[FIC LETTERHEAD]









                                        March 11, 1999



Dear Shareholder:

   The directors and officers of First Indiana Corporation join me in
extending to you a cordial invitation to attend the annual meeting of our
shareholders.  This meeting will be held on Thursday, April 15, 1999 at
9:00 a.m., in the First Indiana Plaza Conference Center, Ohio and
Pennsylvania Streets, Seventh Floor, Indianapolis, Indiana.

   First Indiana enjoyed record earnings in 1998 as a comprehensive
provider of financial services emphasizing local decision-making,
customer relationships and personalized service.  At the annual meeting,
we will review our achievements in 1998 and share our plans for
additional growth.

   The formal notice of this annual meeting and the proxy statement
appear on the following pages.  After reading the proxy statement,
please mark, sign, and return the enclosed proxy card to ensure that
your votes on the business matters of the meeting will be recorded.

   We hope that you will attend this meeting.  Whether or not you
attend, we urge you to return your proxy promptly in the postpaid
envelope provided.  After returning the proxy, you may, of course, vote
in person on all matters brought before the meeting.

   We look forward to seeing you on April 15.

                              Sincerely,

                              /s/Robert H. McKinney

                              Robert H. McKinney,
                              Chairman and Chief
                              Executive Officer


<PAGE>

           FIRST INDIANA CORPORATION
             INDIANAPOLIS, INDIANA
   NOTICE OF ANNUAL MEETING OF SHAREHOLDERS


     The annual meeting of the shareholders of First Indiana
Corporation (the "Corporation") will be held in the First Indiana Plaza
Conference Center, 135 North Pennsylvania Street, Seventh Floor,
Indianapolis, Indiana on April 15, 1999, at 9:00 a.m. EST, to consider
and take action on the following matters:

     1.   The election of three (3) directors of the Corporation;
          and

     2.   The transaction of such other business as may properly
          come before the meeting and any adjournments
          thereof.

Only shareholders of record at the close of business on February 16,
1999 are entitled to notice of and to vote at this meeting and any
adjournments thereof.

                                 By order of the
                                 Board of Directors,

                                 /s/David A. Butcher

                                 David A. Butcher
                                 Secretary



Indianapolis, Indiana
March 11, 1999

<PAGE>


           FIRST INDIANA CORPORATION

              First Indiana Plaza
         135 North Pennsylvania Street
         Indianapolis, Indiana  46204




                PROXY STATEMENT



     This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of First Indiana Corporation (the
"Corporation" or "we") of proxies to be voted at the Annual Meeting
of Shareholders to be held on Thursday, April 15, 1999, and at any
adjournment thereof.  The approximate date of mailing this proxy
statement is March 11, 1999.  The following is important information
in a question-and-answer format regarding the Corporation, its wholly
owned subsidiary First Indiana Bank (the "Bank"), the Annual Meeting
and this Proxy Statement.

Q:  What am I voting on?
     You are voting on the election of three directors (Robert J.
Laikin, Marni McKinney and Phyllis W. Minott).

Q:  Who is entitled to vote?
     Shareholders as of the close of business on February 16, 1999
(the "Record Date") are entitled to vote at the Annual Meeting.  Each
shareholder is entitled to one vote for each share of common stock held
on the Record Date.  As of the Record Date, 12,703,294 shares of the
Corporation's common stock were issued and outstanding.

Q:  How do I vote?
     Sign and date each proxy card you receive and return it in the
prepaid envelope.  If you return your signed proxy card but do not
indicate your voting preferences, we will vote on your behalf FOR the
three management nominees.  You have the right to revoke your proxy
any time before the meeting by (1) notifying the Corporation's
Secretary, or (2) returning a later-dated proxy.  You may also revoke
your proxy by voting in person at the meeting.

Q:  What does it mean if I get more than one proxy card?
     It means you hold shares registered in more than one account.
Sign and return all proxy cards to ensure that all your shares are voted.


<PAGE> 1

Q:  Who will count the vote?
     Representatives of Harris Trust & Savings Bank will tabulate
the votes and act as inspectors of the election.

Q:  What constitutes a quorum?
     A majority of the outstanding shares, present in person or
represented by proxy, constitutes a quorum for the Annual Meeting.

Q:  How many votes are needed for approval of each item?
     Directors will be elected by a plurality of the votes cast at the
Annual Meeting.  Consequently, the three nominees receiving the most
votes will be elected directors.  Only votes cast for a nominee will be
counted, except that the accompanying proxy will be voted for the three
management nominees unless the proxy contains instructions to the
contrary.  Any other matter to come before the Annual Meeting will be
approved if the votes cast at the Annual Meeting (in person or
represented by proxy) in favor of such proposal exceed the votes
opposing such proposal.  An abstention, non-vote, or broker non-vote
will not change the number of votes cast for or against the election of
any director or for or against any other matter to come before the
Annual Meeting.

Q:  Who can attend the Annual Meeting?
     All shareholders as of the Record Date can attend.

Q:  What percentage of stock do the directors and executive
officers own?
     Together, they own approximately 33.4% of the Corporation's
common stock as of the Record Date. (See page 3 for details.)

Q:  Who are the largest principal shareholders?
     The Somerset Group, Inc., is the largest single shareholder of
the Corporation, owning 2,758,467 shares as of the Record Date.
Robert H. McKinney and Marni McKinney are each officers, directors
and, directly or indirectly, substantial shareholders of Somerset.
Together, Somerset, Mr. McKinney and Ms. McKinney beneficially
own 3,416,379 shares (26.6%) of the Corporation's common stock as
of the Record Date.  (See page 3 for details.)

Q:  When are shareholder proposals and nominations for the 2000
meeting due?
     The Corporation's 2000 Annual Meeting is currently
scheduled for April 13, 2000. To be considered for inclusion in next
year's Proxy Statement, shareholder proposals must be submitted in
writing by November 12, 1999 to the Corporation's Secretary, 2800
First Indiana Plaza, 135 N. Pennsylvania Street, Indianapolis, Indiana
46204.  In addition, the Corporation's By-laws provide that any
shareholder wishing to nominate a candidate for director or propose
other business at the Annual Meeting must give the Corporation written
notice 60 days before the meeting, and the notice must provide certain
other information as described in the By-laws. Copies of the By-laws
are available to shareholders free of charge upon request to the
Corporation's Secretary.


