EXHIBIT 99.1

SOUTHERN MICHIGAN BANCORP, INC.
51 West Pearl Street
Coldwater, Michigan 49036

FOR IMMEDIATE RELEASE
CONTACT:  John H. Castle, CEO
(517) 279-5500

SOUTHERN MICHIGAN BANCORP, INC. ANNOUNCES SECOND QUARTER EARNINGS

Coldwater, Michigan, July 30, 2010: Southern Michigan Bancorp, Inc. (OTCBB: SOMC.OB) announced second quarter net income of $803,000, or $0.35 per diluted share, for the three months ended June 30, 2010. This compares to net income of $751,000, or $0.33 per diluted share, for the three months ended June 30, 2009. Southern's net income for the six months ended June 30, 2010, was $1,505,000, or $0.65 per diluted share, compared to net income of $480,000, or $0.21 per diluted share, for the same six month period a year ago.

Southern provided $150,000 for loan losses during the second quarter of 2010 compared to a $500,000 provision for the second quarter of 2009. The decrease in the provision for loan losses resulted because many of the charged off loans had specific reserves previously assigned and from reduced charge offs. Net charge offs totaled $367,000 during the second quarter of 2010 compared to $766,000 in the second quarter of 2009. For the six month period ended June 30, 2010, net charge offs totaled $699,000 compared to $2,430,000 for the same six month period in 2009.

Southern's allowance for loan losses totaled $5.7 million, or 1.77% of total loans, at June 30, 2010 compared to $6.1 million, or 1.82% of total loans, at December 31, 2009. Non-performing loans totaled $8,379,000, or 2.59% of gross loans, at June 30, 2010 compared to $7,599,000, or 2.28% of gross loans, at December 31, 2009, an increase of $780,000. Measurable progress has been achieved with numerous non-performing loan customers and the increase was primarily due to additional loans that are past due 90 days, but are currently fully secured and in the process of collection.

Southern's net interest margin decreased slightly from 4.11% for the six month period ended June 30, 2009 to 4.02% for the same period of 2010. Reduced net interest income resulted from lower earning asset balances and rates which were partially offset by lower deposit rates.

John Castle, Chairman and CEO, stated, "The Federal Reserve has maintained an extremely low interest rate environment in an attempt to encourage economic activity. However, without employment growth, business conditions will in all likelihood remain subdued and interest rates will remain low well into 2011. Loan demand is weak as businesses are uncertain of the future. In addition, near term pressure on earnings from recent financial reform legislation will challenge the financial industry going forward," Castle continued, "while we have more work to do in order to achieve the level of earnings we have historically delivered, we are pleased with our second quarter results and the progress we are making. A number of cost saving initiatives have been started that, when completed, should result in increased profitability in 2011."

The annualized return on average assets for the six month periods ended June 30, 2010 and 2009 was 0.64% and 0.21%, respectively. The annualized return on average equity was 6.48% for the first six months of 2010 compared to 2.13% for the same period of 2009.

Southern Michigan Bancorp, Inc. is a bank holding company headquartered in Coldwater, Michigan with 18 branches within Branch, Calhoun, Cass, Hillsdale and St. Joseph Counties which provide a broad range of consumer, business and wealth management services throughout the region.

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This press release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and Southern Michigan Bancorp, Inc. Forward-looking statements are identifiable by words or phrases such as "will", "likelihood", "uncertain", "future", "going forward", "should" and other similar words or expressions. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to future business and economic conditions, the future impact of recently enacted legislation, future profitability levels, and future interest rates. All statements with references to future time periods are forward-looking. Management's determination of the provision and allowance for loan losses, the appropriate carrying value of intangible assets (including goodwill, mortgage servicing rights and deferred tax assets) and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment) involves judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated. Our ability to improve profitability is not entirely within our control and is not assured. The future effect of changes in the financial and credit markets and the national and regional economy on the banking industry, generally, and Southern Michigan Bancorp, Inc., specifically, are also inherently uncertain. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. Southern Michigan Bancorp, Inc. undertakes no obligation to update, clarify or revise forward-looking statements to reflect developments that occur or information obtained after the date of this report.

