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Irwin Financial narrows losses, continues restructuring

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Irwin Financial Corp. narrowed its losses in the second quarter, as the company continued to restructure or face the possible suspension of its business.

The Columbus-based parent of Irwin Union Bank FSB said today that losses in the latest quarter declined to $57 million, or $1.92 per share, from $107 million, or $3.64 per share, in the same period a year ago.

The smaller loss in the second quarter was due to credit provisions but also reflects the bank's restructuring efforts, Irwin Chairman and CEO Will Miller said in a prepared statement.

"In the second quarter, we saw a meaningful slowdown in new problem credits," Miller said. "This encouraging sign suggests that our focus on credit management is having a positive effect."

The company's loan-loss provision has fallen from $158 million in the second quarter of 2008 to $64 million in the first quarter of 2009 to $45 million in the most recent quarter, Irwin Financial said.

Regulators told Irwin Union Bank late last month that it must boost its capital or face the possible suspension of its business.

"We continue to pursue the only remaining step in our restructuring-raising additional capital," Miller said today in the statement. "We have been advised that Treasury is working on what they call 'Plan C,' which includes discussions with other banking agencies of a new application of the TARP capital program to assist community banks."

Irwin Financial has commitments of $34 million in private investments, Miller said.

Also, as part of its restructuring, the company in early July agreed to sell three bank branches and $200 million in loans to Cincinnati-based First Financial Bancorp.

First Financial, the parent of First Financial Bank, is buying branches in Carmel, Greensburg and Shelbyville. The acquisition includes about $143 million in deposits and $50 million in commercial and consumer loans. The deal is expected to close in the third quarter.

In a separate transaction that already closed, First Financial bought $150 million in commercial loans from Irwin branches in Avon, Carmel, Columbus, Franklin, Greensburg, Indianapolis and Shelbyville.

Irwin Union retains bank branches in Avon, Columbus, Franklin and Indianapolis.


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