Union Acceptance Corporation Announces Completion of Rights Offering; $88 Million of New Capital Raised

    INDIANAPOLIS--June 15, 2001--Union Acceptance Corporation ("UAC"), one of the nation's largest independent, indirect automobile finance companies, today announced the successful completion of its previously announced rights offering. UAC raised a total of $88 million through the issuance of 17.6 million common shares at a price of $5.00 per share. To satisfy subscriptions by shareholders and demand by standby investors, UAC increased the number of shares issued from the expected 16.0 million to 17.6 million. UAC's total number of shares outstanding now totals 30.9 million shares. All unexercised rights expired on June 12, 2001.
    "Despite the stock market environment, we have completed a transaction which will strengthen our balance sheet and provide the capital we need for growth," said John Stainbrook, Chief Executive Officer. "This expansion of our capital foundation will support our overall capital strategy as we move toward enhancing our ratio of equity to managed assets. We believe the increase in the total number of shares outstanding will be positive for the liquidity of our stock in the market. As an additional step in addressing market liquidity, at our 2001 annual meeting, we expect to propose the elimination of voting preferences for the Class B common stock through the conversion of the two existing classes of common stock to a single common class."
    Standby purchasers participated in this offering, purchasing a total of 8.4 million shares for $42.1 million. The standby purchase group consisted of nine institutional and individual investors including: Apple Ridge Partners, Franklin Mutual Advisers, Sandler O'Neill Asset Management, and SuNOVA Capital. Current shareholders, including certain executive officers, members of the board of directors and other principal shareholders who participated in this offering, purchased a total of 9.2 million shares for $45.9 million.

    Corporate Description

    UAC is one of the nation's largest independent, indirect automobile finance companies. The Company's primary business is acquiring, securitizing and servicing prime retail installment sales contracts. These contracts are originated by dealerships affiliated with major domestic and foreign automobile manufacturers. The Company is focused on the upper-end of the credit quality spectrum. UAC commenced business in 1986 and currently acquires receivables from over 5,500 manufacturer-franchised dealerships in 40 states. By using state-of-the-art technology in a highly centralized underwriting and servicing environment, UAC enjoys one of the lowest cost operating structures in the independent prime automobile finance industry. More information on UAC can be obtained from its web site at www.unionacceptance.com.