SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549
                            FORM 10-K
(Mark One)
 x Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
  For the fiscal year ended December 31, 1997 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            (I.R.S.
or Organization)                                 Employer Identification No.)
Organization)
500 Washington Street
Columbus, Indiana                                        47201
(Address of Principal Executive Offices)               (Zip Code)
                         (812) 376-1020
      (Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:
Common Shares
                                (Title of Class)

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
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x    The aggregate market value of the voting stock
held by non-affiliates of the Registrant was $253,131,710.94 as
of March 12, 1998.  As of March 12, 1998, there were outstanding
10,903,149 common shares of the Registrant.

DOCUMENTS INCORPORATED BY REFERENCE

Selected Portions of                         Part of Form 10-K Into Which
the Following Documents                      Incorporated

Annual Report to Shareholders                     Part I, Part II
for the year ended December 31, 1997
Definitive Proxy Statement for                         Part III
Annual Meeting of Shareholders
to be held April 30, 1998

Exhibit Index on Pages 14 through 18                   Page 1

                Total Pages in This Filing:  124
                   FORM 10-K TABLE OF CONTENTS

Part I

     Item 1 - Business                                          3
     Item 2 - Properties                                        7
     Item 3 - Legal Proceedings                                 8
     Item 4 - Submission of Matters to a Vote of Security
               Holders                                          9

Part II

     Item 5 - Market for Registrant's Common Equity and
           Related Security Holder Matters                      9
     Item 6 - Selected Financial Data                          10
     Item 7 - Management's Discussion and Analysis of
           Financial Condition and Results of Operations       10
     Item 8 - Financial Statements and Supplementary Data      12
     Item 9 - Changes in and Disagreements with
           Accountants on Accounting and Financial Disclosure  13

Part III

     Item 10 - Directors and Executive Officers of the
               Registrant                                      13
     Item 11 - Executive Compensation                          13
     Item 12 - Security Ownership of Certain Beneficial
            Owners and Management                              13
     Item 13 - Certain Relationships and Related Transactions  13

Part IV

     Item 14 - Exhibits, Financial Statement Schedules
                    and Reports on Form 8-K                    14

Signatures                                                     19
                             PART I

Item 1    Business

General

Irwin Financial Corporation (the "Registrant") is a diversified
financial services company organized as an Indiana bank holding
company in May, 1972.  The Registrant's principal subsidiaries
are Irwin Mortgage Corporation ("Irwin Mortgage", formerly Inland
Mortgage Corporation), a mortgage banking company; Irwin Union
Bank and Trust Company ("Irwin Union Bank"), a commercial bank;
Irwin Equipment Finance Corp. (the new name of the parent company
of Affiliated Capital Corp.) ("Irwin Equipment"), an equipment
leasing company; Irwin Home Equity Corporation ("Home Equity"), a
consumer home equity lending company; White River Capital
Corporation, a small venture capital company; and Irwin Union
Credit Insurance Corporation, a credit insurance company.
Registrant is also the sole equity shareholder of IFC Capital
Trust I ("Capital Trust"), a special purpose trust.

The Registrant's 1997 Annual Report section on "Management's
Discussion and Analysis of Results of Operations and Financial
Condition" is included with this filing as Exhibit13(a).  Page 53
of the Report states that Irwin Equipment Finance Corp. was
previously Affiliated Capital Corp., and page 55 of the Report
lists the Irwin Equipment Finance Corp. Senior Officers.  This
information is incorrect.  Affiliated Capital Corp. did not
change its name to Irwin Equipment Finance Corp.; the parent
company of Affiliated Capital Corp. (formerly Irwin Union Leasing
Corporation) changed its name to Irwin Equipment Finance Corp.
The Officers listed on page 55 are those of Affiliated Capital
Corp.; not Irwin Equipment Finance Corp., with the exception of
Matthew Colasanti, who is President of both Irwin Equipment
Finance Corp. and Affiliated Capital Corp.  The Annual Report had
already been published when the error was discovered.  When
referring to the leasing line of business, the Registrant now
uses the name "Irwin Equipment Finance Corp." to include the
activities of Affiliated Capital Corp.

Business of Subsidiaries

Irwin Mortgage originates, purchases and services conventional or
government agency backed (i.e., FHA and VA) residential mortgage
loans.  Most mortgages are either insured by an agency of the
federal government, or in the case of a conventional mortgage,
meet requirements for resale to the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation. Irwin
Mortgage also originates a small amount of commercial mortgages.

Irwin Mortgage sells mortgage loans to institutional and private
investors but may retain servicing rights to mortgage loans that
it originates or purchases from correspondents.  Irwin Mortgage
collects and accounts for the monthly payments on each loan
serviced and pays the real estate taxes and insurance necessary
to protect the integrity of the mortgage lien, for which it
receives a servicing fee.  Irwin Mortgage operates 95 production
and satellite offices in 28 states.  During 1997, Irwin Mortgage
established offices in San Diego, California; Pueblo, Colorado;
Farmington, Connecticut; Columbus, and Macon, Georgia; New
Orleans, Louisiana; Braintree, Massachusetts; Wilmington and
Burlington, North Carolina; and Columbia, South Carolina.  During
1997, Irwin Mortgage closed offices in Albuquerque, New Mexico;
Clackamas, Oregon; Denver and Fort Collins, Colorado; Hayes and
Woodbridge, Virginia; Las Vegas, Nevada; LaPorte, Indiana;
Montclair (Oakland), Pasadena, Santa Rosa, and West Lake Village,
California; North Houston and Plano, Texas; Tempe, Arizona;
Seattle/Kirkland and Snohomish, Washington; Crofton and Solomons,
Maryland.

Irwin Mortgage entered the non-prime first mortgage lending
market in 1997.  This market is composed of borrowers who do not
qualify under the underwriting guidelines established by the
government-sponsored secondary market agencies for conforming
first mortgages.  Irwin Mortgage opened a non-prime lending
office in Richmond, Virginia late in the fourth quarter of 1996
and began originating non-prime first mortgages in 1997.

