Part I

Item 1

IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (Unaudited)

(In thousands, except for shares)

March 31,

December 31,

Assets:

2001

2000

Cash and cash equivalents

$ 119,388

$ 83,493

Interest-bearing deposits with financial institutions

61,783

36,400

Trading assets

177,814

154,921

Investment securities (Market value: $32,222 in 2001 and $37,163 in 2000) - Note 2

32,075

37,095

Loans held for sale

851,484

579,788

Loans and leases, net of unearned income - Note 3

1,317,161

1,234,922

Less: Allowance for loan and lease losses - Note 4

(13,622)

(13,129)

1,303,539

1,221,793

Servicing assets - Note 5

142,639

130,522

Accounts receivable

67,597

69,224

Accrued interest receivable

10,873

12,979

Premises and equipment

31,004

29,409

Other assets

68,173

66,805

Total assets

$2,866,369

$2,422,429

Liabilities and Shareholders' Equity:

Deposits

Noninterest-bearing

$ 411,838

$ 263,159

Interest-bearing

686,745

517,127

Certificates of deposit over $100,000

721,421

663,044

1,820,004

1,443,330

Short-term borrowings- Note 6

516,522

475,502

Long-term debt- Note 7

29,619

29,608

Other liabilities

154,869

136,897

Company-obligated mandatorily redeemable

preferred securities of subsidiary trust- Note 8

147,139

147,167

Total liabilities

2,668,153

2,232,504

Commitments and contingencies - Note 10

Shareholders' equity

Preferred stock, no par value - authorized

4,000,000 shares; issued 96,336 shares as of March 31, 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 March 31, 2001 and December 31, 2000;

including 2,235,366 and 2,376,119 shares in treasury as of March 31,

2001 and December 31, 2000 respectively

29,965

29,965

Additional paid-in capital

4,065

4,331

Minority interest

922

1,055

Accumulated other comprehensive income net of deferred income tax

asset of ($456) and ($305) in 2001 and 2000, respectively.

(1,176)

(962)

Retained earnings

209,524

201,729

244,686

237,504

Less treasury stock, at cost

(46,470)

(47,579)

Total shareholders' equity

198,216

189,925

Total liabilities and shareholders' equity

$2,866,369

$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

March 31,

(In thousands, except for per share)

2001

2000

Interest income:

Loans and leases

$ 29,250

$ 20,210

Investment securities:

Taxable

1,243

929

Tax-exempt

62

63

Loans held for sale

22,856

12,140

Trading account

7,146

2,484

Federal funds sold

33

46

Total interest income

60,590

35,872

Interest expense:

Deposits

19,053

8,460

Short-term borrowings

8,151

6,550

Long-term debt

580

583

Preferred securities distribution

3,704

1,174

Total interest expense

31,488

16,767

Net interest income

29,102

19,105

Provision for loan and lease losses - Note 4

1,553

1,136

Net interest income after provision for

loan and lease losses

27,549

17,969

Other income:

Loan origination fees

13,703

10,088

Gain from sale of loans

32,893

16,029

Loan servicing fees

16,052

15,121

Amortization and impairment of servicing assets

7,535

6,101

Net loan administration income

8,517

9,020

Gain on sale of mortgage servicing assets

2,092

252

Trading gains (losses)

3,238

3,389

Other

1,608

11,360

Total other income

62,051

50,138

Other expense:

Salaries

41,283

25,955

Pension and other employee benefits

6,736

5,668

Office expense

3,642

3,269

Premises and equipment

7,428

6,057

Marketing and development

1,529

4,778

Other

14,207

8,209

Total other expense

74,825

53,936

Income before income taxes

14,775

14,171

Provision for income taxes

5,779

5,689

Income before cumulative effect of change in accounting principle

8,996

8,482

Cumulative effect of change in accounting principle, net of tax

175

-

Net income

$ 9,171

$ 8,482

Earnings per share of common stock available to shareholders:

Basic - Note 9

$ 0.44

$ 0.40

Diluted - Note 9

$ 0.41

$ 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 CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)

FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000

Accumulated

Other

Compre-

Additional

Retained

hensive

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)

$1,055

Net income

9,171

9,171

Unrealized gain on investment

securities net of $43 tax liability

63

63

Foreign currency adjustment net of

$187 tax credit

(281)

(281)

Deferred compensation

4

4

Total comprehensive income

8,957

Cash dividends

(1,376)

(1,376)

Tax benefit on stock option exercises

1,590

1,590

Treasury stock:

Purchase of 90,120 shares

(2,138)

(2,138)

Sales of 230,873 shares

1,391

-

(1,856)

3,247

Minority Interest

(133)

(133)

Balance March 31, 2001

$198,216

$ 209,524

$ (1,176)

$ 1,386

$29,965

$ 4,065

$(46,470)

$ 922

Balance at January 1, 2000

$159,296

$ 171,101

$ (70)

$ -

$29,965

$ 4,250

$(45,950)

$ -

Net income

8,482

8,482

Unrealized loss on investment

securities net of $27 tax credit

(42)

(42)

Total comprehensive income

8,440

Cash dividends

(1,259)

(1,259)

Treasury stock:

Purchase of 198,253 shares

(3,052)

(3,052)

Sales of 29,169 shares

444

137

307

Issuance of 96,336 shares of preferred stock

1,387

1,387

Balance March 31, 2000

$165,256

$ 178,324

$ (112)

$ 1,387

$29,965

$ 4,387

$(48,695)

$ -

IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

For the three months ended March 31,

2001

2000

(In thousands)

Net income

$ -

$ 8,482

Adjustments to reconcile net income to cash provided

by operating activities:

Depreciation and amortization

2,550

2,098

Amortization and impairment of servicing assets

7,535

6,101

Provision for loan and lease losses

1,553

1,136

Amortization of premiums, less accretion of discounts

(1)

(29)

Increase in loans held for sale

(271,696)

(32,405)

Gain on sale of mortgage servicing assets

(2,092)

(252)

Net increase in trading assets

(22,893)

(12,649)

Other, net

18,942

(11,714)

Net cash used by operating activities

(266,102)

(39,232)

Lending and investing activities:

Proceeds from maturities/calls of investment securities:

Held-to-maturity

3,270

543

Available-for-sale

2,000

15

Purchase of investment securities:

Held-to-maturity

(143)

(1)

Net increase in interest-bearing

deposits with financial institutions

(25,383)

(2,055)

Net increase in loans, excluding sales

(101,577)

(98,875)

Sale of loans