Byron Center State Bank Expects to Increase Its Provision for Loan Losses in the Second Quarter.

Business Editors

O.A.K. Financial Corporation (OKFC), the holding company of Byron Center State Bank, O.A.K. Financial Services and the Dornbush Insurance Agency, announced today that it is anticipating second quarter results to be impacted by an increase in the loan loss provision.

The bank's loan loss provision is expected to be approximately $2 million in the second quarter, compared to $600,000 in the first quarter of 2002 and $610,000 during the second quarter of 2001. The significant increase is a result of increased net charge-offs, a change in the company's loan rating system, and a continued weak economy.

Higher net charge-offs have been experienced in the commercial lending and indirect consumer lending business areas. Underwriting standards have been reviewed and tightened. The bank's indirect consumer loan portfolio has been intentionally reduced by approximately 15% since October 2001 to help lower risk in this area. Additionally, the bank changed its commercial loan rating system during the second quarter of 2002, resulting in the downgrading of several large loans. Finally, the continued economic slowdown has impacted some of the bank's customers, making it difficult for them to repay their loans according to their loan terms. The bank currently has approximately $7 million in non-performing loans, compared to $5.6 million reported at the end of the first quarter of this year. Bank management will continue to work closely with these customers to reduce the level of non-performing loans.

Because of the increased loan loss provision, management estimates net income (loss) for the second quarter will be minimal. The loan provision is expected to return to more normal levels in the third and fourth quarters.

Management has implemented an aggressive plan, including formation of a special team, designed to develop and implement changes to improve overall asset quality.

"Although we are not pleased with the need for the additional provision this quarter, we have confidence in the future prospects for our Company and the Bank. We are well positioned in good markets and our capital continues to be well above regulatory guidelines for 'well capitalized' banks," said James Luyk, the Company's and Bank's chief financial officer and chief operation officer.

Second quarter earnings are expected to be released in late July/early August.

O.A.K. Financial Corporation is an established and progressive provider of banking, insurance, and investment products. The 11 branch Byron Center State Bank had assets of $512 million at March 31, 2002.

Cautionary Statement: This press release contains certain forward-looking statements that involve risks and uncertainties. When used in this release, the words "believe, "expect," "potential," and similar expressions identify forward-looking statements. These statements include, but are not limited to, statements concerning future growth and assets and profitability. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services, interest rates and fees for services. Readers are cautioned not to place undue reliance on these forward look statements, which speak only as of the date of this release.