# UNITED STATESSECURITIES AND
EXCHANGE COMMISSIONWashington, D.C. 20549

# FORM 10-Q

|[x] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
          OF 1934
|--- | -------------------------------------------------------------------------------------------------

For the quarterly
period ended September 30, 2003 OR

|[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|--- | ---------------------------------------------------------------------

For the transition
period from _______________ to _______________

Commission file number
000-23550

Fentura Financial, Inc.

---

(Exact name of
registrant as specified in its charter)

|                                | 
|------------------------------- | 
|Michigan                        | 
|                                | 
|(State of other jurisdiction of | 
|incorporation or organization)  | 

One Fenton Sq, P.O.
Box 725, Fenton, Michigan 48430  (Address of Principal
Executive Offices)

(810)
629-2263 (Registrants
telephone number)

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act of 1934 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. X Yes ___ No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).
 ___ Yes X No

# APPLICABLE ONLY TO
CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: November 1, 2003

Class  Common
Stock      Shares Outstanding  1,707,772



---



# Fentura Financial Inc. Index to Form 10-Q

|                                                                    | 
|------------------------------------------------------------------- | 
|                                                                    | 
|                                                                   
|Part I - Financial Information                                      | 
|                                                                   
|Item 1 - Consolidated Financial Statements (Unaudited)              | 
|                                                                   
|Item 2 - Management's Discussion and Analysis of                    | 
|Financial Condition and Results of Operations                       | 
|                                                                   
|Item 3 - Quantitative and Qualitative Disclosures about Market Risk | 
|                                                                   
|Item 4 - Controls and Procedures                                    | 
|                                                                   
|Part II - Other Information                                         | 
|                                                                   
|Item 1 - Legal Proceedings                                          | 
|                                                                   
|Item 2 - Changes in Securities and Use of Proceeds                  | 
|                                                                   
|Item 3 - Defaults Upon Senior Securities                            | 
|                                                                   
|Item 4 - Submission of Matters to a Vote of Security Holders        | 
|                                                                   
|Item 5 - Other Information                                          | 
|                                                                   
|Item 6 - Exhibits and Reports on Form 8-K                           | 
|                                                                   
|Signatures                                                          | 
|                                                                   
|Exhibit Index                                                       | 

2

---



# PART I 
FINANCIAL INFORMATION

# ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

Fentura
Financial, Inc.Consolidated Balance Sheets

|                                                        |  |                        
|------------------------------------------------------- |  | -----------------------
|                                                        |  |                        
|                                                       
|(000's omitted Except share data)                       |  | SEPT 30,2003(unaudited)
|                                                       
|ASSETS                                                  | 
|Cash and due from banks                                 |  | $   18,989             
|Federal funds sold                                      |  | 25,250                 
|                                                        |  |                        
|Total cash & cash equivalents                           |  | 44,239                 
|Securities-available for sale                           |  | 112,255                
|Securities-held to maturity, (fair value of $12,063     | 
|at September 30, 2003 and $14,051 at December 31, 2002) |  | 11,692                 
|                                                        |  |                        
|Total securities                                        |  | 123,947                
|Loans held for sale                                     |  | 2,205                  
|Loans:                                                  | 
|Commercial                                              |  | 131,136                
|Real estate loans - mortgage                            |  | 17,275                 
|Real estate loans - construction                        |  | 33,313                 
|Consumer loans                                          |  | 54,455                 
|                                                        |  |                        
|Total loans                                             |  | 236,179                
|Less: Allowance for loan losses                         |  | (3,244                 
|                                                        |  |                        
|Net loans                                               |  | 232,935                
|Bank Owned Life Insurance                               |  | 6,404                  
|Bank premises and equipment                             |  | 9,271                  
|Federal Home Loan Bank stock                            |  | 844                    
|Accrued interest receivable                             |  | 1,845                  
|Other assets                                            |  | 3,200                  
|                                                        |  |                        
|Total assets                                            |  | $ 424,890              
|                                                        |  |                        
|LIABILITIES                                             | 
|Deposits:                                               | 
|Non-interest bearing deposits                           |  | $   57,791             
|Interest bearing deposits                               |  | 309,603                
|                                                        |  |                        
|Total deposits                                          |  | 367,394                
|Borrowings                                              |  | 1,417                  
|Federal Home Loan Bank Advances                         |  | 1,108                  
|Repurchase Agreements                                   |  | 12,500                 
|Accrued taxes, interest and other liabilities           |  | 2,033                  
|                                                        |  |                        
|Total liabilities                                       |  | 384,452                
|                                                        |  |                        
|SHAREHOLDERS' EQUITY                                    | 
|Common stock - no par value                             | 
|1,705,374 shares issued (1,722,126 in Dec. 2002)        |  | 29,671                 
|Retained earnings                                       |  | 10,711                 
|Accumulated other comprehensive income                  |  | 56                     
|                                                        |  |                        
|Total shareholders' equity                              |  | 40,438                 
|                                                        |  |                        
|Total Liabilities and Shareholders' Equity              |  | $ 424,890              
|                                                        |  |                        

See notes to consolidated financial
statements.

3

---



Fentura Financial, Inc. Consolidated Statements
of Income (Unaudited)

|                                      |  |                                 |  |                               
|------------------------------------- |  | ------------------------------- |  | ------------------------------
|                                      |  |                                 |  |                               
|                                      |  | Three Months EndedSeptember 30, |  | Nine Months EndedSeptember 30,
|(000's omitted except per share data) |  | 2003                            |  | 2002                          
|                                      |  |                                
|INTEREST INCOME                       | 
|Interest and fees on loans            |  | $3,925                          |  | $4,024                        
|Interest and dividends on             | 
|securities:                           | 
|Taxable                               |  | 587                             |  | 247                           
|Tax-exempt                            |  | 175                             |  | 167                           
|Interest on federal funds sold        |  | 86                              |  | 116                           
|                                      |  |                                
|Total interest income                 |  | 4,773                           |  | 4,554                         
|INTEREST EXPENSE                      | 
|Deposits                              |  | 1,368                           |  | 1,375                         
|Borrowings                            |  | 81                              |  | 25                            
|                                      |  |                                
|Total interest expense                |  | 1,449                           |  | 1,400                         
|                                      |  |                                
|NET INTEREST INCOME                   |  | 3,324                           |  | 3,154                         
|Provision for loan losses             |  | 122                             |  | 107                           
|                                      |  |                                
|Net interest income after             | 
|Provision for loan losses             |  | 3,202                           |  | 3,047                         
|NONINTEREST INCOME                    | 
|Service charges on deposit accounts   |  | 964                             |  | 661                           
|Gain on sale of mortgages             |  | 373                             |  | 270                           
|Trust income                          |  | 140                             |  | 147                           
|Gain on sale of securities            |  | 0                               |  | 0                             
|Gain on sale of fixed assets          |  | 0                               |  | 0                             
|Other income and fees                 |  | 330                             |  | 311                           
|                                      |  |                                
|Total noninterest income              |  | 1,807                           |  | 1,389                         
|NONINTEREST EXPENSE                   | 
|Salaries and employee benefits        |  | 1,818                           |  | 1,665                         
|Occupancy                             |  | 275                             |  | 267                           
|Furniture and equipment               |  | 365                             |  | 376                           
|Loan and collection                   |  | 70                              |  | 40                            
|Advertising and promotional           |  | 83                              |  | 112                           
|Other operating expenses              |  | 814                             |  | 642                           
|                                      |  |                                
|Total noninterest expense             |  | 3,425                           |  | 3,102                         
|                                      |  |                                
|INCOME BEFORE TAXES                   |  | 1,584                           |  | 1,334                         
|Applicable income taxes               |  | 417                             |  | 407                           
|                                      |  |                                
|NET INCOME                            |  | $1,167                          |  | $   927                       
|                                      |  |                                
|Per share:                            | 
|Net income - basic                    |  | $  0.68                         |  | $  0.53                       
|                                      |  |                                 |  |                               
|Net income - diluted                  |  | $  0.68                         |  | $  0.53                       
|                                      |  |                                 |  |                               
|Cash Dividends declared               |  | $  0.23                         |  | $  0.23                       
|                                      |  |                                 |  |                               

See notes to consolidated financial
statements.

4

---



Fentura Financial, Inc. Consolidated Statements
of Changes in Shareholders Equity (Unaudited)

|                                 |  |                  
|-------------------------------- |  | -----------------
|                                 |  |                  
|                                 |  | Nine Months Ended
|                                
|(000's omitted)                  |  | September 30,2003
|                                
|COMMON STOCK                     | 
|Balance, beginning of period     |  | $ 30,236         
|Issuance of shares under         | 
|Director stock purchase plan &   | 
|Dividend reinvestment program    |  | 308              
|Repurchase stock                 |  | (873             
|                                 |  |                  
|Balance, end of period           |  | 29,671           
|RETAINED EARNINGS                | 
|Balance, beginning of period     |  | 9,395            
|Net income                       |  | 2,898            
|Cash dividends declared          |  | (1,582           
|                                 |  |                  
|Balance, end of period           |  | 10,711           
|ACCUMULATED OTHER COMPREHENSIVE  | 
|INCOME (LOSS)                    | 
|Balance, beginning of period     |  | 297              
|Change in unrealized gain (loss) | 
|on securities, net of tax        |  | (241             
|                                 |  |                  
|Balance, end of period           |  | 56               
|                                 |  |                  
|TOTAL SHAREHOLDERS' EQUITY       |  | $ 40,438         
|                                 |  |                  

See notes to consolidated financial
statements.

