OAK Financial Corporation, Parent Company of Byron Bank, Reports Increase in Total Assets and Net Income in the Second Quarter

Business Wire, July 23, 2007

Highlights Include:

* Second Quarter Net Income of $1,752,000, up 4%

* Earnings Per Share of $0.65, up 3%

* Announced the Addition of New Board Member Stephanie Leonardos

* Total Assets surpass $700 Million milestone, increasing 13% to $713 Million at the end of the Second Quarter.

BYRON CENTER, Mich. -- OAK Financial Corporation (OTCBB:OKFC), a West Michigan based bank holding company, reported second quarter net income of $1,752,000, up 4% from the $1,690,000 reported in the second quarter of 2006. Basic and diluted earnings per share in the second quarter of 2007 were $0.65, an increase of 3% over the $0.63 reported for the second quarter of 2006. On a year-to-date basis, net income and earnings per share are each up 7% over the year-to-date period in 2006. The growth in net income is a result of modest growth in net interest income resulting from the growth in earning assets and strong growth in non-interest income.

"Thus far, 2007 has presented a number of significant, perhaps unprecedented, challenges for Michigan banks of all sizes. Those challenges are particularly apparent in net income and asset quality," said Patrick K. Gill, President and CEO. "Against that backdrop, I'm pleased to report that our net income for the quarter increased 4% over the same period in 2006," Gill added. "We are, however, not immune to the dynamics of the environment in which we operate. Our net interest margin continues to be under pressure as a result of intense competition and the on-going economic challenges in the Michigan economy continue to present challenges to our industry and to our company," Gill concluded.

Byron Bank's net interest income continues to be essentially flat. The increase in net interest income associated with the growth of earning assets is largely being off-set by net interest margin compression. Although average earning assets are up approximately 11% from a year ago, the bank's net interest income is only up 5% from the second quarter of 2006. The decline in the net interest margin is a long-term trend in the financial services industry and is compounded by intense local competition for loans and deposits.

The provision for loan losses was $157,000 higher in the second quarter of 2007 compared to the second quarter of 2006. The increase is a result of an increase in the specific reserve associated with one particular loan and overall continued weakness in the Michigan economy.

The significant increase in service charges on deposit accounts, mortgage banking revenue, and investment revenue contributed to the considerable growth in non-interest income for the quarter. During the second quarter of 2007, non-interest income represented 25.3% of total revenue compared to 21.4% during the second quarter of 2006.

Total operating expenses in the second quarter of 2007 increased $596,000, or 12%, compared to the second quarter of 2006. The increase in operating expenses include a continued investment in staff to support our recent growth, greater marketing expenditures designed to enhance our visibility, increased loan collection and professional expenses associated with the increase in non-performing loans, increased occupancy and equipment cost associated with the renovation of several branches and the main office, and a higher level of support for charitable causes.

Compared to June 30, 2006, total assets increased $84 million, or 13%, total loans increased $67 million, or 14%, and total deposits increased $50 million, or 10%. We continue to be very pleased with our growth in loans and deposits in a very competitive market place. Our ability to grow at these rates, in this environment, is a reflection of the outstanding team of banking professionals at Byron Bank. We continue to be well capitalized, with an equity-to-asset ratio of 9.5% at June 30, 2007, compared to 9.8% at December 31, 2006.

Non-performing assets to total loans increased from .22% at December 31, 2006 to .82% at June 30, 2007. The increase is the result of placing two large credits on non-accrual status. The increase in the provision for loan losses in the second quarter of 2007 reflects the specific reserves have been established for these two credits. On a positive note, annualized net loan losses as a percent of average loans remained very low at .05% during the second quarter of 2007 compared to .03% during the second quarter of 2006.

OAK Financial Corporation owns Byron Bank and 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. Our Byron Insurance Agency subsidiary provides products, such as property and casualty, life, disability and long-term care insurance. 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.