1
SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement

[ ] Definitive additional materials

[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

University Bancorp, Inc.
- - -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:
N/A
- - --------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:
N/A
- - --------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
N/A
- - --------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:
N/A
- - --------------------------------------------------------------------------------

(5) Total fee paid:
N/A
- - --------------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

- - --------------------------------------------------------------------------------

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

(1) Amount previously paid:
N/A
- - --------------------------------------------------------------------------------

(2) Form, schedule or registration statement no.:
N/A
- - --------------------------------------------------------------------------------

(3) Filing party:
N/A
- - --------------------------------------------------------------------------------

(4) Date filed:
N/A
- - --------------------------------------------------------------------------------

UNIVERSITY BANCORP, INC.
209 East Portage Avenue
Sault Ste. Marie, Michigan 49783
(906) 635-9794

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
June 9, 1997

To the Holders of Common Stock of University Bancorp, Inc.:

The Annual Meeting (the "Meeting") of Stockholders of University Bancorp,
Inc. (the "Company") will be held at the main office of University Bank, the
Company's bank subsidiary, 959 Maiden Lane, Ann Arbor, Michigan 48105, at 12:00
noon, local time, on Monday, June 9, 1997 for the following purposes:

1. To elect nine directors to serve until the next Annual Meeting of
Stockholders; and

2. To transact such other business as may properly come before the
Meeting.

The Board of Directors has set 5:30 p.m. Central Standard Time, on April
23, 1997 as the record date for the determination of the stockholders entitled
to vote at the Meeting. All stockholders as of the record date are entitled to
receive this notice. The Proxy Statement and form of proxy for the Meeting are
being mailed with this notice and the initial mailing including the Proxy
Statement and form of proxy will be sent to stockholders on approximately May
2, 1997.

By order of the Board of
Directors,

Joseph L. Ranzini,
Secretary
April 25, 1997

If you wish to participate in the vote on the matters coming before the Annual
Meeting and do not intend to attend in person, please mark, sign and date the
enclosed form of proxy and return it promptly to the Company, c/o University
Bank, 209 East Portage Avenue, Sault Ste. Marie, Michigan 49783.

UNIVERSITY BANCORP, INC.

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

June 9, 1997

TABLE OF CONTENTS

Page

General Information 2

Election of Directors 3

Security Ownership of Certain Beneficial
Owners and Management 6

Executive Officers 8

Executive Compensation 9

Section 16(a) Beneficial Ownership Reporting Compliance 12

Compensation Plans 13

Certain Relationships and Related Transactions 15

Independent Public Accountants 17

Other Matters 18

GENERAL INFORMATION

By appointing "proxies", stockholders may vote their shares at the Annual
Meeting of Stockholders (the "Meeting") of University Bancorp, Inc. (the
"Company"), which is scheduled to be held on June 9, 1997 and any adjournments
thereof, whether or not they attend. With this Proxy Statement, the Company's
Board of Directors provides information on the items of business scheduled for
the Meeting and asks you to appoint proxies selected by the Board of Directors
to vote your shares. The Company's Board of Directors is soliciting your
proxy. The cost of such solicitation is being paid for by the Company.

The proxies will vote your shares according to your instructions. The
Board of Directors recommends a vote:

"FOR" the election of each of the nominees for election as directors of
the Company indicated in the accompanying form of proxy. You may vote "FOR" or
"WITHHOLD" as to all or any one or more nominees for election as directors.

You have one vote for each share of Common Stock, par value $.01 per
share, of the Company ("Common Stock") registered in your name on the Company's
books on April 23, 1997 at 5:30 p.m., Central Standard Time, the record date
for the determination of stockholders entitled to notice of and to vote at the
Meeting. At that time, the Company had 1,261,416 shares of Common Stock
outstanding and entitled to vote.

If you wish to participate in the vote on the matters coming before the
Meeting, please sign, date and promptly return your form of proxy to the
Company, c/o University Bank, 209 East Portage Avenue, Sault Ste. Marie,
Michigan 49783.

If you return a properly signed and dated form of proxy for the election
of directors but do not mark any choices, your shares will be voted in
accordance with the recommendations of the Board of Directors as to such
election.

You may revoke the proxy solicited by the Board of Directors before its
exercise by delivering written notice of such revocation to the Company c/o
University Bank, 209 East Portage Avenue, Sault Ste. Marie, Michigan 49783, or
by submitting a subsequently dated proxy, or by attending the Meeting and
voting by ballot.

Directors will be elected by plurality of the votes of Common Stock cast
at the Meeting. For these purposes, abstentions and broker non-votes are not
considered votes cast.

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PRESENTATION OF
PROPOSALS OF STOCKHOLDERS

It is expected that the next annual meeting of stockholders of the Company
will be held in the 1998 calendar year. Proposals of stockholders to be
presented at such annual meeting must be received by the Company prior to
February 1, 1998 to be included in the Company's proxy statement and form of
proxy for such annual meeting. The notice and any such proposal must comply
with the applicable provisions of Rule 14a-8 under the Securities Exchange Act
of 1934, as amended.

CORPORATE GOVERNANCE - ATTENDANCE
AT BOARD OF DIRECTOR MEETINGS

The Board of Directors oversees the management of the business of the
Company. The Board of Directors had no audit or nominating committees during
the fiscal year ended December 31, 1996. The Compensation Committee of the
Board of Directors consists of three members of the board, presently Messrs.
Stephen Lange Ranzini, Joseph L. Ranzini and Michael Talley. The Compensation
Committee met twice and all members of this committee attended each meeting.
The Board of Directors held a total of 4 meetings during the 1996 fiscal year.
Two of the nine directors attended 3 of the 4 meetings. All other directors
attended 100% of the meetings held during the year.

