Irwin Financial Corporation Announces Results of Convertible Trust Preferred Securities Redemption
March 08 2006 - 8:30AM
PR Newswire (US)
COLUMBUS, Ind., March 8 /PRNewswire-FirstCall/ -- Irwin Financial
Corporation (NYSE:IFC), a bank holding company focusing on small
business and mortgage banking today announced the outcome of a call
notice issued on the securities underlying IFC Capital Trust III,
from which $51.7 million of 8.75 percent convertible trust
preferred securities (NYSE:IFC.NNYSE:CUSIPNYSE:# 449498203) were
outstanding. The terms of the call notice were to redeem all shares
outstanding on March 6, 2006, at their par value of $25 per share
plus accrued interest through March 3, 2006. In lieu of redemption
for cash, the trust preferred securities were convertible at the
option of the holder into Irwin Financial Corporation common stock
(NYSE:IFC) at any time up to 5:00 p.m. EST on March 3, 2006. If
converted, each share of convertible trust preferred securities was
exchanged for 1.2610 shares of common stock, which equated to a
common stock conversion price of $19.825/share. Of the 2.1 million
shares of Capital Trust III convertible securities outstanding, 0.8
million shares were converted, at the 1.2610 exchange ratio, into
1.0 million shares of IFC common stock. The remaining 1.3 million
shares of Capital Trust III convertible securities were redeemed
for a total cash payment of $32.1 million, which consisted of the
$25 par value per share plus accrued interest. Due to the
redemption of 1.3 million convertible securities, the number of
dilutive potential common shares to be included in the
Corporation's earnings per share calculation will decline by 1.6
million shares. For the redeemed shares, capitalized issuance costs
must be expensed in the current quarter, reducing pre-tax income by
$1.1 million. Interest expense savings in the current quarter
resulting from the call are expected to be $0.5 million for a net
impact of -$0.6 million before tax or approximately one cent per
share after-tax. The Corporation intends to issue approximately $32
million of Tier-1 eligible, non-convertible trust preferred
securities in the near future which will have the effect of
replenishing its capital base for the convertible securities that
were redeemed on March 6, 2006. About Irwin Financial Irwin(R)
Financial Corporation (http://www.irwinfinancial.com/ ) is a bank
holding company with a history tracing to 1871. The Corporation,
through its principal lines of business -- Irwin Union Bank, Irwin
Commercial Finance, Irwin Home Equity Corporation, and Irwin
Mortgage Corporation -- provides a broad range of financial
services to consumers and small businesses in selected markets in
the United States and Canada. About Forward-Looking Statements This
press release contains forward-looking statements and estimates
that are based on management's expectations, estimates,
projections, and assumptions. These statements and estimates
include but are not limited to earnings estimates and projections
of financial performance and profitability, and projections of
business strategies and future activities. These statements involve
inherent risks and uncertainties that are difficult to predict and
are not guarantees of future performance. Words that convey our
beliefs, views, expectations, assumptions, estimates, forecasts,
outlook and projections or similar language, or that indicate
events we believe could, would, should, may or will occur (or might
not occur) or are likely (or unlikely) to occur, and similar
expressions, are intended to identify forward- looking statements,
which may include, among other things: * statements and assumptions
about the number and effect of the Corporation's dilutive potential
common shares to be included in our earnings per share calculation;
* statements and assumptions about the expected interest expense
savings and the net impact of the call for the quarter; *
statements about our intention to issue additional trust preferred
securities and the expected impact of the issuance on our capital
base; and * any other statements that are not historical facts. We
qualify any forward-looking statements entirely by these cautionary
factors. Actual future results may differ materially from what is
projected due to a variety of factors including: potential changes
in direction, volatility and relative movement (basis risk) of
interest rates; unanticipated deterioration in or changes in
estimates of the carrying value of our other assets, including
securities; unanticipated difficulty or delay in issuing trust
preferred securities or any other prospective issuance of capital;
legislative or regulatory changes, including changes in tax laws or
regulations, changes in the interpretation of regulatory capital
rules, changes in applicable accounting policies or principles or
their application to our businesses; additional guidance and
interpretation on accounting issues and details of the
implementation of new accounting methods; the final outcome and
implications of our consideration of strategic alternatives for our
conventional mortgage banking segment, or governmental changes in
monetary or fiscal policies. We undertake no obligation to update
publicly any of these statements in light of future events, except
as required in subsequent reports we file with the Securities and
Exchange Commission. DATASOURCE: Irwin Financial Corporation
CONTACT: Suzie Singer, Corporate Communications, +1-812-376-1917,
or Greg Ehlinger, Chief Financial Officer, +1-812-379-7603, both of
Irwin Financial Corporation Web site:
http://www.irwinfinancial.com/
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