---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 March 31, 2003[  ]  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 Corporation as Specified in its Charter)



|Indiana                                                        | 35-1286807                          
|-------------------------------------------------------------- | ------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.)
|                                                               |                                     
|                                                               |                                     
|500 Washington Street Columbus, Indiana                        | 47201                               
|(Address of Principal Executive Offices)                       | (Zip Code)                          
|                                                               |                                     
|(812) 376-1909                                                 | www.irwinfinancial.com              
|(Corporation's Telephone Number, Including Area Code)          | (Web Site)                          
|                                                               |                                     

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.[ X ]  Yes                          [
   ]  No
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act[ X ]  Yes                          [
   ]  No
As of May 9, 2003, there were outstanding 27,923,939 common shares, no par value, of the Registrant.

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FORM 10-Q
                                                                               TABLE OF CONTENTS



|        |                                                                                       | PAGE NO.
|------- | ------------------------------------------------------------------------------------- | --------
|PART I  | FINANCIAL INFORMATION                                                                 |         
|        |                                                                                       |         
|Item 1  | Financial Statements                                                                  | 3       
|        |                                                                                       |         
|Item 2  | Management's Discussion and Analysis of Financial Condition and Results of Operations | 14      
|        |                                                                                       |         
|Item 3  | Quantitative and Qualitative Disclosures About Market Risk                            | 42      
|        |                                                                                       |         
|Item 4  | Controls and Procedures                                                               | 42      
|        |                                                                                       |         
|PART II | OTHER INFORMATION                                                                     |         
|        |                                                                                       |         
|Item 1  | Legal Proceedings                                                                     | 42      
|        |                                                                                       |         
|Item 2  | Changes in Securities and Use of Proceeds                                             | 42      
|        |                                                                                       |         
|Item 6  | Exhibits and Reports on Form 8-K                                                      | 43      
|        |                                                                                       |         
|        | Signatures                                                                            | 46      
|        |                                                                                       |         
|        | Certifications                                                                        | 47      
|        |                                                                                       |         
|        |                                                                                       |         
|        |                                                                                       |         

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PART 1.  FINANCIAL INFORMATION.
Item 1.  Financial Statements.

IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)



|                                                                                                                                                                                                                                                                            | March 31,
2003                   | December 31,
2002
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------- | -----------------
|                                                                                                                                                                                                                                                                            | (In thousands except for shares)
|Assets:                                                                                                                                                                                                                                                                     |                                  |                  
|Cash and cash equivalents                                                                                                                                                                                                                                                   | $      132,332                   | $      157,771   
|Interest-bearing deposits with financial institutions                                                                                                                                                                                                                       | 42,176                           | 34,951           
|Trading assets                                                                                                                                                                                                                                                              | 132,663                          | 157,514          
|Investment securities - held-to-maturity (Market value:                                                                                                                                                                                                                     |                                  |                  
|$5,338 in 2003 and $5,644 in 2002)                                                                                                                                                                                                                                          | 4,966                            | 5,349            
|Investment securities - available-for-sale                                                                                                                                                                                                                                  | 62,834                           | 62,599           
|Loans held for sale                                                                                                                                                                                                                                                         | 1,631,829                        | 1,314,849        
|Loans and leases, net of unearned income - Note 2                                                                                                                                                                                                                           | 2,987,030                        | 2,815,276        
|Less: Allowance for loan and lease losses - Note 3                                                                                                                                                                                                                          | (54,184)                         | (50,936)         
|                                                                                                                                                                                                                                                                            | 2,932,846                        | 2,764,340        
|Servicing assets - Note 4                                                                                                                                                                                                                                                   | 211,612                          | 174,935          
|Accounts receivable                                                                                                                                                                                                                                                         | 44,949                           | 55,928           
|Accrued interest receivable                                                                                                                                                                                                                                                 | 15,583                           | 15,264           
|Premises and equipment, net                                                                                                                                                                                                                                                 | 32,498                           | 32,398           
|Other assets                                                                                                                                                                                                                                                                | 121,644                          | 135,028          
|Total assets                                                                                                                                                                                                                                                                | $   5,365,932                    | $   4,910,926    
|Liabilities and Shareholders' Equity:                                                                                                                                                                                                                                       |                                  |                  
|Deposits
Noninterest-bearing                                                                                                                                                                                                                                                | $      925,488                   | $      821,814   
|Interest-bearing                                                                                                                                                                                                                                                            | 1,215,656                        | 1,170,660        
|Certificates of deposit over $100,000                                                                                                                                                                                                                                       | 884,459                          | 701,870          
|                                                                                                                                                                                                                                                                            | 3,025,603                        | 2,694,344        
|Short-term borrowings - Note 5                                                                                                                                                                                                                                              | 810,674                          | 993,124          
|Long-term debt                                                                                                                                                                                                                                                              | 30,067                           | 30,070           
|Collateralized debt - Note 6                                                                                                                                                                                                                                                | 711,067                          | 391,425          
|Company-obligated mandatorily redeemable preferred
   Securities of subsidiary trusts                                                                                                                                                                                       | 181,250                          | 181,250          
|Convertible securities of subsidiary trusts                                                                                                                                                                                                                                 | 51,750                           | 51,750           
|Other liabilities                                                                                                                                                                                                                                                           | 182,878                          | 207,552          
|Total liabilities                                                                                                                                                                                                                                                           | 4,993,289                        | 4,549,515        
|Commitments and contingencies - Note 9
Minority interest                                                                                                                                                                                                                    | 1,163                            | 856              
|Shareholders' equity
  Preferred stock, no par value - authorized 4,000,000 shares;
     none issued as of March 31, 2003 and December 31, 2002                                                                                                                             | --                               | --               
|Common stock, no par value - authorized 40,000,000 shares; issued 
     29,612,080 shares as of March 31, 2003 and December 31, 2002,
     respectively; including 1,784,084 and 1,840,623 shares in treasury
     as of March 31, 2003 and December 31, 2002, respectively | 112,000                          | 112,000          
|Additional paid-in capital                                                                                                                                                                                                                                                  | 3,225                            | 3,606            
|Deferred compensation                                                                                                                                                                                                                                                       | (558)                            | (240)            
|Accumulated other comprehensive loss, net of deferred income tax
     benefit of $349 and $336 as of March 31, 2003 and December 31, 
     2002, respectively                                                                                                               | (524)                            | (1,142)          
|Retained earnings                                                                                                                                                                                                                                                           | 297,490                          | 287,662          
|                                                                                                                                                                                                                                                                            | 411,633                          | 401,886          
|Less treasury stock, at cost                                                                                                                                                                                                                                                | (40,153)                         | (41,331)         
|Total shareholders' equity                                                                                                                                                                                                                                                  | 371,480                          | 360,555          
|Total liabilities and shareholders' equity                                                                                                                                                                                                                                  | $   5,365,932                    | $   4,910,926    

