Irwin Financial purges quarterly dividends
Irwin Financial Corp. (NYSE: IFC) shares are declining after the financial services company announced before Monday’s opening that it plans to suspend quarterly dividends.
"During the last two years, our dividends have exceeded our earnings," CEO Will Miller said in a statement. "Until we return to normal levels of profitability, that is neither a sustainable nor wise strategy.”
The Columbus, Ind.-based firm needs permission from its outside regulators to pay dividends, which are financed through Irwin’s subsidiary bank. Irwin Financial is doubtful its regulators would approve quarterly dividends, citing “extraordinary uncertainty in the capital markets and continued deterioration in credit quality” as reasons.
To lower risk, Irwin’s bank tightened underwriting guidelines and ceased production of some types of mortgages.
"These precautionary steps help ensure the long-term strength of our 137-year-old bank so that it remains a vital organization in the future,” Miller said in a statement. “With strong capital, good liquidity at the bank, and our moves to reduce risk in our ongoing originations, I believe we can and will manage through the increased uncertainties in the current environment and, when conditions permit, restore the dividends.”
The company noted that the dividend action has no effect on customers of the bank.
In morning trading, IFC shares are down 13.32%, or $1, at $6.51. Over the last 52 weeks, shares have ranged from $5.80 to $20.48.
