UNIVERSITY BANCORP TO INCREASE OWNERSHIP TO 100% OF UNIVERSITY LENDING GROUP

For Immediate Release

UNIVERSITY BANCORP STRIKES $500,000 DEAL TO INCREASE OWNERSHIP OF UNIVERSITY LENDING GROUP FROM 87.5% TO 100%

Ann Arbor, Michigan, May xx, 2012, — University Bancorp, Inc. (OTCQB: UNIB) (Pink Sheets: UNIB) announced today that its subsidiary, University Bank, had signed a definitive agreement to acquire an additional 12.4975% membership interest in University Lending Group, LLC, bringing its total ownership to 100%. University Bank will buy the membership interest in installments for $500,000, $350,000 in the second quarter and $150,000 in the third quarter. As a result of the acquisition, the Tier 1 Capital of University Bank will decrease by $500,000.

As of April 30, 2012, University Bank had Tier 1 Capital of $11,316,000 on average assets of $116.1 million, and its Tier 1 Capital Ratio was 9.74%. During April, University Bank had $443,558 in pre-tax income, and year-to-date $1,381,103 in pre-tax income. Minority expense in April was $80,898 and $487,742 year to date. These results were ahead of the budget by $118,450 in April and $763,656 year-to-date for the four months. April results included no unusual expenses or income. The budget for 2012 calls for University Bank to earn $5.7 million pre-tax.

University Lending Group, LLC is a subsidiary of University Bank specializing in retail residential mortgage originations. ULG originates residential mortgage loans for sale to secondary market investors which are guaranteed by FHA, FNMA, FHLMC, USDA Rural Development, VA and various state housing authorities. University Lending Group, LLC (“ULG”) began operations in May 2008 and University Bank owned 50.01% of ULG until late 2011, when the bank finalized three transactions to increase its ownership to 87.5025%.

For the first four months of 2012, ULG reported $634,802 of pre-tax income (it was budgeted to earn $262,405) and originated $106,374,984 of residential mortgages from its retail residential mortgage production offices. For the 12 months ended December 31, 2012, ULG is budgeted to earn $2,411,090 pre-tax.

For more detailed information on the history, track record and operations of University Lending Group, please refer to the Company’s press release dated January 3, 2012.

Ann Arbor-based University Bancorp owns 100% of University Bank which, together with its subsidiaries, as of March 31, 2012 holds and manages a total of over $10.8 billion in loans and assets. University Bank is an FDIC-insured, locally owned and managed community bank, and meets the financial needs of its community through its creative and innovative services. Founded in 1890, University Bank® is proud to have been selected as the “Community Bankers of the Year” by American Banker magazine and as the recipient of the American Bankers Association’s Community Bank Award.

Shareholders and investors are encouraged to refer to the financial information available on our investor relations web page at: http://www.university-bank.com/bancorp/.

Contact: University Bank
Stephen Lange Ranzini, President and CEO
Phone: 734-741-5858, Ext. 226
Email: ranzini@university-bank.com

CAUTIONARY STATEMENT: This press release contains certain forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements concerning future growth in assets, mortgage originations and net income, the sustainability of past results, and other expectations and/or goals. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive, governmental and technological factors affecting our operations, markets, products, services, interest rates and fees for services. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release