SMB&T Press Release February 21, 2007

Press Release

SOUTHERN MICHIGAN BANCORP, INC. REPORTS RECORD EARNINGS FOR THIRD CONSECUTIVE YEAR

February 21, 2007

Coldwater, Michigan, February 21, 2007: Southern Michigan Bancorp, Inc. (OTCBB: SOMC.OB) today reported net income for 2006 of $4,009,000, a 5.4% increase over the $3,802,000 reported in 2005. Earnings per diluted share were $2.26 for 2006, up from $2.12 for 2005. Outstanding loan and deposit balances increased $10,111,000 or 4.2% and $14,431,000 or 5.4%, respectively over year end 2005 levels.

Earnings for the fourth quarter of 2006 totaled $1,037,000, up 4.9% over the $989,000 reported for the fourth quarter of 2005. Earnings per diluted share were $.59 for the fourth quarter of 2006 compared with $.56 for the fourth quarter of 2005.

For the year ended December 31, 2006, Southern Michigan Bancorp, Inc. attained a return on average assets of 1.25% and a return on average equity of 14.54%.

John H. Castle, Chairman and Chief Executive Officer, commenting on the Company’s 2006 record financial performance, stated, “We are pleased to deliver the third consecutive year of record earnings to our shareholders. The 2006 net income of $4,009,000 marks the first time in our Company’s history that we have surpassed the $4 million in annual earnings milestone. When we consider the challenging rate environment, the strong competition for deposits, and the slowdown in real estate activity, we have an even greater appreciation for these results. We look forward to the challenges and opportunities that lie ahead in 2007."

Southern Michigan Bancorp, Inc. is a holding company and the parent company of Southern Michigan Bank and Trust. Southern Michigan Bank & Trust operates 11 offices throughout southern Michigan. For more information, please visit our website, www.smb-t.com.