<PAGE> 2

    STOCK OWNERSHIP BY DIRECTORS, OFFICERS
           AND CERTAIN SHAREHOLDERS


     The following table shows, as of February 16, 1999, the
number and percentage of shares of common stock held by each person
known to the Corporation who owned beneficially more than five
percent of the issued and outstanding common stock of the Corporation
and shares held by the Corporation's directors and certain executive
officers:

<TABLE>
<CAPTION>

     Beneficial                  Amount and Nature of         Percent
        Owner                    Beneficial Ownership         of Class
     ----------                  --------------------        ---------
<S>                                <C>                          <C>
H. J. Baker                           51,644  1                  2

Gerald L. Bepko                       31,290  3                  2

David L. Gray                         72,714  4                  2

Andrew Jacobs, Jr.                     4,200  5                  2

David A. Lindsey                     112,619  6                  2

Marni McKinney                     3,416,379  7                 26.6%

Robert H. McKinney                 3,416,379  7                 26.6%

Owen B. Melton, Jr.                  302,804  8                  2.4%

Phyllis W. Minott                     33,430  9                  2

Merrill E. Matlock                    37,317  10                 2

Michael L. Smith                      42,172  11                 2

The Somerset Group, Inc.           3,416,379  7, 12             26.6%

John W. Wynne                         34,532  13                 2

All Executive Officers and
Directors as a Group (15 Persons)  4,280,425  14                33.4%

</TABLE>


     1    Includes 18,730 shares as to which the director has the right to
          acquire beneficial ownership as specified in Rule 13d-3(d)(1)
          under the Securities Exchange Act of 1934 (the "Exchange Act").

<PAGE> 3

     2    The number of shares represents less than one percent of the
          Corporation's common stock outstanding.

     3    Includes 1,354 shares held in trust under the First Indiana Bank
          Directors' Stock Purchase Plan (the  "Directors' Stock Purchase
          Plan"), 3,241 shares held in trust under the Bank's Employees'
          Stock Purchase Plan (the "Stock Purchase Plan"), and 26,222
          shares as to which the director has the right to acquire beneficial
          ownership as specified in Rule 13d-3(d)(1) under the Exchange
          Act.

     4    Includes 799 shares held in trust under the Stock Purchase Plan,
          40,870 shares as to which there is a right to acquire beneficial
          ownership as specified in Rule 13d-3(d)(1) under the Exchange
          Act, and 2,400 shares owned of record by Mr. Gray's spouse.

     5    Includes 41 shares held in trust under the Stock Purchase Plan,
          3,746 shares as to which there is a right to acquire beneficial
          ownership as specified in Rule 13d-3(d)(1) under the Exchange
          Act and 413 shares held in trust under the Directors' Stock
          Purchase Plan.

     6    Includes 1,125 shares held in trust under the Stock Purchase Plan
          and 30,447 shares as to which there is a right to acquire beneficial
          ownership as specified in Rule 13d-3(d)(1) under the Exchange
          Act.

     7    These shares are beneficially owned by a group consisting of The
          Somerset Group, Inc. ("Somerset"), Robert H. McKinney and
          Marni McKinney.  Robert H. McKinney owns 516,903 shares of
          the Corporation, including 725 shares held in trust under the
          Stock Purchase Plan, 76,119 shares of the Corporation as to
          which Mr. McKinney has the right to acquire beneficial
          ownership as specified in Rule 13d-3(d)(1) under the Exchange
          Act and 18,000 shares of restricted stock under the Corporation's
          1997-1999 Long-Term Incentive Plan.  Mr. McKinney, his
          immediate family, a family limited partnership, and various
          irrevocable trusts established by Mr. McKinney for the benefit of
          his children together beneficially own, directly or indirectly,
          approximately 42% of the outstanding capital stock of Somerset,
          which owns of record 2,758,467 shares of the Corporation.  The
          total held by the group also includes 64,890 shares of the
          Corporation owned by Mr. McKinney's daughter, Marni
          McKinney, including 3,876 shares held in trust under the Stock
          Purchase Plan, 40,301 shares as to which she has the right to
          acquire beneficial ownership as specified in Rule 13d-3(d)(1)
          under the Exchange Act, 1,837 shares held on her behalf under
          the Bank's 401(k) Plan, 7,500 shares of restricted stock under the
          Corporation's 1997-1999 Long-Term Incentive Plan, and 6,000
          shares of restricted stock under the 1991 Stock Option and
          Incentive Plan.  Mr. McKinney is the Chairman and a director of
          Somerset; Ms. McKinney is the President and Chief Executive
          Officer and a director of Somerset; and Mr. McKinney's son,
          Kevin K. McKinney, is Vice President and a director of Somerset.

     8    Includes 59,244 shares as to which Mr. Melton has the right to
          acquire beneficial ownership as specified in Rule 13d-3(d)(1)
          under the Exchange Act, 10,187 shares held in trust under the
          Stock Purchase Plan, 637 shares held on his behalf under the
          Bank's 401(k) Plan, 107,996 shares owned of record jointly with
          Mr. Melton's spouse, 61,874 owned of record by Mr. Melton's
          spouse and 18,000 shares of restricted stock under the
          Corporation's 1997-1999 Long-Term Incentive Plan.

     9    Includes 4,603 shares held in trust under the Stock Purchase Plan,
          201 shares held under the Corporation's Dividend Reinvestment
          and Stock Purchase Plan (the "DR Plan"), 1,354 shares held
          under the Directors' Stock Purchase Plan, 26,222 shares as to
          which there is a right to acquire beneficial ownership as specified
          in Rule 13d-3(d)(1) under the Exchange Act and 413 shares held
          in trust under the Directors' Stock Purchase Plan.

     10   Includes 618 shares held in trust under the Stock Purchase Plan,
          26,022 shares as to which there is a right to acquire beneficial
          ownership as specified in Rule 13d-3(d)(1) under the Exchange
          Act, and 283 shares held under the DR Plan.