5

---



Fentura Financial, Inc. Consolidated Statements
of Cash Flows (Unaudited)

|                                                                |  |                               
|--------------------------------------------------------------- |  | ------------------------------
|                                                                |  |                               
|                                                                |  | Nine Months EndedSeptember 30,
|                                                               
|(000's omitted)                                                 | 
|                                                                |  | 2003                          
|                                                               
|OPERATING ACTIVITIES:                                           | 
|                                                               
|Net income                                                      |  | $     2,898                   
|Adjustments to reconcile net income to cash                     | 
|Provided by Operating Activities:                               | 
|Depreciation and amortization                                   |  | 744                           
|Provision for loan losses                                       |  | 1,086                         
|Amortization (accretion) on securities                          |  | 625                           
|Loans originated for sale                                       |  | (66,092                       
|Proceeds from the sale of loans                                 |  | 70,588                        
|Gain on sale of securities                                      |  | (31                           
|Gain on sales of fixed assets                                   |  | (201                          
|Gain on sales of loans                                          |  | (1,161                        
|Net increase in bank owned life insurance                       |  | (170                          
|Net (increase) decrease in interest receivable & other assets   |  | (1,183                        
|Net increase (decrease) in interest payable & other liabilities |  | 96                            
|                                                                |  |                               
|Total Adjustments                                               |  | 4,301                         
|                                                                |  |                               
|Net Cash Provided By (Used In) Operating Activities             |  | 7,199                         
|                                                                |  |                               
|Cash Flows From Investing Activities:                           | 
|                                                               
|Proceeds from maturities of securities - HTM                    |  | 5,788                         
|Proceeds from maturities of securities - AFS                    |  | 6,027                         
|Proceeds from calls of securities - HTM                         |  | 613                           
|Proceeds from calls of securities - AFS                         |  | 19,400                        
|Proceeds from sales of securities - AFS                         |  | 10,998                        
|Purchases of securities - HTM                                   |  | (4,366                        
|Purchases of securities - AFS                                   |  | (100,685                      
|Net increase in loans                                           |  | (13,016                       
|Capital expenditures                                            |  | (60                           
|                                                                |  |                               
|Net Cash Provided By (Used in) Investing Activities             |  | (75,301                       
|                                                               
|Cash Flows From Financing Activities:                           | 
|                                                               
|Net increase (decrease) in deposits                             |  | 71,525                        
|Net increase (decrease) in borrowings                           |  | (99                           
|Net increase (decrease) in repurchase agreements                |  | 12,500                        
|Net proceeds from stock issuance and purchase                   |  | (565                          
|Cash dividends                                                  |  | (1,582                        
|                                                                |  |                               
|Net Cash Provided By (Used In) Financing Activities             |  | 81,779                        
|                                                               
|NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS             |  | $   13,677                    
|                                                               
|CASH AND CASH EQUIVALENTS - BEGINNING                           |  | $   30,562                    
|                                                                |  |                               
|CASH AND CASH EQUIVALENTS - ENDING                              |  | $   44,239                    
|                                                                |  |                               
|CASH PAID FOR:                                                  | 
|INTEREST                                                        |  | $     4,021                   
|INCOME TAXES                                                    |  | $        688                  

See notes to consolidated financial
statements.

6

---



Fentura Financial, Inc.Consolidated Statements
of Comprehensive Income (Unaudited)

|                                               |  |                                 |   |                               
|---------------------------------------------- |  | ------------------------------- | - | ------------------------------
|                                               |  |                                 |   |                               
|                                               |  | Three Months EndedSeptember 30, |   | Nine Months EndedSeptember 30,
|(000's Omitted)                                |  | 2003                            |   | 2002                          
|Net Income                                     |  | $ 1,167                         |   | $927                          
|Other comprehensive income (loss), net of tax: | 
|Unrealized holding gains (losses) arising      | 
|during period                                  |  | (342                            | ) | 51                            
|Less: reclassification adjustment for          | 
|gains included in net income                   |  | 0                               |   | 0                             
|                                               |  |                                
|Other comprehensive income (loss)              |  | (342                            | ) | 51                            
|                                               |  |                                
|Comprehensive income                           |  | $    825                        |   | $978                          
|                                               |  |                                

Fentura Financial, Inc. Notes to Consolidated
Financial Statements (Unaudited)

# Note 1. Basis of
presentation

The consolidated financial
statements include Fentura Financial, Inc. (the Corporation) and its wholly owned
subsidiaries, The State Bank in Fenton, Michigan and Davison State Bank in Davison,
Michigan (the Banks). Intercompany transactions and balances are eliminated in
consolidation.

The accompanying unaudited
consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim financial
information and the instructions for Form  10Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and notes required by accounting
principles generally accepted in the United States of America for complete financial
statements. In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. Operating
results for the nine months ended September 30, 2003 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2003. For further
information, refer to the consolidated financial statements and footnotes thereto included
in the Corporations annual report on Form 10-K for the year ended December 31, 2002.

Reclassifications: Some
items in the prior year financial statements were reclassified to conform to the current
presentation.

Allowance for Loan Losses:
The allowance for loan losses is a valuation allowance for probable incurred credit
losses, increased by the provision for loan losses and decreased by charge-offs less
recoveries. Management estimates the allowance balance required using past loan loss
experience, the nature and volume of the portfolio, information about specific borrower
situations and estimated collateral values, economic conditions, and other factors.
Allocations of the allowance may be made for specific loans, but the entire allowance is
available for any loan that, in managements judgment, should be charged-off. Loan
losses are charged against the allowance when management believes the uncollectibility of
a loan balance is confirmed.

A loan is impaired when full
payment under the loan terms is not expected. Impairment is evaluated in total for
smaller-balance loans of similar nature such as residential mortgage, consumer, and credit
card loans, and on an individual loan basis for other loans. If a loan is impaired, a
portion of the allowance is allocated so that the loan is reported, net, at the present
value of estimated future cash flows using the loans existing rate or at the fair
value of collateral if repayment is expected solely from the collateral.

7

---



# Note 2. Earnings per
common share

A reconciliation of the numerators
and denominators used in the computation of basic earnings per common share and diluted
earnings per common share is presented below. Earnings per common share are presented
below for the three months and nine months ended September 30, 2003 and 2002:

|                                   |  |                                 |  |                               
|---------------------------------- |  | ------------------------------- |  | ------------------------------
|                                   |  |                                 |  |                               
|                                   |  | Three Months EndedSeptember 30, |  | Nine Months EndedSeptember 30,
|                                   |  | 2003                            |  | 2002                          
|Basic Earnings Per Common Share:   | 
|Numerator                          | 
|Net Income                         |  | $1,167,000                      |  | $   927,000                   
|                                   |  |                                 |  |                               
|Denominator                        | 
|Weighted average common shares     | 
|Outstanding                        |  | 1,706,864                       |  | 1,733,535                     
|                                   |  |                                 |  |                               
|Basic earnings per common share    |  | $         0.68                  |  | $         0.53                
|                                   |  |                                 |  |                               
|Diluted Earnings Per Common Share: | 
|Numerator                          | 
|Net Income                         |  | $1,167,000                      |  | $   927,000                   
|                                   |  |                                 |  |                               
|Denominator                        | 
|Weighted average common shares     | 
|Outstanding for basic earnings per | 
|Common share                       |  | 1,706,864                       |  | 1,733,535                     
|Add:  Dilutive effects of assumed  | 
|Exercises of stock options         |  | 6,099                           |  | 5,566                         
|                                   |  |                                 |  |                               
|Weighted average common shares     | 
|And dilutive potential common      | 
|Shares outstanding                 |  | 1,712,963                       |  | 1,739,101                     
|                                   |  |                                 |  |                               
|Diluted earnings per common share  |  | $         0.68                  |  | $         0.53                
|                                   |  |                                 |  |                               

Stock options for 18,987 and 5,737
shares of common stock for the three and nine month period ended September 30, 2003 and
stock options for 0 and 6,841 shares of common stock for the three and nine month period
ended September 30, 2002 were not considered in computing diluted earnings per common
share because they were not dilutive.

# Note 3. Stock Option
Plans

The Nonemployee Director Stock
Option Plan grants options to nonemployee directors to purchase the Corporations
common stock on April 1 each year. The purchase price of the shares is the fair market
value at the date of the grant, and there is a three-year vesting period before options
may be exercised. Options to acquire no more than 6,720 shares of stock may be granted
under the Plan in any calendar year and options to acquire not more than 67,200 shares in
the aggregate may be outstanding at any one time.

8

---



The Employee Stock Option Plan
provides for grants of options to eligible employees to purchase the Corporations
common stock at or above, the fair market value of the stock at the date of the grant.
Awards granted under this plan are limited to an aggregate of 72,000 shares. The
administrator of the plan is a committee of directors. The administrator has the power to
determine the number of options to be granted, the exercise price of the options and other
terms of the options, subject to consistency with the terms of the plan. Options covering
13,250 shares were granted under this Plan on June 26, 2003.

