October 4, 2004, Ann Arbor, Michigan – University Bancorp (NASDAQ:UNIB) announced today it has a new Islamic Banking Division. The Islamic Banking Division will initially be responsible for promoting both an interest-free Mortgage Alternative Transaction (a redeemable lease program) and the FDIC-insured Profit Sharing Money Market account for the Bank. Additional products will be added including more deposit options and mutual funds.

As with some other faith communities, the Islamic prohibition against paying interest has kept American Muslims from home ownership and limited options for bank deposit products. As a community bank focused on meeting the diverse needs of the community, this is also an opportunity to reach an under-served market. Recent successes in the growth of both areas led to the development of an entire Division.

“We are very pleased with the progress of our Islamic bank products in gaining market acceptance. We now have $6.3 million in Mortgage Alternative Loan Transactions and just under $1 million in SHAPE™ deposits as a direct result of the program,” noted University Bank’s President Stephen Lange Ranzini. “The announcement today expands our commitment to serve the needs of our community and reinforces why University Bank is the only bank in Washtenaw County with an ‘Outstanding’ rating from the FDIC for community service and community investment.”

Mushir Khwaja and Sarah Siddiqui joined University Bank’s Islamic Banking Division as Islamic Bankers. They will be primarily responsible for building relationships with Muslim customers for the Bank’s interest-free Mortgage Alternative Transaction (a redeemable lease program) and the FDIC-insured Profit-Sharing Money Market Account. Both have completed the Bank’s Islamic Banker Training Program.

“With his degree in economics and his time with Morgan Stanley, Mushir has the background and experience to enhance our Islamic Banking Division,” said John Sickler, Vice President of Residential Lending. “Mushir has the precise profile we were seeking for our Islamic Banking Division and it is a bonus that he is a graduate of the Plymouth-Canton Schools and the University of Michigan, Sickler continued.

Khwaja graduated in May 2002 from the University of Michigan with a Bachelor of Arts, majoring in both Economics and Organizational Studies. While at the University of Michigan Khwaja served on the Executive Council of the Organizational Studies Student Assembly and as Treasurer of the International Cultural Society. He took an active role in jump starting the Organizational Studies’ concentration from a mere individualized concentration, to a full-fledged department with faculty and staff. He is a resident of Canton, Michigan.

“Sarah Siddiqui has a history of leadership in the southeast Michigan Muslim community”, said John Sickler Vice President of Residential Lending. “She definitely shares the bank’s vision that good banking starts by being a good neighbor,” Sickler continued.

Siddiqui is very involved with various organizations in the Islamic Community. She is a Co-Founder and Adjunct Board Member of the Michigan Chapter of the Council of American Muslim Professionals. Since her graduation from the University of Michigan – Dearborn she has volunteered for various organizations including IMPACT, Michigan, and the Council on American-Islamic Relations, the Supporting Empowerment, Enhancement & Development Foundation and the Ummah Project.

Siddiqui, a Magna Cum Laude graduate from the University of Michigan, Dearborn with a Bachelor of Arts, also attended Lambton College of Applied Arts and Technology in Sarnia, with a specialization in Information Systems. Her extracurricular activities included Student Government, Peer Mentoring Program, Muslim Students Association and Phi Theta Kappa Honor Society. She is preparing to enter the MBA program at Eastern Michigan University.

Prior to joining University Bank, Siddiqui worked at Holcim, Inc. from 2002 to 2004 and as a consultant for Stopka & Associates from 2000 to 2002. She is a resident of Ann Arbor, Michigan.

Contact:
Stephen Lange Ranzini
734-741-5858, ext. 266

Ann Arbor based University Bancorp owns 100% of University Bank. University Bank is an FDIC-insured, locally owned and managed Community Bank primarily serving the cities of Ann Arbor and Ypsilanti of Washtenaw County. The Community Banking operation focuses on local businesses, minorities and the non-profit communities. University Bank is the only financial institution located in Washtenaw County to be rated “Outstanding” by the FDIC for Community Service and Community Reinvestment. Other Community Banking specialties include highly competitive deposit products for business owners, residential mortgages, commercial real estate lending and insurance, investments and money management through its wholly-owned subsidiary, University Insurance & Investments, Inc. In addition to its Community Banking operations, University Bancorp specializes in mortgage subservicing and mortgage origination primarily serving the credit union industry through the Bank’s Houghton-based 80%-owned subsidiary, Midwest Loan Services.