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Irwin to sell home equity loans for $1B

July 25, 2008

Columbus-based Irwin Financial Corp. said late yesterday that it has struck a deal to sell $1 billion of home equity loans to a New York firm and to securitize an additional block of loans with the same firm. The moves are part of a restructuring that refocuses the bank on small-business and branch-based customers.

The parent of Irwin Union Bank said the home equity loans, which have caused ongoing losses, will be sold to Roosevelt Management Co. LLC in the third quarter.

Irwin Financial also will sell its small-ticket leasing business for $600 million to RoyNat Inc. Inc. in Canada and Equilease Financial Services Inc. in the United States.

Wayward house mortgages have bedeviled Irwin Financial for more than a year. The company's stock, which traded above $20 as recently as late 2006, now fetches $3.39.

The bank dates to the mid-19th century and has long-standing ties to Cummins Inc., the diesel engine maker headquartered in the same southern Indiana city. Deceased Irwin chairman J. Irwin Miller, a great-grandson of bank founder Joseph Ireland Irwin, also was chairman of Cummins.

Miller, who died in 2004, was the father of Irwin's current chairman and CEO, Will Miller.

In the Indianapolis area, Irwin Union branches are in Avon, Carmel, Franklin, Indianapolis and Shelbyville.

 

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