# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

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

For the quarterly period ended March 31, 2003
OR

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

For the transition period from _______________ to _______________
Commission file number 0-23550Fentura Financial, Inc.
-----------------------------------------------------------------------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

|Michigan
-------------------------
(State or other jurisdiction of
incorporation or organization) | 38-2806518
-------------------------
(IRS Employer Identification No.)
|------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------

One Fenton Sq, P.O. Box 725, Fenton, Michigan 48430
(Address of Principal Executive Offices)(810) 629-2263
(Registrant's telephone number)

Check 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: May 1, 2003
Class - Common Stock                 Shares Outstanding - 1,714,945



---

# Fentura
Financial, Inc.Index to Form 10-Q

|                               |                                                                                                                                                                                                                                                               | Page             
|------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------
|Part I - Financial Information |                                                                                                                                                                                                                                                              
|                               | Item 1 - Consolidated Financial Statements (Unaudited)                                                                                                                                                                                                        | 3                
|                               | 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                       | 10
19
21         
|Part II - Other Information    | 22                                                                                                                                                                                                                                                           
|                               | 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 Securities Holders
Item 5 - Other Information 
Item 6 - Exhibits and Reports on Form 8-K | 22
22
22
22
22
22
|Signatures 
Exhibit Index      | 23
26                                                                                                                                                                                                                                                        

2

---

# PART I -
FINANCIAL INFORMATION

## Item 1.
Consolidated Financial Statements

Fentura Financial, Inc.
  Consolidated Balance Sheets

`----------------------------------------------------------------------------------------------------
                                                                       MARCH 31,        DEC 31,
(000's omitted Except share data)                                         2003           2002
                                                                      (unaudited)
----------------------------------------------------------------------------------------------------
ASSETS
   Cash and due from banks                                                $18,950        $20,262
   Federal funds sold                                                       1,650         10,300
                                                                     -------------------------------
     Total cash & cash equivalents                                         20,600         30,562
   Securities-available for sale                                           59,294         48,981
   Securities-held to maturity, (market value of $13,084
      at March 31, 2003 and $14,051 at December 31, 2002)                  12,717         13,722
                                                                     -------------------------------
       Total securities                                                    72,011         62,703
   Loans held for sale                                                      4,531          5,509
   Loans:
     Commercial                                                           135,077        129,562
     Real estate loans - mortgage                                          13,380         11,944
     Real estate loans - construction                                      29,303         27,032
     Consumer loans                                                        54,053         55,683
                                                                     -------------------------------
   Total loans                                                            231,813        224,221
   Less: Allowance for loan losses                                         (3,219)        (3,184)
                                                                     -------------------------------
   Net loans                                                              228,594        221,037
   Bank Owned Life Insurance                                                6,287          6,234
   Bank premises and equipment                                              9,631          9,754
   Federal Home Loan Bank stock                                               822            822
   Accrued interest receivable                                              1,907          1,595
   Other assets                                                             3,160          2,267
                                                                     -------------------------------
     Total assets                                                        $347,543       $340,483
                                                                     ===============================


LIABILITIES
   Deposits:
     Non-interest bearing deposits                                        $48,334        $44,875
     Interest bearing deposits                                            255,167        250,994
                                                                     -------------------------------
       Total deposits                                                     303,501        295,869
   Borrowings                                                                 605          1,500
   Federal Home Loan Bank Advances                                          1,124          1,124
   Accrued taxes, interest and other liabilities                            2,691          2,062
                                                                     -------------------------------
       Total liabilities                                                  307,921        300,555
                                                                     -------------------------------
SHAREHOLDERS' EQUITY
   Common stock - no par value
   1,713,430 shares issued (1,722,126 in Dec. 2002)                        29,949         30,236
   Retained earnings                                                        9,424          9,395
   Accumulated other comprehensive income                                     249            297
                                                                     -------------------------------
     Total shareholders' equity                                            39,622         39,928
                                                                     -------------------------------
       Total Liabilities and Shareholders' Equity                        $347,543       $340,483
                                                                     ===============================`

See notes to consolidated financial
statements.

3

---

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

`Three Months Ended
                                                               March 31,
(000's omitted except per share data)                    2003             2002
                                                  -------------------------------------
INTEREST INCOME
   Interest and fees on loans                           $3,923            $3,899
   Interest and dividends on
     securities:
     Taxable                                               328               281
     Tax-exempt                                            169               165
   Interest on federal funds sold                           26                71
                                                  ------------------------------------
         Total interest income                           4,446             4,416

   INTEREST EXPENSE
   Deposits                                              1,296             1,532
   Borrowings                                               22                27
                                                  ------------------------------------
         Total interest expense                          1,318             1,559
                                                  ------------------------------------

   NET INTEREST INCOME                                   3,128             2,857
   Provision for loan losses                               296                33
                                                  ------------------------------------
     Net interest income after
       Provision for loan losses                         2,832             2,824

   NONINTEREST INCOME
     Service charges on deposit accounts                   808               554
     Gain on sale of mortgages                             355               142
     Trust income                                          112               134
     Gain on sale of securities                             12                 0
     Other income and fees                                 288               226
                                                  ------------------------------------
       Total noninterest income                          1,575             1,056

   NONINTEREST EXPENSE
     Salaries and employee benefits                      1,836             1,707
     Occupancy                                             293               257
     Furniture and equipment                               359               368
     Loan and collection                                    59                38
     Advertising and promotional                            89                67
     Other operating expenses                              667               597
                                                  ------------------------------------
       Total noninterest expense                         3,303             3,034
                                                  ------------------------------------

   INCOME BEFORE TAXES                                   1,104               846
   Applicable income taxes                                 283               253
                                                  ------------------------------------
   NET INCOME                                             $821              $593
                                                  ====================================

   Per share:
   Net income - basic                                     $0.48            $0.34
   Net income - diluted                                   $0.48             $0.34`

See notes to consolidated financial
statements.

4

---

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

`Three Months                Three Months
                                                                  Ended                      Ended
---------------------------------------------------------------------------------------------------------
                                                                March 31,                   March 31,
(000's omitted)                                                   2003                        2002
---------------------------------------------------------------------------------------------------------
COMMON STOCK
   Balance, beginning of period                                 $30,236                     $30,321
   Issuance of shares under
     Director stock purchase plan &
     Dividend reinvestment program                                   97                           0
   Repurchase stock                                                (384)                        (15)
                                                            ------------------          -----------------
   Balance, end of period                                        29,949                      30,649

RETAINED EARNINGS
   Balance, beginning of period                                   9,395                       7,677
     Net income                                                     821                         593
     Cash dividends declared                                       (792)                       (399)
                                                            ------------------          -----------------
   Balance, end of period                                         9,424                       7,871

ACCUMULATED OTHER COMPREHENSIVE
   INCOME (LOSS)
   Balance, beginning of period                                     297                          92
     Change in unrealized gain (loss)
     on securities, net of tax                                      (48)                        (62)
                                                            ------------------          -----------------
   Balance, end of period                                           249                          30
                                                            ------------------          -----------------
TOTAL SHAREHOLDERS' EQUITY                                      $39,622                     $38,550
                                                            ==================          =================`

See notes to consolidated financial
statements.

5

---

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

`Three Months Ended
                                                                        March 31,
-----------------------------------------------------------------------------------------
(000's omitted)
                                                                     2003       2002
-----------------------------------------------------------------------------------------

OPERATING ACTIVITIES:

   Net income                                                          $821       $593
   Adjustments to reconcile net income to cash
     Provided by Operating Activities:
       Depreciation and amortization                                    243        234
       Provision for loan losses                                        296         33
       Amortization (accretion) on securities                           273        126
       Loans originated for sale                                    (20,226)    (8,969)
       Proceeds from the sale of loans                               21,559      8,283
       Gain on sale of securities                                       (12)         0
       Gain on sales of loans                                          (355)      (142)
       Net increase in bank owned life insurance                        (53)         0
       Net (increase) decrease in interest receivable & other
         assets                                                      (1,205)      (280)
       Net increase (decrease) in interest payable & other
         liabilities                                                    655         69
                                                                  -----------------------
Total Adjustments                                                     1,175       (646)
                                                                  -----------------------
Net Cash Provided By (Used In) Operating Activities                   1,996        (53)
                                                                  -----------------------

Cash Flows From Investing Activities:

   Proceeds from maturities of securities - HTM                       1,000      1,000
   Proceeds from maturities of securities - AFS                       1,500      3,380
   Proceeds from calls of securities - AFS                            3,993      3,700
   Proceeds from sales of securities - AFS                            1,026          0
   Purchases of securities - HTM                                          0          0
   Purchases of securities - AFS                                    (17,162)   (10,286)
   Net increase in loans                                             (7,853)    (1,036)
   Capital expenditures                                                (120)    (1,156)
                                                                  -----------------------
Net Cash Provided By (Used in) Investing Activities                 (17,616)    (4,398)

Cash Flows From Financing Activities:

   Net increase (decrease) in deposits                                7,632     (9,267)
   Net increase (decrease) in borrowings                               (895)    (1,571)
   Net proceeds from stock issuance and purchase                       (287)       (15)
   Cash dividends                                                      (792)      (399)
                                                                  -----------------------
Net Cash Provided By (Used In) Financing Activities                   5,658    (11,252)

NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS                 ($9,962)  ($15,703)

CASH AND CASH EQUIVALENTS - BEGINNING                               $30,562    $41,838
                                                                  -----------------------
CASH AND CASH EQUIVALENTS - ENDING                                  $20,600    $26,135
                                                                  =======================

CASH PAID FOR:
   INTEREST                                                          $1,301     $1,777
   INCOME TAXES                                                         $66       $252`

See notes to consolidated financial
statements.

