SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C.  20549
                                   FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF  1934
For the quarterly period ended          June 30, 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                    (I.R.S. Employer
incorporation or organization                      Identification No.)
                                
                   500 Washington Street, Columbus, IN  47201
                    (Address of principal executive offices)
                                    (Zip Code)

                                   812/376-1020

                Registrant's telephone number, including area code)
               (Former name, former address and former fiscal year
                        if changed since last report)
                                
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes  X      No
    ----
                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13, or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.

Yes        No

As of July 31, 1997, there were outstanding 11,125,102 common
shares, no par value, of the Registrant.

XXX   PAGE 1   XXX
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
                                        June 30,     December 31,
                                            1997             1996
-----------------------------------------------------------------

ASSETS:
<S>                               <C>              <C>
Cash and due from banks              $51,099,483      $71,365,788
Federal funds sold                     7,000,000                0
                                     -----------      -----------
  Cash and cash equivalents           58,099,483       71,365,788
Interest-bearing deposits with 
financial institutions                10,486,386       11,343,546
Investment securities (Market value:
  $69,168,000 in 1997 and $73,819,000
  in 1996)-Note 2                     68,628,801       73,124,455
Mortgage loans held for sale         368,062,609      445,100,504
Loans and leases, net of unearned
 income - Note 4                     538,299,485      529,050,970
Less: Allowance for loan and lease losses
 Note 5                              (7,319,518)      (6,744,577)
                                   -------------    -------------
                                     530,979,967      522,306,393
Capitalized servicing - Note 6        99,035,298       86,757,254
Accounts receivable                   44,041,990       41,712,662
Accrued interest receivable            5,491,699        6,724,973
Premises and equipment                19,388,176       18,687,620
Other assets                          30,220,459       26,762,916
                                   -------------    -------------
                                  $1,234,434,868   $1,303,886,111
                                  ==============   ==============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits
  Noninterest-bearing               $245,150,754     $239,347,589
  Interest-bearing                   368,667,966      334,301,111
  Certificates of deposit over 
  $100,000                            53,361,410       66,504,205
                                   -------------    -------------
                                     667,180,130      640,152,905
Short-term borrowings- Note 7        316,174,070      461,882,725
Long-term debt- Note 8                 9,789,488       17,642,526
Other liabilities                     71,531,291       65,305,875
                                   -------------    -------------
Total liabilities                  1,064,674,979    1,184,984,031
                                   -------------    -------------
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust
 - Note 9                            47,919,397                 0

Shareholders' equity
  Preferred stock, no par value - authorized
   50,000 shares; none issued                  0                0
  Common stock; no par value - issued
   11,701,040 shares in 1997 and 1996;
   including 573,942 and 332,268 shares
   in treasury in 1997 and 1996,
   respectively.                      29,965,287       29,965,287
Additional paid in capital                     0                0
Unrealized gains, net                  1,442,385           56,523
Retained earnings                    103,089,672       94,083,540
                                  --------------    -------------
                                     134,497,344      124,105,350
Less treasury stock, at cost        (12,656,852)      (5,203,270)
                                  --------------   --------------
Total shareholders' equity           121,840,492      118,902,080
                                  --------------   --------------
                                  $1,234,434,868    1,303,886,111
                                  ==============   ==============
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.

XXX   PAGE 2   XXX

IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
                                             Three Months Ended
                                                   June 30,
                                            1997             1996
-----------------------------------------------------------------
<TABLE>
INTEREST INCOME:
<S>                                  <C>              <C>
Loans and leases                     $14,783,505      $12,694,850
Investment securities:
  Taxable                              1,337,716        1,176,637
  Tax-exempt                              70,832           88,598
Loans held for sale                    7,667,524        7,615,719
Federal funds sold                       138,402          452,306
                                   -------------    -------------
Total interest income                 23,997,979       22,028,110
                                   -------------    -------------
INTEREST EXPENSE:
Deposits                               4,554,040        4,451,334
Short-term borrowings                  5,892,609        5,001,138
Long-term debt                           227,100          434,483
                                   -------------    -------------
Total interest expense                10,673,749        9,886,955
                                   -------------      -----------
Net interest income                   13,324,230       12,141,155
Provision for loan and lease 
losses - Note 5                        1,986,000        1,019,000
                                   -------------    -------------
Net interest income after provision
  for loan and lease losses           11,338,230       11,122,155
                                    ------------    -------------
OTHER INCOME:
Loan origination fees                 10,683,699       11,872,588
Gain from sales of loans              10,243,428        9,165,037
Loan servicing fees                   15,384,754       11,439,912
Gain on sale of mortgage servicing     6,849,323        3,341,621
Brokerage fees and commissions           260,627          300,904
Trust fees                               487,289          473,575
Service charges on deposit accounts      377,525          332,389
Insurance commissions, fees and premiums 375,274          399,324
Other                                  1,272,926          681,807
                                   -------------    -------------
                                      45,934,845       38,007,157
                                   -------------    -------------
OTHER EXPENSE:
Salaries                              21,354,127       20,293,042
Pension and other employee benefits    3,430,893        3,205,018
Office expense                         2,458,805        2,691,581
Premises and equipment                 4,301,921        3,274,349
Amortization of capitalized servicing  5,916,063        4,127,476
Marketing and development              3,315,806        2,793,655
Other                                  5,704,902        4,221,454
                                   -------------    -------------
                                      46,482,517       40,606,575
                                   -------------    -------------
Income before income taxes            10,790,558        8,522,737
Income taxes                           3,851,000        3,495,000
                                   -------------    -------------
                                       6,939,558        5,027,737
Distribution on company-obligated
 mandatorily redeemable preferred 
 securities of subsidiary   trust      1,171,163                0
                                   -------------    -------------

Net income available to common 
shareholders                          $5,768,395       $5,027,737
                                  ==============   ==============
Net income per share of common stock:
Net income -Note 1                         $0.50            $0.43
                                          ======           ======
Dividends per share of common stock        $0.07            $0.06
                                          ======           ======
Weighted average shares of common stock
  outstanding                         11,463,037       11,613,186
                                   =============    =============
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.

