<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
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Commission file number 0-23550
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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
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(Address of Principal Executive Offices)
(810) 629-2263
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(Issuer's telephone number)
None
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(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
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: August 7, 1997
--------------
Class - Common Stock ($5 par value) Shares Outstanding - 685,455
Transitional Small Business Disclosure Format (Check one): Yes ; No X
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<PAGE> 2
Fentura Bancorp, Inc.
Index to Form 10-QSB
Page
----
Part I - Financial Information
Item 1 - Consolidated Financial Statements 3
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II - Other Information
Item 1 - 6 Miscellaneous Information 14
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
FENTURA BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
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JUN 30, DEC 31, JUN 30,
(000's omitted Except Per Share Data) 1997 1996 1996
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ASSETS
Cash and due from banks $ 9,790 11,921 11,122
Federal funds sold 8,150 8,450 6,000
----------------------------
Total Cash & Cash Equivalents 17,940 20,371 17,122
Interest bearing deposits with banks 95 95 95
Investment securities-held to maturity,
at cost (market value of $6,800, and
$8,060 at June 30, 1997 and
1996, respectively) 6,772 6,530 8,103
Investment securities-avail for sale,
at market 48,773 44,355 39,194
----------------------------
Total investment securities 55,545 50,885 47,297
Loans:
Commercial 78,341 78,699 74,267
Tax exempt development loans 670 751 1,041
Real estate loans - mortgage 14,491 15,924 15,164
Real estate loans - construction 19,563 15,467 19,286
Consumer loans 67,384 64,388 60,298
----------------------------
Total loans 180,449 175,229 170,056
Less: Reserve for loan losses (2,930) (2,836) (2,810)
----------------------------
Net loans 177,519 172,393 167,246
Loans held for sale 1,119 1,007 881
Bank premises and equipment 4,375 4,794 4,706
Accrued interest receivable 1,810 1,835 1,816
Other assets 3,328 3,001 2,997
----------------------------
Total assets $261,731 254,381 242,160
============================
<PAGE> 4
LIABILITIES
Deposits:
Non-interest bearing deposits $ 27,172 28,206 27,530
Interest bearing deposits 203,674 195,843 186,587
----------------------------
Total deposits 230,846 224,049 214,117
Federal Funds Purchased 0 0 0
Other borrowings 3,025 2,369 2,695
Accrued taxes, interest and
other liabilities 2,309 3,854 2,849
----------------------------
Total liabilities 236,180 230,272 219,661
----------------------------
STOCKHOLDERS' EQUITY
Common stock - $5 par value
685,455 shares issued (677,147 in Dec., 3,427 3,386 3,337
1996 and 667,514 in June, 1996)
Surplus 16,595 16,266 15,925
Retained Earnings 5,690 4,632 3,816
Unrealized loss on sec avail for sale (161) (175) (579)
----------------------------
Total stockholder's equity 25,551 24,109 22,499
----------------------------
Total liabilities and
stockholder's equity $261,731 254,381 242,160
============================
See notes to consolidated financial statements.
