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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For fiscal year ended December 31, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
OF 1934
 For the transition period from  to
 Commission file number 000-23550
 FENTURA FINANCIAL, INC.
 (Exact name of registrant as specified in its charter)
 Michigan
    
    38-2806518(State or other jurisdiction of 
incorporation or organization)
    
    (IRS Employer Identification No.)175 North Leroy, Fenton, Michigan
    
    48430-0725(Address of Principal Executive Offices)
    
    (Zip Code)
 Registrants telephone number, including area code (810) 750-8725
 Securities registered under Section 12(b) of the Exchange Act: None
 Securities registered under Section 12(g) of the Exchange Act: Common Stock
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act. Yes o No þ
 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. Yes o No þ
 Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such filing requirements
for the past 90 days. þ Yes o No
 Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K
is not contained herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See definitions of large accelerated
filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act. (Check one);
 Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ
 (Do not check if a smaller
reporting company
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
 State the aggregate market value of the voting and nonvoting common equity held by nonaffiliates of
the registrant computed by reference to the price at which the common equity was sold, or the
average bid and asked prices of such common equity, as of the last business day of the registrants
most recently completed second quarter.
 Aggregate Market Value as of June 30, 2007: $68,167,544
 State the number of shares outstanding of each of issuers classes of common equity, as of the
latest practicable date. 2,168,007 shares of Common Stock as of March 1, 2008.
 DOCUMENTS INCORPORATED BY REFERENCE
 Portions of the Fentura Financial, Inc. Proxy Statement for its annual meeting of shareholders to
be held April 22, 2008 and its Rule 14a-3 annual report are incorporated by reference into Parts II
and III.




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##### 



PagePART IItem 1. Description of Business
    
    4Item 1A Risk Factors
    
    12Item 1B Unresolved Staff Comments
    
    16Item 2. Properties
    
    17Item 3. Legal Proceedings
    
    17Item 4. Submission of Matters to a Vote of Security Holders
    
    17Additional Item  Executive Officers of Registrant
    
    18PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
    
    19Item 6. Selected Financial Data
    
    19Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations19Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    19Item 8. Financial Statements and Supplementary Data
    
    20Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure20Item 9A(T). Controls and Procedures
    
    20Item 9B. Other Information
    
    20PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    21Item 11. Executive Compensation
    
    21Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters21Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    22Item 14. Principal Accountant Fees and Services
    
    22PART IVItem 15. Exhibits and Financial Statement Schedules
    
    22SIGNATURES
    
    24EXHIBIT INDEX
    
    25Rule 14a-3 Annual Report to Security HoldersCode of EthicsSubsidiaries of the RegistrantConsent of Independent Registered Public Accounting FirmCertificate of President and Chief Executive Officer Pursuant to Section 302Certificate of Chief Financial Officer Pursuant to Section 302Certificate of Chief Executive Officer and Chief Financial Officer Pursuant to 18 .U.S.C. Section 1350
  2




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PART I
 
 ITEM 1. DESCRIPTION OF BUSINESS
 The Company
    The Banks
     3




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Competition
  Supervision and Regulation
 The following is a summary of certain statutes and regulations affecting the Company and the
Banks. This summary is qualified in its entirety by such statutes and regulations. A change in
applicable laws or regulations may have a material effect on the Company, the Banks and the
business of the Company and the Banks.
 General
    4




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##### Table of Contents



The Company
 General
  Investments and Activities
  de novo
 5




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##### Table of Contents



Available for Sale
 Gross
    
    
    GrossFair
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Gains
    
    
    Losses2007U.S. Government and federal agency
    
    $
    21,152
    
    
    $
    41
    
    
    $
    (37
    )Mortgage-backed
    
    
    40,562
    
    
    
    140
    
    
    
    (662
    )State and municipal
    
    
    6,823
    
    
    
    25
    
    
    
    (61
    )Equity securities
    
    
    3,255
    
    
    
    47
    
    
    
    (207
    )$
    71,792
    
    
    $
    253
    
    
    $
    (967
    )2006U.S. Government and federal agency
    
    $
    20,985
    
    
    $
    0
    
    
    $
    (546
    )Mortgage-backed
    
    
    58,499
    
    
    
