UNITED STATES
               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, 1999

                                     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)

                          812/376-1680
           __________________________________________
       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, 1999, there were outstanding 21,667,110
common shares, no par value, of the Registrant.


                           PART I

                           Item 1
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Unaudited)
<CAPTION>

(In thousands, except for shares)                                         June 30,         December 31,
Assets:                                                                     1999               1998
<S>                                                                           <C>              <C>
Cash and due from banks                                                         $56,960          $68,942
Federal funds sold                                                                1,900            8,580
   Cash and cash equivalents                                                     58,860           77,522
Interest-bearing deposits with financial institutions                            28,444           18,441
Trading assets                                                                   47,589           32,148
Investment securities  (Market value: $44,599
in 1999 and $48,537 in 1998)-Note 2                                              44,501           48,055
Loans held for sale - Note 3                                                    575,147          936,788
Loans and leases, net of unearned income - Note 4                               613,087          556,991
 Less: Allowance for loan and lease losses - Note 5                              (9,812)          (9,888)
                                                                                603,275          547,103
Servicing assets  - Note 6                                                      134,925          117,129
Accounts receivable                                                              54,934           71,087
Accrued interest receivable                                                       6,767           13,071
Premises and equipment                                                           21,711           21,382
Other assets                                                                     44,720           50,418
                                                                             $1,620,873       $1,933,144
Liabilities and Shareholders' Equity:
Deposits
   Noninterest-bearing                                                         $385,718         $477,724
   Interest-bearing                                                             418,864          389,516
   Certificates of deposit over $100,000                                        103,521          141,971
                                                                                908,103        1,009,211
Short-term borrowings- Note 7                                                   435,669          644,861
Long-term debt- Note 8                                                            2,483            2,839
Other liabilities                                                                73,834           83,001
Total liabilities                                                             1,420,089        1,739,912

Company-obligated mandatorily redeemable
  preferred securities of subsidiary trust- Note 9                               48,034           47,999

Shareholders' equity
   Preferred stock, no par value - authorized
      4,000,000 shares; none issued                                                  --               --
   Common stock; no par value - authorized 40,000,000 shares;
      issued 23,402,080 shares in 1999 and 1998; including
      1,860,843 and 1,729,324 shares in treasury in 1999 and 1998,
      respectively                                                               29,965           29,965
   Additional paid-in capital                                                     1,519            2,595
   Unrealized gains (losses) on investment securities                                (9)              85
   Retained earnings                                                            156,655          142,232
                                                                                188,130          174,877
   Less treasury stock, at cost                                                 (35,380)         (29,644)
   Total shareholders' equity                                                   152,750          145,233
                                                                             $1,620,873       $1,933,144
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
<CAPTION>
                                                                                     Three Months Ended
                                                                                            June 30,
(In thousands, except for per share)                                        1999               1998
Interest income:
<S>                                                                             <C>              <C>
 Loans and leases                                                               $12,538          $13,976
 Investment securities:
   Taxable                                                                          982              878
   Tax-exempt                                                                        69               80
 Loans held for sale                                                             14,883           13,255
 Trading Account                                                                  1,589              565
 Federal funds sold                                                                 274               67
    Total interest income                                                        30,335           28,821
Interest expense:
 Deposits                                                                         5,751            6,055
Borrowings                                                                        6,802            6,076
    Total interest expense                                                       12,553           12,131
 Net interest income                                                             17,782           16,690
 Provision for loan and lease losses - Note 5                                     2,330            1,056
 Net interest income after provision for
    loan and lease losses                                                        15,452           15,634
Other income:
 Loan origination fees                                                           12,613           14,037
 Gain from sales of loans                                                        16,098           18,885
 Loan servicing fees                                                             15,943           13,624
 Amortization and impairment of servicing assets                                  4,573            7,954
   Net loan administration income                                                11,370            5,670
 Gain on sale of mortgage servicing                                              10,214           10,057
 Trading gains (losses)                                                            (639)            (972)
 Brokerage fees and commissions                                                     411              292
 Trust fees                                                                         544              560
 Service charges on deposit accounts                                                445              394
 Insurance commissions, fees and premiums                                         1,019              466
 Other                                                                            1,444              714
                                                                                 53,519           50,103
Other expense:
 Salaries                                                                        28,808           28,792
 Pension and other employee benefits                                              4,511            4,062
 Office expense                                                                   3,058            3,159
 Premises and equipment                                                           5,804            4,602
 Marketing and development                                                        2,337            3,035
 Other                                                                           10,305            9,239
                                                                                 54,823           52,889
Income before income taxes                                                       14,148           12,848
Provision for income taxes                                                        5,361            4,628
                                                                                  8,787            8,220
Distribution on company-obligated mandatorily
  redeemable preferred securities of subsidiary trust                             1,174            1,174
Net income available to common shareholders                                       $7,613           $7,046

 Earnings per share of common stock available to shareholders:
 Basic - Note 10                                                                   $0.35            $0.32
 Diluted - Note 10                                                                 $0.35            $0.32
 Dividends per share of common stock                                               $0.05            $0.04

</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
<CAPTION>
                                                                                     Six Months Ended
                                                                                              June 30,
(In thousands, except for per share)                                        1999               1998
Interest income:
<S>                                                                             <C>              <C>
 Loans and leases                                                               $24,197          $30,389
 Investment securities:
   Taxable                                                                        1,987            1,617
   Tax-exempt                                                                       141              155
 Loans held for sale                                                             32,447           23,484
 Trading Account                                                                  2,875            1,728
 Federal funds sold                                                                 417              414
    Total interest income                                                        62,064           57,787
Interest expense:
 Deposits                                                                        11,413           11,372
Borrowings                                                                       14,943           15,617
    Total interest expense                                                       26,356           26,989
 Net interest income                                                             35,708           30,798
 Provision for loan and lease losses - Note 5                                     3,531            2,674
 Net interest income after provision for
    loan and lease losses                                                        32,177           28,124
Other income:
 Loan origination fees                                                           26,028           27,009
 Gain from sales of loans                                                        37,635           34,863
 Loan servicing fees                                                             31,375           27,501
 Amortization and impairment of servicing assets                                  5,632           14,923
   Net loan administration income                                                25,743           12,578
 Gain on sale of mortgage servicing                                              22,340           20,013
 Trading gains (losses)                                                         (10,386)             392
 Brokerage fees and commissions                                                     763              510
 Trust fees                                                                       1,120            1,106
 Service charges on deposit accounts                                                847              798
 Insurance commissions, fees and premiums                                         1,507              863
 Other                                                                            2,569            1,806
                                                                                108,166           99,938
Other expense:
 Salaries                                                                        57,407           54,296
 Pension and other employee benefits                                              9,984            8,505
 Office expense                                                                   6,415            6,079
 Premises and equipment                                                          11,472            9,321
 Marketing and development                                                        5,138            6,326
 Other                                                                           19,518           17,569
                                                                                109,934          102,096
Income before income taxes                                                       30,409           25,966
Provision for income taxes                                                       11,475            9,507
                                                                                 18,934           16,459
Distribution on company-obligated mandatorily
  redeemable preferred securities of subsidiary trust                             2,349            2,349
Net income available to common shareholders                                      $16,585          $14,110

 Earnings per share of common stock available to shareholders:
 Basic - Note 10                                                                   $0.77            $0.65
 Diluted - Note 10                                                                 $0.76            $0.64
 Dividends per share of common stock                                               $0.10            $0.08
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
<CAPTION>
                                                              Unrealized
                                                            Gains/Losses              Additional
                                               Retained    on Investment     Common      Paid in   Treasury
                                  Total        Earnings       Securities      Stock      Capital      Stock
(In thousands)
<S>                                  <C>        <C>                  <C>     <C>          <C>       <C>
Balance at April 1, 1999             153,566    150,119               44     29,965        2,881    (29,443)
Comprehensive Income:  Note 1
  Net Income                                      7,613
  Other Comprehensive Income                                         (53)
    Total                              7,560
Cash dividends                        (1,077)    (1,077)
Purchase of treasury stock            (7,119)                                                        (7,119)
Sales of treasury stock                 (180)                                             (1,362)     1,182
Balance June 30, 1999                152,750    156,655               (9)    29,965        1,519    (35,380)

Balance at April 1, 1998             130,097    121,606               62     29,965          986    (22,522)
Comprehensive Income:  Note 1
  Net Income                                      7,046
  Other Comprehensive Income
    Total                              7,046
Cash dividends                          (868)      (868)
Purchase of treasury stock            (5,042)                                                        (5,042)
Sales of treasury stock                  630                                                 208        422
Balance June 30, 1998                131,863    127,784               62     29,965        1,194    (27,142)
</TABLE>

<TABLE>
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
<CAPTION>
                                                              Unrealized
                                                            Gains/Losses              Additional
                                               Retained    on Investment     Common      Paid in   Treasury
                                  Total        Earnings       Securities      Stock      Capital      Stock
(In thousands)
<S>                                  <C>        <C>                  <C>     <C>          <C>       <C>
Balance at January 1, 1999           145,233    142,232               85     29,965        2,595    (29,644)
Comprehensive Income:  Note 1
  Net Income                                     16,585
  Other Comprehensive Income                                         (94)
    Total                             16,491
Cash dividends                        (2,162)    (2,162)
Purchase of treasury stock            (7,119)                                                        (7,119)
Sales of treasury stock                  307                                              (1,076)     1,383
Balance June 30, 1999                152,750    156,655               (9)    29,965        1,519    (35,380)

