September 21, 2004


Via Facsimile (616) 752-2500 and U.S. Mail

Mark Spitzley
Warner Norcross & Judd LLP
900 Fifth Third Center
111 Lyon Street, N.W.
Grand Rapids, Michigan 49503-2487

RE:	Southern Michigan Bancorp, Inc.
	Schedule 13E-3 filed September 3, 2004
	File no. 2-78178

	Preliminary Schedule 14A filed September 3, 2004
	File no. 0-9219

Dear Mr. Spitzley

We have the following comments on the above-referenced filings. The
defined terms we use here have the same meaning as in the proxy
statement, unless otherwise indicated.

Schedule 14A

1. Revise the proxy statement to include all of the disclosure
required by Schedule 13E-3 as to SMB Merger Company. To the extent
that SMB, as a newly-formed company, has not performed the analyses
required by that Schedule, you may specifically adopt the conclusions
and analyses of another filing person.

2. Please revise to indicate that the proxy statement and form of
proxy card are preliminary copies.  Refer to Rule 14a-6(e)(1).

3. Where appropriate please include the disclosure required by Items
1010(a)(3) and 1014(a)(4).

Summary

4. Either in this section or in your Questions and Answers section,
please include a brief discussion of dissenters rights.

5. It appears from the disclosure on page 6 under "Beneficial owners
of shares held in "street name," that a beneficial owner of fewer than
500 shares may not be "cashed out" in this merger, if that beneficial
owner holds through a record holder who in the
aggregate, holds more than 500 shares. Since shareholders who receive
this proxy statement may want to increase or decrease their holdings
in order to receive cash in the merger or remain as a continuing
shareholder, this discussion is critical and should be summarized here
or in the Question and Answer section.

6. Include bulleted disclosure highlighting the potential
disadvantages of the reverse stock split.

7. Please revise the penultimate bullet point to expressly indicate
whether the Board and Audit Committee believe the Rule 13e-3
transaction is both substantively and procedurally fair to the
company`s unaffiliated shareholders.  Refer to Question and Answer No.
21 of Exchange Act Release No. 34-17719.  Note that your fairness
discussion should focus on fairness to unaffiliated shareholders in
accordance with Item 1014(a) of Regulation M-A.  Please make
corresponding revisions throughout.

8. This proxy statement contains forward looking statements, page 3

9. Please delete the statement that the Company undertakes no
obligation to update, amend or clarify forward looking statements, or
explain how this statement is consistent with your obligations under
Rule 14a-9. Delete the comparable language on page 2 of the Schedule
13E-3, since it is also inconsistent with the requirements of Rule
13e-3(d)(2).

Special Factors, page 5

11. Reasons for the Merger, page 5

10. We note that your lists of costs in the second paragraph in this
section does not match the expenses discussed on page 21.  For
example, you indicate in the second paragraph that being subject to
the Exchange Act causes you to be subject to costs of approximately
$166,000 annually.  Dislcosure on page 21 indicates that the costs
were $90,700 in 2002 and $115,000 in 2003 and are estimated to be
$157,600 in 2004 and $318,000 in 2005.  Please explain from where you
derive the $166,000 figure.

11. Provide additional disclosure clarifying the nature of the one-
time costs, including quantification.  Provide similar disclosure on
page 21.

12. Expand your disclosure to explain the legal duties and risks that
will be relieved by virtue of the transaction.

Effects of the Merger, page 6

13. Please revise to ensure that you include a reasonably thorough
discussion of the detriments of the merger.  See Instruction 2 to Item
1013 of Regulation M-A.  For example, one of the adverse effects of
the merger will be that unaffiliated shareholders will be required to
surrender their shares involuntarily in exchange for a cash price
determined by your Board and that shareholders will not have the right
as a result of the reverse stock split to liquidate their shares at a
time and for a price of their choosing.

14. Also, revise to discuss that the company will no longer be subject
to the provisions of the Sarbanes-Oxley Act or the liability
provisions of the Exchange Act and that officers of the company will
no longer be required to certify the accuracy of its financial
statements.

Background of the Merger Proposal, page 6

15. When first referenced, identify the engagement partner, public
accounting firm, members of the Audit Committee and corporate legal
counsel.

16. Your disclosure on page 11 indicates that the company "has
recently repurchased shares for $24.25 per share."  Disclose in this
section the nature and timing of those stock repurchases. In addition,
why aren`t these purchases reflected in the table on page 33?

17. See the last comment above. We note that you had been considering
a going private transaction since 2002. Supplementally explain why
this share repurchase should not be considered the first step of the
going private transaction.