COMPENSATION OF DIRECTORS

Directors are not compensated for attendance at meetings, although they
are reimbursed for travel expenses.

ELECTION OF DIRECTORS

The Board of Directors recommends a vote "FOR" the slate of nine directors
named below. Biographical information is included below for each nominee.
Persons elected at the Meeting will hold office until a successor is elected or
until earlier resignation or removal. In the event that any of these director
nominees becomes unavailable to serve, proxies will be voted for the election
of such other person(s) as may be recommended by the Board of Directors.

NOMINEES FOR ELECTION AS DIRECTORS OF THE COMPANY

Stephen Lange Ranzini, age 32, has been President, CEO and a director of
the Company or its Predecessors since July 1988, and served as the Treasurer of
the Company and its Predecessors from July 1988 to December 1995. Since May
1993, Mr. Ranzini has also served as the Treasurer and a Director of Michigan
BIDCO, Inc., a community development lending organization. Since December
1995, Mr. Ranzini has been Treasurer and a Director of Northern Michigan
Foundation, a non-profit affiliate of BIDCO. Since March 1994 Mr. Ranzini has
served as a director of University Bank and has held various

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senior management positions with the bank, including that of President of the
Bank between October 1994 and November 1995. Since relinquishing that position
he has served as the Bank's Senior Vice President - Mortgage Banking,
supervising the Bank's subsidiaries: Arbor Street LLC, Midwest Loan Services,
Inc., Varsity Funding, LLC., and Varsity Mortgage, LLC. He is the son of
Joseph L. and Mildred Ranzini and the brother of Joseph Lange Ranzini and Paul
Lange Ranzini.
Since July 1991, Mr. Ranzini has been a director of CityFed Financial
Corp., a former savings and loan holding company now based in Massachusetts.
Related to his duties for BIDCO or the Bank, Mr. Ranzini also serves as a
director or officer of four northern Michigan based firms: a GM/Chrysler car
dealership, a tissue paper mill, an ABC-TV broadcast affiliate and a paper
brokerage company.

Joseph L. Ranzini, Esq., age 68, has been Chairman of the Board, a
director and Secretary of the Company or of predecessor corporations merged
into the Company (the "Predecessors") since July 1988. Mr. Ranzini has been a
Director of University Bank (the Company's subsidiary) since July 1988 and
served as Chairman of the Board from March 1994 to January 1996. Since May
1993, Mr. Ranzini has served as the President and Chairman of the Board of
Michigan BIDCO, Inc. (the "BIDCO"), a community development lending
organization described further below. Since December 1995, Mr. Ranzini has
been President and Chairman of the Board of Northern Michigan Foundation, a
non-profit affiliate of BIDCO. Mr. Ranzini maintained a private law practice
in New Jersey from 1965 until June 1991.

Keith Brenner, age 52, has served as a director of the Company or its
Predecessors from October 1985, and also as the President and Treasurer of the
Company or its Predecessors (the Company was then known as Fortune 44 Company,
and manufactured and sold fortune cookies) from inception until December 31,
1989. Prior to forming the Company, Mr. Brenner was employed by Celestial
Seasonings, Inc., a tea manufacturer located in Boulder, Colorado, from 1980 to
1985 as Vice President of Marketing and Vice President of Corporate
Development. Since the fourth quarter of 1988, Mr. Brenner has been President
and owner of Brenner & Associates, a strategic planning and marketing
consulting firm, located in Boulder, Colorado.

Robert Goldthorpe, age 60, has served as a director of the Company since
April 1996. Mr. Goldthorpe also served as a Director of University Bank from
September 1992 to January 1996. For more than the past five years, Mr.
Goldthorpe has been President of Goldthorpe Enterprises, a diversified holding
company with operations in the central and eastern portion of the Upper
Peninsula of Michigan, with investments in hotels, restaurants, apartment
buildings, a hardware store, and the construction and contracting business.

Mark Ouimet, age 48, has served as President, CEO and Chairman of the
Board of Directors of University Bank, and as a

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Director of the Company since December 1995. Previously, he had served in a
variety of capacities at Great Lakes Bancorp of Ann Arbor, Michigan for more
than ten years, including most recently Senior Vice President for Corporate and
Community Affairs and First Vice President for Retail Banking. He also serves
as a director or chairman of numerous volunteer boards and non-profit agencies
in the Ann Arbor area.

Dr. Joseph Lange Ranzini, age 37, has served as a director of the Company
since April 1996. A graduate of Dartmouth College in 1982, he earned his M.D.
from the University of Virginia in 1986, and completed his residency with a
specialty in General Surgery at Mary Imogene Bassett Hospital, an affiliate of
Columbia University in Cooperstown, New York, in 1992. Since that time he has
been in a general surgery private practise at Augusta Medical Center in
Fishersville, Virginia. He is the son of Joseph L. and Mildred Ranzini and the
brother of Stephen Lange Ranzini and Paul Lange Ranzini.

Mildred Lange Ranzini, age 65, has been a director of the Company or its
Predecessors since July 1988, and has served as Assistant Secretary since
January 1990. Mrs. Ranzini holds a M. Div. from Princeton Theological
Seminary, a Masters Degree in Education from Columbia University and a B.A.
from Wellesley College. Mrs. Ranzini has not otherwise held an active business
position during the prior five years.

