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

EXHIBIT 99.3

SOUTHERN MICHIGAN BANCORP, INC. AND FNB FINANCIAL CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
As of September 30, 2007
(Dollars in thousands, except per share data)

	Southern			FNB			Pro Forma Adjustments(1)			Pro Forma Combined
ASSETS
Cash and due from banks	$	9,343		$	4,252		$	(5,498	)	$	8,097
Federal funds sold		7,248			7,256			-			14,504
Securities available for sale(2)		57,516			40,944			(139	)		98,321
Loans held for sale		776			360			-			1,136
Loans held in portfolio		252,921			82,456			(223	)		335,154
Allowance for loan losses		(3,394	)		(1,537	)		-			(4,931	)
Loans, net		249,527			80,919			(223	)		330,223
Premises and equipment, net		10,347			2,711			261			13,319
Cash surrender value of life insurance policies		7,636			2,280			-			9,916
Goodwill		620			-			12,035			12,655
Other intangible assets		-			10			3,112			3,122
Other assets		7,896			2,123			-			10,019
Total assets	$	350,909		$	140,855		$	9,548		$	501,312
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing	$	40,640		$	15,798		$	-		$	56,438
Interest bearing		253,156			106,652			(252	)		360,060
Total deposits		293,796			122,450			(252	)		416,498
Federal funds borrowed		8,409			-						8,409
Other borrowings		5,795			3,150			7,982			16,927
Subordinated debentures		5,155			-			-			5,155
Accrued expenses and other liabilities		4,849			2,638			1,217			8,704
Total liabilities		318,004			128,238			9,451			455,693
Common stock subject to repurchase obligation    in ESOP		2,215			- -			- -			2,215
Shareholders' equity
Preferred stock		-			-			-			-
Common stock and additional paid-in capital		9,703			1,041			11,673			22,417
Retained earnings		21,087			11,592			(11,592	)		21,087
Unearned ESOP plan shares		(103	)		-			-			(103	)
Unearned restricted stock compensation		(58	)		-			-			(58	)
Accumulated other comprehensive (loss) income		61			(16	)		16			61
Total shareholders' equity		30,690			12,617			97			43,404
Total liabilities and shareholders' equity	$	350,909		$	140,855		$	9,548		$	501,312

(1)	See Note D for description of adjustments.
(2)	Includes Federal Home Loan Bank stock of $1,162,000 for Southern and Federal Reserve Bank stock of $39,000 and Federal Home Loan Bank stock of $884,000 for FNB.

SOUTHERN MICHIGAN BANCORP, INC. AND FNB FINANCIAL CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Nine Months Ended September 30, 2007
(Dollars in thousands, except per share data)

	Southern		FNB			Pro Forma Adjustments(1)			Pro Forma Combined
Interest income
Loans, including fees	$	15,157	$	4,937		$	102		$	20,196
Securities
Taxable		1,569		1,084			-			2,653
Tax-exempt		461		286			-			747
Other		-		241			-			241
Total interest income		17,187		6,548			102			23,837
Interest expense
Deposits		5,726		2,497			(119	)		8,104
Federal Home Loan Bank advances		-		280			9			289
Other		559		10			392			961
Total interest expense		6,285		2,787			282			9,354
Net interest income		10,902		3,761			(180	)		14,483
Provision for loan losses		345		890			-			1,235
Net interest income after
provision for loan losses		10,557		2,871			(180	)		13,248
Non-interest income
Service charges on deposit accounts		1,406		783			-			2,189
Trust fees		556		323			-			879
Net gains on sales of loans		317		76			-			393
Income earned on life insurance policies		201		69			-			270
Other income		549		566			-			1,115
Total non-interest income		3,029		1,817			-			4,846
Non-interest expense
Salaries and employee benefits		5,624		2,149			-			7,773
Occupancy, net		699		324			5			1,028
Equipment		567		359			-			926
Professional and outside services		506		393			-			899
Printing, postage and supplies		262		127			-			389
Advertising and marketing		-		57			-			57
Amortization of other intangibles		-		3			281			284
Other		1,658		1,312			-			2,970
Total non-interest expense		9,316		4,724			286			14,326
Income (loss) before federal income    taxes		4,270		(36	)		(466	)		3,768
Federal income taxes		1,141		(167	)		(158	)		816
Net income	$	3,129	$	131		$	(308	)	$	2,952

(1) See Note E for description of adjustments.