<PAGE> 5
FENTURA BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
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(000's omitted,
Except Per Share Data) 1997 1996 1997 1996
- ----------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans $ 4,464 4,282 $ 8,897 8,512
Interest and dividends on
investment securities:
Taxable 715 561 1,385 1,087
Tax-exempt 87 121 175 254
Int on deposits with banks 3 4 5 8
Interest on federal funds sold 82 81 173 186
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Total interest income 5,351 5,049 10,635 10,047
INTEREST EXPENSE
Deposits 2,266 2,049 4,474 4,113
Short-term borrowings 44 37 87 92
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Total interest expense 2,310 2,086 4,561 4,205
NET INTEREST INCOME 3,041 2,963 6,074 5,842
Provision for loan losses 156 150 312 330
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Net interest income after
provision for loan losses 2,885 2,813 5,762 5,512
NON-INTEREST INCOME
Service chrgs on dep accts 396 327 758 638
Fiduciary income 114 81 220 153
Other operating income 356 475 695 906
--------------- ----------------
Total non-interest income 866 883 1,673 1,697
NON-INTEREST EXPENSE
Salaries and benefits 1,226 1,124 2,515 2,217
Occupancy of bank premises 160 157 337 308
Equipment expense 354 330 693 632
Other operating expenses 792 920 1,595 1,702
Investment gains (losses) 0 2 0 67
--------------- ----------------
Total non-interest expense 2,532 2,533 5,140 4,926
NET INCOME BEFORE TAXES 1,219 1,163 2,295 2,283
Applicable income taxes 378 329 719 668
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NET INCOME $ 841 834 $ 1,576 1,615
=============== ================
Per share: (685,455 shares)
Net income .................. $ 1.23 1.22 $ 2.30 2.35
Dividends ................... $ 0.38 0.35 $ 0.76 0.71
See notes to consolidated financial statements.
<PAGE> 6
FENTURA BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED
JUNE 30,
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(000's omitted,
Except Per Share Data) 1997 1996
- ------------------------------------------------------------------------
OPERATING ACTIVITIES:
Net income $ 1,576 $ 1,614
Adjustments to reconcile net inc to cash
Provided by Operating Activities:
Depreciation and amortization 492 431
Provision for loan losses 312 330
Amortization (accretion) on securities 57 76
Loans originated for sale (10,415) (10,965)
Loans sold 10,303 11,009
Gain on investment securities 0 67
Decrease (increase) in interest receivable 25 (139)
Decrease (increase) in other assets (332) 561
Increase (decrease) in accrued taxes,
interest, and other liabilities (1,545) 286
---------------------
Total Adjustments (1,103) 1,656
---------------------
Net Cash Provided By (Used In) Operating Activities 473 3,270
---------------------
Cash Flows From Investing Activities:
Net decrease in deposits with other banks 0 95
Proceeds from maturities of inv activities - HTM 550 2,230
Proceeds from maturities of inv activities - AFS 4,537 9,935
Purchases of investment securities - HTM (797) (995)
Purchases of investment securities - AFS (8,988) (13,575)
Net (increase) in customer loans (5,438) (2,658)
Capital expenditures (73) (1,250)
---------------------
Net Cash Used in Investing Activities (10,209) (6,218)
Cash Flows From Financing Activities:
Net increase (decrease) in DDA/SAV deposits 1,907 (3,187)
Net increase (decrease) in Time deposits 4,890 5,819
Net increase (decr) in borrowing's 656 64
Proceeds from stock issuance 370 17
Cash dividends (518) (488)
---------------------
Net Cash Provided By (Used In) Financing Activities 7,305 2,225
NET DECREASE IN CASH AND CASH EQUIVALENTS ($2,431) ($723)
CASH AND CASH EQUIVALENTS - BEGINNING $ 20,371 $ 17,845
CASH AND CASH EQUIVALENTS - ENDING $ 17,940 $ 17,122
=====================
CASH PAID FOR:
INTEREST $ 4,471 $ 4,176
INCOME TAXES $ 631 $ 800
See notes to consolidated financial statements.
<PAGE> 7
FENTURA BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED ENDED
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June 30, June 30,
(000's omitted) 1997 1996
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COMMON STOCK
Balance, beginning of period $ 3,386 $ 3,335
Issuance of shares under
director stock purchase plan
and dividend reinvestment prog 41 2
Stock dividend 0 0
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Balance, end of period 3,427 3,337
SURPLUS
Balance, beginning of period 16,266 15,910
Issuance of shares under
director stock purchase plan
and dividend reinvestment prog 329 15
Stock dividend 0 0
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Balance, end of period 16,595 15,925
RETAINED EARNINGS
Balance, beginning of period 4,632 2,690
Net income 1,576 1,614
Cash dividends declared (518) (488)
--------- ----------
Balance, end of period 5,690 3,816
UNREALIZED GAIN ON SECURITIES
AVAILABLE FOR SALE
Balance, beginning of period (175) (55)
Change in unrealized gain (loss)
on securities, net of tax $83 14 (524)
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Balance, end of period (161) (579)
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TOTAL SHAREHOLDERS' EQUITY $ 25,551 $ 22,499
========= ==========
See notes to consolidated financial statements.
