September 22nd, 2009

Irwin Bank Fails, Becomes 94th Bank Closure Victim of 2009

The FDIC has announced that Irwin Union Bank, FSB and Irwin Union Bank and Trust Company, both banking subsidiaries of Irwin Financial Corporation out of Columbus, IN, were closed by state regulators last week. The two banks collectively had 27 locations in Kentucky and Indiana, and at the end of August had reported total assets of $3.19 billion. In order to protect those with deposits in the banks, the FDIC agreed to sell all deposits to First Financial Bank, NA of Hamilton, OH. The FDIC and First Financial assure all Irwin Union customers that the transition will not affect their banking deposits, and all Irwin Union branches reopened last Saturday as branches of First Financial.

This failure marks the 94^th bank to fail this year. Irwin Union has been operating in the Columbus, IN area for over 125 years, since 1881. This makes Irwin Union Bank one of the few banking victims that were able to survive the Great Depression, only to be shut down due to the recent financial crisis. This failure is largely due to involvement in risky real estate deals, which reportedly reached $450 million in bad mortgages before they were assumed by the FDIC. Irwin Bank was hoping to receive some of the federal bailout money, but like many banks this year, it was disappointed when the money did not come in time to save the institution from being shut down by both the Indiana Department of Financial Institutions and the Office of Thrift Supervision in Kentucky.

The bank closures were the first in Indiana and Kentucky in 2009, and will reportedly cost the Deposit Insurance Fund (DIF) $850 million dollars. In order to offset some of these losses, the FDIC entered into the deal with First Financial, saying that it was the least costly alternative for the Corporation.

About the banks

Irwin Union Bank

Irwin Union Bank and Trust Company and Irwin Union Bank, F.S.B. are wholly owned subsidiaries of Irwin Financial Corporation (NYSE: IFC) which is headquartered in Columbus, Indiana. Irwin Union Bank and Trust Company was founded in 1871, and today operates locally-managed banks in Indiana, Michigan, Nevada and Utah. Irwin Union Bank, F.S.B. operates locally-managed banks in Arizona, California, Kentucky, Missouri, Nevada, New Mexico and Wisconsin.