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 September 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 November 5, 2001, there were outstanding 21,283,096 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) September 30,   December 31,
Assets: 2001   2000
Cash and cash equivalents $ 145,446   $ 83,493
Interest-bearing deposits with financial institutions 14,978   36,400
Trading assets 208,429   154,921
Investment securities (Market value: $39,696 in 2001 and $37,163 in 2000) - Note 2 39,280   37,095
Loans held for sale 651,380   579,788
Loans and leases, net of unearned income - Note 3 1,707,334   1,234,922
Less: Allowance for loan and lease losses - Note 4 (17,700)   (13,129)
  1,689,634   1,221,793
Servicing assets - Note 5 168,786   130,522
Accounts receivable 32,749   69,224
Accrued interest receivable 12,481   12,979
Premises and equipment 35,178   29,409
Other assets 81,205   66,805
Total assets $ 3,079,546   $ 2,422,429
Liabilities and Shareholders' Equity:      
Deposits      
Noninterest-bearing $ 439,031   $ 263,159
Interest-bearing 756,166   517,127
Certificates of deposit over $100,000 979,923   663,044
  2,175,120   1,443,330
Short-term borrowings- Note 6 292,303   475,502
Long-term debt- Note 7 29,642   29,608
Other liabilities 199,785   136,897
Company-obligated mandatorily redeemable preferred securities of subsidiary trust- Note 8 161,788   147,167
Total liabilities 2,858,638   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 September 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 September 30, 2001 and December 31, 2000;      
including 2,125,799 and 2,376,119 shares in treasury as of September 30,      
2001 and December 31, 2000, respectively 29,965   29,965
Additional paid-in capital 4,430   4,331
Minority interest 640   1,055
Accumulated other comprehensive loss net of deferred income tax      
asset of ($424) and ($305) in 2001 and 2000, respectively (1,138)   (962)
Retained earnings 231,040   201,729
  266,323   237,504
Less treasury stock, at cost (45,415)   (47,579)
Total shareholders' equity 220,908   189,925
Total liabilities and shareholders' equity $ 3,079,546   $ 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
  September 30,
(In thousands, except for per share) 2001   2000
Interest income:      
Loans and leases $ 33,415   $ 24,823
Investment securities:      
Taxable 1,276   919
Tax-exempt 60   64
Loans held for sale 30,210   18,449
Trading account 7,898   3,520
Federal funds sold 66   132
Total interest income 72,925   47,907
Interest expense:    
Deposits 18,344   14,716
Short-term borrowings 8,983   10,055
Long-term debt 580   589
Preferred securities distribution 4,002   1,190
Total interest expense 31,909   26,550
Net interest income 41,016   21,357
Provision for loan and lease losses 5,006   1,356
Net interest income after provision for      
loan and lease losses 36,010   20,001
Other income:    
Loan origination fees 16,175   9,301
Gain from sales of loans 66,279   29,177
Loan servicing fees 16,785   14,857
Amortization and impairment of servicing assets (52,390)   (10,234)
Net loan administration income (expense) (35,605)   4,623
Gain on sale of mortgage servicing assets 298   8,709
Trading gains 13,193   1,832
Other 4,366   4,350
Total other income 64,706   57,992
Other expense:    
Salaries 47,191   32,284
Pension and other employee benefits 6,263   4,916
Office expense 4,516   3,508
Premises and equipment 7,535   7,039
Marketing and development 485   3,618
Other 15,881   11,383
Total other expense 81,871   62,748
Income before income taxes 18,845   15,245
Provision for income taxes 7,446   6,117
Income before minority interest 11,399   9,128
Minority interest in losses of subsidiaries  (68)   -
Net income $ 11,467   $ 9,128
       
Earnings per share of common stock available to shareholders:      
Basic - Note 10 $ 0.54   $ 0.43
Diluted - Note 10 $ 0.50   $ 0.43
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) Nine Months Ended
September 30,
   
(In thousands, except for per share) 2001   2000
Interest income:      
Loans and leases $ 93,929   $ 64,912
Investment securities:      
Taxable 3,880   2,847
Tax-exempt 188   192
Loans held for sale 78,033   50,002
Trading account 22,636   8,685
Federal funds sold 155   461
Total interest income 198,821   127,099
Interest expense:    
Deposits 56,248   34,726
Short-term borrowings 25,234   25,872
Long-term debt 1,740   1,768
Preferred securities distribution 11,410   3,523
Total interest expense 94,632   65,889
Net interest income 104,189   61,210
Provision for loan and lease losses 9,363   3,610
Net interest income after provision for      
loan and lease losses 94,826   57,600
Other income:    
Loan origination fees 44,388   26,177
Gain from sales of loans 147,339   69,188
Loan servicing fees 48,413   44,781
Amortization and impairment of servicing assets (68,795)   (23,044)
Net loan administration income (expense) (20,382)   21,737
Gain on sale of mortgage servicing assets 6,079   14,432
Trading gains 9,893   10,123
Other 7,460   18,974
  194,777   160,631
Other expense:    
Salaries 131,597   87,766
Pension and other employee benefits 20,386   15,839
Office expense 12,193   10,021
Premises and equipment 22,392   20,144
Marketing and development 3,459   12,331
Other 44,884   28,619
  234,911   174,720
Income before income taxes 54,692   43,511
Provision for income taxes 21,700   17,397
Income before minority interest 32,992   26,114
Minority interest in losses of subsidiaries  (279)   -
Income before cumulative effect of change in accounting principle 33,271   26,114
Cumulative effect of change in accounting principle, net of tax 175   -
Net income $ 33,446   $ 26,114
       
Earnings per share of common stock before cumulative effect of change in accounting principle:      
Basic - Note 10 $ 1.57   $ 1.24
Diluted - Note 10 $ 1.46   $ 1.23
Earnings per share of common stock available to shareholders: