<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarter ended June 30, 2000    Commission file number 2-78178
                      -------------                           -------

                         Southern Michigan Bancorp, Inc.
                         -------------------------------
             (Exact name of registrant as specified in its charter)

         Michigan                                38-2407501
         ----------                              ----------
(State or other jurisdiction of                  (I.R.S. Employer Identification
  incorporation or organization)                  Number)

51 West Pearl Street, Coldwater, Michigan              49036
-----------------------------------------              -----
(Address of principal executive offices)         (Zip Code)

Registrant's telephone number, including area code -- (517) 279-5500
                                                       -------------

Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No.

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

Common Stock, $2.50 Par Value - 1,941,060 shares at July 31, 2000 (including
shares held by ESOP)




<PAGE>   2
CONDENSED CONSOLIDATED BALANCE SHEETS

SOUTHERN MICHIGAN BANCORP, INC  AND SUBSIDIARY

<TABLE>
<CAPTION>
                                                                                                        June 30         December 31
                                                                                                          2000               1999
                                                                                              --------------------------------------
                                                                                                            (Unaudited) (A)
                                                                                                            (In thousands)
<S>                                                                                           <C>                     <C>
ASSETS
     Cash and due from banks                                                                      $       13,914      $      12,046
     Investment securities available-for-sale                                                             50,996             54,229
     Loans, net                                                                                          211,708            191,239
     Premises and equipment                                                                                6,773              6,705
     Other assets                                                                                         12,338             11,606
                                                                                              --------------------------------------
                                    TOTAL ASSETS                                                  $      295,729      $     275,825
                                                                                              ======================================

LIABILITIES AND SHAREHOLDERS' EQUITY
     Deposits:
          Non-interest bearing                                                                    $       35,909      $      33,124
          Interest bearing                                                                               197,166            200,179
                                                                                              --------------------------------------
                                                                                                         233,075            233,303
     Federal funds purchased                                                                              10,060
     Accounts payable and other liabilities                                                                3,562              3,542
    Other long-term borrowings                                                                            25,000             15,000
                                                                                              --------------------------------------
                                 TOTAL LIABILITIES                                                       271,697            251,845
    Common stock subject to repurchase obligation in ESOP                                                  1,923              3,990
     Shareholders' equity:
          Preferred stock, 100,000 shares authorized
          Common stock, $2.50 par value:
                 Authorized--4,000,000 shares
                 Issued--1,941,662 shares (1999-1,969,259)
                 Outstanding--1,834,823 shares (1999-1,838,757)                                            4,587              4,597
          Capital surplus                                                                                  9,642              8,421
          Retained earnings                                                                                8,908              7,949
          Net unrealized depreciation on available-for-sale
                securities net of tax of $226 (1999--$200)                                                  (440)              (389)
          Unearned Employee Stock Ownership Plan shares                                                     (588)              (588)
                                                                                              --------------------------------------
                                 TOTAL SHAREHOLDERS' EQUITY                                               22,109             19,990
                                                                                              --------------------------------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                        $      295,729      $     275,825
                                                                                              ======================================

</TABLE>

(A) The balance sheet at December 31, 1999 has been derived from the audited
consolidated financial statements at that date.

See notes to condensed consolidated financial statements.


                                      -2-


<PAGE>   3

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

SOUTHERN MICHIGAN BANCORP, INC. AND SUBSIDIARY

<TABLE>
<CAPTION>

                                                                         Three Months Ended             Six Months Ended
                                                                              June 30                       June 30
                                                                         2000          1999            2000         1999
                                                               -----------------------------------------------------------------
                                                                           (In thousands, except per share amounts)
<S>                                                            <C>                  <C>             <C>              <C>

Interest income:
     Loans, including fees                                      $      4,998         $    3,961      $    9,647       $   7,726
     Investment securities:
         Taxable                                                         465                557           1,009           1,190
         Tax exempt                                                      234                287             473             623
     Other                                                                 0                 16               2              41
                                                               -----------------------------------------------------------------
                  Total interest income                                5,697              4,821          11,131           9,580
Interest expense:
     Deposits                                                          2,123              1,875           4,157           3,794
     Other                                                               399                140             711             258
                                                               -----------------------------------------------------------------
                  Total interest expense                               2,522              2,015           4,868           4,052
                                                               -----------------------------------------------------------------
                                 NET INTEREST INCOME                   3,175              2,806           6,263           5,528
Provision for loan losses                                                150                186             300             336
                                                               -----------------------------------------------------------------
                  NET INTEREST INCOME AFTER
                  PROVISION FOR LOAN LOSSES                            3,025              2,620           5,963           5,192
Non-interest income:
     Service charges on deposit accounts                                 285                263             549             508
     Trust department                                                    123                225             257             340
     Security gains (losses)                                              (4)                                (3)
     Secondary market gains                                              149                233             250             375
     Earnings on life insurance policies                                  51                 62              96             101
     Other                                                               162                135             311             258
                                                               -----------------------------------------------------------------
                                                                         766                918           1,460           1,582
                                                               -----------------------------------------------------------------
                                                                       3,791              3,538           7,423           6,774
Non-interest expenses:
     Salaries and benefits                                             1,206              1,079           2,466           2,165
     Occupancy                                                           193                194             411             407
     Equipment                                                           244                241             501             467
     Other                                                               903                763           1,774           1,482
                                                               -----------------------------------------------------------------
                                                                       2,546              2,277           5,152           4,521
                                                               -----------------------------------------------------------------
INCOME BEFORE INCOME TAXES                                             1,245              1,261           2,271           2,253
Federal income taxes                                                     344                292             613             503
                                                               -----------------------------------------------------------------
NET INCOME                                                               901                969           1,658           1,750
Other comprehensive income, net of tax:
    Change in unrealized gains on securities                              99               (299)            (51)           (492)
                                                               -----------------------------------------------------------------
COMPREHENSIVE INCOME                                             $     1,000         $      670      $    1,607       $   1,258
                                                               =================================================================

Basic and Diluted Earnings Per Share                             $      0.47         $     0.48      $     0.86       $    0.85
                                                               =================================================================
Dividends Declared Per Share                                     $      0.17         $     0.17      $     0.36       $    0.33
                                                               =================================================================
</TABLE>



See notes to condensed consolidated financial statements.


                                      -3-

<PAGE>   4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)

SOUTHERN MICHIGAN BANCORP, INC. AND SUBSIDIARY


<TABLE>
<CAPTION>
                                                                                              Six Months Ended
                                                                                                   June 30
                                                                                           2000               1999
                                                                                        -----------------------------
                                                                                               (In thousands)
<S>                                                                                     <C>                 <C>

OPERATING ACTIVITIES

     Net income                                                                         $   1,658           $  1,750
     Adjustments to reconcile net income to net
           cash provided by operating activities:
                  Provision for loan losses                                                   300                336
                  Provision for depreciation                                                  336                323
                  Increase  in other assets                                                  (707)              (263)
                  Increase in accounts payable and other liabilities                           31                338
                                                                                        ----------------------------
                  Net cash provided by operating activities                                 1,618              2,484


INVESTING ACTIVITIES

     Proceeds from maturity of investment securities                                        6,307             23,183
     Purchases of investment securities                                                    (3,150)            (9,063)
     Decrease in federal funds sold                                                             0              4,000
     Net increase in loans                                                                (20,769)           (19,924)
     Net increase in premises and equipment                                                  (404)              (166)
                                                                                        ----------------------------
                  Net cash used in investing activities                                   (18,016)            (1,970)


FINANCING ACTIVITIES

     Net decrease in deposits                                                                (228)           (13,558)
     Increase in federal funds purchased                                                   10,060              8,000
     Increase in other borrowings                                                          10,000                  0
     Common stock repurchased and retired                                                    (853)              (832)
     Cash dividends                                                                          (713)              (727)
                                                                                        ----------------------------
                  Net cash provided by (used in) financing activities                      18,266             (7,117)
                                                                                        ----------------------------
Increase (decrease) in cash and cash equivalents                                            1,868             (6,603)
Cash and cash equivalents at beginning of period                                           12,046             16,228
                                                                                        ----------------------------

                  CASH AND CASH EQUIVALENTS AT END OF PERIOD                            $  13,914           $  9,625
                                                                                        ============================
</TABLE>

See notes to condensed consolidated financial statements.



                                      -4-



<PAGE>   5



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

SOUTHERN MICHIGAN BANCORP, INC. AND SUBSIDIARY

June 30, 2000



NOTE A -- BASIS OF PRESENTATION

The accompanying year-end balance sheet data was derived from audited
consolidated financial statements, but does not include all disclosures required
by generally accepted accounting principles.

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions for Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1999.

Basic earnings per common share is net income divided by the weighted average
number of common shares outstanding during the period. ESOP shares are
considered outstanding for this calculation unless unearned. Diluted earnings
per common share includes the dilutive effect of additional potential common
shares issuable under stock options. Earnings and dividends per share are
restated for all stock splits and dividends through the date of issue of the
financial statements. The weighted average common shares outstanding for the
three and six month periods ended June 30, 2000 were 1,930,722 and 1,937,711,
respectively. The weighted average common shares outstanding for the three and
six month periods ended June 30, 1999 were 2,039,552 and 2,045,848,
respectively.