<PAGE> 8
FENTURA BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 -
10QSB 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,
1997 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1997.
Note 2. Reclassifications
Certain prior year amounts have been reclassified to conform to the
current year financial statement presentation.
<PAGE> 9
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis is intended to address significant
factors affecting the Corporation's consolidated financial statements during
the six months ended June 30, 1997 and 1996. It provides a more detailed and
comprehensive review of the operating results and financial position than could
be obtained from the financial statements alone.
SIX MONTHS, 1997 VERSUS SIX MONTHS, 1996
Net Interest Income
Net interest income, the principal source of earnings, is the amount of
interest income generated by earning assets (principally investment securities
and loans) less interest expense paid on interest bearing liabilities (largely
deposits and other borrowings). As indicated in the income statement on page 5
interest income for the six months ended June 30, 1997 was $10,635,000 compared
to $10,047,000 for the same period in 1996. This represents an increase of
5.9%. The primary factors contributing to the interest income increase are
growth in the Company's loan portfolio (the largest group of earning assets)
and investment securities. Also indicated in the income statement, interest
expense for the six months ended June 30, 1997 was $4,561,000 compared to
$4,205,000 for the same period in 1996. This represents an increase of 8.5%.
Increases in the Company's certificate of deposit balances, savings account
balances and interest rates caused the increase in interest expense. Balances
increased due to greater market penetration in existing markets, growth in new
market areas, and a change in consumer behavior toward certificates and savings
products as market interest rates increased.
ALLOWANCE AND PROVISION FOR LOAN LOSSES
The allowance for loan losses (ALL) reflects management's judgment as to the
level considered appropriate to absorb potential losses inherent in the loan
portfolio. Fentura's subsidiary, The State Bank's, methodology in determining
the adequacy of the ALL includes a review of individual loans and off-balance
sheet arrangements, 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, 1997, the ALL was
$2,930,000, or 1.62% of total loans. This compares with $2,810,000, or 1.65%,
at June 30, 1996.
The provision for loan losses was $312,000 for the first six months of 1997 and
$330,000 for the same period in 1996. The primary reason for decreasing the
provision was the maintenance of an adequate allowance.
NON-INTEREST INCOME
Non-interest income was $1,673,000 for the first half of 1997 and $1,697,000 in
the same period of 1996. This figure represents an decrease of 1.4% in 1997.
Table 1 provides a more detailed breakdown of the components of non-interest
income than can be found in the income statement on page 5.
The most significant category of non-interest income is service charges on
deposit accounts. These fees were $758,000 in the first half of 1997 and
$638,000 in the same period of 1996. This represents an increase of 18.8%
The increase occurred from the deposit growth the company experienced in its
existing and new markets from June 30, 1996 to June 30, 1997.
Gain on the sale of mortgage loans originated by the bank and sold in the
secondary market were $135,000 in the first six months of 1997 and $194,000 in
the same period in 1996. This 30.4%
<PAGE> 10
decrease occurred because of strong competitive pressures and a reduction in
the margins of these sold mortgage loans.
Gains on the sale of other real estate were $1,000 in the first six months of
1997 compared to $140,000 for the same period in 1996. This decrease occurred
because the Corporation began 1996 with several pieces of other real estate
which were sold in the second quarter. In 1997 the Corporation had and sold
fewer other real estate properties.
