- Loss of $6.1 Million From Continuing Operations COLUMBUS, Ind.,
May 7 /PRNewswire-FirstCall/ -- Irwin Financial Corporation
(NYSE:IFC), a bank holding company focusing on small business and
consumer mortgage lending, today announced a net loss from
continuing operations for the first quarter of 2007 of $6.1 million
or $0.22 per diluted share. This compares with diluted earnings per
share from continuing operations of $0.35 per share and $0.30 per
share, in the fourth quarter of 2006 and the first quarter of 2006,
respectively. When the first quarter 2007 results of the
Discontinued Operations are combined with Continuing Operations,
the Corporation had a consolidated net loss of $10.1 million or
$0.36 per share in the quarter. "This was clearly a very
disappointing quarter after we took meaningful actions last year to
improve our results. We have been negatively affected by three
factors: the loss at home equity, an impaired commercial credit
involving what we believe was misrepresentation of collateral, and
slow loan and deposit growth in commercial banking" said Will
Miller, Chairman and CEO of Irwin Financial. "We believe we have
action plans to address each issue. The disruption in the consumer
mortgage market has been dramatic and protracted. In response, we
have made significant product modifications to reduce our exposure
to changing secondary market requirements. As a result of the
market disruption, there are fewer active buyers in the secondary
market, and those that are active are offering prices that are not
reflective of the underlying economics of our loans. Given the
uncertainty about how long these conditions will exist, our capital
strength allowed us to transfer loans we had originated for sale
into our portfolio. The mark-to-market and additional reserve
requirements for our portfolio, combined with the fact that a
relatively small portion of the loans were delinquent, caused us to
book a significant expense associated with this transfer. It is
important to note, however, that the loans we targeted for our
portfolio in prior quarter originations have been performing in
line with expectations. "While we cannot predict how long the
disruption in the secondary markets will continue, we believe the
consumer mortgage markets will be much more rational in the future
when conditions normalize as a result of reduced competition. We
continue to believe that we can achieve targeted profitability in
this line of business in the long run due to the product changes we
have been making over the past couple months. While disruptive to
our turnaround in the short term, this swing in the real estate and
mortgage cycle affords us competitive opportunities and plays well
to our long-term strategy in the mortgage market. "Our impaired
commercial loan in Michigan appears to have been an isolated event
connected with what we believe to be a borrower's misrepresentation
of collateral. Nonetheless, we have taken steps to retrain on best
practices in collateral review procedures and have embarked on an
extensive review of all material commercial credits in Michigan.
"Finally," Miller continued, "we believe the slowing of growth in
the commercial banking segment is attributable to a combination of
decreased demand and some turnover in our local market leadership
of established branches. While portfolios have been flat to
negative in our Midwestern markets, we have continued to experience
good growth in our newer markets in the West. We have put in place
new processes designed to enhance growth in coming quarters. I
expect loan and deposit growth to pick up as the year goes on."