18. Expand your discussion of the background of the merger to describe
all meetings, negotiations, contacts, etc., addressing the possibility
of a going private transaction.  Identify the participants in and
initiator of each meeting or contact, disclose the date of each
meeting or contact and revise your discussion of those meetings to
provide the reader with more of a sense of the content of those
discussions.  In addition, please clarify when each of the events
discussed in this section occurred.  For example, it is not clear from
the last 4 paragraphs whether all the events discussed occurred at the
August 31, 2004 meeting.   Please revise to disclose the following,
which is not intended to be an exhaustive list:

* who first proposed the possibility of going private and when this
occurred;
* when the Audit Committee asked management to investigate the
possibility of going private; and
* the date when management contacted Donnelly for advice concerning
financial terms of the transaction and the date management retained
Donnelly.

19. The disclosure in this section indicates that the Audit Committee
met and reviewed investment bank proposals and authorized management
to engage Donnelly. In this and other respects, the role of the Audit
Committee seems to have been somewhat unusual here. Revise to discuss
the Audit Committee`s role, how it was determined and why, and the
scope of the Audit Committee`s authority. Your expanded disclosure
should indicate why the Audit Committee voted separately to approve
this transaction.

20. In this regard, discuss why the Board elected not to form a
special committee in connection with considering and structuring this
transaction. We note the disclosure on page 12, but that addresses
only why it chose not to have a representative to negotiate solely on
behalf of unaffiliated shareholders.

21. We note your disclosure that the board considered other methods of
going private.  Disclose whether the Board considered other methods to
reduce expenses other than going private.  If so discuss the
alternatives considered and why they were ultimately rejected.  See
Item 1013(b) of Regulation M-A.

22. Disclose whether the Board considered the possibility of a third
party buy-out.  If the Board did not consider other such options,
please explain why not.
NTE: I just made this a separate comment. I like to keep them short
and clear.

23. Revise to indicate whether Donnelly recommended the amount of
consideration to be paid in the going private transaction.  Refer to
Item 1015(b)(5) of Regulation M-A. If not, explain how the Board set
upon the merger consideration of $29.00 per share, after Donnelly set
the fair value at $26.31 per share as of June 30, 2004.

Fairness, Recommendation of the Board page 9

24. All of the factors listed in Instruction 2 to Item 1014 of
Regulation M-A are generally relevant to the fairness determination
and should be discussed in considerable detail.  Revise the discussion
to address all of the factors listed in Instruction 2 to Item 1014 of
Regulation M-A.  Also, we note that this section does not address the
factors listed in Instruction 2(ii), (iv) and (vi).  If the board did
not consider one or more of the factors, state that and explain why
the factor(s) were not deemed material or relevant.  See Question and
Answer No. 20 of Exchange Act Release No. 34-17719.  Also revise to
quantify the company`s net book value, liquidation value and going
concern value on a per share basis, if known.

25. With respect to liquidation value, explain your statement (on page
11) that the Board did not consider it. That is, why was this factor
given little or no weight in the context of this transaction?

26. If the Board relied upon the analysis of another, such as the
financial advisor, with respect to any of the factors itemized in
Instruction 2 to Item 1014 of Regulation M-A then the board must
expressly adopt the conclusion and analyses of the other.  For
example, if the board is relying on Donnelly`s analysis of historical
trading prices, then it must specifically adopt such analysis as its
own.

Negative factors for remaining shareholders, page 10

27. Please clarify whether the Board considered the 100 share block
trading limitation when as a negative factor for remaining
shareholders.

28. Disclose whether the Board considered that the fairness opinion
did not utilize a marketability or minority interest discount for any
of its analyses.

Fair Price Considerations, page 10

29. Quantify the going concern value discussed in the second bullet
point on page 11.

30. Indicate the effect of submitting this transaction to the vote of
shareholders, despite the fact that such a vote is not required under
Michigan law. For example, will approval by the shareholders affect
the standard of legal review if this transaction is challenged in
court?

Other Considerations, page 12

31. The disclosure here about the potential conflicts of interest of
directors (and other affiliates) should also appear in the Summary or
Question and Answer sections of the proxy statement. The discussion
there should indicate the percentage of shares to be held by officers
and directors before and after the merger.

32. The disclosure in the last paragraph (first sentence) on page 12
states that the discussion of the factors considered by the Board of
Directors "is not intended to be exhaustive." However, Item 1014(b) of
Regulation M-A requires you to describe and discuss all material
factors considered by the Board. Please revise or advise.

