UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                                                     FORM 10-Q

[x]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
                  For the quarterly period ended June 30, 2001
[  ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

        For the transition period from ___________ to _______________

                         Commission file number 0-23550

                              Fentura Bancorp, Inc.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


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

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

                                 (810) 629-2263
                           ---------------------------
                           (Issuer's telephone number)


                                      None
               --------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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

                      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: August 10, 2001


 Class - Common Stock                         Shares Outstanding - 1,730,264
<PAGE>
                              Fentura Bancorp, 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                     9

    Item 3 - Quantitative and Qualitative Disclosures about Market Risk       20



Part II - Other Information

    Item 4 - Submission of Matters to a Vote of Security Holders              23

    Item 6 - Exhibits and Reports on Form 8-K                                 23






                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION


Item 1. Consolidated Financial Statements
<TABLE>
  Fentura Bancorp, Inc.
  Consolidated Balance Sheets
----------------------------------------------------------------------------------------------------
                                                                        JUNE 30,       DEC. 31,
(000's omitted Except Per Share Data)                                     2001           2000
                                                                      (unaudited)
----------------------------------------------------------------------------------------------------
<S>                                                                  <C>              <C>
ASSETS
  Cash and due from banks                                        $        14,402         13,459
  Federal funds sold                                                      21,100          7,250
                                                                     -------------------------------
    Total cash & cash equivalents                                         35,502         20,709
  Securities-available for sale                                           42,358         53,421
  Securities-held to maturity, (market value of $12,680
    at June 30, 2001 and $13,419 at December 31, 2000)                    12,510         13,283
                                                                     -------------------------------
      Total securities                                                    54,868         66,704
  Loans:
    Commercial                                                            99,573        101,090
    Tax exempt development loans                                             803            835
    Real estate loans - mortgage                                          16,028         10,514
    Real estate loans - construction                                      23,915         17,471
    Consumer loans                                                        61,813         65,198
                                                                     -------------------------------
  Total loans                                                            202,132        195,108
  Less: Allowance for loan losses                                         (3,097)        (2,932)
                                                                     -------------------------------
  Net loans                                                              199,035        192,176
  Loans held for sale                                                        264            187
  Bank premises and equipment                                              7,094          6,547
  Accrued interest receivable                                              1,660          1,924
  Other assets                                                             5,372          4,643
                                                                     -------------------------------
    Total assets                                                 $       303,795        292,890
                                                                     ===============================


LIABILITIES
  Deposits:
    Non-interest bearing deposits                                $        35,852         34,762
    Interest bearing deposits                                            226,059        213,894
                                                                     -------------------------------
      Total deposits                                                     261,911        248,656
  Federal funds purchased                                                      0          4,680
  Other borrowings                                                         2,638          1,151
  Accrued taxes, interest and other liabilities                            1,844          2,649
                                                                     -------------------------------
      Total liabilities                                                  266,393        257,136
                                                                     -------------------------------
SHAREHOLDERS' EQUITY
  Common stock - $2.5 par value
   1,730,264 shares issued (1,722,308 in Dec. 2000)                        4,326          4,305
  Surplus                                                                 26,207         26,016
  Retained earnings                                                        6,648          5,648
  Accumulated other comprehensive income (loss)                              221           (215)
                                                                     -------------------------------
    Total shareholders' equity                                            37,402         35,754
                                                                     -------------------------------
      Total Liabilities and Shareholders' Equity                 $       303,795        292,890
                                                                     ===============================
See notes to consolidated financial statements.
</TABLE>

                                       3
<PAGE>
Fentura Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
<TABLE>
                                                              Three Months Ended                   Six Months Ended
                                                                   June 30,                            June 30,
 (000's omitted except per share data)                      2001             2000               2001             2000
--------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                <C>                 <C>             <C>
INTEREST INCOME
  Interest and fees on loans                    $              4,497            4,728   $          9,081            9,181
  Interest and dividends on
   investment securities:
    Taxable                                                      681              829              1,448            1,669
    Tax-exempt                                                   166              165                336              336
  Interest on federal funds sold                                 233              197                498              272
                                                   ----------------------------------- -----------------------------------
       Total interest income                                   5,577            5,919             11,363           11,458

  INTEREST EXPENSE
    Deposits                                                   2,334            2,275              4,906            4,494
    Short-term borrowings                                         28              237                 75              314
                                                   ----------------------------------- -----------------------------------
       Total interest expense                                  2,362            2,512              4,981            4,808

  NET INTEREST INCOME                                          3,215            3,407              6,382            6,650
  Provision for loan losses                                      255              201                393              370
                                                   ----------------------------------- -----------------------------------
    Net interest income after
     provision for loan losses                                 2,960            3,206              5,989            6,280

  NON-INTEREST INCOME
    Service charges on deposit accounts                          520              486                999              953
    Fiduciary income                                             160              159                325              321
    Other operating income                                       328              356                730              665
    Gain on sale of loans                                        174               52                233               65
    Investment gains                                             157                0                157                0
                                                   ----------------------------------- -----------------------------------
      Total non-interest income                                1,339            1,053              2,444            2,004

  NON-INTEREST EXPENSE
    Salaries and benefits                                      1,506            1,486              3,085            2,941
    Occupancy of bank premises                                   206              196                421              398
    Equipment expense                                            354              408                680              781
    Other operating expenses                                     891              986              1,747            1,838
                                                   ----------------------------------- -----------------------------------
      Total non-interest expense                               2,957            3,076              5,933            5,958

  INCOME BEFORE TAXES                                          1,342            1,183              2,500            2,326
  Applicable income taxes                                        400              353                739              623
                                                   ----------------------------------- -----------------------------------
  NET INCOME                                    $                942              830   $          1,761            1,703
                                                   =================================== ===================================

  Per share:
  Net income - basic                            $               0.54             0.48   $           1.02             1.00
  Net income - diluted                          $               0.54             0.48   $           1.02             0.99
  Dividends                                     $               0.22             0.21   $           0.44             0.42
</TABLE>

See notes to consolidated financial statements.