Irwin Mortgage and the Registrant have, for several years, been
exploring opportunities to test the development of mortgage
banking operations in markets outside the United States.  In
December, 1996, Irwin Mortgage began taking applications from U.
S. Borrowers for dollar denominated loans to be secured by
residential real estate located in Mexico.  The Registrant will
continue research of international opportunities to which the
Registrant might apply its knowledge and competencies.

Irwin Union Bank, organized in 1871, is a full service commercial
bank offering a wide variety of services to individual, business,
institutional, and governmental customers.  Irwin Union Bank's
services include personal and commercial checking accounts,
savings and time deposit accounts, personal and business loans,
credit card services, money transfer, financial counseling,
property and casualty insurance agency services, trust services,
securities brokerage and safe deposit facilities.  Irwin Union
Bank is the largest of nine financial institutions operating in
Bartholomew County, Indiana, with eight locations throughout the
county.  Irwin Union Bank also has branch facilities in Seymour
(Jackson County - 2), Shelbyville (Shelby County), Bloomington
(Monroe County), Franklin and Greenwood (Johnson County - 2),
Carmel (Hamilton County), and Greensburg (Decatur County),
Indiana.  On August 13, 1997, Irwin Union Bank became a member of
the Federal Reserve System.  On August 29, 1997 Irwin Union
Securities, formerly the brokerage Subsidiary of Irwin Union
Investor Services, Inc., became a Subsidiary of Irwin Union Bank.
As of February 1, 1998, Irwin Union Insurance, Inc., an insurance
agency subsidiary of Irwin Union Bank, purchased substantially
all the property and casualty assets of Maximum Benefits &
Protection Co. Inc., an Indiana corporation.

Irwin Equipment, located in Northbrook, Illinois, is the parent
company of Affiliated Capital Corp., which is engaged in the
small-ticket equipment leasing and commercial lending business.
Irwin Equipment  offers non-recourse, non-operating, full payout
leases and commercial lines of credit to physicians, medical
clinics, veterinarians, dentists and chiropractors.

Home Equity was formed in 1994 and is located in San Ramon,
California.  Home Equity originates and services home equity
loans and lines of credit.  The loans are marketed through direct
mail and telemarketing in twenty-two states.  At year end, Home
Equity began offering a first mortgage refinance program in
selected states.

White River Capital Corporation ("White River"), a venture
capital company, is located in Columbus, Indiana and currently
holds one investment but has suspended making new investments.

Irwin Union Credit Insurance Corporation is located in Columbus,
Indiana and provides credit life insurance to consumer loan
customers of Irwin Union Bank.

IFC Capital Trust I ("Capital Trust"), is a statutory business
trust created under the laws of Delaware.  The Company owns all
of the Common Securities of Capital Trust.  Capital Trust exists
for the purpose of issuing the Preferred Securities and investing
the proceeds thereof in an equivalent amount of 9.25%
Subordinated Debentures of the Company.  The Subordinated
Debentures will mature on March 31, 2027, which date may be (i)
shortened to a date not earlier than March 31, 2002, or (ii)
extended to a date not later than March 31, 2046, in each case if
certain conditions are met (including, in the case of shortening
the Stated Maturity, the Company having received prior approval
of the Board of Governors of the Federal Reserve System ("Federal
Reserve") to do so if then required under applicable capital
guidelines or policies of the Federal Reserve).  The Preferred
Securities will have a preference under certain circumstances
with respect to cash distributions and  amounts payable on
liquidation, redemption or otherwise over the Common Securities.
Holders of Preferred Securities are entitled to receive
preferential cumulative cash distributions, at the annual rate of
9.25% of the liquidation amount of $25 per Preferred Security
accruing from the date of original issuance and payable quarterly
in arrears on the last day of March, June, September and December
of each year, commencing March 31, 1997.

No single part of the business of the Registrant is dependent
upon a single customer or upon a very few customers and the loss
of any one customer would not have a materially adverse effect
upon the business of the Registrant.  Irwin Mortgage is
registered as a Foreign Financial Institution in Mexico.

Competition

Irwin Mortgage originates and services residential first mortgage
loans from 95 production and satellite offices in Arizona,
California, Colorado, Connecticut, Delaware, Florida, Georgia,
Hawaii, Illinois, Indiana, Kentucky, Louisiana, Massachusetts,
Minnesota, Missouri,  New Jersey, North Carolina, Ohio, Oklahoma,
Oregon, Pennsylvania, South Carolina, Texas, Utah, Washington,
Wisconsin, and the Washington, D.C. metropolitan area, including
offices in Maryland and Virginia.  In each of these locations,
competition for mortgage loans is vigorous, coming from other
national, regional and local mortgage banking companies as well
as commercial banks, savings banks, and savings & loan
associations.  Irwin Mortgage purchases mortgage loans from
correspondents in these and other states as well.

The commercial banking business for Irwin Union Bank in the
Bartholomew, Decatur, Hamilton, Jackson, Johnson, Monroe and
Shelby County areas is very competitive.  Within these counties,
in addition to the commercial banks, there are a number of
savings banks, savings & loan associations, and credit unions
competing for deposits and loans.  Irwin Union Bank also competes
for the provision of banking services with banks located
elsewhere in Indiana, primarily in south central Indiana, and
with a number of nonbank companies located throughout the United
States, including insurance companies, retailers, brokerage
firms, companies offering money market accounts, and national
credit card companies.  As of December 31, 1997, Irwin Union Bank
ranked first among commercial banking and savings bank
institutions on the basis of Bartholomew County deposits.  In
addition to the above mentioned counties, Irwin Union Bank
derives its business from several other counties in south central
Indiana.

