Irwin Union Bank Builds its Reputation on Personalized Financial Services  

By BILL PERRY  

LANSING — Irwin Financial Corp, with $5.9 billion in assets through 2007, and its subsidiaries, Irwin Union Bank and Trust Co. and Irwin Union Bank, F.S.B., are locally operated and managed banks that reach into ten Midwest and Western states including Michigan. Kurt Hanus, president of the bank in the Lansing Market, said Irwin Union has the spirit and independence of a community bank while offering the strength and resources of a national financial institution. In addition to Lansing , the bank also serves the Grand Rapids , Kalamazoo and Traverse City markets.  

Since first opening its doors in a dry goods store in Columbus , Indiana more than 137 years ago, Irwin Union Bank has a history that can be traced back to the early days of the Civil War.  Eventually it was named after the store’s owner, Joseph I. Irwin; a well respected leader in the community and a person other merchants in town trusted enough to keep their cash in the store’s safe. In 1871, when another local bank failed, he officially established Irwin’s Bank as a separate entity.  

Irwin Union Bank (IUB) was based in Columbus , Indiana until the early ‘90s when it opened its first location outside of the south central Indiana city, and continued to add new operations within Indiana throughout the decade.   In 1999, IUB started its expansion to other states by establishing markets in Grand Rapids and Kalamazoo , Carson City , Nevada and St. Louis , Missouri . Early in the 21st Century, the bank has experienced strong growth with rapid expansion. “Many of our newest facilities, such as those located in Kalamazoo and Lansing have advanced the bank’s legacy for innovative design into the new millennium,” Hanus explained.  

Hanus said the bank’s growth is fueled by a unique people-based strategy. Irwin Union Bank’s formula for expansion is predicated on the relationships clients have with experienced, local banking professionals. When it enters a new market, Irwin Union Bank recruits people with strong banking connections in the local community and well refined business development skills. “Talented bankers are drawn to Irwin Union Bank for the opportunity to participate in a truly entrepreneurial culture whereby they can build their own business portfolios with greater autonomy—much like a franchise model. While many banks are pursuing acquisitions to grow, Irwin Union Bank places its energy on finding strong leaders and leveraging their existing local contacts,” he said.

Meeting Today’s Challenges  

Calling it a unique time in the banking industry, Hanus said community bankers face stiff competition for deposits from peer, regional and national banks. Irwin Union Bank has $3.3 billion in deposits. “It’s even more complicated by current disruptions in the housing and credit markets. A sound deposit base offers improved liquidity for community banks as we navigate the current environment,” he said. “Challenges in these markets and the greater economy have had a domino effect for community banks and our clients.”  

He stressed that community banks, such as Irwin Union Bank, are paying close attention to credit quality and fostering regular communication with their lending clients. “All banks are working with their clients to minimize loan losses and ensure that these assets are performing.”  

Hanus pointed to the high profile challenges of larger banks such as IndyMac , Washington Mutual and Wachovia along with mortgage guarantors such as Freddie Mac and Fannie Mae.  These organizations have shaken the confidence of some depositors in financial institutions. “Helping our clients understand FDIC insurance and coverage options continues to be an important topic of discussion when meeting with clients and prospects,” he said.  “In addition, we are working with clients to help them make a clear distinction between a commercial bank, such as ours that is funded by stable deposits, and investment banks such as the former Bear Stearns or Lehman Brothers.”  

Irwin Union Bank has placed additional resources in training our cash management team on FDIC insurance. “The bank’s deposit sales team is educating our clients on their options, especially our larger depositors to mitigate their risk while retaining these funds. To enhance credit quality, we are scrutinizing our loan portfolio with an eye one ensuring loans are performing.”  

Competing with the Big Banks  

Irwin Union Bank’s success against its competition has been its ability to differentiate itself from larger regional banks by focusing on niche markets, providing highly personalized service to small business clients, their employees and retail patrons within the local areas it serves. “By remaining flexible and highly responsive to the needs of clients, the Bank has become known as a valuable resource in the small business community. Irwin Union Bank recognizes that small business clients are highly entrepreneurial individuals who often ‘wear many hats’ in running their daily operations.”  

Hanus explained that these clients often look to Irwin Union Bank for information and business advice. “The bank, which also fosters a highly entrepreneurial culture, focuses its operations on offering services that enable small businesses to worry less about banking so more time can be spent concentrating on business demands.”  

Looking ahead in the next five to ten years, Hanus said Irwin Union will continue to leverage technology to stay in tune with the busy lifestyles of its clients. “Offering tools such as Irwin Online banking, free ATMs anywhere, our bank’s microbank remote deposit service, Irwin Mobile and prepaid deposit envelopes make it more convenient than ever for clients to bank with Irwin Union Bank,” he said. “We believe the traditional approach of saturating markets with a network of bank branches will become less viable and relevant as fewer clients set foot in physical locations and conduct more banking transactions electronically.”  

Over the next few years, Irwin Union’s leadership team sees a natural leveling off of the turbulence in the housing and credit markets. “We have greatly reduced our exposure to this risk and are positioning the organization for profitability and growth in 2009. We believe there is a strong demand in the marketplace for offering top notch service and intimate banking knowledge to small business clients,” Hanus concluded.