Irwin Union Bank & Trust

by Bill Beck and Kathleen Curley

(September 2002) - One of Indiana’s oldest banks is today part of one of the state’s fastest-growing financial services firms. After five generations of family control and nearly a century-and-a-third of history, the Columbus-based Irwin Union Bank plans its 21st century growth strategy around a tradition of banking expertise, innovation and the ability to take the long-term view of financial trends.

The history of the parent Irwin Financial Corp. began with the establishment of a community bank in Columbus 131 years ago. The institution's founder, Joseph I. Irwin, was born in 1824 on a farm outside of Columbus in rural Bartholomew County.

At the age of 22, Joseph I., as he was known to friends and family, decided to leave the farm and seek his fortune in town. He worked in a dry goods store in Columbus making $3 a week. After saving $150 and borrowing $500 more, the only money he would borrow in his life, Joseph I. began developing real estate in Columbus.

Joseph I. was able to pay back his loan and used his real estate profits to open his own mercantile store on Washington Street in Columbus. Other merchants began leaving their money in Joseph I.'s safe, known as "the safest safe in town." When Joseph I. was presented with a piece of sycamore bark requesting him to pay the bearer a sum out of a merchant's poke in the Irwin Mercantile Bank, he knew he had begun his work in the banking business.

Joseph I. established Irwin's Bank as a legal entity in 1871 after a local bank failed, a common occurrence in the then-frequent bank panics of the early 1870s. It was only six years after the end of the Civil War, and Columbus was a thriving merchant center for farmers in surrounding Bartholomew County. Deposits in Irwin's Bank were backed by Joseph I.'s own net worth. It would be another six decades before the federal government created federal deposit insurance for banks.

By the close of the 19th century, what was then known as Irwin's Bank was prospering. Joseph I.'s son, William G. Irwin, joined his father's business in 1889. The bank was doing so well that Joseph I. sold his interest in the dry goods business in 1895. In 1900, Irwin's Bank listed assets of $690,000, an immense sum of money at the time.

When Joseph I. died in 1910 at the age of 86, his son succeeded him as president. William G. Irwin, known as W.G., helped transform the face of Columbus through his work at Irwin's Bank. In 1919, he backed inventor Clessie Cummins, who went on to found Cummins Engine Co. A few years later, he arranged the financing to move Noblitt-Sparks Industries (later called Arvin Industries, now part of ArvinMeritor) to Columbus from Indianapolis. He also arranged a merger between Irwin's Bank and the Union Trust of Columbus. The name of the institution became the Irwin-Union Trust Co.

An astute banker, W.G. recognized the economic warning signs just before the infamous stock market crash of 1929. Hundreds of banks in and around Indiana failed after the October crash on Wall Street, but Irwin-Union Trust remained strong throughout the entire Great Depression. Just before the market collapsed, W.G. had wisely converted the bank's investment portfolios into cash, allowing Irwin-Union Trust Co. to survive the resulting run on banks.

Irwin-Union Trust Co. continued to grow during the upheaval of the Great Depression and World War II. In 1937, deposits reached just under $4.2 million, and Irwin-Union's net earnings were $40,000 at a time when many of the banks in the state still had a negative net worth. In 1943, Hugh Th. Miller became president of Irwin-Union upon the death of his uncle, W.G. Irwin.

A fourth generation of Irwins would head the institution upon Hugh Th. Miller's death. His son, J. Irwin Miller, assumed the presidency of the bank in 1947. At this time, net earnings were $105,000. J. Irwin continued his role as president of Cummins Engine Co. and was elected chairman of Irwin-Union in 1953.

S. Edgar Lauther replaced J. Irwin as president of Irwin-Union. During Lauther's time at the helm, Irwin-Union became in 1953 one of the first banks nationwide to introduce a credit card to its customers. The bank's name was changed to Irwin Union Bank and Trust Co. in 1954 to reflect the increasing importance of commercial banking. Also during Lauther's tenure, Irwin Union's Personal Credit Line, Farm Management and College Career Plan services were introduced, all in 1959. Total assets that year amounted to $45.5 million.

During the next two decades, Irwin Union Bank made significant progress in the banking industry. It was responsible for the installation of the first computer in Bartholomew County, in 1964. With $100 million in assets in 1969, Irwin Union Bank was ranked 17th in size among Indiana's 408 banks. The bank installed Columbus' first cash-dispensing machine, a prototype of today’s ATM, in 1972.

By 1981, Irwin Union's total corporate assets amounted to $280 million. The institution entered the mortgage banking industry that year by acquiring the fast-growing Inland Mortgage Corp., which had 25 offices and just over 500 employees within five years of joining Irwin.

Irwin Union Corp. changed its name to Irwin Financial Corp. in 1990 and entered a period of significant growth, reporting record earnings every year for more than a decade. The holding company also has consistently reported strong return on equity putting it among the top 10 percent of American financial institutions. Irwin Financial a year ago moved to the New York Stock Exchange under the ticker symbol IFC.

Irwin Union Bank expanded outside of Bartholomew County for the first time in 1990, opening a branch in Seymour. Within a few years, additional offices had opened in Shelbyville, Franklin, Bloomington and Greensburg. By 2001, Irwin Union Bank’s reach grew to 29 locations in seven Midwest and Western states, including locations of its new federal savings bank, Irwin Union Bank FSB.

Meanwhile, Inland Mortgage, which is now known as Irwin Mortgage Corp., continued to expand. Its geographic scope has increased to more than 100 offices in two dozen states, and it services more than $12 billion in residential loans. Earlier this year the company announced plans to build a new headquarters and national production center in Fishers, keeping 504 jobs in Indiana and creating a planned 173 new jobs during the first three years of operation.

Today, Irwin Financial Corp. is an interrelated group of specialized financial services companies. Its operating companies include Irwin Mortgage Corp., Irwin Union Bank, Irwin Home Equity Corp., Irwin Ventures and Irwin Capital Holdings. Together, they provide a broad range of consumer and commercial financial services to selected markets all over the country and in Canada. William I. Miller, chairman of Irwin Financial Corp., is the fifth-generation member of the family to head the financial services firm that Joseph I. Irwin founded so long ago.

For Claude Davis, current president of Irwin Union Bank & Trust, the holding company’s success has its roots in the success of the bank. "Probably the best example I can cite here is the simple fact that a 131-year-old community bank from a small town in Indiana has been able to envision and execute a successful, unique national strategy for growth."

Although the bank and holding company have enjoyed growth during much of the last 131 years, the bank has never lost sight of its history and traditions. "As a 131-year-old institution," Davis says, "Irwin Union Bank has a solid foundation that synthesizes strong positive elements from the past with a knack for innovation, a foundation from which we are building strong, consistent, long-term growth."