Financial highlights for Continuing Operations (commercial bank,
commercial finance, and home equity lending) for the period
include: Consolidated Results $ in millions, except EPS 1Q 2007 4Q
2006 Percent 1Q 2006 Change Net Interest Income After Provision for
Losses $43 $57 (24.4)% $52 Non-Interest Income (1) 14 NM 14 Total
Consolidated Net Revenues 42 71 (41) 66 Non-Interest Expense 52 56
(6) 53 Net Income From Continuing Operations (10) 11 NM 9 Earning
per Share from Continuing Operations (diluted) (0.22) 0.35 NM 0.30
Loans and Leases 5,415 5,238 3 4,706 Deposits 3,447 3,552 (3) 4,075
Shareholders' Equity 513 31 (3) 528 Total Risk-Based Capital Ratio
13.5% 13.4% 12.9% Return on Average Equity (4.7)% 8.1% 6.8%
Consolidated net revenues from continuing operations for the first
quarter decreased on both a sequential quarter and year-over-year
basis, primarily reflecting increased loan loss provisions and
credit-based mark-to-market adjustments made on loans moved from
held-for-sale to held-for-investment classification. Net interest
income of $66 million was flat on a sequential quarter basis, but
increased 7 percent year-over-year. Non-interest expenses declined
at a 6 percent annualized rate from the fourth quarter, reflecting
several one-time charges in the prior quarter. The consolidated
loan and lease portfolio grew to $5.4 billion as of March 31, up 3
percent from year-end 2006. The bulk of this increase came from the
transfer of $167 million of consumer mortgage loans from held-for-
sale to held-for-investment classification, reflecting the
Corporation's decision not to sell into weak secondary market
conditions. As a result, mortgage loans held for sale declined to
$45 million as of March 31, down from $238 million at the end of
the year. Deposits totaled $3.4 billion at March 31, down $0.1
billion from December 31, 2006, reflecting the delivery of mortgage
escrow deposits associated with servicing rights which were sold in
late 2006. The quarter-over-quarter decline in escrow deposits
totaled $0.3 billion. This funding source has been replaced by
other core deposits and wholesale funding sources. The consolidated
net interest margin of 4.66 percent was down from 4.86 percent
during the fourth quarter, reflecting a decline in low-cost
mortgage escrow deposits. The Corporation had $513 million or
$16.92 per share in common shareholders' equity as of March 31. At
quarter-end, the Tier 1 Leverage Ratio and Total Risk-based Capital
Ratio were 11.3 percent and 13.5 percent, respectively, compared to
11.5 percent and 13.4 percent as of December 31, 2006. During the
first quarter, the Corporation repurchased 325 thousand shares of
common stock at an average price of $21.57 per share. The
Corporation currently anticipates being in the market for
additional share repurchases during the second quarter of 2007.
Nonperforming assets (including other real estate owned of $14
million) were $63 million or 1.05 percent of total assets as of
March 31, 2007, up from $58 million or 0.93 percent of total assets
at the end of December. The allowance for loan and lease losses for
the Corporation's on-balance sheet portfolio totaled $85 million as
of March 31, up $10 million from the end of the fourth quarter. The
majority of the increase, or approximately $9 million, reflects
additional provision taken at the home equity segment, $6 million
of which was related to the transfer of the $167 million of loans
from warehouse into portfolio noted earlier. In addition to the
loan loss provision taken once these loans were put into portfolio,
the segment recorded a mark-to-market downward valuation adjustment
of approximately $7 million prior to moving the loans to
held-for-investment classification. The ratio of allowance for loan
and lease losses for on-balance sheet portfolio to nonperforming
loans and leases was 179 percent at March 31, compared to 199
percent at December 31. The consolidated loan and lease loss
provision totaled $23.2 million in the first quarter, up from $9.9