Irwin Equipment provides, primarily, medical equipment leasing
and commercial credit services to medical clinics, small groups
of physicians, individual practitioners, chiropractors, dentists,
and veterinarians.  Irwin Equipment's primary competitors include
other equipment leasing companies with operations that are
national in scope, banks, and other financial institutions which
offer commercial credit products.  Such competitors may be
headquartered anywhere in the country.

Home Equity originates and services home equity loans and lines
of credit for private home owners in several states.  Home
Equity's primary competitors include banks, thrifts, credit
unions and other home equity lenders with operations that are
either national, regional or local in scope.  Such competitors
may be headquartered anywhere in the country.

Supervision and Regulation

The Registrant is a bank holding company within the meaning of
the Bank Holding Company Act of 1956, as amended, and is
registered with, regulated and examined by the Board of Governors
of the Federal Reserve System (the "Board of Governors").

Subject to certain exceptions, a bank holding company is
prohibited from acquiring direct or indirect ownership or control
of more than five percent of the voting shares of any company
which is not a bank and from engaging directly or indirectly in
activities unrelated to banking or managing or controlling banks.
One exception to this prohibition permits activities by a bank
holding company or its subsidiary which the Board of Governors
determines to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto.  The Board
of Governors has adopted regulations prescribing those activities
it presently regards as permissible which include the activities
engaged in by Registrant and its subsidiaries.

The Bank Holding Company Act, the Federal Reserve Act, and the
Federal Deposit Insurance Act also subject bank holding companies
and their subsidiaries to certain restrictions on extensions of
credit by subsidiary banks to the bank holding company or any of
its subsidiaries, or investments in the securities thereof, and
on the taking of such securities as collateral for loans to any
borrower.  Further, the Bank Holding Company Act and the
regulations of the Board of Governors thereunder, prohibit a bank
holding company and its subsidiaries from engaging in certain tie-
in arrangements in connection with any extension of credit, sale
or lease of any property or furnishing of services.

In addition to the regulation of the Registrant, Irwin Union Bank
is subject to extensive regulation and periodic examination,
principally by the Indiana Department of Financial Institutions
and the Federal Reserve Bank of Chicago.  Irwin Mortgage is
subject to audit and examination oversight by the federal
department of Housing and Urban Development as well as the
Government National Mortgage Association, the Federal National
Mortgage Association, and the Federal Home Loan Mortgage
Corporation.  The insurance subsidiary of the Registrant and the
insurance subsidiary of Irwin Union Bank are dependent upon state
licenses and upon franchise agreements with private corporations
for their continued existence.  The home equity subsidiary of the
Registrant is also dependent upon state licenses for its ability
to extend credit in certain states.  Finally, the securities
brokerage activities of Irwin Union Bank's registered
broker/dealer are regulated and examined by the Securities and
Exchange Commission, the Indiana Securities Division, the
securities divisions of the various states in which Irwin Union
Securities, Inc. operates, and the National Association of
Securities Dealers.

Employees and Labor Relations

As of December 31, 1997, the Registrant and its subsidiaries had
a total of 1,969 employees, including full-time and part-time
employees.  The Registrant continues a commitment of equal
employment opportunity for all job applicants and staff members,
and management regards its relations with its employees as
satisfactory.

Further Information

The following information responsive to Guide 3 promulgated under
the Securities Exchange Act of 1934, is contained in the
"Management's Discussion and Analysis of Financial Conditions and
Results of Operations" section of the Annual Report to
Shareholders for the year ending December 31, 1997 and is
incorporated herein by reference:  "Daily Average Consolidated
Balance Sheet, Interest Rates and Interest Differential" (p. 74),
"Investment Securities" (p. 60), "Short-Term Borrowings" (p. 60),
"Summary of Net Interest Income Changes" (p. 57), "Deposits" (p.
60), "Loans and Leases" (p. 59), "Five-Year Selected Financial
Data" (p. 28), and the discussion and tabular information under
the caption "Credit Risk" on pages 64 to 68 of "Management's
Discussion and Analysis of Financial Conditions and Results of
Operations".

Executive Officers of the Registrant

The Executive Officers of the Registrant are elected annually by
the Board of Directors and serve for a term of one year or until
their successors are elected and qualified.  There are no
arrangements or understandings between any Executive Officer and
any other person pursuant to which the Officer was or is to be
selected as an Officer.

Robert P. Albert (47) was President of Affiliated Capital Corp.
from February 28, 1990 to March 3, 1998.

Matthew Colasanti (57) is President of Irwin Equipment Finance
Corp. and Affiliated Capital Corp. since March 3, 1998.  From
January through March 2, 1998, Mr. Colasanti was a consultant to
Affiliated Capital Corp.  From 1992 to 1995, Mr. Colasanti was
President of Concord Commercial Corp. a North American subsidiary
of Hong Kong Shanghai Bank.  Mr. Colasanti has more than thirty
years of equipment finance and leasing expertise and leadership,
ranging in firm size from large organizations to start-up
companies, and from work-outs to high growth.

Claude E. Davis (37) is President of Irwin Union Bank since
January 2, 1996.  He has been an officer since 1988.

Elena Delgado (42) is President of Irwin Home Equity Corporation
since September 4, 1994.  From March through August, 1994, Ms.
Delgado was an independent consultant to Irwin Financial
Corporation.  From 1990 to 1993, Ms. Delgado was Vice President,
Second Mortgage Lending of First Deposit Corporation.

Gregory F. Ehlinger (35) is Vice President and Treasurer of the
Registrant since August of 1992.

Jose M. Gonzalez (39) is Vice President and Director of Internal
Audit of the Registrant since October of 1995.  From 1993 to
1995, Mr. Gonzalez was Senior Vice President, Audit & Compliance
Services of Premier Bank and Trust.  From 1991 to 1993, Mr.
Gonzalez was Vice President and Senior Compliance Officer at
First Empire State Corporation.

Theresa L. Hall (45) is Vice President - Human Resources of the
Registrant, since 1988.  She has been an officer since 1980.