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



IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)



|                                                                                                | For the Three Months
Ended March 31,
|----------------------------------------------------------------------------------------------- | ------------------------------------
|                                                                                                | 2003                                
|                                                                                                | (In thousands, except per share)    
|Interest income:                                                                                |                                     
|Loans and leases                                                                                | $         58,124                    
|Loans held for sale                                                                             | 22,896                              
|Trading account                                                                                 | 6,963                               
|Investment securities                                                                           | 862                                 
|Federal funds sold                                                                              | 36                                  
|Total interest income                                                                           | 88,881                              
|Interest expense:                                                                               |                                     
|Deposits                                                                                        | 11,249                              
|Short-term borrowings                                                                           | 4,067                               
|Long-term and collateralized debt                                                               | 3,646                               
|Preferred securities distribution                                                               | 5,528                               
|Total interest expense                                                                          | 24,490                              
|Net interest income                                                                             | 64,391                              
|Provision for loan and lease losses                                                             | 9,243                               
|Net interest income after provision for loan and lease losses                                   | 55,148                              
|Other income:                                                                                   |                                     
|Loan servicing fees                                                                             | 21,892                              
|Amortization and impairment of servicing assets -- Note 4                                       | (33,864)                            
|Net loan administration income (loss)                                                           | (11,972)                            
|Gain from sales of loans                                                                        | 95,511                              
|Gain (loss) on sale of mortgage servicing assets                                                | 4                                   
|Trading losses                                                                                  | (17,789)                            
|Derivative gains (losses), net                                                                  | 314                                 
|Other                                                                                           | 3,531                               
|                                                                                                | 69,599                              
|Other expense:                                                                                  |                                     
|Salaries                                                                                        | 56,423                              
|Pension and other employee benefits                                                             | 10,923                              
|Office expense                                                                                  | 5,192                               
|Premises and equipment                                                                          | 10,302                              
|Marketing and development                                                                       | 3,694                               
|Professional fees                                                                               | 2,805                               
|Other                                                                                           | 16,261                              
|                                                                                                | 105,600                             
|Income before income taxes                                                                      | 19,147                              
|Provision for income taxes                                                                      | 7,371                               
|Income before cumulative effect of change in accounting principle                               | 11,776                              
|Cumulative effect of change in accounting principle, net of tax                                 | --                                  
|Net income                                                                                      | $         11,776                    
|Earnings per share before cumulative effect of change in accounting principle: - Note 7
  Basic | $             0.42                  
|Diluted                                                                                         | $             0.41                  
|Earnings per share: - Note 7
  Basic                                                            | $             0.42                  
|Diluted                                                                                         | $             0.41                  
|Dividends per share                                                                             | $         0.0700                    

