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. |
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 |
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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 |
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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 |
Very truly yours, | |
/s/ Danice L. Chartrand | |
Danice L. Chartrand |