Regulators Shutter Irwin Financial Banks
Indiana regulators closed Irwin Union Bank & Trust of Columbus, Ind., and the Office of Thrift Supervision shuttered Irwin Union Bank FSB of Louisville, Ky. The Federal Deposit Insurance Corp. was appointed receiver and sold both institutions to First Financial Bank NA of Hamilton, Ohio, a subsidiary of First Financial Bancorp (FFBC).
Irwin Financial had announced Wednesday that it was unlikely to meet the capital and liquidity requirements of a regulatory cease and desist order. The holding company also said that regulators had required a restatement of Irwin Union Bank & Trust's second-quarter financial statements, to better recognize loan losses.
Irwin Union Bank & Trust had $2.7 billion in assets and $2.1 billion in deposits. Irwin Union Bank FSB had $493 million in assets and $441 million in deposits. The failed institutions' 27 branches were set to reopen Saturday as branches of First Financial Bank.First Financial Bank acquired more than $200 million in nonaccrual loans from the failed institutions and entered into a loss-sharing agreement with the FDIC on $2.5 billion of the combined institutions' assets. The FDIC released additional information about its loss-sharing agreements, possibly as a response to the growing perception that many acquirers of failed banks and thrifts are getting amazing bargains because of the agreements. Although the agreements vary, the FDIC usually covers 80% of commercial loan losses for the first five years after the acquisition, up to a threshold amount (the FDIC's cost estimate), and 95% of losses above the threshold. For residential loans, the agency covers 80% of losses for 10 years, and 95% of losses above the threshold. The FDIC estimated the cost to its insurance fund for the two failures would be $850 million.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV