Irwin Financial Corporation Announces Second Quarter Earnings * Net
Income of $0.60 per Diluted Share, Year-Over-Year Increase of 33
Percent; COLUMBUS, Ind., July 30 /PRNewswire-FirstCall/ -- Irwin
Financial Corporation (NYSE:IFC), a bank holding company focusing
on mortgage banking, small business and home equity lending, today
announced net income for the second quarter of 2004 of $17.9
million or $0.60 per diluted share. This compares with net income
of $13.2 million or $0.45 per diluted share during the same period
in 2003. Earnings for the first half of 2004 totaled $38.3 million
or $1.27 per diluted share, compared with $25.0 million or $0.86
per share during the same period in 2003. "Irwin Financial produced
good, balanced earnings in the second quarter, in spite of the
decline in our first mortgage business. Improved commercial loan
and lease originations, lower credit costs, and an increase in core
deposits drove higher earnings in our portfolio businesses-in
particular, our home equity business. These increases offset the
decline caused by the extremely competitive conditions in first
mortgages due to the rise in long-term interest rates," said Will
Miller, Chairman and CEO. "We believe our performance was good in
light of the extraordinary conditions that existed in the mortgage
market in the comparable period a year ago. The turn in mortgage
banking production, from record levels in 2003 to a lower volume
and fiercely price-competitive market today, is testing our ability
to maintain production-driven profitability in that line of
business. As anticipated, we have benefited from the increase in
value of our mortgage servicing portfolio, which provided an
economic counter-balance to the production operation, and the
improved performance of our other lines of business." "In the
second half of 2004," Miller continued, "if rates rise as predicted
by nationally-recognized mortgage economists, leading to an
increase in the value of our servicing portfolio and improved
margins in our commercial and consumer portfolios, we would expect
full year earnings to modestly exceed those produced in 2003.
However, should long-term rates not rise as expected, we would
anticipate continued price competition in the mortgage market, but
little or no increase in servicing value. In this case, we would
anticipate that portfolio loan growth and improving credit quality
would likely produce earnings for the year in a narrow range around
those produced in 2003 during the mortgage refinance boom,
notwithstanding the difficult environment for mortgage banking."
Financial highlights for the period include: Consolidated Results
2Q 2Q Percent 1Q Percent $ in millions, except EPS 2004 2003 Change
2004 Change Net Interest Income After $62 $58 7 % $51 22 %
Provision for Losses Non-Interest Income 76 64 20 82 -8 Total
Consolidated Net Revenues 139 122 14 134 4 Non-Interest Expense 108
100 7 100 7 Net Income 17.9 13.2 36 20.3 -12 Earning per Share
(diluted) 0.60 0.45 33 0.67 -10 Loans and Leases 3,203 3,049 5
3,222 0 Mortgage Loans Held for Sale 1,196 1,666 -28 996 20
Deposits 3,361 3,349 0 3,309 2 Shareholders' Equity 469 385 22 453
4 Total Risk-Based Capital Ratio 14.8 % 13.5 % 15.3 % Return on
Average Equity 15.4 14.2 18.4 As noted in the table above, net
revenues increased four percent on a sequential quarter basis and
14 percent compared with the year earlier quarter. Net revenues
increased in each of our credit portfolio lines of business,
successfully offsetting a decline in net revenue in our mortgage
bank. Mortgage banking revenues declined modestly on a sequential
quarter basis reflecting reduced gains on sales of loans due to
lower margins, despite a 36 percent sequential quarterly increase
in the dollar amount of shipped loans. Consolidated net income
declined 12 percent on a sequential quarter basis, largely
reflecting lower net income from our mortgage banking segment. Our
loan and lease portfolio totaled $3.2 billion as of June 30, 2004,
unchanged from the end of the first quarter, but up five percent
from a year earlier. The flat sequential quarter number reflects a
$205 million portfolio sale by our home equity segment during the
quarter. Our first and second mortgage loans held for sale totaled
$1.2 billion at quarter end, up 20 percent from March 31. Deposits
totaled $3.4 billion at June 30, unchanged from a year earlier, but
the composition changed meaningfully as core deposits have been
replacing mortgage escrows that were abnormally high due to
refinancing conditions a year earlier. Average core deposits of
$2.0 billion rose at an annualized rate of 43 percent during the
second quarter and have increased $343 million or 21 percent during
the past year. We had $469 million or $16.60 per share in common
shareholders' equity as of June 30, 2004. At quarter end, our Tier
1 Leverage Ratio and Total Risk-based Capital Ratio were 11.5
percent and 14.8 percent, respectively, compared to 11.8 percent
and 15.3 percent as of March 31, 2004. Our consolidated loan and
lease loss provision totaled $2 million, a $6 million decrease
compared with the first quarter of 2004, principally reflecting a
reversal in provision due to the home equity loan sale noted above
and improving credit quality in each of our portfolios.
