Edgar Filing: STURGIS BANCORP INC

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-12

Sturgis Bancorp, Inc.
---------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

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(Name of Person(s) Filing Proxy Statement if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:

PROXY MATERIALS
STURGIS BANCORP, INC.
125 East Chicago Road
Sturgis, MI 49091
(269) 651-9345

-------------------------------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 27, 2004
--------------------------------------------------

The Annual Meeting of Stockholders of Sturgis Bancorp, Inc. ("Company"),
will be held at the Sturges-Young Auditorium, 201 N. Nottawa Road, Sturgis,
Michigan on Tuesday, April 27, 2004 at 1:30 p.m.

A Proxy and a Proxy Statement for the Meeting are enclosed.

The Meeting is for the purpose of considering and acting upon:

1. The election of two (2) directors of the Company;

2. The ratification of the appointment of Plante & Moran, PLLC as
Independent Public Accountants for the Company for the fiscal year
ending December 31, 2004.

3. Such other matters as may properly come before the Meeting or any
adjournment thereof.

NOTE: The Board of Directors is not aware of any other business to come
before the meeting.

Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Stockholders of
record at the close of business on March 15, 2004 are the Stockholders entitled
to vote at the Meeting and any adjournments thereof.

You are requested to fill in and sign the accompanying form of Proxy
which is solicited by the Board of Directors and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend and vote at the
Meeting in person.

BY ORDER OF THE BOARD OF DIRECTORS

Brian P. Hoggatt
Secretary

Sturgis, Michigan
March 26, 2004

PROXY STATEMENT
OF
STURGIS BANCORP, INC.
125 East Chicago Road
Sturgis, Michigan 49091

ANNUAL MEETING OF STOCKHOLDERS
April 27, 2004

Sturgis Bancorp, Inc. (the "Company") is a financial holding company
under the Bank Holding Company Act of 1956, as amended. The Company was formed
on December 11, 2001 when the shareholders of Sturgis Bank and Trust Company
(the "Bank") approved the reorganization of the Bank to become a wholly owned
subsidiary of the Company. This reorganization was effective January 1, 2002.
Throughout this Proxy Statement, Sturgis Bancorp, Inc. will be referred to as
the Company and Sturgis Bank & Trust Company will be referred to as the Bank.

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Sturgis Bancorp, Inc. (the "Company") to be
used at the Annual Meeting of Stockholders of the Company (the "Meeting") which
will be held at the Sturges-Young Auditorium, 201 N. Nottawa Road, Sturgis,
Michigan, on Tuesday, April 27, 2004, at 1:30 p.m. The accompanying Notice of
Meeting and this Proxy Statement are being first mailed to Stockholders on or
about March 26, 2004.

In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any Stockholder's proposal to
take action at such Meeting must be received at the Company's home office, at
125 East Chicago Road, Sturgis, Michigan 49091, no later than November 26, 2004.
This deadline is calculated in accordance with SEC Rule 14a-8(e) (Question 5)
which states that any such proposal must be received at the Company's principal
executive offices not less than 120 calendar days before the date of the
Company's proxy statement released to shareholders in connection with the
previous year's annual meeting. Any such proposal shall be subject to the proxy
rules adopted under the Securities and Exchange Act of 1934, as amended. If a
shareholder proposal is not presented to the Company by February 9, 2005, SEC
Rule 14a-4(c)(1) provides that the Company may use discretionary authority to
vote on the matter.

The Company has discretionary authority under its By-laws whether or not
to call a vote on any matter, without discussion in the Proxy Statement, on any
stockholder proposal for which it has notice, in writing, 5 days before the
Annual Meeting. A shareholder may obtain a copy of the Company's By-laws by
sending a request to Sturgis Bancorp, Inc., 125 E. Chicago Road, P.O. Box 600,
Sturgis, Michigan 49091.

REVOCATION OF PROXIES

Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company or by the filing of a later dated proxy
prior to a vote being taken on a particular proposal at the Meeting. A written
notice of revocation of proxy should be sent to the Secretary at Sturgis
Bancorp, Inc., 125 East Chicago Road, P.O. Box 600, Sturgis, Michigan 49091, and
will be effective if received by the Secretary prior to the Meeting. A
previously submitted proxy will also be revoked if a stockholder attends the
Meeting and votes in person. Proxies solicited by the Board of Directors of the
Company will be voted in accordance with the directions given therein. Where no
instructions are indicated, proxies will be voted for the nominees for directors
set forth under "PROPOSAL I--ELECTION OF DIRECTORS" and for "PROPOSAL
II--RATIFICATION OF PLANTE & MORAN, PLLC AS INDEPENDENT PUBLIC ACCOUNTANTS OF
THE COMPANY FOR 2002."

COMPANY MAKING THE PROXY SOLICITATION

This proxy solicitation is on behalf of the Company for the purposes set
forth in this Proxy Statement and the costs associated with the Proxy Statement
are being paid by the Company. No director of the Company has

informed the Company in writing or otherwise that he intends to oppose any
action intended to be taken by the Company in accordance with this Proxy
Statement.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

Stockholders of record as of the close of business on March 15, 2004 are
entitled to one vote for each share then held. As of the March 15, 2004 record
date, the Company had 2,809,285 shares of common stock, $1.00 par value, issued
and outstanding ("Common Stock") of which each share is entitled to one vote.

A majority of the outstanding shares of the Company entitled to vote,
represented in person or proxy, shall constitute a quorum at the Meeting.
Abstentions shall be included in a determination of a quorum, however, broker
non-votes shall not be included.

Stockholders may not cumulate their votes for the election of directors.
The individuals with the most votes will be elected as directors.

The ratification of Plante & Moran, PLLC shall be approved if the number
of shares voting for the ratification, either in person or by proxy, exceeds the
number of shares voting against.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN OTHERS

Securities Holders of 5% or More
--------------------------------

To the extent known to the Company, persons and groups owning in excess
of 5% of the Company's Common Stock, as reported on Schedule 13G and Schedule
13D with the SEC are shown in the following tables.

Schedule 13G

---------------- -------------------------------------- ------------------------- ------------------
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT AND NATURE OF PERCENT OF CLASS
BENEFICIAL OWNERSHIP
---------------- -------------------------------------- ------------------------- ------------------

Common Stock Raymond H. Dresser, Jr.(1) Total--141,775(2)
215 Haral Avenue 5.0%
Sturgis, Michigan 49091 Direct--89,175(2)
Indirect--52,600
---------------- -------------------------------------- ------------------------- ------------------
Common Stock Newell A. Franks(3) Total--197,200
509 N. Lakeview Ave. 7.0%
Sturgis, Michigan 49091 Direct--197,200

---------------- -------------------------------------- ------------------------- ------------------

(1) Gretchen M. Dresser, Raymond H. Dresser, Jr.'s spouse, filed a joint Schedule 13G with the
Securities and Exchange Commission relating to these total shares on February 12, 2004.
(2) Includes 600 shares of unexercised options.
(3) Newell A. Franks filed a Schedule 13G with the Securities and Exchange Commission on February
12, 2004. Newell A. Franks is also the father of director Lawrence A. Franks.

