University Bancorp Reports 1Q2008 Results

Market Wire, May, 2008

President & CEO Ranzini noted, "Teams skilled in HUD wholesale lending are in strong demand today and we are pleased to be able to add such a strong group of managers to form this new subsidiary of University Bank."

Mortgage loans subserviced passed the $5 billion mark on April 1, 2008 and are now currently at $5.2 billion with over 39,600 mortgages subserviced.

The following table summarizes the pre-tax net income (loss) of each profit center of the Company for the three months ended March 31, 2008 and 2007 (in thousands):

                                                          2008      2007
                                                        --------  --------

Community and Islamic Banking                           $   (311) $   (296)
Midwest Loan Services                                        583       544
Corporate Office                                             (15)      (15)
Eliminations                                                 (20)      (73)
                                                        --------  --------
Total                                                   $    237  $    160

Note that the allocation of costs between Midwest Loan Services and Community & Islamic Banking for the interest on custodial deposits of Midwest Loan Services held on deposit at Community Banking skews the profit of the individual units as Midwest earns interest on the escrow deposits which is eliminated in consolidation; the expense is an inter-company expense among our two subsidiaries. Most of the eliminations are at the University Bank level among University Bank, Midwest Loan Services and Community & Islamic Banking.

                                           (Unaudited)
                                             For the
                                          Quarter Ended
                                             March 31,
                                            (in 000s)
                                            2008      2007
Net interest & financing income         $    871  $    874
Provision (benefit) for loan &
 financing losses                            (16)       22
Net trading securities gains                  10         -
Total other income                         1,425     1,297
Total other expense                        2,065     1,916
Minority interest in consolidated
 subsidiaries' earnings                       20        73
Income tax benefit                            20         -
Net income                              $    257  $    160
Preferred stock dividends                     12         8
Net income available for Common
 stockholders                           $    245  $    152
Basic earnings per common share         $   0.06  $   0.04
Diluted earnings per common share       $   0.06  $   0.04
Average shares outstanding
   Basic                                   4,248     4,248
   Diluted                                 4,288     4,287
Net interest & profit margin               4.27%     4.95%

Period-end:                                  March 31,      At December 31,
                                           2008      2007        2007
   Loans & financings including those
    held for sale                       $59,120   $56,553      $60,063
   Allowance for loan & financing
    losses                                  447       466          686
   Deposits                              91,817    80,751       78,657
   Assets                               101,992    89,663       88,238
   Equity                                 6,267     5,408        5,984
   Book value per common share            $1.35     $1.27        $1.29