Nonperforming assets (including other real estate owned of $6
million) were $40 million or 0.74 percent of total assets as of
June 30, 2004, down from $45 million or 0.87 percent of total
assets at the end of March. Our on-balance sheet allowance for loan
and lease losses totaled $54 million as of June 30, down $10
million from the end of March. The allowance declined during the
quarter largely as a result of a re-classification of loans to
loans held for sale. The ratio of on-balance sheet allowance for
loan and lease losses to nonperforming loans and leases totaled 163
percent at June 30, compared to 176 percent at March 31. Net
charge-offs totaled $4 million, down $4 million from the first
quarter. The amount of 30-day and greater delinquencies, the ratio
of charge-offs to average loans and leases, and the allowance for
loans and lease losses to total loans and leases for our principal
credit-related portfolios are shown below: Home Equity Home Equity
Commercial Lending On- Lending Off- Commercial Banking Balance
Balance Finance Sheet Sheet(1) 30-Day and Greater Delinquencies *
June 30, 2004 0.19% 1.45% 9.92% 0.88% * March 31, 2004 0.29 2.46
8.65 0.93 * December 31, 2003 0.36 2.91 10.18 0.87 * September 30,
2003 0.72 3.29 9.55 1.10 * June 30, 2003 0.38 2.70 8.66 0.91
Annualized Charge-offs * 2Q04 0.15% 1.08% 4.25% 0.87% * 1Q04 0.24
2.61 6.28 1.12 * 4Q03 0.30 3.03 7.13 1.19 * 3Q03 0.20 2.45 6.23
1.97 * 2Q03 0.25 2.58 6.05 2.72 Allowance to Loans and Leases *
June 30, 2004 1.06% 3.16% 8.12% 2.30% * March 31, 2004 1.10 4.08
10.25 2.29 * December 31, 2003 1.11 4.22 10.47 2.47 * September 30,
2003 1.12 4.17 11.16 2.51 * June 30, 2003 1.13 3.45 11.94 2.59 (1)
Off-balance sheet loans underlie our residual interests. These
loans have been treated as sold under SFAS 140 and have a reserve
methodology that reflects life-of-account loss expectations,
whereas our policy for on-balance sheet loans requires that we hold
loss reserve coverage sufficient for potential losses inherent in
the portfolio at the balance sheet date. The figures for reserves
in the column labeled "Home Equity Lending Off-Balance Sheet,"
therefore, are not balance sheet accounts of "allowance for loan
and lease losses," but instead represent the percentage of
undiscounted losses assumed in our residual valuation relative to
the underlying loan balances supporting the residual interests.
