* Q4 loss $3.54/shr
* External auditors raise going concern doubt
* To remove $690 mln home equity loans from balance sheet
* Restates Q3 loss to $107 mln
* Shares fall 22 pct
(Adds details, updates share movement)
BANGALORE, April 1 (Reuters) - Bank holding company Irwin
Financial Corp said its external auditors raised doubt
about its ability to continue as a going concern and that it
posted a loss for the fourth quarter.
Shares of the company fell as much as 22 percent to $1.52 but
recovered some losses and were down 29 cents at $1.66 in midday
trade on the New York Stock Exchange.
The company sold its mortgage servicing rights and certain
platform assets related to securitized home equity loans at its
indirect unit Irwin Home Equity Corp to Green Tree Servicing LLC
for $2 million, it said in a regulatory filing.
The sale will remove $690 million of home equity loans from
its balance sheet as at March 31, Irwin said, adding that it sees
an improvement in its capital ratios.
Irwin, a company struggling to maintain regulatory capital
requirements and address credit exposure, is currently classified
as "undercapitalized" under applicable regulatory capital
standards.
The Columbus, Indiana-based company also restated its
third-quarter results to correct an error in accounting,
reclassifying certain home equity loans which had been treated as
collateral for secured borrowings to held-for-sale.
The reclassification and valuation of these loans at lower of
cost or fair value resulted in its commercial banking unit Irwin
Union Bank and Trust and its commercial finance unit Irwin
Financial Corp falling below "well capitalized" standards as of
Dec. 31, 2008.
Irwin said it continues to pursue plans to enhance capital
levels and has submitted a proposal for public-private
partnership to the regulators and the U.S. Treasury.
The company said it has agreements with a group of investors,
led by U.S. manufacturer Cummins Inc , to invest $34
million in the form of standby commitments for its planned rights
offering to shareholders.
Core deposits at the company, which ceased loan originations
last year, fell to $1.9 billion at Dec. 31, 2008, from $2.3
billion a year earlier.
Irwin posted a loss of $104 million for the fourth quarter.
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(Reporting by Amiteshwar Singh in Bangalore; Editing by
Gopakumar Warrier and Deepak Kannan)
((amiteshwar.singh@thomsonreuters.com; within U.S. +1 646 223
8780; outside U.S. +91 80 4135 5800; Reuters Messaging:
amiteshwar.singh.reuters.com@reuters.net))
Keywords: IRWINFINANCIAL/
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