EXHIBIT 99.1

April 27, 2011

To Our Shareholders:

I am pleased to report that Fentura achieved net income totaling $310,000 or $0.13 per diluted share for the first quarter 2011. This performance reflects a marked improvement over the first quarter of 2010 when we reported a loss of $483,000 or $0.22 per share. The year-to-year improvement in performance was primarily a result of a $340,000 reduction in the provision for loan losses and a $760,000 gain resulting from the sale of West Michigan Community Bank. Net interest income was down slightly when comparing the two periods, and primarily a result of balance sheet contraction strategies to enhance the overall capital ratios of the bank and holding company. Non interest income (net of the gain on sale) and non interest expense (net of sale expenses) were steady in comparing the 2010 and 2011 first quarter results.

As reflected on the attached consolidated balance sheets, total assets at March 31, 2011 reflect a $194,529,000 decline resulting from the sale of West Michigan Community Bank on January 31, 2011 and our efforts during the year to reduce the size of the balance sheet at The State Bank to maximize capital ratios. Following the sale of West Michigan Community Bank, Fentura Financial, Inc. returned to a regulatory well capitalized status, and The State Bank is also expected to return to a regulatory well capitalized level during the second quarter.

With a stabilizing balance sheet, improving operating margins and strengthened capital position, we remain optimistic about continued improvement in our operating performance for the future.

Sincerely,

Donald L. Grill
President & CEO

Fentura Financial Inc.
Consolidated Balance Sheets
(Dollars in thousands)
UNAUDITED

		Mar 31				Dec 31				Sep 30				Jun 30				Mar 31				Dec 31
		2011				2010				2010				2010				2010				2009
ASSETS
Cash and cash equivalents
Cash and due from banks		$	28,422			$	11,592			$	12,804			$	13,119			$	13,385			$	15,490
Short term investments			16,000				21,900				30,950				21,900				15,150				16,150
Total cash & cash equivalents			44,422				33,492				43,754				35,019				28,535				31,640
Securities:
Securities available for sale			44,870				41,875				38,141				27,925				31,981				33,939
Securities held to maturity			4,349				4,350				4,481				4,702				5,453				5,455
Total securities			49,219				46,225				42,622				32,627				37,434				39,394
Loans held for sale			486				850				1,877				1,386				1,046				229
Loans:
Commercial			145,533				150,179				155,875				163,069				167,177				164,163
Real estate — construction			9,279				9,597				10,807				12,391				14,363				21,904
Real estate — mortgage			19,035				19,046				20,136				21,079				21,958				23,681
Consumer			27,543				29,153				30,341				30,424				31,110				32,302
Total loans			201,390				207,975				217,159				226,963				234,608				242,050
Less: Allowance for loan losses			(9,015	)			(10,027	)			(11,456	)			(10,610	)			(9,686	)			(8,589	)
Net loans			192,375				197,948				205,703				216,353				224,922				233,461
Bank owned life insurance			5,835				5,800				5,764				6,024				5,985				5,947
Bank premises and equipment			10,302				10,335				10,490				10,651				10,818				10,994
Federal Home Loan Bank stock			740				740				806				806				806				806
Accrued interest receivable			1,060				1,050				1,036				1,154				1,386				1,289
Other Real Estate Owned			6,771				2,742				3,920				3,851				4,452				3,761
Assets of discontinued operations			—				122,968				130,996				139,053				184,543				185,273
Other assets			3,255				2,078				2,411				8,365				9,067				9,285
TOTAL ASSETS		$	314,465			$	424,228			$	449,379			$	455,289			$	508,994			$	522,079
LIABILITIES & SHAREHOLDERS’ EQUITY
LIABILITIES
Deposits:
Non-interest bearing deposits			59,017				55,044				54,555				56,097				53,529				53,113
Interest bearing deposits			220,153				220,933				239,172				232,523				245,360				258,438
Total deposits			279,170				275,977				293,727				288,620				298,889				311,551
Short-term borrowings			662				879				116				10				67				164
Federal Home Loan Bank Advances			954				954				954				954				981				981
Subordinated debentures			14,000				14,000				14,000				14,000				14,000				14,000
Liabilities of discontinued operations			—				113,321				121,659				129,579				171,910				172,077
Accrued interest, taxes & other liabilities			3,473				3,042				2,851				4,231				2,904				2,774
Total liabilities			298,259				408,173				433,307				437,394				488,751				501,547
STOCKHOLDERS’ EQUITY
Common stock — no par value 5,000,000 shares authorized			43,062				43,036				43,002				42,974				42,945				42,913
Retained earnings			(26,732	)			(27,042	)			(27,257	)			(24,920	)			(22,140	)			(21,657	)
Accumulated other comprehensive income (loss)			(124	)			61				327				(159	)			(562	)			(724	)
Total stockholders’ equity			16,206				16,055				16,072				17,895				20,243				20,532
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY		$	314,465			$	424,228			$	449,379			$	455,289			$	508,994			$	522,079
Common stock shares issued & outstanding			2,310,977				2,272,065				2,289,912				2,276,441				2,267,135				2,205,419
Asset Quality Ratios:
Non-Performing Loans as a % of Total Loans			11.72	%			6.61	%			6.35	%			6.46	%			6.06	%			5.45	%
Allowance for Loan Losses as a % of Non-Performing Loans			38.20	%			72.62	%			82.32	%			71.93	%			67.73	%			65.01	%
Accruing Loans Past Due 90 Days More to Total Loans			0.28	%			0.06	%			0.00	%			0.73	%			0.17	%			0.13	%
Non-Performing Assets as a % of Total Assets			10.10	%			4.10	%			4.10	%			4.41	%			4.07	%			3.77	%
Quarterly Average Balances:
Total Loans			203,035				203,277				224,170				232,237				240,828				254,810
Total Earning Assets			273,053				270,867				290,127				255,044				294,175				311,418
Total Shareholders’ Equity			16,656				16,713				18,260				19,870				20,750				20,281
Total Assets			349,539				432,033				457,986				477,761				513,830				530,250
Diluted Shares Outstanding			2,309,912				2,291,629				2,277,406				2,276,441				2,249,917				2,226,745

