Southern Michigan Bancorp (SOMC) CORRESP Correspondence with SEC

Southern Michigan Bancorp, Inc.
51 West Pearl Street
P.O. Box 309
Coldwater, MI  49036
Phone 517/279-5500

November 10, 2009

Mr. Paul Cline
Ms. Rebekah Blakeley Moore
United States Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C.  20549

Re: Southern Michigan Bancorp, Inc.
Form 10-K for Fiscal Period Ended December 31, 2008
Form 10-Q for Fiscal Period Ended June 30, 2009
File No. 000-49772

Dear Mr. Cline and Ms. Moore:

                    This letter provides Southern Michigan Bancorp, Inc.'s (the "Company") response to the Commission staff letter dated October 29, 2009 (the "Comment Letter"). For convenience of reference, each of the comments in the Comment Letter is set forth in full below and the Company's response to each comment immediately follows.

                    The Company thanks the Commission staff for its comments. The Company is committed to full disclosure and compliance with the Commission's rules and regulations.

Comment 1:

                    We note your response to our previous comment 1 in our letter dated September 1, 2009. Please note that paragraph 11 of SFAS 150 does not differentiate between an unconditional or conditional obligation. Rather, it states that an obligation to transfer assets in satisfaction of a forward purchase contract causes that obligation to be classified as a liability. Please revise your financial statements in your future filings accordingly. Refer to paragraphs 22, A11, and B27 of SFAS 150.

Response:

                    The Company agrees to revise its financial statements in future filings. For example, the liability and equity section of the balance sheet will be substantially as follows:

Mr. Paul Cline
Ms. Rebekah Blakeley Moore
November 10, 2009
Page 2
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LIABILITIES
Deposits:
Non-interest bearing	$	50,988		$	57,216
Interest bearing		331,701			336,827
Total deposits		382,689			394,043
Securities sold under agreements to repurchase and overnight borrowings		13,895			13,890
Accrued expenses and other liabilities		3,842			4,272
Other borrowings		15,954			12,492
Subordinated debentures		5,155			5,155
Common stock subject to repurchase obligation in        Employee Stock Ownership Plan, 102,502 shares outstanding in 2009        (100,392 in 2008)		871			728
Total liabilities		422,406			430,580
SHAREHOLDERS' EQUITY
Preferred stock, 100,000 shares authorized; none issued or outstanding		-			-
Common stock, $2.50 par value:
Authorized - 4,000,000 shares
Issued - 2,323,410 shares in 2009 (2,311,740 shares in 2008)
Outstanding (other than ESOP shares) - 2,220,908 shares in 2009           (2,211,348 shares in 2008)		5,552			5,528
Additional paid-in capital		18,405			18,473
Retained earnings		21,494			20,593
Accumulated other comprehensive income, net		446			413
Unearned Employee Stock Ownership Plan shares		(466	)		(591	)
Total shareholders' equity		45,431			44,416
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	467,837		$	474,996

See accompanying notes to interim consolidated financial statements.

Very truly yours,

/s/ Danice L. Chartrand

Danice L. Chartrand