Balance at January 1, 1998           127,983    115,414               55     29,965          780    (18,231)
Comprehensive Income:  Note 1
  Net Income                                     14,110
  Other Comprehensive Income                                           7
    Total                             14,117
Cash dividends                        (1,740)    (1,740)
Purchase of treasury stock            (9,488)                                                        (9,488)
Sales of treasury stock                  991                                                 414        577
Balance June 30, 1998                131,863    127,784               62     29,965        1,194    (27,142)
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
<CAPTION>
For the six months ended June 30,                                                   1999             1998
(In thousands)
<S>                                                                            <C>              <C>
Net income                                                                      $16,585          $14,110
Adjustments to reconcile net income to cash provided
   by operating activities:
Depreciation and amortization                                                     2,558           13,550
Provision for loan and lease losses                                               3,531            2,674
Amortization of premiums, less accretion of discounts                             1,082            1,126
(Increase) decrease in loans held for sale                                      361,641         (115,520)
Gain on sale of mortgage servicing                                              (22,340)         (20,013)
Other, net                                                                       17,192          (13,060)
   Net cash (used) provided by operating activities                             380,249         (117,133)

Lending and investing activities:
Proceeds from maturities/calls of investment securities:
   Held-to-Maturity                                                               5,222            5,715
   Available-for-Sale                                                               190            3,792
Proceeds from sales of investment securities:
   Available-for-Sale                                                                              1,000
Purchase of investment securities:
   Held-to-Maturity                                                                               (3,640)
   Available-for-Sale                                                            (2,940)          (4,091)
Net increase in trading assets                                                  (15,441)         (12,623)
Net (increase) decrease in interest-bearing
   deposits with financial institutions                                         (10,003)           3,878
Net increase in loans, excluding sales                                          (82,631)        (264,254)
Sale of loans                                                                    22,928          207,940
Additions to mortgage servicing assets                                          (69,884)         (49,521)
Proceeds from sale of mortgage servicing assets                                  75,726           42,884
Other, net                                                                       (2,448)             574
   Net cash used by lending and investing activities                            (79,281)         (68,346)

Financing activities:
Net increase (decrease) in deposits                                            (101,108)         153,856
Net (decrease) increase in short-term borrowings                               (209,192)          70,565
Proceeds (repayment) of long-term debt                                             (356)           2,620
Purchase of treasury stock                                                       (7,119)          (9,488)
Proceeds from sale of stock for employee benefit plans                              307              991
Dividends paid                                                                   (2,162)          (1,740)
   Net cash provided  by financing activities                                  (319,630)         216,804
Net increase (decrease) in cash and cash equivalents                            (18,662)          31,325
Cash and cash equivalents at beginning of year                                   77,522           56,524
Cash and cash equivalents at end of year                                        $58,860          $87,849

Supplemental disclosures of cash flow information:
Cash paid during the period:
     Interest                                                                   $26,227          $30,104
     Income taxes                                                                $8,219           $6,103
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.

NOTES TO THE FINANCIAL STATEMENTS  (Unaudited)


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:  The unaudited financial statements included herein have
been prepared by the Corporation pursuant to the rules and regulations of the
Securities and Exchange Commission but do not include all information and
footnotes required by generally accepted accounting principles.  In the opinion
of management, the financial statements reflect all material adjustments
necessary for a fair presentation.  The accompanying financial statements
should be read in conjunction with the financial statements and related notes
included with the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1998.

Reclassifications:  Certain amounts in the 1998 consolidated financial
statements have been reclassified to conform to the 1999 presentation.

Derivatives: On June 15, 1998, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
(FAS 133).  The Corporation will adopt FAS 133 on January 1, 2001.
FAS 133 requires that all derivative instruments be recorded on the
balance  sheet at their fair value.  Changes in the fair value of
derivatives are recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designated
as part of a hedge transaction and, if it is, the type of hedge transaction.
The Corporation does not expect the adoption of this standard to have a
material effect on its financial position or results of operation.

Derivative instruments on the Corporation's balance sheet are classified
as trading assets and carried at market value.  Changes in market value are
recorded as trading gains or losses on the income statement.

NOTE 2 - INVESTMENT SECURITIES

The carrying amounts of investment securities, including net unrealized losses
of $16 thousand and $142 thousand on available-for-sale securities at
June 30, 1999 and December 31, 1998, respectively, are summarized as follows:
<TABLE>
<CAPTION>
                                                                               June 30,      December 31,
(In thousands)                                                                    1999              1998

<S>                                                                             <C>              <C>
Held-to-Maturity
    US Treasury and Government obligations                                      $11,399          $32,158
     Obligations of states and political subdivisions                             4,707            5,207
     Mortgage-backed securities                                                   2,160            4,424
Total Held-to-Maturity                                                           18,266           41,789


Available-for-Sale
    US Treasury and Government obligations                                       22,512            2,096
     Mortgage-backed securities                                                   3,147            4,131
    Other                                                                           576               39
Total Available for Sale                                                         26,235            6,266

Total Investments                                                               $44,501          $48,055
</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 on
available-for-sale securities, net of the future tax impact, are reported
as a separate component of shareholders' equity until realized.


NOTE 3 - LOANS HELD FOR SALE

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

NOTE 4 - LOANS AND LEASES
<TABLE>
<CAPTION>
Loans and leases are summarized as follows:
                                                                          June 30,         December 31,
(In thousands)                                                              1999               1998

<S>                                                                            <C>              <C>
Real estate-mortgage                                                           $116,414         $123,980
Commercial, financial and agricultural                                          367,550          278,834
Real estate-construction                                                         84,426           97,253
Consumer                                                                         40,414           51,730
Lease financing                                                                   5,040            6,375
Unearned income                                                                    (757)          (1,181)

                                                                               $613,087         $556,991
</TABLE>

NOTE 5 - ALLOWANCE FOR LOAN AND LEASE LOSSES

Changes in the allowance for loan and lease losses are summarized as follows:
<TABLE>
<CAPTION>
                                                                          June 30,         December 31,
(In thousands)                                                              1999               1998

<S>                                                                              <C>              <C>
Balance at beginning of year                                                     $9,888           $8,812

Provision for loan and lease losses                                               3,531            5,995
Reduction due to sale of loans                                                   (2,902)          (2,976)
Recoveries                                                                          331              559
Charge-offs                                                                      (1,036)          (2,502)

Balance at end of period                                                         $9,812           $9,888
</TABLE>


NOTE 6- SERVICING ASSETS

Included on the consolidated balance sheet at June 30, 1999 and December 31,
1998 are $134.9 million and $117.1 million, respectively, of servicing assets.
These amounts relate to the principal balances of loans serviced by the
Corporation for investors.  Although they are not generally held for purposes
of sale, there is an active secondary market for servicing assets.  The
Corporation has periodically sold servicing assets.


NOTE 7- SHORT-TERM BORROWINGS
<TABLE>
<CAPTION>
Short-term borrowings are summarized as follows:
                                                                          June 30,         December 31,
(In thousands)                                                              1999              1998

<S>                                                                            <C>              <C>
Repurchase agreements and drafts payable related to
     mortgage loan closings                                                     $99,336         $172,126
Lines of Credit                                                                 112,065          180,118
Federal funds                                                                   125,000          266,000
Commercial paper                                                                 25,464           26,617
Other                                                                            73,804                -

Total                                                                          $435,669         $644,861
</TABLE>
Repurchase agreements at June 30, 1999 and December 31, 1998, include
$1.3 million and $29.8 million 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 $98.0 million and
$142.3 million at June 30, 1999 and December 31, 1998.  These borrowings
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 4.82% to the lender's prime rate.



NOTE 8 -- LONG-TERM DEBT

Long-term debt at June 30, 1999 of $2.5 million consists of a note payable
with a variable interest rate averaging 7.4% and maturing on July 1, 2002.
Long-term debt as of December 31, 1998 of $2.8 million consisted of a note
payable with a variable interest rate averaging 7.94%  and maturing on
July 1, 2002.



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

In January 1997, the Corporation issued $50 million of trust preferred
securities through IFC Capital Trust I, 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 $51.5 million, an interest rate
of 9.25% and an initial maturity of 30 years with a 19-year extension option.


NOTE 10 -- EARNINGS PER SHARE

<TABLE>
Earnings per share calculations are summarized as follows:
<CAPTION>
                                                      Basic Earnings    Effects of           Diluted Earnings
                                                         Per Share     Stock Options           Per Share
Three months ended June 30, 1999

<S>                                                           <C>              <C>                 <C>
Net income available to common shareholders                    $7,613            $--                $7,613
Shares                                                         21,547            339                21,886
Per-Share Amount available to common shareholders               $0.35          $0.00                 $0.35


Six months ended June 30, 1999

Net income available to common shareholders                   $16,585            $--               $16,585
Shares                                                         21,547            348                21,895
Per-Share Amount available to common shareholders               $0.77          $0.01                 $0.76
</TABLE>
<TABLE>
<CAPTION>
                                                      Basic Earnings    Effects of           Diluted Earnings
                                                         Per Share     Stock Options           Per Share
Three months ended June 30, 1998

<S>                                                           <C>             <C>                  <C>
Net income available to common shareholders                    $7,046            $--                $7,046
Shares                                                         21,738            246                21,984
Per-Share Amount available to common shareholders               $0.32          $0.00                 $0.32


Six months ended June 30, 1998

Net income available to common shareholders                   $14,110            $--               $14,110
Shares                                                         21,800            329                22,129
Per-Share Amount available to common shareholders               $0.65         ($0.01)                $0.64
</TABLE>


NOTE 11 -- 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, 1999, Irwin Mortgage Corporation (IMC) was a defendant
in two separate class action lawsuits relating to the following:

IMC's administration of mortgage escrow accounts and IMC's right to pay
broker fees to mortgage brokers.

As of June 30, 1999, Irwin Union Leasing, (formerly Affiliated Capital Corp.
(ACC)), and Irwin Financial Corporation were defendants in a class action
lawsuit alleging misrepresentations by a manufacturer of certain equipment
financed by ACC.

