8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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

Date of Report (Date of earliest event reported)     July 20, 2006 (July 17, 2006)

Fentura Financial, Inc.

(Exact name of registrant as specified in its charter)

Michigan

(State or other jurisdiction of incorporation)

0-23550	38-2806518
(Commission File Number)	(IRS Employer Identification No.)
175 North Leroy Street
P.O. Box 725
Fenton, Michigan	48430-0725
(Address of Principal Executive Offices)	(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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Press Release dated July 17, 2006

Item 2.02 Results of Operations and Financial Condition.

     The following information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.

     On July 17, 2006, Fentura Financial, Inc. issued a news release to report its financial results for the quarter and six-month period ended June 30, 2006. The release is furnished as Exhibit 99.1 hereto.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number
99.1	Press Release, dated July 17, 2006.

2

SIGNATURES

     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 hereunto duly authorized.

	FENTURA FINANCIAL, INC.
		(Registrant)
	By:	/s/Ronald L. Justice
		Ronald L. Justice, SVP-Corporate    Governance & Investor Relations
Dated: July 20, 2006

3

EXHIBIT INDEX

Exhibit Number
99.1	Press Release, dated July 17, 2006

4

EX-99.1

EXHIBIT 99.1

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

Contact: Ronald L. Justice
SVP Corporate Governance
& Investor Relations
Fentura Financial, Inc.
(810) 714-3902

July 17, 2006

For Immediate Release

FENTURA FINANCIAL, INC. ANNOUNCES SECOND QUARTER EARNINGS

     Fentura Financial, Inc. reported net income of $1,258,000 or $.59 per diluted share* for the three months ended June 30, 2006 compared to net income of $1,293,000 or $.62 per diluted share* reported for the second quarter of 2005. Net interest income increased $157,000 due to the continued growth of loans while non interest income increased $95,000 principally due to increases in trust and investment income and in service charges on deposit accounts. These quarter to quarter increases were offset by a $389,000 increase in non interest expense due to additional staff and operating costs associated with a new branch office of The State Bank which opened in April. Provision expense to the allowance for loan losses declined $89,000 during the quarter ended June 30, 2006 comparing to the same quarter in 2005 based on the estimated adequacy of the allowance.

     Fentura reported 2006 year to date earnings of $2,465,000 or $1.15 per diluted share*, a 0.8% increase over the $2,446,000 or $1.17 per diluted share* reported for the first half of 2005. During this period, the Company achieved net interest income of $11,711,000 an increase of 5.7% over the $11,077,000 reported in the first half of 2005. Interest income from continued loan growth accounts for the increase. Non interest income of $3,659,000 increased compared to the $3,354,000 reported for the six months ended June 30, 2005 primarily due to increases in both service charges on deposit accounts and trust and investment income and a non recurring security portfolio loss recognized in 2005 on the sale of securities to fund an investment in higher yielding instruments. Non interest expense of $11,256,000 increased in the first half of 2006 compared to the $10,392,000 reported in 2005 due

principally to the additional staff and operating costs associated with the new branch office at The State Bank.

     Total assets increased 4.6% from $601,271,000 at June 30, 2005 to $629,165,000 at June 30, 2006 driven principally by an 8.1% increase in total loans and a substantial 12.4% increase in commercial loans. Total deposits increased $31,293,000 or 6.2%, and total stockholders equity increased $3,369,000 or 7.5% to $48,045,000 at June 30, 2006.

     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 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.

*Per share data adjusted for 10% stock dividend payable August 4, 2006.