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

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IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)

For the Three Months Ended March 31, 2003, and 2002



|                                                                  | Total                         | Retained
Earnings | Accumulated
Other
Comprehensive
Income
(Loss) | Deferred
Compensation | Additional
Paid in
Capital | Common
Stock | Preferred
Stock | Treasury
Stock
|----------------------------------------------------------------- | ----------------------------- | ----------------- | --------------------------------------------- | --------------------- | -------------------------- | ------------ | --------------- | --------------
|                                                                  | (In thousands, except shares)
|Balance January 1, 2003                                           | $  360,555                    | $  287,662        | $          (1,142)                            | $           (240)     | $    3,606                 | $ 112,000    | $          --   | $  (41,331)   
|Net income                                                        | 11,776                        | 11,776            |                                               |                       |                            |              |                 |               
|Unrealized gain on investment securities net of $15 tax liability | 22                            |                   | 22                                            |                       |                            |              |                 |               
|Unrealized loss on interest rate cap net of $20 tax benefit       | (30)                          |                   | (30)                                          |                       |                            |              |                 |               
|Foreign currency adjustment net of $247 tax liability             | 370                           |                   | 370                                           |                       |                            |              |                 |               
|Minimum SERP liability net of $170 tax liability                  | 256                           |                   | 256                                           |                       |                            |              |                 |               
|Total comprehensive
income                                        | 12,394                        |                   |                                               |                       |                            |              |                 |               
|Deferred compensation                                             | (318)                         |                   |                                               | (318)                 |                            |              |                 |               
|Cash dividends                                                    | (1,948)                       | (1,948)           |                                               |                       |                            |              |                 |               
|Tax benefit on stock option exercises                             | (82)                          |                   |                                               |                       | (82)                       |              |                 |               
|Treasury stock:                                                   |                               |                   |                                               |                       |                            |              |                 |               
|Purchase of 6,672 shares                                          | (115)                         |                   |                                               |                       |                            |              |                 | (115)         
|Sales of 63,211 shares                                            | 994                           |                   |                                               |                       | (299)                      |              |                 | 1,293         
|Balance March 31, 2003                                            | $  371,480                    | $  297,490        | $             (546)                           | $           (558)     | $    3,225                 | $ 112,000    | $          --   | $  (40,153)   
|                                                                  |                               |                   |                                               |                       |                            |              |                 |               
|                                                                  |                               |                   |                                               |                       |                            |              |                 |               
|Balance January 1, 2002                                           | $  231,665                    | $  241,725        | $             (325)                           | $           (449)     | $    4,426                 | $   29,965   | $   1,386       | $  (45,063)   
|Net income                                                        | 9,946                         | 9,946             |                                               |                       |                            |              |                 |               
|Unrealized loss on investment securities net of $20 tax benefit   | (29)                          |                   | (29)                                          |                       |                            |              |                 |               
|Foreign currency adjustment net of $4 tax benefit                 | (6)                           |                   | (6)                                           |                       |                            |              |                 |               
|Total comprehensive  income                                       | 9,911                         |                   |                                               |                       |                            |              |                 |               
|Deferred compensation                                             | 30                            |                   |                                               | 30                    |                            |              |                 |               
|Cash dividends                                                    | (1,859)                       | (1,859)           |                                               |                       |                            |              |                 |               
|Sales of 6,210,000 shares of common stock                         | 82,371                        |                   |                                               |                       |                            | 82,371       |                 |               
|Tax benefit on stock option exercises                             | 12                            |                   |                                               |                       | 12                         |              |                 |               
|Treasury stock:                                                   |                               |                   |                                               |                       |                            |              |                 |               
|Purchase of 613 shares                                            | (10)                          |                   |                                               |                       |                            |              |                 | (10)          
|Sales of 27,580 shares                                            | 385                           |                   |                                               |                       | 6                          |              |                 | 379           
|Balance March 31, 2002                                            | $  322,505                    | $  249,812        | $             (360)                           | $           (419)     | $    4,444                 | $ 112,336    | $   1,386       | $  (44,694)   