Rick L. McGuire, (45) is President of Irwin Mortgage since
January 1, 1996.  He has been an officer since 1978.

William I. Miller (41) is Chairman of the Board, since 1990, and
has been a Director of the Registrant since 1985.

Ellen Z. Mufson (49) is Vice President - Legal of the Registrant,
since September, 1997.  She was Vice President - Legal Counsel of
Irwin Union Bank and Trust Company from July, 1996 through
August, 1997; Corporate Counsel of Irwin Financial Corporation
from January, 1995 through June, 1996; Deputy Director/General
Counsel of the Indiana Development Finance Authority from March,
1992 through November, 1994.

John A. Nash (60) is Chairman of the Executive Committee, since
1990, and President, since 1985, of the Registrant.  He has been
an officer and Director of the Registrant since 1972.

Michael F. Ryan (52) is Vice President - Community Development of
the Registrant since January 2, 1996.  He was President of Irwin
Union Bank from 1981 - 1995.  He has been an officer since 1976.

Matthew F. Souza (41) is Vice President and Secretary of the
Registrant.  He has been an officer since 1985.

Marie C. Strack (35) is Vice President and Controller of the
Registrant since May of 1992.

Thomas D. Washburn (51) is Senior Vice President and Chief
Financial Officer, since 1980, of the Registrant.  He has been an
officer since 1976.

Item 2.  Properties

The location and general character of the materially important
physical properties of the Registrant and its subsidiaries are as
follows: The main office of Irwin Mortgage, where administrative
and servicing activities are centered, is located at 9265
Counselor's Row, Indianapolis, Indiana and a servicing facility
is located at 11800 Exit Five Parkway, Indianapolis, Indiana.
Irwin Mortgage also has loan production and satellite offices
located in Flagstaff, Phoenix (2), Mesa, Scottsdale, and Tucson,
Arizona; Antioch, Bakersfield, Concord, Covina, Fresno, Laguna
Hills, Morgan Hill, Richmond, Sacramento, Salinas, San Diego,
Temecula, Ventura, Visalia, Walnut Creek,  Woodland, Yuba City,
and Yreka, California; Castle Rock, Colorado Springs, Denver,
Englewood, Woodland Park, and Pueblo, Colorado; Farmington,
Connecticut; Newark, Delaware; Clearwater and Orlando/Longwood,
Florida; Atlanta, Columbus, and Macon, Georgia; Aiea, Honolulu,
Kailua, and Maui, Hawaii; Chicago and Decatur, Illinois;
Indianapolis (5), Anderson, Ft. Wayne, Kokomo, Lafayette, South
Bend, and Warsaw, Indiana; Lexington and Louisville, Kentucky;
Baton Rouge and New Orleans, Louisiana; Columbia, Rockville, and
Towson, Maryland; Braintree, Massachusetts; Arden Hills,
Burnsville, and Minneapolis, Minnesota; St. Louis, Missouri;
Marlton, New Jersey; Cary, Charlotte, Greensboro, Raleigh,
Wilmington, and Burlington, North Carolina; Dayton and
Independence/Cleveland, Ohio; Tulsa, Oklahoma; Beaverton and Lake
Oswego, Oregon; Wyomissing, formerly West Chester, Pennsylvania;
Columbia, South Carolina; Austin, Corpus Christi, Dallas, El
Paso, and Houston, Texas; Salt Lake City, Utah; Fredericksburg,
Glen Allen, Richmond, Springfield, and Suffolk, Virginia;
Bellevue, Battleground, Everett, and Mount Lake Terrace,
Washington; and Madison, Wisconsin.  All offices occupied by
Irwin Mortgage are leased.

The main office of Irwin Union Bank is located in four connected
buildings all at 500 and 520 Washington Street, Columbus,
Indiana.  These buildings and one branch building are owned in
fee by Irwin Union Realty Corporation, a wholly-owned subsidiary
of Irwin Union Bank, and are leased by Irwin Union Bank.  Irwin
Union Bank owns in fee three of its other fifteen relatively
small branch banking premises.  The other branch offices are
leased.  None of the properties owned by Irwin Union Bank are
subject to any major encumbrances.

The main office of Irwin Equipment, where administrative and
lease servicing activities are centered, is located at 707 Skokie
Boulevard, Northbrook, Illinois.  This office location is leased.

The main office of Irwin Home Equity is located at 12677 Alcosta
Blvd., Suite 500, San Ramon, California.  This office location is
leased.

The main offices of the Registrant, White River Capital
Corporation and Irwin Union Credit Insurance Corporation are
located at 500 Washington Street, Columbus, Indiana in space
leased from Irwin Union Bank.

Item 3.  Legal Proceedings

As a part of the ordinary course of business, the Registrant and
its subsidiary companies are parties to litigation involving
claims to the ownership of funds in particular accounts, the
collection of delinquent accounts, challenges to security
interests in collateral, and foreclosure interests, that is
incidental to their regular business activities.  In addition to
such claims, the Registrant was involved, as of December 31,
1997, in the following actions:

Basmoen, et al. v. Inland Mortgage Corporation.  As of December
31, 1997, Irwin Mortgage was a defendant in a class action
lawsuit initiated in the state of Minnesota in October, 1995.
The case is currently pending before a federal Multidistrict
Litigation Panel in Chicago, Illinois.  Plaintiffs allege that
they represent a nationwide class of persons who have or had
mortgage escrow accounts allegedly improperly managed by Irwin
Mortgage.  This case is among a series of class action cases
commenced against a number of mortgage servicers in several
states challenging the practices used in connection with the
administration of escrow accounts for single family residential
mortgages.  In January, 1997, the court denied a motion by the
plaintiff for class certification; however, in September, 1997,
the court granted a motion by the plaintiff to add a class
representative and denied a motion by Irwin Mortgage for summary
judgment.  In December, 1997, Irwin Mortgage filed a supplemental
memorandum in opposition to the plaintiffs' motion for class
certification to which the plaintiffs replied.  The court has not
yet ruled on class certification.  At this stage of the
litigation, it is impossible to predict the likelihood of an
unfavorable outcome or to establish the possible extent or amount
of liability or potential loss, if any, to which Irwin Mortgage
might be exposed in this or similar escrow individual or class
action cases brought in the future.