                                       4
<PAGE>
Fentura Bancorp, Inc.
Consolidated Statements of Changes in Shareholders' Equity (Unaudited)
<TABLE>
                                                              Six Months                  Six Months
                                                                Ended                        Ended
-------------------------------------------------------------------------------------------------------
                                                               June 30,                    June 30,
(000's omitted)                                                  2001                        2000
-------------------------------------------------------------------------------------------------------
<S>                                                          <C>                      <C>
COMMON STOCK
  Balance, beginning of period                          $             4,305         $            3,555
    Issuance of shares under
      Director stock purchase plan,
      Stock purchase plan, and
      Dividend reinvestment program                                      21                         22
   Impact of 20% stock dividend                                           0                        713
                                                            ----------------            ---------------
  Balance, end of period                                              4,326                      4,285

SURPLUS
  Balance, beginning of period                                       26,016                     18,317
    Issuance of shares under
      Director stock purchase plan,
      Stock purchase plan, and
      Dividend reinvestment program                                     191                        240
    Impact of 20% stock dividend                                          0                      7,267
                                                            ----------------            ---------------
  Balance, end of period                                             26,207                     25,824

RETAINED EARNINGS
  Balance, beginning of period                                        5,648                     11,078
    Net income                                                        1,761                      1,703
    Cash dividends declared                                            (761)                      (715)
    Impact of 20% stock dividend                                          0                     (7,980)
                                                            ----------------            ---------------
  Balance, end of period                                              6,648                      4,086

ACCUMULATED OTHER COMPREHENSIVE
  INCOME (LOSS)
  Balance, beginning of period                                         (215)                    (1,085)
    Change in unrealized gain (loss)
    on securities, net of tax                                           436                       (192)
                                                            ----------------            ---------------
  Balance, end of period                                                221                     (1,277)
                                                            ----------------            ---------------
TOTAL SHAREHOLDERS' EQUITY                              $            37,402         $           32,918
                                                            ================            ===============
</TABLE>
See notes to consolidated financial statements.

                                       5
<PAGE>
Fentura Bancorp, Inc.
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
                                                                     Six Months Ended
                                                                          June 30,
----------------------------------------------------------------------------------------
(000's omitted,
 Except Per Share Data)                                              2001        2000
----------------------------------------------------------------------------------------

OPERATING ACTIVITIES:
<S>                                                               <C>           <C>
  Net income                                                         $1,761      $1,703
 Adjustments to reconcile net income to cash
    Provided by Operating Activities:
      Depreciation and amortization                                     427         510
      Provision for loan losses                                         393         370
      Amortization (accretion) on securities                            (25)        (25)
      Loans originated for sale                                      (1,792)     (2,930)
      Proceeds from the sale of loans                                 1,948       2,971
      Gain in sales of loans                                           (233)        (65)
      Gain on investment securities                                    (157)          0
      Decrease (increase) in interest receivable                        264        (201)
      Decrease (increase) in other assets                              (954)      1,408
      Increase (decrease) in accrued taxes,
        Interest, and other liabilities                                (805)       (173)
                                                                ------------------------
Total Adjustments                                                      (934)      1,865
                                                                ------------------------
Net Cash Provided By (Used In) Operating Activities                     827       3,568
                                                                ------------------------

Cash Flows From Investing Activities:

  Net decrease in deposits with other banks                               0           0
  Proceeds from maturities of investment activities - HTM               773         248
  Proceeds from maturities of investment activities - AFS             2,998       1,518
  Proceeds from calls of investment securities - AFS                 12,566           0
  Proceeds from sales of investment securities - AFS                  3,667           0
  Purchases of investment securities - HTM                                0           0
  Purchases of investment securities - AFS                           (7,325)          0
  Net increase in loans                                              (7,252)    (10,282)
  Capital expenditures                                                 (974)     (1,152)
                                                                ------------------------
Net Cash Provided By (Used in) Investing Activities                   4,453      (9,668)

Cash Flows From Financing Activities:

  Net increase (decrease) in deposits                                13,255       6,263
  Net increase (decrease) in borrowings                              (3,193)     13,435
  Proceeds from stock issuance                                          212         257
  Cash dividends                                                       (761)       (715)
                                                                ------------------------
Net Cash Provided By (Used In) Financing Activities                   9,513      19,240

NET INCREASE IN CASH AND CASH EQUIVALENTS                           $14,793     $13,140

CASH AND CASH EQUIVALENTS - BEGINNING                               $20,709     $13,614
CASH AND CASH EQUIVALENTS - ENDING                                  $35,502     $26,754
                                                                ========================

CASH PAID FOR:
  INTEREST                                                           $5,051      $4,670
  INCOME TAXES                                                       $1,100        $627
</TABLE>

See notes to consolidated financial statements.

                                       6
<PAGE>
Fentura Bancorp, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)
<TABLE>
                                                                      Six Months Ended
(000's Omitted)                                                            June 30,
                                                                       2001          2000
                                                              ----------------------------
<S>                                                             <C>             <C>
Net Income                                                           $1,761        $1,703
Other comprehensive income (loss), net of tax:
  Unrealized holding gains (losses) arising
    During period                                                      $540         ($192)
  Less: reclassification adjustment for
    gains included in net income                                       $104            $0
                                                              ----------------------------
Other comprehensive income (loss)                                      $436         ($192)
                                                              ----------------------------
Comprehensive income                                                 $2,197        $1,511
                                                              ============================
</TABLE>


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

Note 1.  Basis of presentation

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information  and the  instructions  for Form - 10Q and  Article  9 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
notes  required  by  generally  accepted  accounting   principles  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 six months ended June 30, 2001 are not
necessarily  indicative  of the results that may be expected for the year ending
December  31,  2001.  All share and per share  amounts  have been  retroactively
adjusted to reflect the 20% stock  dividend  paid on May 26,  2000.  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, 2000.


                                       7
<PAGE>
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 are
presented below for the three and six months ended June 30, 2001 and 2000:
<TABLE>
                                                   Three Months Ended  Six Months Ended
                                                    June 30,                   June 30,
                                               2001         2000          2001          2000
                                               ----         ----          ----          ----
<S>                                         <C>         <C>            <C>            <C>
Basic Earnings Per Common Share:
 Numerator
  Net Income                                 $942,000     $830,000     $1,761,000     $1,703,000
                                             ========     ========     ==========     ==========

Denominator
 Weighted average common shares
  Outstanding                               1,728,190    1,711,525      1,726,006      1,709,593
                                            =========    =========      =========      =========

Basic earnings per common share                 $0.54        $0.48          $1.02          $1.00
                                                =====        =====          =====          =====

Diluted Earnings Per Common Share:
 Numerator
  Net Income                                $ 942,000     $830,000     $1,761,000     $1,703,000
                                            =========     ========     ==========     ==========

Denominator
 Weighted average common shares
  Outstanding for basic earnings per
  Common share                              1,728,190    1,711,525      1,726,006      1,709,593

Add:  Dilutive effects of assumed
  Exercises of stock options                    3,884        5,126          3,607          5,409
                                                -----        -----          -----          -----

 Weighted average common shares
  And dilutive potential common
  Shares outstanding                        1,732,074    1,716,651      1,729,614      1,715,002
                                            =========    =========      =========      =========

Diluted earnings per common share               $0.54        $0.48          $1.02          $0.99
                                                =====        =====          =====          =====
</TABLE>

Stock  options for 6,975  shares of common stock for the three month and the six
month  periods  ended June 30, 2001 and 2000 were not  considered  in  computing
diluted earnings per common share because they were not dilutive.