million in the fourth quarter of 2006. This increase principally
reflects the provisioning associated with the home equity loans
noted above. The increase also reflects additional provision at the
commercial banking segment related to the impairment of a single
commercial credit in Michigan. Consolidated quarterly net
charge-offs on the Corporation's held for investment portfolio
totaled $12.5 million, up from $7.9 million during the fourth
quarter. The first quarter charge-offs included $4 million related
to the impaired commercial credit. Thirty-day and greater
delinquencies, the ratio of charge-offs to average loans and
leases, and the allowance for loan and lease losses to total loans
and leases for principal credit-related portfolios are shown in the
next table. Commercial Home Equity Commercial Banking Managed
Finance Portfolio March 31, 2007 Portfolio (in $Billions) $2.9 $1.7
$1.1 30-Day and Greater Delinquencies - March 31, 2007 0.22% 2.95%
0.64% - December 31, 2006 0.13 3.16 0.60 - September 30, 2006 0.12
3.07 0.57 - June 30, 2006 0.31 2.67 0.42 - March 31, 2006 0.10 2.29
0.47 Annualized Net Charge-offs - March 31, 2007 0.68% 3.01% 0.76%
- December 31, 2006 0.09 1.50 0.33 - September 30, 2006 0.19 0.86
0.50 - June 30, 2006 0.10 0.58 0.38 - March 31, 2006 0.09 1.01 0.35
Allowance to Loans and Leases(1) - March 31, 2007 0.93% 2.95% 1.39%
- December 31, 2006 0.93 2.63 1.28 - September 30, 2006 0.93 2.48
1.26 - June 30, 2006 0.94 2.44 1.29 - March 31, 2006 0.92 2.49 1.31
1. Home Equity on balance sheet Allowance to Loans and Leases
relates to Loans Held for Investment portfolio only. Segment
Results Net income (loss) by line of business is shown below, with
additional detail available in the segment summary tables at the
end of this release. 1Q 2007 4Q 2007 Percent 1Q 2006 Percent Change
Change Net Income(loss)($ in millions) Commercial Banking $3.2 $8.0
(60.4)% $6.8 (53.2)% Commercial Finance 2.6 3.5 (26.1) 2.9 (10.4)
Home Equity (10.1) 1.2 NM 1.0 NM Other Segments, Including Parent
(1.7) (2.0) (16.0) (2.0) (14.9) Net Income From Continuing
Operations (6.1) 10.6 NM 8.7 NM Income (Loss) From Discontinued
Operations - Mortgage Banking (4.0) (5.7) (29.5) (10.5) (61.7)
Consolidated Net Income (Loss) (10.1) 4.9 NM (1.9) 445.2 The
commercial banking segment earned income of $3.2 million, a
decrease of $3.6 million and $4.8 million as compared to the first
and fourth quarters of 2006, respectively, principally reflecting
an increase in loan loss provision and increased operating
expenses, reflecting a number of non- recurring items and new
branch expansion costs. The commercial banking segment's loan
portfolio was flat as compared to year-end. The segment continues
to see good growth in its newer, Western branches. Growth has
generally been flat to negative in Midwestern markets. Loans
outstanding as of March 31 totaled $2.9 billion. Net interest
margin was 3.99 percent during the quarter, down from 4.24 percent
during the fourth quarter, reflecting lower than planned loan
growth combined with excess funding. The net interest margin was
unchanged from the first quarter of 2006. Management currently
expects interest margin to increase modestly in subsequent
quarters. With the exception of a single commercial credit in
Michigan, overall credit quality continues to be good for this
segment. Thirty-day and greater delinquencies were 0.22 percent,
compared to 0.13 percent at December 31. Non-performing assets
increased from $19 million to $23 million, reflecting weakness in
Midwest markets; management believes it is adequately reserved for
these assets. The segment's watch list loans declined 5 percent on
a sequential quarter basis. The commercial banking segment's loan
and lease loss provision totaled $4.6 million during the quarter.
The majority of the provision reflects the impairment of a loan in
Michigan where the Corporation discovered what appears to have been
misrepresentations about collateral. Total charge-offs, including
$4.1 million for the impaired loan in Michigan, were $4.8 million.