    48
    
    
    
    (1,189
    )State and municipal
    
    
    9,311
    
    
    
    77
    
    
    
    (27
    )Equity securities
    
    
    2,309
    
    
    
    191
    
    
    
    (5
    )$
    91,104
    
    
    $
    316
    
    
    $
    (1,767
    )2005U.S. Government and federal agency
    
    $
    22,886
    
    
    $
    0
    
    
    $
    (640
    )Mortgage-backed
    
    
    68,057
    
    
    
    4
    
    
    
    (1,481
    )State and municipal
    
    
    6,591
    
    
    
    59
    
    
    
    (47
    )Equity securities
    
    
    2,008
    
    
    
    100
    
    
    
    (2
    )$
    99,542
    
    
    $
    163
    
    
    $
    (2,170
    )
 6




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Held to Maturity
 Gross
    
    
    GrossAmortized
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value2007Mortgage-backed
    
    $
    6
    
    
    $
    0
    
    
    $
    0
    
    
    $
    6State and municipal
    
    
    8,679
    
    
    
    61
    
    
    
    (32
    )
    
    
    8,708$
    8,685
    
    
    $
    61
    
    
    $
    (32
    )
    
    $
    8,7142006Mortgage-backed
    
    $
    9
    
    
    $
    0
    
    
    $
    0
    
    
    $
    9State and municipal
    
    
    11,890
    
    
    
    36
    
    
    
    (114
    )
    
    
    11,812$
    11,899
    
    
    $
    36
    
    
    $
    (114
    )
    
    $
    11,8212005Mortgage-backed
    
    $
    14
    
    
    $
    1
    
    
    $
    0
    
    
    $
    15State and municipal
    
    
    14,837
    
    
    
    46
    
    
    
    (226
    )
    
    
    14,657$
    14,851
    
    
    $
    47
    
    
    $
    (226
    )
    
    $
    14,672
 Capital Requirements
 Dividends
  The Banks
 General
 7




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##### Table of Contents



Deposit Insurance
 FICO Assessments. pro rata
 Commissioner Assessments.
 Capital Requirements
 8




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Prompt Corrective Regulatory Action.
 Total
    
    Tier 1Risk-Based
    
    Risk-BasedCapital Ratio
    
    Capital Ratio
    
    Leverage RatioWell capitalized
    
    10% or above
    
    6% or above
    
    5% or aboveAdequately capitalized
    
    8% or above
    
    4% or above
    
    4% or aboveUndercapitalized
    
    Less than 8%
    
    Less than 4%
    
    Less than 4%Significantly undercapitalized
    
    Less than 6%
    
    Less than 3%
    
    Less than 3%Critically undercapitalized
    
    
    
    
    
    A ratio of tangibleequity to total assetsof 2% or less
    Dividends
  Insider Transactions
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Safety and Soundness Standards
 Investments and Other Activities
  Consumer Protection Laws
 Branching Authority.
  11




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ITEM 1A.
    
    Risk Factors.
  The Company may need additional capital in the future and adequate financing may not be
available to it on acceptable terms, or at all.
  The Company has credit risk inherent in its asset portfolio, and its allowance for loan losses
may not be sufficient to cover actual loan losses.
    12




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The Company has credit risk inherent in its securities portfolio.
   The Companys mortgage-banking revenues are susceptible to substantial variations dependent
largely upon factors that the Company does not control, such as market interest rates.
  Fluctuations in interest rates and economic conditions could reduce the Companys
profitability and negatively affect its capital and liquidity.
  13




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
    
    inflation or deflation rates;
    
    levels of business activity;
    
    recession;
    
    unemployment levels;
    
    money supply;
    
    domestic or foreign events; and
    
    instability in domestic and foreign financial markets.
  The Companys operations may be adversely affected if the Company is unable to secure adequate
funding. The Companys use of wholesale funding sources exposes it to liquidity risk and potential
earnings volatility.
  The Company relies heavily on its management team, and the unexpected loss of key managers may
adversely affect its operations.
  Competition with other financial institutions could adversely affect the Companys
profitability.
  14




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Changes in economic conditions could adversely affect the Companys loan portfolio.
   