Schedule 13G

Common Stock Tontine Financial Partners, L.P.(1) Total--151,970
Tontine Management, LLC (2) 5.4%
Jeffrey L. Gendell Direct--151,970(3)
55 Railroad Avenue, 3rd Fl.
Greenwich, Connecticut 06830

---------------- -------------------------------------- ------------------------- ------------------

(1) Tontine Financial Partners, L.P. is a limited partnership organized under the laws of the
State of Delaware.
(2) Tontine Management, LLC is a limited liability company organized under the laws of the State
of Delaware.
(3) As reported in Schedule 13D filed with the SEC on November 24, 2003, the shares of common stock
of the Company are directly owned by Tontine Financial Partners, LP and neither Tontine
Management, LLC nor Jeffrey Gendell directly own any shares of common stock of the Company.

The Schedule 13D filed on November 24, 2003 by Tontine Financial Partners, L.P.,
Tontine Management, LLC, and Jeffrey Gendell indicates that there is a shared
power to vote or direct the vote of 151,970 shares of common stock of the
Company. The Schedule 13D further states that Tontine Management is the general
partner of Tontine Financial Partners and has the power to direct the affairs of
Tontine Financial Partners, including decisions respecting the disposition of
the proceeds from the sale of the shares of the Company. The Schedule 13D
further indicates that Mr. Gendell is the managing member of Tontine Management
and in that capacity directs its operations.

Security Ownership of Management
--------------------------------

The following table indicates as of March 15, 2004 beneficial ownership
by all current directors, executive officers and nominees for director of the
Company's Common Stock individually and as a group. The Company has only one
class of common stock outstanding.

Name and Address of Shares of Common Shares which may Total Shares of Percent of Shares of
Beneficial Owner Stock Directly be acquired Stock deemed as Common Stock
or Indirectly within 60 days being Outstanding and
Owned (1) upon exercise of Beneficially Deemed Outstanding
stock options Owned (2)
---------------------------- ------------------ ------------------- ------------------ ----------------------

Raymond H. Dresser, Jr. 141,175 600 141,775 4.96%
215 Haral Avenue
Sturgis, MI 49091

Eric L. Eishen 9,002 13,514 22,516 .79%
284 Kruszka
Bronson, MI 49028

Leonard L. Eishen 79,673 16,378 96,051 3.36%
66002 Knollwood Drive
Sturgis, MI 49091

Lawrence A. Franks (3) 114,474 975 115,449 4.04%
609 E. Chicago Road
Sturgis, MI 49091

Donald L. Frost 21,206 975 22,181 .78%
68592 Benham Beach
Sturgis, MI 49091

James A. Goethals 20,000 975 20,975 .73%
25580 Waneta Way
Sturgis, MI 49091

Philip G. Ward 37,120 975 38,095 1.33%
1000 S. Lakeview
Sturgis, MI 49091

Brian P. Hoggatt 0 9,028 9,028 .32%
602 Cherry Street
Sturgis, MI 49091

Ronald W. Scheske 0 4,278 4,278 .15%
1208 Parkside Cir.
Sturgis, MI 49091

------------------------ ------------------ ------------------- ------------------ ----------------------
All Directors, Officers
and Nominees of the 422,650 47,698 470.348 16.46%
Company as a Group
(9 people)
-------------------------------------------------------------------------------------
(1) Includes certain shares owned by spouses and children or as custodian or trustee, or over which shares
the individual effectively exercises sole or shared voting and investment power.
(2) The 47,698 shares able to be acquired within 60 days upon exercise of stock options are deemed outstanding
as of March 15, 2004. As a result, the percentages shown are based on the 2,809,535 shares outstanding as
of March 15, 2004, plus 47,698 shares that the group has the right to acquire within 60 days pursuant to
options granted by the Company.
(3) Lawrence A. Franks is a son of Newell A. Franks whom filed a Schedule 13G for his ownership of 197,200
shares of Common Stock of the Company.

PROPOSAL I -- ELECTION OF DIRECTORS

The Board is divided into three classes with staggered terms, consisting
of two directors in Class I, three directors in Class II and two directors in
Class III. Each director holds office for a term of three years. The term of
directors in Class I expires in 2004, Class II in 2005, and Class III in 2006.
Class I directors are scheduled for election at the Meeting.

The Nominating and Corporate Governance Committee of the Board of
Directors is comprised of Directors Franks, Frost, Goethals and Ward, all of
whom qualify as independent directors as defined by NASDAQ. The Nominating
Committee of the Board of Directors has nominated for election Donald L. Frost
and Philip G. Ward to the two available seats in Class I on the Board and to
serve in those positions until 2007.

If any nominee is unable to serve, shares represented by all valid
proxies will be voted for the election of such substitute director as the Board
of Directors may recommend. At this time, the Board knows of no reason why any
nominee might be unable to serve.

The nominees for director receiving the highest number of "FOR" votes for
the number of director positions open for election shall be elected to the Board
of Directors. By way of example, if two director positions are open for
election, the two director nominees with the most "FOR" votes will be elected as
directors. Stockholders of record as of the close of business on March 15, 2004
are entitled to vote one vote for each share then held. As of the March 15, 2004
record date, the Company had 2,809,535 shares of common stock of which each
share is entitled to one vote. Where no instructions are indicated, proxies will
be voted "FOR" the nominees for directors nominated by the Board of Directors.
Both non-votes and abstentions are counted in determining a quorum.

The following table sets forth certain information with respect to
current directors and nominees for director of the Company.

Year Director's
Year First Appointed or Current Term
Name Age Position Elected as a Director(1) Expires
---- --- -------- ------------------------ -------

Raymond H. Dresser, Jr. 72 Director 1968 2005

Leonard L. Eishen 65 Director 1977 2005

Eric L. Eishen 37 Director, President and 1999 2006
Chief Executive Officer

Lawrence A. Franks 69 Director, 1996 2005
Chairman of the Board

Donald L. Frost 57 Director 1995 2004

James A. Goethals 66 Director, 1972 2006
Vice Chairman of the Board

Philip G. Ward 67 Director 1988 2004

(1) These dates reflect the date the respective director was first appointed or elected director of the Bank. Each
director became a director of the Company on August 20, 2001.

The Company is unaware of any arrangement or understanding between any
director or nominee pursuant to which any director or nominee is to be selected
as a director or nominee.

The Board of Directors of the Company has determined that directors
Lawrence Franks, Donald Frost, James Goethals, and Philip Ward are independent
directors, and satisfy the NASDAQ standard for independence.