Prof. Paul Lange Ranzini, age 35, has served as a director of the Company
since April 1996. He is a Lecturer in Music and a Doctoral Candidate in Music
History and Theory at the University of Chicago, where he has been since 1989,
except in 1994 and 1995, when he earned a Fulbright Fellowship to Germany for
Dissertation Research. At the University of Chicago, he is also employed
part-time as the computer data center manager at the University's International
House. From 1984 to 1988 he was a graduate student at the University of
Michigan in Ann Arbor, Michigan, where he earned two Masters, an M.A. in
Musicology and an M.M. in Organ and Church Music. From 1979 to 1983 he was a
student at the College of William and Mary, where he received a B.A. in
Philosophy. He is the son of Joseph L. and Mildred Ranzini and the brother of
Stephen Lange Ranzini and Joseph Lange Ranzini.

Michael Talley, age 46, served as a director of the Company or its
Predecessors since 1988. Since March 1990, Mr. Talley has served as an Account
Executive at Ladenburg, Thalmann & Co. Inc. in New York, New York. Between
February 1988 and March 1990 Mr. Talley served as an Account Executive at
Oppenheimer & Co., Inc. in New York, New York. For more than five years until
February 1988, he served as an Account Executive at L.F. Rothschild Unterberg
Towbin in New York, New York. Mr. Talley is a native of Detroit, Michigan, and
a graduate of Michigan State University, in East Lansing, Michigan.

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There is no family relationship between any current director or executive
officer of the Company and any other current director or executive officer of
the Company, except as indicated above.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Set forth below and on the following pages is information with respect to
number and percentage of outstanding shares of the Company beneficially owned
by certain persons, including those known to the Company to own beneficially
more than 5% of the Company's outstanding Common Stock, the directors of the
Company individually and the directors and officers of the Company as a group.
The information in the table is as of March 31, 1997, except as otherwise
indicated.

Amount and Nature Percent
Title of of Beneficial of
Name and Address Class Ownership (1) Class
- - ---------------- -------- ----------------- -------

Joseph L. Ranzini, Esq. Common 596,851 (2)(4) 47.04%
209 East Portage Ave. Stock (11)
Sault S. Marie, MI 49783

Mildred Ranzini Common 482,872 (2)(3)(5) 37.76%
173 W. Queens Drive Stock (10)
Williamsburg, VA 23185

Stephen Lange Ranzini Common 308,151 (3)(6) 24.29%
c/o University Bank Stock (11)(12)
959 Maiden Lane
Ann Arbor, MI 48105

Dr. Joseph Lange Ranzini Common 61,600 (12) 4.85%
30 Chestnut Avenue Stock
Waynesboro, VA 22980

Prof. Paul Lange Ranzini Common 114,400 (12) 9.02%
International House Stock
1414 59th Street
Chicago, IL 60637

Keith E. Brenner Common 19,721 (7)(10) 1.54%
135 Green Meadow Lane Stock
Boulder, CO 80302

Robert Goldthorpe Common 35,000 (10) 2.74%
2564 Helmer St. Stock
McMillan, MI 49853

Mark Ouimet Common 132,000 (8)(10) 9.50%
c/o University Bank Stock
959 Maiden Lane
Ann Arbor, MI 48105 (TABLE CONTINUED ON FOLLOWING PAGE)

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Michael Talley Common 10,000 (10) 0.78%
55 Payson Avenue #4I Stock
New York, NY 10034

Ranzini Family Trust Common 320,000 (2) 25.22%
dated 11/8/90 Stock
173 W. Queens Drive
Williamsburg, VA 23185

Ranzini Family Trust Common 132,872 (3) 10.47%
dated 12/20/89 Stock
173 W. Queens Drive
Williamsburg, VA 23185

All Current Officers Common 1,108,723 (2)(3)(6) 77.60%
and Directors, as a Stock (7)(9)
Group (Nine Persons) (10)(11) -
______________________ (12)(13)

(1) Unless otherwise indicated, the indicated person is believed to have
sole voting and investment power over shares indicated as beneficially owned by
such person.

(2) Includes 320,000 shares of Common Stock held by an irrevocable trust,
the primary beneficiary of which is Mr. Stephen Lange Ranzini. The trustees of
the trust are Mr. Joseph L. Ranzini and Mrs. Mildred Ranzini.

(3) Includes 132,872 shares of Common Stock held by an irrevocable trust,
the primary beneficiaries of which are Mr. Joseph L. Ranzini's five adult
children. The trustees of the trust are Mr. Stephen Lange Ranzini and Mrs.
Mildred Ranzini. Mr. Stephen Lange Ranzini is a primary beneficiary of
one-fifth or 26,574 of the shares of Common Stock held under the terms of the
trust.

(4) Does not include the 132,872 shares of Common Stock referred to in
note 3 above, as to which Mr. Ranzini disclaims beneficial ownership.

(5) Mrs. Ranzini disclaims beneficial ownership of shares of Common Stock
owned by her spouse, Joseph L. Ranzini.

(6) Includes 12,529 shares of Common Stock which represent Mr. Stephen
Lange Ranzini's current accrued allocation of shares of Common Stock under the
University Bancorp, Inc. ESOP. Does not include the shares held in the trust
referred to above in note 2 as to which Mr. Ranzini is the primary beneficiary.