XXX   PAGE 3   XXX
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
                                               Six Months Ended
                                                   June 30,
                                            1997             1996
-----------------------------------------------------------------
<S>                                  <C>              <C>
INTEREST INCOME:
Loans and leases                     $27,607,014      $23,572,277
Investment securities:
  Taxable                              2,730,063        2,274,457
  Tax-exempt                             142,263          182,476
Loans held for sale                   14,580,249       14,741,348
Federal funds sold                       365,418        1,073,114
                                     -----------      -----------
Total interest income                 45,425,007       41,843,672
                                     -----------      -----------
INTEREST EXPENSE:
Deposits                               9,597,991        8,820,152
Short-term borrowings                 10,046,832        9,137,199
Long-term debt                           532,032          847,724
                                     -----------      -----------
Total interest expense                20,176,855       18,805,075
                                     -----------      -----------
Net interest income                   25,248,152       23,038,597
Provision for loan and lease 
losses - Note 5                        2,692,000        1,963,000
                                     -----------      -----------
Net interest income after provision
  for loan and lease losses           22,556,152       21,075,597
                                     -----------      -----------
OTHER INCOME:
Loan origination fees                 19,272,045       22,841,519
Gain from sales of loans              18,394,930       16,776,533
Loan servicing fees                   30,329,450       23,295,719
Gain on sale of mortgage servicing    13,668,135        4,529,470
Brokerage fees and commissions           607,454        1,128,266
Trust fees                             1,067,434        1,033,465
Service charges on deposit accounts      801,662          683,012
Insurance commissions, fees and 
premiums                                 742,649          816,130
Other                                  1,971,555        1,203,278
                                     -----------      -----------
                                      86,855,314       72,307,392
                                     -----------      -----------
OTHER EXPENSE:
Salaries                              40,071,505       38,568,024
Pension and other employee benefits    7,217,120        6,386,116
Office expense                         5,224,915        5,333,852
Premises and equipment                 8,180,602        6,566,144
Amortization of capitalized servicing 11,033,740        6,699,292
Marketing and development              6,340,699        5,238,595
Other                                 10,912,336        7,630,993
                                     -----------      -----------
                                      88,980,917       76,423,016
                                     -----------      -----------
Income before income taxes            20,430,549       16,959,973
Income taxes                           7,341,000        6,944,000
                                     -----------      -----------
                                      13,089,549       10,015,973
Distribution on company-obligated 
mandatorily redeemable preferred 
securities of subsidiary trust         2,124,878                0
                                     -----------      -----------
Net income available to common 
shareholders                         $10,964,671      $10,015,973
                                     ===========      ===========

Net income per share of common stock:
Net income -Note 1                         $0.95            $0.86
                                          ======           ======
Dividends per share of common stock        $0.14            $0.12
                                          ======           ======
Weighted average shares of common stock
  outstanding                         11,547,691       11,609,612
                                     ===========      ===========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.

XXX   PAGE 4   XXX
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS

June 30,                                    1997             1996
-----------------------------------------------------------------
<S>                              <C>              <C>
Net income                           $10,964,671      $10,015,973
Adjustments to reconcile net income 
to cash provided by operating 
activities:
Depreciation and amortization         12,853,344        8,972,432
Provision for loan and lease losses    2,692,000        1,785,000
Premium amortization less 
discount accretion                       579,979          996,523
Mortgage loan originations       (2,391,354,544)  (2,589,187,197)
Sales of mortgage loans            2,468,392,439    2,585,261,575
Gain on sale of mortgage servicing  (13,668,135)      (4,529,470)
Other, net                             3,351,115      (2,121,104)
                                     -----------      -----------
Net cash provided (used) by operating
activities                            93,810,869       11,193,732
                                     -----------      -----------

Lending and investing activities:
Proceeds from maturities/calls of
investment securities:
   Held-to-Maturity                      110,000          615,000
   Available-for-Sale                 18,745,042       28,777,845
Purchase of investment securities:
   Held-to-Maturity                  (1,987,500)      (5,051,178)
   Available-for-Sale               (12,951,867)     (28,107,320)
Net (increase) decrease in 
interest-bearing deposits with 
financial institutions                   857,160        (312,622)
Net increase in loans, excluding 
sales                              (136,184,833)    (102,384,538)
Sale of loans                        124,970,242                0
Net additions to premises and 
equipment                            (2,485,340)      (2,598,602)
Additions to mortgage servicing 
assets                              (42,494,684)     (46,552,278)
Proceeds from sale of mortgage 
servicing                             32,341,018       30,776,503
                                    ------------     ------------
Net cash provided (used) by lending 
and investing activities            (19,080,762)    (124,837,190)
                                    ------------     ------------

Financing activities:
Net increase in deposits              27,027,225       39,621,420
Net increase (decrease) in 
short-term borrowings              (145,708,655)       60,940,704
Proceeds from (repayment of)
long-term debt                       (7,853,038)          798,796
Sale of company-obligated 
manditorily redeemable preferred 
securities of subsidiary trust        47,950,178                0
Purchase of treasury stock           (8,191,372)        (235,816)
Proceeds from sale of stock for 
employee benefit plans                   350,526          562,400
Dividends paid                       (1,571,275)      (1,362,163)
                                   -------------    -------------
Net cash provided (used) by 
financing activities                (87,996,411)      100,325,341
                                   -------------    -------------
Net increase (decrease) in cash 
and cash equivalents                (13,266,304)     (13,318,117)
Cash and cash equivalents at 
beginning of year                     71,365,788       64,256,953
                                   -------------    -------------
Cash and cash equivalents 
at end of year                       $58,099,484      $50,938,836
                                   =============    =============
</TABLE>
Supplemental disclosures of cash flow
information:
Cash paid during the period:
Interest                             $19,449,504       $8,933,690
                                   =============    =============
Income taxes                          $5,609,375         $750,200
                                   =============    =============

The accompanying notes are an integral part of the consolidated
financial statements.

XXX   PAGE 5   XXX

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION:  Irwin Financial Corporation and its
subsidiaries (the Corporation) provide financial services
throughout the United States.  The Corporation is engaged in
the mortgage banking, commercial banking, home equity
lending, and equipment leasing lines of business.
Intercompany balances and transactions have been eliminated
in consolidation.  Significant accounting policies followed
by the Corporation are consistent with those followed for
annual financial reporting.  The information furnished
reflects all adjustments which are, in the opinion of
management, necessary for a fair presentation of the results
of interim periods.

RECLASSIFICATIONS:  Certain amounts in the 1996 consolidated
financial statements have been reclassified to conform to
the 1997 presentation.

TRANSFER OF ASSETS:  On January 1, 1997, the Corporation
adopted Statement of Financial Accounting Standards No. 125,
"Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities" (SFAS No. 125).  This
statement establishes the accounting treatment to be used
for the securitization of all financial assets.  Under the
provisions of SFAS No. 125, the net carrying values of
assets sold and retained are allocated based on their
relative fair values.  The adoption of SFAS No. 125 did not
have a material effect on the Corporation's financial
position or results of operations.

EARNINGS PER SHARE:  Earnings per share computations are
based on the weighted average number of common shares
outstanding during the year.

In February 1997 the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" (SFAS No. 128).  This statement
specifies the computation, presentation and disclosure
requirements for earnings per share.  SFAS No. 128 is
effective for financial statements issued for periods ending
after December 15, 1997.  If the Corporation had calculated
earnings per share in accordance with SFAS No. 128, the
following amounts would have been reported:
<TABLE>
                              Three Months Ended     Six Months Ended
                                   June 30,              June 30,
                                 1997    1996           1997    1996
                                 ----    ----           ----    ----

<S>                             <C>      <C>           <C>     <C>
Basic earnings per share        $0.52    $0.44         $0.98   $0.88
Dilutive earnings per share     $0.50    $0.43         $0.95   $0.86
</TABLE>
XXX   PAGE 6   XXX

NOTE 2 - INVESTMENT SECURITIES

The carrying amounts of investment securities, including net
unrealized gains (losses) of ($45,896) and $51,159 on available-for-
sale securities at June 30, 1997 and December 31, 1996, respectively, 
are summarized as follows:
<TABLE>
                                        June 30,     December 31,
                                            1997             1996
-----------------------------------------------------------------
<S>                                  <C>              <C>
Held-to-Maturity
US Treasury and Government 
obligations                          $30,076,068       29,570,239
Obligations of states and political
  subdivisions                         4,349,409        4,466,043
Mortgage-backed securities             4,642,211        7,153,865
                                   -------------    -------------
Total Held-to-Maturity                39,067,688       41,190,147

Available-for-Sale
US Treasury and Government 
obligations                           26,328,776       28,670,847
Mortgage-backed securities             3,212,920        3,237,633
Other                                     19,417           25,828
                                   -------------    -------------
Total Available for Sale              29,561,113       31,934,308
                                   -------------    -------------

Total Investments                    $68,628,801      $73,124,455
                                   =============    =============
</TABLE>
Securities which the Corporation has the positive intent and ability
to hold until maturity are classified as "held-to-maturity" and are
stated at cost adjusted for amortization of premium and accretion of
discount.  Securities that might be sold prior to maturity are
classified as "available-for-sale" and are stated at fair value.
Unrealized gains and losses, net of the future tax impact, are
reported as a separate component of shareholders' equity until
realized.


NOTE 3 - MORTGAGE LOANS HELD FOR SALE

Mortgage loans held for sale are stated at the lower of cost or market
as of the balance sheet date.



NOTE 4 - LOANS AND LEASES

Loans and leases are summarized as follows:
<TABLE>
                                        June 30,     December 31,
                                            1997             1996
-----------------------------------------------------------------

<S>                                 <C>              <C>
Real estate-mortgage                $189,897,249     $210,697,305
Commercial, financial and 
agricultural                         188,549,155      179,650,053
Real estate-construction              65,384,024       48,990,519
Consumer                              40,955,598       38,371,100
Lease financing                       69,242,989       62,371,808
Unearned income                     (15,729,530)     (11,029,815)
                                   -------------    -------------

                                    $538,299,485     $529,050,970
                                   =============    =============
</TABLE>
XXX   PAGE 7   XXX

NOTE 5 - ALLOWANCE FOR LOAN AND LEASE LOSSES

Changes in the allowance for loan and lease losses are summarized as
follows:
<TABLE>
                                        June 30,     December 31,
                                            1997             1996
-----------------------------------------------------------------

<S>                                  <C>              <C>
Balance at beginning of year          $6,744,577       $4,770,908

Provision for loan and lease losses    2,692,000        4,450,000
Reduction due to sale of loans         (752,304)        (696,195)
Recoveries                               209,156          593,421
Charge-offs                          (1,573,911)      (2,373,557)
                                   -------------    -------------

Balance at end of period              $7,319,518       $6,744,577
                                   =============    =============
</TABLE>


NOTE 6- CAPITALIZED SERVICING

Included in capitalized servicing at June 30, 1997 and December 31,
1996 are $71,251,988 and $70,551,101, respectively, of servicing
assets.  These amounts represent the capitalized, contractually
specified servicing fees earned on securitized loans.  Capitalized
servicing also includes interest only strips totaling $27,783,310 and
$16,206,153 at June 30, 1997 and December 31, 1996, respectively.



NOTE 7- SHORT-TERM BORROWINGS

Short-term borrowings are summarized as follows:
<TABLE>
                                        June 30,     December 31,
                                            1997             1996
-----------------------------------------------------------------
<S>                                 <C>              <C>
Repurchase agreements and drafts 
payable related to mortgage loan 
closings                            $193,701,323     $264,998,449
Federal funds                         64,125,000       74,118,000
Lines of Credit                       43,160,739      105,591,525
Commercial paper                      15,187,008       17,174,751
                                   -------------    -------------

Total                               $316,174,070     $461,882,725
                                    ============    =============
</TABLE>
Repurchase agreements at June 30, 1997 and December 31, 1996, include
$97,485,161 and $183,869,533 respectively, in mortgage loans sold
under agreements to repurchase which are used to fund mortgage loans
sold prior to sale in the secondary market.  These repurchase
agreements are collateralized by mortgage loans held for sale.
Drafts payable related to mortgage loan closings totaled
$89,808,169 and $74,042,188 at June 30, 1997 and December
31, 1996.  These borrowings

XXX   PAGE 8   XXX

are related to mortgage closings at the end of the period
which have not been presented to banks for payment.  When
presented for payment these borrowings will be funded
internally or by borrowing from the lines of credit.

The Corporation has lines of credit available to fund
mortgage loans held for sale.  Interest on the lines of
credit is payable monthly at variable rates ranging from
6.13 % to the lender's prime rate.



NOTE 8 -- LONG-TERM DEBT

Long-term debt at June 30, 1997 of $9,789,488 consists of
various notes payable at annual interest rates ranging from
6.3% to 9.6% and maturity dates ranging from September 30,
1997 through April 30, 2002. Long-term debt as of December
31, 1996 was $17,642,526 and consisted of various notes
payable at annual interest rates ranging from 6.3% to 9.6%
and maturity dates through April 30, 2002.


NOTE 9 -- COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED
SECURITIES OF SUBSIDIARY TRUST

In January 1997, the Corporation issued $50,000,000 of trust
preferred securities through IFC Capital Trust 1, a trust
created and controlled by the Corporation.  The securities
were issued at $25 per share with a cumulative dividend rate
of 9.25%, payable quarterly.  They have an initial maturity
of 30 years with a 19-year extension option.  The securities
are callable at par after five years, or immediately, in the
event of an adverse tax development affecting the
Corporation's classification of the securities for federal
income tax purposes.  They are not convertible into common
stock of the Corporation.  The securities are shown on the
balance sheet net of capitalized issuance costs.

The sole assets of IFC Capital Trust I are subordinated
debentures of the Corporation with a principal balance of
$51,546,400, an interest rate of 9.25% and an initial
maturity of 30 years with a 19-year extension option.


NOTE 10 -- CONTINGENCIES

In the normal course of business, Irwin Financial
Corporation and its subsidiaries are subject to various
claims and other pending and possible legal actions.

As of June 30, 1997 Inland Mortgage Corporation (Inland) was
a defendant to three separate class action lawsuits relating
to the following: Inland's administration of mortgage escrow
accounts, Inland's right to require its borrowers to pay
premiums for private mortgage insurance, and Inland's right
to pay broker fees to mortgage brokers.

At present, it is not possible for the Corporation to
predict the likelihood of an unfavorable outcome or to
establish the possible extent or amount of liability or
potential loss exposure with respect to the litigation.

XXX   PAGE 9   XXX


                                    Item 2

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

     Net income for the second quarter ended June 30, 1997, was
$5,768,395 up 14.7% from the second quarter 1996 net income of
$5,027,737.  Net income per share was $0.50 for the second
quarter of 1997 as compared to $0.43 for the same period in 1996.
Return on equity for the second quarter of 1997 was 19.11%
compared to 18.97% in 1996.

      For the year to date, the Corporation recorded net income
of $10,964,671, up 9.5% from 1996.  Net income per share was
$0.95, up from $0.86 a year earlier.  Return on equity for the
year to date was 18.21% as compared to 19.44% for the same period
in 1996.

LINES OF BUSINESS

     Irwin Financial Corporation has four lines of business:

-    Mortgage banking (includes Inland Mortgage Corporation and
     the related activities of Irwin Union Bank)
-    Community banking (Irwin Union Bank and Irwin Union Advisory
     Services)
-    Home equity lending (includes Irwin Home Equity and the
     related activities of Irwin Union Bank)
-    Equipment leasing (includes Affiliated Capital Corp. and the
     related activities of Irwin Union Bank)

     Listed below are the earnings by line of business for the
quarter and year to date, as compared to the same periods in
1996:
<TABLE>
                            Three Months                Six Months
                           Ended June 30,              Ended June 30,
                          1997        1996           1997          1996
                          -----       -----          -----         -----
<S>                       <C>        <C>           <C>           <C>
Mortgage banking          $5,074,349 $6,039,587     $8,994,200   $11,333,180
Community banking          1,279,973    901,777      2,630,796     2,155,941
Home equity lending          515,421 (2,106,362)     1,701,832    (4,111,512)
Equipment leasing             65,868     42,890         71,140        14,620
Parent (including 
consolidating entries)    (1,167,216)   149,845     (2,433,297)      623,744
                        ------------- ---------     ------------  ----------
                          $5,768,395 $5,027,737    $10,964,671   $10,015,973
                        ============ ==========    ===========   ===========
</TABLE>
XXX   PAGE 10   XXX

MORTGAGE BANKING

Selected Financial Data (shown in thousands):
<TABLE>
                               Three Months       Six Months
                              Ended June 30,      Ended June 30,
                             ---------------      --------------
 
                              1997      1996      1997      1996
                            -------   -------   -------   -------
 Selected Income 
 Statement Data:
 
 <S>                     <C>       <C>        <C>       <C>
 Loan origination fees     $10,571   $11,782   $19,050   $22,673
 Gain from sales of loans    4,728     9,059     8,119    16,355
 Loan servicing fees        12,097    10,413    24,070    21,178
 Net interest income         4,409     4,662     8,242     8,873
 Provision for loan losses   (382)     (178)     (527)     (178)
 Gain on sale of servicing   6,849     3,342    13,668     4,529
 Other income                  802       324     1,115       520
 Operating expense        (30,507)  (29,258)  (58,553)  (54,925)
                         ----------------------------------------
 Income before tax           8,567    10,146    15,184    19,025
 Income tax                (3,493)   (4,106)   (6,190)   (7,692)
                         ----------------------------------------
 Net income                 $5,074    $6,040    $8,994   $11,333
                         ========================================
 
 Return on average equity   29.60%    40.87%    26.30%    38.47%
                         ========================================
 Mortgage loan 
 originations           $1,292,805 $1,341,623 $2,394,020 $2,589,187
                        ===========================================
</TABLE>
<TABLE>
  Selected Operating Data:           June 30,   December 31,
                                        1997           1996
                                 ------------   ------------
 
 <S>                             <C>            <C>
 Servicing portfolio             $10,509,593    $10,810,988
 Mortgage loans held for sale        278,254        371,058
 Mortgage servicing asset             71,384         70,551
</TABLE>

      Net income for the second quarter was $5.1 million, down
16.0% from the same period in 1996.  Year to date, net income was
$9.0 million compared to $11.3 million in 1996.

      Mortgage loan originations of $1.3 billion (including $81.4
million of brokered loans) were 3.6% below the second quarter of
1996.  For the year, originations totaled $2.4 billion, down 7.5%
from 1996.  Refinances accounted for 14.4% of loan production in
the second quarter of 1997 and 18.5% year to date.  This compares
to 15.1% and 24.5%, respectively, in 1996.  Decreased production
caused mortgage loan origination income to decline 10.3% in the
second quarter to $10.6 million, and year to date was down 16.0%
to $19.1 million.  Mortgage loan applications in process totaled
$1.3 billion at June 30, 1997, compared to $1.7 billion a year
earlier.

      Gains on the sale of loans decreased 46.9% in the second
quarter to $4.8 million.  Year to date, gains on the sale of
loans totaled $8.2 million compared with $16.4 million in 1996.

XXX   PAGE 11   XXX

      Mortgage servicing fees increased 16.2% in the second
quarter and 13.7% year to date to $12.1 million and $24.1
million, respectively.  The increase is reflective of a more
profitable mix of types of loans serviced by the company.  The
servicing portfolio totaled $10.5 billion at June 30, 1997, down
1.9% from a year earlier and 2.8% from December 31, 1996.
Mortgage servicing assets totaled $71.4 million at June 30, 1997,
up 1.2% from December 31, 1996.

      Revenues from the sale of mortgage servicing were up 105.0%
from the second quarter of 1996 to $6.8 million.  Year to date
servicing sale revenues totaled $13.7 million, up from $4.5
million in 1996.

      As a result of the decrease in mortgage loan closings from
1996, net interest income was down in the second quarter and year
to date.  Net interest income for the three months ended June 30,
1997 was $4.4 million, down 5.4% from the second quarter 1996.
Year to date, net interest income totaled $8.2 million, compared
to $8.9 million in 1996.