Fiduciary income increased $67,000 in the first six months of 1997 compared to
the same time period in the prior year. This 43.8% increase in fees is
attributed to growth in the assets under management within the Corporation's
Investment Trust Department.
Other operating income, which includes income from the sale of checks, safe
deposit box rent, mortgage servicing rights income, and other miscellaneous
income items, was $363,000 in the first six months of 1997 compared to $376,000
in the same period of 1996. This decrease of 3.5% is primarily attributable to
a one time credit insurance premium refund received in 1996 which was based on
loss experience for the preceding calendar year.
TABLE 1
SIX Months Ended
Analysis of Non-Interest Income June 30,
- ---------------------------------------------------------
(000's omitted)
1997 1996
- ---------------------------------------------------------
Service Charges on Deposit Accounts $ 758 $ 638
Gain on Sale of Mortgages 135 194
Gain on Sale of Real Estate Owned 1 140
Mortgage Servicing Fees 196 196
Fiduciary Income 220 153
Other Operating Income 363 376
-------- --------
Total Non-Interest Income $ 1,673 $ 1,697
======== ========
Non-Interest Expense
Total non-interest expense was $5,140,000 in the first half of 1997 compared
with $4,926,000 in the same period of 1996. This is an increase of 4.3%.
Salary and benefit costs, Fentura's largest non-interest expense category, were
$2,515,000 in the first six months of 1997, compared with $2,217,000 for the
first six months of 1996. 1997 salary costs represent an increase of 13.4%
over 1996. Increased costs are primarily a result of adding new positions to
staff two new branches opened in the last half of 1996.
During the first six months of 1997 equipment expenses were $693,000 compared
to $632,000 for the same period in 1996. Depreciation on equipment (mostly
computer hardware and software) for the new branch and increased costs for
maintenance contracts on the Corporation's computer systems are the primary
reasons for the increase in equipment expense.
Occupancy expenses associated with the Company's facilities were $337,000 in
the first half of 1997 compared to $308,000 in the same period of 1996. This
represents an increase of 9.4%. The primary reason for the increase in
occupancy expense is the cost associated with leasing and operating the two new
branch facilities and increases in costs associated with grounds maintenance.
Loan and collection expenses were $199,000 in the first half of 1997 compared
to $186,000 for the same period in 1996, an increase of 7.0%. The increase is
primarily attributable to an increase in indirect consumer loan volume and
accordingly, an increase in dealer reserve expense.
<PAGE> 11
FDIC assessment expense was $13,000 in the first six months of 1997 compared to
$1,000 in the same period of 1996. The increase is attributable to the FDIC's
reinstatement of required reserves.
In the first half of 1997, the Company did not experience a loss on security
transactions compared to $67,000 for the same period in 1996. The losses were
associated with the sale of investment securities which the Company sold in
order to reinvest in issues with higher interest rates.
Other operating expenses were $1,088,000 in the first half of 1997 compared to
$1,208,000 in the first half of 1996. The decrease in expense is attributable
to loss of $125,000 on a litigation settlement which occurred in the second
quarter of 1996.
TABLE 2
Six Months Ended
Analysis of Non-Interest Expense June 30,
- --------------------------------------------------------
(000's omitted)
1997 1996
- --------------------------------------------------------
Salaries and Benefits $2,515 $2,217
Equipment 693 632
Net Occupancy 337 308
FDIC Assessment 13 1
Office Supplies 128 127
Loan & Collection Expense 199 186
Advertising 167 180
Security Losses 0 67
Other Operating Expense 1,088 1,208
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Total Non-Interest Expense $5,140 $4,926
====== ======
LIQUIDITY AND INTEREST RATE RISK MANAGEMENT
Asset/Liability management procedures are 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. ALCO, which is comprised of key members
of management, meets regularly to review Fentura's financial performance and
soundness, including interest rate risk and liquidity exposure in relation to
present and perspective markets, business conditions, and product lines.