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 exposure with respect to the litigation.

NOTE 12 -- Industry Segment Information

The Corporation has three principal segments that provide a broad range of
financial services throughout the United States.  The Mortgage Banking line
of business originates, sells and services residential first mortgage loans.
The Commercial Banking line of business provides commercial banking services.
The Home Equity Lending line of business originates and services home equity
loans via direct mail and telemarketing.  The Corporation's other segments
include equipment leasing and the parent company.


The accounting policies of each segment are the same as those decribed in the
"Summary of Significant Accounting Policies. " Below is a summary of each
segment's revenues, net income, and assets for 1999 and 1998:
<TABLE>
<CAPTION>

                                                 Mortgage    Commercial    Home Equity
(In thousands)                                    Banking      Banking       Lending      Other       Consolidated
For the three months ended June 30, 1999
<S>                                               <C>            <C>          <C>         <C>           <C>
Net interest income                                 $5,205         $6,248       $4,712       ($713)        $15,452
Intersegment interest                              ($1,430)          $806        ($339)       $963               0
Other revenue                                       44,510          2,949        6,853        (793)         53,519
Intersegment revenues                                    0             42          607        (649)              0
  Total net revenues                                48,285         10,045       11,833      (1,192)         68,971
Other expense                                       38,102          6,170        8,067       2,484          54,823
Intersegment expenses                                  685            906          466      (2,057)              0
  Net income before taxes                            9,498          2,969        3,300      (1,619)         14,148
Income taxes                                         3,876          1,118            0         367           5,361
  Net income                                         5,622          1,851        3,300      (1,986)          8,787
Distribution on Preferred Securities                     0              0            0       1,174           1,174
  Net income available to shareholders              $5,622         $1,851       $3,300     ($3,160)         $7,613
Assets at June 30, 1999                           $736,851       $656,443     $283,455    ($55,876)     $1,620,873

For the three months ended June 30, 1998
Net interest income                                $13,024           $765        ($315)     $2,160         $15,634
Intersegment interest                               (6,306)         4,822        1,805        (321)              0
Other revenue                                       43,035          2,673        4,102         293          50,103
Intersegment revenues                                    0             32          182        (214)              0
  Total net revenues                                49,753          8,292        5,774       1,918          65,737
Other expense                                       36,577          5,444        7,890       2,978          52,889
Intersegment expenses                                  463            419           26        (908)              0
  Net income before taxes                           12,713          2,429       (2,142)       (152)         12,848
Income taxes                                         5,148            919            0      (1,439)          4,628
  Net income                                         7,565          1,510       (2,142)      1,287           8,220
Distribution on Preferred Securities                     0              0            0       1,174           1,174
  Net income available to shareholders               7,565          1,510       (2,142)        113           7,046
Assets at June 30, 1998                           $748,620       $581,583     $178,245    $220,022      $1,728,470
</TABLE>
<TABLE>
<CAPTION>
                                                 Mortgage    Commercial    Home Equity
(In thousands)                                    Banking      Banking       Lending      Other       Consolidated
For the six months ended June 30, 1999
<S>                                               <C>            <C>          <C>         <C>           <C>
Net interest income                                $12,416        $11,487       $3,938      $4,336         $32,177
Intersegment interest                               (3,402)         2,191        5,396      (4,185)              0
Other revenue                                       88,533          6,049       12,373       1,211         108,166
Intersegment revenues                                    0             84        1,171      (1,255)              0
  Total net revenues                                97,547         19,811       22,878         107         140,343
Other expense                                       76,699         12,422       15,943       4,870         109,934
Intersegment expenses                                1,319          1,735          603      (3,657)              0
  Net income before taxes                           19,529          5,654        6,332      (1,106)         30,409
Income taxes                                         7,959          2,138            0       1,378          11,475
  Net income                                        11,570          3,516        6,332      (2,484)         18,934
Distribution on Preferred Securities                     0              0            0       2,349           2,349
  Net income available to shareholders             $11,570         $3,516       $6,332     ($4,833)        $16,585
Assets at June 30, 1999                           $736,851       $656,443     $283,455    ($55,876)     $1,620,873

For the six months ended June 30, 1998
Net interest income                                $16,234         $7,004         $818      $4,068         $28,124
Intersegment interest                               (5,150)         4,018        1,153         (21)              0
Other revenue                                       82,730          5,415       12,354        (561)         99,938
Intersegment revenues                                    0             67         (773)        706               0
  Total net revenues                                93,814         16,504       13,552       4,192         128,062
Other expense                                       70,639         10,811       14,846       5,800         102,096
Intersegment expenses                                  915            790           52      (1,757)              0
  Net income before taxes                           22,260          4,903       (1,346)        149          25,966
Income taxes                                         9,043          1,847            0      (1,383)          9,507
  Net income                                        13,217          3,056       (1,346)      1,532          16,459
Distribution on Preferred Securities                     0              0            0       2,349           2,349
  Net income available to shareholders              13,217          3,056       (1,346)       (817)         14,110
Assets at June 30, 1998                           $748,620       $581,583     $178,245    $220,022      $1,728,470
</TABLE>




                           Item 2

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

Management's discussion and analysis should be read in
conjunction with the accompanying consolidated financial
statements and footnotes.  Forward-looking statements contained
in the following discussion are based on estimates and
assumptions that are subject to significant business, economic
and competitive uncertainties, many of which are beyond the
Corporation's control and are subject to change.  These
uncertainties can affect actual results and could cause actual
results to differ materially from those expressed in any forward-
looking statements in this discussion.

Overview

     Net income for the second quarter ended June 30, 1999, was
$7.6 million, up 8.0% from the second quarter 1998 net income of
$7.0 million.  Net income per share (diluted) was $0.35 for the
second quarter of 1999 as compared to $0.32 for the same period
in 1998.  Return on equity for the second quarter of 1999 was
19.90% compared to 21.69% in 1998.

      For the year to date, the Corporation recorded net income
of $16.6 million, up 17.5% from 1998.  Net income per share
(diluted) was $0.76, up from $0.64 a year earlier.  Return on
equity for the year to date was 22.06% as compared to 21.86% for
the same period in 1998.

Lines of Business

     Irwin Financial Corporation has three principal lines of
business:

    Mortgage banking (includes Irwin Mortgage Corporation and
    the related activities of Irwin Union Bank)
    Commercial banking (Irwin Union Bank)
    Home equity lending (includes Irwin Home Equity 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
1998:

                               Three Months         Six Months
                               Ended June 30,       Ended June 30,
(In thousands)                1999       1998      1999       1998

Mortgage banking            $5,622     $7,565    $11,570    $13,217
Commercial banking           1,851      1,510      3,516      3,056
Home equity lending          3,300    (2,142)      6,332    (1,346)
Parent (including
consolidating entries)     (3,160)        113    (4,833)      (817)
                            $7,613     $7,046    $16,585    $14,110

Mortgage Banking

Selected Financial Data (shown in thousands):

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

                                     1999        1998        1999        1998

 Selected Income Statement
 Data:

 Loan origination fees            $12,441     $13,890     $25,655     $26,734
 Gain from sales of loans          11,361      12,965      26,099      23,481
 Loan servicing fees               14,226      12,438      28,294      25,178
 Amortization and impairment
 of servicing assets              (3,989)     (7,685)     (4,657)    (14,425)
 Trading gains (losses)             (791)       1,029    (10,772)       1,029
 Net interest income                5,504       6,827      11,203      11,475
 Provision for loan losses        (1,729)       (109)     (2,189)       (390)
 Gain on sale of servicing         10,214      10,057      22,340      20,013
 Other income                       1,048         341       1,573         719
 Total net revenues                48,285      49,753      97,546      93,814

 Salaries and employee             23,236      23,601      47,256      45,075
 benefits
 Other operating expenses          15,551      13,439      30,761      26,479

 Income before tax                  9,498      12,713      19,529      22,260
 Income tax                         3,876       5,148       7,959       9,043
 Net income                        $5,622      $7,565     $11,570     $13,217


 Return on average equity          20.60%      36.10%      21.10%      31.50%
 Mortgage loan originations    $1,609,898  $2,052,999  $3,386,794  $4,049,659


 Selected Operating Data:            June 30,  December 31,
                                         1999          1998

 Servicing portfolio              $10,714,259   $11,242,470
 Mortgage loans held for sale         396,135       555,197
 Mortgage servicing asset             129,584       113,131


      Mortgage banking activities are conducted by Irwin Mortgage
Corporation which originates, sells, and services residential
mortgage loans throughout the United States.

      Net income for the second quarter was $5.6 million, down
25.7% from the same period in 1998.  Year to date, net income was
$11.6 million compared to $13.2 million in 1998.

      As a result of a rising interest rate environment, mortgage
loan originations of $1.6 billion were 21.6% below the second
quarter of 1998.  For the year, originations totaled $3.4
billion, down 16.4% from 1998.  Refinances accounted for 26.5% of
loan production in the second quarter of 1999 and 37.8% year to
date.  This compares to 39.1% and 47.0%, respectively, in 1998.
Lower production volume caused mortgage loan origination income
to decrease 10.4% in the second quarter to $12.4 million. Year to
date it was down 4.0% to $25.7 million.

      As a result of lower loan production in the second quarter
of 1998, gains on the sale of loans decreased 12.4% to $11.4
million.  Year to date, gains on the sale of loans totaled $26.1
million, up 11.1% from 1998.

      Mortgage servicing fees increased 14.4% in the second
quarter and 12.4% year to date to $14.2 million and $28.3
million, respectively. The increase was due to a higher
percentage of the servicing portfolio being government loans
which earn a greater servicing fee.  The servicing portfolio
totaled $10.7 billion at June 30, 1999, down 2.0% from a year
earlier and down 4.7% from December 31, 1998.