The following table
summarizes stock option activity:

|                                          |  |                 
|----------------------------------------- |  | ----------------
|                                          |  |                 
|                                          |  | Number ofOptions
|                                          |  |                 
|Options outstanding at December 31, 2001  |  | 22,583          
|Options granted 2002                      |  | 2,947           
|Options forfeited 2002                    |  | (2,760          
|                                          |  |                 
|Options outstanding at December 31, 2002  |  | 22,770          
|Options granted 2003                      |  | 13,250          
|                                          |  |                 
|Options outstanding at September 30, 2003 |  | 36,020          
|                                          |  |                 

The stock option plans are
accounted for in accordance with Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees (APB 25) as permitted under Financial Accounting
Standards No. 123, Accounting for Stock Based Compensation (SFAS 123). In
accordance with APB 25, no compensation expense is required nor has been recognized for
the options issued under existing plans. Had the Corporation chosen not to elect APB 25,
SFAS 123 would apply and compensation expense would have been recognized, and the
Corporations earnings would have been as follows (in thousands, except per share
data):

|                        |  |                              |  |                            
|----------------------- |  | ---------------------------- |  | ---------------------------
|                        |  |                              |  |                            
|                        |  | Three Months Ended Sept. 30, |  | Nine Months Ended Sept. 30,
|                        |  | 2003                         |  | 2002                       
|Net Income              | 
|As reported             |  | $      1,167                 |  | $       927                
|Proforma                |  | 1,150                        |  | 922                        
|                       
|Basic  net  income  per | 
|share                   | 
|As reported             |  | 0.68                         |  | 0.53                       
|Proforma                |  | 0.67                         |  | 0.52                       
|                       
|Diluted  net income per | 
|share                   | 
|As reported             |  | 0.68                         |  | 0.53                       
|Proforma                |  | 0.67                         |  | 0.52                       

Proforma net income includes
compensation cost for the Corporations stock option plan based on the fair values of
the grants as of the dates of the awards consistent with the method prescribed by SFAS
123. The fair value of each option grant is estimated using the Black-Scholes
option-pricing model. Assumptions used in the model for options granted during 2003 were
as follows: an expected life of 6 years, a dividend yield of 3.8%, a risk free return of
3.77% and expected volatility of 31%. Assumptions used in the model for options granted
during 2002 were as follows: an expected life of 6 years, a dividend yield of 3.8%, a risk
free return of 4.62% and expected volatility of 31%.

# Note 4. Commitments and
contingencies

There are various contingent
liabilities that are not reflected in the financial statements including claims and legal
actions arising in the ordinary course of business. In the opinion of management, after
consultation with legal counsel, the ultimate disposition of these matters is not expected
to have a material effect on the Corporations consolidated financial condition or
results of operations.

9

---



# Note 5. Securities

September 30, 2003
securities and year-end 2002 securities are as follows:

|                                     |  |            | 
|------------------------------------ |  | ---------- | 
|                                     |  |            | 
|Available for SaleSeptember 30, 2003 |  | Fair Value | 
|                                    
|U.S. Government & federal agency     |  | $  70,025  | 
|State and Municipal                  |  | 6,435      | 
|Mortgage-backed                      |  | 34,368     | 
|Corporate                            |  | 1,032      | 
|Equity securities                    |  | 395        | 
|                                     |  |           
|Total                                |  | $112,255   | 
|                                     |  |           
|December 31, 2002                    | 
|U.S. Government & federal agency     |  | $  29,027  | 
|State and Municipal                  |  | 9,388      | 
|Mortgage-backed                      |  | 7,093      | 
|Corporate                            |  | 3,078      | 
|Equity securities                    |  | 395        | 
|                                     |  |           
|Total                                |  | $  48,981  | 
|                                     |  |           

|                                   |  |                |  |                      
|---------------------------------- |  | -------------- |  | ---------------------
|                                   |  |                |  |                      
|Held to MaturitySeptember 30, 2003 |  | Amortized Cost |  | Gross Unrealized Gain
|                                  
|State & municipal                  |  | $11,692        |  | $421                 
|                                   |  |               
|Total                              |  | $11,692        |  | $421                 
|                                   |  |               
|December 31, 2002                  | 
|State & municipal                  |  | $13,722        |  | $332                 
|                                   |  |               
|Total                              |  | $13,722        |  | $332                 
|                                   |  |               

10

---



# ITEM 2. MANAGEMENT'S DISSCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION

# Results of Operations

Certain of the Corporations
accounting policies are important to the portrayal of the Corporations financial
condition, since they require management to make difficult, complex or subjective
judgments, some of which may relate to matters that are inherently uncertain. Estimates
associated with these policies are susceptible to material changes as a result of changes
in facts and circumstances. Facts and circumstances, which could affect these judgments,
include, but without limitation, changes in interest rates, in the performance of the
economy or in the financial condition of borrowers. Management believes that its critical
accounting policies include determining the allowance for loan losses and determining the
fair value of securities and other financial instruments.

As indicated in the income
statement, earnings for the nine months ended September 30, 2003 were $2,898,000 compared
to $2,296,000 for the same period in 2002. Earnings increased on the year to date basis
due to higher non-interest income, which more than offset a decrease in net interest
income comparing year to year. Net income for the third quarter of 2003 was $1,167,000
compared to $927,000 for the same period in 2002. Earnings increased as a result of an
increase in non-interest income and an increase in net interest income. The Corporation
continues to focus on core banking activities and new opportunities in current and
surrounding markets. Management believes that the softening of the economy that began in
2001 and projected economic uncertainty may continue to place pressure on net interest
income and asset quality.

The banking industry uses standard
performance indicators to help evaluate a banking institutions performance. Return
on average assets is one of these indicators. For the nine months ended September 30, 2003
the Corporations return on average assets (annualized) was 1.05% compared to 0.99%
for the same period in 2002. Net income per share  basic and diluted was $1.69 in
the first nine months of 2003 compared to $1.32 net income per share  basic and
diluted for the same period in 2002. Net income per share  basic and diluted was
$0.68 in the third quarter 2003 compared to $0.53 net income per share  basic and
diluted for the same period in 2002.

# Net Interest Income

Net interest income and average
balances and yields on major categories of interest-earning assets and interest-bearing
liabilities for the three months ended September 30, 2003 and 2002 are summarized in Table
3 and for the nine months ended September 30, 2003 and 2002 are summarized in Table 2. The
effects of changes in average interest rates and average balances are detailed in Table 1
below.

Table 1

|                                   |  |                                                                               |  
|---------------------------------- |  | ----------------------------------------------------------------------------- | -
|                                   |  |                                                                               |  
|                                   |  | NINE MONTHS ENDEDSEPTEMBER 30,2003 COMPARED TO 2002INCREASE (DECREASE)DUE TO: |  
|                                   |  |                                                                               |  
|(000'S OMITTED)                    |  | VOL                                                                           |  
|                                  
|TAXABLE SECURITIES                 |  | $ 1,067                                                                       |  
|TAX-EXEMPT SECURITIES              |  | 192                                                                           |  
|FEDERAL FUNDS SOLD                 |  | (21                                                                           | )
|TOTAL LOANS                        |  | 1,026                                                                         |  
|LOANS HELD FOR SALE                |  | (17                                                                           | )
|                                   |  |                                                                               |  
|TOTAL EARNING ASSETS               |  | 2,247                                                                         |  
|                                  
|INTEREST BEARING DEMAND DEPOSITS   |  | 74                                                                            |  
|SAVINGS DEPOSITS                   |  | 287                                                                           |  
|TIME CD'S $100,000 AND OVER        |  | 224                                                                           |  
|OTHER TIME DEPOSITS                |  | 29                                                                            |  
|OTHER BORROWINGS                   |  | 146                                                                           |  
|                                   |  |                                                                               |  
|TOTAL INTEREST BEARING LIABILITIES |  | 760                                                                           |  
|                                   |  |                                                                               |  
|NET INTEREST INCOME                |  | $ 1,487                                                                       |  
|                                   |  |                                                                               |  

11

---



As indicated in Table 1, during
the nine months ended September 30, 2003, net interest income increased compared to the
same period in 2002, principally because of the increase in securities interest income and
the decrease in interest expense due to the repricing of certificates of deposit as they
matured and renewed at lower rates. Interest income decreased slightly in the loan
portfolio and interest expense decreased slightly in the core deposit portfolio.

Net interest income (displayed
with consideration of full tax equivalency), average balance sheet amounts, and the
corresponding yields for the nine months ended September 30, 2003 and 2002 are shown in
Table 2. Net interest income for the nine months ended September 30, 2003 was $10,000,000
an increase of $611,000 over the same period in 2002. This represents an increase of 6.5%.
The primary factor contributing to the net interest income increase was reduction in
interest expense due to repricing time deposit rates and an increase in investment
interest income. Also, net interest income increased due to an increased volume at a lower
spread and as a result the net interest margin declined during the quarter.
Managements actions to reprice loans and deposits to improve the margin and
short-term rate stability contributed substantially to the improvement during the first
nine months of 2003 compared to the first nine months of 2002.