The commercial finance line of business earned $2.6 million in the
first quarter of 2007, down from $3.5 million in the fourth
quarter. The decline in sequential quarter income reflects an
increase in provision for its small ticket leasing portfolio as
well as increased compensation and related expenses. Loan and lease
fundings totaled $129 million, compared to $164 million in the
fourth quarter and $120 million a year earlier. The loan and lease
portfolio totaled $1.1 billion as of March 31, unchanged from
year-end. During the quarter, the segment sold $27 million of loans
for portfolio management purposes, recording a gain-on-sale of $1.6
million. Net interest income totaled $12.0 million during the first
quarter, essentially unchanged from the prior quarter and net
interest margin declined modestly to 4.64 percent, as compared to
4.77 percent in the prior quarter. Credit quality remains in a
range in which management is comfortable. The loan and lease loss
provision in this segment totaled $3.5 million during the quarter,
up from $2.1 million during the prior quarter. The increase in
provision reflects elevated losses and delinquencies in the
domestic lease portfolio, partially in a vendor-based lease stream
in the automotive sector. Originations through this vendor have
been stopped and total exposure to this stream account for less
than one half of one percent of the consolidated loan and lease
portfolio. Loan and lease performance in the remaining commercial
finance portfolio remains strong. Net charge-offs increased to $1.9
million, as compared to $0.9 million in the prior quarter. The
thirty-day and greater delinquency ratio increased modestly to 0.64
percent at March 31, from 0.60 percent at December 31. The home
equity segment lost $10.1 million during the first quarter,
compared to earnings of $1.2 million during the fourth quarter. A
combination of higher actual and expected loss rates on loans
originated for sale to the secondary market as well as rapid
deterioration in conditions and liquidity in the secondary market
fueled the loss. The credit performance of the segment's loans
targeted for portfolio continue to meet management's expectations
and none of the bonds sold in the secondary market with the
company's collateral have been downgraded by independent rating
agencies. Mortgage loan originations totaled $189 million, down
from $254 million during the fourth quarter. The decline reflects
changing conditions in the secondary market where intermediaries to
whom the Corporation sells loans rapidly changed their underwriting
guidelines throughout the quarter. These frequent changes to
guidelines inhibited the loan origination process. Management
believes that the credit quality and price as well as quantity of
originations should increase as the year progresses as a number of
competitors have been forced to exit the market. As noted earlier,
the Corporation elected to reclassify approximately $167 million of
loans and lines of credit from held-for-sale to held-for-
investment. The loans and lines that were moved were originated
with the intent to sell into the secondary market, however,
conditions in that market deteriorated rapidly during the quarter.
It is management's expectation that conditions will improve, but
only gradually and, as a result, determined that it was more
appropriate to move these loans from the "for-sale" warehouse to
the Corporation's portfolio. As part of that reclassification, the
segment made two adjustments. The first was to mark the loans to
estimated current market value. This resulted in an expense of $7
million which was recorded as a negative gain on sale. In addition,
after the loans were transferred to portfolio an additional $6
million was recognized through the loan loss provision to provide a
portfolio loss reserve reflective of uncertain conditions in the
mortgage market. Thirty-day and greater delinquencies on the
segment's managed portfolio decreased during the quarter to 2.95
percent, from 3.16 percent as of December 31. Loan loss provision
totaled $15 million, up from $7 million in the fourth, reflecting
the reclassification noted above as well as growth in portfolio and
seasonality. Net charge-offs on the segment's managed portfolio of
$12.7 million (3.0 percent) increased from $6.4 million (1.5
percent) during the fourth quarter. This increase is primarily due
to the $7 million noted above as a mark-to-market taken on loans
transferred from held-for-sale treatment. The parent and other
consolidating entities lost $1.7 million during the first quarter,
compared to a loss of $2.0 million in the fourth quarter of 2006.
The improvement in the current period largely reflects the
elimination of certain one-time expenses in the fourth quarter.