6

---

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

`Three Months Ended
(000's Omitted)                                              March 31,
                                                         2003         2002
                                                     ---------------------------
Net Income                                                 $821         $593
Other comprehensive income (loss), net of tax:
   Unrealized holding gains (losses) arising
       during period                                        (60)         (62)
   Less: reclassification adjustment for
       gains included in net income                          12            0
                                                     ---------------------------
Other comprehensive income (loss)                           (48)         (62)
                                                     ---------------------------
Comprehensive income                                       $773         $531
                                                     ===========================`

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 three
months  ended March 31,  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.

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 ended March 31, 2003 and 2002:

`Three Months Ended
                                                       March 31,
                                                     2003           2002
                                                     ----           ----
Basic Earnings Per Common Share:
Numerator
   Net Income                                    $821,000       $593,000
                                                 ========       ========

Denominator
   Weighted average common shares
   Outstanding                                  1,719,560      1,735,080
                                                =========      =========

Basic earnings per common share                     $0.48          $0.34
                                                    =====          =====

Diluted Earnings Per Common Share:
Numerator
   Net Income                                   $ 821,000      $ 593,000
                                                =========      =========

Denominator
   Weighted average common shares
   Outstanding for basic earnings per
   Common share                                 1,719,560      1,735,080
                                                =========      =========

Add:  Dilutive effects of assumed
   Exercises of stock options                       6,274          3,556
                                                    =====          =====

   Weighted average common shares
   And dilutive potential common
   Shares outstanding                           1,725,834      1,738,636
                                                =========      =========

Diluted earnings per common share                   $0.48          $0.34
                                                    =====          =====`

Stock options for 5,737 and 6,841
shares of common stock for the three-month period ended March 31, 2003 and 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
grants 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 4,300 shares were granted
under this Plan on March 31, 2003.

# The following table
summarizes stock option activity:

`Number of                 Weighted
                                                                 Options                Average Price
                                                                 -------                -------------

     Options outstanding at December 31, 2001                     22,583                    $25.89
     Options granted 2002                                          2,947                     26.50
     Options forfeited 2002                                       (2,760)                    29.36
                                                                 --------
     Options outstanding at December 31, 2002                     22,770                     26.21
     Options granted 2003                                          4,300                     34.25
                                                                 --------
     Options outstanding at March 31, 2003                        27,070                    $29.42
                                                                 ========`

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):

`1st Quarter               1st Quarter
                                                                  2003                      2002
                                                                  ----                      ----

     Net Income
          As reported                                        $     821                        $593
          Proforma                                                 808                         588

     Basic net income per share
          As reported                                              0.48                       0.34
          Proforma                                                 0.47                       0.33

     Diluted net income per share
          As reported                                              0.48                       0.34
          Proforma                                                 0.47                       0.33`

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 and
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

---

# Item 2 
Managements Discussion and Analysis of Financial Condition and Results of Operations

# Results of Operations

As indicated in the income
statement, earnings for the first quarter ended March 31, 2003 were $821,000 compared to
$593,000 for the same period in 2002. Earnings increased in the first quarter due to 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 three months ended March 31, 2003
the Corporations return on average assets (annualized) was 0.97% compared to 0.79%
for the same period in 2002. Net income per share  basic and diluted was $0.48 in
the first three months of 2003 compared to $0.34 for 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 March 31, 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

`THREE MONTHS ENDED
                                                          MARCH 31,
                                                    2003 COMPARED TO 2002
                                                     INCREASE (DECREASE)
                                                           DUE TO:
                                             -------------------------------------
                                                            YIELD/
(000'S OMITTED)                                  VOL         RATE        TOTAL
----------------------------------------------------------------------------------
TAXABLE SECURITIES                               $236       ($189)         $47
TAX-EXEMPT SECURITIES                              49         (40)           9
FEDERAL FUNDS SOLD                                (34)        (11)         (45)

TOTAL LOANS                                       257        (239)          18
LOANS HELD FOR SALE                                 9          15           24
                                             -------------------------------------

