Two Banks Closed on Sep. 18Irwin Union Banks in Kentucky, Indiana Acquired by First Financial of Ohio Two related banks in Kentucky and Indiana were closed by federal and state regulators on Friday, Sept. 18.
Irwin Union Bank, F.S.B., Louisville, Kentucky, and Irwin Union Bank and Trust Company, Columbus, Indiana - both subsidiaries of Irwin Financial Corporation, Columbus, Indiana - were shut down by regulators, which immediately named the Federal Deposit Insurance Corporation (FDIC) as the receiver for the banks. To protect depositors, the FDIC entered into a purchase and assumption agreement with First Financial Bank, National Association, Hamilton, Ohio, to assume all of the deposits of the two banks.
This year's running tally of failed institutions now stands at 105 banks and credit unions that have been closed, acquired or placed into conservatorship.
Irwin Union Bank and Trust Company, Columbus, Indiana, was closed by the Indiana Department of Financial Institutions. As of August 31, 2009, it had total assets of $2.7 billion and total deposits of approximately $2.1 billion. Irwin Union Bank, F.S.B., Louisville, Kentucky, was closed by the Office of Thrift Supervision. As of August 31, 2009, it had total assets of $493 million and total deposits of approximately $441 million.
Irwin Union B&T Company and Irwin Union Bank, F.S.B. had 27 locations between them and were to reopen during their normal business hours beginning Saturday as branches of First Financial Bank. Depositors of the failed institutions will automatically become depositors of First Financial Bank.
First Financial Bank will pay the FDIC a premium of one percent to assume all of the deposits of Irwin Union B&T Company and zero percent for those of Irwin Union Bank, F.S.B. In addition to assuming all of the deposits of the failed institutions, First Financial Bank agreed to purchase essentially all of their assets.
The FDIC and First Financial Bank entered into a loss-share transaction on approximately $2.5 billion of the assets of Irwin Union B&T Company and Irwin Union Bank, F.S.B. First Financial Bank will share in the losses on the asset pools covered under the loss-share agreement.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for both institutions will be $850 million. These were the first failures of the year in Indiana and Kentucky, which had not seen bank failures since the early 1990s.