Discontinued Operations - Conventional Mortgage Segment During the
quarter, the Corporation continued the steps to complete the
wind-down of its conforming, conventional mortgage segment
operations. The bulk of the activity in the first quarter involved
transfer of mortgage servicing rights and loan repurchases for
early payment defaults or breaches of representations and
warranties made at the time loans were sold to the secondary
market, prior to the sale of the segment in 2006. Reflecting staff
and other operating costs as well as net losses of $4.2 million
incurred on the re-marketing of repurchased loans, this
discontinued segment reported a loss during the first quarter of
$4.0 million. The Discontinued Operations segment has total
reserves against unsold loans and potential repurchases of $21
million as of March 31, compared with $22 million as of December
31. Assets held for sale totaled $41 million as of March 31,
compared with $56 million as of December 31. With the substantial
completion of the sale of the segment's activities, but with
certain remaining obligations in this segment, management expects
to report a small loss from Discontinued Operations in each of the
remaining quarters of 2007. The amount of the loss is most likely
to be affected by future repurchase demands and results of
disposition in the secondary market. 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 provides a broad range of
financial services to small businesses and consumers in selected
markets in the United States and Canada. About Forward-Looking
Statements This press release contains forward-looking statements
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
relating to projected growth in our earnings, projected loan
originations and deposits, net interest and margins, and the
relative performance of our lines of business; - statements and
assumptions relating to projected trends or potential changes in
our asset quality, loan delinquencies, charge-offs, reserves and
asset valuations, including valuations of our servicing portfolios;
- statements about the expected behavior of the secondary market; -
statements about our share repurchase program; - statements about
expected results from the discontinued operations of our
conventional mortgage banking segment; 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,
which may affect consumer demand for our products and the
management and success of our interest rate risk management
strategies; staffing fluctuations in response to product demand or
the implementation of corporate strategies that affect our work
force; the relative profitability of our lending and deposit
operations; the valuation and management of our portfolios,
including the use of external and internal modeling assumptions we
embed in the valuation of those portfolios and short-term swings in
the valuation of such portfolios; borrowers' refinancing
opportunities, which may affect the prepayment assumptions used in
our valuation estimates and which may affect loan demand;
unanticipated deterioration in the credit quality or collectibility
of our loan and lease assets, including deterioration resulting
from the effects of natural disasters; unanticipated deterioration
or changes in estimates of the carrying value of our other assets,
including securities; difficulties in delivering products to the
secondary market as planned; difficulties in expanding our business
and obtaining funding sources as needed; competition from other
financial service providers for experienced managers as well as for
customers; changes in the value of our lines of business,
subsidiaries, or companies in which we invest; changes in variable
compensation plans related to the performance and valuation of
lines of business where we tie compensation systems to line of
business performance; unanticipated outcomes in litigation;
legislative or regulatory changes, including changes in laws, rules
or regulations that affect tax, consumer or commercial lending,
