Union Acceptance Corporation Announces Investment Firm's Increase in Ownership

21 December 1999

Union Acceptance Corporation Announces Investment Firm's Increase in Ownership

    INDIANAPOLIS--Dec. 20, 1999--Union Acceptance Corporation today announced that Castle Creek Capital, LLC, ("Castle Creek") has acquired additional shares of Union Acceptance Corporation, through the purchase of shares by the three funds in which it is the sole general partner. These purchases bring the investment firm's ownership percentage to approximately 25% of the outstanding Class A common shares and 11% of the total shares outstanding.
    In a filing with the Securities and Exchange Commission, the group disclosed it acquired these additional shares for investment purposes between December 3 and December 6 at a price of $7.00 per share.
    Castle Creek is a California-based private equity investment firm, specializing in the financial services industry. John Eggemeyer of Castle Creek commented, "Union Acceptance Corporation has an outstanding management team, and we are very pleased with the continued improvement in the Company's financial performance. We believe the market has not yet recognized that Union Acceptance Corporation is undervalued."
    "We appreciate the confidence the Castle Creek group has in our Company, particularly with their expertise in the financial services industry. They believe, as do we, that Union Acceptance Corporation has significant growth potential," stated President and Chief Executive Officer of Union Acceptance Corporation, John Stainbrook.

    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 4,300 manufacturer-franchised dealerships in 35 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.

    Forward Looking Information

    This news release contains forward-looking statements regarding matters such as delinquency and credit loss trends, recoveries of repossessed vehicles, receivable acquisitions and other issues. Readers are cautioned that actual results may differ materially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, the relative unpredictability of changes in delinquency and credit loss rates, changes in acquisition volume, general economic conditions that affect consumer loan performance and consumer borrowing practices and other important factors detailed in the Company's annual report on Form 10-K for the fiscal year ended June 30, 1999, which was filed with the Securities and Exchange Commission.