Segment Results Net income by line of business is shown below, with
additional detail available in the segment summary tables at the
end this release and in the Form 10-Q. 2Q 2Q Percent 1Q Percent Net
Income ($ in millions) 2004 2003 Change 2004 Change Mortgage
Banking $5.5 $23.2 -76% $9.7 -43% Commercial Banking 5.8 5.9 -2 5.4
6 Home Equity 8.9 -14.4 NM 6.6 34 Commercial Finance 1.3 0.0 NM
-0.3 NM Venture Capital -0.2 -0.1 NM 0.0 NM Other Segments,
Including Parent -3.4 -1.4 143 -1.1 209 Consolidated Net Income
17.9 13.2 36 20.3 -12 * Mortgage banking net income declined 43
percent on a sequential quarter basis, reflecting reduced secondary
market margins due to rising interest rates and increasingly
competitive conditions. During the quarter, we recorded $14 million
of revenues related to reversals of valuation impairment, net of
losses on servicing asset-related derivatives. Our mortgage
servicing asset in this line of business had a carrying value of
$366 million at June 30 or 125 basis points of underlying loan
balance, compared with 102 basis points at the end of March. Due to
the rise in interest rates in the quarter, the economic value of
the portfolio has significantly surpassed the carrying value that
is capped at its amortized cost. Our estimate, based on an
independent, third-party price survey, of the June 30 economic
value of our servicing rights was $424 million. If conditions for
the origination of mortgage loans in the second half of 2004 are
similar to that currently being experienced, we are likely to sell
a portion of our servicing portfolio to allow us to continue to
invest in our production operations. * Commercial banking net
revenues increased six percent sequentially from the first quarter,
reflecting loan growth and improving credit quality; net income
declined by $0.1 million compared with the same period in 2003 due
to a decline in mortgage loan originations in this line of
business. Net interest margin was 3.64 percent during the quarter,
down from 3.79 percent during the first quarter. Margins in this
line of business should increase in the second half of the year if
short- term interest rates rise and we are able to deploy deposits
into longer-term assets. As noted in the table above, thirty-day
and greater delinquencies in our commercial banking line of
business portfolio totaled 0.19 percent at June 30, compared with
0.29 percent at March 31. * Our home equity line of business
continues to see improving credit quality and as a result, strong
net income. Earnings totaled $8.9 million during the quarter. Loan
originations totaled $404 million, a $97 million sequential quarter
increase. Our residual asset totaled $73 million at June 30, up
from $69 million at March 31, reflecting valuation adjustments and
the re-acquisition of residuals we had sold between 1999 and 2001.
These residuals were reacquired without a loss when measured for
fair value at June 30. Actual cash flows from our residuals during
the second quarter totaled $11 million, a $4 million positive
variance as compared to our March 31 valuation assumptions. * Our
commercial finance line of business had strong operating results
with net income of $1.3 million, compared to breakeven performance
a year earlier. Loan and lease fundings reached a new quarterly
high of $89 million and our thirty-day and greater delinquency
ratio remained low at 0.88 percent. Net interest margin was 5.62
percent, down modestly from 5.74 percent during the first quarter.
More complete details on operations of each of our lines of
business can be found in our Form 10-Q, which is being filed today
with the SEC. About Irwin Financial Irwin(R) Financial Corporation
(http://www.irwinfinancial.com/) is an interrelated group of