Howell, et al. v. Inland Mortgage Corporation.  As of December
31, 1997, Irwin Mortgage was a defendant to a class action
lawsuit initiated in the state of Indiana in January, 1995.  The
case is currently pending before the Marion County Superior
Court.  Plaintiffs allege that lenders do not have the right to
require borrowers to pay premiums for private mortgage insurance.
A decision has not yet been rendered with regard to class
certification.  Similar suits have been filed in Indianapolis and
other jurisdictions against mortgage lenders.  Irwin Mortgage
filed a motion for summary judgment in this case, which was
denied.  Irwin Mortgage is aware that the Indiana court has ruled
against two other lenders on their respective dismissal and
summary judgment motions.  One of these lenders has been
permitted to appeal the decision against it to the Indiana Court
of Appeals.  Because the issues in the case before the Indiana
Court of Appeals are very much like those in the Irwin Mortgage
case, a decision by the Court of Appeals will have a significant
effect on the Irwin Mortgage case.  At present, however, it is
impossible to predict the likelihood of an unfavorable outcome or
to establish the possible extent or amount of liability loss
exposure, if any, to which Irwin Mortgage might be exposed.

Culpepper, et al. v. Inland Mortgage Corporation.  As of December
31, 1997, Irwin Mortgage was a defendant to a class action
lawsuit initiated in the state of Alabama in April, 1996.  This
action is one of a breed of "RESPA Section 8" class actions that
have been filed against several mortgage lenders challenging the
legality of the payment of broker fees by mortgage lenders to
mortgage brokers.  On January 9, 1998, the Court of Appeals for
the Eleventh Circuit reversed the district court's grant of
summary judgment in favor of Irwin Mortgage and vacated the
district court's dismissal of class claims and denial of class
certification.  On January 30, 1998, Irwin Mortgage petitioned
the court of appeals for rehearing.  On February 4, 1998, the
court of appeals issued an order giving plaintiffs a deadline to
reply to the rehearing petition.  The litigation is still at a
stage where it is impossible to predict the likelihood of an
unfavorable outcome or to establish the possible extent or amount
of liability or potential loss exposure, if any, to which Irwin
Mortgage might be exposed.

Except as described above, there is no material pending
litigation in which the Registrant or any of its subsidiaries is
involved or of which any of their property is the subject.
Furthermore, there is no pending legal proceeding that is adverse
to the Registrant in which any director, officer or affiliate of
the Registrant, or any associate of any such director or officer,
is a party, or has a material interest.

The following litigation, previously reported, was no longer
pending as of December 31, 1997:

Providian Bankcorp, Inc. v. Irwin Financial Corporation, et al.
The parties agreed to dismiss the litigation in April, 1997.  The
suit, which alleged the misappropriation of trade secrets, was
initiated in the State of California in May, 1995.

Irwin Union Bank and Trust Company v. United States Trust Company
of New York, et al.  The parties agreed to dismiss the litigation
in May, 1997.  The suit, which arose from a wire transfer, was
initiated in the United States District Court for the Southern
District of New York in August, 1996.

Item 4.  Submission of Matters to a Vote of Security Holders

During the fourth quarter of 1997, no matters were submitted to a
vote of security holders of the Registrant, through the
solicitation of proxies or otherwise.

                             PART II

Item 5.  Market for Registrant's Common Equity and Related
Stockholder Matters

The Common Stock of the Registrant is quoted on the Nasdaq
National Marekt (NASDAQ-NMS - trading symbol, IRWN).  The
following table sets forth certain information regarding trading
in, and cash dividends paid with respect to, the shares of the
Registrant's Common Stock in each quarter of the two most recent
calendar years. All data have been adjusted for stock splits.
The approximate number of shareholders of record on March 12,
1998 was 1,590.

Stock Prices and Dividends:

                   High    Low   Quarter    Cash        Total
                     $      $    End        Dividend    Dividends
                                 $          $           For Year


1996 (split
adjusted)

First Quarter    22 3/4   19 3/4   22 1/8   0.060

Second Quarter   22 1/4   19 5/8   19 5/8   0.060

Third Quarter    21 5/8   17 7/8   21 1/4   0.060

Fourth Quarter   24 3/4   21 1/4   24 3/4   0.060      0.24

1997

First Quarter    30 1/2   24 1/4   27 1/4   0.070

Second Quarter   29 1/2   24       29 1/2   0.070

Third Quarter    37 1/4   28 3/4   37 1/4   0.070

Fourth Quarter   43       36 1/2   41 7/8   0.070      0.28


The Registrant expects to continue its policy of paying regular
cash dividends, although there is no assurance as to future
dividends because they are dependent on future earnings, capital
requirements, and financial condition.  On February 19, 1997, the
Registrant's Board of Directors approved an increase in the
Registrant's quarterly dividend to $.07 per share which dividend
rate was unchanged as of December 31, 1997.  Dividends paid by
Irwin Union Bank to the Registrant are restricted by banking law.
See Note 14 of Notes to the Consolidated Financial Statements in
the attached Annual Report to Shareholders.

No sales of unregistered equity securities were made by the
Registrant during the fourth quarter of 1997.

Item 6.  Selected Financial Data

The information contained in the Annual Report to Shareholders
for the year ended December 31, 1997, under the caption "Five-
Year Selected Financial Data", is incorporated herein by
reference in response to this item.

Item 7.  Management's Discussion and Analysis of Financial
Condition and Results of Operations

The information set forth under the caption "Management's
Discussion and Analysis of Results of Operations and Financial
Condition" in the Annual Report to Shareholders for the year
ended December 31, 1997, is incorporated herein by reference in
response to this item.