Management reviews economic
forecasts and strategy on a monthly basis. Accordingly, the Corporation will continue to
strategically manage the balance sheet structure in an effort to create stability in net
interest income. The Corporation expects to continue to seek out new loan opportunities
while continuing to maintain sound credit quality.

As indicated in Table 3, for the
three months ended September 30, 2003, the Corporations net interest margin (with
consideration of full tax equivalency) was 3.66% compared with 4.54% for the same period
in 2002. This decline is attributable to the impact of an increase in volume at a lower
spread, which helped increase net interest income but decreased the net interest margin.
Also, interest rate reductions by the Federal Reserve Board in late 2002 and near the end
of the second quarter in 2003 contributed to the decline in net interest margin. Also the
Corporations investment of excess cash in lower yielding securities reduced the net
interest margin. The decrease in interest rates has impacted the net interest income in
the short term because loans repriced more quickly than deposits thus reducing net
interest margin.

Average earning assets increased
19.4% or approximately $54,022,000 comparing the first nine months of 2003 to the same
time period in 2002. Loans, the highest yielding component of earning assets, represented
70.0% of earning assets in 2003 compared to 76.8% in 2002. Average interest bearing
liabilities increased 22.1% or $49,660,000 comparing the first nine months of 2003 to the
same time period in 2002. Non-interest bearing deposits amounted to 15.5% of average
earning assets in the first nine months of 2003 compared with 15.5% in the same time
period of 2002.

Management continually monitors
the Corporations balance sheet to insulate net interest income from significant
swings caused by interest rate volatility. If market rates change in 2003, corresponding
changes in funding costs will be considered to avoid any potential negative impact on net
interest income. Management has adjusted both loan and deposit rates in response to the
June 27th prime rate reduction of twenty-five basis points, which should alleviate any
negative impact on net interest income. The Corporations policies in this regard are
further discussed in the section titled Interest Rate Sensitivity Management.

12

---



Table 2

|                                                      |  |                                 |   |             |  |   
|----------------------------------------------------- |  | ------------------------------- | - | ----------- |  | --
|                                                      |  |                                 |   |             |  |   
|                                                      |  | NINE MONTHS ENDED SEPTEMBER 30,
|AVERAGE BALANCES AND RATES(000's omitted)(Annualized) |  | AVERAGE                         |   | 2003INCOME/ |  |   
|ASSETS                                                |  | BALANCE                         |   | EXPENSE     |  |   
|                                                      |  |                                
|Securities:                                           | 
|U.S. Treasury and Government Agencies                 |  | $54,272                         |   | $1,150      |  | 2 
|State and Political (1)                               |  | 20,859                          |   | 779         |  | 4 
|Other                                                 |  | 2,959                           |   | 97          |  | 4 
|                                                      |  |                                 |  
|Total Securities                                      |  | 78,090                          |   | 2,026       |  | 3 
|Fed Funds Sold                                        |  | 19,146                          |   | 147         |  | 1 
|Loans:                                                | 
|Commercial                                            |  | 158,533                         |   | 7,898       |  | 6 
|Tax Free (1)                                          |  | 5,280                           |   | 259         |  | 6 
|Real Estate-Mortgage                                  |  | 14,361                          |   | 791         |  | 7 
|Consumer                                              |  | 54,319                          |   | 2,850       |  | 7 
|                                                      |  |                                 |  
|Total loans                                           |  | 232,493                         |   | 11,798      |  | 6 
|Allowance for Loan Losses                             |  | (3,229                          | ) |             |  |   
|Net Loans                                             |  | 229,264                         |   | 11,798      |  | 6 
|                                                      |  |                                 |  
|Loans Held for Sale                                   |  | 2,895                           |   | 117         |  | 5 
|                                                      |  |                                 |  
|TOTAL EARNING ASSETS                                  |  | $ 332,624                       |   | $   14,088  |  | 5.
|                                                      |  |                                
|Cash Due from Banks                                   |  | 18,282                          |   |             |  |   
|All Other Assets                                      |  | 19,983                          |   |             |  |   
|                                                      |  |                                 |   |             |  |   
|TOTAL ASSETS                                          |  | $ 367,660                       |   |             |  |   
|                                                      |  |                                 |   |             |  |   
|LIABILITIES & SHAREHOLDERS' EQUITY:                   | 
|Deposits:                                             | 
|Interest bearing - DDA                                |  | $   51,633                      |   | 339         |  | 0 
|Savings Deposits                                      |  | 111,601                         |   | 954         |  | 1 
|Time CD's $100,000 and Over                           |  | 30,074                          |   | 674         |  | 3 
|Other Time CD's                                       |  | 74,708                          |   | 1,990       |  | 3 
|                                                      |  |                                 |  
|Total Deposits                                        |  | 268,016                         |   | 3,957       |  | 1 
|Other Borrowings                                      |  | 6,293                           |   | 131         |  | 2 
|                                                      |  |                                 |  
|INTEREST BEARING LIABILITIES                          |  | $ 274,309                       |   | $     4,088 |  | 1 
|                                                      |  |                                
|Non-Interest bearing - DDA                            |  | 51,458                          |   |             |  |   
|All Other Liabilities                                 |  | 1,440                           |   |             |  |   
|Shareholders' Equity                                  |  | 40,453                          |   |             |  |   
|                                                      |  |                                 |   |             |  |   
|TOTAL LIABILITIES & SHAREHOLDERS' EQUITY              |  | $ 367,660                       |   |             |  |   
|                                                      |  |                                 |   |             |  |   
|Net Interest Rate Spread                              |  |                                 |   |             |  |   
|                                                      |  |                                 |   |             |  |   
|Net Interest Income /Margin                           |  |                                 |   | $   10,000  |  |   
|                                                      |  |                                 |   |             |  |   

(1)    
           Presented on a fully taxable equivalent basis using a federal income tax
          rate of 34%.

13

---



Table 3

|                                                      |  |                                 |   |              |  |  
|----------------------------------------------------- |  | ------------------------------- | - | ------------ |  | -
|                                                      |  |                                 |   |              |  |  
|                                                      |  | NINE MONTHS ENDED SEPTEMBER 30,
|AVERAGE BALANCES AND RATES(000's omitted)(Annualized) |  | AVERAGE                         |   | 2003INCOME/  |  |  
|ASSETS                                                |  | BALANCE                         |   | EXPENSE      |  |  
|                                                      |  |                                
|Securities:                                           | 
|U.S. Treasury and Government Agencies                 |  | $   72,943                      |   | $        563 |  | 3
|State and Political (2)                               |  | 20,481                          |   | 261          |  | 5
|Other                                                 |  | 2,281                           |   | 24           |  | 4
|                                                      |  |                                 |  
|Total Securities                                      |  | 95,705                          |   | 852          |  | 3
|Fed Funds Sold                                        |  | 35,921                          |   | 86           |  | 0
|Loans:                                                | 
|Commercial                                            |  | 162,396                         |   | 2,614        |  | 6
|Tax Free (2)                                          |  | 5,105                           |   | 85           |  | 6
|Real Estate-Mortgage                                  |  | 16,461                          |   | 292          |  | 7
|Consumer                                              |  | 54,346                          |   | 924          |  | 6
|                                                      |  |                                 |  
|Total loans                                           |  | 238,308                         |   | 3,915        |  | 6
|Allowance for Loan Losses                             |  | (3,184                          | ) |              |  |  
|Net Loans                                             |  | 235,124                         |   | 3,915        |  | 6
|                                                      |  |                                 |  
|Loans Held for Sale                                   |  | 2,822                           |   | 39           |  | 5
|                                                      |  |                                 |  
|TOTAL EARNING ASSETS                                  |  | $ 372,756                       |   | $     4,892  |  | 5
|                                                      |  |                                
|Cash Due from Banks                                   |  | 19,601                          |   |              |  |  
|All Other Assets                                      |  | 20,636                          |   |              |  |  
|                                                      |  |                                 |   |              |  |  
|TOTAL ASSETS                                          |  | $ 409,809                       |   |              |  |  
|                                                      |  |                                 |   |              |  |  
|LIABILITIES & SHAREHOLDERS' EQUITY:                   | 
|Deposits:                                             | 
|Interest bearing - DDA                                |  | $   58,337                      |   | 152          |  | 1
|Savings Deposits                                      |  | 133,451                         |   | 363          |  | 1
|Time CD's $100,000 and Over                           |  | 28,102                          |   | 139          |  | 1
|Other Time CD's                                       |  | 74,357                          |   | 714          |  | 3
|                                                      |  |                                 |  
|Total Deposits                                        |  | 294,247                         |   | 1,368        |  | 1
|Other Borrowings                                      |  | 14,327                          |   | 81           |  | 2
|                                                      |  |                                 |  
|INTEREST BEARING LIABILITIES                          |  | $ 308,574                       |   | $     1,449  |  | 1
|                                                      |  |                                
|Non-Interest bearing - DDA                            |  | 58,017                          |   |              |  |  
|All Other Liabilities                                 |  | 2,213                           |   |              |  |  
|Shareholders' Equity                                  |  | 41,005                          |   |              |  |  
|                                                      |  |                                 |   |              |  |  
|TOTAL LIABILITIES & SHAREHOLDERS' EQUITY              |  | $ 409,809                       |   |              |  |  
|                                                      |  |                                 |   |              |  |  
|Net Interest Rate Spread                              |  |                                 |   |              |  |  
|                                                      |  |                                 |   |              |  |  
|Net Interest Income /Margin                           |  |                                 |   | $     3,443  |  |  
|                                                      |  |                                 |   |              |  |  

(2)    
           Presented on a fully taxable equivalent basis using a federal income tax
          rate of 34%.