(7) Includes shares of Common Stock owned beneficially by Mr. Brenner's
retirement plan, and also includes 708 shares of Common Stock owned by Mr.
Brenner's minor children.

(FOOTNOTES CONTINUED ON FOLLOWING PAGE)

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(8) Does not includes options on 60,000 shares of common stock granted to
Mr. Ouimet, as such options are not exercisable until January 10, 1998 and
dates thereafter.

(9) Does not include shares held by the University Bancorp, Inc. ESOP,
other than the accrued allocation of shares thereunder to Stephen Lange Ranzini
referred to in note 6 above.

(10) Currently exercisable options on 10,000 shares of common stock are
held by each of Mr. Brenner, Mr. Goldthorpe, Mrs. Ranzini and Mr. Talley, and
currently exercisable options on 120,000 shares of common stock are currently
held by Mr. Ouimet. The shares subject to such person's respective option are
included in such person's respective holdings and in the total shares held by
all current officers and directors as a group. See footnote 8, above.

(11) Includes 23,000 shares of Common Stock held by Michigan BIDCO, Inc.
The Company, the Bank, Stephen Lange Ranzini, Joseph L. Ranzini, Mildred Lange
Ranzini and one Ranzini family trust are officers, directors, and/or security
holders of the BIDCO. Each of such persons and trust disclaims beneficial
ownership of the shares held by the BIDCO.

(12) Includes shares held by various of the thirteen Ranzini family trusts
established in 1996, which collectively hold 114,400 shares of Common Stock, as
follows: Stephen Lange Ranzini and Prof. Paul Lange Ranzini are trustees of
each of such 13 trusts covering all 114,400 shares, and disclaim beneficial
ownership of such 114,400 shares of Common Stock held by such Trusts for which
they are trustees. Dr. Joseph Lange Ranzini is a trustee as to certain of such
trusts covering 61,600 shares, and disclaims beneficial ownership of such
61,600 shares of Common Stock held by Trusts for which he is a trustee.

(13) The total number of shares of Common Stock held by the Mr. Joseph L.
Ranzini, Mr. Stephen Lange Ranzini, Mrs. Mildred Ranzini, the various Ranzini
family trusts and the shares included in note 6, above, is 879,002. In
addition, Mrs. Mildred Ranzini holds currently exercisable options to purchase
10,000 shares of Common Stock.

EXECUTIVE OFFICERS

Joseph L. Ranzini and Stephen Lange Ranzini hold executive officer
positions with the Company, as indicated above under "Election of Directors".
Thomas J. Vandermus, age 43, is Chief Financial Officer of the Company.
He was elected to such position in November 1995. He has also served as
Treasurer of University Bank since February 1995. Prior to that time and for
more than five years he was employed by Valley Bancorp, Sheboygan, Wisconsin,
where he held the positions of Controller of Valley Real Estate Services,

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a mortgage banking subsidiary company, and Controller of Valley United Bank.
Mark Ouimet, age 48, was appointed President, CEO and Chairman of the
Board of Directors of University Bank, and a Director of the Company in
November 1995. Previously, he had served in a variety of capacities at Great
Lakes Bancorp of Ann Arbor, Michigan for more than ten years, including most
recently Senior Vice President for Corporate and Community Affairs and First
Vice President for Retail Banking. Mr. Ouimet is not an officer of the Company
but for certain purposes could perhaps be considered as executive officer of
the Company by virtue of his position as Chief Executive Officer of the Bank.

Officers of the Company serve at the discretion of the Board of Directors
and generally are to be elected annually.

EXECUTIVE COMPENSATION

The following table sets forth information concerning all cash
compensation paid or accrued for services rendered in all capacities to the
Company and affiliates for the fiscal years ended December 31, 1996, 1995, and
1994, of the Chief Executive Officer of the Company, and the Chief Executive
Officer of the Bank, who was elected to such position in December 1995. There
were no other individuals whose salary and bonus from the Company or its
affiliates for the latest fiscal year exceeded $100,000:

SUMMARY COMPENSATION TABLE

Long Term
Annual Compensation($) Compensation
----------------------------------- ------------
Awards
----------------------
Other Securities
Name and Annual Restricted Underlying
Principal Compen- Stock Options/
Position Year Salary Bonus sation Awards($) SARs (#)
---------------- ---- ------ ----- -------- -------- ----------

Stephen Lange 1996 $108,524 $ - $ - $2,605 -
Ranzini (2) (3)(4)
President &
CEO 1995 $103,750 $ - $ - $5,208 -
(2) (5)

1994 $101,073 $ - $ - $4,898 -
(1)(2) (6)

Mark Ouimet 1996 $127,000 $255,000 $ 8,507 $ - -
Director & (8)(7)
Pres. of
University 1995 $7,815 $ - $114,922 $ - 180,000
Bank (9)

______________________
(1) Includes $60,000 paid for 1994 to Arete, a general partnership comprised
of Stephen Lange Ranzini and Joseph L.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)