                                       -5-




<PAGE>   6

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

FINANCIAL CONDITION

Total deposits have declined by less than 1% during the first six months of
2000. Because of the lack of deposit growth, the Company added $10,000,000 to
its long-term borrowings to fund loan growth.

Net loans have increased by 10.7% in the first six months of 2000. The loan
growth has occurred in the commercial and real estate mortgage portfolios. The
commercial growth is due to borrowers' seasonal demands and continued economic
expansion within the Company's market area. The real estate mortgage increase
has occurred in adjustable rate mortgages as a result of customers being
reluctant to commit to long-term fixed rate mortgages in a rising rate
environment. At June 30, 2000 the Company had $280,000 in loans held for sale.

Investment securities decreased by 6.0% during the first six months of 2000.
Funds received from maturing securities were used to support the increase in
loans.

In 2000, the Bank will spend approximately $2,300,000 to renovate the Coldwater
main office and the Beckley Road office.

On February 15, 2000, the Company announced that it had agreed to merge with
Sturgis Bank & Trust Company of Sturgis, Michigan ("Sturgis"). The transaction
is anticipated to be a tax-free exchange. It is subject to regulatory approvals
and the approval by shareholders of Sturgis, and is anticipated to be effective
the second half of 2000. The exchange ratio is .398 shares of the Company's
common stock for one share of Sturgis' common stock. The Company expects to
incur costs of approximately $278,000 directly related to the merger in 2000.

CAPITAL RESOURCES

The Federal Reserve Board (FRB) has adopted risk-based capital guidelines
applicable to the Company. These guidelines require that bank holding companies
maintain capital commensurate with both on and off balance sheet credit risks of
their operations. Under the guidelines, a bank holding company must have a
minimum ratio of total capital to risk-weighted assets of 8.0 percent. In
addition, a bank holding company must maintain a minimum ratio of Tier 1 capital
equal to 4.0 percent of risk-weighted assets. Tier 1 capital includes common
shareholders' equity, qualifying perpetual preferred stock and minority interest
in equity accounts of consolidated subsidiaries less goodwill.



                                       -6-

<PAGE>   7

As a supplement to the risk-based capital requirements, the FRB has also adopted
leverage capital ratio requirements. The leverage ratio requirements establish a
minimum ratio of Tier 1 capital to total assets less goodwill of 3 percent for
the most highly rated bank holding companies. All other bank holding companies
are required to maintain additional Tier 1 capital yielding a leverage ratio of
4 percent to 5 percent, depending on the particular circumstances and risk
profile of the institution.

The following table summarizes the Company's capital ratios as of June 30, 2000:

<TABLE>
<S>                                                           <C>
                  Tier 1 risk-based capital ratio             10.20%
                  Total risk-based capital ratio              11.16
                  Leverage ratio                               8.09
</TABLE>

The above table indicates that the Company's capital ratios are above the
regulatory minimum requirements.

The Company repurchased and retired 27,531 shares of outstanding common stock
from ESOP participants in the first six months of 2000.

RESULTS OF OPERATIONS

Net Interest Income

Net interest income increased by $369,000 and $735,000 for the three and six
month periods ended June 30, 2000 compared to the same periods in 1999. This
increase is due to loan growth and higher interest rates.

Provision for Loan Losses

The provision for loan losses is based on an analysis of outstanding loans. In
assessing the adequacy of the allowance, management reviews the characteristics
of the loan portfolio in order to determine the overall quality and risk
profile. Some factors considered by management in determining the level at which
the allowance is maintained include a continuing evaluation of those loans
identified as being subject to possible problems in collection, results of
examinations by regulatory agencies, current economic conditions and historical
loan loss experience.

The provision for loan losses decreased by $36,000 for the three and six month
periods ended June 30, 2000 compared to the same periods in 1999. The 1999
provision was higher to provide for increased charge-offs and delinquencies,
primarily as a result of increased customer bankruptcies. The loan portfolio has
experienced significant growth in recent years and management is closely
monitoring portfolio performance particularly in light of recent interest rate
increases.

                                       -7-


<PAGE>   8

The allowance for loan losses is being maintained at a level which, in
management's opinion, is adequate to absorb possible loan losses in the loan
portfolio as of June 30, 2000.

Non-interest Income

Non-interest income, which includes service charges on deposit accounts, trust
fee income, security gains and losses and other miscellaneous charges and fees,
decreased by $152,000 and $122,000 for the three and six month periods ended
June 30, 2000 compared to the same periods in 1999. This decrease is due
primarily to a decline in gains recognized on the sale of real estate mortgage
loans to the secondary market and a decline in collected trust fees. These
declines are partially offset by increases in service charge income, ATM income
and brokerage commissions.