Note 3. 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.

                                       8
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
         of Operations

This item  provides a narrative  discussion  and  analysis  of the  consolidated
financial  condition  and results of operations  of Fentura  Bancorp,  Inc. (the
Corporation),  together  with its  operating  subsidiaries,  The State  Bank and
Davison State Bank (the Banks), for the six months ended June 30, 2001 and 2000.
The  supplemental   financial  data  included   throughout  should  be  read  in
conjunction with the primary financial  statements  presented on pages 3 through
7. It provides a more detailed and comprehensive review of the operating results
and financial  position  than could be obtained  from the  financial  statements
alone.

Table 1           Selected Financial Data
<TABLE>
                                                                   Six Months Ended
                                                                       June 30,
$ in thousands except per share data and ratios                  2001             2000
                                                             (unaudited)         (unaudited)
---------------------------------------------------------------------------------------------
<S>                                                        <C>                 <C>
Summary of Consolidated Statements of Income:
Interest Income                                                     $11,363          $11,458
Interest Expense                                                      4,981            4,808
                                                           ----------------------------------
Net Interest Income                                                   6,382            6,650
Provision for Loan Losses                                               393              370
                                                           ----------------------------------
Net Interest Income after Provision for Loan Losses                   5,989            6,280
Total Other Operating Income                                          2,444            2,004
Total Other Operating Expense                                         5,933            5,958
                                                           ----------------------------------
Income Before Income Taxes                                            2,500            2,326
Provision for Income Taxes                                              739              623
                                                           ----------------------------------
Net Income                                                           $1,761           $1,703
                                                           ==================================
Net Income Per Share - Basic                                          $1.02            $1.00
Net Income Per Share - Diluted                                        $1.02            $0.99

Other Financial and Statistical Data:
Tier 1 Capital to Risk Weighted Assets                                14.91%           13.85%
Total Capital to Risk Weighted Assets                                 16.15%           15.10%
Tier 1 Capital to Average Assets                                      12.19%           12.66%
Total Cash Dividends                                                   $760             $715
Book Value Per Share                                                 $21.65           $19.21
Cash Dividends Paid Per Share                                         $0.44            $0.42
Period End Market Price Per Share                                    $27.90           $30.00
Dividend Pay-out Ratio                                                43.15%           41.98%
Return on Average Shareholders' Equity                                10.34%           10.40%
Return on Average Assets                                               1.16%            1.16%
Net Interest Margin (FTE)                                              4.69%            5.01%

Summary of Consolidated Balance Sheets:                       June 30, 2001     June 30, 2000
                                                              -------------     -------------
Assets                                                             $303,795         $304,199
Securities                                                           54,868           65,854
Loans                                                               202,132          201,478
Deposits                                                            261,911          253,314
Shareholders' Equity                                                 37,402           32,918
Total Equity to Assets                                                12.31%           10.82%
</TABLE>

                                       9
<PAGE>
Results of Operations
Table 1  summarizes  selected  financial  data for the six months ended June 30,
2001 and 2000.  As  indicated  in Table 1 earnings for the six months ended June
30, 2001 were  $1,761,000  compared to  $1,703,000  for the same period in 2000.
Earnings  increased  as a  result  of an  increase  in  operating  income  and a
reduction  in  operating  expenses.  The  Corporation  continues to work on core
banking activities and new opportunities in our current and surrounding  markets
remain strong and  accordingly,  management  believes  overall  performance will
remain strong throughout 2001. However,  performance in 2001 could be negatively
affected by any further softening of the economy.

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 six months ended June 30, 2001 the Corporation's  return on
average  assets was 1.16%  compared  to 1.16% for the same  period in 2000.  Net
income per  share-basic  was $1.02 in the first six months of 2001  compared  to
$1.00 for the same period in 2000.

Net Interest Income

Net  interest  income and average  balances  and yields on major  categories  of
interest-earning  assets  and  interest-bearing  liabilities  for the six months
ended June 30, 2001 and 2000 are summarized in Table 4. Net interest  income and
average balances and yields on major categories of  interest-earning  assets and
interest-bearing  liabilities  for the three months ended June 30, 2001 and 2000
are summarized in Table 3. The effects of changes in average  interest rates and
average balances are detailed in Table 2 below.

Table 2
<TABLE>
                         CHANGES IN NET INTEREST INCOME
                        DUE TO CHANGES IN AVERAGE VOLUME
                               AND INTEREST RATES

                                                  SIX MONTHS ENDED JUNE 30,
                                                    2001 COMPARED TO 2000
                                                     INCREASE (DECREASE)
                                                           DUE TO:
                                             -----------------------------------------
                                                            YIELD/
(000'S OMITTED)                                  VOL         RATE        TOTAL
--------------------------------------------------------------------------------------
<S>                                          <C>            <C>          <C>
TAXABLE SECURITIES                              ($182)       ($39)       ($221)
TAX-EXEMPT SECURITIES                               0           0            0
FEDERAL FUNDS SOLD                                347        (121)         226

TOTAL LOANS                                       143        (243)        (100)
LOANS HELD FOR SALE                                 0           0            0
                                             -----------------------------------------

    TOTAL EARNING ASSETS                          308        (403)         (95)


INTEREST BEARING DEMAND DEPOSITS                  (49)          0          (49)
SAVINGS DEPOSITS                                   17        (117)        (100)
TIME CD'S $100,000 AND OVER                       106          22          128
OTHER TIME DEPOSITS                               233         200          433
OTHER BORROWINGS                                 (239)          0         (239)
                                             -----------------------------------------

    TOTAL INTEREST BEARING LIABILITIES             68         105          173
                                             -----------------------------------------

         NET INTEREST INCOME                     $240       ($508)       ($268)
                                             =========================================
</TABLE>

                                       10
<PAGE>
As indicated in Table 2, during the six months ended June 30, 2001, net interest
income decreased compared to the same period in 2000, principally because of the
increase in interest  expense  resulting  from growth of  certificate of deposit
balances and the increase in interest rates paid on these  deposits,  which rose
with market rates throughout 2000.