   TOTAL EARNING ASSETS                           517        (464)          53


INTEREST BEARING DEMAND DEPOSITS                   27         (41)         (14)
SAVINGS DEPOSITS                                   60         (85)         (25)
TIME CD'S $100,000 AND OVER                       103         (56)          47
OTHER TIME DEPOSITS                               (16)       (228)        (244)
OTHER BORROWINGS                                  (10)          5           (5)
                                             -------------------------------------

   TOTAL INTEREST BEARING LIABILITIES             164        (405)        (241)
                                             -------------------------------------

      NET INTEREST INCOME                        $353        ($59)        $294
                                             =====================================`

10

---

As indicated in Table 1, during
the three months ended March 31, 2003, net interest income increased compared to the same
period in 2002, principally because of the decrease in interest expense due to the
lowering of core deposit rates and the repricing of certificates of deposits as they have
matured and renewed at lower rates. Interest income increased slightly due to the increase
in volume in the loan and security portfolios.

Net interest income (displayed
with consideration of full tax equivalency), average balance sheet amounts, and the
corresponding yields for the three months ended March 31, 2003 and 2002 are shown in Table
2. Net interest income for the three months ended March 31, 2003 was $3,244,000 an
increase of $293,000 over the same period in 2002. This represents an increase of 9.9%.
The primary factor contributing to the net interest income increase was reduction in
interest expense due to repricing deposit rates in late 2002. 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 quarter of 2003 compared to the fourth
quarter of 2002.

Management reviews the economic
forecasts and strategy on a monthly basis. Accordingly, the Corporation will continue to
strategically manage the balance sheet structure 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 2, for the
three months ended March 31, 2003, the Corporations net interest margin (with
consideration of full tax equivalency) was 4.26% compared with 4.32% for the same period
in 2002. This decline is attributable to the impact of interest rate reductions by the
Federal Reserve Board in late 2002. 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 income.

Average earning assets increased
11.6% or approximately $32,212,000 compared to the first three months of 2003 to the same
time period in 2002. Loans, the highest yielding component of earning assets, represented
74.5% of earning assets in 2003 compared to 77.9% in 2002. Average interest bearing
liabilities increased 15.5% or $34,050,000 compared to the first three months of 2003 to
the same time period in 2002. Non-interest bearing deposits amounted to 15.0% of average
earning assets in the first quarter of 2003 compared with 15.0% 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 regard to the
November 6th prime rate reduction of fifty basis points, which should have
alleviated 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.

11

---

# Table 2

`THREE MONTHS ENDED MARCH 31,
AVERAGE BALANCES AND RATES                                      2003                               2002
(000's omitted)(Annualized)                         AVERAGE     INCOME/    YIELD/     AVERAGE      INCOME/    YIELD/
ASSETS                                              BALANCE     EXPENSE     RATE       BALANCE     EXPENSE     RATE
                                                   -------------------------------------------------------------------
   Securities:
     U.S. Treasury and Government Agencies           $44,853       $287     2.60%       $21,053       $208     4.01%
     State and Political (1)                          21,074        256     4.93%        17,603        247     5.69%
     Other                                             3,855         41     4.31%         5,411         73     5.47%
                                                   --------------------------------   --------------------------------
     Total Securities                                 69,782        584     3.39%        44,067        528     4.86%
     Fed Funds Sold                                    9,004         26     1.17%        17,233         71     1.67%
   Loans:
     Commercial                                      154,258      2,609     6.86%       139,124      2,411     7.03%
     Tax Free (1)                                      5,501         88     6.48%         2,449         41     6.79%
     Real Estate-Mortgage                             12,555        216     6.98%        12,284        243     8.02%
     Consumer                                         55,055        980     7.22%        59,363      1,180     8.06%
                                                   --------------------------------   --------------------------------
   Total loans                                       227,369      3,893     6.94%       213,220      3,875     7.37%
   Allowance for Loan Losses                          (3,247)                            (3,089)
   Net Loans                                         224,122      3,893     7.04%       210,131      3,875     7.48%
                                                   --------------------------------   --------------------------------
   Loans Held for Sale                                 2,821         60     8.63%         2,244         36     6.51%
                                                   --------------------------------   --------------------------------
   TOTAL EARNING ASSETS                             $308,976     $4,563     5.99%      $276,764     $4,510     6.61%
                                                   -------------------------------------------------------------------
   Cash Due from Banks                                17,765                             14,496
   All Other Assets                                   19,414                             17,316
                                                   -----------                        -----------
TOTAL ASSETS                                        $342,908                           $305,487
                                                   -----------                        -----------
LIABILITIES & SHAREHOLDERS' EQUITY:
   Deposits:
   Interest bearing - DDA                            $49,653         95     0.78%       $39,923        109     1.11%
   Savings Deposits                                   97,504        282     1.17%        81,621        307     1.53%
   Time CD's $100,000 and Over                        32,127        279     3.52%        22,279        232     4.22%
   Other Time CD's                                    74,830        640     3.47%        76,241        884     4.70%
                                                   --------------------------------   --------------------------------
   Total Deposits                                    254,114      1,296     2.07%       220,064      1,532     2.82%
   Other Borrowings                                    1,702         22     5.24%         2,661         27     4.11%
                                                   --------------------------------   --------------------------------
   INTEREST BEARING LIABILITIES                     $255,816     $1,318     2.09%      $222,725     $1,559     2.84%
                                                   -------------------------------------------------------------------
   Non-Interest bearing - DDA                         46,227                             41,378
   All Other Liabilities                               1,024                              2,778
   Shareholders' Equity                               39,841                             38,606
                                                   -----------                        -----------
   TOTAL LIABILITIES & SHAREHOLDERS' EQUITY         $342,908                           $306,423
                                                   -----------            ---------   -----------            ---------
Net Interest Rate Spread                                                    3.90%                              3.77%
                                                                          ---------                          ---------
Net Interest Income /Margin                                      $3,245     4.26%                   $2,951     4.32%
                                                              =====================              =====================`