Item 7A.  Quantitative and Qualitative Disclosures About Market
Risk.

Interest Rate Risk:

Interest rate risk refers to the potential for changes in market
rates of interest to cause changes in net interest income. Since
net interest income is a major source of income, it is important
that potential changes are managed prudently.

The Asset-Liability Management Committee of the commercial bank
monitors the repricing structure of both assets and liabilities
over various time horizons.  Exposure to changes in interest
rates is evaluated by modeling the repricing characteristics of
the commercial bank's portfolio under multiple rate scenarios.
Formal policies approved by the commercial bank's Board of
Directors ensure that exposure to changes in net interest
revenues is maintained within acceptable levels.

The mortgage banking business assumes a form of interest rate
risk by entering into commitments to extend loans to borrowers at
a fixed price for a limited period of time.  Loans are also held
temporarily until a pool is formed.  The home equity and
equipment leasing businesses are exposed to potential interest
rate risk that is similar to the lending operations of the
commercial bank.  Once again, formal policies ensure that this
risk is controlled.

Rate risk at the commercial bank can typically be managed by
controlling the maturity of loans, securities, and deposits.  The
commercial bank may also use financial futures or interest rate
swaps from time to time, although there were none in place at
December 31, 1997. The mortgage bank buys commitments to deliver
loans at a fixed price to manage risk.  The policy at both the
home equity lending business and the equipment leasing business
is to match-fund all assets.   In some cases, the Corporation
uses internal hedges between companies to allow for the risk
characteristics of one line of business to offset those of
another line.

The following table shows in summary form the Corporation's
interest rate sensitivity based on expected interest rate
repricing intervals for the balance sheet as of December 31, 1997
(a "gap" analysis).  For example, a 30-year adjustable rate
residential mortgage held in the portfolio of Irwin Union Bank is
included in the "4-12 month" category since that is the time
frame over which the asset will reprice.  Some items, such as
certain deposit accounts, are non-interest bearing, but will vary
in balance due to interest rate changes.  Since the Corporation
relies on such accounts in its operations and would need to
replace them with "at market" liabilities should the non-interest
bearing ones be unavailable, they are included in the gap table
and in simulations as "non-market" items.

As the table shows, the consolidated one-year gap at December 31,
1997 was a positive $143.0 million.  This compares to a positive
gap of $133.2 million at December 31, 1996.

Since the gap was positive at December 31, 1997, it means that
the Corporation's net interest income was positioned to benefit
from rising rates, or to be harmed by declining rates.  While
traditional interest rate risk focuses on the changes in net
interest income due to interest rate changes, the Corporation
engages in other activities which are also affected by interest
rate changes.  Principal among these are mortgage loan
origination and servicing.  Through the use of simulations using
regression modeling and option-adjusted valuation techniques for
modeling expected customer behavior, the Corporation attempts to
analyze and mitigate the interest rate risks associated with the
negatively correlated activities of mortgage loan origination and
servicing.  For example, if interest rates decline, management
expects an increase in mortgage loan origination income and a
decline in the value of mortgage servicing assets.  Management
attempts to monitor this exposure to traditional interest rate
risk as well as interest rate influences on production and
servicing value in a comprehensive manner.
<TABLE>
<CAPTION>
Interest Sensitivity:
(Thousands)

          Within 3   4 to 12    1 to 5     Over 5     Non -              Fair
           Months     Months    Years      Years      Market    Total    Value



<S>       <C>       <C>        <C>        <C>       <C>       <C>       <C>
Assets -  $3,511     $8,412   $10,211        $0         $0   $22,134   $22,134
Trading:
Taxable
investment
securities
Assets -
Other than
Trading:
Interest-  10,920      4,027     3,293         0          0    18,240    18,240
bearing
deposits with
banks
Taxable    16,682      9,477     18,021     6,213          0   50,393    51,041
investment
securities
Tax-exempt    100        500        962     3,252          0    4,814    4,853
investment
 securities
Mortgages 528,739          0          0         0          0  528,739  530,207
held for sale
Loans,    269,988     99,787    146,186    95,132          0  611,093  613,513
net of unearned
income
Total     829,940    122,203    178,673   104,597          01,235,413$1,239,988
interest-
earning
assets


Liabilities -
Other than
Trading
Non-interest   0          0          0          0    287,555  287,555   $287,555
bearing
deposits
Money     32,625          0     47,148     10,169          0   89,942     89,942
market checking
Money      1,758          0      5,487          0          0    7,245      7,245
market savings
Regular   25,565      1,939     10,343      7,992          0   45,839     45,839
savings
Time     166,381     64,683     57,186        764          0  289,014    289,088
deposits
Short-   512,276          0          0          0          0  512,276    512,276
term borrowings
Long-      1,399      2,499      3,197          0          0    7,095      7,138
term debt
Total   740,004     69,121    123,361     18,925    287,555 1,238,966 $1,239,083
interest-
bearing
liabilities
Trust          0          0          0     50,000          0   50,000    $55,038
preferred
securities
Interes   89,936     53,082     55,312     35,672  (287,555) (53,553)
sensitivity
gap
Cumu-
lative   $89,936   $143,018   $198,330   $234,002  $(53,553)$(53,553)
interest
sensitivity
gap
</TABLE>

<TABLE>
<CAPTION>
(Thousands)         Weighted
                    Average
                    Interest
                    Rate
<S>                 <C>
Assets - Trading:
Taxable invesnment   8.50%
securities
Assets - Other than
Trading:
Interest-bearing     5.72
deposits with banks
Taxable investment   6.31
securities
Tax-exempt           8.88
Mortgages held for   7.36
sale
Loans, net of        9.04
unearned income
Total interest-      8.15%
earning assets


Liabilities - Other
than Trading
Non-Interest bearing  n/a
deposits
Money market        2.07%
checking
Money market        2.39
savings
Regular savings     3.15
Time deposits       5.65
Short-term          4.84
borrowings
Long-term debt      7.67
Total interest-     4.74
bearing liabilities
Trust preferred     9.25%
securities
Interest sensitivity
gap
Cumulitive interest
sensitivity gap
</TABLE>






Note:  This analysis is based on certain assumptions, including
relative levels of market interest rates, and should not be
relied upon as indicative of actual results.