Net interest income (displayed  without  consideration of full tax equivalency),
average balance sheet amounts, and the corresponding yields for the three months
ended June 30, 2001 and 2000 are shown in Table 3. Net  interest  income for the
three months ended June 30, 2001 was  $3,215,000 a decrease of $192,000 over the
same period in 2000.  This  represents  a decrease of 5.6%.  The primary  factor
contributing  to the net  interest  income  decrease was an increase in interest
expense from deposit  growth and the reduction in interest  rates by the Federal
Reserve Board.

Net interest income, average balance sheet amounts, and the corresponding yields
for the six  months  ended  June 30,  2001  and  2000 are  shown in Table 4. Net
interest income for the six months ended June 30, 2001 was $6,382,000 a decrease
of $268,000  over the same period in 2000.  This  represents a decrease of 4.0%.
The primary  factor  contributing  was the  reduction  in interest  rates by the
Federal Reserve Board.

Management  expects a continued strong local economy throughout 2001 and because
of this  believes  loan  demand  will  become  stronger  in the  upcoming  year.
Accordingly,  the Corporation will aggressively seek out new loan  opportunities
while continuing to maintain sound credit quality. Management also believes that
continued  loan growth and managing  deposit  rates will  stabilize net interest
income in 2001.

As  indicated  in  Table 3, for the  three  months  ended  June  30,  2001,  the
Corporation's   net  interest   margin  (without   consideration   of  full  tax
equivalency)  was 4.58%  compared  with 4.89% for the same period in 2000.  This
decline is attributable to the impact of interest rate reductions by the Federal
Reserve Board and the increase in interest expense due to certificate of deposit
growth.  The decrease in interest  rates impacts the net interest  income in the
short  term  because  loans  start to reprice  quicker  than our  deposits  thus
reducing net interest income.

Average earning assets increased 0.4% or approximately  $1,010,000 comparing the
second  quarter  of 2001 to the same time  period in 2000.  Loans,  the  highest
yielding  component of earning  assets,  represented  71.5% of earning assets in
2001 compared to 71.6% in 2000. Average interest bearing  liabilities  decreased
2.5% or $5,755,000  comparing the second quarter of 2001 to the same time period
in 2000.  Non-interest  bearing  deposits  amounted to 14.2% of average  earning
assets in the second quarter of 2001 compared with 12.4% in the same time period
on 2000.

Management  continually monitors the Corporation's balance sheet in an effort to
insulate net interest  income from  significant  swings  caused by interest rate
volatility. If market rates continue to change in 2001, corresponding changes in
funding costs will be considered to limit any potential  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
<PAGE>
Table 3
<TABLE>
                                                                     THREE MONTHS ENDED JUNE 30,
AVERAGE BALANCES AND RATES                                     2001                               2000
(000's omitted)                                    AVERAGE     INCOME/    YIELD/       AVERAGE     INCOME/   YIELD/
ASSETS                                             BALANCE     EXPENSE     RATE        BALANCE     EXPENSE    RATE
                                                -------------------------------------------------------------------
<S>                                               <C>          <C>        <C>        <C>           <C>       <C>
 Interest bearing deposits in Banks                     $0          $0    0.00%            $0          $0    0.00%
 Investment securities:
   U.S. Treasury and Government Agencies            43,459         657    6.06%        51,728         824    6.41%
   State and Political                              13,890         166    4.79%        14,398         165    4.61%
   Other                                             1,302          24    7.39%         1,077          15    5.60%
                                                --------------------------------   --------------------------------
   Total Investment Securities                      58,651         847    5.79%        66,110         994    6.05%
   Fed Funds Sold                                   21,462         233    4.35%        13,224         197    5.99%
 Loans:
   Commercial                                      120,667       2,734    9.09%       104,528       2,517    9.68%
   Tax Free                                            825          11    5.35%           548           7    5.14%
   Real Estate-Mortgage                             15,060         306    8.15%        26,205         583    8.95%
   Consumer                                         64,663       1,443    8.95%        69,679       1,617    9.33%
                                                --------------------------------   --------------------------------
 Total loans                                       201,215       4,494    8.96%       200,960       4,724    9.45%
 Allowance for Loan Loss                            (2,992)                            (3,156)
 Net Loans                                         198,223       4,494    9.09%       197,804       4,724    9.61%
                                                --------------------------------   --------------------------------
Loans Held for Sale                                    177           3    6.80%           201           4    8.00%
                                                --------------------------------   --------------------------------
 TOTAL EARNING ASSETS                             $281,505      $5,577    7.95%      $280,495      $5,919    8.49%
                                                -------------------------------------------------------------------
 Cash Due from Banks                                10,687                             11,251
 All Other Assets                                   13,783                             13,048
                                                -----------                        -----------
TOTAL ASSETS                                      $302,983                           $301,638
                                                -----------                        -----------
LIABILITIES & SHAREHOLDERS' EQUITY:
  Deposits:
   Non-Interest bearing - DDA                      $39,917                            $34,776
   Interest bearing - DDA                           35,950         150    1.67%        41,660         183    1.77%
   Savings Deposits                                 70,929         502    2.84%        68,122         585    3.45%
   Time CD's $100,000 and Over                      32,770         450    5.51%        33,263         514    6.22%
   Other Time CD's                                  84,936       1,232    5.82%        74,302         993    5.38%
                                                --------------------------------   --------------------------------
 Total Deposits                                    264,502       2,334    3.54%       252,123       2,275    3.63%
 Other Borrowings                                    1,823          28    6.16%        14,816         237    6.43%
                                                --------------------------------   --------------------------------
  INTEREST BEARING LIABILITIES                    $226,408      $2,362    4.18%      $232,163      $2,512    4.35%
                                                -------------------------------------------------------------------
 All Other Liabilities                               2,118                              1,277
 Shareholders' Equity                               34,540                             33,422
                                                -----------                        -----------
 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY         $302,983                           $301,638
                                                -----------            ---------   -----------            ---------
Net Interest Rate Spread                                                  3.76%                              4.14%
Impact of Non-Interest Bearing Funds on Margin                            0.82%                              0.75%
                                                                       ---------                          ---------
Net Interest Income /Margin                                     $3,215    4.58%                    $3,407    4.89%
                                                           =====================              =====================
</TABLE>