     11   Includes 26,222 shares as to which there is a right to acquire
          beneficial ownership as specified in Rule 13d-3(d)(1) under the
          Exchange Act.

     12   The address of The Somerset Group, Inc. is 135 North
          Pennsylvania Street, Suite 2800, Indianapolis, Indiana 46204.
          This number includes 2,758,467 shares owned of record by The
          Somerset Group, Inc. (see note 7).

<PAGE> 4

     13   Includes 2,280 shares held in trust under the Stock Purchase Plan,
          1,076 shares held under the DR Plan, 4,014 shares held under the
          Directors' Stock Purchase Plan and 11,238 shares as to which there
          is a right to acquire beneficial ownership as specified in Rule
          13d-3(d)(l) under the Exchange Act.

     14   31,951 shares held in trust under the Stock Purchase Plan, 1,769
          shares held under the DR Plan, includes 7,135 shares held under
          the Directors' Stock Purchase Plan, 4,392 shares held under the
          Bank's 401(k) Plan, and 444,660 shares as to which there is a right
          to acquire beneficial ownership as specified in Rule 13d-3(d)(1)
          under the Exchange Act.



PROPOSAL NO. 1:  ELECTION OF DIRECTORS

     Three directors are to be elected.  Robert J. Laikin, Marni
McKinney and Phyllis W. Minott have been nominated for a term of
three years and until their successors are elected and qualified.  Mr.
Laikin has been nominated to the Board of Directors for the first time.
If elected, Mr. Laikin will assume the position left vacant by H. J.
Baker.  Mr. Baker's term will expire at the Annual Meeting.  Having
reached the age of mandatory retirement from the Board of Directors,
Mr. Baker will not stand for re-election.  The Board of Directors thanks
Mr. Baker for his years of dedicated service to the Corporation and the
Bank.  Ms. McKinney and Ms. Minott are members of the present
Board of Directors and have consented to serve an additional term.
The other directors listed in the table below will continue in office until
the expiration of their terms.  With the exception of Mr. Laikin, all of
the nominees and the other directors listed in the table below also are
members of the Board of Directors of the Bank.  Mr. Laikin will be
elected to the Board of Directors of the Bank upon his election to the
Board of Directors of the Corporation at the Annual Meeting.  For
directors of the Corporation who were directors of the Bank before the
Corporation was formed in 1986, the table below lists the year in which
the director became a director of the Bank.  If, at the time of the Annual
Meeting, any of the nominees is unable or declines to serve, the
discretionary authority provided in the proxy may be exercised to vote
for a substitute or substitutes.  The Board of Directors has no reason to
believe that any substitute nominee or nominees will be required.

[The remainder of this page is intentionally left blank]


<PAGE> 5

The Board of Directors unanimously recommends the election of
the following nominees.


<TABLE>
<CAPTION>



                   NOMINEES FOR TERMS EXPIRING IN 2002



Name, Age, Principal
Occupation(s) and
Business Experience                                                  Director
During Past 5 Years                                                   Since
----------------------------------------------------------------------------
<S>                                                                     <C>
Robert J. Laikin, Age 35                                                 --
Chairman and Chief Executive Office of Brightpoint, Inc., provider of
distribution and value-added logistics services to the wireless
communications industry; previously President of Brightpoint, Inc.

Marni McKinney, Age 42                                                  1992
Vice Chairman of the Corporation and Chairman of the Bank; Director,
President, and Chief Executive Officer, The Somerset Group, Inc.,
an affiliate of the Corporation, financial services provider;
previously Executive Vice President of The Somerset Group, Inc.,
and Vice President of the Corporation and the Bank.

Phyllis W. Minott, Age 60                                               1976
Chairman and Chief Executive Officer, Minott Motion Pictures, Inc.,
commercial movie production; previously General Auditor, Eli Lilly
& Company, a pharmaceutical company; Controller, Accounting and
Chief Accounting Officer, Eli Lilly & Company.


<CAPTION>


                DIRECTORS WHOSE TERMS EXPIRE IN 2001


Name, Age, Principal
Occupation(s) and
Business Experience                                                   Director
During Past 5 Years                                                    Since
------------------------------------------------------------------------------
<S>                                                                     <C>
Robert H. McKinney, Age 73                                              1954
Chairman and Chief Executive Officer of the Corporation;
Chairman and Director, The Somerset Group, Inc., an
affiliate of the Corporation, financial services;
retired partner, Bose McKinney & Evans,
attorneys; Chairman, Federal Home Loan Bank Board, 1977-1979.

Owen B. Melton, Jr., Age 52                                             1983
President and Chief Operating Officer of the Corporation and
President and Chief Executive Officer of the Bank.

Michael L. Smith, Age 50                                                1985
Senior Vice President, Finance, Anthem, Inc. and Chief Financial
Officer, Anthem Midwest and Anthem Blue Cross and Blue Shield of
Connecticut, health care organization; formerly
Chief Operating Officer, American Health Network, Inc.,
a physician group practice; formerly President, Somerset Financial
Services, a division of The Somerset Group, Inc.; also formerly
Chairman, President and Chief Executive Officer, Mayflower Group,
Inc., diversified transportation services; Director of The Somerset
Group, Inc., an affiliate of the Corporation, and Finishmaster, Incorporated.


<PAGE> 6

<CAPTION>

                DIRECTORS WHOSE TERMS EXPIRE IN 2000

Name, Age, Principal
Occupation(s) and
Business Experience                                                   Director
During Past 5 Years                                                    Since
------------------------------------------------------------------------------
<S>                                                                     <C>
Gerald L. Bepko, Age 58                                                 1988
Vice President for Long-Range Planning of Indiana University and
Chancellor, Indiana University-Purdue University at Indianapolis;
previously Dean and Professor of Law, Indiana University School of
Law, Indianapolis.

Andrew Jacobs, Jr., Age 67                                              1997
Adjunct Professor, Indiana University-Purdue University at
Indianapolis; Attorney; Retired Member, United States Congress.

John W. Wynne, Age 66                                                   1991
Director of Duke Realty Investments, Inc., a real estate investment
trust; previously Chairman, Duke Realty Investments, Inc. and partner,
Duke Associates, real estate development; retired as counsel
(previously partner), Bose McKinney & Evans, attorneys.