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

12

---

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 ALL 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 March 31, 2003, the ALLwas $3,219,000, or 1.36% of total
loans. This compares with $3,184,000, or 1.39%, at December 31, 2002. The decrease of the
ALLas a percentage of total loans reflects a slight increase in the allowance for
loan losses and substantial increase in loan totals. Management believes that the
allowance to gross loans percentage is appropriate given anticipated risk in the loan
portfolio based on asset quality.

Table 3 also summarizes loan losses
and recoveries for the first three months of 2003 and 2002. During the first three months
of 2003 the Corporation experienced net charge-offs of $261,000, compared with net
charge-offs of $55,000 for the three months ended March 31, 2002. As a result, the net
charge-off ratio for the first three months of 2003 was .11% compared to .03% for the same
period in 2002. The provision for loan losses was $296,000 in the first three months of
2003 and $33,000 for the same time period in 2002. The Corporation increased the provision
in 2003 compared to 2002 to maintain the allowance for loan losses at the level management
believes is necessary to provide for probable incurred losses in the loan portfolio.

Table 3

`ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
                                                         Three Months Ended       Three Months Ended
                                                              March 31                 March 31,
(000's omitted)                                                 2003                     2002
                                                       --------------------------------------------------
Balance at Beginning of Period                                  $3,184                   $3,125
                                                       --------------------------------------------------
Charge-Offs:
     Commercial, Financial and Agriculture                        (126)                     (67)
     Real Estate-Mortgage                                            0                        0
     Installment Loans to Individuals                             (181)                    (105)
                                                       --------------------------------------------------
         Total Charge-Offs                                        (307)                    (172)
Recoveries:
     Commercial, Financial and Agriculture                          11                       74
     Real Estate-Mortgage                                            0                        0
     Installment Loans to Individuals                               35                       43
                                                       --------------------------------------------------
         Total Recoveries                                           46                      117
                                                       --------------------------------------------------
Net Charge-Offs                                                   (261)                     (55)
Provision                                                          296                       33
                                                       --------------------------------------------------
Balance at End of Period                                        $3,219                   $3,103
                                                       ==================================================
Ratio of Net Charge-Offs to Gross Loans                          0.11%                    0.03%
                                                       ==================================================`

13

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NON-INTEREST INCOME

Non-interest income increased during
the three months ended March 31, 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 $1,575,000 for the three months ended
March 31, 2003 compared to $1,056,000 for the same period in 2002. These figures represent
an increase of 49.1%. 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 $808,000 in
the first quarter of 2003 compared to $554,000 for the same period of 2002. This
represents an increase of 45.9%. 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 $355,000 in the three months
ended March 31, 2003 and $142,000 in 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 of historically low
market interest rates.

Trust income decreased $22,000 in the
first quarter of 2003 compared to the same period in the prior year. This 16.4% decrease
in fees is attributable to the decline in the value of assets under management and the
loss of several trust accounts within the Corporations Trust Department.

Gain on sale of securities increased
$12,000 in the first quarter of 2003, due to the sale of one security. This gain made up
0.3% of the 2003 first quarter noninterest income.

Other operating income increased
$62,000 to $288,000 in the first three months of 2003 compared to $226,000 in the same
time period in 2002. This is an increase of 27.4%. Other operating income increased due to
income on the cash surrender value of life insurance and the increase in debit and ATM
income.

14

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Non-Interest Expense

Total non-interest expense was
$3,303,000 in the first three months ended March 31, 2003 compared with $3,034,000 in the
same period of 2002. This is an increase of 8.9%. This increase is 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 $1,836,000 in the first quarter
of 2003, compared with $1,707,000, or an increase of 7.6%, for the same time period 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.