                                       12
<PAGE>
Table 4
<TABLE>

                                                                     SIX MONTHS ENDED JUNE 30,
AVERAGE BALANCES AND RATES                                   2001                               2000
(000's omitted)                                   AVERAGE     INCOME/    YIELD/      AVERAGE     INCOME/    YIELD/
ASSETS                                            BALANCE     EXPENSE     RATE       BALANCE     EXPENSE     RATE
                                                -------------------------------------------------------------------
<S>                                               <C>          <C>        <C>        <C>           <C>       <C>
 Interest bearing deposits in Banks                     $0          $0    0.00%            $0          $0    0.00%
 Investment securities:
   U.S. Treasury and Government Agencies            45,486       1,408    6.24%        51,182       1,638    6.44%
   State and Political                              14,064         336    4.82%        14,580         336    4.63%
   Other                                             1,062          40    7.60%         1,077          31    5.79%
                                                --------------------------------   --------------------------------
   Total Investment Securities                      60,612       1,784    5.94%        66,839       2,005    6.03%
   Fed Funds Sold                                   20,492         498    4.90%         8,984         272    6.09%
 Loans:
   Commercial                                      118,604       5,425    9.22%       103,273       4,885    9.51%
   Tax Free                                            812          21    5.22%           568          16    5.66%
   Real Estate-Mortgage                             15,291         668    8.81%        25,761       1,118    8.73%
   Consumer                                         65,717       2,960    9.08%        67,747       3,155    9.37%
                                                --------------------------------   --------------------------------
 Total loans                                       200,424       9,074    9.13%       197,349       9,174    9.35%
 Allowance for Loan Loss                            (2,984)                            (3,070)
 Net Loans                                         197,440       9,074    9.27%       194,279       9,174    9.50%
                                                --------------------------------   --------------------------------
Loans Held for Sale                                    183           7    7.71%           192           7    7.33%
                                                --------------------------------   --------------------------------
 TOTAL EARNING ASSETS                             $281,711     $11,363    8.13%      $273,364     $11,458    8.43%
                                                -------------------------------------------------------------------
 Cash Due from Banks                                10,852                             10,991
 All Other Assets                                   13,753                             13,119
                                                -----------                        -----------
TOTAL ASSETS                                      $303,332                           $294,404
                                                -----------                        -----------
LIABILITIES & SHAREHOLDERS' EQUITY:
  Deposits:
   Non-Interest bearing - DDA                      $39,732                            $33,718
   Interest bearing - DDA                           35,977         330    1.85%        41,449         370    1.80%
   Savings Deposits                                 68,855       1,052    3.08%        67,848       1,161    3.44%
   Time CD's $100,000 and Over                      36,160       1,085    6.05%        32,586         964    5.95%
   Other Time CD's                                  83,937       2,439    5.86%        75,180       1,999    5.35%
                                                --------------------------------   --------------------------------
 Total Deposits                                    264,661       4,906    3.74%       250,781       4,494    3.60%
 Other Borrowings                                    2,284          75    6.62%         9,517         314    6.63%
                                                --------------------------------   --------------------------------
  INTEREST BEARING LIABILITIES                    $227,213      $4,981    4.42%      $226,580      $4,808    4.27%
                                                -------------------------------------------------------------------
 All Other Liabilities                               2,321                              1,368
 Shareholders' Equity                               34,066                             32,738
                                                -----------                        -----------
 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY         $303,332                           $294,404
                                                -----------            ---------   -----------            ---------
Net Interest Rate Spread                                                  3.71%                              4.16%
Impact of Non-Interest Bearing Funds on Margin                            0.86%                              0.73%
                                                                       ---------                          ---------
Net Interest Income /Margin                                     $6,382    4.57%                    $6,650    4.89%
                                                           =====================              =====================
</TABLE>
                                       13
<PAGE>
ALLOWANCE AND PROVISION FOR LOAN LOSSES

The allowance  for loan losses (ALL)  reflects  management's  judgment as to the
level  considered  appropriate to absorb losses  inherent in the loan portfolio.
Fentura's  subsidiary banks'  methodology in determining the adequacy of the ALL
includes a review of  individual  loans,  historical  loss  experience,  current
economic  conditions,  portfolio trends, and other pertinent  factors.  Although
reserves have been allocated to various portfolio  segments,  the ALL is general
in nature and is available for the portfolio in its entirety.  At June 30, 2001,
the ALL was $3,097,000,  or 1.53% of total loans. This compares with $3,257,000,
or 1.62%,  at June 30, 2000.  The  reduction of the ALL as a percentage of total
loans  reflects a reduction in the allowance for loan losses and increased  loan
totals.  Management  feels that a lower  allowance to gross loans is appropriate
given the changes in the portfolio mix and overall asset quality.

The  provision  for loan losses was $393,000 in the first six months of 2001 and
$370,000  for the same  time  period  in 2000.  The  Corporation  increased  the
provision in 2001  compared to 2000 to fund the  allowance  for loan losses to a
level  management  feels is  necessary  to  cover  losses  inherent  in the loan
portfolio, particularly considering the growth in the loan portfolio in the 2001
period.

Table 5 also  summarizes  loan losses and recoveries for the first six months of
2000 and 2001.  During the first six months of 2001 the Corporation  experienced
net  charge-offs of $228,000,  compared with net  charge-offs of $74,000 for the
same time period in 2000.  Accordingly,  the net charge-off  ratio for the first
six months of 2001 was .11% compared to .04% for the same time period in 2000.

The Corporation  maintains formal policies and procedures to control and monitor
credit risk.  Management  believes the  allowance for loan losses is adequate to
meet normal credit risks in the loan portfolio. The Corporation's loan portfolio
has no  significant  concentrations  in any one  industry  nor 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 may not be  performing as agreed.
Therefore,  in  light  of the  aforementioned,  and  assuming  continued  strong
economic conditions and asset quality,  management expects a modest reduction to
the allowance for loan losses as a percentage to gross loans in 2001. Of course,
should  economic  conditions  deteriorate  management  may need to increase  the
provision  for loan losses and maintain or increase  the ALL as a percentage  of
gross loans.  Non-performing  loans are discussed  further in the section titled
"Non-Performing Assets".