</TABLE>


     During 1998, the Boards of Directors of the Corporation and
the Bank each met 12 times.  All directors attended in excess of 75% of
the aggregate of the total number of meetings of the Boards of
Directors of the Corporation and the Bank (considered separately) and
the total number of meetings held by all Corporation and Bank
committees (considered separately) on which he or she served.

     Certain Committees of the Boards of Directors of the
Corporation and the Bank

     Among other committees, the Board of Directors of the
Corporation has an Audit Committee and a Compensation Committee.

     Audit Committee.  The Audit Committee evaluates audit
performance, handles relations with the Corporation's independent
auditors, and evaluates policies and procedures related to internal audit
functions and controls.  The members of the Corporation's Audit
Committee in 1998 were Phyllis W. Minott (Chairperson), H.J. Baker,
Andrew Jacobs, Jr., and John W. Wynne.  The Audit Committee met
three times during 1998.

     Compensation Committee.  The Compensation Committee
reviews and makes recommendations to the Board of Directors with
respect to the compensation of directors, officers, and employees of the
Corporation and the Bank, administers and grants options and other
stock awards under the Corporation's stock option plans, and
administers the Bank's Employees' Stock Purchase Plan.  The members
of the Compensation Committee during 1998 were Gerald L. Bepko
(Chairman), H.J. Baker, and Phyllis W. Minott.  The Compensation
Committee met three times during 1998.


<PAGE> 7

Compensation of Directors

     Directors of the Corporation and the Bank, other than Robert
H. McKinney, Marni McKinney and Owen B. Melton, Jr., received in
1998 a quarterly retainer of $2,150 for the first quarter of 1998 and
$2,500 for the second, third and fourth quarters of 1998, plus $600 per
meeting of the full Board of Directors and per committee meeting
attended prior to April 1, 1998, and $900 per meeting of the full Board
of Directors and per committee meeting attended on or after April 1,
1998.

     Under the First Indiana 1992 Director Stock Option Plan, the
Corporation reserved approximately 221,291 shares of its common
stock for issuance upon the exercise of options to be granted under the
plan.  The plan provides for the issuance of non-qualified options to
purchase 3,746 shares to each outside director of the Corporation on
the date of each annual meeting of shareholders.  The Corporation
granted 3,746 shares to each outside director on April 16, 1998, in
accordance with the plan.  No option is exercisable during the period of
one year following the date of grant, and options granted under the plan
must specify an exercise price of not less than 100% of the market price
of the shares at the date of grant.

     Under the Directors' Deferred Fee Plan, directors of the
Corporation may elect to defer all or any portion of the fees paid for
attendance at a Board of Directors or committee meeting.  The deferred
fees are then contributed to a trust which buys stock with such fees or
invests such fees in an interest-bearing account.  Directors are not
eligible to receive shares or cash held under the plan until they cease to
be a director, officer, or employee of the Corporation.  Amounts
deferred are not taxable to the director until the trust distributes the
cash or stock to the director.  In the event of a change in control of the
Corporation, amounts held under the plan are payable immediately in
one lump sum.

     Directors also may elect to contribute part of their fees to the
Bank's Employees' Stock Purchase Plan.  As with other participants,
the Bank matches a certain portion of such contributions and purchases
the Corporation's common stock on the open market at the prevailing
market price.  The material features of the Stock Purchase Plan are
described under the heading "EXECUTIVE COMPENSATION."

Certain Transactions

     The Bank offers its directors, officers, and employees a loan
plan involving variable-rate mortgages, lines of credit, home equity
loans, credit cards, and various installment loans with a lower interest
rate (not below the Bank's cost of funds) and waiver of loan origination
fees, and fixed-rate mortgage loans with waiver of loan origination fees
only.  Except as described above, all outstanding loans to directors,
officers, and employees have been made in the ordinary course of
business and on substantially the same terms as those prevailing at the
time for comparable transactions with non-affiliated persons.
Management believes that these loans neither involve more than the
normal risk of collectibility nor present other unfavorable features.

     In 1996, the Bank sold its insurance and non-FDIC-insured
investment business to The Somerset Group, Inc.  At the same time, the
two companies entered into a multi-year operating

<PAGE> 8


agreement under which Somerset provides insurance and non-FDIC-insured
investment products and services to the Bank's customers and pays the Bank
a commission on such sales.  During the year ended December 31, 1998,
Somerset paid to the Bank $81,947 in accordance with the terms of the
purchase agreement and the operating agreement.  Robert H. McKinney
and Marni McKinney are officers, directors and substantial shareholders
of Somerset, and H. J. Baker and Michael L. Smith are directors of
Somerset.

            EXECUTIVE COMPENSATION

     The following Report of the Compensation Committee,
     as well as the following Performance Graph, shall not
     be deemed incorporated by reference by any general
     statement incorporating by reference this proxy
     statement into any of the Corporation's filings under
     the Securities Act of 1933, as amended, or the
     Securities Exchange Act of 1934, as amended, except
     to the extent that the Corporation specifically
     incorporates this information by reference, and shall
     not otherwise be deemed filed under such Acts.

Report of the Compensation Committee

     Policy and Performance Measures

     In determining the compensation of executive officers, the
Compensation Committee strives to maintain an appropriate balance
between executive pay and the creation of shareholder value.  Executive
compensation must attract and retain well-qualified officers while at the
same time motivating them to achieve the short-term and long-term
strategic goals of the Corporation.  To achieve this balance, executive
officers receive a competitive base salary and also have the opportunity
to earn bonuses tied to the Corporation's overall performance.

     The Compensation Committee based the 1998 annual salaries
of the Corporation's executive officers on the results of surveys
compiled by an independent consultant.  The compensation consultant
began with an analysis of the compensation of executive officers of
other financial institutions and utilized a regression analysis to conform
the compensation survey data to the Corporation's asset size.  The
consultant derived the weighted average salaries of the executive
officers of the institutions contained in the survey, and then calculated
average (mean) salaries.  The Compensation Committee relied on this
independent calculation of average salaries in setting the salaries of the
Corporation's executive officers.