corporate governance and disclosure requirements, regulatory
capital and other laws or regulations affecting the rights and
responsibilities of our Corporation, bank or thrift; regulatory
actions that impact our Corporation, including the memorandum of
understanding entered into as of March 1, 2007 between our
subsidiary bank and the Federal Reserve Bank of Chicago; changes in
applicable accounting policies or principles or their application
to our businesses or final audit adjustments; the availability of
resources to address legislative, regulatory or policy changes or
to respond to regulatory actions; additional guidance and
interpretation on accounting issues and details of the
implementation of new accounting methods; the final disposition of
our remaining assets and obligations of our discontinued 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. The Corporation will host a conference call to review
results on Monday, May 7, at 1:00 p.m. EDT. Greg Ehlinger, Senior
Vice President and CFO, and Will Miller, CEO, of Irwin Financial
Corporation, will be the speakers on the call. The toll-free number
for the call is (800) 640-5128; please tell the operator you would
like to join the Irwin Financial call, confirmation #17836141. A
replay of the call will be available on the Irwin Financial
Corporation website at.
http://www.irwinfinancial.com/investors/index_ir.htm. IRWIN
FINANCIAL CORPORATION Selected Consolidated Financial Highlights
($'s in thousands, except per share data) Q1-2007 Q1-2006 $ Change
% Change Q4-2006 Net Interest Income $66,128 $61,578 $4,550 7.4
$66,693 Provision for Loan and Lease Losses (23,208) (9,193)
(14,015) (152.5) (9,946) Noninterest Income (814) 13,996 (14,810)
(105.8) 14,232 Total Net Revenues 42,106 66,381 (24,275) (36.6)
70,979 Noninterest Expense 52,285 52,814 (529) (1.0) 55,717 (Loss)
Income from Continuing Operations before Income Taxes (10,179)
13,567 (23,746) (175.0) 15,262 Income Taxes on Continuing
Operations (4,085) 4,877 (8,962) (183.8) 4,615 Net (Loss) Income
from Continuing Operations (6,094) 8,690 (14,784) (170.1) 10,647
Loss from Discontinued Operations, Net of Tax (4,035) (10,548)
6,513 61.7 (5,726) Net (Loss) Income ($10,129) ($1,858) ($8,271)
(445.2) $4,921 Dividends on Common Stock $3,533 $3,268 $265 8.1
$3,292 Diluted Earnings Per Share (29,757,384 Weighted Average
Shares Outstanding) From Continuing Operations (0.22) $0.30 (0.52)
(173.3) $0.35 From All Operations (0.36) ($0.06) (0.30) (500.0)
0.16 Basic Earnings Per Share (29,623,305 Weighted Average Shares
Outstanding) From Continuing (0.22) 0.30 (0.52) (173.3) 0.36
Operations From All Operations (0.35) (0.07) (0.28) (400.0) 0.17
Dividends Per Common Share 0.12 0.11 0.01 9.1 0.11 Net Charge-Offs
$19,397 $4,500 $14,897 331.0 $7,939 Performance Ratios - Quarter to
Date: Return on Average Assets from Continuing Operations -0.4%
0.5% 0.7% Return on Average Equity from Continuing Operations -4.7%
6.8% 8.1% March 31, March 31, December 31, 2007 2006 $ Change %
Change 2006 Loans Held for Sale $44,906 $465,812 ($420,906) (90.4)
$237,510 Loans and Leases in Portfolio 5,414,778 4,705,850 708,928
15.1 5,238,193 Allowance for Loan and Lease Losses (84,877)
(63,923) (20,954) (32.8) (74,468) Assets held for sale IMC 41,456
1,212,617 (1,171,161) (96.6) 56,573 Total Assets 6,017,736
6,795,682 (777,946) (11.4) 6,237,958 Total Deposits 3,447,397
4,074,500 (627,103) (15.4) 3,551,516 Shareholders' Equity 512,869
527,693 (14,824) (2.8) 530,502 Shareholders' Equity available to
Common Shareholders (per share) 16.92 17.76 (0.84) (4.7) 17.30
Average Equity/Average Assets 8.7% 7.8% 8.1% Tier I Capital
$687,341 $699,523 ($12,182) (1.7) $712,403 Tier I Leverage Ratio
11.3% 10.5% 11.5% Total Risk-based Capital Ratio 13.5% 12.9% 13.4%
Nonperforming Assets to Total Assets 1.05% 0.80% 0.93% COMMERCIAL
BANKING Q1-2007 Q1-2006 $ Change % Change Q4-2006 Net Interest
Income $29,586 $29,862 ($276) (0.9) $31,515 Provision for Loan and