During the first three months ended
March 31, 2003 furniture and equipment expenses were $359,000 compared to $368,000 for the
same period in 2002, a decrease of 2.5%. The decreases in expenses are attributable to
reduction in equipment maintenance contracts and equipment depreciation.

Occupancy expenses at $293,000
increased in the three months ended March 31, 2003 compared to the same period in 2002 by
$36,000 or 14.0%. The increases are attributable to increases in facility repairs, a full
quarter of expenses pertaining to the opening of the Grand Blanc and Silver Lake Parkway
offices in 2002 and maintenance contracts expense.

Loan and collection expenses, at
$59,000, were up $21,000 during the three months ended March 31, 2003 compared to the same
time period in 2002. The increase is primarily attributable to an increase in other loan
expense and an increase in dealer service fees.

Advertising expenses were $89,000 in
the three months ended March 31, 2003 compared with $67,000 for the same period in 2002.
The increase of $22,000 or 32.8% was primarily due to the increase in media expense,
shareholder expenses and promotional expenses.

Other operating expenses were
$667,000 in the three months ended March 31, 2003 compared to $597,000 in the same time
period in 2002, an increase of $70,000 or 11.7%. The increase is attributable to an
increase in the amount of overdrawn deposit account charge-offs and an increase in other
outside services and consulting expenses.

15

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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 $348 million at March 31, 2003 compared to December 31, 2002 total assets of
$340 million. Loans comprised 68.0% of total assets at March 31, 2003 compared to 67.5% at
December 31, 2002. Loans grew $6.6 million with commercial loans and real estate loans
leading the advance, which together grew $9.2 million while other loan categories
experienced small decreases. The ratio of non-interest bearing deposits to total deposits
was 15.9% at March 31, 2003 compared to 15.2% at December 31, 2002. Interest bearing
deposit liabilities totaled $255 million at March 31, 2003 compared to $251 million at
December 31, 2002. Total deposits increased $7.6 million with non-interest bearing demand
deposits increasing $3.4 million and interest bearing deposits increasing $4.2 million.
Short-term borrowings decreased $895 thousand due to the decrease in treasury tax &
loan deposit at the end of the two periods. FHLB advance balances were unchanged comparing
the two periods.

Bank premises and equipment
decreased $123,000 to $9.6 million at March 31, 2003 compared to $9.7 million at December
31, 2002. The decrease is due to a small increase in depreciation expense.

# NON-PERFORMING ASSETS

Non-performing assets 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 were delinquent 90
days or more, but have not been placed on non-accrual status. Table 4 reflects the levels
of these assets at March 31, 2003 and December 31, 2002.

Non-performing assets increased at
March 31, 2003 compared to December 31, 2002. This increase is attributable to an increase
in REO-in-Redemption and an increase in non-performing loans. The non-accrual loans
increased because three new loans were placed on non-accrual totaling $2,108,000. The
Banks provided $296,000 to the loan loss reserve in the first quarter partially in
response to the increase in non-performing assets. The majority of the non-performing
assets are real estate secured loans, which could have a lesser value once liquidated. The
charge-off percentage for the three months ended March 31, 2003 is .11% and it was 0.03%
at December 31, 2002. The mix of the loan portfolio has transitioned over the past
two years with continuing growth in the commercial loan and commercial real estate
portfolios.

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. Based on the current economic conditions, management continues to
closely monitor credit quality.

16

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# Table 4

# Non-Performing Assets
and Past Due Loans

`March 31,    December 31,
                                                      2003            2002
                                                 --------------------------------
Non-Performing Loans:
     Loans Past Due 90 Days or More & Still
         Accruing                                        $105            $72
     Non-Accrual Loans                                  2,567            512
     Renegotiated Loans                                     0              0
                                                 --------------------------------
         Total Non-Performing Loans                     2,672            584
                                                 --------------------------------
Other Non-Performing Assets:
     Other Real Estate                                    110            110
     REO in Redemption                                    496            164
     Other Non-Performing  Assets                          33             92
                                                 --------------------------------
         Total Other Non-Performing Assets                639            366
                                                 --------------------------------
Total Non-Performing Assets                            $3,311           $950
                                                 ================================
Non-Performing Loans as a % of
     Total Loans                                       1.15%           0.26%
Allowance for Loan Losses as a % of
     Non-Performing Loans                            120.47%         545.21%
Accruing Loans Past Due 90 Days or
     More to Total Loans                               0.05%           0.03%
Non-performing Assets as a % of
     Total Assets                                      0.95%           0.28%`

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 three 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. As of March 31, 2003 federal funds
sold represented 0.5% of total assets, compared to 3.0% at December 31, 2002. The
Corporation regularly monitors liquidity to ensure adequate cash flows to cover
unanticipated reductions in the availability of funding sources.