      Mortgage servicing assets totaled $129.6 million at June
30, 1999, up 14.5% from December 31, 1998.  The amortization and
impairment of servicing assets declined 48.1% in the second
quarter of 1999 to $4.0 million.  Year to date amortization and
impairment totaled $4.7 million, down 67.7% from 1998.  The
decline is the result of the rising interest rate environment
during the second quarter of 1999 that slowed prepayments in
underlying loans and  reduced impairment levels of mortgage
servicing assets.

      The improvement in mortgage servicing asset amortization
and impairment was partially offset by losses on hedging
activities.  The mortgage bank uses options on treasury futures
to offset the interest rate risk associated with its mortgage
servicing assets.  At June 30, 1999, these options were recorded
at their market value of $35.9 thousand, reflecting a market loss
of $0.8 million during the second quarter of 1999 and $10.8
million year to date.  This compares with a market gain recorded
on the hedge position of $1.0 million in the second quarter and
year to date 1998.  The mortgage bank currently does not attempt
to satisfy the criteria for "hedge accounting." As a result,
options are accounted for as trading assets, and changes in fair
value are adjusted through earnings as trading gains or losses.

      Revenues from the sale of mortgage servicing were up 1.6%
from the second quarter of 1998 to $10.2 million.  Year to date
servicing sale revenues totaled $22.3 million, up 11.6% from
1998.

      As a result of the decrease in mortgage loan closings from
1998, net interest income was down in the second quarter and year
to date.  Net interest income for the three months ended June 30,
1999 was $5.5 million, down 19.4% from the second quarter 1998.
Year to date, net interest income totaled $11.2 million, down
2.4% from 1998.

      The provision for loan losses totaled $1.7 million in the
second quarter of 1999, up from $0.1 million a year earlier.
Year to date, the provision totaled $2.2 million compared with
$0.4 million in 1998.  The increased provision reflects an
increase in nonperforming assets at the mortgage bank in recent
periods and the sale of certain distressed assets.  See further
discussion of this subject in the section on credit risk.

      Salaries and employee benefits decreased 1.5% to $23.2
million for the second quarter of 1999.  The reduction was due to
the decline in loan production in the second quarter of 1999.
Year to date, they totaled $47.3 million, up 4.8% from a year
earlier.  Other operating expenses increased 15.7% and 16.2% for
the quarter and year to date, respectively.


Commercial Banking

Selected Financial Data (shown in thousands):

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

                                  1999        1998        1999        1998
Selected Income Statement
Data:

Net interest revenue            $7,605      $6,068     $14,680     $12,072
Provision for loan losses        (550)       (480)     (1,002)     (1,050)
Other income                     2,990       2,704       6,132       5,482
Operating expenses             (7,075)     (5,863)    (14,156)    (11,601)
Income before taxes              2,970       2,429       5,654       4,903
Income taxes                   (1,119)       (919)     (2,138)     (1,847)
Net income                      $1,851      $1,510      $3,516      $3,056

Return on average equity        14.50%      14.88%      14.27%      15.40%


                              June 30,    December 31,
Selected Balance Sheet           1999            1998
Data:

Securities and short-term
investments                    $29,194     $62,411
Loans                          586,728     514,950
Allowance for loan losses        7,168       6,680
Deposits                      $574,202    $567,526

     Commercial banking activities are conducted by Irwin Union
Bank through locations in nine counties in Indiana as well as
offices in St. Louis, Missouri and Kalamazoo, Michigan. Net
income was up in the second quarter to $1.9 million from $1.5
million a year earlier.  Year to date, net income was $3.5
million, up from $3.1 million in 1998.

      Net interest income improved 25.3% to $7.6 million in the
second quarter of 1999.  Year to date, it was up 21.6% to $14.7
million.  The increase reflects the commercial bank's continued
growth in new markets.  The provision for loan losses increased
14.6% to $550.0 thousand in the second quarter compared with a
provision of $480.0 thousand a year earlier.  However, year to
date, it decreased 4.6% to $1.0 million.

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


For the Three Months
Ended June 30,                    1999                          1998

                      Average              Yield/   Average              Yield/
(In thousands)        Balance   Interest    Rate    Balance   Interest    Rate

Interest -
Earning assets        $616,675  $13,005     8.46%   $526,967  $11,415     8.69%

Interest -
Bearing liabilities   533,817     5,331     4.01%   $412,975    5,305     5.15%


Net interest income       *      $7,674       *         *      $6,110       *

Net interest margin       *         *       4.99%       *         *       4.65%


For the Six Months
Ended June 30,                    1999                          1998

                      Average              Yield/   Average              Yield/
(In thousands)        Balance   Interest    Rate    Balance   Interest    Rate

Interest -
Earning assets        $597,625  $25,036     8.45%   $520,580  $22,539     8.73%

Interest -
Bearing liabilities   512,041    10,228     4.03%    407,505   10,350     5.12%

Net interest income       *     $14,808       *         *     $12,189       *

Net interest margin       *         *       5.00%       *         *       4.72%


     Other income in the second quarter was up 10.6% to $3.0
million from $2.7 million in 1998.  For the year to date, other
income increased 11.9% to $6.1 million.  Operating expenses
increased 20.7% from the second quarter of 1998 to $7.1 million.
For the year, these expenses were up 22.0% to $14.2 million.  The
continued expansion of operations in new markets led to the
increases in both other income and operating expenses.


Home Equity Lending

Selected Financial Data (shown in thousands):


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

                                      1999        1998      1999      1998
Selected Income Statement
Data:
Net interest revenue                $4,377      $1,490    $9,334    $1,971
Gain from sale of loans              5,645       5,578    10,508    10,759
Loan servicing fees, net of
amortization of servicing              891         611     1,543     1,239
assets
Trading gains (losses)                 152     (2,001)       387     (636)
Other revenue                          768          96     1,106       218
Total net revenues                  11,833       5,774    22,878    13,551
Operating expenses                   8,533       7,916    16,546    14,897
Pre-tax income (loss)               $3,300    $(2,142)    $6,332  $(1,346)


Other Selected Financial Data:    June 30,    December
                                                   31,
                                      1999        1998

Home equity loans (in
portfolio and held for sale)      $185,237    $247,445
Interest-only strips                46,644      26,761
Servicing portfolio                685,003     581,241

      The home equity lending business markets home equity loans
through direct mail and telemarketing in 30 states.  The home
equity lending business recorded pre-tax income of $3.3 million
during the second quarter of 1999 and $6.3 million year to date.
These results are compared to 1998 quarterly and year to date pre-
tax losses of $2.1 million and $1.3 million, respectively.

      Net interest revenue was $2.9 million higher in the second
quarter of 1999 than 1998, and $7.4 million higher year to date.
The increase was due to increased loans outstanding during 1999.

      During the second quarter of 1999, the home equity lending
business originated $99.2 million of loans, compared with $99.6
million in 1998.  Year to date, loan originations totaled $194.2
million, up from $154.8 million a year earlier.  Gains from the
securitization of loans totaled $5.6 million in the second
quarter of 1999 and $10.5 million year to date, up 1.2% and down
2.3%, respectively.

      The home equity lending business services the loans it has
securitized and collects an annual fee equal to 1% of the
outstanding principal balance of the securitized loans. Net
servicing fee income totaled $0.9 million in the second quarter
of 1999, up 45.8% from the same period in 1998.  Year to date,
servicing fees totaled $1.5 million, up 24.5% from 1998.  The
increase is due to growth in the servicing portfolio combined
with a decline in the prepayments of underlying loans and
resulting impairment of servicing assets caused by the rising
interest rate environment.

       Interest-only strips are carried at their market values
determined using assumptions about the duration and performance
of the securitized loans.  At June 30, 1999, the assumed annual
loss rates ranged from 0.25% to 2.00%, prepayment speeds ranged
from 8% to 41% CPR (constant prepayment rate) per year, and the
discount rate was 15.0%.  To mitigate the interest rate risk
associated with interest-only strips, the home equity lending
business uses interest rate caps which are also carried at their
market values.

      Included in income during the second quarter of 1999 was an
unrealized trading gain of $0.2 million recorded to adjust the
carrying value of interest-only strips and interest rate caps to
their market values.  This gain compares with a $2.0 million loss
recorded in the second quarter of 1998.  Year to date, trading
gains totaled $0.4 million, compared with a $0.6 million trading
loss in 1998.  The improvement in 1999 is due to the rising
interest rate environment combined with efforts made to shift a
substantial portion of the home equity loan portfolio into
product with less prepayment sensitivity.

     Operating expenses were $8.5 million in the second quarter
of 1999, up 7.8% from 1998.  Year to date, they increased 11.1%
to $16.5 million.


Parent Company (Including Consolidating Entries)

     For the quarter ended June 30, 1999, the parent company
recorded a net loss of $3.2 million compared with net income of
$0.1 million a year earlier.  Year to date, the parent company's
net loss totaled $4.8 million compared with net loss of $0.8
million in 1998. The parent company records the income tax
expense or benefit generated at the home equity business until
such time that all net operating losses carried forward are fully
used.  In the second quarter and year to date 1999, the parent
recorded $1.3 million and $2.5 million, respectively, of income
tax expense related to this line of business.  This compares with
$0.9 million and $0.5 million of income tax benefits recorded in
the second quarter and year to date, respectively, in 1998.

Consolidated Income Statement Analysis

     Net interest income for the second quarter of 1999 totaled
$17.8 million, up 6.5% from the second quarter of 1998.  For the
year, it increased 15.9% to $35.7 million.  The increase was
primarily the result of the increased loans outstanding at the
community bank and home equity business which offset declines at
the mortgage bank resulting from the rising interest rate
environment.

