Two Irwin Union Bank Subsidiaries Fail – Costing Deposit Insurance Fund another $850 Million

Two more banks were shuttered this week, as Irwin Union Bank subsidiaries based in Indiana and Kentucky were closed down by regulators, bringing this years total bank failures to 94, and costing the Deposit Insurance fund another $850 million.

According to the Federal Deposit Insurance Corp. the two closings were Irwin Union Bank and Trust Co. based in Columbus, Indiana, and Irwin Union Bank F.S.B. based in Louisville, Ky.

Assets for Irwin Union Bank and Trust Co. stood at $2.7 billion with deposits of $2.1 billion as of August 31, and assets held by Irwin Union Bank F.S.B. came in at $493 million with deposits of $441 million, also as of August 31.

First Financial Bank, based in Hamilton, Ohio, will assume the deposits from both subsidiaries, with funds available immediately, according to the FDIC, and Irwin Union Bank F.S.B. will open again at their usual time of business on Monday morning in Louisville, while Irwin Union Bank and Trust Co. has already reopened on Saturday.

Irwin Union is one of the oldest banks in Indiana, being founded in 1871. Most of their problems stemmed from real estate loans in western states.

These are the first bank failures in Indiana and Kentucky in 2009, with the last failure being in 1992 for Indiana, and 1991 for Kentucky.