Southern Michigan Bancorp (SOMC) 8-K/A Financial Statements and Exhibits

EXHIBIT 99.2

FNB Financial Corporation

Consolidated Financial Statements

FNB Financial Corporation
September 30, 2007 and December 31, 2006

Contents
Consolidated Financial Statements
Balance Sheets	1
Statements of Income	2
Statements of Stockholders' Equity	3
Statements of Cash Flows	4
Notes to Financial Statements	5

FNB Financial Corporation
Consolidated Balance Sheets
September 30, 2007 and December 31, 2006
(Unaudited)

	September 30, 2007			December 31, 2006
Assets
Cash and due from banks	$	4,124,367		$	4,355,333
Interest-bearing demand deposits		127,332			102,468
Federal funds sold		7,256,079			5,597,663
Cash and cash equivalents		11,507,778			10,055,464
Available-for-sale securities		40,020,885			40,084,583
Loans held for sale		359,736			686,288
Loans, net of allowance for loan losses of $1,537,437 and             $1,266,134 at September 30, 2007 and December 31, 2006		80,918,422			91,821,242
Premises and equipment		2,711,305			2,928,507
Federal Reserve and Federal Home Loan Bank stock		923,100			923,100
Life insurance contracts		2,280,441			2,217,483
Interest receivable		906,012			1,000,412
Other assets		1,227,045			1,454,797
Total assets	$	140,854,724		$	151,171,876
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing demand	$	15,797,438		$	18,059,000
Savings, NOW and money market		58,837,894			59,219,328
Time		47,814,246			52,208,093
Total deposits		122,449,578			129,486,421
Short-term borrowings		150,000			-
Long-term borrowings		3,000,000			8,000,000
Interest payable		303,901			306,325
Shares subject to mandatory redemption		-			48,975
Other liabilities		2,334,402			951,565
Total liabilities		128,237,881			138,793,286
Stockholders' Equity
Preferred stock, no par value, authorized 100,000 shares; none                issued and outstanding
Common stock, $1 par value; authorized 1,000,000 shares;                issued and outstanding September 30, 2007 - 573,339 shares,                December 31, 2006 - 574,839		573,339			574,839
Additional paid-in capital		468,000			468,000
Retained earnings		11,591,501			11,508,379
Shares subject to mandatory redemption		-			(48,975	)
Accumulated other comprehensive loss		(15,997	)		(123,653	)
Total stockholders' equity		12,616,843			12,378,590
Total liabilities and stockholders' equity	$	140,854,724		$	151,171,876

See Notes to Consolidated Financial Statements 1

FNB Financial Corporation
Consolidated Statements of Income
Three and Nine Months Ended September 30, 2007 and 2006
(Unaudited)

	Three Months Ended September 30, 2007			Three Months Ended September 30, 2006		Nine Months Ended September 30, 2007			Nine Months Ended September 30, 2006
Interest and Dividend Income
Loans	$	1,587,252		$	1,836,814	$	4,937,007		$	5,556,741
Securities
Taxable		360,878			198,699		1,083,725			556,150
Tax-exempt		94,947			100,289		285,972			276,838
Federal funds sold		74,459			53,934		207,468			107,532
Dividends on Federal Home Loan         and Federal Reserve Bank stock		10,519			11,619		31,439			41,534
Deposits with financial institutions		718			858		2,514			2,329
Total interest and dividend income		2,128,773			2,202,213		6,548,125			6,541,124
Interest Expense
Deposits		819,530			759,216		2,497,111			2,096,939
Short-term borrowings		2,875			---		10,063			1,716
Long-term borrowings		98,698			98,237		279,499			294,735
Total interest expense		921,103			857,453		2,786,673			2,393,390
Net Interest Income		1,207,670			1,344,760		3,761,452			4,147,734
Provision for Loan Losses		620,000			120,000		890,000			360,000
Net Interest Income After Provision for    Loan Losses		587,670			1,224,760		2,871,452			3,787,734
Noninterest Income
Fiduciary activities		102,896			95,332		322,673			302,930
Service charges on deposit accounts		272,703			273,253		783,318			802,109
Other customer fees		86,878			82,640		257,233			244,397
Net gains on loan sales		26,275			29,227		76,431			189,371
Other		50,108			146,674		377,247			402,138
Total noninterest income		538,860			627,126		1,816,902			1,940,945
Noninterest Expense
Salaries and employee benefits		699,522			677,786		2,149,013			2,061,054
Net occupancy expense		101,322			113,203		323,994			349,265
Equipment expense		114,919			126,704		359,121			374,929
Professional fees		150,591			85,332		392,786			198,890
Other		510,761			510,946		1,499,332			1,459,941
Total noninterest expense		1,577,115			1,513,971		4,724,246			4,444,079
Income (loss) Before Income Tax		(450,585	)		337,915		(35,892	)		1,284,600
Provision (credit) for Income Taxes		(196,337	)		63,133		(166,489	)		308,429
Net Income (loss)	$	(254,248	)	$	274,782	$	130,597		$	976,171
Basic Earnings (loss) Per Share	$	(.44	)	$	.48	$	.23		$	1.69
Weighted-Average Shares Outstanding		573,339			576,626		573,339			576,626