     The loan and lease loss provision was $2.3 million for the
second quarter of 1999, as compared with $1.1 million for the
same period in 1998.  For the year, it totaled $3.5 million, up
from $2.7 million a year earlier.   See the section on credit
risk for additional information on this subject.

     Noninterest income was up 6.8% to $53.5 million in the
second quarter of 1999.  Year to date noninterest income
increased 8.2% to $108.2 million.  This increase was driven by
improvements in loan servicing fee income of $2.3 million or
17.0% for the quarter and $3.9 million or 14.1% year to date.
Additionally, the amortization and impairment of servicing assets
improved $3.4 million or 42.5% for the quarter and $9.3 million
or 62.3% year to date as a result of the rising interest rate
environment and resultant decrease in loan prepayment activity.
These improvements were partially offset by declines in gains on
trading assets, the majority of which related to options at the
mortgage bank that are used to offset fluctuations in the value
of mortgage servicing assets.  Trading losses totaled $0.6
million in the second quarter of 1999 compared with $1.0 million
in 1998.  Year to date, trading losses totaled $10.4 million
compared with trading gains of $0.4 million a year earlier.  Also
offsetting the aforementioned improvements were declines in loan
origination fees as a result of decreased mortgage production
activity.  Loan origination fees declined $1.4 million or 10.2%
during the second quarter of 1999 and $1.0 million or 3.6% year
to date.

      Other expenses increased moderately in the second quarter
of 1999, up $1.9 million or 3.7% from 1998.  For the year, other
expenses increased $7.8 million or 7.7%.

     The effective income tax rate for the Corporation was 41.3%
in the second quarter of 1999 and 40.9% year to date.  This is
compared with 39.6% in the second quarter of 1998 and 40.3% year
to date 1998.


Consolidated Balance Sheet Analysis

     Total assets of the Corporation at June 30, 1999, were $1.6
billion, down from December 31, 1998 total assets of $1.9
billion.  The decrease was due to a decline in loans held for
sale which totaled $0.6 billion at June 30, 1999, down from $0.9
billion at December 31, 1998.  The decrease in assets was
accompanied by a decrease in deposits of $0.1 billion and a
decrease in short-term borrowings of $0.2 billion.  A portion of
noninterest bearing deposits is associated with escrow accounts
held on loans in the servicing portfolio of Irwin Mortgage.
These escrow accounts totaled $354.8 million at June 30, 1999,
down from $399.6 million at December 31, 1998.

     Shareholders' equity grew to $152.8 million or $7.09 per
share, an increase over the $145.2 million or $6.70 per share at
the end of 1998. The Corporation's equity to assets ratio ended
the quarter at 9.42% compared to 7.46% at the end of 1998.

     Prior to the adoption of new mortgage banking accounting
standards in the second quarter of 1995, authoritative accounting
guidance precluded recognition of the full value of mortgage
servicing assets 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.  Management estimated
this value to be approximately $56.6 million or $2.63 per share
at June 30, 1999.  The estimate was based on the market value of
servicing assets related to loans with similar interest rates and
servicing fees.  With the implementation of the new accounting
standard in 1995, this off-balance sheet value will decline over
future years and eventually be reduced to zero as the underlying
loans pay off.


Credit Risk

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

     An allowance for loan losses is established as an estimate
of the probable credit losses on the loans held by the
Corporation.  It is based on management's judgement combined with
a quantitative process of evaluation and analysis.  A specific
allowance is determined by evaluating those loans which are
either substandard or have the potential to become substandard.
In general, commercial loans and mortgage loans are evaluated
individually to determine the appropriate allowance.  Consumer
loans are evaluated as a group.  A specific allowance is set at a
level which management considers sufficient to cover probable
losses on these specific loans.  A general allowance is
determined by analyzing historical loss experience by loan type
and then adjusting these loss factors for current conditions not
reflected in prior experience.

     Loans that are determined by management to be uncollectible
are charged against the allowance.  The allowance is increased by
provisions against income and recoveries of loans previously
charged off.

      As of June 30, 1999, the allowance for loan and lease
losses as a percentage of total loans and leases was 1.60%
compared to 1.78% at December 31, 1998.  For the three months
ended June 30, 1999, the provision for loan and lease losses
totaled $2.3 million, a 120.7% increase from the amount recorded
in the second quarter of 1998.  Year to date, the provision
totaled $3.5 million, up 32.1% from a year earlier.  The increase
occurred primarily at the mortgage bank in connection with
nonperforming loans on its balance sheet.  See further discussion
of this matter below.  Net charge-offs for the quarter were $0.3
million as compared to $0.6 million in 1998.  Year to date net
charge-offs totaled $0.7 million, down from $1.1 million a year
earlier.

     Nonperforming assets (loans 90 days past due, nonaccrual,
and owned real estate) were $9.6 million or 0.59% of total assets
at June 30, 1999, down from $15.4 million or 0.79% at December
31, 1998 and $9.5 million or 0.64% at December 31, 1997.  The
decline resulted from the sale of nonperforming mortgage loans
during the second quarter of 1999.

      Although most mortgages are either government-insured or
conform to the underwriting guidelines of the government-
sponsored agencies that support the secondary mortgage market,
the mortgage bank has credit risk on those loans that are not
eligible for government insurance or that must be repurchased
from agencies  or other investors due to lack of conformity to
underwriting guidelines.  In recent years, the government-
sponsored agencies that provide credit enhancement on the loans
underwritten by the mortgage bank have become more stringent in
their adherence to their right to seek recourse from the
originator of loans.  In addition, during periods of high
origination volume, due to delays in gathering required
documentation for submission to the insuring agencies, the
mortgage bank experiences an increase in the number of new loans
that do not qualify for insurance prior to the borrower's first
30-day delinquency.  As such, the mortgage bank has had an
increase in the number of loans it has repurchased from or been
unable to submit to the agencies and other investors.  This has
resulted in an increase in the nonperforming loans and other real
estate owned at the mortgage bank.  The mortgage bank seeks to
cure the underwriting defect in these loans and resell them to
the agencies or sell them to alternative investors.



Nonperforming Assets     June 30,     December 31,   December 31,
(In Thousands)               1999            1998           1997


Accruing loans past
due 90 days or more:
     Real Estate               $-         $291          $534
     Commercial               132          252           382
     Consumer                 242           86            86
          Subtotal            374          632         1,002

Nonaccrual loans:
     Real Estate            6,585        9,570         5,333
     Commercial               840        1,052           777
     Leasing                  116          426           506
     Consumer                 111          174            63
          Subtotal          7,652       11,222         6,679

Total nonperforming loans   8,026       11,854         7,681

Other real estate           1,564        3,506         1,828
owned

Total nonperforming
assets                     $9,590      $15,360        $9,509

Nonperforming assets
to total assest             0.59%        0.79%         0.64%



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.

Interest Rate Risk

     Interest rate risk refers to the potential for changes in
market rates of interest to cause changes in net interest income
and in the market value of assets and liabilities.

      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.  Rate sensitivity 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.
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 mortgage
bank buys commitments to deliver loans at a fixed price to manage
risk.  The policy at the home equity lending business is to match-
fund all loan assets.  The mortgage bank and the home equity
business are also exposed to interest rate risk through their
ownership of servicing assets and other retained interests
resulting from securitization.  The companies manage their risk
using a variety of techniques including: maintaining a strong
production operation which offsets the interest rate risk,
selective sales of servicing rights, and the use of financial
hedges.  In some cases, the Corporation uses internal hedges to
allow for risk characteristics of one line of business to offset
those of another line.

      Through the use of simulations using regression modeling,
option-adjusted valuation techniques for estimating expected
customer behavior, and Monte-Carlo based cash flow simulation,
the Corporation attempts to analyze and mitigate total interest
rate risk, that associated with both net interest income and non-
interest income.  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.

      The following table shows management's estimate of the
present value of interest-sensitive assets and liabilities, as
well as off-balance sheet financial contracts as of June 30,
1999, at then current interest rates as well as simulated rates
1.0% and 2.0% above and below those interest rates.  It does not
take into account the book values of the Corporation's non-
interest sensitive assets and liabilities, such as cash, accounts
receivable, and fixed assets, the value of which is not directly
determined by interest rates, nor does it address the market
value of certain off balance sheet interests not recognized under
GAAP (e.g., principally mortgage servicing rights acquired prior
to the adoption of FAS 122 in 1995) or attempt to make any
estimate of the value changes resulting from increases or
decreases in production fees as interest rates change.

      As noted above, the analysis is based on discounted cash
flows over the remaining estimated lives of the financial
instruments.  The total measurement of the Corporation's exposure
to interest rate risk as presented in the following table may not
be representative of the actual values which might result from a
higher or lower rate environment.  Such environments would likely
result in different lending and borrowing strategies by the
Corporation, designed in part to further mitigate the effect on
the value of, and the net earnings generated from the
Corporation's net assets from any change in interest rates.

      The figures suggest, based on balance sheet and off balance
sheet financial assets, that the present value of the
Corporation's interest-sensitive assets and liabilities would
decline in a falling rate environment and increase in a rising
rate environment.  The magnitude and direction of the present
value rate sensitivity is largely unchanged from year-end 1998.
The Corporation's book value of servicing assets was capped below
estimated market value as of June 30, 1999, due to the accounting
principle which requires servicing assets to be carried at the
lower of their cost or market value.  The following table shows
these assets uncapped (i.e. at estimated market value rather than
book value.)

      As previously noted, this present value sensitivity
analysis does not account for potential earnings the Corporation
would recognize due to strategic initiatives it would undertake
if the interest rate scenarios modeled occurred, nor does it
reflect value from activities not traditionally measured in terms
of financial assets or liabilities.  Principal among these
activities for the Corporation would be the change in mortgage
loan production and the earnings stream the Corporation derives
therefrom.





                        PRESENT
                         VALUE
                        ($000)
                      AT JUNE 30,
                         1999
                          -2%         -1%      CURRENT      +1%       +2%

Interest Sensitive
Assets

Interest-bearing           26,341      26,338     26,335    26,332    26,330
deposits with banks
Federal Funds Sold       (57,334)    (57,341)   (57,347)  (57,353)  (57,360)
Taxable investment        107,190     108,607    110,855   113,495   116,164
securities
Tax - exempt                4,967       4,774      4,591     4,416     4,249
investment securities
Mortgages held for        410,042     407,619    405,114   402,506   399,773
sale
Mortgage Servicing        117,035     158,115    191,922   214,335   228,254
Rights
Loans, net of             676,367     667,873    659,309   650,751   642,115
unearned discount

Total Interest
Sensitive Assets        1,284,608   1,315,985  1,340,779 1,354,482 1,359,525

Interest Sensitive
Liabilities

Non-Interest Bearing      390,608     390,448    390,299   390,160   390,031
Deposits
Money Market Checking     116,029     115,937    115,845   115,754   115,663
Money Market Savings        6,379       6,374      6,369     6,364     6,359
Regular Savings           113,912     113,822    113,732   113,642   113,553
Time Deposits             287,476     285,279    283,137   281,059   279,050
Short term borrowings     244,433     244,465    244,498   244,530   244,561
Long Term Debt             63,451      59,029     55,654    53,070    51,056

Total Interest
Sensitive Liabilities   1,222,288   1,215,354  1,209,534 1,204,579 1,200,273

Interest Sensitive
Off Balance Sheet           7,314         625        697       977     1,330
Items
Net Sensitivity as of     $69,634    $101,256   $131,942  $150,880  $160,582
June 30, 1999
Potential Change        ($62,308)   ($30,686)         $-   $18,938   $28,640

Net Sensitivity as of     $50,666     $78,781   $103,290  $126,155  $140,238
December 31, 1998
Potential Change        ($52,624)   ($24,509)         $-   $22,865   $36,948


Derivative Financial Instruments

      The Corporation hedges its interest rate risk on mortgage
loans held for sale using mandatory commitments to sell the loans
at a future date.  The economic value of mortgage servicing
assets is hedged using options on treasury futures.  At June 30,
1999, these options had a fair value of $35.9 thousand and a net
notional amount (which does not represent the amount at risk) of
$337.5 million.  Interest-only strips are hedged using interest
rate caps that had a fair value of $661.2 thousand at June 30,
1999, and a notional amount of $57.3 million.  Options on
treasury futures and interest rate caps are classified as trading
assets on the balance sheet and carried at their market values.
Adjustments to market values are recorded as net trading gains or
losses on the income statement. The Corporation recorded $0.3
million of trading losses related to these derivative products in
the second quarter of 1999 and $10.3 million year to date.  This
compares with a $1.0 million trading gain recorded in the second
quarter and year to date 1998.


Capital Adequacy

     The Corporation is subject to various regulatory capital
requirements administered by federal banking agencies.
Quantitative measures established by regulation to ensure capital
adequacy require the Corporation to maintain minimum amounts and
ratios (set forth in the table below) of total and Tier I capital
(as defined in the regulations) to risk-weighted assets (as
defined), and of Tier I capital to average assets (as defined).
Equity and risk-based capital ratios for the Corporation are as
follows:

                     Ratio
                  required to       June     December     December
                 be considered       30,          31,          31,
                     well-          1999         1998         1997
                  capitalized

Equity to Assets            n/a    9.42%        7.46%        8.55%

Risk-Based Capital        10.0%   12.70%       12.25%       14.85%

Tier I Capital             6.0%   12.11%       11.63%       13.56%

Tier I Leverage            5.0%   12.34%       10.51%       12.06%


Year 2000 Readiness

Beginning in 1997, the Corporation developed a seven-stage
project plan to achieve effective Year 2000 readiness by June 30,
1999, that included:  (i) an awareness campaign throughout the
Corporation to raise the level of importance and attention beyond
that of a typical "information technology" issue; (ii) assessment
of the Corporation's Year 2000 problem, including contract
review, a technical audit and an estimation of remediation costs;
(iii) remediation of non-compliant systems through repairs,
upgrades or replacements of computer programs and chips; (iv)
testing of the Corporation's systems for Year 2000 compliance;
(v) development of contingency plans to continue processes in the
event of Year 2000 readiness failure by the Corporation or
parties on whom it is dependent; (vi) implementation of the
remediated systems; and (vii) auditing after January 1, 2000, of
the completed processes for post-year 2000 compliance.  The
Corporation has engaged a leading technology-consulting firm to
increase its level of confidence that the methods and standards
it employs to address the Year 2000 issue are appropriate and
comprehensive.  The entire project is overseen by a Year 2000
Steering Committee which includes the Corporation's Chairman,
President, and those in charge of Information Technology (IT) at
each entity.

As of June 30, 1999, the Corporation has substantially completed
phases (i) through (vi).

Scope

The Corporation has developed a technology strategy that
primarily uses systems developed by third parties and has very
few internally developed applications.  Consequently, the
Corporation's principal focus has been on assuring Year 2000
compliance from its commercial application vendors and other
third-party service providers.  The project plan has addressed
computer hardware and software as well as environmental systems
used in the Corporation's work places to address readiness of
both direct and indirect process support systems (i.e., IT and
non-IT systems).

Progress

The Corporation is currently finishing application testing and
the development of contingency planning processes for mission
critical applications.  These steps were substantially complete
by June 30, 1999.  However, as noted in the graphs below which
illustrate current project progress against the work plan for
each of the Corporation's principal entities, there have been
minor delays in the testing and contingency planning phases of
the project.  In all cases, these phases will be caught-up early
in the third quarter and none of the processes for which testing
and/or contingency planning are behind the Corporation's original
schedule are material or "mission critical".  A certain number of
these delays were the result of delays by third-party vendors.
When this has occurred, the Corporation has accelerated progress
on other areas of the project.

Costs

The Year 2000 project has required a reallocation of business
resources from other areas of the Corporation.  However, to date,
the consolidated cost of the project has not been material to the
overall financial results of operations, liquidity, or capital,
nor does the Corporation believe it will be material throughout
the duration of the project.  Additionally, the Corporation does
not believe that the reallocation of resources necessary to
address the Year 2000 issue has resulted in a material adverse
change in the Corporation's ability to address other information
technology projects critical to the Corporation's growth.  The
Corporation has incurred and expensed approximately $2.3 million
on the Year 2000 project since its inception.  These costs have
been funded through operating cash flows.  The total cost of the
project over the period 1997 to 2000 is anticipated to be
approximately $3.3 million, excluding incentive stock-based
compensation valued at approximately $0.3 million at the time of
grant.  The Corporation cannot guarantee that the current
estimate of $3.3 million will be adequate to complete the
project.  If the costs increase significantly beyond the current
estimate, it could have a material adverse affect on the
Corporation's financial results.  The graph below illustrates the
amounts expensed on the project to date (excluding the cost of
options which are not expensed under GAAP) and on a pro forma
basis through 1999 and contain forward-looking estimates.

Year 2000 Project-Irwin Financial Consolidated
As of June 30, 1999
Pre-tax Costs in $000

1997--Actual    $119
1998--Actual    1317
1999--YTD       889
1999 *          1,887

* Estimate as of June 30, 1999.

Risks

Financial services require exact calculations and prompt
delivery.  If the Corporation's products are not accurate and
timely, it increases its exposure to risks such as client service
failure, regulatory compliance problems and disruption of third
party operations when it interacts with others.  The Corporation
believes it has substantially implemented the necessary changes
to ensure that its internal operations are Year 2000 compliant
prior to December 31, 1999, and expects to complete those which
are not currently finished well before December 31.  However, to
achieve this goal, the Corporation has relied heavily upon its
information system vendors, supplemented by the Corporation's own
internal testing.  The Corporation cannot guarantee that all of
its efforts will have succeeded.  In addition, if the Year 2000
issue adversely affects the Corporation's customers, this in turn
could have a material adverse effect on the Corporation's ability
to collect and service outstanding loans.  Finally, even if the
Corporation's internal operations and customers are Year 2000
compliant, the Corporation's operations can be materially
adversely affected if agencies and third parties with which the
Corporation interacts fail to address the Year 2000 issue
successfully.

Contingency Plans

Each of the Corporation's entity's has developed contingency
plans, the majority of which are complete in design of the plan
and testing procedures.  Those which are not yet complete are
targeted to be finished and tested by September 30, 1999.  Each
of those plans will include procedures for addressing application
or third-party vendor failure as well as the financial impact of
any such failure.


Irwin Financial Corporation (parent company)

The operations of the parent company largely are intended to
further the Corporation's strategic development, allocation of
capital, planning for entering or exiting lines of business,
certain support services for its operating companies, and
external relations.  There are few direct, ongoing revenue-
producing interactions with end customers of the Corporation.
Nonetheless, the services of the parent company are of sufficient
size and importance to the overall condition of the Corporation
that a separate project team is in place to assure Year 2000
readiness of its systems and operating environment.

Scope

As with the Corporation's overall project plan, the parent
company's plan included an assessment of computer hardware and
software as well as environmental systems.  The principal risk of
failure to be Year 2000 compliant at the parent company lies in
the failure or delay in providing its services to its
constituents in a timely manner.  In most cases, this will lead
to increases in expenses, rather than in ultimate failure to
deliver the service.