specialized financial services companies organized as a bank
holding company, with a history tracing to 1871. The Corporation,
through its major subsidiaries -- Irwin Mortgage Corporation, Irwin
Union Bank, Irwin Home Equity Corporation, Irwin Commercial
Finance, and Irwin Ventures -- 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
relating to projected growth in our earnings, projected loan
originations, 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; and * any other
statements that are not historical facts. We undertake no
obligation to update publicly any of these statements in light of
future events, except as required in subsequent periodic reports we
file with the Securities and Exchange Commission. Actual future
results may differ materially from what is projected due to a
variety of factors including: potential changes in and volatility
of interest rates, which may affect consumer demand for our
products and the success of our interest rate risk management
strategies; staffing fluctuations in response to product demand;
the relative profitability of our lending operations; the valuation
and management of our servicing and derivatives portfolios,
including short-term swings in valuation of such portfolios due to
quarter-end movements in secondary market interest rates which are
inherently volatile; 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 of our loan assets;
unanticipated deterioration in or changes in estimates of the
carrying value of our other assets, difficulties in delivering
loans to the secondary market as planned; difficulties in expanding
our business and obtaining funding as needed; competition from
other financial service providers for experienced managers as well
as for customers; changes in the value of companies in which we
invest; changes in variable compensation plans related to the
performance and valuation of lines of business where we have
compensation systems tied to line of business performance;
legislative or regulatory changes, including changes in tax laws or
regulations, changes in the interpretation of regulatory capital
rules, changes in consumer or commercial lending rules or rules
affecting corporate governance, and the availability of resources
to address these rules; changes in applicable accounting policies
or principles or their application to our businesses; or
governmental changes in monetary or fiscal policies. IRWIN
FINANCIAL CORPORATION Selected Consolidated Financial Highlights
($'s in thousands, except per share data) Q2-2004 Q2-2003 $Change
%Change Q1-2004 Net Interest Income $64,256 $71,961 ($7,705) (10.7)
$59,203 Provision for Loan and Lease Losses (1,794) (13,634) 11,840
86.8 (8,146) Noninterest Income 76,106 63,521 12,585 19.8 82,454
Total Net Revenues 138,568 121,848 16,720 13.7 133,511 Noninterest
Expense 107,855 100,482 7,373 7.3 100,436 Income before Income
Taxes 30,713 21,366 9,346 43.7 33,075 Income Taxes 12,769 8,139
4,630 56.9 12,734 Net Income $17,944 $13,227 $4,717 35.7 $20,341
Dividends on Common Stock $2,262 $1,957 $305 15.6 $2,260 Diluted
Earnings Per Share (31,186 Weighted Average Shares Outstanding)
$0.60 $0.45 0.15 33.3 $0.67 Basic Earnings Per Share (28,244
Weighted Average Shares Outstanding) 0.64 0.47 0.17 36.2 0.72
Dividends Per Common Share 0.08 0.07 0.01 14.3 0.08 Net Charge-Offs
$4,460 $9,696 ($5,236) (54.0) $8,158 Performance Ratios - Quarter
to Date: Return on Average Assets 1.4% 1.0% 1.7% Return on Average
Equity 15.4% 14.2% 18.4% YTD-2004 YTD-2003 $Change %Change Net
Interest Income $123,459 $136,352 ($12,893) (9.5) Provision for
Loan and Lease Losses (9,940) (22,877) 12,937 56.6 Noninterest
Income 158,561 126,332 32,229 25.5 Total Net Revenues 272,080