      Operating expenses were up $1.2 million, or 4.3% from the
second quarter of 1996 and $3.6 million or 6.6% year to date.
Included in second quarter operating expenses is $3.5 million of
amortization expense relating to  mortgage servicing assets, a
decrease of $0.3 million from 1996.  Year to date amortization
expense totaled $6.7 million, up $1.1 million from the previous
year.  The increase in other operating expense reflects the
significant investments in technology being made by this line of
business in order to remain competitive in the current
environment of the industry.

XXX   PAGE 12   XXX

Community Banking
<TABLE>
Selected Financial Data (shown in thousands):

                               Three Months           Six Months
                              Ended June 30,        Ended June 30,
                               ------------         ------------

                              1997      1996         1997      1996
                              -----     -----       -----     -----
Selected Income Statement Data:

<S>                        <C>       <C>          <C>       <C>
Net interest revenue        $5,395    $4,844      $10,473    $9,403
Provision for loan and
lease losses                 (553)     (426)        (995)     (952)
Other income                 2,227     2,096        4,654     4,479
Operating expense          (5,058)   (5,080)      (9,951)   (9,520)
                          --------- ---------   --------- ---------
Income before tax            2,011     1,434        4,181     3,410
Income tax                   (731)     (532)      (1,550)   (1,254)
                          --------- ---------   --------- ---------
Net income                  $1,280      $902       $2,631    $2,156
                          ========= =========   ========= =========
</TABLE>
<TABLE>
                          June 30,          December 31,
Selected Balance 
Sheet Data:                  1997                1996
                         ---------           ---------
<S>                       <C>                 <C>
Securities and short-term
  investments             $111,958            $116,533
Loans and leases           368,457             336,580
Allowance for loan and
  lease losses             (5,046)             (4,790)
All other assets            39,098              55,184
                          ---------           ---------
Total assets              $514,467            $503,507
                          =========           =========

Deposits                  $463,839            $453,879
All other liabilities       14,091              15,661
                          ---------           ---------
Total liabilities         $477,930            $469,540
                          =========           =========
Shareholder's equity       $36,537             $33,967
                          =========           =========
</TABLE>
     Community banking activities are conducted by Irwin Union
Bank through locations in seven counties in central Indiana. Net
income was up in the second quarter to $1.3 million from $901.8
thousand.  Year to date, net income was $2.6 million, up from
$2.2 million in 1996.  The provision for loan and lease losses
increased 29.8% to $553.0 thousand in the second quarter compared
with a provision of $426.0 thousand a year earlier.  Year to
date, the provision for loan and lease losses totaled $995.0
thousand, compared to $952.0 thousand in 1996, an increase of
4.5%.

XXX   PAGE 13   XXX

     Following is an analysis of net interest income and net
interest margin computed on a tax equivalent basis:

<TABLE>                             
For the Three Months Ended June 30,
                              1997                  1996
                              ----                  ----
(In thousands)    Average          Yield/  Average          Yield/
                  Balance Interest   Rate  Balance Interest   Rate
                 -------- ----------------------------------------
<S>              <C>       <C>      <C>   <C>      <C>      <C>

Interest -
earning assets   $475,821  $10,207  8.70% $408,441 $8,704   8.57%
Interest -
bearing 
liabilities      $412,042    4,733  4.66% $344,469  3,813   4.45%
Net interest 
income                      $5,474                 $4,891

Net interest margin                 4.61%                   4.82%
</TABLE>
<TABLE>
For the Six Months 
Ended June 30,                1997                   1996
                              ----                   ----
(In thousands)    Average          Yield/  Average           Yield/
                  Balance Interest   Rate  Balance Interest   Rate
                  ------- -------- ------  -------  -------  ------

<S>              <C>       <C>      <C>   <C>       <C>       <C>

Interest -
earning assets   $470,930  $19,846  8.50% $406,589  $17,121   8.47%
Interest -
bearing 
liabilities      $409,053    9,218  4.54% $340,693  $ 7,620   4.50%

Net interest income       $ 10,628                  $ 9,501

Net interest margin                 4.55%                     4.70%
</TABLE>
     Other income in the second quarter was up 6.2% to $2.2
million from $2.1 million in 1996.  For the year to date, other
income increased 3.9% to $4.7 million.  Other expenses decreased
0.4% from the second quarter of 1996 to $5.1 million.  For the
year, these expenses were up 4.5% to $10.0 million.  The
continued expansion of operations in new markets has increased
non-interest expense in 1997.  However, during the second
quarter, this increase was offset by a decline in certain
expenses incurred in 1996 relating to the restructuring of the
community bank's trust operations.

XXX    PAGE 14   XXX

HOME EQUITY LENDING

Selected Financial Data (shown in thousands):

<TABLE>
                               Three Months       Six Months
                               Ended June 30,     Ended June 30,
                              ---------------     --------------

                              1997      1996      1997      1996
                               ----      ----      ----      ----
Selected Income Statement 
Data:
<S>                       <C>       <C>       <C>       <C>
Net interest revenue        $1,634    $1,278    $2,807    $2,186
Provision for loan and
 lease losses                (813)     (248)     (732)     (514)
Gain from sale of loans      5,336         0     9,995         0
Loan servicing fees          3,105       868     5,834     1,844
Other revenue                   69        25       120        39
                          --------- --------- --------- ---------
Total net revenues           9,331     1,923    18,024     3,555
                          --------- --------- --------- ---------
Amortization of 
capitalized servicing        2,428       316     4,022       551
Operating expense            6,388     3,713    12,300     7,116
                          --------- --------- --------- ---------
Pre-tax income (loss)         $515  ($2,106)    $1,702  ($4,112)
                          ========= ========= ========= =========
</TABLE>
<TABLE>
Other Selected Financial Data:      June 30,    December 31,
                                       1997            1996
                                      ----             ----
<S>                                  <C>          <C>
Home equity loans, net of allowance  $91,113      $117,588
Net capitalized servicing             27,783        15,343
Servicing portfolio                  299,363       230,450
</TABLE>

      The home equity lending business was begun in 1994 with the
incorporation of Irwin Home Equity Corporation.  It has a single
production and servicing office located in San Ramon, California.
In 1995, the business began marketing home equity lines of credit
by means of direct mail and telemarketing.

      The home equity lending business recorded pre-tax income of
$0.5 million during the second quarter of 1997 and $1.7 million
year to date.  These results are compared to 1996 quarterly and
year to date losses of $2.1 million and $4.1 million,
respectively.  Net revenues for the quarter totaled $9.3 million,
up from $1.9 million a year earlier.  Year to date net revenues
increased to $18.0 million from $3.6 million in 1996. Included in
1997 net revenues are gains from the securitization of $64.9
million of home equity loans during the quarter and $125.0
million year to date.