Like the other units of the Corporation, the parent company has
developed a technology strategy that primarily uses systems
developed by third parties and has very few internally developed
applications.  Consequently, the parent company's principal focus
is on assuring Year 2000 compliance from its commercial
application vendors and other third-party service providers.

Progress

The progress of this team in meeting the seven-stage requirements
of its project plan to achieve Year 2000 readiness by June 30,
1999, is shown below.


Year 2000 Project-Irwin Financial (parent only)
As of June 30, 1999
Percent Completed

                 Target          Actual        Projected
                 Completion *    Completion    Actual
                                               Completion
                                               Date

Post-2000 Audit   0               0            During 2000
                                               and 2001
Implementation   95              95            3Q99
Contingency
Planning         95              95            On-going
Testing          100             100           Done
Remediation      100             100           Done
Assessment       100             100           Done
Awareness        100             100           Done

* Target is original plan to achieve Year 2000 Readiness by June
30, 1999.

Contingency planning is complete except for the on-going review
of the plans as the end of the year approaches.  Implementation
is complete except for the completion of an upgrade of the
company's general ledger system.  The team has tested the
upgraded version and plans to move it into production in the
third quarter.

Costs

The parent company has spent approximately $196 thousand since
inception of the Year 2000 project.  The graph below indicates
the amounts expensed on the project to date and on a pro forma
basis through 1999.

Year 2000 Project-Irwin Financial (parent only)
As of June 30, 1999
Pre-tax Costs in $000

1997--Actual    $33
1998--Actual    103
1999--YTD       60
1999 *          115

*  Estimate as of June 30, 1999.

Risks

The consequence of failure to achieve Year 2000 compliance at the
parent company is likely to be increased labor expense as certain
automated procedures are performed with additional human
intervention.  If such failures cause the parent company to miss
deadlines for required filings, the company could face fines or
penalties for late reporting of regulatory items.  The company
does not believe these risks pose a material monetary risk.

Contingency Plans

Contingency plans and testing procedures for all the parent
company's mission critical processes are complete.  As part of
the process, plans have been made as to the exact manner in which
the company would address likely worst case scenarios, including
the financial and operational impact of such scenarios.


Irwin Mortgage Corporation

Irwin Mortgage Corporation (IMC) is principally engaged in the
business of originating, selling, and servicing mortgage loans.
Its net income is dependent on information technology and support
systems which allow the efficient production and servicing of
loans.

Scope

IMC has had teams addressing Year 2000 readiness since August of
1997 and it has adopted the same seven phase plan to achieve
readiness used by the Corporation as discussed above.  IMC
participates with the Corporation's Steering Committee and has
specific internal personnel whose time is dedicated solely to the
Year 2000 project.  In addition, IMC has partnered with the local
office of a national IT consulting firm that has assisted with
staff augmentation and technical expertise in the areas of code
renovation and testing applications.  IMC has kept abreast of
Year 2000 issues by participating in local Year 2000 user groups
and national Year 2000 seminars.

IMC is dependent on third parties in three principal areas.

1.   IMC has developed a technology strategy that primarily uses
  systems developed by third parties and has very few internally
  developed applications.
2.   IMC depends on several key business partners to successfully
  conduct operations (e.g., Government Sponsored Enterprises [GNMA,
  FNMA, and FHLMC], private investors, title companies, mortgage
  brokers).
3.   IMC needs a properly operating infrastructure (i.e. power,
  communications, transportation) in order to effectively conduct
  business.

Consequently, IMC has focused its Year 2000 readiness efforts on
working with each of these groups.

As with the Corporation's overall project plan, IMC's plan
includes computer hardware, software, and environmental systems.
IMC owns none of the properties in which it conducts business, so
the principal focus of the environmental systems review has been
to work with the management companies of the facilities it
leases.  Additionally, the company has worked with various user
groups to address the Year 2000 issue with public service
providers on which it depends.

Progress

IMC has substantially met its internal plan to achieve Year 2000
readiness by June 30, 1999.  The first three phases of the plan
(awareness, assessment, and remediation) have been completed.
The testing phase is nearing completion as all critical
applications have completed testing with the exception of the
loan servicing and production systems, which are 90% through
their processes.  Testing has involved internal application
validation in the IMC Y2K test laboratory as well as
participation in the Mortgage Bankers Association Year 2000 Inter-
Industry Test.  IMC has participated in the mandatory test
transactions set forth by FNMA, FHLMC, and GNMA.  Overall, the
testing process for critical applications has been successful in
that there are no outstanding Year 2000 issues pending.  All
testing of critical applications is projected to be completed by
July 31,  1999.  Although the testing phase was scheduled to be
completed by June 30th, the risk associated with the delay is not
considered material since the remaining applications are in the
final stages of testing.  The implementation phase of this
initiative has been completed as all business critical
applications in production are claimed compliant and have
undergone, or are in the process of validation.

Year 2000 Project-Irwin Mortgage
As of June 30, 1999
Percent Completed
                    Target         Actual        Projected
                    Completion*    Completion    Actual
                                                 Completion Date

Post-2000 Audit     0              0             During 2000 and
                                                 2001
Implementation      100            100           Done
Contingency
Planning             75             85           On-going
Testing             100            90            3Q99
Remediation         100            100           Done
Assessment          100            100           Done
Awareness           100            100           Done

* Target is original plan to achieve Year 2000 readiness by June
30, 1999.

Costs

IMC has spent approximately $1.75 million since inception on the
Year 2000 project.  The graph below indicates the amounts
expensed in the project to date and on a pro forma basis through
1999.


Year 2000 Project-Irwin Mortgage
As of June 30, 1999
Pre-tax Costs in $000

1997--Actual    $40
1998--Actual    1,046
1999--YTD       663
1999 *          1,441

* Estimate as of June 30, 1999.

Failure to be Year 2000 compliant could cause the malfunctioning
of the loan origination or servicing systems.

If there were a failure within the loan origination system that
prevented IMC from closing mortgage loans, the company could be
adversely affected through delayed or failed loan closings.  This
would reduce current revenues and/or would increase the cost to
originate loans as more processes are performed with alternative,
less efficient processes.  The company has developed contingency
plans which should allow a certain amount of production to
continue, thus mitigating the loss of revenues.

Another risk to the company could involve a failure of one or
more components in the loan servicing system.  The loan servicing
system is a high-volume, transactional system that makes logic
decisions based on dates (both current and future).  For example,
if the payment posting module of the system fails, the company
may be unable to remit payments and information to IMC's
investors.  The cost associated with this problem includes fines
(for late reporting) that could range from a few hundred dollars
to cease and desist orders that could cost IMC all revenue
related to an individual investor's servicing portfolio.

Contingency Plans

The company has made significant  progress toward completing its
contingency planning efforts.  Its approach is to review the most
important business processes that were identified in the
assessment phase and work with the key personnel to develop
alternative plans in case a Year 2000 issue is encountered.  IMC
has completed contingency plans for 14 of 16 areas that were
identified as most critical.  Plans for the loan production
process and voice communications are in the final stages of
development.  All plans are anticipated to be completed and
tested by the middle of August.  Although June 30, 1999, was the
original target to have all plans completed, the risk exposure
associated with this delay is not considered to be material,
based on management's assessment of its ability to complete the
development and testing of these two additional contingency plans
well before the millenium change.


Irwin Union Bank

Irwin Union Bank & Trust (the Bank) is engaged in providing
consumer and commercial banking, trust, insurance and brokerage
services primarily in central and south central Indiana.  The
Year 2000 technology compliance issue poses a significant
challenge to the organization as technology has been integrated
with all major business processes.  The methodology is based on
the Corporation's seven-stage implementation plan.

Scope

Recognizing the impact of non-compliance, the Bank began a
formalized compliance program in 1997.  The Bank has adopted the
same seven phase plan to achieve readiness used by the
Corporation as discussed above.  The Bank participates with the
Corporation's Steering Committee.  The Bank's plan includes
computer hardware, software, and environmental systems.

The Bank's applications are primarily commercial off-the-shelf
applications, including its core banking technologies, facility
controls and desktop applications.  In addition, the Bank
utilizes third party providers for retail brokerage and
trust/employee benefits account processing.  Finally, the Bank
has two internally developed technologies, those for certificate
of deposit servicing and insurance originations that required
remediation due to non-compliance.

Progress

The Bank involved over 25 staff members to participate in Year
2000 technology discussions, vendor appraisals and compliance
testing.  A multi-level testing strategy has been deployed within
the Bank.  Depending on the level of vendor and third party
testing, the Bank has determined whether additional testing is
warranted.  For those applications that were certified by either
a third party or vendor, the Bank has requested and reviewed the
test results and scripts.  An exception to this policy of
reviewing the testing procedures of others was deemed necessary
for those applications that were critical to the Bank's continued
operation.  These "Hot List" technologies were tested by bank
staff throughout the second quarter using proxy testing, vendor
scripts and/or actual date scenario testing with internally
developed scripts.

The testing procedures for third party providers are more
challenging for the Bank to assess Year 2000 compliance.  The
Bank has three critical technologies that are provided through a
service bureau environment: retail brokerage, trust and employee
benefits account processing.  The providers of these services are
all industry-leading firms who have committed significant
resources to ensure Year 2000 compliance.  They have documented
their efforts to the Bank through ongoing disclosure of testing
plans and results.  All of the third-party providers have
furnished statements of their compliance and have committed to
providing uninterrupted service before and after January 1, 2000.

The Bank has completed all Year 2000 technology testing as of
June 30, 1999.

The Bank's progress against each stage of its plan is shown
below.


