http://www.marketwatch.com/story/irwin-union-bank-failures-bring-2009-total-to-94-2009-09-18
By John Letzing, MarketWatch
SAN FRANCISCO (MarketWatch) -- Two Irwin Union Bank subsidiaries in Kentucky and Indiana were closed by regulators Friday, bringing the total number of U.S. bank failures this year to 94 and punching an $850 million hole in the federal deposit insurance fund.
The Federal Deposit Insurance Corp. said that Irwin Union Bank and Trust Co. in Columbus, Ind., and Irwin Union Bank F.S.B. in Louisville, Ky., were each closed.
Irwin Union Bank and Trust Co. had $2.7 billion in assets and $2.1 billion in deposits as of Aug. 31, the FDIC said. Irwin Union Bank F.S.B. had $493 million in assets and $441 million in deposits as of Aug. 31.
Hamilton, Ohio-based First Financial Bank /quotes/comstock/15*!ffbc/quotes/nls/ffbc (FFBC 8.31, -0.05, -0.60%) has agreed to assume the failed banks' deposits. First Financial Bank said in a statement that assumption of the Irwin Union Bank subsidiaries brings with it 27 banking centers in nine states.
The effect on the subsidiaries' parent, bank holding company Irwin Financial Corp. /quotes/comstock/13*!ifc/quotes/nls/ifc (IFC 0.48, -0.02, -4.00%) , was not immediately clear. An external spokeswoman for the company was unable to comment. Shares of Irwin Financial tumbled more than 50% to 22 cents a share in late trading.
Irwin Financial had disclosed in a regulatory filing on Wednesday that it was told by the Federal Reserve Bank of Chicago and the Indiana Department of Financial Institutions that they disagreed with its view of the timing and recognition of certain loan losses at Irwin Union Bank and Trust Co., requiring it to submit amended reports to the FDIC.
The failures marked the first this year both in Indiana and Kentucky. However, bank failures have become a regular occurrence since the economic calamity late last year the ensuing credit crunch.
The FDIC said the last bank closed in Indiana was seized in 1992, while last closure in Kentucky occurred in 1991.
John Letzing is a MarketWatch reporter based in San Francisco.
