With the recent toppling of Irwin Union Bank and Trust, the City of Columbus lost one of its most storied and stable businesses.
And shareholders in Irwin Financial Corporation around the world reportedly lost more than $1 billion before the company declared bankruptcy this week.
But Columbus officials say the city will likely move past Irwin’s collapse without much collateral damage.
For the first time in more than 130 years, the Irwin family is not in control of the banks which formerly bore its name.
Columbus Mayor Fred Armstrong says it will be a strange transition having out-of-towners come in and run what used to be a Columbus-based financial juggernaut. Now Irwin Financial Corporation’s shares, which have stopped trading on the New York Stock Exchange, are worth close to nothing.
Still, Armstrong says the bank’s failure and devalued stock doesn’t hurt the city much.
“I’m not worried about it. Not one iota.”
Claude Davis is now in charge of the embattled financial institution. He used to work for the company in Columbus before leaving for First Financial. Armstrong says his connection to the city will help.
But in conversations with Davis since Irwin’s sale, Armstrong says he’s gleaned few answers.
“I’m not sure what happened. You know you’re going to hear rumor after rumor. You assume certain things that have happened. But you know it’s going to be awhile before people get over it if they ever do. But we just got to go forward. And I think they will. And I think First Financial will do a fine job,” Armstrong said.
FDIC workers descended on Columbus on Friday to assure bank customers their deposits aren’t in any danger. But over the last six quarters, Irwin Financial Corporation, one of the bank’s holding companies, has lost around $450 million mostly because of high-risk loans in western markets heavily affected by the recession.
Although Irwin’s recent history brought the company to its knees, Armstrong says it’s best to view the situation long-term.
“Things do change. And if they change every 130 years that’s just what happens. I think First Financial will be a good solid bank. And I think Irwin Union was a good solid bank for 130 years. But there are evidentially some business decisions that didn’t work well for them,” he said.
Irwin’s sale was the 94th instance of a federally-insured bank failing this year.