federal Home Loan Bank stock	2,300		2,300		2,300		2,276		2,252
Accrued interest receivable	2,676		2,550		2,438		2,393		2,335
Goodwill	7,955		7,955		7,955		7,955		7,955
Acquisition intangibles	1,075		1,162		1,248		1,335		1,433
Other assets	4,754		4,441		4,706		4,557		4,294
TOTAL ASSETS	$    619,089		$    609,187		$    601,271		$    589,116		$    584,890
LIABILITIES & SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-interest bearing deposits	76,792		81,532		81,930		78,715		80,631
Interest bearing deposits	451,262		435,404		421,177		395,519		410,434
Total deposits	528,054		516,936		503,107		474,234		491,065
Borrowings	1,537		1,950		8,384		17,356		5,200
Federal Home Loan Bank Advances	14,228		16,267		18,806		28,863		19,402
Repurchase agreements	10,000		10,000		10,000		10,000		10,000
Subordinated debentures	14,000		14,000		12,000		12,000		12,000
Accrued interest, taxes & other liabilities	4,375		3,893		4,298		3,476		4,254
Total liabilities	572,194		563,046		556,595		545,929		541,921
SHAREHOLDERS' EQUITY
Common stock - no par value
1,931,297 shares authorized	34,491		34,359		33,467		33,325		33,110
Retained earnings	13,729		12,882		12,048		11,211		10,514
Accumulated other comprehensive income (loss)	(1,325	)	(1,100	)	(839	)	(1,349	)	(655	)
Total shareholders' equity	46,895		46,141		44,676		43,187		42,969
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$    619,089		$    609,187		$    601,271		$    589,116		$    584,890
* Common stock shares issued & outstanding	1,931,297		1,926,704		1,898,382		1,895,419		1,889,463
Asset Quality Ratios:
Non-Performing Loans as a % of Total Loans	0.67	%	0.46	%	0.43	%	0.38	%	0.42	%
Allowance for Loan Losses as a % of
Non-Performing Loans	213.09	%	317.40	%	329.27	%	371.94	%	350.16	%
Accruing Loans Past Due 90 Days More to Total Loans	0.02	%	0.01	%	0.02	%	0.02	%	0.02	%
Non-Performing Assets as a % of Total Assets	0.56	%	0.45	%	0.45	%	0.41	%	0.47	%
Quarterly Average Balances:
Total Loans	436,632		429,357		426,132		401,512		360,330
Total Earning Assets	559,834		551,618		548,971		530,420		495,441
Total Shareholders' Equity	47,497		45,294		43,839		44,229		41,730
Total Assets	610,275		603,683		598,698		580,454		546,901
Diluted Shares Outstanding	1,934,741		1,901,444		1,903,516		1,899,080		1,893,716

Fentura Financial Inc.
Consolidated Income Statements
(Dollars in thousands)
UNAUDITED

	Three Months ended						Twelve months ended
	Dec 31 2005		Sep 30 2005		Dec 31 2004		Dec 31 2005		Dec 31 2004
Interest income:
Interest & fees on loans
Interest & dividends on securities:	$ 8,154		$7,749		$6,362		$ 29,670		$22,161
Taxable	764		801		779		3,250		3,053
Tax-exempt	112		227		215		794		746
Interest on federal funds sold	110		36		63		164		134
Total interest income	9,140		8,813		7,419		33,878		26,094
Interest expense:
Deposits	2,941		2,538		1,894		9,390		7,004
Borrowings	473		498		366		1,908		1,259
Total interest expense	3,414		3,036		2,260		11,298		8,263
Net interest income	5,726		5,777		5,159		22,580		17,831
Provision for loan losses	387		404		370		1,389		1,389
Net interest income after provision for loan losses	5,339		5,373		4,789		21,191		16,442
Non-interest income:
Service charges on deposit accounts	874		907		919		3,501		3,738
Gain on sale of mortgage loans	212		282		97		842		510
Trust & investment services income	372		329		279		1,387		1,071
Loss on sale of securities	(41	)	2		-		(150	)	-
Gain on sale of credit cards and SBA loans	-		-		464		-		464
Other income and fees	227		364		393		1,302		1,509
Total non-interest income	1,644		1,884		2,152		6,882		7,292
Non-interest expense:
Salaries & employee benefits	2,922		3,094		2,624		11,984		9,956
Occupancy	349		441		440		1,673		1,633
Furniture and equipment	504		496		594		2,080		2,153
Loan and collection	133		122		49		388		289
Advertising and promotional	118		152		113		627		499
Other operating expenses	1,109		967		945		4,047		3,646
Total non-interest expense	5,135		5,272		4,765		20,799		18,176
Income before federal income taxes	1,848		1,985		2,176		7,274		5,558
Federal income taxes	538		686		642		2,220		1,524
Net Income	$ 1,310		$1,299		$1,534		$   5,054		$  4,034
Per Share Data:
Basic earnings	$   0.68		$  0.68		$  0.81		$     2.65		$    2.14
Diluted earnings	$   0.68		$  0.68		$  0.81		$     2.64		$    2.13
Cash dividends declared	$   0.25		$  0.24		$  0.23		$     0.97		$    0.92
Performance Ratios:
Return on Average Assets	0.85	%	0.85	%	0.59	%	0.85	%	0.74	%
Return on Average Equity	10.94	%	11.38	%	8.41	%	11.09	%	9.72	%
Net Interest Margin (FTE)	4.11	%	4.26	%	3.71	%	4.23	%	3.70	%
Book Value Per Share	$ 24.28		$23.95		$22.28		$   24.28		$  22.74
Net Charge-offs	380		106		127		589		461
Ratio of Net charge-offs to Gross Loans	0.09	%	0.02	%	0.03	%	0.13	%	0.12	%