UPDATE 1-Irwin Financial to raise $50 mln in capital
(Recasts; adds details, share movement)
Oct 1 (Reuters) - Irwin Financial Corp IFC.N said it will raise $50 million in capital through a stock offering as the bank holding company struggles to maintain regulatory capital requirements and address credit exposure.
The company also said its agreement to transfer mortgage servicing rights to Roosevelt Management Co LLC did not get third-party approval, and that it will retain the related home equity loans of about $1 billion, which was on its balance sheet on June 30.
On termination of the agreement, the amount of pretax net loss exposure on the home equity loans will be limited to $100 million, and third-quarter pretax costs will be lower than what the company could have incurred, the company said.
Irwin Financial is also exploring a possibility of exchanging some of its outstanding trust preferred securities for common stock in order to increase the company's core capital.
The company said its balance sheet had been reduced by over 10 percent in the third quarter as it completed sales of nearly $750 million of small ticket leasing assets.
Shares of the Columbus, Indiana-based company were trading down 6 cents at $3.89 early Wednesday morning on the New York Stock Exchange. (Reporting by Anurag Kotoky in Bangalore; Editing by Amitha Rajan)