     Net revenues for the second quarter include $3.1 million of
servicing fees, up from $0.9 million a year earlier.  Year to
date, servicing fees totaled $5.8 million, up from $1.8 million
in 1996.  The home equity lending business has retained the
servicing rights on all the loans it has securitized.  Its
managed portfolio of home equity loans totaled $299.4 million as
of June 30, 1997, compared with $230.5 million at December 31,
1996.  Loan volume for the quarter ended June 30, 1997 totaled
$56.7 million, an increase of 36.1% from 1996.  Year-to-date loan
volume increased 39.9% to $101.5 million.

XXX   PAGE 15   XXX

     The business will maintain the flexibility of either holding
the loans it produces or securitizing them.  Management will
evaluate these options throughout the year in light of market
conditions and financial objectives.

     Operating expenses were $8.8 million in the second quarter
of 1997, up 118.8% from 1996.  Year to date, they increased
112.9% to $16.3 million.  The increase is reflective of the
increased production activities of the company in 1997.  Included
in operating expenses is the amortization of capitalized
servicing which totaled $2.4 million in the second quarter, up
from $0.3 million in 1996. For the year to date, amortization
expense totaled $4.0 million compared with $0.6 million in the
previous year.  The increase results from the growth in
capitalized servicing asset which was $27.8 million at June 30,
1997, up from $15.3 million at December 31, 1996 and $5.2 million
a year earlier.

EQUIPMENT LEASING

      The equipment leasing business recorded pre-tax income for
the quarter and for the year of $65.9 thousand and $71.1
thousand, respectively. This compares to pre-tax income of $42.9
thousand and $14.6 thousand in the second quarter and year to
date 1996, respectively.  Net revenues were up 5.7% for the
quarter to $1.1 million and 5.1% year to date to $2.2 million.
Operating expenses totaled $1.0 million in the second quarter and
$2.1 million year to date in 1997, up 3.7% and 2.4%,
respectively, from 1996.  Lease volume was $10.0 million in the
second quarter of 1997, up 7.9% from a year earlier.  Year-to-
date volume was $18.3 million, up 8.3%.

PARENT COMPANY (INCLUDING CONSOLIDATING ENTRIES)

     For the quarter ended June 30, 1997, the parent company
recorded a net loss of $1.2 million, compared with net income of
$0.1 million a year earlier.  Year to date, the parent company's
net loss totaled $2.4 million compared with net income of $0.6
million in 1996.  There are two primary reasons for the decline.
First, the parent company records the income tax expense or
benefit generated at the home equity lending and equipment
leasing businesses until such time that all net operating losses
carried forward are fully used.  In the second quarter and year
to date 1997, the parent recorded $232.5 thousand and $709.2
thousand, respectively, of income tax expense related to these
lines of business.  This compares with $825.4 thousand and $1.6
million of income tax benefit recorded in the second quarter and
year to date, respectively, in 1996.

      The second factor in the decline in the parent company's
1997 results is the distributions on trust preferred securities
which were sold in January 1997.  During the second quarter and
year to date 1997, $1.2 million and $2.1 million, respectively,
was distributed.  See the section on the consolidated balance
sheet for further discussion of these securities.

XXX   PAGE 16   XXX

CONSOLIDATED INCOME STATEMENT ANALYSIS

     Net interest income for the second quarter of 1997 totaled
$13.3 million, up 9.7% from the second quarter of 1996.  For the
year, it increased 9.6% to $25.2 million.  The increases were the
net effect of a combination of factors throughout the
Corporation.  The mortgage banking business recorded decreased
net interest revenue as a result of the decreased production of
mortgage loans during 1997.  This decline was offset by increases
at the community banking and home equity lending businesses which
corresponded to growth in the loan portfolios in each of those
businesses.

     The loan and lease loss provision was $2.0 million for the
second quarter of 1997, as compared with $1.0 million for the
same period in 1996.  For the year, it totaled $2.7 million, up
from $2.0 million a year earlier.  This increase is consistent
with an increase in nonperforming assets which the Corporation
has experienced during 1997.  See the section on credit risk for
more discussion of this subject.

     Other income was up $7.9 million or 20.9% in the second
quarter of 1997.  Year to date other income increased $14.5
million or 20.1%.  This increase was driven primarily by home
equity lending activities.  Total income from home equity loan
sales and servicing was $8.4 million in the second quarter of
1997 and $15.8 million year to date.  This compares to 1996
revenues of $0.9 million and $1.8 million in the second quarter
and year to date, respectively.

      Operating expenses also increased in 1997 as the second
quarter was up $5.9 million or 14.5% from 1996.  For the year,
operating expenses increased $12.6 million or 16.4%.  This
increase is due in part to the growth of the Corporation through
the continued expansion of the home equity lending business,
investments in new technology at the mortgage banking business,
and the community bank's growth in new markets.  Also
contributing to the increase was additional amortization expense
associated with capitalized servicing assets on the balance
sheets of the mortgage bank and home equity lending business.
Amortization expense increased $1.8 million in the second quarter
to $5.9 million.  Year to date, the expense grew to $11.0 million
from $7.0 a year earlier.

     The effective income tax rate for the Corporation was 40.0%
in the second quarter of 1997 and 40.1% year to date.  This is
compared with 41.0% in the second quarter of 1996 and 40.9% year
to date 1996.

     In February 1997 the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
"Earnings per Share" (SFAS No. 128).  This statement specifies
the computation, presentation and disclosure requirements for
earnings per share.  SFAS No. 128 is effective for financial
statements issued for periods ending after December 15, 1997.  If
the Corporation had calculated earnings per share in accordance
with SFAS No. 128, the following amounts would have been
reported:
<TABLE>
                           Three months ended    Six months ended
                                  June 30,           June 30,
                               1997      1996      1997      1996
                             ------    ------    ------    ------
<S>                           <C>       <C>       <C>       <C>
Basic earnings per share      $0.52     $0.44     $0.98     $0.88
Dilutive earnings per share   $0.50     $0.43     $0.95     $0.86
</TABLE>
XXX   PAGE 17   XXX

CONSOLIDATED BALANCE SHEET ANALYSIS

     Total assets of the Corporation at June 30, 1997, were $1.2
billion, a decline of $69.5 million or 5.3% from December 31,
1996 total assets of $1.3 billion.  The decline was attributed to
an decrease in mortgage loans held for sale of $77.0 million.

      The decrease in assets was accompanied by an decrease in
short-term borrowings of $145.7 million or 31.5% and an increase
in deposits of $27.0 million or 4.2%.  A portion of noninterest
bearing deposits is associated with escrow accounts held on loans
in the servicing portfolio of Inland Mortgage.  These escrow
accounts totaled $181.7 million at June 30, 1997, up from $171.1
million at December 31, 1996.

     Shareholders' equity grew to $121.8 million or $10.95 per
share, a 2.4% increase over the $118.9 million or $10.46 per
share at the end of 1996.  The Corporation's equity to assets
ratio ended the quarter at 9.47%, compared to 9.12% at the end of
1996.

     Prior to the adoption of new mortgage banking accounting
standards in the second quarter of 1995, mortgage banking
accounting did not allow the full value of mortgage servicing
rights to be reflected on the balance sheet.  Since a significant
portion of the Corporation's mortgage servicing portfolio was
generated prior to the adoption of the new accounting standards,
it represents substantial economic value which is not recorded on
the balance sheet.  The following table demonstrates the
estimated after-tax value for the current quarter as well as the
past two year ends.
<TABLE>
(In thousands)         June 30,1997   Dec. 31,1996   Dec. 31,1995
                       ------------   ------------   ------------
<S>                     <C>            <C>            <C>
Servicing portfolio 
balance                 $10,509,593    $10,810,988    $10,301,914
                       ------------   ------------   ------------
Value @1.5%                $157,644       $162,165       $154,529
Less: capitalized 
servicing                    71,384         70,551         51,783
Tax liability at 40%         34,504         36,646         41,098
                       ------------   ------------   ------------

Net value not on 
balance sheet               $51,756        $54,968        $61,648
                       ============   ============   ============
Per share of common 
stock                         $4.65          $4.84          $5.44
                            =======        =======        =======
</TABLE>

CREDIT RISK

     The assumption of credit risk is a key source of earnings
for the community banking, home equity lending, and equipment
leasing businesses.  In addition, the mortgage banking business
assumes some credit risk despite the fact that the mortgages are
typically secured.

     The community banking and home equity lending businesses
manage credit risk through the use of lending policies, credit
analysis and approval

XXX   PAGE 18   XXX

procedures, and personal contact with the borrowers.  Loans over
a certain size are reviewed prior to approval by a loan
committee.   The equipment leasing business manages credit risk
in a similar manner through the use of lending policies, credit
analysis procedures, and personal contact with lessees.

     Management reviews various ratios as measurements of asset
quality; however, the two most significant areas are delinquent
loan and lease ratios and the adequacy of the allowance for
possible loan and lease losses.

     The adequacy of the allowance for loan and lease losses is
critical to the fair valuation of net loans and leases recorded
on the Corporation's balance sheet.  Management evaluates the
creditworthiness of significant borrowers, past loan and lease
loss experience, and current and anticipated economic conditions.
The allowance for loan and lease losses is reduced by loans and
leases which, in the opinion of management, are deemed to be
uncollectible.  The allowance is increased by provisions against
income.  The ending allowance at any reporting period reflects
management's opinion of the possible future loss potential of all
loans and leases currently recorded on the Corporation's books.

      As of June 30, 1997, the allowance for loan and lease
losses as a percentage of total loans and leases was 1.36%,
compared to 1.25% at December 31, 1996.  For the three months
ended June 30, 1997, the provision for possible loan and lease
losses totaled $2.0 million, a 94.9% increase over the amount
recorded in the second quarter of 1996.  Year to date, the
provision totaled $2.7 million, up from $2.0 million a year
earlier.  The higher 1997 reserve and provision are consistent
with the increase in nonperforming assets experienced by the
Corporation.  Net charge-offs for the quarter were $877.7
thousand as compared to $304.4 thousand in 1996.  Year to date
net charge-offs totaled $1.4 million, up from $0.5 million a year
earlier.

     Nonperforming assets (loans 90 days past due, nonaccrual,
and owned real estate) were $9.0 million or 0.70% of total assets
at June 30, 1997, up from $7.2 million or 0.55% at December 31,
1996 and $2.7 million or 0.26% at December 31, 1995.  The most
significant increases occurred at the mortgage bank and community
bank where nonperforming assets were up $1.6 million and $0.6
million, respectively, from year end 1996. The Corporation
monitors the loans and property included in this total in
evaluating the status of the current reserve.

XXX   PAGE 19   XXX
<TABLE>
Nonperforming Assets
(In Thousands)             June 30,   December 31,   December 31,
                               1997           1996           1995
                       --------------------------------------------

<S>                          <C>            <C>            <C>
Accruing loans past due
90 days or more:
     Commercial                $913           $256           $418
     Leasing                      0              0              0
     Real Estate                  0            234              0
     Consumer                    94            205            202
                          ---------      ---------      ---------
          Subtotal            1,007            695            620
                          ---------      ---------      ---------

Nonaccrual loans:
     Commercial               2,459          2,739            670
     Leasing                  1,051          1,261            415
     Real Estate              2,757            260            694
     Consumer                     0              0              0
                          ---------      ---------      ---------
          Subtotal            6,267          4,260          1,779
                          ---------      ---------      ---------
Total nonperforming loans     7,274          4,955          2,399
                          ---------      ---------      ---------

Other real estate owned       1,763          2,239            295
                          ---------      ---------      ---------
Total nonperforming assets   $9,037         $7,194         $2,694
                          =========      =========      =========
Nonperforming assets to
total assets                  0.70%          0.55%          0.26%
                             ======         ======         ======
</TABLE>
LIQUIDITY

     Liquidity is the availability of funds to meet the daily
requirements of the business.  For financial institutions, demand
for funds comes principally from extensions of credit and
withdrawal of deposits.  Liquidity is provided by asset
maturities, sales of investment securities, or short-term
borrowings.  Seasonal fluctuations in deposit levels and loan
demand require differing levels of liquidity at various times
during the year.  Liquidity measures are formally reviewed by
management monthly, and they continue to show adequate liquidity
in all areas of the organization.

XXX   PAGE 20   XXX

INTEREST RATE SENSITIVITY

Interest rate sensitivity refers to the degree to which the
Corporation's short- and long-term earnings would change due to
changes in market rates of interest.  The corporation's goal in 
addressing this risk is to manage its businesses so that movements 
of interest rates have a non-material impact on net income and on 
the value of its assets and liabilities.  To measure its sensitivity 
to changes in interest rates and appropriate hedging strategies, the 
Corporation uses a combination of measurement techniques including 
simulation, rate shock analysis, and gap analysis.

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 June 30, 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.  Fixed rate assets and
liabilities such as mortgage servicing rights and the escrow
deposits associated with them are analyzed based on their
expected maturities which reflect estimated pre-payment
characteristics, rather than their maximum contractual
maturities.  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. 