See Notes to Consolidated Financial Statements 2

FNB Financial Corporation
Consolidated Statements of Stockholders' Equity
Year Ended December 31, 2006 and Nine Months Ended September 30, 2007
(Unaudited)

	Common Stock				Additional Paid-in	Compre- hensive	Shares Subject to Mandatory		Retained		Accumulated Other Compre- hensive
	Shares		Amount		Capital	Income	Redemption		Earnings		Loss		Total
Balance, January 1, 2006	581,843		$ 581,843		$ 468,000		$ (104,520	)	$11,467,522		$ (313,108	)	$12,099,737
Comprehensive income
Net income						$ 774,180			774,180				774,180
Other comprehensive       income, net of tax,       unrealized gain on       available-for-sale       securities, net of       reclassification       adjustment						189,455					189,455		189,455
Total comprehensive           income						$  963,635
Change in shares subject     to mandatory redemption							(146,925	)					(146,925	)
Redemption of stock	(7,004	)	(7,004	)			202,470		(227,133	)			(31,667	)
Cash dividends ($.88 per     share)									(506,190	)			(506,190	)
Balance, December 31, 2006	574,839		$ 574,839		$ 468,000		$  (48,975	)	$11,508,379		$ (123,653	)	$12,378,590
Comprehensive income
Net income						$  130,597			130,597				130,597
Other comprehensive       gain, net of tax,       unrealized gain on       available-for-sale       securities, net of       reclassification       adjustment						107,656					107,656		107,656
Total comprehensive           income						$ 238,253
Redemption of stock	(1,500	)	(1,500	)			48,975		(47,475	)
Balance, September 30, 2007	573,339		$ 573,339		$ 468,000		$           0		$11,591,501		$  (15,997	)	$12,616,843

See Notes to Consolidated Financial Statements 3

FNB Financial Corporation
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2007 and 2006
(Unaudited)

	2007			2006
Operating Activities
Net income	$	130,597		$	976,171
Items not requiring (providing) cash
Depreciation and amortization		289,137			312,772
Provision for loan losses		890,000			360,000
Amortization of premiums on securities, net		16,428			83,691
Loan fees and costs amortization, net		(42,316	)		(53,066	)
Amortization of mortgage servicing rights		48,179			69,949
Increase in cash value of life insurance contracts		(62,958	)		(63,653	)
Loss on abandonment of premises and equipment		439			4,771
Proceeds from sale of loans held for sale		3,128,305			7,507,719
Originations of loans held for sale		(2,751,231	)		(7,293,459	)
Gain from sale of loans		(50,522	)		(127,876	)
Changes in
Interest receivable		94,400			(202,022	)
Other assets		627,538			95,964
Interest payable		(2,424	)		84,039
Other liabilities		1,382,837			240,928
Net cash provided by operating activities		3,698,409			1,995,928
Investing Activities
Purchases of available-for-sale securities		(8,681,099	)		(7,871,191	)
Proceeds from maturities and calls of available-for-sale securities		8,891,508			4,359,526
Net change in loans		9,551,688			4,416,318
Purchase of premises and equipment		(72,374	)		(224,775	)
Proceeds from sale of FHLB stock		-			149,100
Net cash provided by investing activities		9,689,723			828,978
Financing Activities
Net increase (decrease) in demand deposits, money market,           NOW and savings accounts		(2,642,996	)		(2,079,562	)
Net increase (decrease) in certificates of deposit		(4,393,847	)		4,003,110
Net increase (decrease) in short-term borrowings		150,000			(2,366,994	)
Repayment of long-term borrowings		(5,000,000	)		(1,000,000	)
Redemption of stock		(48,975	)		(185,162	)
Dividends paid		-			(380,386	)
Net cash used in financing activities		(11,935,818	)		(2,008,994	)
Increase in Cash and Cash Equivalents		1,452,314			815,912
Cash and Cash Equivalents, Beginning of Year		10,055,464			5,057,833
Cash and Cash Equivalents, End of Period	$	11,507,778		$	5,873,745
Supplemental Cash Flows Information
Interest paid	$	2,789,097		$	2,309,351
Income taxes paid		171,208			38,605
Noncash investing activity, transfer of loans to foreclosed assets           held for sale		503,448			330,851