239,807 32,273 13.5 Noninterest Expense 208,291 199,294 8,997 4.5
Income before Income Taxes 63,789 40,513 23,276 57.5 Income Taxes
25,503 15,510 9,993 64.4 Net Income $38,286 $25,003 $13,283 53.1
Dividends on Common Stock $4,523 $3,905 $618 15.8 Diluted Earnings
Per Share (31,248 Weighted Average Shares Outstanding) $1.27 $0.86
0.41 47.7 Basic Earnings Per Share (28,218 Weighted Average Shares
Outstanding) 1.36 0.90 0.46 51.1 Dividends Per Common Share 0.16
0.14 0.02 14.3 Net Charge-Offs $12,618 $15,823 ($3,205) (20.3)
Performance Ratios - Year to Date: Return on Average Assets 1.52%
1.00% Return on Average Equity 15.82% 13.69% June 30, June 30,
March 31, 2004 2003 $ Change % Change 2004 Loans Held for Sale
$1,196,130 $1,665,983 ($469,853) (28.2) $996,219 Loans and Leases
in Portfolio 3,203,279 3,049,405 153,874 5.0 3,222,296 Allowance
for Loan and Lease Losses (53,837) (57,935) 4,098 7.1 (63,681)
Total Assets 5,425,172 5,530,153 (104,981) (1.9) 5,146,170 Total
Deposits 3,361,264 3,349,077 12,187 0.4 3,309,007 Shareholders'
Equity 469,486 384,835 84,650 22.0 453,185 Shareholders' Equity
available to Common Shareholders (per share) 16.60 13.76 2.84 20.6
16.04 Average Equity/Average Assets (YTD) 9.6% 7.3% 9.1% Tier I
Capital $614,003 $485,342 $128,661 26.5 $585,287 Tier I Leverage
Ratio 11.5% 9.1% 11.8% Total Risk-based Capital Ratio 14.8% 13.5%
15.3% Nonperforming Assets to Total Assets 0.74% 0.76% 0.87%
MORTGAGE BANKING Q2-2004 Q2-2003 $ Change % Change Q1-2004 Net
Interest Income $11,781 $20,904 ($9,123) (43.6) $8,662 Recovery of
(Provision for) Loan Losses 284 (83) 367 442.2 107 Gain on Sales of
Loans 34,870 111,511 (76,641) (68.7) 42,782 Gain (loss) on Sale of
Servicing 1,928 (4) 1,932 48300.0 6,489 Loan Servicing Fees, Net of
Amortization Expense 1,484 (14,076) 15,560 110.5 (1,411) Recovery
(impairment) of Servicing Assets, Net of Hedging 13,512 (11,736)
25,248 215.1 10,168 Other Revenues 2,052 3,129 (1,077) (34.4) 1,839
Total Net Revenues 65,911 109,645 (43,734) (39.9) 68,636 Salaries,
Pension, and Other Employee Expense $31,654 $44,807 (13,153) (29.4)
$29,528 Other Expenses 25,062 27,066 (2,004) (7.4) 22,941 Income
Before Income Taxes 9,195 37,772 (28,577) (75.7) 16,167 Income
Taxes 3,680 14,530 (10,850) (74.7) 6,435 Net Income $5,515 $23,242
($17,727) (76.3) $9,732 Total Mortgage Loan Originations:
$3,727,591 $7,237,670 ($3,510,079) (48.5) $2,930,716 Percent retail
20% 27% 23% Percent wholesale 33% 42% 43% Percent brokered 11% 3%
9% Percent correspondent 36% 28% 25% Refinancings as a Percentage
of Total Originations 54% 75% 61% YTD-2004 YTD-2003 $Change %Change
Net Interest Income $20,443 $36,969 ($16,527) (44.7) Recovery of
(Provision for) Loan Losses 390 (30) 420 1400.0 Gain on Sales of
Loans 77,652 202,739 (125,087) (61.7) Gain on Sale of Servicing
8,418 0 8,418 na Loan Servicing Fees, Net of Amortization Expense
73 (24,555) 24,628 100.3 Recovery (impairment) of Servicing Assets,
Net of Hedging 23,680 (13,370) 37,049 277.1 Other Revenues 3,891
4,994 (1,103) (22.1) Total Net Revenues 134,547 206,747 (72,200)
(34.9) Salaries, Pension, and Other Employee Expense 61,182 85,819
(24,637) (28.7) Other Expenses 48,003 51,267 (3,264) (6.4) Income
Before Income Taxes 25,362 69,661 (44,299) (63.6) Income Taxes
10,114 26,780 (16,666) (62.2) Net Income $15,248 $42,881 ($27,633)
(64.4) Total Mortgage Loan Originations: $6,658,307 $12,714,962
($6,056,655) (47.6) Percent retail 22% 27% Percent wholesale 37%
45% Percent brokered 10% 3% Percent correspondent 31% 25%
Refinancings as a Percentage of Total Originations 57% 73% June 30,
June 30, March 31, 2004 2003 $ Change % Change 2004 Owned Servicing
Portfolio Balance $28,844,599 $24,700,125 $4,144,474 16.8