<TABLE>
                  Within   4-12     1-5    Over 5   Subtotal Non-    Total
                     3     Months   Years  Years             market
                  Months
                  ----------------------------------------------------------
(In Thousands)
Assets:
<S>             <C>        <C>     <C>     <C>     <C>     <C>        <C>
Interest-bearing
deposits with 
banks             $1,744   $4,095   $4,647      $0  $10,486       $0   $10,486
Federal Funds Sold 7,000        0        0       0    7,000        0     7,000
Taxable 
investment
securities        15,564   12,242   34,990   1,483   64,279        0    64,279
Tax-exempt 
investment
securities           384      100    1,462   2,403    4,349        0     4,349
Mortgages held 
for sale         368,062        0        0       0  368,062        0   368,062
Loans, net of
unearned income  258,841   72,144  121,046  86,268  538,299        0   538,299

Total interest-
earning assets   651,595   88,581  162,145  90,154  992,475        0   992,475

Liabilities:
Non-interest 
bearing
deposits              0         0        0       0       0  $204,773  $204,773
Money Market 
checking         16,368         0   49,104  16,082  81,554         0    81,554
Money Market 
savings           2,518         0    7,761       0  10,279         0    10,279
Regular savings  27,295     2,217   11,822   9,135  50,469         0    50,469
Time deposits   157,623    69,191   51,901   1,014 279,729         0   279,729
Short-term 
borrowings      266,174         0        0       0 266,174         0   266,174
Long-term debt    1,377     3,196    5,217  50,000  59,790         0    59,790
Total interest-
bearing
liabilities      471,355   74,604  125,805  76,231 747,995   204,773   952,768
Trust preferred
 securities            0        0        0  50,000  50,000         0    50,000

Interest 
sensitivity
gap             180,240    13,977   36,340 (36,077) 194,480 (204,773) (10,293)

Cumulative 
interest
sensitivity 
gap            $180,240  $194,217 $230,557 $194,480         (10,293)
                ===================================         ========
</TABLE>

As the above table shows, the consolidated one-year gap at June
30, 1997 was a positive $194.2 million.  This compares to a
positive gap of $188.4 million at March 31, 1997.

Since the gap was positive at June 30, 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 rights.  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.


XXX   PAGE 22   XXX

CAPITAL ADEQUACY

     Capital is a major focus of regulatory attention, with the
risk-based capital standard being the principal capital adequacy
measure.  Based on this standard, financial institutions are
currently required to have a risk-based capital ratio of at least
8.0%.  In addition to the minimum requirements for the risk-based
capital ratio, Tier I capital of at least 4.0% of total risk-adjusted
assets must be maintained.  Equity and risk-based capital ratios for the
Corporation are as follows:
<TABLE>
 
                       June 30,      December 31,    December 31,
                           1997              1996           1995
                     ---------- --------------------------------

<S>                 <C>               <C>             <C>
Equity to Assets      9.47%            9.12%           9.56%
Risk-Based Capital 
Ratio                17.39%           14.23%          14.49%
Tier I Capital 
Ratio                16.62%           13.47%          13.80%
</TABLE>

The Corporation's capital ratios are adequate and above
regulatory minimums.


OTHER MATTERS

The Corporation, like many financial institutions, is actively
addressing its exposure to the "Year 2000 Bug" (which is commonly
defined as the ability of information and other business systems
to function fully and accurately from, into, and between the
twentieth and twenty-first centuries).  The Corporation has
developed a five-stage project plan which culminates in final
testing and implementation by mid-1999.

      The Corporation is currently in the assessment stage of its
plan and cannot definitively estimate the extent of the problem
for the Corporation or the cost to remedy it.  The Corporation
has developed a technology strategy which primarily uses systems
developed by third parties and has very few internally developed
applications.  Consequently, the Corporation's principal focus
will be on assuring Year 2000 compliance from its commercial
application vendors.

      In April 1997, a lawsuit commenced in May 1995 against the
Corporation, Irwin Home Equity Corporation and certain employees
of Irwin Home Equity, alleging misappropriation of trade secrets,
was terminated.

XXX   PAGE 23   XXX

PART II

Other Information


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


a.   The Annual Meeting of Shareholders of Registrant was held on
April 29, 1997.

b.   The following directors were elected at the meeting:

<TABLE>
                        Affirmative  Negative     Votes     Votes
                              Votes     Votes  Withheld Abstained
                        ----------- --------- --------- ---------
     
   <S>    <C>            <C>           <C>      <C>         <C>
   Sally A. Dean         10,127,125    15,707    36,000     5,187
   David W. Goodrich     10,162,083    15,707     1,042     5,187
   John T. Hackett       10,163,125    15,707         0     5,187
   William H. Kling       9,690,855    15,707   472,270     5,187
   Brenda J. Lauderback  10,159,735    15,707     3,390     5,187
   John C. McGinty       10,117,919    15,707    45,206     5,187
   Irwin Miller           9,694,473    15,707   468,652     5,187
   William I. Miller     10,163,125    15,707         0     5,187
   John A. Nash          10,162,925    15,707       200     5,187
   Lance R. Odden        10,123,929    15,707    39,196     5,187
   Theodore M. Solso     10,161,018    15,707     2,107     5,187
</TABLE>
    

c.   Other matters voted on during the meeting were as follows:

     Confirmation of independent auditors, Coopers & Lybrand, of
     the Registrant.  10,078,153 affirmative, 65,402 negative, 40,464
     abstained

     Approval of the 1997 Irwin Financial Corporation Stock
     Option Plan.  9,949,623 affirmative, 170,480 negative, 63,916 abstained
 

XXX   PAGE 24   XXX


PART II

Other Information



Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits to Form 10-Q
<TABLE>
Number Assigned                                   Sequential Numbering
In Regulation S-K                                 System Page Number
Item 601            Description                   of Exhibit
-----------------   -----------                   --------------------

<C>                 <S>                                <C>
(10)                Irwin Financial Corporation        27
                    1997 Stock Option Plan

(11)                Computation of                     38
                    Earnings per Share

(27)                Financial Data Schedule            39
</TABLE>


(b)  Reports on Form 8-K

None

XXX   PAGE 25   XXX

SIGNATURES

     Pursuant to the requirements 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

                              By: /s/ Thomas D. Washburn
                                  ________________________
                                  Thomas D. Washburn
                                  Chief Financial Officer


                              By: /s/ Marie C. Strack
                                  _________________________
                                  Marie C. Strack
                                  Corporate Controller
                                  (Chief Accounting Officer)

XXX   PAGE 26   XXX