Irwin Financial Corporation Announces Sales of Assets and Managerial Changes

"We continue to pursue our conversations with the U.S. Treasury to complete our public-private partnership recapitalization plan for Irwin Financial, Irwin Union Bank and Trust and Irwin Union Bank, F.S.B.," said Will Miller, Chairman and CEO of Irwin Financial Corporation. "In the meantime, we have taken action intended to help keep our banks adequately capitalized at the end of the second quarter in order to retain access to sources of liquidity that are important to us. While we finalize our second quarter results and await approval for our capital infusion, reducing our balance sheet with loan sales at or near par value is the best way to help keep our banks adequately capitalized.

"The sale of the three branch locations north and east ofIndianapolis allows us to preserve our coreSouth Central Indiana markets. These transactions are designed to give us the time necessary to complete our work with the Treasury and private investors who have committed to make equity investments as part of our recapitalization plan," concluded Miller.

Additionally, Irwin announced a reorganization of managerial responsibilities in the commercial banking segment. John Wilcox will assume the role of President of the commercial banking division of Irwin Union Bank and Trust. Brad Kime, the current President of commercial banking, has decided to focus exclusively on loan portfolio credit quality, where management believes the company is making good progress. Rick Hagan will become the President of Irwin Union Bank, F.S.B. Mr. Wilcox and Mr. Hagan's appointments are pending regulatory approval. These changes are designed to align managerial responsibilities with the most critical tasks facing the company as it completes its restructuring.

About Irwin Financial

Irwin(R) Financial Corporation (http://www.irwinfinancial.com) is a bank holding company with a history tracing to 1871. The Corporation provides a broad range of banking services to small businesses and consumers in our branches in the Midwest and Southwest and to restaurant franchisees nationwide.

About Forward-looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We are including this statement for purposes of invoking these safe harbor provisions.

Forward-looking statements are based on management's expectations, estimates, projections, and assumptions. 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 will not or might not occur) or are likely (or unlikely) to occur, and similar expressions, are intended to identify forward-looking statements. These may include, among other things, statements and assumptions about:

    --  our expected results of operations during the second quarter and our
        expected financial condition as of June 30, 2009, including our expected
        regulatory capital levels;
    --  transactions involved in our strategic restructuring, including the sale
        of branches and reorganization of managerial responsibilities;
    --  the outcome of our proposal for a public-private partnership in raising
        capital, as well as other aspects of our capital-raising plans,
        including the possible exchange of trust preferred securities for equity
        or other method of increasing equity; and

    --  any other projections or expressions that are not historical facts.

We qualify any forward-looking statements entirely by these and the following cautionary factors.

Actual future results may differ materially from our forward-looking statements and we qualify all forward looking statements by various risks and uncertainties we face, as well as the assumptions underlying the statements, including, but not limited to, the following cautionary factors:

    --  difficulties in completing the branch sales, including the receipt of
        regulatory approvals;
    --  difficulties in completing our recapitalization plan, including the
        failure to raise sufficient private investment through our proposed
        rights offer or a possible exchange of trust preferred securities for
        our equity or by other means, the failure of a sufficient number of
        shareholders to participate in a rights offer or to exercise fully their
        rights, the failure to satisfy the conditions that require the standby
        purchasers to exercise fully their subscription privileges, the failure
        to receive assistance in substantially the form proposed to the U.S.
        Treasury and banking regulators, or the failure to obtain any necessary
        regulatory approvals;
    --  potential further deterioration or effects of general economic
        conditions, particularly in sectors relating to real estate and/or
        mortgage lending, small business lending, and franchise restaurants
        finance;
    --  fluctuations in housing prices;
    --  potential effects related to the Corporation's decision to suspend
        the payment of dividends on its common, preferred and trust preferred
        securities;
    --  potential changes in direction, volatility and relative movement (basis
        risk) of interest rates, which may affect consumer and commercial demand
        for our products and the management and success of our interest rate
        risk management strategies;
    --  difficulties in obtaining regulatory approval for our managerial
        appointments;
    --  the impact on staff of implementing corporate strategies that affect our
        work force, and potential associated charges;
    --  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 collectability of
        our loan and lease assets, including deterioration resulting from the
        effects of natural disasters (including a pandemic);
    --  difficulties in accurately estimating any future repurchases of
        residential mortgage, home equity, or other loans or leases due to
        alleged violations of representations and warranties we made when
        selling these loans and leases to the secondary market or in
        securitizations;
    --  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 businesses and obtaining or retaining
        deposit or other funding sources as needed, including the loss of public
        fund deposits or any actions that may be taken by the state of Indiana
        and its political subdivisions;
    --  competition from other financial service providers, including the
        purchasers of our assets, 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 lawsuits or 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, and other laws, rules or
        regulations affecting the rights and responsibilities of our
        Corporation, or our state-chartered bank or federal savings bank
        subsidiary;
    --  regulatory actions that impact our Corporation, bank or thrift,
        including the written agreement the Corporation and its state-chartered
        bank subsidiary, Irwin Union Bank and Trust Company, entered into with
        the Federal Reserve Bank of Chicago and the Indiana Department of
        Financial Institutions on October 10, 2008, and the supervisory
        agreement the Corporation's federal savings bank subsidiary, Irwin
        Union Bank, F.S.B., entered into with the Office of Thrift Supervision
        on the same day;
    --  changes in the interpretation and application of regulatory capital or
        other rules;
    --  the availability of resources to address changes in laws, rules or
        regulations or to respond to regulatory actions;
    --  changes in applicable accounting policies or principles or their
        application to our business or final audit adjustments, including
        additional guidance and interpretation on accounting issues and details
        of the implementation of new accounting methods;
    --  the final disposition of the remaining assets and obligations of lines
        of business we have exited or are exiting, including the mortgage
        banking segment, small ticket commercial leasing segment and home equity
        segment; or

    --  governmental changes in monetary or fiscal policies.

In addition, our past results of operations do not necessarily indicate our future results. 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.

SOURCE Irwin Financial Corporation

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