The principal occupation and certain other information for each current
director, executive officer and nominee for director of the Company are set
forth below. Unless otherwise noted, all individuals have held the position
described below for at least the past five years.

NOMINEES FOR ELECTION AS CLASS I DIRECTORS CONTINUING IN OFFICE UNTIL 2007

DONALD L. FROST is President of LTI Printing, Inc. He served on the Board
of the Glen Oaks Community College Foundation and served as the Chairman of the
Building Committee for the Doyle Community Center in 1994 to 1995. LTI Printing,
Inc. is not a parent, subsidiary or other affiliate of the Company.

PHILIP G. WARD is past President of Glen Oaks Community College. He is
also a past President of the Michigan Association of Community Colleges and
currently serves on the Sturgis Hospital Board (since 2000) and is a former
member of the City of Sturgis Planning Board.

CLASS II DIRECTORS CONTINUING IN OFFICE UNTIL 2005

RAYMOND H. DRESSER, JR., is a principal stockholder of and serves as
Chairman of the law firm of Dresser, Dresser, Haas & Caywood, P.C., which was
founded in Sturgis in 1898. The firm has served as legal counsel to the Bank for
many years. He is President and a director of the Economic Development
Corporation of the City of

Sturgis and the Sturgis Improvement Association. Dresser, Dresser, Haas &
Caywood, P.C. is not a parent, subsidiary or other affiliate of the Company.

LEONARD L. EISHEN is the former President and Chief Executive Officer of
the Company. He retired from Company in 2003. He was also the President of the
Bank, the wholly owned subsidiary of the Company, since 1980 and Chief Executive
Officer since 1976 until retiring in 2002. He is a past Chairman of the Michigan
League of Community Banks. He is a former member of the board of directors of
America's Community Bankers (1998-2002) and former Vice Chairman of District V
(1998) of the Michigan Chamber of Commerce. He is also a past Vice Chairman of
the Federal Home Loan Bank of Indianapolis. President and Chief Executive
Officer Eric L. Eishen is his son.

LAWRENCE A. FRANKS is President of Burr Oak Tool and Gauge Company, Inc.,
Oak Products, Inc., and Chairman of the Board of Oak Japan. He is past Vice
President of the Sturgis Improvement Association and the Economic Development
Corporation of Sturgis. He is a Trustee (since 1984) and Chairman Emeritus of
the Board (1999) of Tri-State University, Angola, Indiana. He is also a past
Lieutenant Governor for Kiwanis International and a past President of the
Kiwanis Club of Sturgis. Director Franks serves as the Chairman of the Board of
the Company. Neither Burr Oak Tool and Gauge Company, Inc., Oak Products, Inc.,
nor Oak Japan is a parent, subsidiary or other affiliate of the Company.

CLASS III DIRECTORS CONTINUING IN OFFICE UNTIL 2006

ERIC L. EISHEN has been the President and Chief Executive Officer of the
Company since May 1, 2003. He was appointed President and Chief Executive
Officer of the Bank, a wholly owned subsidiary of the Company in 2002. He has
been a full time employee of the Bank since 1987 and became Vice President of
Administration in 1991, First Vice President Chief Administration Officer in
1995, First Vice President and Chief Administrative Officer in 1998, and
Executive Vice President and Chief Operating Officer in 1999. He is a member of
the Board of Directors of the Sturgis Public Schools Endowment Fund, past
President of the Sturgis Area Chamber of Commerce (1997) and the Kiwanis Club of
Sturgis (1999). He is the son of director Leonard L. Eishen.

JAMES A. GOETHALS is past President of Sturgis Foundry Corporation. He is
a past President of the Sturgis Chamber of Commerce and Sturgis United Fund. He
is the President and a trustee of the Sturgis Area Community Foundation. He is
the Chairman of the Board of the Bank. Sturgis Foundry Corporation is not a
parent, subsidiary or other affiliate of the Company.

In addition to Eric L. Eishen, the Company has two additional executive
officers.

BRIAN P. HOGGATT is the Chief Financial Officer, Secretary and Treasurer
of the Company. He is 37 years old and has been with the Bank since 1988 where
he was Controller from 1991 to 1994, became Vice President in 1993, Chief
Financial Officer and Treasurer in 1994, and Corporate Secretary in 2002. He
also became Chief Financial Officer, Secretary and Treasurer of the Company in
2002.

RONALD W. SCHESKE is the Vice President of the Company. He is 48 years
old and has been with the Bank as Vice President from 1997 to 2000, when he
became First Vice President. He became Senior Vice President of the Bank in 2001
and Executive Vice President of the Bank in 2002. He also became Vice President
of the Company in 2003.

Transactions with the Company
-----------------------------

Mr. Raymond H. Dresser, Jr. is the majority stockholder in Dresser,
Dresser, Haas & Caywood, P.C. and is also a Director of the Company. Dresser,
Dresser, Haas & Caywood, P.C. acts as legal counsel to the Company and its
subsidiaries. Dresser, Dresser, Haas & Caywood, P.C. was paid $188,590.24 by the
Company and its subsidiaries in 2003 for legal fees and disbursements and
$131,701 for legal fees and disbursements in 2002. John R. Dresser, the son of
director Raymond H. Dresser, Jr., is also a stockholder in Dresser, Dresser,
Haas & Caywood, P.C.

The Bank, a wholly owned subsidiary of the Company, provides residential
mortgage loans and other types of loans in the ordinary course of business. The
Bank provides such residential mortgage loans and other types of loans to its
directors, officers and employees in the ordinary course of business. The Bank
has a policy that all loans to officers, principal stockholders, or directors of
the Company must be on substantially the same terms as with any customer
including terms of interest and collateral. The Bank has followed this policy in
regard to these loans and it is the belief of the management of the Company that
these loans neither involve more than the normal risk of collectability nor
present other unfavorable features, and none of these loans is a nonaccrual,
past due, restructured or potential problem loan. Neither the Company nor its
subsidiaries have any loans to directors, officers, and employees other than in
the ordinary course of its regularly conducted business activities as detailed
above.

Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------

Directors, and certain officers and security holders during 2003 were
required to file timely reports of their security holdings and transactions with
the Securities and Exchange Commission. Section 16(a) of the Securities and
Exchange Act of 1934, as amended, requires each director and certain officers of
the Company, and any person or entity that owns more than 10% of our common
stock, to file with the Securities and Exchange Commission by a specified date
certain reports of ownership and changes in ownership of our common stock.
Shareholders who own more than 10% of our common stock are required to furnish
the Company copies of all reports they file under Section 16(a). The Company
prepares and files 16(a) reports on behalf of its officers and directors. A
registrant is required to identify any of these individuals failing to timely
file these reports. The directors and relevant officers timely filed the
necessary Form 4 reporting of changes in beneficial ownership for 2003. No
Section 16(a) reports for 2003 were untimely filed.

