Indiana's Irwin Financial Corp. is getting out of the CD brokerage business.

Like many bank companies, $1 billion-asset Irwin of Columbus, Ind., recently examined its strategic focus and determined that brokered certificates of deposit no longer fit the picture. "Our other lines of business are more in the lending area," said Gregory F. Ehlinger, vice president and treasurer. Irwin concentrates on community banking, mortgage lending, and equipment leasing.

"From a standpoint of corporate focus - of things we know how to do, and where we could add value - we just didn't find the right spot for this business."

Irwin plans to sell the CD brokerage business to Corporate One Credit Union, Columbus, Ohio, which would acquire the right to use Irwin's proprietary software and certain related assets.

The deal, subject to regulatory and board approvals, is expected to close in the third quarter. Terms were not disclosed.

Irwin has been in the brokered CD business about 13 years, Mr. Ehlinger said. The bank acts as a nonprincipal, nonunderwriting broker for small banks that want to issue certificates of deposit but lack the sales volume to interest larger brokers.

In addition, a sales force identifies short to medium-term investors who want to invest in brokered CDs. About 65% of that account base is credit unions, he said.

The business makes sense for Corporate One because of its credit union contacts, said Mike Lee, vice president of marketing.

Corporate One, which acts in most ways as a correspondent bank for credit unions, began marketing Irwin's CDs to its 640 credit union members in April and subsequently was approached about buying the business, Mr. Lee said.

The business line would increase fee income and build capital, as well as enhance membership services at the nation's eighth largest corporate credit union, he said.

Credit unions traditionally have been large holders of insured CDs because they require less reporting and are relatively safe, and because credit unions are more limited than many financial institutions in their investments, he said.

Moreover, possible regulatory changes regarding credit unions' investments and capital could make CDs even more attractive, Mr. Ehlinger said.

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