$29,563,330 Weighted average interest rate 5.70% 6.08% 5.73%
Delinquency ratio (30+ days): 3.34% 4.26% 2.74% Conventional 1.98%
1.80% 1.57% Government 6.20% 8.41% 5.41% Loans Held for Sale
$735,278 $1,542,863 ($807,585) (52.3) $781,224 Servicing Asset
365,775 194,288 171,487 88.3 298,486 COMMERCIAL BANKING Q2-2004
Q2-2003 $Change %Change Q1-2004 Net Interest Income $21,191 $19,438
$1,754 9.0 $20,546 Provision for Loan and Lease Losses (750)
(1,333) 583 43.7 (1,200) Other Revenues 5,061 5,645 (584) (10.3)
4,776 Total Net Revenues 25,502 23,750 1,751 7.4 24,122 Salaries,
Pension, and Other Employee Expense 9,665 8,716 949 10.9 9,322
Other Expenses 6,201 5,250 951 18.1 5,761 Income Before Income
Taxes 9,636 9,784 (148) (1.5) 9,039 Income Taxes 3,867 3,904 (38)
(1.0) 3,622 Net Income $5,769 $5,880 ($112) (1.9) $5,417 Net
Charge-offs $787 $1,167 ($380) (32.6) $1,170 Net Interest Margin
3.64% 3.87% 3.79% YTD-2004 YTD-2003 $ Change % Change Net Interest
Income $41,737 $38,465 $3,272 8.5 Provision for Loan and Lease
Losses (1,950) (2,913) 963 33.1 Other Revenues 9,837 10,774 (937)
(8.7) Total Net Revenues 49,624 46,326 3,298 7.1 Salaries, Pension,
and Other Employee Expense 18,987 17,641 1,346 7.6 Other Expenses
11,961 10,230 1,731 16.9 Income Before Income Taxes 18,676 18,455
221 1.2 Income Taxes 7,489 7,364 125 1.7 Net Income $11,187 $11,091
$96 0.9 Net Charge-offs $1,957 $2,113 ($156) (7.4) Net Interest
Margin 3.71% 3.95% June 30, June 30, March 31, 2004 2003 $ Change %
Change 2004 Securities and Short- Term Investments $313,580
$114,102 $199,478 174.8 $210,647 Loans and Leases 2,081,788
1,900,975 180,813 9.5 2,007,917 Allowance for Loan and Lease Losses
(22,049) (21,525) (524) (2.4) (22,086) Interest-Bearing Deposits
1,938,282 1,681,787 256,495 15.3 1,800,571 Noninterest-Bearing
Deposits 341,896 247,189 94,707 38.3 281,986 Delinquency Ratio (30+
days): 0.19% 0.38% 0.29% HOME EQUITY LENDING Q2-2004 Q2-2003 $
Change % Change Q1-2004 Residual Asset Interest Income $3,285
$6,006 ($2,721) (45.3) $3,258 Net Interest Income - Unsold Loans
and Other 22,874 22,216 658 3.0 21,438 Recovery of (provision for)
Loan Losses 706 (7,970) 8,676 108.9 (5,899) Trading Gains (Losses)
6,688 (33,131) 39,819 120.2 4,641 Gain on Sales of Loans, Including
Points and Fees 3,035 8,280 (5,245) (63.3) 8,689 Servicing Income,
net 2,313 1,772 541 30.5 3,064 Other Revenues 2,797 587 2,210 376.5
1,261 Total Net Revenues 41,698 (2,240) 43,938 1961.5 36,452
Salaries, Pension, and Other Employee Expense 17,865 12,664 5,201
41.1 16,126 Other Expense 8,990 9,146 (156) (1.7) 9,260 Income
(Loss) Before Income Taxes 14,843 (24,050) 38,893 161.7 11,066
Income Taxes 5,945 (9,620) 15,565 161.8 4,433 Net Income (Loss)
$8,898 ($14,430) $23,328 161.7 $6,633 Loan Volume $403,822 $298,955
$104,867 35.1 $306,877 Loans Sold 223,956 242,235 (18,279) (7.5)
202,432 Net Charge-offs (Loans Held for Investment) 2,626 5,827
(3,201) (54.9) 5,694 YTD-2004 YTD-2003 $ Change % Change Residual
Asset Interest Income $6,543 $12,969 ($6,426) (49.5) Net Interest
Income - Unsold Loans and Other 44,310 41,665 2,645 6.3 Provision
for Loan Losses (5,193) (12,850) 7,657 59.6 Trading Gains (Losses)
11,329 (50,919) 62,248 122.2 Gain on Sales of Loans, Including
Points and Fees 11,725 10,250 1,475 14.4 Servicing Income, net
5,377 2,544 2,833 111.4 Other Revenues 4,059 651 3,408 523.5 Total
Net Revenues 78,150 4,310 73,841 1713.2 Salaries, Pension, and
Other Employee Expense 33,991 25,726 8,264 32.1 Other Expense
18,250 18,465 (215) (1.2) Income (Loss) Before Income Taxes 25,909
(39,881) 65,789 165.0 Income Taxes 10,378 (15,952) 26,330 165.1 Net
Income (Loss) $15,531 ($23,929) $39,460 164.9 Loan Volume $710,700
