SMB&T Press Release June 5, 2007

Press Release

Southern Michigan Ranked in Top 200 Banking Companies in U.S.

June 5, 2007

Coldwater, Michigan June 5, 2007--Southern Michigan Bancorp, Inc. (OTC Bulletin Board: SOMC.OB) was ranked among the top 200 banking organizations in the United States, according to SNL Financial data cited in the June 2007 edition of US Banker Magazine. US Banker, a leading financial trade publication, ranked community banks with under $1 billion in total assets by their three-year average return on equity.

The article “Top Banks focus on the ‘E’ in ROE” states that “The most successful community banks are increasingly focused on a strategy of managing their capital base to increase returns on equity.”

Southern Michigan’s 2006 ROE of 14.54 percent and average return over the 2004-2006 period of 14.23 percent ranked it 114th out of approximately 9,500 community banks nationwide. In addition, Southern Michigan was ranked first among Michigan-based financial institutions recognized for its superior financial performance.

“We are extremely proud that Southern was cited for providing excellent financial returns for its shareholders,” Chairman and Chief Executive Officer John H. Castle said. “Our directors, management team and bank staff have intently focused on generating strong earnings and performance while serving our local communities in the best possible manner with high value financial services.”

“The ranking also validates our strategic commitment to creating consistently increasing, long-term shareholder value. Our proposed acquisition of FNB Financial Corporation coupled with the recent opening of our Marshall office are key initiatives designed to deploy our community banking service delivery model to other Michigan markets,” he added.

Southern Michigan is a holding company and the parent company of Southern Michigan Bank & Trust. It is headquartered in Coldwater, Michigan, with total assets of $340.5 million, total deposits of $292.9 million and total shareholders’ equity of $29.1 million as of March 31, 2007. Southern Michigan Bank and Trust operates 11 branches within Branch, Calhoun and Hillsdale counties.