Accordingly, the committee adopts funding and balance sheet management
strategies that are intended to determine that earnings, liquidity, and growth
rates are 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 Bank'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 Bank's 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 1997 and 1996.
Primary liquidity is provided through short-term investments or borrowings
(including federal funds sold and purchased) and secondary liquidity is
provided by the investment portfolio. As of June 30, 1997 federal funds sold
represented 3.1% of total assets, compared to 2.5% at June 30, 1996. The
Corporation regularly monitors liquidity to ensure adequate cash flows to cover
unanticipated reductions in the availability of funding sources.
Interest rate risk is managed by controlling and limiting the level of earnings
volatility arising from rate movements. The Corporation 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.
<PAGE> 12
As indicated in the statement of cash flows, cash flows from financing
activities have increased due to growth in deposits. In the first six months
of 1997 time deposits increased $4,890,000 and demand and savings deposits
increased $1,907,000. Comparatively, in the first six months of 1996, cash
flows from financing activities were growth in Time deposits of $5,819,000 and
a decline of demand and savings deposits of $3,187,000. Cash flows from
investing activities were ($10,209,000) during the first six months of 1997 and
($6,218,000) in the same period of 1996. The primary reason for the increase
in investing activities was an increase in deposits creating funding for
increases in the investment and loan portfolios.
CAPITAL MANAGEMENT
Total shareholders' equity rose 13.6% to $25,551,000 at June 30, 1997 compared
with $22,499,000 at June 30, 1996. The Company's equity to asset ratio was
9.8% at June 30, 1997 and 9.3% at June 30, 1996. The increase in the amount of
capital was obtained through retained earnings and the proceeds from the
issuance of new shares. In the first half of 1997, the Company increased its
cash dividends by 7.0% to $.76 per share compared with $.71 in the first half
of 1996.
As indicated on the balance sheet on page 4, at June 30, 1997 the Company had
an unrealized loss on securities available for sale (AFS) of $161,000 compared
to an unrealized loss at June 30, 1996 of $579,000. This decrease in
unrealized loss is attributable to market interest rates and the interest rate
structures on those securities held in the Company's AFS portfolio.
SECOND QUARTER, 1997 VERSUS SECOND QUARTER, 1996
Net Interest Income
Net interest income, the principal source of earnings, is the amount of
interest income generated by earning assets (principally investment securities
and loans) less interest expense paid on interest bearing liabilities (largely
deposits and other borrowings). As indicated in the income statement on page 5
interest income for the three months ended June 30, 1997 was $5,351,000 and
compared to $5,049,000 for the same period in 1996. This represents an
increase of 6.0%. The primary factors contributing to the interest income
increase are growth in the Company's loan portfolio (the largest group of
earning assets) and investment securities. Also indicated in the income
statement, interest expense for the three months ended June 30, 1997 was
$2,310,000 compared to $2,086,000 for the same period in 1996. This
represents an increase of 10.7%. Increases in the Company's savings account
and certificate of deposit balances caused the increase in interest expense.
Balances increased due to greater market penetration in existing markets and
growth in new markets.
PROVISION FOR LOAN LOSSES
The provision for loan losses was $156,000 for the three months ended June 30,
1997 and $150,000 for the same period in 1996.
NON-INTEREST INCOME
Non-interest income was $866,000 in the second quarter of 1997 and $883,000 in
the same period of 1996. This figure represents an decrease of 1.9% in 1997.
Table 3 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 $396,000 in the second quarter of 1997 and
$327,000 in the same period of 1996. This represents an increase of 21.1%.
The increase occurred from the deposit growth the company experienced in its
existing and new markets throughout the last year.
<PAGE> 13
During the second quarter of 1997 there were no gains on the sale of other
real estate compared to $140,000 for the same period in 1996. This increase
occurred because the Corporation began 1996 with several pieces of other real
estate which were sold in the second quarter. In the second quarter of 1997
the Corporation had no other real estate properties.
