/2HN  d 1$&%* 'Part I 'Item 13'IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES-'CONSOLIDATED BALANCE SHEET (Unaudited)('(In thousands, except for shares)^September 30,^December 31,'Assets: "2001 "2000 'Cash and cash equivalents"$ 145,446"$ 83,493<'Interest-bearing deposits with financial institutions "14,978 "36,400'Trading assets"208,429"154,921Y 'Investment securities (Market value: $39,696 in 2001 and $37,163 in 2000) - Note 2  "39,280  "37,095 'Loans held for sale "651,380 "579,7888 'Loans and leases, net of unearned income - Note 3 "1,707,334 "1,234,9229 'Less: Allowance for loan and lease losses - Note 4 "(17,700) "(13,129) "1,689,634 "1,221,793 'Servicing assets - Note 5"168,786"130,522'Accounts receivable "32,749 "69,224"'Accrued interest receivable "12,481 "12,979'Premises and equipment "35,178 "29,409'Other assets "81,205 "66,805'Total assets"$ 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' equity1!'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 ""1,386A#'Common stock; no par value - authorized 40,000,000 shares;O$'issued 23,402,080 shares as of September 30, 2001 and December 31, 2000;O%'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 ("1,055F)'Accumulated other comprehensive loss net of deferred income tax@*'asset of ($424) and ($305) in 2001 and 2000, respectively*"(1,138) *"(962)+'Retained earnings+"231,040+"201,729,"266,323,"237,504#-'Less treasury stock, at cost-"(45,415)-"(47,579)!.'Total shareholders' equity."220,908."189,9251/'Total liabilities and shareholders' equity/"$ 3,079,546/"$ 2,422,429\0'The accompanying notes are an integral part of the consolidated financial statements.32'IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES33'CONSOLIDATED STATEMENT OF INCOME (Unaudited)4^Three Months Ended5^September 30,+6'(In thousands, except for per share) 6^2001 6^20007'Interest income:8'Loans and leases8"$ 33,4158"$ 24,8239'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:A'Deposits A"18,344 A"14,716B'Short-term borrowings B"8,983 B"10,055C'Long-term debt C"580 C"589(D'Preferred securities distribution D"4,002 D"1,190E'Total interest expense E"31,909 E"26,550F'Net interest income F"41,016 F"21,357*G'Provision for loan and lease losses G"5,006 G"1,356.H'Net interest income after provision forI'loan and lease losses I"36,010 I"20,001J'Other income:K'Loan origination fees K"16,175 K"9,301L'Gain from sales of loans L"66,279 L"29,177M'Loan servicing fees M"16,785 M"14,8576N'Amortization and impairment of servicing assetsN"(52,390)N"(10,234)/O'Net loan administration income (expense)O"(35,605) O"4,6230P'Gain on sale of mortgage servicing assets P"298 P"8,709Q'Trading gains Q"13,193 Q"1,832 R'Other R"4,366 R"4,350S'Total other income S"64,706 S"57,992T'Other expense:U'Salaries U"47,191 U"32,284*V'Pension and other employee benefits V"6,263 V"4,916W'Office expense W"4,516 W"3,508X'Premises and equipment X"7,535 X"7,039 Y'Marketing and development Y"485 Y"3,618 Z'Other Z"15,881 Z"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 ^"9,1283_'Minority interest in losses of subsidiaries _"(68) _"-`'Net income`"$ 11,467`"$ 9,128Da'Earnings per share of common stock available to shareholders:b'Basic - Note 10 b"$ 0.54 b"$ 0.43c'Diluted - Note 10 c"$ 0.50 c"$ 0.43*d'Dividends per share of common stockd"$ 0.065 d"$ 0.06\f'The accompanying notes are an integral part of the consolidated financial statements.3h'IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES3i'CONSOLIDATED STATEMENT OF INCOME (Unaudited)i^Nine Months Endedj^September 30,+k'(In thousands, except for per share) k^2001 k^2000l'Interest income:m'Loans and leasesm"$ 93,929m"$ 64,912n'Investment securities:o'Taxable o"3,880 o"2,847p'Tax-exempt p"188 p"192q'Loans held for sale q"78,033 q"50,002r'Trading account r"22,636 r"8,685s'Federal funds sold s"155 s"461t'Total interest incomet"198,821t"127,099u'Interest expense:v'Deposits v"56,248 v"34,726w'Short-term borrowings w"25,234 w"25,872x'Long-term debt x"1,740 x"1,768(y'Preferred securities distribution y"11,410 y"3,523z'Total interest expense z"94,632 z"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 "44,7816'Amortization and impairment of servicing assets"(68,795)"(23,044)/'Net loan administration income (expense)"(20,382) "21,7370'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 "26,1143'Minority interest in losses of subsidiaries "(279) "-H'Income before cumulative effect of change in accounting principle "33,271 "26,114F'Cumulative effect of change in accounting principle, net of tax "175 "-'Net income"$ 33,446"$ 26,114e'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 "$ 1.23D'Earnings per share of common stock available to shareholders:'Basic - Note 10 "$ 1.58 "$ 1.24'Diluted - Note 10 "$ 1.47 "$ 1.23*'Dividends per share of common stock "$ 0.13 "$ 0.12' The accompanying notes are an integral part of the consolidated financial statements. 