Year 2000 Project-Irwin Union Bank
As of June 30, 1999
Percent Completed
                    Target          Actual         Projected
                    Completion*     Completion     Actual
                                                   Completion Date

Post-2000 Audit     0               0              During 2000 and
                                                   2001
Implementation      100             100            Done
Contingency
Planning             95              95           On-going
Testing             100             100            Done
Remediation         100             100            Done
Assessment          100             100            Done
Awareness           100             100            Done

* Target is original plan to achieve Year 2000 readiness by June
30, 1999.

Costs

The focus on commercial off-the-shelf applications has allowed
the Bank to avoid major programming costs that are required with
proprietary systems.  However, the impact of testing existing
systems has added significant time requirements to the Bank's IT
department.  In 1998, the Bank added a fifth IT professional to
allow the department to  support its 350 users while conducting
Year 2000 activities.  In addition, the Bank has incurred expense
in the replacement and repair of specific non-compliant systems.
To date, expenditures for the Year 2000 effort have totaled $233
thousand.  The graph below illustrates the estimated total cost
of the project for the Bank.


Year 2000 Project-Irwin Union Bank
As of June 30, 1999
Pre-tax Costs in $000

1997--Actual         $46
1998--Actual         96
1999--YTD            91
1999 *               165

* Estimate as of June 30, 1999.

Risks

The impact of specific technologies utilized by the Bank not
being Year 2000 compliant could be significant.  The inability to
process, reconcile and report customer account information could
create concern for the safety and security of the customer funds.
To focus on those technologies that have the highest operational
and customer impact, the bank has conducted a risk analysis on
each technology and, based on the results, devoted adequate
resources to test, remediate and monitor.


Contingency Planning

The Bank's contingency planning approach identifies core
processes, and corresponding critical activities, to develop
alternative approaches to accomplishing the desired outputs.  The
bank has formed teams composed of the department managers and
members of the IT department to evaluate the impact of technology
non-compliance for each critical process.  Each team is then
responsible for preparing a contingency plan that provides
alternative operating procedures in the case of technology non-
compliance.  The IT manager of the Bank is responsible for
collecting the contingency plans and ensuring completeness.
Completion of all contingency plans occurred in June 1999.  The
bank will continue to review the plans to address modifications
and duties.


Irwin Home Equity

The primary products of Irwin Home Equity (IHE) are second
mortgage and line of credit loans secured by real estate.  Since
IHE relies on third party processors and off-the-shelf software,
its efforts are mainly directed to the testing of these
applications.  Principal remediation efforts, therefore, have
been the responsibility of its vendors.

Scope

The Company's Year 2000 project plan was developed within the
guidelines set forth by the Corporation to achieve Year 2000
readiness by June 30, 1999.

When compiling the plan, all functions of the organization were
considered, including computer software, hardware, data
communications, environmental facilities, third party vendors,
and other companies with whom data is exchanged.  IHE's team to
manage the Year 2000 effort consists of individuals representing
Senior Management, Information Systems, Networks, Loan
Origination, Loan Servicing, Accounting, and Finance.  In
addition, Telecommunications, Building, and Office Services are
involved in various phases of the project.  A full time project
manager oversees the effort and IHE participates on the
Corporation's Steering Committee.

Progress

The company identified its mission critical applications and
tested those modules first.  Applications were considered mission
critical if they have an impact on customers or could have a
negative impact on the continued operation of the company.
Testing has been completed on all mission critical applications
with the exception of credit bureaus.

Testing with credit bureaus was still in progress as of June 30,
1999.  IHE recently changed vendors for the ordering of credit
reports.  Testing is progressing with both the old and new
repositories as a contingency should one bureau be unavailable.
Completion is scheduled for late July.  The company believes that
since both vendors have completed internal testing and provided
notification of Year 2000 readiness that there is little risk
associated with the delay in completing IHE confirmation of those
results.

The company has completed the installation of the remediated
versions of software for all of its mission critical
applications.  Conversion to a new Loan Servicing System was
completed in late March 1999.  Since this application is housed
at the vendor's service bureau, the company relied on proxy test
results to validate Year 2000 readiness.  Results of a third
party audit of the vendor have also been requested as supporting
documentation.  The vendor for the Loan Servicing system is an
industry-leading provider who has committed significant resources
to Year 2000 compliance.

The progress of the IHE Year 2000 team in meeting the
requirements of its project plan to achieve Year 2000 readiness
by June 30, 1999, is shown below.


Year 2000 Project-Irwin Home Equity
As of June 30, 1999
Percent Completed
                   Target         Actual         Projected
                   Completion*    Completion     Actual
                                                 Completion Date

Post-2000 Audit    0              0              During 2000 and
                                                 2001
Implementation     100            100            Done
Contingency
Planning            75             55           On-going
Testing            100            98             3Q99
Remediation        100            100            Done
Assessment         100            100            Done
Awareness          100            100            Done

* Target is original plan to achieve Year 2000 readiness by June
30, 1999.

Costs

Year 2000 costs have largely been limited to internal staff time
since all software and hardware upgrades were planned as part of
the company's  normal business plan.  Costs directly associated
with the Year 2000 remediation have thus far totaled $147
thousand.  Those costs and anticipated future costs for the
project are displayed below.



Year 2000 Project-Irwin Home Equity
As of June 30, 1999
Pre-tax Costs in $000

1997--Actual
1998--Actual    $72
1999--YTD       75
1999 *          166

* Estimate as of June 30, 1999.

Risks

As a result of IHE's dependence on third party providers and
despite the company's testing, there is no assurance that all
vendors will have achieved Year 2000 compliance.  However, the
company believes its contingency plans should provide sufficient
backup to normal operations.  For instance, should the loan
origination system be unavailable due to software problems or
environmental outages, this would slow the closing and funding
process.  The loan servicing system could be unavailable,
requiring manual payment or billing methods to be implemented,
thereby incurring increased expenses.  The company anticipates
that any Year 2000 failure would lead principally to increased
expenses rather than failure to perform the origination,
servicing, and support functions of the company.

Contingency Plans

IHE has established a contingency planning team, identified core
business processes, and has developed contingency plans for the
majority of its mission critical applications.  The company has
determined that the most likely worst case scenario would be
environmental in nature (lack of power, telephone, data center
communications).  The company is completing a detailed plan
addressing the potential impact a Year 2000 compliance failure by
it or its service providers could have on the company.

The company's contingency planning process is running slightly
behind schedule; approximately 50% complete whereas its original
plan was to be 75% complete as of June 30, 1999.  However, plans
for the majority of IHE's core business processes have been
developed and are ready for testing.  Certain processes, mostly
related to internal support issues, are in development with
completion scheduled by late July.  All plans will be tested in
the third quarter.  Plans for all areas include tasks to be
completed in late December 1999 as advance preparation should
contingency plans need to be invoked.

PART II

Item 1.  Legal Proceedings

The following litigation, previously reported, was no longer
pending as of June 30, 1999:

Banda et al. v. City of Houston et al.  On June 4, 1999, the 80th
Judicial District Court of Harris County, Texas, entered a final
judgement reflecting the parties' agreement to settle the lawsuit
involving Irwin Mortgage Corporation's participation in a housing
opportunity program.  Irwin Mortgage had been served as a
defendant in March of 1998.

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, 1999.

b.   The following directors were elected at the meeting:


                           Affirmative    Negative       Votes       Votes
                                 Votes       Votes    Withheld   Abstained

     Sally A. Dean          18,775,870     134,125      73,218     165,789
     David W. Goodrich      18,833,381     134,125      15,707     165,789
     John T. Hackett        18,846,928     134,125       2,160     165,789
     William H. Kling       18,848,424     134,125         664     165,789
     Brenda J. Lauderback   18,752,003     134,125      97,085     165,789
     John C. McGinty        18,745,799     134,125     103,289     165,789
     Irwin Miller           17,874,239     134,125     974,849     165,789
     William I. Miller      18,848,426     134,125         662     165,789
     John A. Nash           18,848,024     134,125       1,064     165,789
     Lance R. Odden         18,750,870     134,125      98,218     165,789
     Theodore M. Solso      18,774,726     134,125      74,362     165,789


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

     Confirmation of independent auditors,PricewaterhouseCoopers,
of the Registrant:  18,922,908 affirmative, 115,629 negative,
110,447 abstained

     Approval of the Irwin Financial Corporation Employees' Stock
Purchase Plan III:  18,691,300 affirmative, 395,685 negative,
62,017 abstained

     Approval of the Irwin Financial Corporation 1999 Outside
Director Restricted Stock Compensation Plan:  18,597,603
affirmative, 468,289 negative, 83,110 abstained

     Amendment of the Articles of Incorporation to increase the
total number of authorized preferred shares of the Corporation:
15,586,607 affirmative, 2,023,197 negative, 1,539,198 abstained

     Amendment of the Articles of Incorporation to delete an
outdated section of Article V:  18,987,492 affirmative, 81,949
negative, 79,561 abstained


                             PART II

                             Item 6

(a)  Exhibits to Form 10-Q

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

(2)                 No Exhibit

(3)                 Articles of Incorporation

(4)                 No Exhibit

(10)                (a) Employee Stock Purchase Plan III
                    (b) 1999 Outside Director Restricted
                        Stock Compensation Plan

(11)                Computation of earnings per
                    share is included in the
                    footnotes to the financial
                    statements

(15)                No Exhibit

(18)                No Exhibit

(19)                No Exhibit

(22)                No Exhibit

(23)                No Exhibit

(24) No Exhibit

(27)                Financial Data Schedule

(99)                No Exhibit



(b)  Reports on Form 8-K

None




                           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: /c/ Thomas D. Washburn
                                 ________________________
                                  Thomas D. Washburn
                                  Chief Financial Officer


                              By: /c/ Marie S. Ameis
                                 _________________________
                                  Marie S. Ameis
                                  Corporate Controller
                                  (Chief Accounting Officer)