Fiduciary income was $114,000 in the second quarter of 1997 compared to $82 in
the same period of 1996, an increase of $32,000 or 39.0%. The increase in
fees is attributed to growth in the assets under management within the
Corporation's Investment Trust Department.
TABLE 3
Three Months Ended
Analysis of Non-Interest Income June 30,
- -----------------------------------------------------------
(000's omitted)
1997 1996
- -----------------------------------------------------------
Service Charges on Deposit Accounts $ 396 $ 327
Gain on Sale of Mortgages 72 70
Gain on Sale of Real Estate Owned 0 140
Mortgage Servicing Fees 98 98
Fiduciary Income 114 82
Other Operating Income 186 166
--------- ---------
Total Non-Interest Income $ 866 $ 883
========= =========
Non-Interest Expense
Total non-interest expense was $2,532,000 in the second quarter of 1997
compared with $2,533,000 in the same period of 1996.
Salary and benefit costs, Fentura's largest non-interest expense category, were
$1,226,000 in the quarter ended June 30, 1997, compared with $1,124,000 for the
same period in 1996. 1997 salary costs represent an increase of 9.1% over
1996. Increased costs are primarily a result of adding new positions to staff
two new branches opened in the last half on 1996.
During the second quarter of 1997 equipment expenses were $354,000 compared to
$330,000 for the same period in 1996, an increase of 7.3%. Equipment (mostly
computer hardware and software) for the new branch and increased costs for
maintenance contracts are the primary reasons for the increase in equipment
expense costs.
FDIC assessment expense was $7,000 in the second quarter of 1997 compared to
$1,000 in the same period of 1996. The increase is attributable to the FDIC's
reinstatement of required reserves
Advertising expenses were $67,000 in the quarter ended June 30, 1997 compared
to $96,000 in the same quarter of 1996. This is a decrease of 30.2%. Expenses
associated with certain promotional and media related transactions were reduced
in 1997.
Other operating expenses were $556,000 in the second quarter of 1997 compared
to $659,000 in the same period of 1996. The decrease in expense is
attributable to loss of $125,000 on a litigation settlement which occurred in
the second quarter of 1996.
<PAGE> 14
TABLE 4
Three Months Ended
Analysis of Non-Interest Expense June 30,
- -----------------------------------------------------
(000's omitted)
1997 1996
- -----------------------------------------------------
Salaries and Benefits $1,226 $1,124
Equipment 354 330
Net Occupancy 160 157
FDIC Assessment 7 1
Office Supplies 65 69
Loan & Collection Expense 97 95
Advertising 67 96
Security Losses 0 2
Other Operating Expense 556 659
--------- ---------
Total Non-Interest Expense $2,532 $2,533
========= =========
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
The exhibits listed on the "Exhibit Index" on page 15 of this report are
incorporated herein by reference.
b. Report on Form 8-k
No reports on Form 8-k were filed for the quarter ended June 30, 1997.
<PAGE> 15
FENTURA BANCORP, INC.