17

---

Interest rate risk is managed by
controlling and limiting the level of earnings volatility arising from rate movements. 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 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 $5,658,000 in the first three months of
2003 due to the increase in deposits. Comparatively, in the first three months of 2002,
cash used in financing activities was $11,252,000 because of decreases in deposits. Cash
used in investing activities was $17,616,000 during the first three months of 2003. Cash
flow from investing activities decreased for the first three months of 2003 primarily
because of an increase in securities purchases and an increase in loan demand.

CAPITAL MANAGEMENT

Total shareholders equity
declined 0.8% to $39,622,000 at March 31, 2003 compared with $39,928,000 at December 31,
2002. The Corporations equity to asset ratio was 11.4% at March 31, 2003 and 11.7%
at December 31, 2002. The decrease in the amount of capital resulted primarily from the
decrease in common stock, due to the stock repurchase plan.

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 March 31, 2003 of $249,000. The
decrease in the income position is attributable to the fluctuation of the market price of
securities held in the available for sale portfolio.

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 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 5, at March 31, 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.

18

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Table 5

`Capital Ratios
                               -----------------------------------------------------------------------------
                                  Regulatory Minimum                  Fentura Financial, Inc.
                                For "Well Capitalized"     March 31,      December 31,        March 31,
                                                              2003            2002              2002
Total Capital to risk
     Weighted assets                      10%                15.02%          15.20%            16.29%
Tier 1  Capital to risk                    6%                13.89%          14.10%            15.07%
     Weighted assets
Tier 1 Capital to average
     Assets                                5%                11.48%          12.60%            12.61%`

# 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 three 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 are
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 6 sets forth the
distribution of re-pricing of the Corporations earning assets and interest bearing
liabilities as of March 31, 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.

19

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Table 6

`GAP ANALYSIS MARCH 31, 2003

(000's Omitted)                                    Within       Three      One to       After
                                                   Three      Months to     Five        Five
                                                   Months     One Year      Years       Years       Total
                                                -------------------------------------------------------------
Earning Assets:
    Federal Funds Sold                            $  1,650   $       0   $       0   $       0    $  1,650
    Securities                                      13,844      20,840      28,438       8,889      72,011
    Loans                                          119,152      17,628      79,140      15,893     231,813
    Loans Held for Sale                              4,531           0           0           0       4,531
                                                -------------------------------------------------------------
       Total Earning Assets                       $139,177   $   38,468  $ 107,578   $  24,782    $310,005
                                                =============================================================

Interest Bearing Liabilities:
    Interest Bearing Demand Deposits             $  47,554   $       0   $       0   $       0   $  47,554
    Savings Deposits                               101,183           0           0           0     101,183
    Time Deposits Less than $100,000                 7,551      28,116      42,069         101      77,837
    Time Deposits Greater than $100,000              8,201       9,122      11,270           0      28,593
    Short term borrowings                              605           0           0           0         605
    Other Borrowings                                    16           0          77       1,031       1,124
                                                -------------------------------------------------------------
       Total Interest Bearing Liabilities        $ 165,110   $  37,238   $  53,416   $    1,132  $ 256,896
                                                =============================================================
Interest Rate Sensitivity GAP                    $ (25,933)  $   1,230   $  54,162   $  23,650   $  53,109
Cumulative Interest Rate
    Sensitivity GAP                              $ (25,933)  $ (24,703)  $  29,459   $  53,109
Interest Rate Sensitivity GAP                        (0.84)      (1.03)       2.01       21.89
Cumulative Interest Rate
    Sensitivity GAP Ratio                            (0.84)      (0.88)       1.12        1.21`

As  indicated  in Table 6,  the  short-term  (one  year and  less)  cumulative  interest  rate  sensitivity  gap is
negative.  Accordingly,  if market  interest  rates  increase,  this negative gap position would have a short- term
negative  impact on interest  margin.  Conversely,  if market rates  continue to decline this should  theoretically
have a short-term  positive  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 March 31, 2002 and the change in net
interest  income for the three months ended March 31, 2003  compared to the same time period in 2002.  At March 31,
2002 the  Corporation  was  negatively  gapped  through one year and since that time  interest  rates have declined
further,  yet net  interest  income  increased  compared  to the first  three  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 or at the same  level as asset  portfolios.  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  regard to the  November  6, 2002  prime  rate
reduction of fifty basis points, which should alleviate any negative impact on net interest income.