Item 8.  Financial Statements and Supplementary Data

Consolidated financial statements of the Registrant and its
subsidiaries are contained in the Annual Report to Shareholders
for the year ending December 31, 1997, under the caption "1997
Financial Statements", and are incorporated herein by reference
in response to this item.

Item 9.  Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure

In connection with the audits of the Registrant for the two most
recent fiscal years ended December 31, 1997, the Registrant has
not changed its independent certified public accountants nor have
there been any disagreements (as defined in Instruction 4 to Item
304 of Regulation S-K) with such accountants on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.

                            PART III

Item 10.  Directors and Executive Officers of the Registrant

The information contained in the proxy statement of the
Registrant for the 1998 Annual Meeting of Shareholders under the
caption "Election of Directors", on pages 4 through 6, inclusive,
is incorporated herein by reference in response to this item.

Item 11.  Executive Compensation

The information contained in the proxy statement of the
Registrant for the 1998 Annual Meeting of Shareholders under the
captions "Election of Directors - Outside Director Compensation
", "Executive Compensation and Other Information" and "Board
Compensation Committee Report on Executive Compensation" on pages
8 through 18, inclusive, is incorporated herein by reference in
response to this item.

Item 12.  Security Ownership of Certain Beneficial Owners and
Management

The information contained in the proxy statement of the
Registrant for the 1998 Annual Meeting of Shareholders, under the
captions "Voting Securities and Principal Holders" and "Security
Ownership of Management", on pages 2 and 3, inclusive, is
incorporated herein by reference in response to this item.

Item 13.  Certain Relationships and Related Transactions

The information contained in the proxy statement of the
Registrant for the 1998 Annual Meeting of Shareholders under the
caption "Interest of Management in Certain Transactions" on pages
19 and 20, is incorporated herein by reference in response to
this item.
                             PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on
Form 8-K

                                                      Page #

a.   Documents filed as a part of this Report: Form    Annual
                                               10-K    Report

     1.   Financial Statements:

          A. Irwin Financial Corporation and
             Subsidiaries:

          Report of Coopers & Lybrand L.L.P.,
          Independent Accountants                21

          Consolidated Statement of Income
          for the years ended December 31, 1997,
          1996, and 1995                                81

          Consolidated Balance Sheet as of
          December 31, 1997, and 1996                   82

          Consolidated Statement of Changes in
          Shareholders' Equity for the years
          ended December 31, 1997, 1996 and
          1995                                          83

          Consolidated Statement of Cash Flows
          for the years ended December 31, 1997,
          1996, and 1995                                84

          Notes to Consolidated Financial Statements    85

The above listed report, financial statements, and the notes
thereto, set forth on pages 81 through 105 of the Registrant's
1997 Annual Report to Shareholders are incorporated herein by
reference.

     2.   Financial Statement Schedules

          None

Schedules are omitted because they are not required or the
information is included in the Notes to Consolidated Financial
Statements.

     3.   Exhibits

          A. Exhibits to Form 10-K

                                                  Sequential
                                                  Numbering
Number Assigned                                   System Page
in Regulation                                     Number of
S-K Item 601      Description of Exhibit          Exhibit

 (2)                    No exhibit.

 (3) (i)          3(a)  Amended Articles of
                       Incorporation, dated
                       December 29, 1972.
                       (Incorporated by
                       reference to Exhibit 3(a)
                       to Form 10-K Report for
                       year ended December 31,
                       1985, File No. 0-6835.)

                  3(b)  Articles of Amendment,
                       dated March 30, 1973.
                       (Incorporated by
                       reference to Exhibit 3(b)
                       to Form 10-K Report for
                       year ended December 31,
                       1985, File No. 0-6835.)

                  3(c)  Articles of Amendment,
                       dated September 4, 1990.
                       (Incorporated by
                       reference to Exhibit 3(d)
                       to Form 10-K Report for
                       year ended December 31,
                       1990, File No. 0-6835.)

                  3(d)  Articles of Amendment,
                       dated April 30, 1992.
                       (Incorporated by
                       reference to Exhibit 3(d)
                       to Form 10-K Report for
                       year ended December 31,
                       1992, File No. 0-6835.)

                  3(e)  Articles of Amendment,
                       dated April 26, 1994.
                       (Incorporated by
                       reference to Exhibit 3(e)
                       to Form 10-K Report for
                       year ended December 31,
                       1994, File No. 0-6835.)

                  3(f)  Articles of Amendment,
                       dated April 30, 1996.
                       (Incorporated by
                       reference to Exhibit 3(f)
                       to Form 10-K Report for
                       year ended December 31,
                       1996, File No. 0-6835.)

     (ii)         3(a)  Code of By-Laws as              22
                       amended to date.

 (4)              4(a)  Specimen stock
                       certificate.
                       (Incorporated by
                       reference to Exhibit 4(a)
                       to Form 10-K Report for
                       year ended December 31,
                       1994, File No. 0-6835.)

                  4(b)  Certain instruments
                       defining the rights of
                       the holders of long-term
                       debt of the Registrant
                       and certain of its
                       subsidiaries, none of
                       which authorize a total
                       amount of indebtedness in
                       excess of 10% of the
                       total assets of the
                       Registrant and its
                       subsidiaries on a
                       consolidated basis, have
                       not been filed as
                       Exhibits.  The Registrant
                       hereby agrees to furnish
                       a copy of any of these
                       agreements to the
                       Commission upon request.

 (9)                    No exhibit.