    
    Loan delinquencies may increase;
    
    Problem assets and foreclosures may increase;
    
    Demand for the Companys products and services may decline; and
    
    Collateral for the Companys loans may decline in value, in turn reducing customers
borrowing power and reducing the value of assets and collateral associated with
existing loans.
  The Company may be unable to maintain its historical growth rate, which may adversely impact
its results of operations and financial condition.
  The Company operates in a highly regulated environment and may be adversely affected by
changes in federal and local laws and regulations.
  15




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The Company may face challenges in managing its operational risks as the Company grows.
  16




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The Companys ability to pay dividends on its common stock is limited not only by its
profitability, but also by bank regulation.
    There is only a limited trading market for the Companys common stock.
  
 ITEM 1B.
    
    Unresolved Staff Comments.
  17




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ITEM 2.
    
    PROPERTIES
  
    
    Branch  15095 Silver Parkway, Fenton (owned)
    
    Branch  18005 Silver Parkway, Fenton (leased)
    
    Loan Extension Office  101 North Leroy Street, Fenton (owned)
    
    Branch  107 Main Street, Linden (owned)
    
    Branch  4043 Grange Hall Road, Holly (leased)
    
    Branch  7606 S Saginaw, Grand Blanc (owned)
    
    Branch  8185 Holly Road, Grand Blanc (leased)
    
    Branch  1401 E. Hill Road, Grand Blanc (owned)
    
    Branch  315 E. Grand River Ave, Brighton (leased)
    
    Branch  134 N. First St, Brighton (owned)
    
    Operations Center  3202 Owen Road, Fenton (owned)
  
    
    Branch  8503 Davison Road, Davison (leased)
  
    
    Branch  3467 Kelly Street, Hudsonville (owned)
    
    Branch  81 E. 8th Street, Holland (leased)
    
    Branch  3493 W. Shore Dr, Holland (owned)
    
    Branch  437 Baldwin Road, Jenison (owned)
  
 ITEM 3.
    
    LEGAL PROCEEDINGS
  
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  18




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ADDITIONAL ITEM  EXECUTIVE OFFICERS OF REGISTRANT
   Donald L. Grill
 Robert E. Sewick
 Ronald L. Justice
 Dennis E. Leyder
 Holly J Pingatore
 Douglas J. Kelley
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PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
   Total Number of
    
    
    Maximum Number ofAverage


    
    
    Purchased as
    
    
    Shares that May YetTotal Number of
    
    
    Price Paid
    
    
    Publicly Announced
    
    
    be Purchased UnderShare Purchased
    
    
    per Share
    
    
    Plans or Programs
    
    
    the ProgramOctober 1-October 31
    
    
    0
    
    
    $
    0.00
    
    
    
    0
    
    
    
    32,816November 1-November 30
    
    
    0
    
    
    $
    0.00
    
    
    
    0
    
    
    
    32,816December 1-December 31
    
    
    0
    
    
    $
    0.00
    
    
    
    0
    
    
    
    32,816Total
    
    
    0
    
    
    $
    0.00
    
    
    
    0
    
    
    
    32,816
  
 ITEM 6.
    
    SELECTED FINANCIAL DATA
  
 ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  20




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ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
  
 ITEM 9A(T)
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures.
  Internal Control over Financial Reporting.
 Managements Annual Report on Internal Control over Financial Reporting.
     
 ITEM 9B
    
    OTHER INFORMATION
  20




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PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
  Securities Authorized for Issuance Under Equity Compensation Plans.
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EQUITY COMPENSATION PLAN INFORMATION
 Number of securitiesremaining available forfuture issuance underequity compensationNumber of securities to
    
    Weighted-average
    
    plans (excludingbe issued upon exercise
    
    exercise price of
    
    securities reflectedof outstanding options
    
    outstanding options
    
    in column (1))Plan Category
    
    (1)
    
    (2)
    
    (3)Equity compensation
plans approved by
security holders
    
    
    40,228
    
    
    $
    29.74
    
    
    
    120,400Equity compensation
plans not approved by
security holders
    
    
    0
    
    
    
    0
    
    
    
    0Total
    
    
    40,228
    
    
    $
    29.74
    
    
    
    120,400
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  
 PART IV
 
 ITEM 15.
    