Lease Losses (4,641) (1,476) (3,165) (214.4) (1,253) Other Revenues
3,947 4,268 (321) (7.5) 4,620 Total Net Revenues 28,892 32,654
(3,762) (11.5) 34,882 Salaries, Pension, and Other Employee Expense
14,353 13,488 865 6.4 12,538 Other Expenses 9,938 7,983 1,955 24.5
10,229 Income Before Income Taxes 4,601 11,183 (6,582) (58.9)
12,115 Income Taxes 1,438 4,421 (2,983) (67.5) 4,127 Net Income
$3,163 $6,762 ($3,599) (53.2) $7,988 Net Charge-offs $4,826 $591
$4,235 716.6 $670 Net Interest Margin 3.99% 3.98% 4.24% March 31,
March 31, December 31, 2007 2006 $ Change % Change 2006 Securities
and Short- Term Investments $249,211 $282,665 ($33,454) (11.8)
$55,116 Loans and Leases 2,895,784 2,766,534 129,250 4.7 2,901,029
Allowance for Loan and Lease Losses (26,928) (25,554) (1,374) (5.4)
(27,113) Interest-Bearing Deposits 2,485,457 2,537,639 (52,182)
(2.1) 2,270,946 Noninterest-Bearing Deposits 331,288 365,688
(34,400) (9.4) 364,434 Delinquency Ratio (30+ days): 0.22% 0.10%
0.13% COMMERCIAL FINANCE Q1-2007 Q1-2006 $ Change % Change Q4-2006
Net Interest Income $12,008 $9,692 $2,316 23.9 $12,328 Provision
for Loan and Lease Losses (3,479) (1,164) (2,315) (198.9) (2,139)
Gain on Sales of Loans 1,571 754 817 108.4 372 Derivative Losses,
net (16) (53) 37 69.8 (72) Other Revenues 1,236 1,448 (212) (14.6)
1,034 Total Net Revenues 11,320 10,677 643 6.0 11,523 Salaries,
Pension, and Other Employee Expense 4,583 3,527 1,056 29.9 3,234
Other Expenses 2,551 2,410 141 5.9 3,004 Income Before Income Taxes
4,186 4,740 (554) (11.7) 5,285 Income Taxes 1,595 1,849 (254)
(13.7) 1,781 Net Income (Loss) $2,591 $2,891 ($300) (10.4) $3,504
Net Charge-Offs $1,946 $747 $1,199 160.5 $852 Loans sold 27,393
12,074 15,319 126.9 6,808 Net Interest Margin 4.64% 4.67% 4.77%
Total Fundings of Loans and Leases $128,611 $120,082 $8,529 7.1
$163,781 March 31, March 31, Dec. 31, 2007 2006 $ Change % Change
2006 Investment in Loans and Leases $1,062,506 $856,073 $206,434
24.1 $1,056,406 Allowance for Loan and Lease Losses (14,730)
(11,180) (3,550) (31.9) (13,525) Weighted Average Coupon 9.68%
8.89% 9.29% Delinquency ratio (30+ days) 0.64% 0.47% 0.60% HOME
EQUITY LENDING Q1-2007 Q1-2006 $ Change % Change Q4-2006 Net
Interest Income 24,564 23,669 895 3.8 24,261 Provision for Loan
Losses (15,088) (6,553) (8,535) (130.2) (6,548) Gain on Sales of
Loans, Including Points and Fees 191 2,386 (2,195) (92.0) 2,210
Valuation Write-down on Loans Held for Sale (7,913) (453) (7,460)
nm (2,151) Servicing Income, net 857 2,061 (1,204) (58.4) 4,108
Other Revenues 69 3,393 (3,324) (98.0) 870 Total Net Revenues 2,680
24,503 (21,823) (89.1) 22,750 Salaries, Pension, and Other Employee
Expense 12,162 13,600 (1,438) (10.6) 11,360 Other Expense 7,419
9,171 (1,752) (19.1) 9,406 Income Before Income Taxes (16,901)
1,732 (18,633) (1075.8) 1,984 Income Taxes (6,752) 698 (7,450)
(1067.3) 807 Net Income ($10,149) $1,034 ($11,183) (1081.6) $1,177
Loan Volume $189,220 $284,375 ($95,155) (33.5) $253,935 Percent
retail 6.8% 24.8% 10% Percent brokered 50.3 25.6 42% Percent
correspondent 38.3 31.3 31% Percent other 4.6 18.3 17% Loans Sold
109,860 140,243 (30,383) (21.7) 60,275 Net Charge-offs 12,625 3,162
9,463 299.3 6,383 Net interest margin 6.23% 5.99% 6.16% March 31,
March 31, Dec. 31, 2007 2006 $ Change % Change 2006 Home Equity
Loans Held for Sale $44,549 $464,490 ($419,941) (90.4) $236,636
Home Equity Loans Held for Investment 1,456,230 1,083,273 372,957
34.4 1,280,497 Allowance for Loan and Lease Losses (43,004)
(26,944) (16,060) (59.6) (33,614) Residual Asset 2,530 7,900
(5,370) (68.0) 2,760 Servicing Asset 26,465 31,679 (5,214) (16.5)
28,231 Managed Portfolio 1,675,660 1,621,286 54,374 3.4 1,708,975
Delinquency Ratio (30+ days) 2.95% 2.29% 3.16% DATASOURCE: Irwin
Financial Corporation CONTACT: Suzie Singer, Corporate
Communications, +1-812-376-1917, Greg Ehlinger, Chief Financial
Officer, +1-812-379-7603, both of Irwin Financial Corporation Web
site: http://www.irwinfinancial.com/
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