# # #

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

	June 30			Mar 31			Dec 31			Sep 30			June 30
	2006			2006			2005			2005			2005
ASSETS
Cash and cash equivalents
Cash and due from banks	$	19,346		$	19,156		$	21,327		$	22,885		$	21,799
Short term investments		6,900			8,650			9,750			8,300			550
Total cash & cash equivalents		26,246			27,806			31,077			31,185			22,349
Securities:
Securities available for sale		92,646			93,217			99,542			94,705			99,910
Securities held to maturity		16,958			15,395			14,851			13,663			18,607
Total securities		109,604			108,612			114,393			108,368			118,517
Loans held for sale		679			1,695			1,042			2,442			3,722
Loans:
Commercial		265,097			260,054			254,498			241,190			235,823
Real estate — construction		87,908			86,449			76,386			81,156			76,658
Real estate — mortgage		37,076			36,347			37,627			39,529			37,605
Consumer		66,896			69,534			70,845			72,541			72,726
Total loans		456,977			452,384			439,356			434,416			422,812
Less: Allowance for loan losses		(6,682	)		(6,518	)		(6,301	)		(6,294	)		(5,996	)
Net loans		450,295			445,866			433,055			428,122			416,816
Bank owned life insurance		6,683			6,642			6,579			6,417			6,941
Bank premises and equipment		16,665			15,350			14,617			14,245			14,279
Federal Home Loan Bank stock		2,432			2,300			2,300			2,300			2,300
Accrued interest receivable		2,837			2,830			2,676			2,550			2,438
Goodwill		7,955			7,955			7,955			7,955			7,955
Acquisition intangibles		912			988			1,075			1,162			1,248
Other assets		4,857			4,276			4,320			4,441			4,706
TOTAL ASSETS	$	629,165		$	624,320		$	619,089		$	609,187		$	601,271
LIABILITIES & SHAREHOLDERS’ EQUITY
LIABILITIES
Deposits:
Non-interest bearing deposits		77,463			77,652			76,792			81,532			81,930
Interest bearing deposits		456,937			456,313			451,262			435,404			421,177
Total deposits		534,400			533,965			528,054			516,936			503,107
Short-term borrowings		6,565			20			1,537			1,950			8,384
Federal Home Loan Bank Advances		12,130			14,189			14,228			16,267			18,806
Repurchase agreements		10,000			10,000			10,000			10,000			10,000
Subordinated debentures		14,000			14,000			14,000			14,000			12,000
Accrued interest, taxes & other liabilities		4,025			4,420			4,375			3,893			4,298
Total liabilities		581,120			576,594			572,194			563,046			556,595
STOCKHOLDERS’ EQUITY
Common stock — no par value 5,000,000 shares authorized		41,811			34,798			34,491			34,359			33,467
Retained earnings		8,358			14,431			13,729			12,882			12,048
Accumulated other comprehensive income (loss)		(2,124	)		(1,503	)		(1,325	)		(1,100	)		(839	)
Total stockholders’ equity		48,045			47,726			46,895			46,141			44,676
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	629,165		$	624,320		$	619,089		$	609,187		$	601,271
* Common stock shares issued & outstanding		2,142,496			2,130,564			2,124,427			2,119,374			2,088,220
Asset Quality Ratios:
Non-Performing Loans as a % of Total Loans		0.44	%		0.46	%		0.67	%		0.46	%		0.43	%
Allowance for Loan Losses as a % of Non-Performing Loans		330.14	%		312.91	%		213.09	%		317.40	%		329.27	%
Accruing Loans Past Due 90 Days More to Total Loans		0.04	%		0.02	%		0.02	%		0.01	%		0.02	%
Non-Performing Assets as a % of Total Assets	0.44		%		0.35	%		0.56	%		0.45	%		0.45	%
Quarterly Average Balances:
Total Loans		450,361			446,889			436,632			429,357			426,132
Total Earning Assets		573,687			570,751			559,834			551,618			548,971
Total Shareholders’ Equity		48,223			47,937			47,497			45,294			43,839
Total Assets		622,474			619,398			610,275			603,683			598,698
Diluted Shares Outstanding		2,135,056			2,137,265			2,128,215			2,091,588			2,093,868

*Per share data adjusted for 10% stock dividend payable August 4, 2006

Fentura Financial Inc.
Consolidated Income Statements
(Dollars in thousands, except per share data)
UNAUDITED

	Three Months ended												Six months ended
	June 30			Mar 31			Dec 31			June 30			June 30			June 30
	2006			2006			2005			2005			2006			2005
Interest income:
Interest & fees on loans	$	8,852		$	8,430		$	8,154		$	7,226		$	17,282		$	13,767
Interest & dividends on securities:
Taxable		852			883			764			811			1,735			1,663
Tax-exempt		196			207			112			233			403			477
Interest on federal funds sold		79			94			110			8			173			18
Total interest income		9,979			9,614			9,140			8,278			19,593			15,925
Interest expense:
Deposits		3,594			3,241			2,941			2,111			6,835			3,911
Borrowings		540			507			473			479			1,047			937
Total interest expense		4,134			3,748			3,414			2,590			7,882			4,848
Net interest income		5,845			5,866			5,726			5,688			11,711			11,077
Provision for loan losses		240			400			387			329			640			598
Net interest income after provision for loan losses		5,605			5,466			5,339			5,359			11,071			10,479
Non-interest income:
Service charges on deposit accounts		942			831			874			879			1,773			1,664
Gain on sale of mortgage loans		157			163			212			166			320			348
Trust & investment services income		417			383			372			294			800			588
Loss on sale of securities		—			—			(41	)		1			—			(110	)
Other income and fees		346			420			227			427			766			864
Total non-interest income		1,862			1,797			1,644			1,767			3,659			3,354
Non-interest expense:
Salaries & employee benefits		3,307			3,334			2,922			3,003			6,641			5,967
Occupancy		511			432			349			420			943			884
Furniture and equipment		551			508			504			536			1,059			1,080
Loan and collection		84			71			133			99			155			168
Advertising and promotional		201			153			118			229			354			356
Other operating expenses		1,033			1,071			1,109			1,011			2,104			1,937
Total non-interest expense		5,687			5,569			5,135			5,298			11,256			10,392
Income before federal income taxes		1,780			1,694			1,848			1,828			3,474			3,441
Federal income taxes		522			487			538			535			1,009			995
Net Income	$	1,258		$	1,207		$	1,310		$	1,293		$	2,465		$	2,446
*Per Share Data:
Basic earnings	$	0.59		$	0.56		$	0.62		$	0.62		$	1.15		$	1.17
Diluted earnings	$	0.59		$	0.56		$	0.62		$	0.62		$	1.15		$	1.17
Cash dividends declared	$	0.23		$	0.23		$	0.23		$	0.22		$	0.45		$	0.44
Performance Ratios:
Return on Average Assets		0.81	%		0.79	%		0.85	%		0.87	%		0.79	%		0.84	%
Return on Average Equity		10.46	%		10.21	%		10.94	%		11.83	%		10.26	%		11.30	%
Net Interest Margin (FTE)		4.17	%		4.26	%		4.11	%		4.26	%		4.22	%		4.29	%
Book Value Per Share	$	22.42		$	22.40		$	22.07		$	21.39		$	22.42		$	21.39
Net Charge-offs		76			183			380			113			259			103
Ratio of Net charge-offs to Gross Loans		0.02	%		0.04	%		0.09	%		0.02	%		0.06	%		0.02	%

*Per share data adjusted for 10% stock dividend payable August 4, 2006