	Southern		FNB		Pro Forma Adjustments		Pro Forma Combined
Earnings per share
Basic	$	1.77		0.23		-	$	1.28
Diluted	$	1.77		0.23		-	$	1.28
Average shares outstanding
Basic		1,766,294		573,339		536,073		2,302,367
Diluted		1,772,303		573,339		536,073		2,308,376

SOUTHERN MICHIGAN BANCORP, INC. AND FNB FINANCIAL CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Twelve Months Ended December 31, 2006
(Dollars in thousands, except per share data)

	Southern		FNB		Pro Forma Adjustments(1)			Pro Forma Combined
Interest income
Loans, including fees	$	19,475	$	7,350	$	130		$	26,955
Securities
Taxable		1,018		767		-			1,785
Tax-exempt		555		434		-			989
Other		406		211		-			617
Total interest income		21,454		8,762		130			30,346
Interest expense
Deposits		6,083		2,909		(159	)		8,833
Federal Home Loan Bank advances		346		392		12			750
Other		530		1		522			1,053
Total interest expense		6,959		3,302		375			10,636
Net interest income		14,495		5,460		(245	)		19,710
Provision for loan losses		500		1,195		-			1,695
Net interest income after
provision for loan losses		13,995		4,265		(245	)		18,015
Non-interest income
Customer service charges		1,838		1,057		-			2,895
Trust fees		709		385		-			1,094
Net gains on sales of loans		627		262		-			889
Net securities gains		1		6		-			7
Income earned on life insurance policies		272		92		-			364
Other income		658		750		-			1,408
Total non-interest income		4,105		2,552		-			6,657
Non-interest expense
Salaries and employee benefits		7,041		2,794		-			9,835
Occupancy		766		462		7			1,235
Equipment		756		493		-			1,249
Professional and outside services		951		306		-			1,257
Printing, postage and supplies		373		181		-			554
Advertising and marketing		284		98		-			382
Amortization of other intangibles		22		4		374			400
Other		2,407		1,570		-			3,977
Total non-interest expense		12,600		5,908		381			18,889
Income before federal income taxes		5,500		909		(626	)		5,783
Federal income taxes		1,491		135		(213	)		1,413
Net income	$	4,009	$	774	$	(413	)	$	4,370

(1) See Note E for description of adjustments.

	Southern		FNB		Pro Forma Adjustments		Pro Forma Combined
Earnings per share
Basic	$	2.27	$	1.35		-	$	1.90
Diluted	$	2.26	$	1.35		-	$	1.89
Average shares outstanding
Basic		1,764,532		575,440		536,073		2,300,605
Diluted		1,770,835		575,440		536,073		2,306,908

NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

The unaudited pro forma combined condensed consolidated financial statements have been prepared assuming that the merger will be accounted for under the purchase method of accounting. The unaudited pro forma combined condensed consolidated statements of income for the year ended December 31, 2006 and the nine months ended September 30, 2007 are presented as if the merger occurred at the beginning of the period. The unaudited pro forma combined condensed consolidated balance sheet as of September 30, 2007 is presented as if the merger occurred as of that date. This information is not intended to reflect the actual results that would have been achieved had the merger actually occurred on those dates. Southern is in the process of completing its review of FNB's accounting policies. After this review is completed, Southern might determine that it is necessary to restate certain amounts in the financial statements of FNB to conform to Southern's accounting policies.

NOTE B - SOURCES OF FUNDS AND PURCHASE PRICE

Under the terms of the plan of merger, 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. Southern funded the cash portion of the merger consideration with a combination of a cash dividend from Southern Michigan Bank & Trust and loan proceeds of approximately $8,000,000. Southern Michigan Bank & Trust funded the cash dividend from existing cash reserves and cash equivalent investments.

NOTE C - ALLOCATION OF PURCHASE PRICE OF FNB

Under purchase accounting, FNB's assets and liabilities and any identifiable intangible assets are required to be adjusted to their estimated fair values. The estimated fair values have been determined by Southern based upon available information from FNB. Southern cannot be sure that such estimated values represent the fair value that will ultimately be determined as of the merger date. The following are the pro forma adjustments made to record the transaction and to adjust FNB's assets and liabilities to their estimated fair values at September 30, 2007.

Purchase Price of FNB:
(Dollars in thousands)
Market value (assuming market value per share of $23.95)
of Southern common stock to be issued	$	12,839
Cash to holders of FNB common stock		13,000
Offering costs		(125	)
Merger costs		498
Total purchase price	$	26,212
Historical net assets of FNB as of September 30, 2007	$	12,617
Adjustments:
Accrual of remaining professional fees		(259	)
Accrual of severance and health care plan benefits		(15	)
Write-off FNB's intangible		(10	)
Tax benefit of above adjustments (excluding non-deductible professional fees)		5
Adjusted net assets of FNB		12,338
Fair market value adjustments as of September 30, 2007:
Loans held in portfolio		(223	)
Securities		(139	)
Premises and equipment, net		261
Goodwill		12,035
Core deposit intangible		3,122
Fixed rate certificates of deposit		(252	)
Advances from the Federal Home Loan Bank		18
Deferred taxes on purchase accounting adjustments		(948	)
	$	26,212

All of the other asset and liability categories are either variable rate or short-term in nature and fair market adjustments were considered to be immaterial to the financial presentation. The purchase price adjustments are subject to further refinement, including the determination of a core deposit intangible and its life for amortization purposes. In accordance with Statement of Financial Accounting Standards No. 141, "Business Combinations," and No. 142, "Goodwill and Other Intangible Assets," goodwill and intangible assets with indefinite lives are not amortized for acquisitions initiated after June 30, 2001; therefore, no goodwill amortization is presented in the pro forma financial statements. However, the core deposit intangible will be amortized over its estimated life of 10 years and recorded as a charge to operations.

Southern's cost estimates are forward-looking. While the costs represent Southern's current estimate of merger costs associated with the merger that will be incurred, the ultimate level and timing of recognition of these costs will be based on the final integration in connection with completion of the merger. Readers are cautioned that the completion of this integration and other actions that may be taken in connection with the merger will impact these estimates. The type and amount of actual costs incurred could vary materially from these estimates if future developments differ from the underlying assumptions used by management in determining the current estimate of these costs.

NOTE D - PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET ADJUSTMENTS

For purposes of determining the pro forma effect of the merger on the balance sheet, the following pro forma adjustments have been made as if the acquisition occurred as of September 30, 2007:

(Dollars in thousands)

Cash received from line of credit	$	8,000
Cash disbursed for Purchase Price		(13,000	)
Cash disbursed for Merger costs		(498	)
Fair market value adjustment for loans held in portfolio		(223	)
Fair market value adjustment for securities		(139	)
Fair market value adjustment for premises and equipment, net		261
Write-off of FNB's intangible		(10	)
Recognition of goodwill caused by Merger		12,035
Recognition of core deposit intangible		3,122
	$	9,548
Fair market value adjustment of fixed rate certificates of deposit	$	252
Fair market value adjustment of advances from the Federal Home Loan Bank		(18	)
Line of credit funding		8,000
Accrual of remaining professional fees, severance and benefits		274
Deferred tax effect of Merger costs		(5	)
Deferred tax effect of fair market value adjustments		948
Market value of Southern common stock to be issued		12,714
Elimination of FNB common stock and paid-in capital balance		(1,041	)
Elimination of remaining FNB retained earnings balance		(11,592	)
Elimination of FNB accumulated other comprehensive (loss) income balance		16
	$	9,548

NOTE E - PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF INCOME ADJUSTMENTS

For purposes of determining the pro forma effect of the merger on the statement of income, the following pro forma adjustments have been made as if the acquisition occurred as of January 1, 2007 and 2006, respectively:

	Nine Months Ended September 30, 2007			Year Ended December 31, 2006
	(Dollars in thousands)
Yield adjustment for fair market value adjustment of loans held in     portfolio	$	102		$	130
Cost adjustment for fair market value adjustment of fixed rate time     deposits		119			159
Cost adjustment for fair market value adjustment of Federal Home     Loan Bank advances		(9	)		(12	)
Interest expense increase due to line of credit		(392	)		(522	)
Amortization of fair market adjustment of bank premises and     equipment		(5	)		(7	)
Amortization of core deposit intangible		(281	)		(374	)
		(466	)		(626	)
Tax effect of pro forma adjustments		158			213
Total pro-forma effect on net income	$	(308	)	$	(413	)

Taxes were adjusted for pro forma purposes at a 34% rate for all income statement adjustments.

Basic and diluted average shares outstanding were calculated by adding the shares assumed to be issued by Southern in the merger (536,073 shares) to the historical average Southern shares outstanding for the nine months ended September 30, 2007 and for the year ended December 31, 2006.

The following assumptions were used for purposes of determining the pro forma effect of the merger on the statement of income. In accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," goodwill will not be amortized, but will be reviewed for impairment at least annually.

	Weighted Average Remaining Term/ Useful Life in Years	Method of Amortization or Accretion
Loans held in portfolio	1	Accelerated(1)
Premises and equipment, net	40	Straight line
Core deposit intangible assets	10	Accelerated(1)
Interest-bearing deposits	1	Accelerated(1)
Advances from the Federal Home Loan Bank	4	Accelerated(1)

(1) Amortization or accretion will be based on the estimated life of the asset or liability category.

NOTE F - PRO FORMA FINANCIAL PRESENTATION AND POTENTIAL FINANCIAL BENEFITS

Southern and FNB anticipate that the merger will provide the combined organization with financial benefits that could include reduced operating expenses and enhanced opportunities to earn more revenue. Due to the uncertainty of the realization of the benefits, their effect has not been included in the pro forma financial statements.