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Ranzini, which provided management services to the Company pursuant to an
agreement between the Company and Arete, until December 31, 1994.
(2) Salary in 1996, 1995 and 1994 includes $44,025, 41,250 and $36,358,
respectively, from Michigan BIDCO, Inc., for which Mr. Ranzini served as
Treasurer.
(3) At the end of the Company's fiscal year ended December 31, 1996, 12,529
shares of the Company's common stock were allocated to Mr. Ranzini under
the Company's ESOP. Mr. Ranzini's rights in all of said shares are
vested. Valued at $7.375 per share, the last sale price of the Company's
common stock on December 31, 1996, the aggregate value of such shares was
$92,401.
(4) Allocation under the Company's ESOP of 521 shares of the Company's common
stock to Mr. Ranzini in June 1996.
(5) Allocation under the Company's ESOP of 1,126 shares of the Company's
common stock to Mr. Ranzini in April 1995.
(6) Allocation under the Company's ESOP of 1,306 shares of the Company's
common stock to Mr. Ranzini in April 1994.
(7) Includes $90,000 incentive bonus, pursuant to the terms of his Employment
Agreement, paid in January 1997 with respect to 1996.
(8) Includes perquisite amounts aggregating $** representing car lease
payments allocable to 1996 and amounts paid to or paid on behalf of Mr.
Ouimet as reimbursement for certain expenses incurred by him.
(9) Consists of bonus amounts paid to Mr. Ouimet in connection with the
commencement of his employment with University Bank, pursuant to the terms
of his Employment Agreement (in part to cover benefits from his former
employer foregone by Mr. Ouimet), including the issuance of 12,000 shares
of Common Stock, valued for this purpose at $4.625 per share, the closing
bid for the Common Stock on December 31, 1995, and perquisite amounts
aggregating $9,422 representing car lease payments allocable to 1995 and
amounts paid to Mr. Ouimet as reimbursement for certain expenses incurred
by him.

OPTION GRANTS IN LAST FISCAL YEAR

Number of % of Total
Securities Options/SARs
Exercise Underlying Granted to
Expiration Options Employees in Price
Name Granted (#) Fiscal Year (4) ($/share) Date
- - ------------- ------------- --------------- ------------ -----

Stephen Lange
Ranzini 0 - - -

Mark Ouimet 120,000(1)(2) 63.42% $4.50 12/31/1997

60,000(1)(3) $4.50
9/30/2000

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______________________
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
(1) All options were granted in December 1995 subject to stockholder approval
of the 1995 Stock Plan which was later secured.
(2) Options for 20,000 of the indicated shares did not become exercisable
until January 10, 1997. The options for the other 100,000 shares became
exercisable upon such stockholder approval.
(3) Such options become exercisable as follows: 20,000 shares on January 10,
1998, 20,000 shares on January 10, 1999 and 20,000 shares on January 10,
2000.
(4) Includes options granted in November and December 1995 subject to
stockholder approval which was later secured.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR & FY-END OPTION VALUES

Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Shares
Exercisable/ Acquired on Value Exercisable/
Name Exercise (#) Realized($) Unexercisable Unexercisable
- - --------------- ------------ ----------- --------------------- -------------

Stephen Lange
Ranzini 0 - - -

Mark Ouimet
(exercisable) 0 - 120,000 $345,000
(unexercisable) 0 - 60,000 $172,500

Except as indicated in the above tables and as indicated below in the
description of Mr. Ouimet's Employment Agreement, neither Stephen Lange Ranzini
nor Mark Ouimet received during the three fiscal years ended December 31, 1996
or held at December 31, 1996, any stock options, SAR grants or Long Term
Incentive Plan Awards.

The Company does not have a defined benefit or actuarial pension plan.

University Bank and the Company have entered into an Employment Agreement
with Mr. Mark Ouimet, providing for his retention as President and Chief
Executive Officer of the Bank. It provides for a base annual salary of
$127,000, increasing annually by a minimum of 5%, and bonus compensation tied
to the performance of the Bank's office(s) in the lower peninsula in Michigan,
with incremental bonus amounts payable upon the

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achievement of cumulative financial milestones in terms of dollar amounts of
deposits and of "on balance sheet" loans. The total cumulative amount of
bonuses available under the Employment Agreement is $750,000, of which $165,000
was paid in 1996, and $90,000 was paid in January 1997 in respect of 1996.

Under the terms of the Employment Agreement options to purchase up to
180,000 shares of Common Stock at $4.50 per share were granted to Mr. Ouimet
under the Company's 1995 Stock Plan. Mr. Ouimet, under the terms of his
Employment Agreement and the agreement granting him such options, is entitled
to loans from the Company to finance the exercise price of such options. Such
loans are to be for a term of three years with an amortization schedule of not
less than 15 years and with interest to accrue but not to be payable until
December 31, 2000.

Under the terms of the Employment Agreement, Mr. Ouimet also received a
payment of $50,000 and the grant to him of 12,000 shares of Common Stock in
respect of benefits foregone by him from his prior employer, as well as an
amount to cover Mr. Ouimet's legal costs in connection with the negotiation,
review and execution of the Employment Agreement and to cover dental costs
through December 31, 1996.

The term of the Employment Agreement is through December 31, 2000, subject
to the Bank's right to terminate such employment for "cause" (as defined). In
the event of termination of Mr. Ouimet's employment without "cause" or if there
is a material reduction of his responsibilities without his express written
consent, the Agreement entitles Mr. Ouimet to immediate payment of the balance
of the base salary payable to him during the remaining portion of the term of
the Employment Agreement, but in no event less than an amount equal to 12
month's base salary, and the payment of all future bonus compensation under the
Employment Agreement when earned and otherwise payable (if the termination or
reduction of responsibilities had not occurred), as well as payment of health
and life insurance premiums for comparable benefits coverage of one (1) year
from date of termination. If the Company's stockholders' equity falls below 3%
of total consolidated assets, the amount of future salary and bonus payable to
Mr. Ouimet must be placed in escrow.

