OAK Financial Corporation, Parent Company of Byron Bank, Reports 20% Increase in Second Quarter Earnings

Business Wire, July 21, 2006

BYRON CENTER, Mich. -- OAK Financial Corporation (OTCBB:OKFC):

Highlights Include:

--Second Quarter Net Income of $1,690,000, up 20%

--Year-Over-Year Double Digit Growth in Total Assets, Loans and Deposits

--Declaration and Payment of a 10% Stock Dividend

OAK Financial Corporation (OTCBB:OKFC), a West Michigan based bank holding company, reported second quarter net income of $1,690,000, up 20% from the $1,410,000 reported in the second quarter of 2005. Basic and diluted earnings per share in the second quarter of 2006 were $0.69, an increase of 22% over the $0.57 reported for the second quarter of 2005. The increase in earnings during the second quarter is attributed to double digit increases in net interest income and non-interest income.

For the year-to-date period, net income was $3,257,000, up 23% from the $2,648,000 reported in the first half of 2005. Basic and diluted earnings per share for the first six months of 2006 were $1.33, an increase of 24% over the $1.07 reported for the first six months of 2005. The rise in net income for the year-to-date period is attributed to the increase in net interest income resulting from earning asset growth and margin improvement.

"As we have demonstrated, success in our business is the result of three key fundamentals: an outstanding team of professionals, a competitive suite of products and a passion for creating an unsurpassed experience for all of our constituents," said Patrick K. Gill, president and CEO. "While there is much yet to do, I am proud of our growing reputation as a banking organization with exceptional talent, cutting-edge products and an unwavering commitment to mutually-beneficial relationships. I am equally proud that we continue to expand our geographic horizons and, supported by our unique Mobile Banking courier service, do business throughout West Michigan," Gill continued.

During the second quarter of 2006, our net interest income increased 13.6% as a result of an increase in earning assets and a three basis point expansion of the net interest margin over the second quarter of 2005. On a year-to-date basis, our net interest income is up 15.3% as a result of a 14 basis point higher net interest margin and growth in earning assets when compared to the first half of 2005. In the second quarter of 2006, the net interest margin was 3.98% compared to 3.95% in the second quarter of 2005.

Total non-interest income increased $217,000, or 16%, from $1,354,000 in the second quarter of 2005 to $1,571,000 in the second quarter of 2006. The increase includes a 26% increase in deposit service charges and recognition of a deferred gain, $114,000 net of tax, on other bank real estate. These increases were partially off-set by a decline in mortgage banking income due to the drop in refinancing activities and the slowing housing market and declines in insurance and investment services revenue.

Total operating expenses in the second quarter of 2006 increased 9.9% compared to the second quarter of 2005. Year-to-date, total operating expenses have increased 9.4% from 2005 to 2006. In addition to regular merit increases, the increase in salary expense includes staff additions, including the staff increases associated with opening the Wayland Office, an increase in sales incentives paid as a result of a very successful deposit account acquisition campaign, and an increase in the management bonus accrual associated with bank performance.

Total assets increased $38 million from December 31, 2005 to June 30, 2006, or an annualized rate of 13%. Total loans and deposits increased $31 million and $32 million respectively, from December 31, 2005 to June 30, 2006. At June 30, 2006, total loans increased at an annualized growth rate of 14% and total deposits increased at an annualized rate of 13%. The company continues to be well capitalized, with an equity-to-asset ratio of 9.9% at June 30, 2006, compared to 10.3% at December 31, 2005.

Non-performing assets to total loans declined to .24% from .40% at December 31, 2005 and .28% a year ago. Annualized net loan losses as a percent of average loans is .04% for the first six-months of 2006 compared to .02% during the first six-months of 2005. Both the non-performing asset and net charge-off percentages compare very favorably to other Michigan banks.

OAK Financial Corporation is a single bank holding company for Byron Bank, which provides traditional banking services and products through thirteen banking offices serving thirteen communities in Kent, Ottawa and Allegan counties in western Michigan. Byron Bank owns a subsidiary, Byron Investment Services, which offers mutual fund products, securities brokerage services, retirement planning services, investment management and advisory services. Insurance products, such as property and casualty, life, disability and long-term care insurance, are provided through the Byron Insurance Agency subsidiary. For information regarding stock transactions, please contact Kent King Securities at 1-888-804-8891, Howe Barnes at 1-800-800-4693, Royal Securities at 616-538-2550 or Stifel, Nicolaus & Co., Inc. at 616-942-1717.