Non-interest Expense

Non-interest expenses increased by $269,000 and $631,000 for the three and six
month periods ended June 30, 2000 compared to the same periods in 1999. Salaries
and benefits increased as additional loan department employees were added to
assist with the increased loan volume. Legal and professional fees increased in
connection with the impending merger with Sturgis Bank & Trust. The Company has
also seen an increase in federal income taxes as its nontaxable municipal
securities income has declined. As the nontaxable municipal securities matured,
the funds were reinvested in loans.

Year 2000

The Company had a successful Year 2000 rollover. The Company has not experienced
any significant Year 2000 problems as a result of the rollover, and is not aware
of any customers that have experienced material Year 2000 problems. This success
can be attributed to the fact that the Company began addressing Year 2000 issues
in mid 1997. The Company followed a plan to identify all critical business
processes and established a priority schedule for assessment of each process. As
the Company worked through its Year 2000 plan, any hardware, software, equipment
or vendor provided services that were identified as not Year 2000 compliant were
either upgraded or retired. While no Year 2000 problems have been identified to
date, monitoring will continue for most of 2000 to assure that all Year 2000
issues have been addressed.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary market risk exposure is interest rate risk and to a lesser
extent liquidity risk. Interest rate risk arises when the maturity or repricing
characteristics of

                                       -8-


<PAGE>   9


assets differ significantly from the maturity or the repricing characteristics
of liabilities. Accepting this risk can be an important source of profitability
and shareholder value, however, excessive levels of interest rate risk could
pose a significant threat to the Company's earnings and capital base.
Accordingly, effective risk management that maintains interest rate risk at
prudent levels is essential to the Company's safety and soundness.

The Company measures the impact of changes in interest rates on net interest
income through a comprehensive analysis of the Bank's interest rate sensitive
assets and liabilities. Interest rate sensitivity varies with different types of
interest-earning assets and interest-bearing liabilities. Overnight federal
funds and mutual funds on which rates change daily and loans which are tied to
the prime rate or a comparable index differ considerably from long-term
investment securities and fixed-rate loans. Similarly, certificates of deposit
and money market investment accounts are much more interest sensitive than
passbook savings accounts. The shorter term interest rate sensitivities are key
to measuring the interest sensitivity gap, or excess interest-earning assets
over interest-bearing liabilities. In addition to reviewing the interest
sensitivity gap, the Company also analyzes projected changes in market interest
rates and the resulting effect on net interest income.

Liquidity management involves the ability to meet the cash flow requirements of
customers who may be either depositors wanting to withdraw funds or borrowers
needing assurance that sufficient funds will be available to meet their credit
needs. Certain portions of the Bank's liabilities may be short-term or due on
demand, while most of its assets may be invested in long-term loans or
investments. Accordingly, the Company seeks to have in place sources of cash to
meet short-term demands. These funds can be obtained by increasing deposits,
borrowing or selling assets. Also, Federal Home Loan Bank advances and
short-term borrowings provide additional sources of liquidity for the Company.

There have been no significant changes in the distribution of the Company's
financial instruments that are sensitive to changes in interest rates during the
first six months of 2000.










                                       -9-



<PAGE>   10


PART II - OTHER INFORMATION

ITEM 4. Submission of Matters to a Vote of Security Holders

The Annual Meeting of Shareholders of Southern Michigan Bancorp, Inc. was held
on April 17, 2000 at Southern Michigan Bank & Trust. The following items were
approved by the shareholders at the Annual Meeting:

a.   Election of Gregory J. Hull, Freeman E. Riddle and Thomas E. Kolassa as
     directors.

b.   Adoption of the Southern Michigan Bancorp, Inc. 2000 Stock Option Plan.

c.   Ratification of the selection of Crowe, Chizek and Company LLP as
     Independent Auditors for 2000.

ITEM 6. Exhibits and Reports on Form 8-K

a.   Listing of Exhibits: Financial Data Schedule

b.   There were no reports filed on Form 8-K during the second quarter of 2000.

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                           Southern Michigan Bancorp, Inc.
                                           ------------------------------
                                                   (Registrant)

AUGUST 7, 2000                              /s/ JAMES T. GROHALSKI
--------------                             ------------------------------
Date                                       James T. Grohalski,  President
                                           and Chief Executive Officer
                                           (Principal Financial and
                                           Accounting Officer)










                                      -10-
<PAGE>   11
                                 Exhibit Index
                                 -------------

<TABLE>
<CAPTION>

Exhibit No.                   Description
-----------                   -----------
<S>                           <C>
     27                       Financial Data Schedule

</TABLE>