Table 5           ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
<TABLE>
                                                             Six Months Ended
                                                                  June 30
(000's omitted)                                             2001           2000
                                                       ------------------------------
<S>                                                     <C>             <C>
Balance at Beginning of Period                              $2,932         $2,961
                                                       ------------------------------
Charge-Offs:
    Commercial, Financial and Agriculture                      (15)            (9)
    Real Estate-Mortgage                                         0              0
    Installment Loans to Individuals                          (278)          (176)
      Total Charge-Offs                                       (293)          (185)
                                                       ------------------------------
Recoveries:
    Commercial, Financial and Agriculture                        2             71
    Real Estate-Mortgage                                         0              0
    Installment Loans to Individuals                            63             40
      Total Recoveries                                          65            111
                                                       ------------------------------
Net Charge-Offs                                               (228)           (74)
                                                       ------------------------------
Provision                                                      393            370
                                                       ------------------------------
Balance at End of Period                                    $3,097         $3,257
                                                       ==============================
Ratio of Net Charge-Offs to Gross Loans                      0.11%          0.04%
                                                       ==============================
</TABLE>
                                       14
<PAGE>
NON-INTEREST INCOME

TABLE 6
<TABLE>
                                                   Three Months Ended       Six Months Ended
Analysis of Non-Interest Income                          June 30                 June 30
(000's omitted)                                    2001        2000        2001       2000
----------------------------------------------------------------------------------------------
<S>                                                <C>         <C>         <C>         <C>
Service Charges on Deposit Accounts                   $520        $486       $999        $953
Gain on Sale of Mortgages                             $174         $52       $233         $65
Mortgage Servicing Fees                                 $1         $63        $34        $128
Fiduciary Income                                      $160        $159       $325        $321
Other Operating Income                                $327        $293       $696        $537
Investment Gains                                      $157          $0       $157          $0
                                              ------------------------------------------------
  Total Non-Interest Income                         $1,339      $1,053     $2,444      $2,004
                                              ================================================
</TABLE>

Non-interest  income increased in the six months ended June 30, 2001 as compared
to the same  period in 2000,  due to an increase in the gain on sale of mortgage
loans,  and  an  increase  in  the  gain  on  sale  of  investment   securities.
Non-interest  income  increased in the second quarter of 2001 as compared to the
same quarter in 2000, due to increase in other operating income, gain on sale of
mortgages and gain on the sale of investment  securities.  Overall  non-interest
income  was  $2,444,000  in the six  months  ended  June 30,  2001  compared  to
$2,004,000 for the same period in 2000.  These figures  represent an increase of
21.9%.  Table  6  provides  a  more  detailed  breakdown  of the  components  of
non-interest income than can be found in the income statement on page 4.

The most  significant  category  of  non-interest  income is service  charges on
deposit  accounts.  These  fees were  $999,000  in the first six  months of 2001
compared to $953,000 for the same period of 2000. This represents an increase of
4.8%. The service charges for the second quarter of 2001 were $520,000  compared
to $486,000 in the same period in 2000.

Gains on the sale of  mortgage  loans  originated  by the  Banks and sold in the
secondary market were $233,000 in the six months ended June 30, 2001 and $65,000
in the same  period in 2000.  For the second  quarter of 2001,  gains on sale of
mortgages  were  $174,000  compared to $52,000 for the same period in 2000.  The
change is due to the increase in residential mortgage refinance activity and new
loan volumes due to the downward movement of market interest rates.

Mortgage  servicing  fees were  $34,000  in the six months  ended June 30,  2001
compared  to  $128,000  in the same time  period in 2000.  This is a decline  of
$94,000 or 73.4%.  Mortgage  servicing  fees for the second quarter of 2001 were
$1,000  compared  to  $63,000  in the  same  period  of  2000.  The  decline  is
attributable to the sale of a significant portion of the Corporation's  serviced
loans,  in the  last  quarter  of  2000.  There  is also a  significant  decline
comparing  these  fees from the first  quarter  of 2001 at $34,000 to the second
quarter 2001 at $1,000.  This decline is also attributable to the sale that took
place at the end of 2000.  Servicing  income was  recognized  in January of 2001
until these serviced loans were actually transferred to the purchaser.

Fiduciary  income  increased  $4,000  in the six  months  ended  June  30,  2001
comparing  to the same period in the prior year.  This 0.1%  increase in fees is
attributed  to growth in the assets under  management  within the  Corporation's
Trust Department.

Investment  gains on the sale of securities  totaled $157,000 for the six months
ended June 30, 2001  compared to $0 for the same  period in 2000.  Fentura  took
advantage of the interest rate  decreases and sold three  securities  for a gain
totaling $157,000.

Other operating income increased $159,000 to $696,000 in the first six months of
2001  compared to $537,000 in the same time period in 2000.  This is an increase
of 29.6%.  Other  operating  income for the second  quarter of 2001 of  $327,000
compared  to  $293,000  in the same  period  of  2000.  Other  operating  income
increased  due to  increases  in income from the sale of official  checks and an
increase in income from the sale of consumer investment products.

                                       15
<PAGE>
Non-Interest Expense

TABLE 7
<TABLE>
                                                   Three Months Ended       Six Months Ended
Analysis of Non-Interest Expense                        June 30,                June 30,
-------------------------------------------------------------------------------------------------
(000's omitted)
                                                  2001        2000       2001         2000
------------------------------------------------------------------------------------------------
<S>                                              <C>         <C>        <C>          <C>
Salaries and  Benefits                            $1,506      $1,486     $3,085       $2,941
Equipment                                           $354        $408       $680         $781
Net Occupancy                                       $206        $196       $421         $398
Office Supplies                                      $62         $87       $108         $161
Loan & Collection Expense                            $56         $85        $82         $206
Advertising                                          $94         $71       $168         $126
Other Operating Expense                             $679        $743     $1,389       $1,345
                                              --------------------------------------------------
  Total Non-Interest Expense                      $2,957      $3,076     $5,933       $5,958
                                              ==================================================
</TABLE>


Total non-interest  expense was $5,933,000 in the six months ended June 30, 2001
compared with $5,958,000 in the same period of 2000. This is a decrease of 0.4%.
This  decrease is largely  attributable  to an  decrease in loan and  collection
expense and equipment expenses.