14

---



# ALLOWANCE AND PROVISION
FOR LOAN LOSSES

The Corporation maintains formal
policies and procedures to control and monitor credit risk. Management believes the
allowance for loan losses is adequate to provide for probable incurred losses in the loan
portfolio. The Corporations loan portfolio has no significant concentrations in any
one industry or any exposure in foreign loans. The Corporation has not extended credit to
finance highly leveraged transactions nor does it intend to do so in the future.
Employment levels and other economic conditions in the Corporations local markets
may have a significant impact on the level of loan losses. Management continues to
identify and devote attention to credits that are not performing as agreed. Of course,
deterioration of economic conditions could have an impact on the Corporations credit
quality, which could impact the need for greater provision for loan losses and the level
of the allowance for loan losses as a percentage of gross loans. Non-performing loans are
discussed further in the section titled Non-Performing Assets.

The allowance for loan losses
(ALL)reflects managements judgment as to the level considered appropriate to
absorb probable losses in the loan portfolio. Fenturas subsidiary banks
methodology in determining the adequacy of the ALLincludes a review of individual
loans, historical loss experience, current economic conditions, portfolio trends, and
other pertinent factors. Although portions of the allowance have been allocated to various
portfolio segments, the ALLis general in nature and is available for the portfolio
in its entirety. At September 30, 2003, the ALLwas $3,244,000, or 1.37% of total
loans. This compares with $3,184,000, or 1.42%, at December 31, 2002. The decrease of the
ALLas a percentage of total loans reflects a small increase in the allowance for
loan losses and a large increase in total loans. Management believes that the allowance to
gross loans percentage is appropriate given identified risk in the loan portfolio based on
asset quality.

Table 4 also summarizes loan losses
and recoveries for the first nine months of 2003 and 2002. During the first nine months of
2003 the Corporation experienced net charge-offs of $1,026,000 or .43% of loans
(annualized) compared with net charge-offs of $201,000 or .09% in the first nine months of
2002. The charge-off of one large commercial credit relationship comprised $841,000 of the
$1,026,000 net charge-offs for the period. The provision for loan losses was $1,086,000 in
the first nine months of 2003 and $209,000 for the same time period in 2002. The provision
was increased primarily as a result of the unanticipated charges to the allowance related
to the commercial credit relationship noted. The loss resulted from borrower falsification
of borrowing base reports related to accounts receivables and inventory.

Table 4       
           ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

|                                        |  |                                   
|--------------------------------------- |  | ----------------------------------
|                                        |  |                                   
|(000's omitted)                         |  | Nine Months EndedSeptember 30,2003
|                                        |  |                                   
|Balance at Beginning of Period          |  | $ 3,184                           
|                                        |  |                                   
|Charge-Offs:                            | 
|Commercial, Financial and Agriculture   |  | (924                              
|Real Estate-Mortgage                    |  | 0                                 
|Installment Loans to Individuals        |  | (362                              
|                                        |  |                                   
|Total Charge-Offs                       |  | (1,286                            
|Recoveries:                             | 
|Commercial, Financial and Agriculture   |  | 154                               
|Real Estate-Mortgage                    |  | 0                                 
|Installment Loans to Individuals        |  | 106                               
|                                        |  |                                   
|Total Recoveries                        |  | 260                               
|                                        |  |                                   
|Net Charge-Offs                         |  | (1,026                            
|Provision                               |  | 1,086                             
|                                        |  |                                   
|Balance at End of Period                |  | $ 3,244                           
|                                        |  |                                   
|Ratio of Net Charge-Offs to Gross Loans |  | 0.43                              
|                                        |  |                                   

15

---



# NON-INTEREST INCOME

Non-interest income increased during
the nine months ended September 30, 2003 as compared to the same period in 2002, primarily
due to the increase in gain on sale of mortgages, and an increase in service charges on
deposit accounts. Overall non-interest income was $5,435,000 for the nine months ended
September 30, 2003 compared to $3,613,000 for the same period in 2002. These figures
represent an increase of 50.4%. Non-interest income increased 30.1% in the third quarter
of 2003 compared with the same period in 2002. The increase was due to higher gain on sale
of mortgages and higher service charges on deposits in the third quarter of 2003. The
income statement provides a detailed breakdown of the components of non-interest income.

The most significant category of
non-interest income is service charges on deposit accounts. These fees were $2,706,000 in
the first nine months of 2003 compared to $1,808,000 for the same period of 2002. This
represents an increase of 49.7%. In the third quarter of 2003 service charges increased
45.8% over the same period in 2002. Increases are attributable to service charges from
growth in core deposits and the introduction of a new overdraft privilege product.

Gains on the sale of mortgage loans
originated by the Banks and sold in the secondary market were $1,161,000 in the nine
months ended September 30, 2003 and $562,000 in the same period in 2002. In the third
quarter of 2003 gain on the sale of mortgages increased 38.1% over the same period in
2002. The change is due to an increase in loans sold in the secondary market due to the
increase in residential mortgage refinance activity and new loan volumes due to the
downward movement to historically low market interest rates. The gain on sale of mortgages
started to slow down in the last month of the third quarter due to higher rates in the
market.

Trust income decreased $53,000 in the
first nine months of 2003 compared to the same period in the prior year. In the third
quarter of 2003 trust fees decreased 4.8% compared with the same period in 2002. The
decrease in fees is attributable to the decline in the average market value of assets
under management and the loss of several trust accounts within the Corporations
Trust Department.

Gain on sale of securities increased
$31,000 in the first nine months of 2003, due to the bank selling some low yielding
securities and purchasing higher yielding securities in the second quarter and selling a
single security in the first quarter. This gain made up 0.6% of the 2003 first nine months
noninterest income.

Gain on sale of fixed assets
increased $201,000 in the first nine months, due to the sale of a branch of one of the
Bank subsidiaries. The gain made up 3.7% of the 2003 first nine months non-interest
income.

Other operating income increased
$146,000 to $963,000 in the first nine months of 2003 compared to $817,000 in the same
time period in 2002. This was an increase of 17.9%. Other operating income increased due
to the cash surrender value of life insurance and the increase in debit and ATM income.

16

---



# Non-Interest Expense

Total non-interest expense was
$10,093,000 in the first nine months ended September 30, 2003 compared with $9,223,000 in
the same period of 2002. This is an increase of 9.4%. In the third quarter of 2003 total
non-interest expenses were $3,425,000 compared to $3,102,000 in the same quarter in 2002.
These increases are largely attributable to an increase in salaries and benefits expense
and other operating expenses.

Salary and benefit costs,
Fenturas largest non-interest expense category, were $5,416,000 in the first nine
months of 2003, compared with $4,979,000, or an increase of 8.8%, for the same time period
in 2002. In the third quarter of 2003 salary and benefits costs were $1,818,000 compared
with $1,665,000, or an increase of 9.2% for the same quarter in 2002. Increased costs are
primarily a result of a modest salary increase for employees and an increase in employee
benefit costs and commission expenses paid to mortgage originators.

Occupancy expenses at $836,000
increased in the nine months ended September 30, 2003 compared to the same period in 2002
by $48,000 or 6.2%. Occupancy expenses increased 3.0% in the third quarter of 2003
compared to 2002. The increases are attributable to increases in facility repairs, a full
nine months of expenses pertaining to the opening of the Grand Blanc and Silver Lake
Parkway offices in 2002 and maintenance contracts expense.

During the first nine months ended
September 30, 2003 furniture and equipment expenses were $1,088,000 compared to $1,122,000
for the same period in 2002, a decrease of 3.0%. In the third quarter of 2003 equipment
expenses decreased 2.9% from the third quarter of 2002. The decreases in expenses are
attributable to reduction in equipment maintenance contracts and equipment depreciation.

Loan and collection expenses, at
$213,000, were up $85,000 during the nine months ended September 30, 2003 compared to the
same time period in 2002. In the third quarter loan and collection expense increased 75.0%
compared to the third quarter of 2002. The increase is primarily attributable to an
increase in other loan expense pertaining to the large charged off loan noted earlier and
an increase in dealer service fees.

Advertising expenses were $270,000 in
the nine months ended September 30, 2003 compared with $237,000 for the same period in
2002. Advertising expenses decreased 25.9% in the third quarter of 2003 compared to the
same quarter in 2002. The decreases were primarily due to the decrease in media,
shareholder and promotional expenses.