Mr. Ouimet is also entitled to certain other benefits under the Employment
Agreement, including disability and life insurance coverage at the Bank's cost,
reimbursement for lease payments, maintenance, gas and insurance on an
automobile, participation in the Bank's medical savings account benefit
program, reimbursement for club and civic and professional association dues and
for continuing education, and matching charitable contributions as deemed
appropriate by the Bank's Board of Directors.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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The management of the Company ("we") reviewed the Forms 3 and 4 and
amendments thereto furnished to the Company pursuant to Rule 16a-3(e)
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), during its most recent fiscal year. We also reviewed the
Forms 5 and amendments thereto furnished to the Company with respect to its
most recent fiscal year, and written representations from executive officers
and directors of the Company that did not file a Form 5 with respect to its
most recent fiscal year, to the effect that no filing of a Form 5 is required
with respect to such person. Based upon our review, no person who, at any time
during the Company's most recent fiscal year, was a director, officer or
beneficial owner of more than 10% of the Company's Common Stock, failed, as
disclosed in the above Forms, to file on a timely basis, any reports required
by Section 16(a) of the Exchange Act, except as follows:

The Company has been informed that Robert Goldthorpe, a director of the
Company, inadvertently failed to report the ownership of 15,000 shares of
Common Stock at the time he became a director of the Company in April 1996.
The Company understands that Mr. Goldthorpe will promptly file an amendment to
correct this error in his original form 3.

COMPENSATION PLANS

University Bancorp, Inc. 1995 Stock Plan. The 1995 Stock Plan of the
Company was adopted by the Board of Directors in November 1995 (and amended in
April 1996) and later approved by the Company's stockholders. The purpose of
the 1995 Stock Plan is to provide incentives to officers, directors, employees
and consultants of the Company. Under the 1995 Stock Plan, officers and other
employees of the Company and any present or future parent or subsidiary
(collectively "Related Corporations") are provided with the opportunity to
purchase shares of Common Stock as "incentive stock options" ("ISOs"), as
defined in Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), and directors, officers, employees and consultants of the Corporation
and Related Corporations are provided with the opportunity to purchase shares
of Common Stock of the Company pursuant to options which do not qualify as ISOs
("Non-Qualified Options") and, in addition, such directors, officers, employees
and consultants may be granted awards of stock in the Company ("Awards") and
opportunities to make direct purchases of stock in the Company ("Purchases").
Both ISOs and Non-Qualified Options are referred to hereafter individually as
an "Option" and collectively as "Options". Options, Awards and Purchases are
referred to hereafter as "Stock Rights".
A total of 350,000 shares of Common Stock are reserved for issuance upon
the exercise of Options or in connection with Awards or Purchases of stock
under the 1995 Stock Plan (subject to adjustment for capital changes). Shares
subject to Options which for any reason expire or are terminated unexercised
may again be available for grant under the 1995 Stock Plan. Unless sooner
terminated, the 1995 Stock Plan will terminate on November 15, 2005.
The 1995 Stock Plan is administered by the Board of Directors of the
Company. The Board has the right, in accordance with the Plan, to appoint a
Compensation Commitee ("Compensation Committee") of three or more of its
members to administer the Plan. The Compensation Committee of the Board of
Directors has been established and provides recommendations to the Board on the
granting of options. The 1995 Stock Plan requires that each

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Option shall expire on the date specified by the Compensation Committee, but
not more than ten years from its date of grant in the case of ISOs and not more
than ten years and one day in the case of Non-Qualified Options. However, in
the case of any ISO granted to an employee or officer owning more than 10% of
the total combined voting power of all classes of stock of the Company or any
Related Corporation, the ISO expires no more than five years from its date of
grant.
Exercise of any Stock Right, in whole or in part, under the 1995 Stock
Plan is effected by a written notice of exercise delivered to the Company at
its principal office together with payment for the Common Stock in full, or, at
the discretion of the Compensation Committee, by the delivery of shares of
Common Stock of the Company, valued at fair market value, a promissory note, or
through an exercise notice payment procedure, or any combination thereof.
During 1996, Options for a total of 283,841 shares of Common Stock were
granted under the 1995 Stock Plan, including those granted in November or
December 1995, subject to stockholder approval, and Awards of 1,300 shares of
Common Stock were made under the 1995 Stock Plan. Options for a total of 4,541
shares of Common Stock were exercised in 1996. As of March 31, 1997, options
for a total of 260,500 shares of Common Stock were outstanding under the 1995
Stock Plan and 83,659 shares of Common Stock were available for grant of Stock
Rights under the 1995 Stock Plan.

University Bancorp, Inc. Employee Stock Ownership Plan. The Company has
had in effect an employee stock ownership plan (the "ESOP") for eligible
employees of the Company and its subsidiaries. The ESOP is a qualified plan
under section 401(a) of the Internal Revenue Code, as amended. The ESOP
provides that the employer may contribute thereto such amounts as it may
determine and the contributions may be in cash or in stock, at the election of
the Company. Contributions are allocated among employees who have reached age
21, have at least one year of service and are employed more than 500 hours
throughout the year. Contributions are allocated in the proportion that the
employee's total compensation for the year (up to $200,000) bears to the total
compensation of all ESOP participants for the year (up to $200,000 per
participant). However, the sum of contributions and forfeitures allocated to
an employee in any year cannot exceed the lesser of $30,000 or 25 percent of
his or her compensation for the year, subject to indexing in accordance with
Internal Revenue Service regulations to reflect changes in the cost of living.
Employees who retire, die, become disabled or terminate their employment for
any other reason would receive the value of the vested portion of their
accounts, in cash or stock. Employees vest in their accounts in accordance
with a vesting schedule based on years of credited service. Employees have the
right to require the Company to repurchase shares distributed to them pursuant
to the terms of the ESOP. In 1996 and 1995, the Company contributed to the
ESOP 2,700 and 10,000 in additional shares of Common Stock valued at $15,056
and $35,000,

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respectively, based upon the then current bid price of the Company's common
stock of $5.5625, and $3.50.