Salary and benefit costs, Fentura's largest non-interest expense category,  were
$3,085,000 in the six months ended June 30, 2001,  compared with $2,941,000,  or
an  increase  of 4.9%,  for the same time  period in 2000.  Increased  costs are
primarily a result of a modest  increase in the number of employees.  The second
quarter showed a slight increase in the salaries and benefits due to an increase
in employee  benefit costs,  and an increase in salary costs in connection  with
the opening of the Davison State Bank.

During the six months  ended June 30,  2001  equipment  expenses  were  $680,000
compared to  $781,000  for the same  period in 2000,  a decrease  of 12.9%.  The
equipment  expenses  for the second  quarter of 2001 were  $354,000  compared to
$408,000 in the same period of 2000. The decreases in expenses are  attributable
to a reduction in equipment  maintenance  contracts and  equipment  depreciation
which decreased due to the roll off of fully depreciated assets.

Occupancy  expenses at $421,000  increased in the six months ended June 30, 2001
comparing to the same period in 2000 by $23,000 or 5.8%.  Occupancy expenses for
the second  quarter of 2001 were  $206,000  compared to $196,000  for the second
quarter of 2000. The increases are attributable to increases in facility repairs
and maintenance contracts expense.

During the six months  ended June 30, 2001 office  supplies  expense at $108,000
decreased  $53,000  comparing  to the $161,000 in expense for the same period in
2000.  Office  supplies for the second quarter of 2001 were $62,000  compared to
$87,000 in the same period of 2000.  The  decreases are  attributable  to volume
decreases of regular office supplies and preprinted forms in 2001.

Loan and  collection  expenses,  at $82,000,  were down $124,000  during the six
months ended June 30, 2001  comparing to the same time period in 2000.  The loan
and collection  expenses in the second quarter of 2001 were $56,000  compared to
$85,000 for the same period in 2000. The decreases are primarily attributable to
a decrease  in legal  expenses  in  connection  with  collection  efforts  and a
decrease in fees paid to dealers for indirect lending transactions.

Other  operating  expenses were $1,389,000 in the six months ended June 30, 2001
compared to  $1,345,000  in the same time period in 2000, an increase of $44,000
or 3.3%.  Other operating  expenses for the second quarter of 2001 were $679,000
compared to $743,000 in the same period of 2000. The increases are  attributable
to an increase in the amount of overdrawn  deposit  account  charge-offs  and an
increase in legal and consulting expenses.

                                       16
<PAGE>
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  investment
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.  Client  deposits are the primary  source of funding for earning  assets
while  short term debt and other  sources of funds  could be  utilized if market
conditions and liquidity needs change.

The Corporation's total assets equaled $304 million at June 30, 2001 compared to
December 31, 2000 total assets of $293 million.  Loans  comprised 66.5% of total
assets at June 30, 2001  compared to 66.6% at December 31,  2000.  Loans grew $7
million,  with real estate and  construction  loans leading the advance by $12.0
million  and the other  loan  categories  experiencing  reductions  The ratio of
non-interest  bearing  deposits  to total  deposits  was 13.9% at June 30,  2001
compared to 14.0% at December 31, 2000.  Interest  bearing  deposit  liabilities
totaled $226  million at June 30, 2001  compared to $214 million at December 31,
2000. Deposits grew $13.2 million and Fed Funds Purchased decreased $4.7 million
to make up the change in interest bearing liabilities at June 30, 2001.

Bank premises and equipment  increased $547,000 to $7.1 million at June 30, 2001
comparing to $6.5 million at December 31, 2000. The increase is  attributable to
the renovation of an existing facility and the construction  completion of a new
headquarters for Davison State Bank.

NON-PERFORMING ASSETS

Non-performing  assets  include  loans on which  interest  accruals have ceased,
loans  which  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 8 represents  the levels of
these assets at June 30, 2001 and December 31, 2000.

Non-performing  assets decreased  modestly at June 30, 2001 compared to December
31, 2000.  This  decrease is  attributable  to a decrease in both loans that are
non-accrual and loans which are past due 90 days or more and still accruing. The
non-accrual  loans decreased because of both charge-offs taken in the first half
of 2001 and loans which were made current by the borrower, and loans past due 90
days or more and still  accruing  decreased  due to the  collection  of payments
making certain loans current.

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.

                                       17
<PAGE>
Table 8

Non-Performing Assets and Past Due Loans
<TABLE>
                                                    June 30,      December 31,
                                                      2001            2000
                                                 --------------------------------
<S>                                               <C>             <C>
Non-Performing Loans:
  Loans Past Due 90 Days or More & Still
    Accruing                                         $155,000       $489,000
  Non-Accrual Loans                                   547,000        731,000
  Renegotiated Loans                                        0              0
                                                 --------------------------------
    Total Non-Performing Loans                        702,000      1,220,000
                                                 --------------------------------
Other Non-Performing Assets:
  Other Real Estate                                    37,000              0
  REO in Redemption                                         0              0
  Other Non-Performing  Assets                        114,000        159,000
                                                 --------------------------------
    Total Other Non-Performing Assets                 151,000        159,000
                                                 --------------------------------
Total Non-Performing Assets                          $853,000     $1,379,000
                                                 ================================
Non-Performing Loans as a % of
  Total Loans                                           0.35%          0.63%
Allowance for Loan Losses as a % of
  Non-Performing Loans                                441.17%        240.33%
Accruing Loans Past Due 90 Days or
  More to Total Loans                                   0.08%          0.25%
Non-performing Assets as a % of
  Total Assets                                           .28%          0.47%
</TABLE>

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 six
months of 2001.  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  secondary  liquidity  is
provided by the  investment  portfolio.  As of June 30, 2001 federal  funds sold
represented  7.4% of total  assets,  compared to 2.5% at December 31, 2000.  The
Corporation  regularly monitors liquidity to ensure adequate cash flows to cover
unanticipated reductions in the availability of funding sources.

                                       18
<PAGE>
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  is
reviewed,  analyzed, and compared to policy and objectives to assure present and
future financial viability.

As  indicated  in the  statement  of  cash  flows,  cash  flows  from  financing
activities  increased  $9,513,000  in the  first  six  months of 2001 due to the
increase in deposits. Comparatively, in the first six months of 2000, cash flows
from financing activities increased $19,240,000 because of increases in deposits
and borrowings.  Cash flows from investing activities were $3,541,000 during the
first six months of 2000.  The  increases in investing  activities at the end of
the second  quarter  of 2001,  were  offset by  maturing  and called  investment
securities.