     In order to more directly tie executive compensation to the
Corporation's overall performance, the Compensation Committee also
administers short-term and long-term bonus plans.  These plans are
designed to increase the total compensation of the Corporation's
executive officers, but only if the Corporation's performance merits
such increases.  The Compensation Committee is guided by the
principle that when certain corporate goals are achieved, the
compensation of the executive officers who contributed to the
Corporation's success should increase accordingly.


<PAGE> 9

     Under the Long-Term Management Performance Incentive Plan
(the "Long-Term Plan"), performance-based compensation will be
awarded at the end of fiscal year 1999 if certain performance targets are
achieved.  Two groups of Corporation and Bank officers have been
selected to participate in the Long-Term Plan for the 1997-1999
performance period.  Group A consists of Robert H. McKinney, Marni
McKinney and Owen B. Melton, Jr.  Group B consists of David L.
Gray, Vice President and Treasurer of the Corporation, Senior Vice
President in charge of the Bank's Financial Management Group and
Chief Financial Officer of the Bank; David A. Lindsey, Senior Vice
President in charge of the Bank's Consumer Finance Group; Merrill E.
Matlock, Senior Vice President in charge of the Bank's Commercial
and Mortgage Banking Group; Timothy J. O'Neill, Senior Vice
President in charge of the Bank's Correspondent Banking Services
Group; and Kenneth L. Turchi, Senior Vice President in charge of the
Bank's Retail Banking Group and Marketing and Strategic Planning
Group.  If interim performance goals for each of 1997, 1998 and 1999
are attained, as well as overall goals for the entire performance period,
Mr. McKinney and Mr. Melton each will be eligible to receive 18,000
shares of the Corporation's common stock, Ms. McKinney will be
eligible to receive 7,500 shares (as well as 6,000 shares granted under
the 1991 Stock Option and Incentive Plan, which carry the same
restrictions as those shares granted under the Long-Term Plan), and
Group B participants will be eligible to receive an amount equal to 50%
of the participant's average annual rate of base salary in effect during
the performance period.  The Compensation Committee of the Board
of Directors has determined that the interim performance goals for 1997
and 1998 were satisfied.  Accordingly, the incentive amounts for 1997-1999
still may be earned, provided the 1999 performance goals and the
overall goals for the entire period are met.

     The Compensation Committee believes that stock ownership by
management and stock-based performance compensation arrangements
are beneficial in aligning management's and shareholders' interests in
the enhancement of shareholder value.  Accordingly, the Bank has
adopted management stock ownership objectives to be attained by
December 31, 2000.  By that time, each officer and director of the Bank
must own Corporation stock with a market value equal to a specified
multiple of such officer's or director's compensation.  These multiples
range from one times base compensation for vice presidents to three
times base compensation for senior vice presidents, and five times base
compensation for the Bank's Chairman, Vice Chairman and President,
as well as for the Bank's Board of Directors.  (Such multiples already
have been attained by Mr. McKinney, Ms. McKinney and Mr. Melton.)
The Board of Directors believes that these stock ownership
requirements will further align the interests of the Bank's management
with the objectives of the Corporation's shareholders.  Accordingly,
each recipient of a bonus under the Long-Term Plan who does not meet
the stock ownership requirements will be required to take at least
one-third of his or her bonus in stock.

     Additionally, the Compensation Committee typically considers
granting stock options to various executive officers, including the
executive officers named in the Summary Compensation Table, every
two years, and awarded such stock options in 1998.  Any compensation
derived from the stock options will be directly related to the
performance of the Corporation's stock.

     To further encourage Bank officers and employees, as well as
directors, to acquire ownership of the Corporation, such persons are
eligible to contribute a portion of their earnings to the Bank's
Employees' Stock Purchase Plan after completing six months of
service.  Such contributions are

<PAGE> 10

used to purchase the Corporation's stock each month at the then-prevailing
market price.  If the Corporation attains a specified after-tax return on
average equity for a calendar year (as determined by the Compensation
Committee), the Bank generally will match participant contributions during the
subsequent Plan Year (as defined in the Plan) at a ratio of one to three.
If such after-tax returns are not achieved for a calendar year, participant
contributions during the subsequent Plan Year will be matched at a ratio
of one to four.  Because the Corporation achieved the performance
objectives specified in the Stock Purchase Plan for the year ended
December 31, 1997, participant contributions for the Plan Year
beginning April 1, 1998 were matched at a ratio of one to three.
Contributions by the Bank to the accounts of the executive officers
named in the Summary Compensation Table (see page 14) during the
calendar year ended December 31, 1998 are set forth in the column
titled "All Other Compensation."   The Corporation also achieved the
performance objectives specified in the Stock Purchase Plan for the year
ended December 31, 1998.  As an additional inducement to the Bank's
employees to increase their ownership of Corporation stock, the
Compensation Committee has elected to match participant contributions
at a ratio of one to two for the 1999 Plan Year only.

     In 1993, the Internal Revenue Code of 1986 (the "Code") was
amended to generally limit to $1 million the amount of compensation
(other than qualified performance-based compensation) that may be
deducted by the Corporation in any year with respect to certain of the
Corporation's executive officers.  While annual salaries and cash
bonuses of the Corporation's executive officers historically have been
structured so that such compensation will be deductible, the
Compensation Committee recognizes that certain executive officers
may receive compensation which cannot be deducted in full by the
Corporation.  Because these situations are most likely to arise as a
result of the vesting of restricted stock under the Long-Term Plan, the
Compensation Committee has attempted to structure the Long-Term
Plan, to the extent possible within the Corporation's compensation
philosophy, so that compensation under the Long-Term Plan will be
performance-based and will not count against the $1 million limit under
the Code.

     CEO Performance

     Mr. McKinney serves as the chief executive officer of the
Corporation, and Mr. Melton serves as the chief executive officer of the
Corporation's principal operating unit, the Bank.  While Mr. McKinney
devotes a major portion of his time to the operations of the Corporation
and the Bank, Mr. Melton devotes all of his time to those operations.