Code of Ethics
--------------

The Company has adopted a Code of Ethics that applies to the Company's
principal executive officer, principal financial officer, principal accounting
officer, as well as all directors, officers and employees of the Company. The
Code of Ethics was adopted during calendar year 2003 and a copy is attached as
an exhibit to the Company Form 10-K. To the extent the Company makes any
amendments to or any waivers of any provision of the Code of Ethics, it will
disclose such under Item 10 of Form 8-K.

Shareholder Communications
--------------------------

The Board of Directors of the Company has a procedure whereby
shareholders may send communications to the Board's attention. Any shareholder
desiring to communicate with the Board, or one or more specific members of the
Board, should communicate in a writing addressed to Bancorp, Inc., Board of
Directors, c/o Secretary, 125 East Chicago Rd., Sturgis, Michigan 49091. The
Secretary of the Company has been instructed to promptly forward all such
communications to the specified addressees thereof.

The Board of Directors and Its Committees
-----------------------------------------

The Board of Directors met 18 times (12 regular, one organizational, and
five special) during the fiscal year ended December 31, 2003. No Director
attended fewer than 75 percent of the aggregate of the total number of meetings
of the Board of Directors and the total number of meetings held by all
committees of the Board on which he served. The Company strongly encourages
attendance of the Board of Directors at the Annual Meeting of shareholders. For
last year's annual meeting, all directors attended except Director Franks.

The Board of Directors has established various committees, including a
standing Audit Committee, Executive Committee, Planning and Budget Committee and
Nominating and Corporate Governance Committee. The Bank also has several
committees, including and Audit Committee, Trust Audit Committee, Community
Reinvestment Act Committee, Compensation Committee and Loan Committee.

The Compensation Committee recommends the compensation to be allowed to
officers and managers selected by the Board. The Compensation Committee was
comprised of Directors Frost, Goethals, and Ward during the year ended December
31, 2003 and met three times during 2003. The Compensation Committee Charter is

attached as Appendix A to this Proxy Statement.

The Loan Committee of the Bank meets to review all commercial loans in
excess of loan officer limits, which is over $500,000 up to $1 million aggregate
for any one borrower. Any aggregate loan request, for any one borrower, over $1
million is presented to the full Board of the Bank. This Committee was comprised
of Directors Dresser, Ward, L. Eishen and E. Eishen during the year ended
December 31, 2003 and met four times during 2003.

The Nominating and Corporate Governance Committee recommends to the total
Board of Directors individuals for election to the Board based upon the
individual's experience and qualifications. At the time of the recommendation of
the nominees for election at the Annual Meeting scheduled for April 27, 2004,
the Nominating Committee had not yet approved of a charter. Since the
nominations, the Nominating Committee has adopted the Nominating and Corporate
Governance Committee Charter that is attached to this Proxy Statement as
Appendix B.

Generally when nominating candidates for director, the Nominating and
Corporate Governance Committee will not consider nominees recommended by
Stockholders. Nominations for directors, however, may be made by Stockholders,
but such nominations must be in writing and delivered to the Secretary of the
Company at least sixty (60) days prior to the date of the Annual Meeting. Upon
delivery, such nominations shall be posted in a conspicuous place in each office
of the Company. Ballots bearing the names of all persons nominated by the Board
of Directors and by Stockholders shall be provided for use at the Annual
Meeting. If the Nominating Committee fails or refuses to name nominees at least
seventy-five (75) days prior to the Annual Meeting, nominations for directors
may be made at the Annual Meeting by any stockholders entitled to vote and shall
be voted upon. Within the preceding year, neither the Board of Directors nor the
Nominating Committee has rejected a board candidate recommended by a beneficial
owner of more than 5% of the Company's Common Stock.

As set forth in Nominating and Corporate Governance Charter, in
identifying individuals qualified for nomination as directors, the Nominating
Committee selects individuals who satisfy applicable Company governing
documents, who shall have the highest personal and professional integrity, who
shall have demonstrated exceptional ability and judgment, and who shall be most
effective, in conjunction with other nominees to the board, in collectively
serving the long-term interests of the shareholders. The Nominating Committee
does not currently pay any third party a fee to assist in identifying and
evaluating nominees for director.

In addition to making recommendations to the full Board of Directors for
nominees for directors, the Nominating and Corporate Governance Committee serves
other functions. These functions include reviewing the Board of Directors'
committee structure and making recommendations for committee members, to develop
and recommend to the Board of Directors a set of corporate governance
guidelines, to develop and recommend an annual self-evaluation process for the
Board and its committees, and to review on an annual basis director compensation
and benefits. For more detailed information, see the Nominating and Corporate
Governance Committee Charter attached as Appendix B to this Proxy Statement.

The Audit Committee selects the Company's independent public accountants
and reviews major financial, accounting and internal auditing policies and the
audit scope. This committee meets with the independent public accountants in
connection with their annual audit. This Committee met 10 times during the year
ended December 31, 2003. The Audit Committee was comprised of Directors Frost,
Goethals, and Ward during the year ended December 31, 2003. The Board of
Directors has determined that all members of the committee are independent
directors, and satisfy the NASDAQ standard for independence for members of the
Audit Committee. The Board of Directors of the Company has adopted a written
charter for the Audit Committee. The Audit Committee Charter was revised during
the year ended December 31, 2003 and the revised charter is attached as Appendix
C to this Proxy Statement.

The Board of Directors of the Company has determined that the Audit
Committee does not currently have an audit committee financial expert serving on
its Audit Committee. The Audit Committee does not have an "audit committee
financial expert" as that term is defined in the SEC regulations, because the
Board of Directors did not believe that any of the members of the Audit
Committee met the qualifications of an "audit committee financial expert."
However, the Board of Directors has determined that all of the members of the
Audit Committee are able to read and understand fundamental financial statements
within the meaning of the NASDAQ audit committee requirements and that at least
one of its members has the financial sophistication required by NASDAQ. Our
Board of Directors has determined that by satisfying the requirements of the
NASDAQ listing standards with a member of

the Audit Committee that has the requisite "financial sophistication"
qualifications, the Audit Committee has the financial expertise necessary to
fulfill the duties and the obligations of the Audit Committee. The Board of
Directors has concluded that the appointment of an additional director to the
Audit Committee is not necessary at this time.

AUDIT COMMITTEE REPORT

The following Audit Committee Report does not constitute solicitation
material and should not be deemed filed or incorporated by reference into any
other Company filing under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent the Company specifically incorporates this
Report by reference therein.

The Audit Committee reports:

1. The Audit Committee has reviewed and discussed the audited financial
statements with management.

2. The Audit Committee has discussed with the Company's independent auditors
the matters required to be discussed by SAS 61(codification of statements
on auditing standards, AU 380), as may be modified or supplemented.

