Cummins to invest $25 million in local bank

[hemiram]

Cummins Inc. made a “standby commitment” to buy $25 million of stock in Irwin Financial Corp., which is in the midst of a financial restructuring.

If Cummins (NYSE: CMI) buys the shares, Irwin Financial chairman William I. Miller will resign from the Cummins board, which he joined in February 1989, Cummins said in a news release.

Cummins chairman and CEO Tim Solso said in the release that Cummins executives saw the move as a vote of confidence in Irwin, which also is based in Columbus.

“IFC is the largest financial institution in our home community and the second largest in our home state,” Solso said in the release. “Given all of the chaos in the financial markets, Cummins wants to help ensure that IFC’s restructuring plan works.”

Irwin Financial (NYSE: IFC) today announced that it has filed for a $50 million shareholder rights offering as a means of raising capital for the bank.

The company has entered into agreements with Cummins and four other investors, who have agreed to buy up to $31 million of common shares after shareholders have been given the first opportunity to invest in the offering, Irwin Financial said in a separate release.

Those investors include Miller and his family members and Henry B. Schacht, a former chairman and CEO of Cummins and Lucent Technologies Inc., Irwin Financial said in the release.

Source: bizjournal

[flint]

The old C doesn't seem to have any issue with their finances during this economy.  I wish every company ran like Cummins did.  Nice to see that they're helping out a local business too.

[no spoiler]

I would think that Cummins would be hit by the financial problems too.  People won't buy as many new trucks if they can't afford to right?  Though it's pretty cool to see them thinking of investing in a bank to keep it afloat.  We don't need the whole bailout, the market will figure this out on it's own.

[gman]

Nice to see them helping out the community.  It would be nice to see something like that happen for chrysler.

[95concord]

I'm kinda surprised to see an engine company investing in banks.  Banks these days seem like a pretty high risk.  Though this just goes to show that we don't need a bailout, the market will sort itself out.