UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2001

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to _____________

Commission File Number: 0-6835

IRWIN FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

INDIANA

35-1286807

(State or other jurisdiction of Incorporation or organization)

(IRS Employer Identification No.)

 

500 Washington Street, Columbus, IN 47201

(Address or principal executive offices)

(Zip Code)

(812) 376-1909

(Registrant's telephone number, including area code)

________________________________________________________________

(Former name, former address and former fiscal year if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes __ X __ No _____

As of August 9, 2001 there were outstanding 21,252,233 common shares, no par value, of the Registrant.

 

Part I
 
Item 1
 
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Unaudited)
 
 
(In thousands, except for shares) June 30,   December 31,
Assets: 2001   2000
Cash and cash equivalents $ 128,853   $ 83,493
Interest-bearing deposits with financial institutions 84,446   36,400
Trading assets 191,947   154,921
Investment securities (Market value: $32,855 in 2001 and $37,163 in 2000) - Note 2 32,648   37,095
Loans held for sale 1,016,792   579,788
Loans and leases, net of unearned income - Note 3 1,486,386   1,234,922
Less: Allowance for loan and lease losses - Note 4 (15,218)   (13,129)
  1,471,168   1,221,793
Servicing assets - Note 5 181,329   130,522
Accounts receivable 46,681   69,224
Accrued interest receivable 16,003   12,979
Premises and equipment 31,977   29,409
Other assets 59,813   66,805
Total assets $ 3,261,657   $ 2,422,429
Liabilities and Shareholders' Equity:      
Deposits      
Noninterest-bearing $ 398,186   $ 263,159
Interest-bearing 747,183   517,127
Certificates of deposit over $100,000 783,517   663,044
  1,928,886   1,443,330
Short-term borrowings- Note 6 776,926   475,502
Long-term debt- Note 7 29,631   29,608
Other liabilities 168,756   136,897
Company-obligated mandatorily redeemable      
preferred securities of subsidiary trust- Note 8 147,193   147,167
Total liabilities 3,051,392   2,232,504
       
Commitments and contingencies - Note 9      
       
Shareholders' equity      
Preferred stock, no par value - authorized      
4,000,000 shares; issued 96,336 shares as of June 30, 2001 and      
December 31, 2000 1,386   1,386
Common stock; no par value - authorized 40,000,000 shares;      
issued 23,402,080 shares as of June 30, 2001 and December 31, 2000;      
including 2,210,486 and 2,376,119 shares in treasury as of June 30,      
2001 and December 31, 2000, respectively 29,965   29,965
Additional paid-in capital 4,206   4,331
Minority interest 813   1,055
Accumulated other comprehensive income net of deferred income tax      
asset of ($290) and ($305) in 2001 and 2000, respectively (890)   (962)
Retained earnings 220,955   201,729
  256,435   237,504
Less treasury stock, at cost (46,170)   (47,579)
Total shareholders' equity 210,265   189,925
Total liabilities and shareholders' equity $ 3,261,657   $ 2,422,429
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
  Three Months Ended
  June 30,
(In thousands, except for per share) 2001   2000
Interest income:      
Loans and leases $ 31,263   $ 19,614
Investment securities:      
Taxable 1,362   999
Tax-exempt 65   64
Loans held for sale 24,748   19,509
Trading account 7,592   2,682
Federal funds sold 56   46
Total interest income 65,086   42,914
Interest expense:    
Deposits 18,851   11,550
Short-term borrowings 8,100   8,949
Long-term debt 580   580
Preferred securities distribution 3,704   1,174
Total interest expense 31,235   22,253
Net interest income 33,851   20,661
Provision for loan and lease losses 2,804   1,119
Net interest income after provision for      
loan and lease losses 31,047   19,542
Other income:    
Loan origination fees 16,536   9,329
Gain from sales of loans 46,143   21,441
Loan servicing fees 15,574   14,802
Amortization and impairment of servicing assets 8,870   6,708
Net loan administration income 6,704   8,094
Gain on sale of mortgage servicing assets 3,689   5,471
Trading gains (losses) (6,539)   4,902
Other 1,883   3,351
Total other income 68,416   52,588
Other expense:    
Salaries 43,123   29,527
Pension and other employee benefits 7,386   5,256
Office expense 4,035   3,244
Premises and equipment 7,430   7,048
Marketing and development 1,445   3,934
Other 14,973   9,026
Total other expense 78,392   58,035
Income before income taxes 21,071   14,095
Provision for income taxes 8,474   5,590
Income before minority interest 12,597   8,505
Minority interest   (211)    
Net income $ 12,808   $ 8,505
       
Earnings per share of common stock available to shareholders:      
Basic - Note 10 $ 0.61   $ 0.41
Diluted - Note 10 $ 0.56   $ 0.40
Dividends per share of common stock $ 0.065   $ 0.06
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited) Six Months Ended
June 30,
   
(In thousands, except for per share) 2001   2000
Interest income:      
Loans and leases $ 60,514   $ 40,088
Investment securities:      
Taxable 2,604   1,928
Tax-exempt 128   127
Loans held for sale 47,603   31,648
Trading account 14,738   5,166
Federal funds sold 89   93
Total interest income 125,676   79,050
Interest expense:    
Deposits 37,904   20,010
Short-term borrowings 16,251   15,499
Long-term debt 1,160   1,163
Preferred securities distribution 7,408   2,348
Total interest expense 62,723   39,020
Net interest income 62,953   40,030
Provision for loan and lease losses - Note 4 4,356   2,254
Net interest income after provision for      
loan and lease losses 58,597   37,776
Other income:    
Loan origination fees 28,214   16,875
Gain from sales of loans 81,061   40,011
Loan servicing fees 31,627   29,923
Amortization and impairment of servicing assets 16,405   12,809
Net loan administration income 15,222   17,114
Gain on sale of mortgage servicing assets 5,781   5,722
Trading gains (losses) (3,300)   8,291
Other 3,248   14,448
  130,226   102,461
Other expense:    
Salaries 84,406   55,482
Pension and other employee benefits 14,121   10,923
Office expense 7,678   6,513
Premises and equipment 14,858   13,105
Marketing and development 2,975   8,713
Other 28,938   17,235
  152,976   111,971
Income before income taxes 35,847   28,266
Provision for income taxes 14,254   11,279
Income before minority interest 21,593   16,987
Minority interest         (211)    
Income before cumulative effect of change in accounting principle 21,804   16,987
Cumulative effect of change in accounting principle, net of tax 175   -
Net income $ 21,979   $ 16,987
               
Earnings per share of common stock available to shareholders:      
Basic - Note 10 $ 1.04   $ 0.81
Diluted - Note 10 $ 0.97   $ 0.80
Dividends per share of common stock $ 0.13   $ 0.12

IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 2001 AND 2000
 
      Accumulated          
      Other          
      Compre-     Additional    
    Retained hensive Preferred Common Paid in Treasury Minority