     Like the salaries of the Corporation's other executive officers,
Mr. Melton's and Mr. McKinney's salaries also are derived from the
data compiled by the independent consultant.  Since these two
individuals have the greatest impact on the Corporation's long-term
performance, their salaries are determined based on their achievement
of certain goals relating to the Corporation's performance during the
prior year, such as return on equity, return on assets, credit quality, and
management of operating expenses.

<PAGE> 11

     Because Mr. Melton is the chief executive officer of the
Corporation's sole operating unit and responsible for its day-to-day
activities, the Compensation Committee gives special weight to Mr.
Melton's achievement of these objectives when determining his salary
for the coming year.  In addition, the Compensation Committee meets
separately with Mr. McKinney for his candid evaluation of Mr.
Melton's performance during the preceding year and his achievement
of the objectives described above.  The Corporation's attainment of the
1997 performance goals resulted in an increase in both Mr. McKinney's
and Mr. Melton's salaries for 1998.

           Compensation Committee
          Gerald L. Bepko, Chairman
                 H.J. Baker
              Phyllis W. Minott



[The remainder of this page is intentionally left blank]

<PAGE> 12


Performance Graph

     The following line graph compares the cumulative total
shareholder return on the common stock of the Corporation over the
last five fiscal years with the cumulative total return of the NASDAQ
Stock Market Index and the cumulative total return of the NASDAQ
Bank Index over the same period.



<TABLE>
<CAPTION>


COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*

First Indiana Corporation Common Stock, NASDAQ Stock Market Index,
 and NASDAQ Bank Index**




               First Indiana     Nasdaq Stock     Nasdaq Bank
Period            Corp.          Market Index       Index
------         -------------     ------------     -----------
<S>                <C>               <C>             <C>

Dec-93             $100              $100            $100

Jun-94             $101               $91            $107

Dec-94             $102               $98            $100

Jun-95             $134              $122            $120

Dec-95             $180              $138            $148

Jun-96             $207              $157            $157

Dec-96             $238              $170            $196

Jun-97             $258              $190            $245

Dec-97             $355              $209            $328

Jun-98             $377              $251            $340

Dec-98             $283              $293            $325




*  Assumes that the value of the investment in the Corporation's stock and each
   index was $100 on December 31, 1993 and that all dividends were reinvested.

** The NASDAQ Bank Index contains performance data for banks, savings
   institutions and holding companies.

</TABLE>

% Change for 6 Months Ended 12/31/98:
        First Indiana Corporation -24.8%
        Nasdaq Stock Market Index +16.8%
        Nasdaq Bank Index          -4.5%

% Change for 12 Months Ended 12/31/98:
        First Indiana Corporation -20.2%
        Nasdaq Stock Market Index +40.6%
        Nasdaq Bank Index          -0.9%

<PAGE> 13

Summary

   The following table sets forth the compensation awarded to,
earned by, or paid to the chief executive officer and the four most
highly compensated executive officers other than the chief executive
officer (collectively, the "Named Executive Officers") during the last
three fiscal years.

            Summary Compensation Table



<TABLE>
<CAPTION>
                                                    Summary Compensation Table

                                                                               Long-Term Compensation
                                                                               ----------------------
                                        Annual Compensation                 Awards (1)            Payouts
                                     ----------------------------    ------------------------     -------
Name and                                                              Restricted   Securities
Principal                                             Other Annual   Stock Awards  Underlying                   All Other
Position                     Year    Salary   Bonus   Compensation                 Options (#)  LTIP Payouts   Compensation
---------------------------------------------------------------------------------------------------------------------------
<S>                          <C>    <C>      <C>        <C>       <C>            <C>           <C>          <C>

Robert H. McKinney           1998   $199,231 $ 40,520   $  --     $   --          12,000       $  --        $5,944(2)
Chairman and Chief           1997    210,000   37,800      --      357,000          --            --         6,404
Executive Officer            1996    200,000     --      395,910      --          18,000          --         6,055
of the Corporation;
----------------------------------------------------------------  ----------------------------------------------------
Owen B. Melton, Jr.          1998    295,000   61,395    375,213      --           7,920          --         3,356 (3)
President and Chief          1997    280,000   50,400      --      357,000          --            --         4,550
Operating Officer of         1996    265,000     --      398,818      --          18,000          --         3,905
the Corporation;
President and Chief
Executive Officer of
the Bank
----------------------------------------------------------------  ----------------------------------------------------
David L. Gray                1998   160,000    31,218      --         --           6,000          --         8,863 (4)
Vice President and           1997   152,500    25,940      --         --            --            --         9,065
Treasurer of the Corpor-     1996   145,000      --        --         --           9,000       69,167        8,131
ation; Senior Vice
President-Financial
Management Group,
and Chief Financial Officer
of the Bank
----------------------------------------------------------------  ----------------------------------------------------
Merrill E. Matlock           1998   150,000    31,573      --         --           6,000          --          2,959 (5)
Senior Vice President        1997   119,616    24,349      --         --            --            --          2,325
Commercial and Mortgage      1996   108,000        --      --         --           9,000       49,800         2,065
Banking Group of the Bank
----------------------------------------------------------------  ----------------------------------------------------
David A. Lindsey             1998   145,000    29,789      --         --           6,000          --          8,192 (6)
Senior Vice President-       1997   140,000    23,349      --         --            --            --          8,309
Consumer Finance Group       1996   132,000      --        --         --           9,000       60,417         7,424
of the Bank


1 Adjusted for all stock splits through December 31, 1998.


<PAGE> 14

2 Consists of a $4,261 contribution by the Bank to the Stock Purchase Plan, and a $1,683
  contribution by the Bank to Mr. McKinney's account in the Bank's 401(k) Plan.

3 Consists of a $1,733 contribution by the Bank to the Stock Purchase Plan, and a $1,623
  contribution by the Bank to Mr. Melton's account in the Bank's 401(k) Plan.

4 Consists of a $5,333 contribution by the Bank to the Stock Purchase Plan, the payment by
  the Bank of $1,786 for term life insurance premiums, and a $1,744 contribution by the
  Bank to Mr. Gray's account in the Bank's 401(k) Plan.

5 Consists of a $520 contribution by the Bank to the Stock Purchase Plan, the payment by
  the Bank of $1,681 for term life insurance premiums, and a $758 contribution by the Bank
  to Mr. Matlock's account in the Bank's 401(k) Plan.

