Indiana-based

Irwin Financial

(IFC)

is selling its traditional mortgage business and will buy back up to 2 million of its shares.

The terms of the deal with privately-held Freedom Mortgage were not disclosed. The transaction will add 40 mortgage offices to Freedom's network of 110 branches.

Irwin Financial, based in Columbus, Ind., will keep its subprime mortgage business.

"Earlier this year, we announced our desire to focus the corporation's attention on the growth of our small business and nonconforming consumer mortgage segments," says Irwin Financial Chairman and CEO William Miller.

The bank also said its board has approved a 2 million share repurchase plan. The company plans to buy back up to $50 million in shares from time to time.