Risk factors include, but are not limited to, the risk factors described in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2009 and in "Part II, Item 1A - Risk Factors" of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 to be filed with the Securities and Exchange Commission on or before August 16, 2010.

SOUTHERN MICHIGAN BANCORP, INC.
UNAUDITED INTERIM FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

	June 30, 2010			December 31, 2009
ASSETS
Cash and cash equivalents	$	42,423		$	24,814
Federal funds sold		1,887			2,540
Securities available for sale		55,071			56,948
Loans held for sale		1,440			605
Loans, net of allowance for loan losses of $5,726 - 2010 ($6,075 - 2009)		318,390			327,004
Premises and equipment, net		12,885			12,914
Accrued interest receivable		1,890			2,054
Net cash surrender value of life insurance		9,766			9,881
Goodwill		13,422			13,422
Other intangible assets, net		2,180			2,355
Other assets		9,402			9,872
TOTAL ASSETS	$	468,756		$	462,409
LIABILITIES
Deposits :
Non-interest bearing	$	57,728		$	55,250
Interest bearing		328,008			325,655
Total deposits		385,736			380,905
Securities sold under agreements to repurchase and overnight borrowings		14,899			14,799
Accrued expenses and other liabilities		4,510			4,039
Other borrowings		10,491			10,832
Subordinated debentures		5,155			5,155
Common stock subject to repurchase obligation in Employee
Stock Ownership Plan, shares outstanding - 105,431 in 2010
(101,999 shares in 2009)		1,292			945
Total liabilities		422,083			416,675
SHAREHOLDERS' EQUITY
Preferred stock, 100,000 shares authorized; none issued or outstanding		-			-
Common stock, $2.50 par value:
Authorized - 4,000,000 shares
Issued - 2,340,717 shares in 2010 (2,323,410 shares in 2009)
Outstanding (other than ESOP shares) - 2,235,286 shares in 2010           (2,221,411 shares in 2009)		5,588			5,553
Additional paid-in capital		18,056			18,363
Retained earnings		23,333			22,062
Accumulated other comprehensive income, net		74			193
Unearned Employee Stock Ownership Plan shares		(378	)		(437	)
Total shareholders' equity		46,673			45,734
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	468,756		$	462,409

SOUTHERN MICHIGAN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Interest income:
Loans, including fees	$	4,748	$	4,971	$	9,549	$	9,915
Federal funds sold and balances with banks		34		11		57		20
Securities:
Taxable		142		278		323		667
Tax-exempt		198		223		402		453
Total interest income		5,122		5,483		10,331		11,055
Interest expense:
Deposits		934		1,145		1,935		2,433
Other		175		207		343		402
Total interest expense		1,109		1,352		2,278		2,835
Net interest income		4,013		4,131		8,053		8,220
Provision for loan losses		150		500		350		1,950
Net interest income after provision for loan losses		3,863		3,631		7,703		6,270
Non-interest income:
Service charges on deposit accounts		612		738		1,182		1,305
Trust fees		243		228		496		479
Net gains on security calls and sales		207		407		207		407
Net gains on loan sales		161		236		281		430
Earnings on life insurance assets		76		84		150		168
Gain on life insurance proceeds		-		-		156		-
Income and fees from automated teller machines		218		176		425		333
Other		197		269		441		504
Total non-interest income		1,714		2,138		3,338		3,626
Non-interest expense:
Salaries and employee benefits		2,437		2,432		4,938		4,942
Occupancy, net		363		325		744		722
Equipment		233		231		454		455
Printing, postage and supplies		146		159		291		312
Telecommunication expenses		96		84		174		175
Professional and outside services		232		274		525		660
FDIC assessments		147		407		316		519
Software maintenance		97		143		208		214
Amortization of other intangibles		88		91		175		181
Other		718		728		1,422		1,441
Total non-interest expense		4,557		4,874		9,247		9,621
INCOME BEFORE INCOME TAXES		1,020		895		1,794		275
Federal income tax provision (credit)		217		144		289		(205	)
NET INCOME	$	803	$	751	$	1,505	$	480
Basic Earnings Per Common Share	$	.35	$	.33	$	.65	$	.21
Diluted Earnings Per Common Share	$	.35	$	.33	$	.65	$	.21
Dividends Declared Per Common Share	$	.05	$	.05	$	.10	$	.10