6 Consists of a $4,833 contribution by the Bank to the Stock Purchase Plan, the payment by
  the Bank of $1,674 for term life insurance premiums, and a $1,685 contribution by the
  Bank to Mr. Lindsey's account in the Bank's 401(k) Plan.


</TABLE>


                Stock Options

     The following table sets forth certain information with respect
to stock options granted to the Named Executive Officers during the
last fiscal year.  The Potential Realizable Value columns on the right of
this table assume that the value of the underlying stock will appreciate
each year at the specified percentages.


<TABLE>
<CAPTION>


     OPTION GRANTS IN THE LAST FISCAL YEAR

                                                                                      Potential Realizable Value at
                                                                                      Assumed Annual Rates of Stock
                               Individual Grants                                      Price Appreciation for Option
                                                                                               Term

                                 % of Total
                                  Options/
                  Number of         SARs
                 Securities      Granted to
                 Underlying       Employees
                Options/SARs       Fiscal     Exercise or Base
Name               Granted          Year       Price ($/Share)   Expiration Date       0%        5%        10%
----------------------------------------------------------------------------------------------------------------------
<C>                 <C>            <C>          <C>               <C>                <C>      <C>       <C>
Robert H. McKinney  12,000         9.7%         $24.38            01-22-08           $00.00   $183,960  $466,320

Owen B. Melton, Jr. 12,000         9.7%          24.38            01-22-08            00.00    183,960   466,320

David L. Gray        6,000         4.8%          24.38            01-22-08            00.00     91,980   233,160

Merrill E. Matlock   6,000         4.8%          24.38            01-22-08            00.00     91,980   233,160

David A. Lindsey     6,000         4.8%          24.38            01-22-08            00.00     91,980   233,160

</TABLE>


<PAGE> 15

     The following table sets forth on an aggregate basis each
exercise of stock options during fiscal year 1998 by each of the Named
Executive Officers and the 1998 year-end value of the unexercised
options of each such executive officer.



<TABLE>
<CAPTION>

                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                                    AND
                       FISCAL YEAR-END OPTION VALUES

                                                    Number of Securities Underlying       Value of Unexercised
                                                     Unexercised Options at FY-End        In-the-Money Options
                                                                                               at FY-End
                                                     -------------------------------   ---------------------------
                       Shares
                       Acquired on
Name                   Exercise (#)    Value Realized   Exercisable  Unexercisable     Exercisable    Unexercisable
-------------------------------------------------------------------------------------------------------------------
<S>                     <C>              <C>              <C>            <C>             <C>               <C>
Robert H. McKinney        --             $   --           64,119         12,000          $749,165          $  -- (1)
Owen B. Melton, Jr.      15,000           375,213         47,244         12,000           485,943             -- (1)
David L. Gray             --                 --           34,870          6,000           420,314             -- (1)
Merrill E. Matlock        --                 --           20,022          6,000           215,733             -- (1)
David A. Lindsey         12,223           245,942         24,447          6,000           295,599             -- (1)

</TABLE>


1    On December 31, 1998, the exercise price of the unexercisable options
     exceeded the market price.

Pension Plans

     The following table sets forth, in specified compensation and
years of service classifications, the estimated annual benefits payable
upon retirement at age 65 under the Bank's non-contributory, qualified
defined benefit pension plan (the "Qualified Plan"), as supplemented by
the supplemental benefit plan adopted by the Bank on January 17, 1992
(the "Supplemental Plan") (the Qualified Plan and the Supplemental
Plan are collectively referred to as the "Plans").  While the table shows
the annual benefit payable, participants may elect to receive the present
value of the entire benefit in one lump sum.

[The Pension Plan Table is set forth on page 17.]

<PAGE> 16



<TABLE>
<CAPTION>
                             PENSION PLAN TABLE 1


Covered         10 Years' Benefit  20 Years' Benefit  30 Years' Benefit  40 Years' Benefit
Compensation         Service            Service            Service            Service
------------------------------------------------------------------------------------------
 <C>              <C>               <C>                 <C>                  <C>

 $100,000         $ 18,347          $ 36,694            $ 55,041             $  54,215
  120,000           22,347            44,694              67,041                66,215
  140,000           26,347            52,694              79,041                78,215
  160,000           30,347            60,694              91,041                90,215
  180,000           34,347            68,694             103,041               102,215
  200,000           38,347            76,694             115,041               114,215
  220,000           42,347            84,694             127,041               126,215
  240,000           46,347            92,694             139,041               138,215
  260,000           50,347           100,694             151,041               150,215
  280,000           54,347           108,694             163,041               162,215
  300,000           58,347           116,694             175,041               174,215
  320,000           62,347           124,694             187,041               186,215
  340,000           66,347           132,694             199,041               198,215
  360,000           70,347           140,694             211,041               210,215
  380,000           74,347           148,694             223,041               222,215
  400,000           78,347           156,694             235,041               234,215
  500,000           98,347           196,694             295,041               294,215
  600,000          118,347           236,694             355,041               354,215
  700,000          138,347           276,694             415,041               414,215
  800,000          158,347           316,694             475,041               474,215
------------------------------------------------------------------------------------------
</TABLE>


1 Amounts shown are based on an assumed Social Security integration base of
  $33,060 and are not subject to any deduction for Social Security or
  other offset amounts.


     The annual retirement benefit displayed in the Pension Plan
Table is the product of (i) the participant's number of years of credited
benefit service, multiplied by (ii) the sum of 1.5% of that portion of the
participant's covered compensation that does not exceed the Social
Security integration base for the participant plus 2% of the participant's
covered compensation that exceeds such integration base.
Compensation covered by the Plans is the sum of the average of a
participant's annualized rate of base salary (as reported in the Salary
column of the Summary Compensation Table) for the five consecutive
years of employment which produce the highest such average, plus the
annual average of all bonuses (including both the Bonus and the LTIP
Payouts columns as reported in the Summary Compensation Table, and
the market value on the date of vesting of any restricted stock awards
made pursuant to the Long-Term Plan) paid to the participant for the
three years preceding the participant's retirement.