3'IRWIN FINANCIAL CORPORATION AND SUBSIDIARIESL'CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)='FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000^Accumulated Other^Additional^Retained^Comprehensive^Preferred ^Common^Paid in^Treasury^Minority ^Total^Earnings ^Income ^Stock ^Stock^Capital ^Stock^Interest'Balance at July 1, 2001"210,265"$ 220,955"$ (890)"$ 1,386  u n"(46,170) "$ 813'Net income "11,467 "11,4673'Unrealized gain on investment securities net'of $15 tax liability "23 "23.'Foreign currency adjustment net of $149'tax benefit "(223) "(223)'Deferred compensation "(48) "(48)!'Total comprehensive income "11,219'Cash dividends"(1,382)"(1,382),'Tax benefit on stock option exercises "735 'Treasury stock: 'Purchase of 31,681 shares "(814) "(814)'Sales of 116,368 shares "1,058 "-  "1,569'Minority Interest "(173) "(173)!'Balance September 30, 2001"$220,908"$ 231,040"$ (1,138)"$ 1,386  u N"$(45,415) "$ 640'Balance at July 1, 2000"172,817"$ 185,570"$ (105)"$ 1,386  u "(48,333) "$ -'Net income "9,128 "9,1283'Unrealized gain on investment securities net'of $30 tax liability "45 "45"'Foreign currency adjustment "(100) "(100)!'Total comprehensive income "9,073'Cash dividends"(1,258)"(1,258)'Treasury stock:'Purchase of 2,011 shares "(30) "(30)'Sales of 34,741 shares "463  "486!'Balance September 30, 2000"$181,065"$ 193,440"$ (160)"$ 1,386  u "$(47,877) "$ -  <'FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000^Accumulated Other^Additional^Retained^Comprehensive^Preferred ^Common^Paid in^Treasury^Minority ^Total^Earnings ^Income ^Stock ^Stock^Capital ^Stock^Interest!'Balance at January 1, 2001"$189,925"$ 201,729"$ (962)"$ 1,386"$29,965"$ 4,331"$(47,579)"$ 1,0553'Unrealized gain on investment securities net'of $73 tax liability "111 "111.'Foreign currency adjustment net of $192'tax benefit "(288) "(288)'Deferred compensation "1 "1!'Total comprehensive income "33,270'Cash dividends"(4,135)"(4,135)'Tax benefit on stock'option exercises "2,366 "2,366'Treasury stock:!'Purchase of 125,441 shares"(3,034)"(3,034)'Sales of 375,761 shares "2,931"(2,267) "5,198'Minority Interest "(415) "- "(415)!'Balance September 30, 2001"220,908"$ 231,040"$ (1,138)"$ 1,386 "29,965"$ 4,430"(45,415) "$ 640!'Balance at January 1, 2000"159,296"$ 171,101 "$ (70) "$ - "29,965"$ 4,250"(45,950) "$ -'Net income "26,114 "26,1143'Unrealized gain on investment securities net'of $7 tax liability "10 "10"'Foreign currency adjustment "(100) "(100)'Total comprehensive 'income "26,024'Cash dividends"(3,775)"(3,775)'Treasury stock:!'Purchase of 220,925 shares"(3,414)"(3,414)'Sales of 120,464 shares "1,548 "61 "1,4873'Issuance of 96,336 shares of preferred stock "1,386 "1,386!'Balance September 30, 2000"$181,065"$ 193,440"$ (160)"$ 1,386"$29,965"$ 4,311"$(47,877) "$ -3'IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES7'CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited).'For the nine months ended September 30, ^2001 ^2000'(In thousands)'Net income"$ 33,446"$ 26,114;'Adjustments to reconcile net income to cash provided'by operating activities:$'Depreciation and amortization "6,183 "6,6756'Amortization and impairment of servicing assets "68,795 "23,044*'Provision for loan and lease losses "9,363 "3,6100'Gain on sale of mortgage servicing assets"(6,079)"(14,432)-'Additions to mortgage servicing assets"(107,831)"(42,549)6'Proceeds from sale of mortgage servicing assets "6,851 "31,471%'Net increase in trading assets"(53,508)"(45,290)''Decrease in accounts receivable "36,475 "9,5721'Decrease (increase) in loans held for sale"(71,592) "18,307'Other, net "45,031"(13,909)7'Net cash (used) provided by operating activities"(32,866) "2,613('Lending and investing activities:?'Proceeds from maturities/calls of investment securities:'Held-to-maturity "4,036 "1,035'Available-for-sale "2,028 "28)'Purchase of investment securities:'Held-to-maturity "(437) "(251)'Available-for-sale"(7,630) "(29)2'Net increase (decrease) in interest-bearing+'deposits with financial institutions "21,422"(8,623)-'Net increase in loans, excluding sales"(561,951)"(341,969)0'Sale of mortgage loans by commercial bank "84,747 "18,919E'Acquisition of Onset Capital Corporation, net of cash acquired "- "(837)'Other, net"(9,106)"(10,144)8'Net cash used by lending and investing activities"(466,891)"(341,871)'Financing activities:'Net increase in deposits"731,790"449,846,'Net decrease in short-term borrowings"(183,199)"(87,642)#'Repayments of long-term debt "- "(223)@ 'Proceeds from the issuance of trust preferred securities  "15,000  "-0 'Proceeds from issuance of preferred stock  "-  "1,386< 'Purchase of treasury stock for employee benefit plans "(3,034) "(3,414)= 'Proceeds from sale of stock for employee benefit plans  "5,297  "1,548 'Dividends paid "(4,135) "(3,775)0'Net cash provided by financing activities"561,719"357,726.'Effect of exchange rate changes on cash "(9) "(11)0'Net increase in cash and cash equivalents "61,953 "18,4577'Cash and cash equivalents at beginning of period "83,493 "47,2151'Cash and cash equivalents at end of period"$ 145,446"$ 65,6729'Supplemental disclosures of cash flow information:#'Cash paid during the period:'Interest"$ 94,255"$ 55,454'Income taxes"$ 1,789"$ 4,364\'The accompanying notes are an integral part of the consolidated financial statements.