See Notes to Consolidated Financial Statements 4

FNB Financial Corporation
Notes to Consolidated Financial Statements

Basis of Presentation

The financial statements of FNB Financial Corporation (Corporation) include the consolidation of its wholly owned subsidiary The First National Bank of Three Rivers. These interim financial statements are unaudited and do not include all disclosures normally provided with annual financial statements. These interim statements should be read in conjunction with the Corporation's annual financial statements and footnotes for the year ended December 31, 2006.

In the opinion of management, these statements reflect all adjustments (consisting of normal recurring adjustments) which are necessary for a fair presentation for the interim periods. The annualized results of operations for the nine months ended September 30, 2007 are not necessarily indicative of the results expected for the full year ending December 31, 2007.

Securities

The amortized cost and approximate fair values of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
Available-for-Sale Securities
September 30, 2007
U.S. government agencies	$	12,673	$	58	$	30	$	12,701
Mortgage-backed securities		8,866		50		123		8,793
Collateralized mortgage obligations		6,393		17		9		6,401
State and political subdivisions		12,113		99		86		12,126
	$	40,045	$	224	$	248	$	40,021
December 31, 2006
U.S. government agencies	$	11,172	$	24	$	100	$	11,096
Mortgage-backed securities		9,150		14		142		9,022
Collateralized mortgage obligations		6,915		17		1		6,931
State and political subdivisions		13,035		126		125		13,036
	$	40,272	$	181	$	368	$	40,085

Loans and Allowance for Loan Losses

Categories of loans at September 30, 2007 and December 31, 2006 include:

	September 30, 2007			December 31, 2006
Commercial and industrial loans	$	16,430		$	18,023
Real estate loans (includes $878 and $3,876 secured by farmland)		56,905			65,638
Construction loans		3,239			3,446
Agricultural production financing and other loans to farmers		1,425			1,457
Individuals' loans for household and other personal expenditures		2,767			2,796
Tax-exempt loans		1,684			1,717
Other		6			10
Total loans		82,456			93,087
Less
Allowance for loan losses		(1,537	)		(1,266	)
Net loans	$	80,919		$	91,821

Activity in the allowance for loan losses was as follows:

	September 30, 2007			September 30, 2006
Balance, beginning of year	$	1,266		$	1,217
Provision charged to expense		890			360
Recoveries of loans		41			43
Loans charged off		(660	)		(220	)
Balance, end of year	$	1,537		$	1,400

Sale of Corporation

On December 1, 2007, the Corporation was merged with and into Southern Michigan Bancorp, Inc. (Southern). Each outstanding share of FNB common stock was converted into the right to receive, at the holder's election, either $45.35 in cash or 1.87 shares of Southern common stock (plus cash in lieu of any fractional share), or a combination of both. All elections were subject to an allocation adjustment, whereby 50% of the outstanding shares of FNB common stock were converted into the right to receive cash and 50% of the outstanding shares of FNB common stock were converted into the right to receive Southern common stock.