1997 Quarterly Report on Form 10Q-SB
EXHIBIT INDEX
Exhibit
No. Exhibit Location
- ------- ----------------------------------------------------------- ----------
4.1 Dividend Reinvestment Plan *****
10.1 Equipment Sale Agreement between The State Bank and ITI, Inc.
dated May 31, 1989 *
10.2 Master Equipment Lease Agreement between The State Bank and
Unisys Finance Corporation dated September 6, 1989 *
10.3 Software License Agreement between The State Bank and ITI, Inc.
dated July 3, 1989 *
10.4 Lease of Site for Automated Teller Machines between The State
Bank and Bryce Felch dated November 6, 1986 *
10.5 Lease of Site for Automated Teller Machines between The State
Bank and VG's Food Center, Inc. dated January 1, 1992 *
10.6 Lease of Holly Branch Bank Site between The State Bank and Inter
Lakes Associates dated March 26, 1991 *
10.7 Lease of Davison Branch Bank Site between The State Bank and
VG's Food Center, Inc. dated April 27, 1993 *
10.8 Lease of Clarkston Branch Site between The State Bank and
Waldon Properties, Inc. dated January 24, 1994 ***
10.9 Lease of Site for Automated Teller Machines between The
State Bank and Russell and Joy Manser dated December 1, 1994 ***
10.10 Lease of Fenton Silver Parkway Branch site between
The State Bank and VG's Food Centers dated March 26, 1996 ****
10.11 Lease of Davison (second) Branch site between The
State Bank and VG'S Food Centers dated November 12, 1996 ******
10.12 Directors Stock Purchase Plan *****
10.13 Non-Employee Director Stock Option Plan *****
10.14 Form of Non-Employee Director Stock Option Agreement *****
10.15 Retainer Stock Plan for Directors *****
10.16 Employee Stock Option Plan *****
10.17 Form of Employee Stock Option Plan Agreement *****
10.18 Executive Stock Bonus Plan *****
<PAGE> 16
10.19 Stock Purchase Plan between The State Bank and Donald E.
Johnson, Jr., Mary Alice J. Heaton, and Linda J. LeMieux
dated November 27, 1996 ******
10.20 Severance Compensation Agreements between the registrant and
Donald L. Grill and Richard A. Bagnall dated March 20, 1997 *******
27.0 Financial Data Schedule
* Incorporated by reference to form 10-SB registration number 0-23550
** Incorporated by reference to form 8-K filed July 8, 1994
*** Incorporated by reference to form 10K-SB filed March 20, 1995
**** Incorporated by reference to form 10Q-SB filed May 2, 1996
***** Incorporated by reference to form 10K-SB filed March 27, 1996
****** Incorporated by reference to form 10K-SB filed March 20, 1997
******* Incorporated by reference to from 10Q-SB filed May 12, 1997
<PAGE> 17
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized .
Fentura Bancorp, Inc.
Date August 8, 1997 By /s/ Donald L. Grill
-------------- --------------------
Donald L. Grill
Director
President & CEO
Date August 8, 1997 By /s/ Ronald L. Justice
-------------- ----------------------
Ronald L. Justice
Vice President (Authorized Signer)
Chief Financial Officer
Cashier
<PAGE> 18
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 9,790
<INT-BEARING-DEPOSITS> 95
<FED-FUNDS-SOLD> 8,150
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 48,773
<INVESTMENTS-CARRYING> 6,772
<INVESTMENTS-MARKET> 6,800
<LOANS> 180,449
<ALLOWANCE> 2,930
<TOTAL-ASSETS> 261,731
<DEPOSITS> 230,846
<SHORT-TERM> 1,500
<LIABILITIES-OTHER> 2,649
<LONG-TERM> 1,185
0
0
<COMMON> 3,427
<OTHER-SE> 22,124
<TOTAL-LIABILITIES-AND-EQUITY> 261,731
<INTEREST-LOAN> 8,897
<INTEREST-INVEST> 1,565
<INTEREST-OTHER> 173
<INTEREST-TOTAL> 10,635
<INTEREST-DEPOSIT> 4,474
<INTEREST-EXPENSE> 4,561
<INTEREST-INCOME-NET> 6,074
<LOAN-LOSSES> 312
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 5,140
<INCOME-PRETAX> 2,295
<INCOME-PRE-EXTRAORDINARY> 2,295
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,576
<EPS-PRIMARY> 2.30
<EPS-DILUTED> 2.30
<YIELD-ACTUAL> 5.18
<LOANS-NON> 1,665
<LOANS-PAST> 192
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,836
<CHARGE-OFFS> 256
<RECOVERIES> 38
<ALLOWANCE-CLOSE> 2,930
<ALLOWANCE-DOMESTIC> 2,930
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
