SMB&T Press Release July 23, 2007

Press Release

SOUTHERN MICHIGAN BANCORP, INC. ANNOUNCES SECOND QUARTER EARNINGS

July 23, 2007

Coldwater, Michigan, July 23, 2007: Southern Michigan Bancorp, Inc. (OTCBB: SOMC.OB) reported a 5.1% increase in net income for the second quarter of 2007 compared to the same quarter of 2006. Net income increased to $1,069,000, or $.60 per share, for the quarter ended June 30, 2007. Net income for the same quarter a year ago was $1,017,000 or $.57 per share. For the six months ended June 30, 2007, Southern reported net income of $2,047,000 or $1.15 per share, compared to $1,943,000 or $1.10 per share for the six months ended June 30, 2006, representing an increase of 5.4%.

For the first half of 2007, Southern attained a return on average assets of 1.23% and a return on average equity of 13.84%, compared to first half 2006 results of 1.22% and 14.39%, respectively.

Total assets at June 30, 2007 were $331.3 million, compared to $329.9 million at December 31, 2006.

“Southern achieved solid financial performance during the second quarter of 2007,” said John H. Castle, Chairman and CEO. "We are pleased with the financial results for both the second quarter and year-to-date. The increase in net income is especially gratifying in light of the challenging interest rate and economic environment. We remain confident that our long-term strategic objectives and commitment to customer service will position us well for continued growth."

Southern Michigan Bancorp, Inc. is a holding company and the parent company of Southern Michigan Bank and Trust. It operates 11 offices in southern Michigan providing a broad range of consumer, business and wealth management services throughout the region. For more information please visit the Southern Michigan Bank & Trust website, www.smb-t.com.