20

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FORWARD LOOKING STATEMENTS
This report  contains  "forward  looking  statements" as that term is used in the  securities  laws. All statements
regarding the Corporation's expected financial position,  performance,  business and strategies are forward looking
statements. These statements are based on management's beliefs,  assumptions,  current expectations,  estimates and
projections about the financial services industry,  the economy,  and about the Corporation  itself.  Words such as
"anticipates,"  "believes,"  "estimates,"  "expects,"  "forecasts,"  "intends," "is likely,"  "plans,"  "projects,"
variations of such words and similar  expressions are intended to identify such forward looking  statements.  These
statements are not  guarantees of future  performance  and involve  certain risks,  uncertainties  and  assumptions
("Future  Factors"),  which are  difficult  to predict  with  regard to timing,  extent,  likelihood  and degree of
occurrence.  Therefore,  actual results and outcomes may  materially  differ from what may be expressed or forecast
in such forward-looking  statements.  The Corporation  undertakes no obligation to update, amend or clarify forward
looking statements as a result of new information, future events, or otherwise.
Future Factors that could cause a difference  between an ultimate  actual outcome and a preceding  forward  looking
statements  contained in this report  include,  but are not limited to,  changes in interest rate and interest rate
relationships,  demands for products and services,  the degree of competition by  traditional  and  non-traditional
competitors,  changes in  banking  laws or  regulations,  changes  in tax laws,  changes  in prices,  the impact of
technological  advances,  government and regulatory  policy changes,  the outcome of pending and future  litigation
and  contingencies,  trends  in  customer's  behaviors  as well as their  ability  to repay  loans,  and the  local
economy.  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
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-14(c) and 15d-14(c)) as of
a date  within  90 days of the  filing  date of this Form 10-Q  Quarterly  Report  (the  "Evaluation  Date"),  have
concluded that as of the Evaluation Date, the  Corporation's  disclosure  controls and procedures were adequate and
effective  to ensure  that  material  information  relating  to the  company  would be made known to them by others
within the company, particularly during the period in which this Form 10-Q Quarterly Report was being prepared.Changes in Internal Controls
There  were no  significant  changes  in the  Corporation's  internal  controls  or in  other  factors  that  could
significantly  affect internal controls  subsequent to the date of the most recent evaluation,  nor any significant
deficiencies  or material  weaknesses in such internal  controls  requiring  corrective  actions.  As a result,  no
corrective actions were taken.

21

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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  Committee 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                                                                                                                                                                    
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | 99.1                                                                                                                                                                        
| |     | 99.2                                                                                                                                                                        
| | (b) | Reports on 8-K
A report on Form 8-K dated January 20, 2003 was filed which contained as an exhibit a press
                  release reporting 2002 fourth quarter earnings.

22

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# Signatures

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

|                    | Fentura Financial, Inc.
|------------------- | -----------------------
|Date:  May 14, 2003 | By                     
|                    |                        
|Date:  May 14, 2003 | By                     
|                    |                        

23

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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 quarterly 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 quarterly 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
quarterly 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-14 and 15d-14) for the registrant and
we have:                                                                                                                                                                
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                      
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                      
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                      
|5. | The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent function):                                                                                                                                           
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                      
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                      
|6. | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

Date:   May 14, 2003

| | /s/ Donald L. GrillDonald L. Grill
Chief Executive Officer
| | ----------------------------------------------------------

24

---

I, Ronald L
Justice, certify that:

|1. | I have reviewed this quarterly report on Form 10-Q of Fentura Financial Inc.;                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Based on my knowledge, this quarterly 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 quarterly 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
quarterly 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-14 and 15d-14) for the registrant and
we have:                                                                                                                                                                
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                      
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                      
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                      
|5. | The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent function):                                                                                                                                           
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                      
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                      
|6. | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

Date:   May 14, 2003

| | /s/ Ronald L. JusticeRonald L. Justice
Chief Financial Officer
| | --------------------------------------------------------------

25

---

EXHIBIT INDEX

|Exhibit | Description                                                                                                                                                                                       
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|99.1    | 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.
|99.2    | 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 99.1

I, 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 March 31,
               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 March 31, 2003 fairly presents, in all material
               respects, the financial condition and results of operations of Fentura
               Financial, Inc.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dated:   May 14, 2003

| | /s/ Donald L. GrillDonald L. Grill
Chief Executive Officer
| | ----------------------------------------------------------

27

---

# Exhibit 99.2

I, Ronald L. Justice,  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 March 31,
               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 March 31, 2003 fairly presents, in all material
               respects, the financial condition and results of operations of Fentura
               Financial, Inc.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dated:   May 14, 2003

| | /s/ Ronald L. JusticeRonald L. Justice
Chief Financial Officer
| | --------------------------------------------------------------

28