    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    1. Financial Statements:
The following consolidated financial statements of the Company and Report of Crowe
Chizek and Company LLC, Independent Registered Public Accounting Firm, are
incorporated by reference under Item 8 Financial Statements and Supplementary Data
of this document:
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Stockholders Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial statements
Report of Crowe Chizek and Company LLC, Independent Registered Public Accounting
Firm
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2.
    
    Financial Statement Schedules
All schedules are omitted  see Item 15(c) below.
 3.
    
    Exhibits:
The exhibits listed on the Exhibit Index following the signature page of this
report are filed herewith and are incorporated herein by reference.
 (b)
    
    Exhibits:
The Exhibit Index follows the signature page of this report and is incorporated herein by
reference.
 (c)
    
    Financial Statement Schedules:
All financial statement schedules normally required by Article 9 of Regulation S-X are
omitted since they are either not applicable or the required information is shown in the
consolidated financial statements or notes thereto.
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Signatures
  Fentura Financial, Inc.(Registrant)By
    
    /s/ Donald L. GrillDonald L. GrillOn behalf of the registrantand as President & CEOBy
    
    /s/ Douglas J. KelleyDouglas J. Kelley
Chief Financial Officer
(Principal Accounting Officer)
  Signature
    
    Capacity
    
    Date/s/ Forrest A. Shook
    
    Chairman of the Board
    
    March 14, 2008Forrest A. Shook
    
    Director/s/ Donald L. Grill
    
    Director
    
    March 14, 2008Donald L. Grill/s/ Kenneth R. Elston
    
    Director
    
    March 14, 2008Kenneth R. Elston/s/ J. David Karr
    
    Director
    
    March 14, 2008J. David Karr/s/ Thomas P. McKenney
    
    Director
    
    March 14, 2008Thomas P. McKenney/s/ Thomas L. Miller
    
    Director
    
    March 14, 2008Thomas L. Miller/s/ Brian P. Petty
    
    Director
    
    March 14, 2008Brian P. Petty/s/ Douglas W. Rotman
    
    Director
    
    March 14, 2008Douglas W. Rotman/s/ Ian W. Schonsheck
    
    Director
    
    March 14, 2008Ian W. Schonsheck/s/ Sheryl E. Stephens
    
    Director
    
    March 14, 2008Sheryl E. Stephens
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FENTURA FINANCIAL, INC.
2007 Annual Report on Form 10-K
 
 EXHIBIT INDEX
 ExhibitNo.
    
    Exhibit2
    
    Agreement and Plan of Merger By and Among Fentura Financial, Inc., West Michigan Financial
Corporation and West Michigan Community Bank dated as of October 14, 2003, and joined in
by WMFC Acquisition Subsidiary, Inc. and Amendment No. 1 thereto (Incorporated by
reference to Exhibits 2.1 and 2.2 to the Registrants Current Report on Form 8-K dated
March 15, 2004).3(i)
    
    Articles of Incorporation of Fentura Financial, Inc. (Incorporated by reference to Form
10-SB Registration Number 0-23550).3(ii)
    
    Bylaws of Fentura Financial, Inc. (Incorporated by reference to Form 10-SB Registration
Number 0-23550).3(iii)
    
    Amendment to the Articles of Incorporation of Fentura Financial, Inc. (Incorporated by
reference to Exhibit 3(iii) to the Form 10-K Filed March 20, 2001).3(iv)
    
    Amendment to the Articles of Incorporation of Fentura Financial, Inc. (Incorporated by
reference to Exhibit 3 filed with Form 10-Q for the quarter ended March 31, 2002).4.1
    
    Amended and Restated Automatic Dividend Reinvestment Plan (Incorporated by reference to
Registration Statement on Form S-3  Registration No. 333-75194).10.1
    