CAPITAL MANAGEMENT

Total  shareholders'  equity rose 4.6% to  $37,402,000 at June 30, 2001 compared
with $35,754,000 at December 31, 2000. The  Corporation's  equity to asset ratio
was 12.3% at June 30, 2001 and 12.2% at December 31,  2000.  The increase in the
amount of capital was obtained through  retained  earnings and the proceeds from
the  issuance of new shares.  In the first six months of 2001,  the  Corporation
increased its cash dividends by 4.8% to $.44 per share compared with $.42 in the
same period in 2000.

As  indicated  on the balance  sheet at December  31, 2000 the  Corporation  had
accumulated other  comprehensive  loss of $215,000 compared to accumulated other
comprehensive  income at June 30, 2001 of  $221,000.  The  increase to an income
position is attributable  to the downward  movement of market interest rates and
the interest rate structures on those  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 9, at June 30,
2001 and at December 31, 2000, 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
receive a designation of "well capitalized".

                                       19
<PAGE>
Table 9
<TABLE>
                                                                Capital Ratios
                               -----------------------------------------------------------------------------
                                  Regulatory Minimum                   Fentura Bancorp, Inc.
                                For "Well Capitalized"      June 30,      December 31,        June 30,
                                                              2001            2000              2000
<S>                                       <C>                <C>             <C>               <C>
  Total Capital to risk
      weighted assets                     10%                16.15%          16.20%            15.10%
  Tier 1  Capital to risk                  6%                14.91%          15.00%            13.85%
      weighted assets
  Tier 1 Capital to average
      Assets                               5%                12.19%          12.10%            12.66%
</TABLE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The information concerning quantitative and qualitative disclosures about market
risk contained and incorporated by reference on pages 40 through 42 in Fentura's
Annual Report on Form 10-K, is here incorporated by reference.

Fentura Bancorp, 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 six  months of 2001,  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 2001 compared to 2000.

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.

                                       20
<PAGE>
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 10 sets forth the distribution of re-pricing of the Corporation's  earning
assets and interest  bearing  liabilities as of June 30, 2001, 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.

Table 10                                    GAP ANALYSIS JUNE 30, 2001
<TABLE>

(000's Omitted)                                    Within     Three         One to      After
                                                   Three      Months-         Five       Five
                                                   Months     One Year       Years      Years       Total
                                                -------------------------------------------------------------
<S>                                             <C>           <C>          <C>          <C>         <C>
Earning Assets:
  Federal Funds Sold                            $  21,100     $      0     $      0     $      0    $  21,100
  Investment Securities                             5,751        8,074       11,373       29,670       54,868
  Loans                                            78,322       18,846       81,307       23,657      202,132
  Loans Held for Sale                                 264            0            0            0          264
                                                -------------------------------------------------------------
    Total Earning Assets                        $ 105,437     $ 26,920     $ 92,680     $ 53,327    $ 278,364
                                                =============================================================

Interest Bearing Liabilities:
  Interest Bearing Demand Deposits              $  39,571     $      0     $      0     $      0    $  39,571
  Savings Deposits                                 74,695            0            0            0       74,695
  Time Deposits Less than $100,000                 12,429       43,112       26,029          154       81,724
  Time Deposits Greater than $100,000              12,498       13,014        4,557            0       30,069
  Other Borrowings                                  1,500            0          245          893        2,638
                                                -------------------------------------------------------------
    Total Interest Bearing Liabilities          $ 140,693     $ 56,126     $ 30,831     $  1,047    $ 228,697
                                                =============================================================
Interest Rate Sensitivity GAP                   $ (35,256)    $ (29,206)   $ 61,849     $ 52,280    $  49,667
Cumulative Interest Rate
  Sensitivity GAP                               $ (35,256)    $ (64,462)   $ (2,613)    $ 49,667
Interest Rate Sensitivity GAP                                                              50.93
                                                    (0.75)        (0.48)       3.01
Cumulative Interest Rate
  Sensitivity GAP Ratio                             (0.75)       (0.67)       (0.99)        1.22
</TABLE>

As indicated in Table 10, 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 would 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 our Gap position at June 30, 2000 and
the  change in net  interest  income  for the six  months  ended  June 30,  2001
compared to the same time period in 2000. At June 30, 2000 the  Corporation  was
negatively  gapped  through  one year and since  that time  interest  rates have
lowered  considerably,  yet net interest income declined comparing the first six
months of 2001 to the same period in 2000. This occurred because certain deposit
categories,  specifically  interest bearing demand and savings, did not re-price
at the  same  time or at the  same  level  as  asset  portfolios.  Additionally,
simulation modeling,  which measures the impact of upward and downward

                                       21
<PAGE>
movements of interest  rates on interest  margin and the market value of equity,
indicates  that an upward  movement  of interest  rates would not  significantly
reduce net interest income.



FORWARD LOOKING STATEMENTS

This report contains  "forward  looking  statements" as that term is used in the
securities  laws.  All  statements  regarding our 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  statement  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 filings with the Securities and Exchange
Commission.

                                       22
<PAGE>
                           PART II - OTHER INFORMATION


Item 5. Submission of Matters to a Vote of Security Holders

The  Corporation's  annual  meeting was held on April 25, 2001.  The only matter
submitted  to a vote  of  shareholders  at  the  meeting  was  the  election  of
directors.  The  following  directors  were each  elected  to a three  year term
expiring in 2004 based on the vote set opposite their names:

                                                                   Abstentions
                               For            Authority               and
                               ---            Withheld          Broker Non-Votes
                                              --------          ----------------
David A. Duthie              1,227,645        65,296                  -0-
J. David Karr                1,251,984        40,957                  -0-
Thomas P. McKenney           1,251,467        41,474                  -0-


Item 6. Exhibits and Reports on Form 8-K

a.       Exhibits - None

b.       Report on Form 8-K - None.





                                       23
<PAGE>
                                   Signatures



In accordance with 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 Bancorp, Inc.




Date  August 14, 2001                           By   /s/  Donald L. Grill
                                                     Donald L. Grill
                                                     President & CEO


Date  August 14, 2001                           By   /s/  Ronald L. Justice
                                                     Ronald L. Justice
                                                     Chief Financial Officer



                                       24