Other operating expenses were
$2,270,000 in the nine months ended September 30, 2003 compared to $1,969,000 in the same
time period in 2002, an increase of $301,000 or 15.3%. Other operating expenses were
$814,000 in the third quarter of 2003 compared to $642,000 in the same period in 2002. The
increases are attributable to an increase in the amount of overdrawn deposit account
charge-offs and an increase in other outside services and consulting expenses.

17

---



# Financial Condition

Proper management of the volume
and composition of the Corporations earning assets and funding sources is essential
for ensuring strong and consistent earnings performance, maintaining adequate liquidity
and limiting exposure to risks caused by changing market conditions. The
Corporations securities portfolio is structured to provide a source of liquidity
through maturities and generate an income stream with relatively low levels of principal
risk. The Corporation does not engage in securities trading. Loans comprise the largest
component of earning assets and are the Corporations highest yielding assets.
Customer deposits are the primary source of funding for earning assets while short-term
debt and other sources of funds could be further utilized if market conditions and
liquidity needs change.

The Corporations total
assets were $425 million at September 30, 2003 compared to December 31, 2002 total assets
of $340 million. Loans comprised 56.1% of total assets at September 30, 2003 compared to
67.5% at December 31, 2002. Loans grew $8.7 million with commercial loans and real estate-
construction loans leading the advance, which together grew $7.9 million while other loan
categories experienced small decreases. The ratio of non-interest bearing deposits to
total deposits was 15.7% at September 30, 2003 compared to 15.2% at December 31, 2002.
Interest bearing deposit liabilities totaled $310 million at September 30, 2003 compared
to $251 million at December 31, 2002. Total deposits increased $71.5 million with
non-interest bearing demand deposits increasing $12.9 million and interest bearing
deposits increasing $58.6 million. Short-term borrowings decreased $83,000 due to the
slight decrease in treasury tax & loan deposits at the end of the two periods. FHLB
advance balances decreased slightly during the period due to a principal payment being
made on the advance. The Corporation entered into repurchase agreements during the second
quarter of 2003 for $12.5 million. Repurchase agreements are instruments with deposit type
characteristics, which are secured by bank securities. The repurchase agreements were
leveraged against securities to increase net interest income.

Bank premises and equipment
decreased $483,000 to $9.3 million at September 30, 2003 compared to $9.7 million at
December 31, 2002. The decrease is due to depreciation expense and reduction in property
resulting from the sale of the North Fenton office.

# NON-PERFORMING ASSETS

Non-performing assets are assets
that have more than a normal risk of loss and include loans on which interest accruals
have ceased, loans that have been renegotiated, and real estate acquired through
foreclosure. Past due loans are loans which are delinquent 90 days or more, but have not
been placed on non-accrual status. Table 5 reflects the levels of these assets at
September 30, 2003 and December 31, 2002.

Non-performing assets increased at
September 30, 2003 compared to December 31, 2002. This increase is primarily due to an
increase in Other Real Estate and REO-in-Redemption, which increased $1,122,000 in the
first nine months of 2003. One property directly related to the $841,000 charged off
commercial credit, comprises $599,000 of the increase in the period. The majority of the
properties are commercial and marketability is dependent on the real estate market.
Non-performing assets increased significantly as compared to June 30, 2003 primarily due
to the increase in renegotiated loans, which included one commercial credit and one
mortgage credit. The commercial loan in the amount of $480,000 is completely guaranteed by
the U.S. Government and the mortgage loan in the amount of $783,000 is secured by
residential property. The Corporation provided $122,000 to the loan loss reserve in the
third quarter.

The level and composition of
non-performing assets are affected by economic conditions in the Corporations local
markets. Non-performing assets, charge-offs, and provisions for loan losses tend to
decline in a strong economy and increase in a weak economy, potentially impacting the
Corporations operating results. In addition to non-performing loans, management
carefully monitors other credits that are current in terms of principal and interest
payments but, in managements opinion, may deteriorate in quality if economic
conditions change.

18

---



# Table 5

Non-Performing Assets and Past Due Loans

|                                       |  |                  
|-------------------------------------- |  | -----------------
|                                       |  |                  
|                                       |  | September 30,2003
|                                       |  |                  
|Non-Performing Loans:                  | 
|Loans Past Due 90 Days or More & Still | 
|Accruing                               |  | $     68         
|Non-Accrual Loans                      |  | 260              
|Renegotiated Loans                     |  | 1,263            
|                                       |  |                  
|Total Non-Performing Loans             |  | 1,591            
|                                       |  |                  
|Other Non-Performing Assets:           | 
|Other Real Estate                      |  | 1,212            
|REO in Redemption                      |  | 184              
|Other Non-Performing  Assets           |  | 7                
|                                       |  |                  
|Total Other Non-Performing Assets      |  | 1,403            
|                                       |  |                  
|Total Non-Performing Assets            |  | $2,994           
|                                       |  |                  
|Non-Performing Loans as a % of         | 
|Total Loans                            |  | 0.67             
|Allowance for Loan Losses as a % of    | 
|Non-Performing Loans                   |  | 203.92           
|Accruing Loans Past Due 90 Days or     | 
|More to Total Loans                    |  | 0.03             
|Non-performing Assets as a % of        | 
|Total Assets                           |  | 0.70             

# LIQUIDITY AND INTEREST
RATE RISK MANAGEMENT

Asset/Liability management is
designed to assure liquidity and reduce interest rate risks. The goal in managing interest
rate risk is to maintain a strong and relatively stable net interest margin. It is the
responsibility of the Asset/Liability Management Committee (ALCO) to set policy guidelines
and to establish short-term and long-term strategies with respect to interest rate
exposure and liquidity. The ALCO, which is comprised of key members of management, meets
regularly to review financial performance and soundness, including interest rate risk and
liquidity exposure in relation to present and prospective markets, business conditions,
and product lines. Accordingly, the committee adopts funding and balance sheet management
strategies that are intended to maintain earnings, liquidity, and growth rates consistent
with policy and prudent business standards.

Liquidity maintenance together with a
solid capital base and strong earnings performance are key objectives of the Corporation.
The Corporations liquidity is derived from a strong deposit base comprised of
individual and business deposits. Deposit accounts of customers in the mature market
represent a substantial portion of deposits of individuals. The Banks deposit base
plus other funding sources (federal funds purchased, other liabilities and
shareholders equity) provided primarily all funding needs in the first nine months
of 2003. While these sources of funds are expected to continue to be available to provide
funds in the future, the mix and availability of funds will depend upon future economic
conditions. The Corporation does not foresee any difficulty in meeting its funding
requirements.

Primary liquidity is provided through
short-term investments or borrowings (including federal funds sold and purchased) while
the securities portfolio provides secondary liquidity. The securities portfolio has
increased $63 million since December 31, 2002 due to the increase in deposits and slower
loan demand than expected. The Corporation has decided to invest the excess funds in the
security portfolio to increase yield and income versus keeping the excess funds in federal
funds sold at a lower yield. As of September 30, 2003 federal funds sold represented 5.9%
of total assets, compared to 3.0% at December 31, 2002. The Corporation had excess
liquidity at September 30, 2003 due to a large short-term deposit from a local
municipality. The Corporation regularly monitors liquidity to ensure adequate cash flows
to cover unanticipated reductions in the availability of funding sources.

Interest rate risk is managed by
controlling and limiting the level of earnings volatility arising from rate movements. The
Corporation entered into a leverage strategy in the second quarter, which was purchasing
securities funded by repurchase agreements. This strategy helped leverage more capital of
the Corporation and limit volatility if interest rates dropped further. The Corporation
regularly performs reviews and analysis of those factors impacting interest rate risk.
Factors include maturity and re-pricing frequency of balance sheet components, impact of
rate changes on interest margin and prepayment speeds, market value impacts

19

---



of rate
changes, and other issues. Both actual and projected performance are reviewed, analyzed,
and compared to policy and objectives to assure present and future financial viability.

As indicated in the statement of cash
flows, cash provided by financing activities was $81,779,000 in the first nine months of
2003 due to the increase in deposits. Comparatively, in the first nine months of 2002,
cash provided in financing activities was $16,054,000 because of increases in deposits.
Cash used in investing activities was $75,301,000 during the first nine months of 2003.
Cash flow from investing activities decreased for the first nine months of 2003 primarily
because of an increase in securities purchased and an increase in loan demand.

# NEWLY ISSUED BUT NOT
EFFECTIVE ACCOUNTING STANDARDS

The Financial Accounting Standards
Board (FASB) recently issued two new accounting standards, Statement 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities,and Statement 150,
Accounting for Certain Financial Instruments with Characteristics of both Liabilities
and Equities, both of which generally became effective in the quarter beginning July
1, 2003. The Corporation does not expect that these new accounting standards will
materially affect the Corporations operating results or financial condition.

# CAPITAL MANAGEMENT

Total shareholders equity
increased 1.3% to $40,438,000 at September 30, 2003 compared with $39,928,000 at December
31, 2002. The Corporations equity to asset ratio was 9.5% at September 30, 2003 and
11.7% at December 31, 2002. The increase in the amount of capital resulted primarily from
the net income from the Corporation, partially offset by dividends declared.

As indicated on the balance sheet at
December 31, 2002 the Corporation had accumulated other comprehensive income of $297,000
compared to accumulated other comprehensive income at September 30, 2003 of $56,000. The
decrease in the income position is attributable to the fluctuation of the market price of
securities held in the available for sale portfolio.