     As of January 1, 1999, the number of years of credited benefit
service and the compensation covered by the Plans (based on average
annual salaries for 1994-1998 and average annual bonuses for
1996-1998) for each of the Named Executive Officers were as follows:
Robert H. McKinney, 46 years - $420,954; Owen B. Melton, Jr., 20
years - $510,100; David L. Gray, 17 years - $224,319; Merrill E.
Matlock, 14 years - $141,174; and David A. Lindsey, 16 years -
$196,158.

<PAGE> 17

Employment Agreements and Other Arrangements

     Special retirement benefits are provided under the
Supplemental Plan to Mr. McKinney.  His normal retirement benefit
under the Supplemental Plan is payable for life and 15 years certain.
The monthly amount of his normal benefit is the higher of two
calculated amounts.  The first is his monthly retirement benefit that
would be payable to him under the Supplemental Plan if such benefit
were determined in the normal way and were payable for life only.  The
second is a monthly retirement benefit equal to the excess of (i) 80% of
his adjusted monthly compensation over (ii) the sum of (a) his monthly
retirement benefit under the Qualified Plan (determined as though such
benefit were payable in the form of a straight-life annuity) plus (b) his
primary Social Security benefit payable at age 65.  For purposes of the
foregoing, Mr. McKinney's adjusted monthly compensation is
one-twelfth of the sum of (i) his highest annual rate of salary from the
Corporation plus (ii) the greater of (a) 37.5% of his highest annual rate
of salary from the Corporation or (b) the annual average of all bonuses
paid to him by the Corporation for the three years next preceding his
retirement.  In the last fiscal year, Mr. McKinney received $134,892 in
payments under the Qualified Plan.

     Special death benefits are provided under the Supplemental
Plan to Mr. McKinney and Mr. Melton.  The death benefit provided to
Mr. McKinney equals three times his highest annual rate of salary,
grossed up for income taxes at the highest applicable marginal rate in
effect at the time of his death, and is payable whether he dies before or
after separation from service and without regard to when he separates
from service.  The death benefit provided to Mr. Melton equals three
times his highest annual rate of salary, grossed up for income taxes at
the highest applicable marginal rate in effect at the time of his death and
is payable whether he dies before or after separation from service and
without regard to when he separates from service.

     Messrs. McKinney and Melton are parties to agreements with
the Corporation, and Messrs. Gray, Lindsey and Matlock are parties to
agreements with the Bank, which agreements provide for certain
benefits if the executive officer's employment is terminated following
a change in control of the Corporation (as defined in the applicable
agreement), other than a termination with cause (as defined in the
applicable agreement) or a termination by the officer without good
reason (as defined in the applicable agreement).  In such case, the
executive officer would be entitled to a severance payment equal to that
portion of his annual base salary (calculated as 12 times the highest
monthly base salary paid to the executive officer during the 12 months
prior to the change in control) not already paid, plus any compensation
previously deferred by the executive officer, accrued vacation pay and
a lump-sum pension supplement.  Certain adjustments may be made to
the severance payments made in connection with the change in control
if such payments would be subject to the excise tax imposed on "excess
parachute payments" under Section 4999 of the Internal Revenue Code
of 1986, as amended.


<PAGE> 18


            APPOINTMENT OF AUDITORS

     The Corporation's financial statements for the year ended
December 31, 1998 were audited by KPMG Peat Marwick LLP ("Peat
Marwick").  The Corporation has selected Peat Marwick as its
independent auditors for the fiscal year ending December 31, 1999.
Representatives of Peat Marwick are expected to attend the annual
meeting, will have the opportunity to make a statement if they desire to
do so, and will be available to respond to appropriate questions.

      SECTION 16(a) BENEFICIAL OWNERSHIP
             REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Corporation's officers and directors, and persons
who own more than 10% of the Corporation's common stock, to file
reports of ownership and changes in ownership with the Securities and
Exchange Commission.  Officers, directors and greater than 10%
shareholders (the "Reporting Persons") are required by Securities and
Exchange Commission regulations to furnish the Corporation with
copies of all Section 16(a) forms they file.

     Based solely on a review of the copies of such forms furnished
to the Corporation, the Corporation believes that during 1998 all
Reporting Persons complied with the filing requirements of Section
16(a), except that purchases of the Corporation's Common Stock by
The Somerset Group, Inc., of which Mr. McKinney and Ms. McKinney
are beneficial owners (see Note 7 to the Stock Ownership Table on
page 3), were not timely reported by Mr. McKinney and Ms.
McKinney, but the same were reported in the year-end report.

                 ANNUAL REPORT

     A copy of the Corporation's Annual Report for the year ended
December 31, 1998 has been provided to all shareholders as of the
record date.  The Annual Report is not to be considered as proxy
solicitation material.

                 OTHER MATTERS

     The Board of Directors knows of no other matters to be
brought before the Annual Meeting.  However, if other matters should
come before the meeting, it is the intention of each person named in the
proxy to vote such proxy in accordance with his or her judgment on
such matters.

          EXPENSES OF SOLICITATION

     The entire expense of preparing, assembling, printing and
mailing the proxy form and the material used in the solicitation of
proxies will be paid by the Corporation.  The Corporation does not
expect that the solicitation will be made by specially engaged employees
or paid solicitors.  Although the Corporation might use such employees
or solicitors if it deems them necessary, no


<PAGE> 19



arrangements or contracts have been made with any such employees or solicitors
as of the date of this statement.  In addition to the use of the mails,
solicitation may be made by telephone, telegraph, cable or personal interview.
The Corporation will request record holders of shares beneficially owned by
others to forward this Proxy Statement and related materials to the
beneficial owners of such shares, and will reimburse such record holders
for their reasonable expenses incurred in doing so.

     IT IS IMPORTANT THAT PROXIES BE RETURNED
PROMPTLY.  Whether or not you attend the meeting, you are urged
to execute and return the proxy.

                                 For the Board of Directors,

                                 /s/Robert H. McKinney


                                 Robert H. McKinney
                                 Chairman

March 11, 1999


<PAGE> 20






    [CAMERA-READY LOGO OF THE BANK]









Principal Subsidiary of First Indiana Corporation

<PAGE>