3. The audit committee has received the written disclosures in the letter
from the Company's independent accountants required by Independence
Standards Board Standard No. 1, as may be modified or supplemented, and
has discussed with the independent accountants the independent
accountant's independence.

4. Based on the review and discussions referred to in paragraphs 1 through 3
of this section, the audit committee recommended to the Board of
Directors that the audited financial statements be included in the
Company's Annual Report on Form 10-K for the last fiscal year for filing
with the Securities and Exchange Commission.

AUDIT COMMITTEE
Donald L. Frost, Chairman
James A. Goethals
Philip G. Ward

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Executive Compensation

The following executive compensation information and the performance
graph included elsewhere in this Proxy Statement do not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Company filing under the Securities Ace of 1933 or the Securities Exchange
Act of 1934, except to the extent the Company specifically incorporates this
executive compensation information or the performance graph by reference
therein.

The following tables set forth certain information as to compensation
received by certain executive officers during the periods indicated. These
periods relate to compensation received from both the Bank and the Company.

SUMMARY COMPENSATION TABLE

Annual Compensation Long Term Compensation
------------------- ----------------------
Salary and Securities
Name and Principal Position Year Directors Fees ($) Bonus ($) Underlying Options(1)
--------------------------------------------------------------------------------------------------------------------

Leonard L. Eishen,(2) 2003 $ 37,886 - $ 3,150
President and CEO 2002 185,000 $10,000 -
2001 174,000 - -

Eric L. Eishen,(2) 2003 $175,983(1) $20,000 -
Vice President 2002 135,873(1) 18,000 -
President and CEO 2001 120,679(1) 14,000 -

Brian P. Hoggatt, 2003 $117,292(1) $16,000 -
CFO, Secretary/Treasurer 2002 100,704 15,000 -
2001 80,000 12,600 -

Ronald W. Scheske, 2003 $105,988 $14,500 -
Exec. Vice Pres. (Bank) 2002 90,704 12,500 -
2001 79,596 9,800 -

(1) This figure includes the taxable value of the car allowance received by Mr. Eishen and Mr. Hoggatt.
(2) Leonard L. Eishen retired on April 30, 2003 and Eric L. Eishen became President and CEO of the Company on
May 1, 2003.

FISCAL YEAR-END OPTION VALUE TABLE

Number of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
Fiscal Year-End Fiscal Year-End
Aggregate or Value -------------------------- --------------------------
Name Exercised Realized Exercisable Unexercisable Exercisable Unexercisable
-------------- ----------- -------- ----------- ------------- ------------ -------------
Eric L. Eishen -0- -0- 13,514(1) -0- $14,013(2) -0-
Brian P. Hoggatt -0- -0- 9,028 -0- 2,025 -0-
Ronald W. Scheske -0- -0- 4,278 -0- -0- -0-

(1) Includes 2,878 shares of unexercised options of spouse, Chandre Eishen.
(2) Includes $3,114 of value of unexercised options of spouse, Chandre Eishen.

The Board of Directors of the Bank entered into a three (3) one (1) year
employment contracts with the Chief Executive Officer Eric L. Eishen, Chief
Financial Officer Brian P. Hoggatt, and the Vice President Ronald W. Scheske,
effective May 1, 2003. Mr. Eishen received an initial annual base salary of
$175,000 on the effective date of the contract, which salary is subject to
increases or decreases as approved by the Board of Directors. Mr. Hoggatt
received an initial annual base salary of $115,000 on the effective date of the
contract, which salary is subject to increases or decreases as approved by the
Board of Directors. Mr. Scheske received an initial annual base salary of
$105,000 on the effective date of the contract, which salary is subject to
increases or decreases as approved by the Board of Directors. The contracts for
Mr. Eishen, Mr. Hoggatt and Mr. Scheske also provide, among other things, for
participation in an equitable manner in employee benefits applicable to all
employees of the Company. The Company may discharge Mr. Eishen, Mr. Hoggatt,
and/or Mr. Scheske for cause at any time or upon the occurrence of certain
events specified by State of Michigan Division of Financial Institutions of the
Office of Financial and Insurance Services regulations. Upon termination of Mr.
E. Eishen's, Mr. Hoggatt's, and/or Mr. Scheske's employment by the Company for
reasons other than cause or in the event of termination of employment by Mr. E.
Eishen, Mr. Hoggatt or Mr. Scheske for good reason, Mr. E. Eishen, Mr. Hoggatt
or Mr. Scheske will receive his base compensation (subject to IRS Code Sec.
280(G)) under the contract for an additional three (3) years if the termination
follows a change of control. If this would have occurred in 2003, Mr. E. Eishen
would have been entitled to receive a total of $525,000. If this would have
occurred in 2003, Mr. Hoggatt would have been entitled to receive $345,000. If
this would have occurred in 2003, Mr. Scheske would have been entitled to
receive $315,000. The agreements provide the Bank with protection of its
confidential business information and protection from competition by Mr. Eishen,
Mr. Hoggatt and/or Mr. Scheske should employment terminate pursuant to specified
conditions.

On December 17, 2001, the Board of Directors of the Bank implemented a
Supplemental Executive Retirement Program ("SERP") for the senior executives of
the Bank. The SERP provides a supplemental retirement benefit equal to a
percentage of compensation, based on the average of the highest five consecutive
years of employment prior to retirement and based upon years of service with the
Bank. The SERP benefit is paid for fifteen years after retirement. Normal
retirement age under the SERP is sixty-five (65) years old and the employee must
have one year of SERP participation to receive a retirement benefit. The SERP
also contains provisions for early retirement, benefits to the employee's
beneficiaries upon death, and disability provisions. The SERP is fully paid by

the Bank and is financed through life insurance coverage on Bank officers that
is owned and paid for by the Bank. The SERP is effective December 31, 2001. The
SERP participants are Eric L. Eishen, Brian P. Hoggatt, Tracey L. Parker and
Ronald W. Scheske.

Directors Compensation
----------------------

As a result of the previously described reorganization, a portion of the
historical discussion contained below relates the Company while it operated as
Sturgis Bank & Trust Company and prior to the effective date of the
reorganization (effective January 1, 2002). With respect to matters relating to
January 1, 2002 and after, the discussion relates to the Company. As part of the
reorganization, the stock options plans discussed below continue in full force
and effect for the option to purchase shares of the Company.

Except for Mr. E. Eishen, each Director of the Company currently receives
$6,300 per year, $500 for each regular Board Meeting attended and $350 for each
special Board Meeting attended for the year ended 2003. The Chairman of the
Audit Committee received $375 for each Audit Committee meeting attended plus
$100 per hour. Other members of the Audit Committee received $175 for each Audit
Committee meeting attended plus $100 per hour. Members of the Planning and
Budget Committee each received $300 for each meeting attended. Members of the
various other committees who are not also Company employees received fees of
$175 for each meeting attended. The Chairmen of the Company, Bank and Audit
Committee each received an additional $3,300 per year.