$577,505 $133,195 23.1 Loans Sold 426,388 328,303 98,085 29.9 Net
Charge-offs (Loans Held for Investment) 8,320 9,194 (874) (9.5)
June 30, June 30, March 31, 2004 2003 $ Change %Change 2004 Home
Equity Loans Held for Sale $460,118 $118,659 $341,459 287.8
$213,864 Home Equity Loans Held for Investment 598,021 727,064
(129,043) (17.7) 721,685 Allowance for Loan and Lease Losses
(18,902) (25,084) 6,182 24.6 (29,456) Residual Asset 73,219 92,847
(19,628) (21.1) 68,692 Servicing Asset 28,122 27,540 582 2.1 30,870
Managed Portfolio 1,543,457 1,698,876 (155,419) (9.1) 1,473,356
Delinquency Ratio (30+ days) 4.16% 5.68% 4.72% COMMERCIAL FINANCE
Q2-2004 Q2-2003 $Change %Change Q1-2004 Net Interest Income $6,881
$5,398 $1,483 27.5 $6,754 Provision for Loan and Lease Losses
(2,034) (4,069) 2,035 50.0 (1,153) Other Revenues 2,622 2,663 (41)
(1.5) 448 Total Net Revenues 7,469 3,992 3,477 87.1 6,049 Salaries,
Pension, and Other Employee Expense 3,477 2,852 625 21.9 3,362
Other Expenses 1,588 1,202 386 32.1 836 Income (Loss) Before Income
Taxes 2,404 (62) 2,466 3977.4 1,851 Income Taxes 1,087 (63) 1,150
1825.4 2,144 Net Income (Loss) $1,317 $1 $1,316 nm ($293) Net
Charge-Offs $1,051 $2,659 ($1,608) (60.5) $1,294 Loans Sold 15,939
21,067 (5,128) (24.3) 7,694 Net Interest Margin 5.62% 5.45% 5.74%
Total Fundings of Loans and Leases $88,586 $66,300 $22,286 33.6
$71,652 YTD-2004 YTD-2003 $Change %Change Net Interest Income
$13,635 $10,205 $3,430 33.6 Provision for Loan and Lease Losses
(3,187) (6,933) 3,746 54.0 Other Revenues 3,070 3,497 (427) (12.2)
Total Net Revenues 13,518 6,769 6,749 99.7 Salaries, Pension, and
Other Employee Expense 6,839 5,141 1,698 33.0 Other Expenses 2,424
2,240 184 8.2 Income (Loss) Before Income Taxes 4,255 (612) 4,867
795.3 Income Taxes 3,231 (353) 3,584 1015.3 Net Income (Loss)
$1,024 ($259) $1,283 495.4 Net Charge-Offs $2,345 $4,471 ($2,126)
(47.6) Loans Sold 23,634 21,067 2,567 12.2 Net Interest Margin
5.68% 5.73% Total Fundings of Loans and Leases $160,238 $123,909
$36,329 29.3 June 30, June 30, March 31, 2004 2003 $ Change %
Change 2004 Investment in Loans and Leases $510,308 $399,358
$110,950 27.8 $479,364 Allowance for Loan and Lease Losses (11,738)
(10,325) (1,413) (13.7) (10,962) Weighted Average Yield 9.10% 9.90%
9.24% Delinquency ratio (30+ days) 0.88% 0.91% 0.86% VENTURE
CAPITAL Q2-2004 Q2-2003 $ Change % Change Q1-2004 Net Interest
Income ($2) $2 ($4) (200.0) ($1) Mark to Market Adjustment on
Investments (350) (162) ($188) (116.0) 9 Other Revenues 179 (68)
$247 363.2 149 Total Net Revenues (173) (228) 55 24.1 157 Operating
Expenses 117 4 $113 nm 128 Income (Loss) Before Income Taxes (290)
(232) (58) (25.0) 29 Income Tax Expense (Benefit) (112) (96) ($16)
(16.7) 11 Net Income (Loss) ($178) ($136) ($42) (30.9) $18 YTD-2004
YTD-2003 $ Change % Change Net Interest Income ($3) $9 ($12)
(133.3) Mark to Market Adjustment on Investments (341) (2,421)
$2,080 85.9 Other Revenues 328 79 $249 315.2 Total Net Revenues
(16) (2,333) 2,317 99.3 Operating Expenses 245 111 $134 120.7
Income (Loss) Before Income Taxes (261) (2,444) 2,183 89.3 Income
Tax Expense (Benefit) (100) (980) $880 89.8 Net Income (Loss)
($161) ($1,464) $1,303 89.0 June 30, June 30, March 31, 2004 2003 $
Change % Change 2004 Investment in Portfolio Companies (cost)
$14,592 $14,571 21 0.1 $14,592 Mark to Market Adjustment (11,418)
(10,543) (875) (8.3) (11,068) Carrying Value - Portfolio Companies
$3,174 $4,028 ($854) (21.2) $3,524 DATASOURCE: Irwin Financial
Corporation CONTACT: Suzie Singer, Corporate Communications,
+1-812-376-1917, or Greg Ehlinger, CFO, +1-812-376-1935, both of
Irwin Financial Corporation Web site:
http://www.irwinfinancial.com/
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