The Corporation has entered into a
definitive agreement and plan of merger to acquire West Michigan Financial Corporation in
Hudsonville, Michigan. Consummation of the transaction is subject to approval by West
Michigan Financial Corporation shareholders, regulatory approval and other closing
conditions. The proposed acquisition is an all cash transaction totaling approximately
$13.1 million dollars for all of the outstanding stock of WMFC. The Corporation expects to
fund the acquisition in large part by its proposed issuance and sale of pooled Trust
Preferred Securities.

West Michigan Financial
Corporation is a one-bank holding company for West Michigan Community Bank, which will
become the third affiliate bank owned by Fentura Financial, Inc.

Regulatory Capital
Requirements

Bank holding companies and their
bank subsidiaries are required by banking industry regulators to maintain certain levels
of capital. These are expressed in the form of certain ratios. These ratios are based on
the degree of credit risk in the Corporations assets. All assets and off-balance
sheet items such as outstanding loan commitments are assigned risk factors to create an
overall risk-weighted asset total. Capital is separated into two levels, Tier I capital
(essentially total common shareholders equity plus qualifying cumulative preferred
securities (limited to 33% of common equity), less goodwill) and Tier II capital
(essentially the allowance for loan losses limited to 1.25% of gross risk-weighted
assets). Capital levels are then measured as a percentage of total risk weighted assets.
The regulatory minimum for Tier I capital to risk weighted assets is 4% and the minimum
for Total capital (Tier I plus Tier II) to risk weighted assets is 8%. The Tier I leverage
ratio measures Tier I capital to average assets and must be a minimum of 4%. As reflected
in Table 6, at September 30, 2003 and at December 31, 2002, the Corporation was well in
excess of the minimum capital and leverage requirements necessary to be considered a
well capitalized banking company.

The FDIC has adopted a risk-based
insurance premium system based in part on a banks capital adequacy. Under this
system a depository institution is classified as well capitalized, adequately capitalized,
or undercapitalized according to its regulatory capital levels. Subsequently, a financial
institutions premium levels are based on these classifications and its regulatory
supervisory rating (the higher the classification the lower the premium). It is the
Corporations goal to maintain capital levels sufficient to retain a designation of
well capitalized.

20

---



# Table 6

|                          |  |                                          |  |                        
|------------------------- |  | ---------------------------------------- |  | -----------------------
|                          |  |                                          |  |                        
|                          |  | Capital Ratios                          
|                          |  |                                         
|                          |  | Regulatory MinimumFor "Well Capitalized" |  | Fentura Financial, Inc.
|Total Capital to risk     | 
|Weighted assets           |  | 10%                                      |  | 14.50%                 
|Tier 1  Capital to risk   |  | 6%                                       |  | 13.42%                 
|Weighted assets           | 
|Tier 1 Capital to average | 
|Assets                    |  | 5%                                       |  | 10.98%                 

# ITEM 3. QUANTITATIVE AND
QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The information concerning
quantitative and qualitative disclosures about market risk contained on page 47 in the
Corporations Annual Report on Form 10-K for the year ended December 31, 2002,
is here incorporated by reference.

Fentura Financial, Inc. faces
market risk to the extent that both earnings and the fair value of its financial
instruments are affected by changes in interest rates. The Corporation manages this risk
with static GAP analysis and has begun simulation modeling. For the first nine months of
2003, the results of these measurement techniques were within the Corporations
policy guidelines. The Corporation does not believe that there has been a material change
in the nature of the Corporations primary market risk exposures, including the
categories of market risk to which the Corporation is exposed and the particular markets
that present the primary risk of loss to the Corporation, or in how those exposures have
been managed in 2003 compared to 2002.

The Corporations market risk
exposure is mainly comprised of its vulnerability to interest rate risk. Prevailing
interest rates and interest rate relationships in the future will be primarily determined
by market factors, which are outside of the Corporations control. All information
provided in this section consists of forward-looking statements. Reference is made to the
section captioned Forward Looking Statements in this quarterly report for a
discussion of the limitations on the Corporations responsibility for such
statements.

# INTEREST RATE
SENSITIVITY MANAGEMENT

Interest rate sensitivity
management seeks to maximize net interest income as a result of changing interest rates,
within prudent ranges of risk. The Corporation attempts to accomplish this objective by
structuring the balance sheet so that re-pricing opportunities exist for both assets and
liabilities in roughly equivalent amounts at approximately the same time intervals.
Imbalances in these re-pricing opportunities at any point in time constitute a banks
interest rate sensitivity. The Corporation currently does not utilize derivatives in
managing interest rate risk.

An indicator of the interest rate
sensitivity structure of a financial institutions balance sheet is the difference
between rate sensitive assets and rate sensitive liabilities, and is referred to as
GAP.

Table 7 sets forth the
distribution of re-pricing of the Corporations earning assets and interest bearing
liabilities as of September 30, 2003, the interest rate sensitivity GAP, as defined above,
the cumulative interest rate sensitivity GAP, the interest rate sensitivity GAP ratio
(i.e. interest rate sensitive assets divided by interest rate sensitive liabilities) and
the cumulative sensitivity GAP ratio. The table also sets forth the time periods in which
earning assets and liabilities will mature or may re-price in accordance with their
contractual terms.

21

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Table 7

GAP ANALYSIS SEPTEMBER 30, 2003

|                                    |  |                   |  |                        | 
|----------------------------------- |  | ----------------- |  | ---------------------- | 
|                                    |  |                   |  |                        | 
|(000's Omitted)                     |  | WithinThreeMonths |  | ThreeMonths toOne Year | 
|                                    |  |                  
|Earning Assets:                     | 
|Federal Funds Sold                  |  | $  25,250         |  | $           0          | 
|Securities                          |  | 18,515            |  | 51,298                 | 
|Loans                               |  | 128,409           |  | 20,525                 | 
|Loans Held for Sale                 |  | 2,174             |  | 0                      | 
|                                    |  |                  
|Total Earning Assets                |  | $174,348          |  | $71,823                | 
|                                    |  |                  
|Interest Bearing Liabilities:       | 
|Interest Bearing Demand Deposits    |  | $  65,481         |  | $           0          | 
|Savings Deposits                    |  | 144,434           |  | 0                      | 
|Time Deposits Less than $100,000    |  | 15,489            |  | 21,364                 | 
|Time Deposits Greater than $100,000 |  | 8,846             |  | 4,619                  | 
|Short term borrowings               |  | 1,417             |  | 0                      | 
|Other Borrowings                    |  | 0                 |  | 16                     | 
|Repurchase Agreements               |  | 0                 |  | 2,500                  | 
|                                    |  |                  
|Total Interest Bearing Liabilities  |  | $170,186          |  | $28,499                | 
|                                    |  |                  
|Interest Rate Sensitivity GAP       |  | $    4,162        |  | $43,324                | 
|Cumulative Interest Rate            | 
|Sensitivity GAP                     |  | $    4,162        |  | $47,486                | 
|Interest Rate Sensitivity GAP       |  | 1.02              |  | 2.52                   | 
|Cumulative Interest Rate            | 
|Sensitivity GAP Ratio               |  | 1.02              |  | 1.24                   | 

As indicated in Table 7, the short-term  (one year and less)  cumulative  interest rate  sensitivity gap is positive.  Accordingly,  if
market interest rates increase,  this positive gap position would have a short-term  positive  impact on interest  margin.  Conversely,
if market rates continue to decline this should  theoretically  have a short-term  negative  impact.  However,  gap analysis is limited
and may not provide an accurate  indication  of the impact of general  interest  rate  movements on the net  interest  margin since the
re-pricing of various  categories of assets and  liabilities is subject to the  Corporation's  needs,  competitive  pressures,  and the
needs of the Corporation's  customers.  In addition,  various assets and liabilities indicated as re-pricing within the same period may
in fact re-price at different times within such period and at different rate volumes.  These  limitations are evident when  considering
the  Corporation's  Gap position at September  30, 2002 and the change in net interest  margin for the nine months ended  September 30,
2003  compared to the same time period in 2002.  At September  30, 2002 the  Corporation  was  negatively  gapped  through one year and
since that time interest rates have declined  further,  yet net interest margin decreased  compared to the first nine months of 2003 to
the same period in 2002. This occurred  because certain deposit  categories,  specifically  interest  bearing demand and savings,  have
been  repriced  at the same time but not at the same level as the asset  portfolios  resulting  in a decrease in net  interest  margin.
Additionally,  simulation  modeling,  which measures the impact of upward and downward  movements of interest rates on interest  margin
and the market  value of equity,  indicates  that an upward  movement of interest  rates would not  significantly  impact net  interest
income.  Management  has adjusted  both loan and deposit  rates in response to the June 27, 2003 prime rate  reduction  of  twenty-five
basis points, which should assist in alleviating any negative impact on net interest income.

