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) April 24, 2008 (April 21, 2008)

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))

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 April 21, 2008, Fentura Financial, Inc. issued a news release to report its financial results for the quarter ended March 31, 2008. 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 April 21, 2008.

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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: April 24, 2008

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EXHIBIT INDEX

Exhibit Number
	99.1	Press Release, dated April 21, 2008

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EX-99.1

EXHIBIT 99.1

Fentura Financial, Inc.
P.O. Box 725
Fenton, MI 48430-0725

Contact:	Donald L. Grill
	CEO
	Fentura Financial, Inc.
	(810) 714-3985
	April 21, 2008

For Immediate Release

FIRST QUARTER 2008 FINANCIAL PERFORMANCE HIGHLIGHTS

Fentura Financial, Inc. reported an operating loss for the first quarter of 2008 totaling $249,000 or a loss of $0.12 per diluted share. Net income for the first quarter of 2007 totaled $948,000 or $0.44 per diluted share. The loss in 2008 was a result of additional provision for loan losses and lower net interest income than reported for the first quarter of 2007. Although first quarter 2008 provision for loan losses at $1,081,000 was lower than levels reported for both the third and fourth quarters of 2007, it was significantly higher than the $439,000 reported for the first quarter of 2007, due to continued deterioration in the subsidiary bank loan portfolios. Net interest income for the first quarter of 2008 at $4,424,000 was lower than the $5,400,000 reported for the first quarter of 2007 due to lower asset yields as a result of a significantly lower market interest rate environment and an increase in non-performing loans.

According to Fentura’s CEO, Donald L. Grill, “In spite of the asset quality issues faced by the Company, our core operating performance remains sound. We continue to expand services that contribute to our historically strong level of non-interest income and have implemented numerous initiatives that reduce our cost of operations. So when the Michigan economy begins to show signs of improvement and our loan trends stabilize, we believe these and other strategies will assist in returning the Company to profitability.”

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Total assets of $609,978,000 as of March 31, 2008 decreased 2.4% from the $624,952,000 reported at March 31, 2007 due to a decline in the investment portfolio. Conversely, gross loans increased at the end of the first quarter of 2008 to $471,531,000 compared to the $459,826,000 reported at March 31, 2007, an increase of 2.5%. New commercial loans were the primary contributor to the loan growth. Total deposits of $523,470,000 at March 31, 2008 were below the $531,349,000 reported as of March 31, 2007, declining as lower market interest rates increased competition from other financial institutions for deposits. At March 31, 2008 total shareholder equity declined to $49,545,000 from the $52,304,000 reported at March 31, 2007 based on the operating losses reported in 2007 and for the first quarter of 2008.

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 the Davison area; and West Michigan Community Bank headquartered in Hudsonville, Michigan with offices serving Hudsonville, Holland, and Jenison. 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. Forward-looking statements include, but are not limited to, statements concerning future growth in earning assets and net income. Such statements are subject to certain 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, interest rates and fees for services. 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 our business, including additional factors that could materially affect our financial results, is included in our filings with the Securities and Exchange Commission.

