Union Acceptance Reports Confirmation of Plan of Reorganization.

Business Editors

INDIANAPOLIS--(BUSINESS WIRE)--Aug. 14, 2003

Union Acceptance Corporation (OTC:UACAQ) today announced that the U.S. Bankruptcy Court has confirmed its Plan of Reorganization in its Chapter 11 bankruptcy proceeding.

At its confirmation hearing before the U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis on August 8, 2003, the Court ordered confirmation of UAC's Second Amended Plan of Reorganization in the form filed with the Court on August 6, 2003. The Second Amended Plan reflects certain non-material modifications to the First Amended Plan of Reorganization, which was circulated to creditors of UAC. The Plan received broad acceptance of UAC's creditors of each class and no objections to the Plan were made.

Generally, the plan calls for the use of available cash resources and cash flows to be released over time from the retained interest to repay creditors in their order of priority. Holders of senior and senior subordinated notes will receive new restructured notes reflecting these rights. Holders of smaller unsecured claims were entitled to elect a discounted repayment in exchange for early payout for convenience.

The Bankruptcy Court entered its order approving the Plan on August 8, 2003. The effective date of the Plan has not yet been fixed, but is anticipated to occur in the coming few weeks.

"We are very pleased that the Plan has been confirmed," commented John M. Eggemeyer, UAC Chairman. "This marks a significant hurdle for UAC and we are grateful for the cooperation and extensive efforts of the Members of our Creditors and Equity Committees, their advisors, and the many others who helped us to build a fair and equitable Plan. We remain optimistic that our available cash resources will be sufficient to repay our creditors in full over time as contemplated in the Plan of Reorganization. What value will remain for equity after our creditors are repaid pursuant to the Plan is subject to a number of factors that are difficult to predict. Net losses in the portfolio will be a significant factor, of course, and much depends on the effectiveness of our servicer, Systems & Services Technologies, Inc. Because the plan of reorganization provides for repayment of our creditors over time, realization of remaining value, if any, by our equity holders from our remaining assets will be several years away."

Board and Management Changes

UAC also announced a reduction in the size of its board of directors, as contemplated by the Plan or Reorganization. The directors continuing on the board are the Chairman, John M. Eggemeyer, III, as well as Richard D. Waterfield, Donald A. Sherman, and Thomas M. West.

Stepping down from the board are John Davis, Tom Haegy, Bill McKnight, Mike Stout, as well as Lee N. Ervin, whose service as CEO ended at the end of June. "We are truly grateful to our retiring directors for the able guidance and dedication they have shared with UAC over the years, especially during the pendency of our bankruptcy," commented Mr. Eggemeyer.

UAC also announced that Mr. Eggemeyer has assumed the responsibilities of Chief Executive Officer, along with his responsibilities as Chairman. In addition, Mark R. Ruh has been appointed President and Chief Financial Officer. Mr. Ruh is a Vice President with Castle Creek Capital LLC, Rancho Santa Fe, California, a private investment firm with which Mr. Eggemeyer is affiliated.

Shareholder Rights Plan Terminates

UAC further announced that, upon the effective date of the Plan of Reorganization, UAC's Shareholders' Rights Plan originally adopted in 2001, will be deemed rejected and all related share purchase rights will terminate. The Shareholders' Rights Plan is a contractual arrangement (similar to plans established by many public companies) intended to induce parties seeking to acquire a controlling interest in the company to negotiate any such transaction with the board of directors. The share purchase rights have heretofore traded only with the shares of common stock and are not exercisable.

About Union Acceptance

Union Acceptance Corporation is a specialized financial services company headquartered in Indianapolis, Indiana. Union Acceptance filed a petition for reorganization under Chapter 11 of the Bankruptcy Code in the Southern District of Indiana, Indianapolis Division of the U.S. Bankruptcy Court on October 31, 2002 to facilitate a financial restructuring.

Forward Looking Information

This news release contains forward-looking statements regarding matters such as prospective cash resources, future credit loss trends and estimates of recoveries on repossessed vehicles. 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 difficulty inherent in predicting changes in delinquency and credit loss rates, general economic conditions that affect consumer loan performance, the effectiveness of the successor servicer of UAC's securitized portfolio and other factors that will affect the timing and amount of cash resources that will be available to UAC and the amount of claims that UAC will be required to satisfy in connection with its Plan of Reorganization.