(10)              10(a) Amended 1986 Stock Option
                       Plan.  (Incorporated by
                       reference to Exhibit
                       10(b) to Form 10-K Report
                       for year ended December
                       31, 1991, File No. 0-
                       6835.)

                  10(b) Amended and Restated
                       Management Bonus Plan.
                       (Incorporated by
                       reference to Exhibit
                       19(a) to Form 10-K Report
                       for year ended December
                       31, 1986, File No. 0-
                       6835.)

                  10(c) Long-Term Management
                       Performance Plan.
                       (Incorporated by
                       reference to Exhibit
                       10(d) to Form 10-K Report
                       for year ended December
                       31, 1986, File No. 0-
                       6835.)

                  10(d) Long-Term Incentive Plan
                       - Summary of Terms.
                       (Incorporated by
                       reference to Exhibit
                       10(e) to Form 10-K Report
                       for year ended December
                       31, 1986, File No. 0-
                       6835.)

                  10(e) Irwin Financial
                       Corporation Employees'
                       Stock Purchase Plan.
                       (Incorporated by
                       reference to Exhibit
                       10(f) to Form 10-K Report
                       for year ended December
                       31, 1991, File No. 0-
                       6835.)

                  10(f) Employee Stock Purchase
                       Plan II.  (Incorporated
                       by reference to Exhibit
                       10(f) to Form 10-K Report
                       for year ended December
                       31, 1994, File No. 0-
                       6835.)

                  10(g) Amended Irwin Financial
                       Corporation Outside
                       Directors Restricted
                       Stock Compensation Plan.
                       (Incorporated by
                       reference to Exhibit
                       10(g) to Form 10-K Report
                       for year ended December
                       31, 1991, File No. 0-
                       6835.)

                  10(h) Irwin Financial
                       Corporation 1992 Stock
                       Option Plan.
                       (Incorporated by
                       reference to Exhibit
                       10(h) to Form 10-K report
                       for year ended December
                       31, 1992, File No. 0-
                       6835.)

                  10(i) Amended Irwin Financial
                       Corporation Outside
                       Director Restricted Stock
                       Compensation Plan.
                       (Incorporated by
                       reference to Exhibit
                       10(i) to Form 10-K report
                       for year ended December
                       31, 1995, File No. 0-
                       6835.)

                  10(j) Inland Mortgage
                       Corporation Long Term
                       Incentive Plan.
                       (Incorporated by
                       reference to Exhibit
                       (10)(j) to Form 10-K
                       report for year ended
                       December 31, 1996, File
                       No. 0-6835.)

                  10(k) Irwin Financial
                       Corporation 1997 Stock
                       Option Plan.
                       (Incorporated by
                       reference to Exhibit (10)
                       to Form 10-Q report for
                       quarter ended June 30,
                       1997, File No. 0-6835.)

                  10(l) Amendment to Irwin              37
                       Financial Corporation
                       1997 Stock Option Plan.
                       (Incorporated by
                       reference to Exhibit (10)
                       to Form 10-Q report for
                       quarter ended June 30,
                       1997, File No. 0-6835.)

(11)              11(a) Computation of Earnings         39
                       Per Share.

(12)                    No exhibit.

(13)              13(a) Registrant's 1997 Annual        40
                       Report to Shareholders.
                       This exhibit contains
                       such portions thereof
                       that have been
                       incorporated by reference
                       into this Report.

(16)                    No exhibit.

(18)                    No exhibit.

(21)              21(a) Subsidiaries of the            122
                       Registrant.

(22)                    No exhibit.

(23)              23(a) Consent of Independent         123
                       Accountants.

(24)                    No exhibit.

(27)                    Financial Data Schedule.       124



(99)              99(a) Annual Report on Form 11-
                       K for the Irwin Financial
                       Corporation Employees'
                       Savings Plan for the year
                       ending December 31,
                       1997.*

                  99(b) Annual Report on Form 11-
                       K for the Inland Mortgage
                       Corporation Retirement
                       and Profit Sharing Plan
                       for the year ending
                       December 31, 1997.*


*  To be filed by amendment pursuant to Rule 15d-21.

b.   Reports on Form 8-K

     None.

                           SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the Undersigned,
thereunto duly authorized.

                                   IRWIN FINANCIAL CORPORATION

Date:  March 26, 1998              By:  /s/ William I. Miller
                                    William I. Miller,
                                    Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of
1934, this report on Form 10-K has been signed below by the
following persons on behalf of the Registrant and in the
capacities on the dates indicated.

                              Capacity with
        Signature              Registrant           Date


/s/ Sally A. Dean               Director       March 26, 1998
Sally A. Dean


/s/ David W. Goodrich           Director       March 26, 1998
David W. Goodrich


/s/ John T. Hackett             Director       March 26, 1998
John T. Hackett


/s/ William H. Kling            Director       March 26, 1998
William H. Kling


/s/ Brenda J. Lauderback        Director       March 26, 1998
Brenda J. Lauderback


/s/ John C. McGinty, Jr.        Director       March 26, 1998
John C. McGinty, Jr.


/s/ Irwin Miller                Director       March 26, 1998
Irwin Miller


/s/ William I. Miller           Director,      March 26, 1998
William I. Miller            Chairman of the
                            Board (Principal
                                Executive
                                Officer)


/s/ John A. Nash                Director,      March 26, 1998
John A. Nash                 Chairman of the
                                Executive
                                Committee


/s/ Lance R. Odden              Director       March 26, 1998
Lance R. Odden



/s/ Theodore M. Solso           Director       March 26, 1998
Theodore M. Solso


/s/ Thomas D. Washburn         Senior Vice     March 26, 1998
Thomas D. Washburn              President
                               (Principal
                                Financial
                                Officer)


/s/ Marie C. Strack          Vice President    March 26, 1998
Marie C. Strack              and Controller
                               (Principal
                               Accounting
                                Officer)