    Supplemental Executive Retirement Agreement with Donald Grill dated March 16, 2007
(Incorporated by reference from Current Report filed on Form 8-K on March 22, 2007).10.2
    
    Supplemental Executive Retirement Agreement with Robert Sewick dated March 16, 2007
(Incorporated by reference from Current Report filed on Form 8-K on March 22, 2007).10.3
    
    Severance Compensation Agreement with Donald Grill dated March 16, 2007 (Incorporated by
reference from Current Report filed on Form 8-K in March 22, 2007).10.4
    
    Severance Compensation Agreement with Donald Grill dated March 16, 2007 (Incorporated by
reference from Current Report filed on Form 8-K in March 22, 2007).10.5
    
    Non-Employee Director Stock Option Plan (Incorporated by reference to Form 10-K SB filed
on March 17, 1996).10.6
    
    Form of Non Employee Stock Option Plan Agreement (Incorporated by reference to Form 10-Q
SB filed on May 2, 1996)10.7
    
    Retainer Stock Option Plan for Directors (Incorporated by reference to Form 10-K SB filed
on March 17, 1996).10.8
    
    Employee Stock Option Plan (Incorporated by reference to Form 10-K SB filed on March 17,
1996).10.9
    
    Form of Employee Stock Option Plan Agreement (Incorporated by reference to Form 10-K SB
filed on March 17, 1996).
 25




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ExhibitNo.
    
    Exhibit10.10
    
    Stock Purchase Plan between The State Bank and Donald E. Johnson, Jr., Mary Alice J.
Heaton, and Linda J. LeMieux dated November 17, 1996 (Incorporated by reference to Exhibit
10.19 to the Form 10-K SB filed March 20, 1997).10.11
    
    Stock Purchase Plan (Incorporated by reference to Exhibit 99.1 Form S-8 filed on August
10, 2004).10.12
    
    Form of Severance Compensation Agreement between the Registrant, The State Bank, and
Ronald Justice. (Incorporated by reference to Exhibit 10.10 to the Form 10-K filed March
28, 2005).10.13
    
    Severance Compensation Agreement between the Registrant and Dennis Leyder dated March 9,
2006. (Incorporated by reference to Exhibit 99.1 to the Form 8-K filed March 10, 2006).10.14
    
    Severance Compensation Agreement between the Registrant and Douglas Kelley dated March 9,
2006. (Incorporated by reference to Exhibit 99.2 to the Form 8-K filed March 10, 2006).10.15
    
    Severance Compensation Agreement between the Registrant and Holly Pingatore dated March 9,
2006. (Incorporated by reference to Exhibit 99.3 to the Form 8-K filed March 10, 2006).10.16
    
    Nonqualified Deferred Compensation Plan. (Incorporated by reference to Exhibit 10.12 to
the Form 10-K filed March 28, 2005).10.17
    
    Fentura Bancorp, Inc. Employee Deferred Compensation and Stock Ownership Plan.
(Incorporated by reference to Exhibit 10.13 to the Form 10-K filed March 28, 2005).10.18
    
    2006 Executive Stock Bonus Plan (Filed as Exhibit 10.1 Form 8-K filed on December 4, 2006).13
    
    Rule 14a-3 Annual Report to Security Holders (This report, except for those portions which
are expressly incorporated by reference in this filing, is furnished for the information
of the Securities and Exchange Commission and is not deemed filed as a part of this
Report).14
    
    Code of Ethics for Directors and Executive Officers (Filed herewith).21.1
    
    Subsidiaries of the Registrant (Filed herewith).23.1
    
    Consent of Independent Registered Public Accounting Firm (Filed herewith).24
    
    Powers of Attorney. Contained on the signature page of this report.31.1
    
    Certificate of President and Chief Executive Officer of Fentura Financial, Inc. pursuant
to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.31.2
    
    Certificate of Chief Financial Officer of Fentura Financial, Inc. pursuant to 15 U.S.C.
Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certificate of Chief Executive Office and Chief Financial Officer of Fentura Financial,
Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 26