In 1995, the Stockholders adopted a stock option plan that allows all
Directors, both employee and non-employee Directors, to participate ("Director
Plan"). Pursuant to the Director Plan, 7,000 shares of authorized but unissued
Common Stock were reserved for issuance to Directors upon exercise of options
granted under the Director Plan. Under the Director Plan each Director was
granted an annual option to purchase 200 shares of Common Stock at an exercise
price to be determined as the closing price of the Common Stock reported on the
OTC Bulletin Board on the day before grant. Each option for 200 shares was
granted immediately after each of the four annual meetings of Stockholders,
beginning with the 1995 Annual Meeting, to those individuals who remain
Directors after the respective annual meeting or who are elected at the
respective annual meeting. Pursuant to the plan, after the 1999 Annual Meeting,
all remaining options (375 shares per Director at $10.50 per share) were
allocated pro rata among the Directors.

In 1995, options for 1,400 shares were granted under the Director Plan.
Each director received an option for 200 shares at an exercise price of $14.50
per share. In 1996, options for 1,400 shares were granted under the Director
Plan; each director received an option for 200 shares at an exercise price of
$17.25 per share. In 1997, options for 1,600 shares were granted under the
Director Plan; each director received an option for 200 shares at an exercise
price of $27.25 per share. In 1998, options for 2400 shares were granted under
the Director Plan; each director received an option for 300 shares at an
exercise price of $31.75 per share. As of June 15, 1998, options to purchase
1,400 shares at $14.50 per share, 1,400 shares at $17.25 per share, 1,600 shares
at $27.25 per share had been exercised under the Director Plan. The Director
Plan provides that options granted to Directors vest on the date of grant. There
remain 6,825 shares subject to purchase and issuance.

In 1999, the Stockholders of the Company approved an amendment to the
Director Plan to adjust for the two-for-one stock split which occurred on June
15, 1998. The Director Plan amendment changed the exercise price per share for
options granted on April 28, 1998 from $31.75 to $15.88. The number of shares to
be issued upon the exercise of then currently outstanding options yet to be
granted was changed from 300 to 600 shares.

The purpose of the Director Plan was to increase the incentives and
attract and encourage the continued service of Directors of the Company by
facilitating the purchase of the Company's shares. The Director Plan authorizes
the grant of Non-Qualified Stock Options (options that subject the option holder
to Federal Income Tax in the amount by which the market price of the stock at
the time of exercise exceeds the exercise price and the Company will receive a
deduction in the same amount at the time of exercise, pursuant to the Internal
Revenue Code of 1986). The Board of Directors has limited discretion in the
administration of the Director Plan so that they can remain "disinterested"
persons as that term is used in Securities and Exchange Commission Rule
16b-3(c)(2) promulgated under the Securities Exchange Act of 1934, in relation
to the plan.

Options under the Director Plan are only exercisable within 10 years and
one day from the date of grant, unless the individual ceases being a Director
prior to that time. In that event, if the individual ceases being a Director for
reasons other than death or disability, the option is exercisable only within 30
days of cessation of Director status; if the individual's status as a Director
terminates because of death or disability, the option will only be exercisable
within 90 days from the date of such cessation of Director status.

The Board, without further action on the part of the Stockholders of the
Company, may from time to time alter, amend, or suspend the Director Plan or any
stock option granted thereunder or may at any time terminate the Director Plan,
except that, unless approved by a majority of the Stockholders represented at an
Annual Meeting or Special Meeting held in accordance with the Company's By-Laws,
the Board of Directors may not, (i) change the total number of shares of Common
Stock available for grant under the Director Plan; (ii) extend the duration of
the Director Plan; (iii) increase the maximum term of stock options; or (iv)
change the exercise option price of the stock options under the Director Plan.
No action taken by the Board of Directors as outlined above may materially and
adversely affect any outstanding stock option without the consent of the holder
thereof. In any case, the Board of Directors may not amend the Director Plan
more than once every six months, other than to comport with the Internal Revenue
Code, the Employee Retirement Income Security Act, or the rules thereunder.

PROPOSAL II -- RATIFICATION OF PLANTE & MORAN, PLLC AS INDEPENDENT PUBLIC
ACCOUNTANTS OF THE COMPANY FOR 2004

The Board of Directors recommends the engagement of Plante & Moran, PLLC,
as independent public accountants, to be its independent public accountants for
the 2004 fiscal year, subject to ratification by the Company's Stockholders. A
representative of Plante & Moran, PLLC, is expected to be present at the
Meeting, will have the opportunity to make a statement if he or she desires to
do so, and will be available to respond to appropriate questions.

The Board of Director's selection of the Plante & Moran, PLLC accounting
firm for the Company, occurred after solicitation and receipt of bids from
qualified accounting firms in 2002 to provide services through 2005. Plante &
Moran, PLLC submitted the most favorable plan to conduct the Company's
independent accounting reports. Plante & Moran, PLLC has been the Company's
independent public accountings since 2000.

The appointment of the independent public accountants must be approved by
a majority of the votes cast by the Stockholders of the Company at the Meeting
where a quorum is present. The Board of Directors recommends that Stockholders
vote "FOR" the approval of the appointment of Plante & Moran, PLLC, as the
Company's independent public accountants. Where no instructions are indicated,
proxies will be voted "FOR" the approval of the appointment of Plante & Moran,
PLLC. Any abstentions on the vote for the approval of Plante & Moran, PLLC, as
the Company's independent public accountants, will be treated as a no vote. Such
abstentions, however, will be counted toward determining a quorum, as will any
proxies not containing instructions.

Principal Accounting Firm Fees
------------------------------

The discussion contained below relates the Company and its wholly owned
subsidiaries.

AUDIT FEES

Audit fees billed to the Company by Plante & Moran, PLLC for review of
the Company's annual financial statements for 2003 and the financial statements
included in the Company's quarterly reports on Form 10-Q for 2003 totaled
$56,300. Audit fees billed to the Company by Plante & Moran, PLLC for review of
the Company's annual financial statements for 2002 and the financial statements
included in the Company's quarterly reports on Form 10-Q for 2002 totaled
$46,070.

AUDIT-RELATED FEES

The total fees billed in 2003 for assurance and related services by the
principal accountant that reasonably related to the performance of the audit or
review of the registrant's financial statements and are not reported under Audit
Fees are $7,250. The services comprising these fees for 2003 include assistance
with post-retirement health

plan accounting, low income housing partnership accounting, and reporting on the
allowance for loan losses. The total fees billed in 2002 for assurance and
related services by the principal accountant that re reasonably related to the
performance of the audit or review of the registrant's financial statements and
are not reported under Audit Fees are $41,500 The services comprising these fees
for 2002 include agreed-upon procedures for internal audit

TAX FEES

The total tax fees billed in 2003 by the principal accountant were
$9,560. The services comprising these fees for 2003 include tax returns,
compliance and advice. The total tax fees billed in 2002 by the principal
accountant were $9,935. The services comprising these fees for 2002 include tax
returns, compliance and advice.

