As the economy has been increasing seeming worse and we see many banks and lending companies going through difficult times and with many being bought out, it is not a surprise that Indiana based Irwin Union Bank and Irwin Union Bank and Trust (subsidiaries of Irwin Financial Corp.) both be acquired by Ohio based First Financial Bank on Friday. Irwin Union Bank had announced on Wednesday that they were in a cease and desist order with federal and state regulators and that they were not going to be able to comply with the order. The company had made reductions in the size of the corporation and they had refocused their customer service but they had not been able to raise capital, which was part of the order.
On Friday around 5 p.m., Bartholomew Sheriff’s Deputies were providing security as FDIC and First Financial employees along with employees of Irwin Union began to compile an inventory of deposits ,assets, and claims at the offices in Columbus, Indiana. They will produce balance sheets which will go to First Financial and FDIC.
First Financial purr chased Irwin Union loans at 75 % of the value of the loans, which was about $2.5 billion of which all are performing loans. All of the other loans became property of the FDIC. They also purchased from the FDIC approximately 63,000 deposit accounts at a value of $ 2.1 billion for $21 million.
While there are not many details yet as to what all of this takeover will entail, it has been announced that all Irwin Union account holders still have access to their money and accounts. They will still be able to check out accounts with the on line banking and will still be available to go into local branches and use the ATM. Most Irwin Union employees will keep their jobs at this time.
Irwin Union had suffered many problems due to the economic state of the union and had lost more than $450 million in the last six quarters. Customers have struggled to pay back loans and this failure will likely cost the FDIC insurance fund a total of $850 million. Many other banks are suffering too as a result of souring loans, especially on commercial real estate. The FDIC has 416 banks on a “problem list”, which is the highest since 1994.
First Financial seems to be a fairly solid banking institution as they reported assets of $3.8 billion in June of this year and they currently operate 107 offices in three states. Hopefully, once all of the logistics of this sale are final consumers and customers will see a more solid based company handling their money.
No comments could be obtained by the local newspaper reporter by Irwin Financial Chairman and CEO Will Miller on Friday. Miller is a descendant of the bank’s founder.