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                                  EXHIBIT 99.1

                                  PRESS RELEASE

The board of directors of Southern Michigan Bancorp, Inc. (OTC Bulletin Board:
SOMC - news) announced that the company will implement a stock repurchase plan
beginning in May 2001. The board has authorized repurchase of five percent (5)
of the company's outstanding shares from time to time in the open market or
through privately negotiated transactions.

Repurchased common shares will be added to the corporation's authorized but
unissued shares and will be used to meet the corporation's current and near-term
stock requirements for its benefit plans. As of December 31, 2000, Southern
Michigan Bancorp, Inc. had 1,931,984 shares of common stock outstanding.

"Our strong capital position combined with the attractiveness of Southern
Michigan Bancorp, Inc. stock at its current trading levels make this an
opportune time to implement our stock repurchase program," said James T.
Grohalski, President and CEO of Southern Michigan Bancorp, Inc. "In addition,
the development of stock incentive-based compensation plans will expand
ownership of the company among a broader cross-section of employees and will
help to focus strategic efforts that will improve financial performance and
shareholder value," Grohalski added.

Southern Michigan Bancorp, with more than $300 million in total assets at
December 31, 2000, is headquartered in Coldwater, Michigan and has banking
offices in Branch, Calhoun and Hillsdale Counties.

2/12/01