CHICAGO -- Irwin Financial Corp. officials assured investors this week that the Columbus, Ind., banking company would remain profitable should the current boom in mortgage refinancings go bust.

"We are much less exposed to a jump in interest rates than the industry as a whole," president John A. Nash told analysts and investors in Chicago.

Irwin's community banking unit has been somewhat eclipsed by the stellar performance of its Indianapolis-based mortgage subsidiary -- an uncommon line of business for community bankers. Inland Mortgage Corp., with a $5.5 billion servicing portfolio, accounted for roughly 80% of the banking company's earnings in 1992.

ROE Was 26.5% Last Year

Last year Irwin Financial earned a whopping 26.5% return on equity, or $4.46 per share, ranking it among the most profitable community banking companies in the Midwest.

In addition to Inland, Irwin is the parent company of $439 million-asset Irwin Union Bank & Trust Co., Irwin Union Investor Services, and Affiliated Capital Corp., an equipment leasing firm in Northbrook, 111.

Irwin is hedging against a future slowdown in mortgage refinancings by holding mortgage servicing rights off its balance sheet.

By doing so, the company said, it can sell the servicing rights at a later date -- presumably when refinancing income tapers off in a high interest rate environment.

A Common Strategy

The strategy is commonly embraced by large mortgage banks such as Fleet Financial Group's mortgage unit and Countrywide Credit .

"By doing this, they have the ability to continue to report strong profitability even in a high interest rate environment," said Dan Coughlin, a community bank analyst at Howe Barnes Investments, Chicago.

Had Irwin sold its servicing rights in 1992, Mr. Coughlin estimated, it would have added $7.19 per share, for total earnings of $11.65 per share.

Still, Irwin's stock trades at a low multiple of nine times earnings, hovering at about $44 this week.

The shares are thinly traded, as much of the stock is controlled by the family of Will Miller, the company's chief executive.

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