University Bank SEP IRA Plan. On January 1, 1995, the Company's Bank
subsidiary established a noncontributory SEP IRA contribution plan. Under the
Plan, the Bank contributed 3% of an employee's salary multiplied by 100 times
the Bank's percentage return on assets excluding unusual gains from sales of
assets (with a minimum payment of 1.5% of employee's salary) to an employee SEP
IRA, with immediate vesting. The Corporation made no contributions to the plan
for the year ended December 31, 1995, and made a contribution of $6,904 for the
year ended December 31, 1996.

University Bank 401(k) Profit Sharing Plan. In 1996 the Bank replaced the
SEP IRA Plan with a new 401(k) Profit Sharing Plan (the "401(k) Plan"),
effective January 1, 1996, which allows an employee of the Company or any of
its subsidiaries who has reached age 18 and has completed one year of service
to elect to reduce their compensation by up to 12% (subject to specified
maximum limitations) and have such amounts contributed on their behalf to the
401(k) Plan. The 401(k) Plan provides for matching employer contributions for
each employee who elects to reduce his or her compensation. The amount of
matching contribution is up to the sole discretion of the employer. The
employer can also make additional discretionary contributions for participating
employees. The sum of an employee's salary reductions, and the matching and
discretionary contributions and forfeitures allocated to an employee in the
year could not exceed the lesser of $30,000 or 25 percent of his or her
compensation for the year, subject to indexing in accordance with Internal
Revenue Service regulations to reflect changes in the cost of living.
Participants in the 401(k) Plan who retire, die or terminate their employment
for any other reason after having completed at least five years of service
would receive the total amount of their account. No matching contributions
were made by the Bank for the year ended December 31, 1996.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Joseph L. Ranzini and Stephen Lange Ranzini have executed personal
guarantees of the debt of Newberry Motors, a car dealership, to GMAC and
Chrysler Finance in the amount of approximately $1,000,000 to each financial
institution. Stephen Lange Ranzini currently owns 50% of Newberry Motors;
however, such shares are subject to a right to purchase at a nominal price by
the current management of Newberry Motors under the terms of an agreement.
Stephen Lange Ranzini also owns 50% of the shares of Knauf Motors, a related
holding company; however, such shares are subject to a right to purchase by
University Bank at a nominal price. Newberry Motors and Knauf Motors are
borrowers from the Bank which became financially distressed in 1991, and the
arrangements described above were entered into in conjunction with a
restructuring of the management and business structure of the car dealership at
that time. Joseph L. Ranzini and Stephen

- 16 -

Lange Ranzini serve as unpaid directors of both Newberry Motors and Knauf
Motors.

In May 1993, a Rural Business and Industrial Development Company now
called Michigan BIDCO, Inc. was established (the "BIDCO"). The BIDCO is
licensed by the Michigan Financial Institutions Bureau (the "FIB") under the
State of Michigan BIDCO program, and regulated and examined by the Bank & Trust
Division of the FIB. The BIDCO invests in businesses in northern Michigan with
the objective of fostering job growth and economic development. In 1995 and
1996, the Company purchased a total of $197,000 convertible debentures of BIDCO
for $203,000, convertible into 131 shares of BIDCO's shares, representing 4.97%
of BIDCO's shares on a fully diluted basis. Joseph L. Ranzini is the President
and Chairman of the Board of BIDCO and Stephen Lange Ranzini is the Treasurer.
Stephen Lange Ranzini received $44,025 in salary, SEP IRA and board fee
compensation from BIDCO in 1996. Joseph L. Ranzini, received $93,220 in
salary, SEP IRA and board fee compensation from BIDCO in 1996.

In December 1995, the Bank acquired 80% of the common stock of Midwest
Loan Services, Inc. In connection with this acquisition, the BIDCO received
23,000 shares of Common Stock of the Company, puttable to the Company at $5.00
per share in December 1997, in exchange for its ownership of 10% of Midwest
Loan Services, Inc. and options to buy an additional 30% of that company.

When the BIDCO invests in businesses, it generally requires as part of its
lending and/or investing agreement the right to designate one seat on the board
of the companies in which it invests. Staff members of the BIDCO are assigned
the task of sitting on such boards. Remuneration for such board assignments is
paid directly to the BIDCO. In connection with his duties as Treasurer of
BIDCO, Stephen Lange Ranzini, is a director of Great Lakes Tissue, a tissue
paper mill, and Scanlan Communications, an ABC-TV broadcast affiliate. He also
serves as the President of Arbor Street Corp., the General Partner for Austin
Trading Partners, LP, an investor in a mixed office waste deinked pulp mill.