Fentura Financial Inc.
Consolidated Income Statements
(Dollars in thousands, except per share data)
UNAUDITED

		Three Months ended
		Mar 31				Dec 31				Sep 30				Jun 30				Mar 31
(prior periods restated with out DSB and WMCB)		2011				2010				2010				2010				2010
Interest income:
Interest & fees on loans		$	3,017			$	3,291			$	3,453			$	3,538			$	3,592
Interest & dividends on securities:
Taxable			279				213				224				219				225
Tax-exempt			45				45				46				92				112
Interest on federal funds sold			9				8				9				7				3
Total interest income			3,350				3,557				3,732				3,856				3,932
Interest expense:
Deposits			722				856				985				1,057				1,134
Borrowings			126				132				135				127				126
Total interest expense			848				988				1,120				1,184				1,260
Net interest income			2,502				2,569				2,612				2,672				2,672
Provision for loan losses			795				700				2,650				2,449				1,135
Net interest income after provision for loan losses			1,707				1,869				(38	)			223				1,537
Non-interest income:
Service charges on deposit accounts			296				320				341				359				425
Gain on sale of mortgage loans			68				283				214				123				81
Trust & investment services income			288				260				192				194				269
Gain (Loss) on sale of securities			5				(20	)			—				71				—
Other than temporary impairment loss			—				—				(307	)			—				—
Gain on sale of subsidiary			760				—				—				—				—
Other income and fees			540				541				498				589				340
Total non-interest income			1,957				1,384				938				1,336				1,115
Non-interest expense:
Salaries & employee benefits			1,673				1,600				1,573				1,595				1,619
Occupancy			284				284				309				311				321
Furniture and equipment			292				297				340				322				306
Loan and collection			306				338				296				272				373
Advertising and promotional			19				12				22				41				26
Loss on Equity Impairment			—				—				—				—				—
Other operating expenses			855				777				765				837				633
Total non-interest expense			3,429				3,308				3,305				3,378				3,278
Income (loss) from continuing operations before income tax			235				(55	)			(2,405	)			(1,819	)			(626	)
Federal income taxes (benefit)			30				106				(235	)			421				(314	)
Net income (loss) from continuing operations			205				(161	)			(2,170	)			(2,240	)			(312	)
Net Income (loss) from discontinued operations, net of tax			105				375				(165	)			(541	)			(171	)
Net Income (loss)		$	310			$	214			$	(2,335	)		$	(2,781	)		$	(483	)
Net Income (Loss) per share from continuing operations:
Basic and diluted earnings		$	0.09			$	(0.07	)		$	(0.95	)		$	(0.99	)		$	(0.14	)
Net Income (Loss) per share from discontinued operations:
Basic and diluted earnings		$	0.04			$	0.16			$	(0.07	)		$	(0.23	)		$	(0.08	)
Net Income (Loss) per share:
Basic and diluted earnings		$	0.13			$	0.09			$	(1.02	)		$	(1.22	)		$	(0.22	)
Performance Ratios:
Return on Average Assets			0.09	%			0.05	%			-0.51	%			-0.58	%			-0.09	%
Return on Average Equity			1.86	%			1.28	%			-12.79	%			-14.00	%			-2.33	%
Net Interest Margin (FTE)			3.76	%			3.66	%			3.62	%			3.76	%			3.78	%
Book Value Per Share		$	7.00			$	6.95			$	7.02			$	7.86			$	8.93
Net Charge-offs			1,806				1,315				2,095				1,908				178
Ratio of Net charge-offs to Gross Loans			0.90	%			0.63	%			0.96	%			0.84	%			0.08	%