Opinion of Independent Financial Advisor, page 20

33. Describe the method of selection of Donnelly. See Item 1015(b)(3)
of Regulation M-A.

34. Please expand your summary of Donnelly valuation report to include
a more detailed summary of the "numerous assumptions" that it made, as
indicated in Appendix B of the proxy materials.

35. Provide us with the material referred to in the second and third
bullet points on page 13.    We may have further comments.

36. We note your reference on page 14 to forecasts prepared by
management and provided to Donnelly. Disclose all of the financial
forecasts that management provided to Donnelly and any projections
that management helped the advisor to develop.  In addition, disclose
and quantify the material assumptions underlying the forecasts.

37. We note that Donnelly`s valuation report evaluated the market
value of the company`s common stock as of June 30, 2004.  Given that
the company did not file preliminary proxy materials until September
of 2004, disclose what consideration, if any, the Board gave to
requesting an updated valuation analysis.  Also revise the section
relating to the Board`s recommendation to discuss how the date of the
valuation analysis impacted the Board`s decision to rely on the
advisor`s opinion, if at all.

Analysis of Comparable Transactions, page 14

38. Clarify which of the transactions involved going private.  For
transactions that did not involve going private, briefly explain why
Donnelley considered them to be comparable.  In addition, disclose the
multiple calculated for each transaction, or a range of multiples, and
explain how the advisor derived the multiples from the acquired
companies.

Material U.S. Federal Income Tax Consequences of the Merger, page 24

39. Please eliminate the statement that the discussion is included for
general information only.  We believe this statement might suggest
that your stockholders may not rely on the description of material tax
consequences included in the proxy statement.

Amendment Proposal, page 26

40. Clarify whether the Amendment would apply to beneficial or record
holders of the Company`s shares. That is, if a person beneficially
owns fewer than 100 shares but those shares are held in street name by
a broker that, together with its other holdings, owns more than 100
shares, what would be the effect under the proposed Amendment?

Procedures for Voting by Proxy, page 27

41. Rule 14a-4(c)(3) contemplates the use of discretionary authority
only for matters unknown "a reasonable time before the solicitation."
Please revise the first paragraph accordingly.  Also ensure that the
proxy card includes this language.

Solicitation of Proxies, page 27

42. Please advise us of the means by which proxies may be solicited
and confirm, if true, that proxies will not be solicited via the
Internet.  In addition, please confirm your understanding that all
written soliciting materials, including any scripts to be used in
soliciting proxies over the telephone or in person, must be filed
under the cover of Schedule 14A.  See Rule 14a-6(b) and (c).

Information About Southern Michigan and Its Affiliates, page 28

43. Either here or where appropriate, provide the disclosure regarding
your plans as required by Item 1006(c)(1-8) of Regulation M-A.  If a
specific item contained in (c)(1-8) is inapplicable or the answer is
in the negative, revise the Schedule 13E-3 to so state.

Documents, page 35

44. We note that you have incorporated by reference the information
required by Item 13 of Schedule 14A.  Please note that the information
required by Item 13(a) may be incorporated by reference to the same
extent as would be permitted by Form S-3 pursuant to Instruction E to
Schedule 14A.  It does not appear that your public float is sufficient
and, therefore, you are probably not eligible to incorporate by
reference pursuant to Item 13(b)(1).  Please advise us if you intend
to rely upon Item 13(b)(2) to incorporate the required information by
reference.  If so, confirm that you will deliver the information
incorporated by reference in the information statement to shareholders
at the same time as you send them the information statement.
Alternatively, revise the Schedule to include the information required
by Item 13(a).

Closing Information

Please revise the proxy statement and Schedule 13E-3 in response to
these comments.  You may wish to provide us with marked copies of the
amendments to expedite our review.  You should include a letter
responding to each comment, noting the location of the change in the
revised materials made in response to comments or otherwise.  If you
believe a comment raised in this letter is inappropriate or feel that
no change is required, indicate your position and the basis for that
position in your response letter.  In the absence of such response, we
assume you will comply with staff comments.  We may have additional
comments based upon our receipt of the revised materials and your
response to our comments.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to be
certain that they have provided all information investors require.
Since the company and its management are in possession of all facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

	In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

In addition, please be advised that the Division of Enforcement has
access to all information you provide to the staff of the Division of
Corporation Finance in our review of your filing or in response to our
comments on your filing.

Direct any questions to me at (202) 942-1976.  You may also contact me
via facsimile at (202) 942-9638 or email at PressmanM@sec.gov.  Please
send all correspondence to us at the following ZIP code:  20549-0303.


								Sincerely,




								Michael Pressman
								Office of Mergers and
								Acquisitions