Union Acceptance Corporation Publishes Annual Letter to Shareholders and Announces Change in Year-End

    INDIANAPOLIS--Aug. 1, 2001--Union Acceptance Corporation ("UAC") today announced that its Chairman's Letter to Shareholders, which will also accompany the Company's annual report, has been published and is available on the Company's web site www.unionacceptance.com.
    The Letter to Shareholders is intended to set forth the fundamental aspects of UAC's business model and to outline the opportunities that exist for the Company. The letter will also describe management's approach to risk-based pricing, enhancements the Company has made to its pricing model, and the Company's overall capital structure and plan subsequent to the recently completed rights offering.
    "Given the ongoing shakeout occurring in the auto finance industry and recent changes in our business model, I thought it was important to communicate with our shareholders sooner than would have been possible with our annual report," said UAC Chairman, Michael G. Stout. "As a result, we have released the letter I have written for that report early. It is my desire that our shareholders be candidly informed about our business in a timely manner and I believe that this early release is consistent with that philosophy."

    Fiscal Year Change

    Union Acceptance Corporation also announced that its Board of Directors has approved a change in the Company's fiscal year-end from June 30 to December 31. The Company will file a report on Form 10-K for the transition period of the six months ending December 31, 2001.

    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. Union Acceptance Corporation commenced business in 1986 and currently acquires receivables from over 5,600 manufacturer-franchised dealerships in 40 states. By using state-of-the-art technology in a highly centralized underwriting and servicing environment, Union Acceptance Corporation enjoys one of the lowest cost operating structures in the independent prime automobile finance industry.