22

---



# FORWARD LOOKING STATEMENTS

This report includes  "forward-looking  statements" as that term is used in the securities laws. All statements  regarding our expected
financial  position,  business and  strategies  are  forward-looking  statements.  In addition,  the words  "anticipates,"  "believes,"
"estimates," "seeks," "expects," "plans," "intends," and similar expressions,  as they relate to us or our management,  are intended to
identify  forward-looking  statements.  The  presentation  and discussion of the provision and allowance for loan losses and statements
concerning  future  profitability  or future growth or increases,  are examples of inherently  forward looking  statements in that they
involve  judgments and statements of belief as to the outcome of future events.  Our ability to predict results or the actual effect of
future plans or strategies is  inherently  uncertain.  Factors which could have a material  adverse  affect on our  operations  and our
future  prospects  include,  but are not limited to, changes in: interest rates,  general economic  conditions,  legislative/regulatory
changes,  monetary and fiscal policies of the U.S.  Government,  including policies of the U.S. Treasury and the Federal Reserve Board,
the quality or  composition of the loan or investment  portfolios,  demand for loan products,  deposit flows,  competition,  demand for
financial  services in our market area and accounting  principles,  policies and guidelines.  These risks and  uncertainties  should be
considered in evaluating  forward-looking  statements and undue reliance should not be placed on such statements.  Further  information
concerning us and our business,  including  additional factors that could materially affect our financial  results,  is included in our
other filings with the Securities and Exchange Commission.

# ITEM 4:  CONTROLS AND PROCEDURES

|(a) |  | Evaluation of Disclosure Controls and Procedures. The  Corporation's  Chief  Executive  Officer and Chief Financial
                  Officer,  after evaluating the effectiveness of the Corporation's  disclosure  controls and procedures (as defined in
                  Exchange Act Rules  13a-15(e) and 15d-15(e)) as of the end of the period covered by this Form 10-Q Quarterly  Report,
                  have concluded that the Corporation's  disclosure  controls and procedures were adequate and effective to ensure that
                  material  information  relating  to the  Corporation  would be made known to them by others  within the  Corporation,
                  particularly during the period in which this Form 10-Quarterly Report was being prepared.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | Changes  in  Internal  Controls. During  the  period  covered  by this  report,  there  have been no  changes in the
                  Corporation's  internal control over financial  reporting that have materially  affected or are reasonably  likely to
                  materially affect the Corporation's internal control over financial reporting.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---



# PART II  OTHER
INFORMATION

|Item 1. | Legal Proceedings. None.
|------- | ------------------------

|Item 2. | Changes in Securities and Use of Proceeds. None.
|------- | ------------------------------------------------

|Item 3. | Defaults Upon Senior Securities. None.
|------- | --------------------------------------

|Item 4. | Submission of Matters to a Vote of Securities Holders. None.
|------- | ------------------------------------------------------------

|Item 5. | Other Information. The Audit Committe of the Board of Directors approved the categories of all non-audit services
performed by the Registrant's independent accountants during the period covered by this report.
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 6. | Exhibits and Reports on Form 8-K.
|------- | ---------------------------------

|(a) |  | Exhibits
|--- |  | --------

| | 31.1 |  | Certificate of the 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 the 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 the Chief Executive 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.
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 32.2 |  | Certificate of the 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.
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | Reports on 8-K
|--- |  | --------------

| |  | Report on Form 8-K dated July 2, 2003 and filed July 2, 2003 furnishing information announcing a dividend for the
                  quarter ended June 30, 2003.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Report on Form 8-K dated July 18, 2003 furnishing press releases announcing the results of the quarter ended June
                  30, 2003, and year to date results.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Report on Form 8-K dated September 30, 2003 and filed September 30, 2003 furnishing information
                  announcing a dividend for the quarter ended September 30, 2003.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

---



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 thereunto duly authorized.

|                       |                                                                                                         
|---------------------- | --------------------------------------------------------------------------------------------------------
|Date November 12, 2003 | Fentura Financial, Inc.
By /s/ Donald L. Grill   Donald L. Grill   President and Chief Executive Officer
|                      
|Date November 12, 2003 | By /s/ Douglas J. Kelley   Douglas J. Kelley   Chief Financial Officer                                  

25

---



EXHIBIT INDEX

|Exhibit |  | Description
|------- |  | -----------

|31.1 |  | Certificate of the 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 the 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 the Chief  Executive  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.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|32.2 |  | Certificate of the 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

---



EXHIBIT 31.1

I, Donald L. Grill, certify that:

|1. | I have reviewed this quarterly report on Form 10-Q of Fentura Financial, Inc.;
|-- | ------------------------------------------------------------------------------

|2. | Based on my knowledge, this report does not contain any untrue statement of a
          material fact or omit to state a material fact necessary to make the statements
          made, in light of the circumstances under which such statements were made, not
          misleading with respect to the period covered by this report;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Based on my knowledge, the financial statements, and other financial information
          included in this quarterly report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this report;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | The registrants other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) |  | designed such disclosure controls and procedures, or caused such disclosure
               controls and procedures to be designed under our supervision, to ensure that
               material information relating to the registrant, including its consolidated
               subsidiaries, is made known to us by others within those entities, particularly
               during the period in which this report is being prepared;
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | evaluated the effectiveness of the registrants disclosure controls and
               procedures and presented in this report our conclusions about the effectiveness
               of the disclosure controls and procedures, as of the end of the period covered
               by this report based on such evaluation; and
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) |  | disclosed in this report any change in the registrants internal control
               over financial reporting that occurred during the registrants most recent
               fiscal quarter that has materially affected, or is reasonably likely to
               materially affect, the registrants internal control over financial
               reporting; and
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | The registrants other certifying officers and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
          registrants auditors and the audit committee of the registrants
          board of directors:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) |  | all significant deficiencies and material weaknesses in the design or operation
               of internal control over financial reporting which are reasonably likely to
               adversely affect the registrants ability to record, process, summarize and
               report financial information; and
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | any fraud, whether or not material, that involves management or other employees
               who have a significant role in the registrants internal control over
               financial reporting.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |                                                                        
|----------------------- | -----------------------------------------------------------------------
|Date: November 12, 2003 | /s/ Donald L. GrillDonald L. GrillPresident and Chief Executive Officer

27

---



EXHIBIT 31.2

I, Douglas J.Kelley, certify that:

|1. | I have reviewed this quarterly report on Form 10-Q of Fentura Financial, Inc.;
|-- | ------------------------------------------------------------------------------

|2. | Based on my knowledge, this report does not contain any untrue statement of a
          material fact or omit to state a material fact necessary to make the statements
          made, in light of the circumstances under which such statements were made, not
          misleading with respect to the period covered by this report;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Based on my knowledge, the financial statements, and other financial information
          included in this quarterly report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this report;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | The registrants other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) |  | designed such disclosure controls and procedures, or caused such disclosure
               controls and procedures to be designed under our supervision, to ensure that
               material information relating to the registrant, including its consolidated
               subsidiaries, is made known to us by others within those entities, particularly
               during the period in which this report is being prepared;
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | evaluated the effectiveness of the registrants disclosure controls and
               procedures and presented in this report our conclusions about the effectiveness
               of the disclosure controls and procedures, as of the end of the period covered
               by this report based on such evaluation; and
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) |  | disclosed in this report any change in the registrants internal control
               over financial reporting that occurred during the registrants most recent
               fiscal quarter that has materially affected, or is reasonably likely to
               materially affect, the registrants internal control over financial
               reporting; and
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | The registrants other certifying officers and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
          registrants auditors and the audit committee of the registrants
          board of directors:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) |  | all significant deficiencies and material weaknesses in the design or operation
               of internal control over financial reporting which are reasonably likely to
               adversely affect the registrants ability to record, process, summarize and
               report financial information; and
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | any fraud, whether or not material, that involves management or other employees
               who have a significant role in the registrants internal control over
               financial reporting.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |                                                              
|----------------------- | -------------------------------------------------------------
|Date: November 12, 2003 | /s/ Douglas J. KelleyDouglas J. KelleyChief Financial Officer

28

---



EXHIBIT 32.1

| | Donald L. Grill, Chief Executive Officer of Fentura Financial, Inc., certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) | the Quarterly Report on Form 10-Q for the quarterly period ended September 30,
          2003 which this statement accompanies fully complies with the requirements of
          Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | the information contained in the Quarterly Report on Form 10-Q for the quarterly
          period ended September 30, 2003 fairly presents, in all material respects, the
          financial condition and results of operations of Macatawa Bank Corporation.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |                                                                        
|----------------------- | -----------------------------------------------------------------------
|Date: November 12, 2003 | /s/ Donald L. GrillDonald L. GrillPresident and Chief Executive Officer

29

---



EXHIBIT 32.2

| | I, Douglas J. Kelley, Chief Financial Officer of Fentura Financial, Inc., certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) | the Quarterly Report on Form 10-Q for the quarterly period ended September 30,
          2003 which this statement accompanies fully complies with the requirements of
          Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | the information contained in the Quarterly Report on Form 10-Q for the quarterly
          period ended September 30, 2003 fairly presents, in all material respects, the
          financial condition and results of operations of Macatawa Bank Corporation.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |                                                              
|----------------------- | -------------------------------------------------------------
|Date: November 12, 2003 | /s/ Douglas J. KelleyDouglas J. KelleyChief Financial Officer

30

---