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 THIRD QUARTER EARNINGS

Coldwater, Michigan, October 29, 2010: Southern Michigan Bancorp, Inc. (OTCBB: SOMC.OB) announced net income of $870,000, or $0.38 per diluted share, for the three months ended September 30, 2010. This compares to net income of $771,000, or $0.34 per diluted share, for the three months ended September 30, 2009. Southern's net income for the nine months ended September 30, 2010 was $2,375,000, or $1.03 per diluted share, compared to net income of $1,251,000, or $0.55 per diluted share, for the same nine month period a year ago.

Southern provided $425,000 for loan losses during the third quarter of 2010 compared to $350,000 for the third quarter of 2009. Net charge offs totaled $423,000 during the third quarter of 2010 compared to $254,000 in the third quarter of 2009. For the nine month period ended September 30, 2010, net charge offs totaled $1,122,000 compared to $2,684,000 for the same nine month period in 2009.

Southern's allowance for loan losses totaled $5.7 million, or 1.79% of total loans at September 30, 2010, compared to $6.1 million, or 1.82% of total loans at December 31, 2009. Non-performing loans totaled $6,869,000, or 2.18% of total loans at September 30, 2010, compared to $7,599,000, or 2.28% of total loans at December 31, 2009, and $8,151,000, or 2.43% of total loans at September 30, 2009.

Southern's net interest margin decreased slightly from 4.14% for the nine month period ended September 30, 2009 to 4.02% for the same period of 2010. Reduced net interest income resulted from lower rates and balances for investment securities and loans, which were partially offset by lower deposit rates.

John Castle, Chairman & CEO, stated, "Residential mortgage activity along with expense control initiatives contributed to continued earnings improvement in the third quarter of 2010. Southern maintained a favorable net interest margin at September 30, 2010, largely by aggressively working to reduce non-earning assets. In addition, we continue to monitor the outcomes from the recent banking legislation. While it remains uncertain what the final rules and regulations will say, we expect that the banking industry will bear significantly increased compliance costs and a higher cost of capital."

The annualized return on average assets for the nine month periods ended September 30, 2010 and 2009 was 0.67% and 0.36%, respectively. The annualized return on average equity for the same periods was 6.76% and 3.70%, respectively.

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.

***

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 "uncertain", "expect", "continue" and other similar words or expressions. These statements include, among others, statements related to the future effect of recently passed banking legislation. 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 and mortgage servicing rights) 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. 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, extend, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed in or implied by such forward-looking statements. Southern Michigan Bancorp, Inc. does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

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 September 30, 2010. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.

SOUTHERN MICHIGAN BANCORP, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share data)

	September 30, 2010			December 31, 2009
ASSETS
Cash and cash equivalents	$	64,411		$	24,814
Federal funds sold		221			2,540
Securities available for sale		58,057			56,948
Loans held for sale		1,115			605
Loans, net of allowance for loan losses of $5,728 - 2010 ($6,075 - 2009)		314,542			327,004
Premises and equipment, net		12,712			12,914
Accrued interest receivable		2,366			2,054
Net cash surrender value of life insurance		9,859			9,881
Goodwill		13,422			13,422
Other intangible assets, net		2,093			2,355
Other assets		8,700			9,872
TOTAL ASSETS	$	487,498		$	462,409
LIABILITIES
Deposits:
Non-interest bearing	$	56,501		$	55,250
Interest bearing		345,487			325,655
Total deposits		401,988			380,905
Securities sold under agreements to repurchase and overnight borrowings		16,876			14,799
Accrued expenses and other liabilities		4,183			4,039
Other borrowings		10,318			10,832
Subordinated debentures		5,155			5,155
Common stock subject to repurchase obligation in Employee
Stock Ownership Plan, shares outstanding - 104,514 in 2010
(101,999 shares in 2009)		1,233			945
Total liabilities		439,753			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) - 2,236,203 shares in 2010           (2,221,411 shares in 2009)		5,591			5,553
Additional paid-in capital		18,152			18,363
Retained earnings		24,086			22,062
Accumulated other comprehensive income, net		243			193
Unearned Employee Stock Ownership Plan shares		(327	)		(437	)
Total shareholders' equity		47,745			45,734
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	487,498		$	462,409

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2010		2009		2010		2009
Interest income:
Loans, including fees	$	4,878	$	4,966	$	14,427	$	14,881
Federal funds sold and balances with banks		42		22		99		42
Securities:
Taxable		151		228		474		895
Tax-exempt		178		231		580		684
Total interest income		5,249		5,447		15,580		16,502
Interest expense:
Deposits		928		1,128		2,863		3,561
Other		172		142		515		544
Total interest expense		1,100		1,270		3,378		4,105
Net interest income		4,149		4,177		12,202		12,397
Provision for loan losses		425		350		775		2,300
Net interest income after provision for loan losses		3,724		3,827		11,427		10,097
Non-interest income:
Service charges on deposit accounts		652		786		1,834		2,091
Trust fees		244		237		740		716
Net gains on security calls and sales		-		-		207		407
Net gains on loan sales		403		173		684		603
Earnings on life insurance assets		93		83		243		251
Gain on life insurance proceeds		-		-		156		-
Income and fees from automated teller machines		235		181		660		514
Other		211		214		652		718
Total non-interest income		1,838		1,674		5,176		5,300
Non-interest expense:
Salaries and employee benefits		2,529		2,413		7,467		7,355
Occupancy, net		324		325		1,068		1,047
Equipment		229		217		683		672
Printing, postage and supplies		146		158		437		470
Telecommunication expenses		107		88		281		263
Professional and outside services		160		339		685		999
FDIC assessments		157		157		473		676
Software maintenance		94		101		302		315
Amortization of other intangibles		87		91		262		272
Other		595		672		2,017		2,113
Total non-interest expense		4,428		4,561		13,675		14,182
INCOME BEFORE INCOME TAXES		1,134		940		2,928		1,215
Federal income tax provision (credit)		264		169		553		(36	)
NET INCOME	$	870	$	771	$	2,375	$	1,251
Basic Earnings Per Common Share	$	0.38	$	0.34	$	1.03	$	0.55
Diluted Earnings Per Common Share		0.38		.34		1.03		.55
Dividends Declared Per Common Share		.05		.05		.15		.15