The BIDCO has, by general policy of its board of directors, a loan and
investment in one borrower limit of $500,000. From time to time, the BIDCO
receives loan and/or investment proposals from third parties requesting an
investment by the BIDCO in excess of this $500,000 limit. In such event, the
BIDCO has in certain instances formed single purpose limited liability
companies (the "LLCs") whose members, including Joseph and Stephen Ranzini, are
directors, shareholders and bondholders of the BIDCO to fund amounts over the
$500,000 limit. The outside investor groups invest on a pro rata, parri passu
(equal) basis with the BIDCO. Since the inception of the BIDCO the following
investments were made with investor group participation:

- 17 -

The BIDCO invested $500,000 and an LLC invested $800,000 of a $1,300,000,
5.5 year fully amortizing lease at 24% interest, plus an upfront $100,000
origination fee, secured by railroad boxcars through Northern Federal Leasing
LLC. The BIDCO invested $500,000 and an LLC invested $280,000 of a $780,000
investment in Northern Federal Pulp and Paper LLC, which made an equity
investment in Austin Trading Partners, LP (a partner in the Great Lakes Pulp
and Fibre recycle pulp mill being built in Menominee, Michigan). In each of
these LLCs, Joseph and Stephen Ranzini each contributed 1/9th of the LLCs'
investment. The BIDCO invested $42,000 and an LLC (in which Joseph and Stephen
Ranzini each contributed 1/10th of the LLCs' investment) invested $28,000 for a
50% equity investment in Northern Federal Hotels LLC.

In 1995, the Bank, through a 98%-owned subsidiary, Arbor Street LLC,
purchased $1,000,000 in federal low income housing tax credits through a
partnership investment in Michigan Capital Fund for Housing Limited Partnership
I, a Michigan limited partnership (the "Partnership"). The investment
consisted of a $100,000 equity purchase and the execution by Arbor Street LLC
of a $900,000 promissory note held by the Partnership (the "Note"). In
connection with the execution of the Note, the Partnership required Joseph L.
Ranzini and the Ranzini Family Trust dated 12/20/89 to personally guarantee the
Note, because the Bank was prohibited from doing so by state banking
regulations. In exchange for arranging for the guaranty of the Note, Joseph L.
Ranzini and Stephen Lange Ranzini each received a 1% interest in Arbor Street
LLC.

The Company maintains an investment securities account with Ladenburg
Thalmann & Co. Inc. Michael Talley, a director of the Company, receives
commissions on the transactions in this account. The Company pays commissions
at rates which are comparable to those paid in its other investment securities
accounts at other brokerage firms.

Stephen Lange Ranzini, Prof. Paul Lange Ranzini and Dr. Joseph Lange
Ranzini are the sons of Joseph L. Ranzini and Mildred Ranzini.

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountant selected to be the Company's principal
accountants for the fiscal year ending December 31, 1997 is Crowe, Chizek & Co.
A representative of such accounting firm is expected to be available by
speaker telephone at the Meeting. Such representative will have an opportunity
to make a statement, if he or she desires to do so, or to respond to
appropriate questions.

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OTHER MATTERS

The cost of proxy solicitation will be borne by the Company. Banks,
brokers and other nominees will be reimbursed for their customary expenses
incurred in connection with the forwarding of proxy materials. In addition,
proxies may be solicited, without additional compensation, by directors,
officers and other regular employees of the Company and its subsidiaries by
telephone, telegraph, telecopy or in person.

Dated: April 25, 1997

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UNIVERSITY BANCORP, INC.

This proxy is solicited on behalf of the Board of Directors for the Annual
Meeting of Stockholders of University Bancorp, Inc. (the "Company") scheduled
for June 9, 1997.

The undersigned hereby appoints Joseph L. Ranzini, Stephen Lange Ranzini
and Robert Goldthorpe, and each of them individually, proxies, with full power
of substitution, to vote all shares of Common Stock of the undersigned at the
Annual Meeting of Stockholders (the "Meeting") scheduled to be held on June 9,
1997, and at any adjournment(s) thereof, upon all subjects that may properly
come before the Meeting and any adjournments thereof, including the matters
described in the proxy statement furnished herewith, subject to any directions
indicated on the reverse side of this proxy. If no directions are given, the
proxies will vote "FOR" the election of all listed nominees for election as
Directors, and at their direction on any other matter that may properly come
before the Meeting or any adjournment thereof.

Your vote for the election of directors, described in the proxy statement
may be indicated on the reverse side of this proxy.

The nominees for election as directors are: Keith Brenner, Robert
Goldthorpe, Mark Ouimet, Joseph L. Ranzini, Dr. Joseph Lange Ranzini, Mildred
Ranzini, Prof. Paul Lange Ranzini, Stephen Lange Ranzini and Michael Talley.

___________________________________________________________________________

The Board of Directors recommends a vote FOR all listed
candidates for election as Directors.
___________________________________________________________________________

(SEE REVERSE SIDE)

This proxy, when properly executed, will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR the election as
Directors of the nominees listed on the reverse side of this proxy.

Election of Directors (see reverse side for list of nominees)

FOR WITHHELD FOR, except vote withheld from the
[ ] [ ] following nominee(s):

__________________________________

The signer hereby revokes all
proxies heretofore given by the
signer to vote at the Meeting or
any adjournment thereof.

Dated:__________________

x_______________________
Signature

Stockholder: ________________________
Signature (if held jointly)

Please sign above exactly as name
appears hereon. Joint owners
should each sign. When signing
as officer, attorney, executor,
administrator, trustee or
guardian, please give full title
as such.