ALL OTHER FEES

Fees billed to the Company by Plante & Moran, PLLC for all other services
not previously disclosed above to the Company during 2003 totaled $5,850. Fees
billed to the Company by Plante & Moran, PLLC for all other services not
previously disclosed above to the Company during 2002 totaled $30,970. The Audit
Committee considered and confirmed that the provision of these non-audit
services was compatible with maintaining the independence of Plante & Moran,
PLLC as the Company's independent auditors for the year 2003 audit.

The Audit Committee's policy and procedure is to pre-approve all audit
and non-audit services provided by the independent auditor. These services may
include audit services, audit-related services, tax services, and other
services. The Audit Committee regularly monitors the services provided by the
independent auditors for both audit and non-audit services. For the year ending
2003, the Audit Committee pre-approved 100% of the services for audit fees
described above.

OTHER MATTERS

The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that Proxies in the accompanying form will be voted in accordance with
the judgment of the person or persons voting the Proxies.

MISCELLANEOUS

The solicitation of proxies is being made by the Company. The cost of
solicitation of proxies will be borne by the Company. In addition to
solicitations by mail, directors, officers, regular employees of the Company,
and its agent, may solicit proxies personally or by telegraph, telephone or
other means without additional compensation.

The Company's Annual Report to Stockholders has been mailed to all
Stockholders of record who owned Company stock at the close of business on March
15, 2004. Any Stockholder who has not received a copy of such Annual Report may
obtain a copy by writing the Company. Such Annual Report is not to be treated as
a part of the proxy solicitation material nor as having been incorporated herein
by reference.

STOCKHOLDERS' PROPOSALS

If a shareholder proposal is not presented to the Company by February 9,
2005, SEC Rule 14a-4(c)(1) provides that the Company may use discretionary
authority to vote on the matter.

Also the Company has discretionary authority under its By-laws whether or
not to call a vote on any matter,

without discussion in the Proxy Statement, on any stockholder proposal for which
it has notice, in writing, 5 days before the Annual Meeting. A shareholder may
obtain a copy of the Company's By-laws by sending a request to Sturgis Bancorp,
Inc., 125 E. Chicago Road, P.O. Box 600, Sturgis, Michigan 49091.

PERFORMANCE GRAPH

The following graph illustrates the value of a $10,000 investment in the
Company's stock (symbol STBI) on December 31, 1998 for each of the subsequent
five years, compared to a similar investment in the FRB Small Cap Financial Fund
(symbol FRBSX) and the NASDAQ Composite. FBRSX is a professionally managed,
public mutual fund that invests almost exclusively in small banks and thrifts
with a goal of capital appreciation. The fund's investment emphasis is on those
companies engaged in investing in real estate, usually through mortgages or
other consumer-related loans. It typically invests at least 65% of assets in
securities of companies with market capitalizations of less than $750 million;
it is expected that the fund will focus on companies with market capitalizations
below $200 million. The fund may, however, invest a portion of assets in
larger-capitalization issuers as well.

[PERFORMANCE GRAPH]

EXHIBITS

Set forth below under the heading "Appendices" is a list of exhibits
included as part of this Proxy.

BY ORDER OF THE BOARD OF DIRECTORS
Brian P. Hoggatt
Secretary

Sturgis, Michigan
March 26, 2004

FORM 10-K

THE BANK HAS DESIGNATED THE FORM 10-K OF THE COMPANY AS ITS ANNUAL DISCLOSURE
STATEMENT UNDER 12 CFR PART 350. A COPY OF THE COMPANY'S FORM 10-K FOR THE
FISCAL YEAR ENDED DECEMBER 31, 2003, AS FILED WITH THE UNITED STATES SECURITIES
EXCHANGE COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO STURGIS BANCORP, INC., 125 EAST CHICAGO
ROAD, P.O. BOX 600, STURGIS, MICHIGAN 49091. PHONE (269) 651-9345. THIS FORM
10-K IS ALSO AVAILABLE FROM THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
EDGAR SYSTEM AT WWW.SEC.GOV.

The Bank also maintains a website at WWW.STURGISBANK.COM. On this site, a link
is provided to the SEC's website that provides all filings of the Company. In
this way, the Company makes available reports, including the annual report on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K,
securities transaction reports on Form 3, Form 4, and Form 5, and certain other
reports filed or furnished pursuant to the Exchange Act as soon as reasonably
practicable after it electronically files such material with, or furnishes it
to, the Securities and Exchange Commission.

APPENDICES

Appendix A Sturgis Bancorp, Inc. Compensation Committee Charter

Appendix B Sturgis Bancorp, Inc. Nominating and Corporate Governance
Committee Charter

Appendix C Sturgis Bancorp, Inc. Audit Committee Charter

APPENDIX A

STURGIS BANCORP, INC.

COMPENSATION COMMITTEE

The Compensation Committee of the board of directors of Sturgis Bancorp, Inc.
(the "Company") shall consist of a minimum of three directors. Members of the
committee shall be appointed by the board of directors upon the recommendation
of the Nominating and Corporate Governance Committee and may be removed by the
board of directors in its discretion. All members of the committee shall be
independent directors, and shall satisfy the NASDAQ standard for independence
for members of the Audit Committee.

The purpose of the committee shall be to carry out the board of directors'
overall responsibility relating to executive compensation.

In furtherance of this purpose, the committee shall have the following authority
and responsibilities:

1. To review and approve on an annual basis the corporate goals and objectives
with respect to compensation for the chief executive officer. The committee
shall evaluate at least once a year the chief executive officer's
performance in light of these established goals and objectives and based
upon these evaluations shall set the chief executive officer's annual
compensation, including salary, bonus, incentive and equity compensation.

2. To review and approve on an annual basis the evaluation process and
compensation structure for the Company's officers. The committee shall
evaluate the performance of the Company's senior executive officers and
shall approve the annual compensation, including salary, bonus, incentive
and equity compensation, for such senior executive officers. The committee
shall also provide oversight of management's decisions concerning the
performance and compensation of other company officers.

3. To review the Company's incentive compensation and other stock-based plans
and recommend changes in such plans to the board as needed. The committee
shall also make recommendations to the board of directors with respect to
the administration of such plans.

4. To maintain regular contact with the leadership of the Company relating to
committee issues.

5. To approve such documents necessary concerning annual executive
compensation for the Company's proxy statement.

The committee shall have the authority to delegate any of its responsibilities
to subcommittees as the committee may deem appropriate in its sole discretion.
The committee shall have authority to consult such compensation consultants,
outside counsel and other advisors as the committee may deem appropriate in its
sole discretion. The committee shall have sole authority to approve related fees
and retention terms.