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

	Mar 31			Dec 31			Sept 30			June 30			Mar 31
	2008			2007			2007			2007			2007
ASSETS
Cash and cash equivalents
Cash and due from banks	$	19,314		$	22,734		$	22,122		$	18,658		$	17,236
Short term investments		2,700			7,300			350			4,250			6,100
Total cash & cash equivalents		22,014			30,034			22,472			22,908			23,336
Securities:
Securities available for sale		62,660			71,792			80,250			88,816			88,783
Securities held to maturity		8,682			8,685			8,856			8,934			10,441
Total securities		71,342			80,477			89,106			97,750			99,224
Loans held for sale		1,463			1,655			2,349			1,066			2,352
Loans:
Commercial		314,065			313,642			303,533			298,359			298,338
Real estate – construction		60,709			59,805			62,787			62,722			64,973
Real estate – mortgage		38,321			39,817			40,926			37,842			35,562
Consumer		58,436			58,139			59,800			59,147			60,953
Total loans		471,531			471,403			467,046			458,070			459,826
Less: Allowance for loan losses		(9,389	)		(8,554	)		(11,425	)		(7,174	)		(6,962	)
Net loans		462,142			462,849			455,621			450,896			452,864
Bank owned life insurance		7,087			7,042			6,974			6,920			6,872
Bank premises and equipment		19,568			20,101			19,442			19,383			19,509
Federal Home Loan Bank stock		2,032			2,032			2,032			2,032			2,032
Accrued interest receivable		2,487			2,813			3,362			3,272			3,313
Goodwill		7,955			7,955			7,955			7,955			7,955
Acquisition intangibles		419			485			551			616			683
Equity Investment		2,921			3,089			—			—			—
Other assets		10,548			9,487			9,682			6,321			6,812
TOTAL ASSETS	$	609,978		$	628,019		$	619,546		$	619,119		$	624,952
LIABILITIES & SHAREHOLDERS’ EQUITY
LIABILITIES
Deposits:
Non-interest bearing deposits		71,574			75,148			75,280			81,606			77,790
Interest bearing deposits		451,896			468,355			454,654			451,012			453,559
Total deposits		523,470			543,503			529,934			532,618			531,349
Short-term borrowings		716			649			5,250			1,074			450
Federal Home Loan Bank Advances		14,031			11,030			11,030			11,030			11,052
Repurchase agreements		5,000			5,000			5,000			5,000			10,000
Subordinated debentures		14,000			14,000			14,000			14,000			14,000
Accrued interest, taxes & other liabilities		3,216			4,341			4,269			3,070			5,797
Total liabilities		560,433			578,523			569,483			566,792			572,648
STOCKHOLDERS’ EQUITY
Common stock – no par value
5,000,000 shares authorized		42,649			42,478			42,304			42,538			42,476
Retained earnings		7,231			7,488			8,180			10,827			10,524
Accumulated other comprehensive income (loss)		(335	)		(470	)		(421	)		(1,038	)		(696	)
Total stockholders’ equity		49,545			49,496			50,063			52,327			52,304
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	609,978		$	628,019		$	619,546		$	619,119		$	624,952
Common stock shares issued & outstanding		2,171,681			2,163,385			2,159,536			2,164,049			2,162,107
Asset Quality Ratios:
Non-Performing Loans as a % of Total Loans		4.44	%		2.86	%		3.03	%		0.66	%		1.03	%
Allowance for Loan Losses as a % of Non-Performing Loans		44.68	%		63.18	%		80.44	%		227.44	%		146.02	%
Accruing Loans Past Due 90 Days More to Total Loans		0.78	%		0.01	%		0.20	%		0.01	%		0.11	%
Non-Performing Assets as a % of Total Assets		4.03	%		2.79	%		2.92	%		1.01	%		1.12	%
Quarterly Average Balances:
Total Loans		470,940			472,205			462,981			461,450			452,274
Total Earning Assets		566,398			565,614			564,033			564,364			569,289
Total Shareholders’ Equity		49,852			50,001			52,434			53,224			51,968
Total Assets		622,673			622,766			618,763			619,249			622,594
Diluted Shares Outstanding		2,167,415			2,162,039			2,162,669			2,165,667			2,160,899

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

	Three Months ended
	March 31			Dec 31			Sept 30			June 30			March 31
	2008			2007			2007			2007			2007
Interest income:
Interest & fees on loans	$	8,104		$	8,612		$	8,796		$	8,917		$	8,647
Interest & dividends on securities:
Taxable		628			713			786			801			917
Tax-exempt		117			158			169			180			215
Interest on federal funds sold		98			52			40			44			167
Total interest income		8,947			9,535			9,791			9,942			9,946
Interest expense:
Deposits		4,027			4,306			4,147			3,990			3,961
Borrowings		496			525			547			560			585
Total interest expense		4,523			4,831			4,694			4,550			4,546
Net interest income		4,424			4,704			5,097			5,392			5,400
Provision for loan losses		1,081			1,234			5,144			649			439
Net interest income after provision for loan losses		3,343			3,470			(47	)		4,743			4,961
Non-interest income:
Service charges on deposit accounts		774			874			860			836			851
Gain on sale of mortgage loans		118			133			65			119			84
Trust & investment services income		456			462			471			461			507
Loss on sale of securities		—			2			—			—			—
Other income and fees		210			245			574			612			423
Total non-interest income		1,558			1,716			1,970			2,028			1,865
Non-interest expense:
Salaries & employee benefits		3,002			2,876			2,868			3,193			3,247
Occupancy		551			533			543			510			503
Furniture and equipment		494			549			532			534			525
Loan and collection		166			465			111			85			91
Advertising and promotional		104			90			125			159			112
Other operating expenses		1,013			991			1,057			1,117			1,018
Total non-interest expense		5,330			5,504			5,236			5,598			5,496
Income (loss) before federal income taxes		(429	)		(318	)		(3,313	)		1,173			1,330
Federal income taxes (benefit)		(180	)		(166	)		(1,206	)		329			382
Net Income (loss)	$	(249	)	$	(152	)	$	(2,107	)	$	844		$	948
Per Share Data:
Basic earnings	$	(0.12	)	$	(0.07	)	$	(0.98	)	$	0.39		$	0.44
Diluted earnings	$	(0.12	)	$	(0.07	)	$	(0.98	)	$	0.39		$	0.44
Cash dividends declared	$	—		$	0.25		$	0.25		$	0.25		$	0.25
Performance Ratios:
Return on Average Assets		-0.16	%		-0.02	%		-0.34	%		0.55	%		0.62	%
Return on Average Equity		-2.01	%		-0.30	%		-4.02	%		6.36	%		7.40	%
Net Interest Margin (FTE)		3.20	%		3.37	%		3.66	%		3.91	%		3.94	%
Book Value Per Share	$	22.81		$	22.88		$	23.22		$	24.18		$	24.19
Net Charge-offs		247			4,105			892			437			169
Ratio of Net charge-offs to Gross Loans		0.05	%		0.87	%		0.19	%		0.10	%		0.04	%

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