The committee shall report its actions and any recommendations to the board
after each committee meeting and shall conduct and present to the board an
annual performance evaluation of the committee. The committee shall review at
least annually the adequacy of this charter and recommend any proposed changes
to the board for approval.

APPENDIX B

STURGIS BANCORP, INC.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER

The Nominating and Corporate Governance Committee of the board of directors of
Sturgis Bancorp, Inc. (the "Company") shall consist of a minimum of three
directors. These should include the chairs of the Audit Committee and the
Compensation Committee. Members of the committee shall be appointed and may be
removed by the board of directors. All members of the committee shall be
independent directors, and shall satisfy the NASDAQ standard for independence
for members of the Audit Committee.

The purpose of the committee shall be to assist the board in identifying
qualified individuals to become board members, in determining the composition of
the board of directors and its committees, in monitoring a process to assess
board effectiveness, and in developing and implementing the Company's corporate
governance guidelines.

In furtherance of this purpose, the committee shall have the following authority
and responsibilities:

1. To lead the search for individuals qualified to become members of the board
of directors and to select director nominees to be presented for shareholder
approval at the annual meeting. The committee shall select individuals as
director nominees who satisfy applicable Company governing documents, who shall
have the highest personal and professional integrity, who shall have
demonstrated exceptional ability and judgment, and who shall be most effective,
in conjunction with the other nominees to the board, in collectively serving the
long-term interests of the shareholders.

2. To review the board of directors' committee structure and to recommend to the
board for its approval directors to serve as members of each committee. The
committee shall review and recommend committee slates annually and shall
recommend additional committee members to fill vacancies as needed.

3. To develop and recommend to the board of directors for its approval a set of
corporate governance guidelines. The committee shall review the guidelines on an
annual basis, or more frequently if appropriate, and recommend changes as
necessary.

4. To develop and recommend to the board of directors for its approval an annual
self-evaluation process of the board and its committees. The committee shall
oversee the annual self-evaluations.

5. To review on an annual basis director compensation and benefits.

The committee shall have the authority to delegate any of its responsibilities
to subcommittees as the committee may deem appropriate in its sole discretion.

The committee shall have the authority to retain any search firm engaged to
assist in identifying director candidates, and to consult outside counsel and
any other advisors as the committee may deem appropriate in its sole discretion.
The committee shall have sole authority to approve related fees and retention
terms.

The committee shall report its actions and recommendations to the board after
each committee meeting and shall conduct and present to the board an annual
performance evaluation of the committee. The committee shall review at least
annually the adequacy of this charter and recommend any proposed changes to the
board for approval.

APPENDIX C

STURGIS BANCORP, INC.
(THE "COMPANY")

CHARTER

AUDIT COMMITTEE

The Audit Committee is a committee of the Board of Directors.

PURPOSE & COMPOSITION

This charter details the composition, roles and responsibilities of the Audit
Committee. The Board of Directors shall appoint at least three directors who are
independent of the Company's Management and have no relationships that could
interfere with their independence and execution of the Committee's
responsibilities to the Board of Directors. At least one member must have
expertise in accounting or other aspects of financial management and all members
are expected to be financially literate or to gain such literacy after
appointment. The Committee shall review this charter annually and receive
approval for its continued use (and any recommended amendments) from the Board
of Directors.

STATEMENT OF POLICY

The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and the legal
compliance and ethics programs as established by Management and the Board. In so
doing, it is the responsibility of the Committee to maintain free and open
communication between the Committee, independent auditors, the internal
auditors, and Management of the Company. In discharging its oversight role, the
Committee is empowered to investigate any matter brought to its attention with
full access to all books, records, facilities, and personnel of the Company and
the power to retain outside counsel, or other experts for this purpose.

RESPONSIBILITIES

The primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of
their activities to the Board. While the Audit Committee has the
responsibilities and powers set forth in this Charter, it is not

the duty of the Audit Committee to plan or conduct audits or to determine that
the Company's financial statements are complete and accurate and are in
accordance with generally accepted accounting principles. Management is
responsible for preparing the Company's financial statements, and the
independent auditors are responsible for auditing those financial statements. It
is not the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between Management and the independent auditor, or to
assure compliance with laws and regulations and the Company's Code of Conduct.

The Committee, in carrying out its responsibilities, believes its policies and
procedures should remain flexible, in order to best react to changing conditions
and circumstances. The Committee should take appropriate actions to set the
overall corporate "tone" for quality financial reporting, sound business risk
practices, and ethical behavior.

PROCESSES

The following shall be the principal recurring processes of the Audit Committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the Committee may supplement them as
appropriate.

The Committee shall have a clear understanding with Management and the
independent auditors that the independent auditors are ultimately accountable to
the Board and the Audit Committee, as representatives of the Company's
shareholders. The Committee shall be directly responsible for the appointment
and termination (subject, if applicable, to shareholder ratification),
compensation, and oversight of the work of the independent auditors. The
Committee shall discuss with the auditors their independence from Management and
the Company shall consider the compatibility of non-audit services with the
auditors' independence. Annually, the Committee shall review and recommend to
the Board the selection of the Company's independent auditors, subject to
shareholders' approval.

The Committee shall discuss with the internal auditors and the independent
auditors the overall scope and plans for their respective audits, including the
adequacy of staffing and compensation. Also, the Committee shall discuss with
Management, the internal auditors, and the independent auditors the adequacy and
effectiveness of the accounting and financial controls, including the Company's
system to monitor and manage business risk, and legal and ethical compliance
programs, including the Company's Code of Conduct. Further, the Committee shall
meet separately with the internal auditors and the independent auditors, with
and without Management present, to discuss the results of their examinations and
will provide sufficient opportunity for the internal auditors and the
independent auditors to meet privately with the members of the Committee.

The Committee shall review the interim financial statements with Management and
the independent auditors prior to the filing of the Company's Quarterly Report
on Form 10-Q. Also,

the Committee shall discuss the results of the quarterly review and any other
matters required to be communicated to the Committee by the independent auditors
under generally accepted auditing standards. The Chair of the Committee may
represent the entire committee for the purposes of this review.

The committee shall review with Management and the independent auditors the
financial statements to be included in the Company's Annual Report on Form 10-K
(or the annual report to shareholders if distributed prior to the filing of Form
10-K), including their judgment about the quality, not just the acceptability,
of accounting principles, the reasonableness of significant judgments, and the
clarity of the disclosures in the financial statements. Also, the Committee
shall discuss the results of the annual audit and any other matters required to
be communicated to the Committee by the independent auditors under generally
accepted auditing standards.

The Committee has established procedures for the receipt, retention, and
treatment of complaints received by the issuer regarding accounting, internal
accounting controls, or auditing matters, and the confidential, anonymous
submission by employees of the issuer of concerns regarding questionable
accounting or auditing matters.

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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.

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