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

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IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)



|                                                                      | For the Three Months Ended March 31,
|--------------------------------------------------------------------- | ------------------------------------
|                                                                      | 2003                                
|                                                                      | (In thousands)                      
|Net income                                                            | $            11,776                 
|Adjustments to reconcile net income to cash                           |                                     
|(used) provided by operating activities:                              |                                     
|Depreciation, amortization, and accretion, net                        | 2,754                               
|Amortization and impairment of servicing assets                       | 33,864                              
|Provision for loan and lease losses                                   | 9,243                               
|Gain from sale of loans held for sale                                 | (95,511)                            
|Originations of loans held for sale                                   | (5,837,368)                         
|Proceeds from the sale of loans held for sale                         | 5,545,358                           
|Net decrease in trading assets                                        | 24,851                              
|Decrease in accounts receivable                                       | 10,979                              
|Other, net                                                            | (11,780)                            
|Net cash (used) provided by operating activities                      | (305,834)                           
|Lending and investing activities:                                     |                                     
|Proceeds from maturities/calls of investment securities:              |                                     
|Held-to-maturity                                                      | 383                                 
|Available-for-sale                                                    | 15,258                              
|Purchase of investment securities:                                    |                                     
|Available-for-sale                                                    | (15,440)                            
|Net increase in interest-bearing deposits with financial institutions | (7,225)                             
|Net increase in loans, excluding sales                                | (1,170,749)                         
|Sales of loans                                                        | 993,000                             
|Other, net                                                            | (2,060)                             
|Net cash used by lending and investing activities                     | (186,833)                           
|Financing activities:                                                 |                                     
|Net increase (decrease) in deposits                                   | 331,259                             
|Net (decrease) increase in short-term borrowings                      | (182,450)                           
|Repayments of long-term debt                                          | (3)                                 
|Net proceeds from issuance of collateralized borrowings               | 319,642                             
|Proceeds from sale of stock for equity offering                       | --                                  
|Purchase of treasury stock for employee benefit plans                 | (115)                               
|Proceeds from sale of stock for employee benefit plans                | 912                                 
|Dividends paid                                                        | (1,948)                             
|Net cash provided by financing activities                             | 467,297                             
|Effect of exchange rate changes on cash                               | (69)                                
|Net decrease in cash and cash equivalents                             | (25,439)                            
|Cash and cash equivalents at beginning of period                      | 157,771                             
|Cash and cash equivalents at end of period                            | $          132,332                  
|Supplemental disclosures of cash flow information:                    |                                     
|Cash paid during the period:                                          |                                     
|Interest                                                              | $            24,469                 
|Income taxes                                                          | $            13,651                 

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting PoliciesConsolidation:Irwin Financial Corporation and its subsidiaries provide financial services throughout the United States and Canada.  We are engaged in the mortgage banking, commercial banking, home equity lending, commercial finance, and venture capital lines of business.  Intercompany balances and transactions have been eliminated in consolidation.Use of Estimates:The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.Trading Assets:Trading assets are stated at fair value.  Unrealized gains and losses are included in earnings.  Included in trading assets are residual interests.  In the past, when we sold receivables in securitizations of home equity loans and lines of credit, we retained residual interests, a servicing asset, one or more subordinated tranches, and in some cases a cash reserve account, all of which are retained interests in the securitized receivables.  Gain or loss on the sale of the receivables depends in part on the previous carrying amount of the financial assets involved in the transfer, allocated between the assets sold and the retained interests based on their relative fair value at the date of transfer.
     To obtain fair value of residual interests, quoted market prices are used if available.  However, quotes are generally not available for residual interests, so we generally estimate fair value based on the present value of expected cash flows using estimates of the key assumptions -- prepayment speeds, credit losses, and discount rates commensurate with the risks involved -- that management believes market participants would use to value similar assets.  Adjustments to carrying values are recorded as trading gains or losses.  An adjustment of $17.8 million was recorded in the first quarter of 2003 to write down the residual interests due to increased prepayment speeds and expected credit losses.Cash and Cash Equivalents Defined:For purposes of the statement of cash flows, we consider cash and due from banks to be cash equivalents.Stock-Based Employee Compensation:  At March 31, 2003, we have two stock-based employee compensation plans.  We use the intrinsic value method to account for our plans under the recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations.  No stock-based employee compensation cost is reflected in net income for any of the periods presented, as all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the date of grant.  The Board of Directors has not chosen to expense stock options.  The Board wishes to analyze new guidance from the FASB, SEC or other relevant authority regarding the standardization of valuation methods, should such guidance be forthcoming.  In the absence of a uniform valuation method for public companies, we will continue to disclose in this footnote the impact of expensing stock options, using our valuation method, which is based on a Black-Scholes model using several assumptions management believes to be reasonable.  The following table illustrates the effect on net income and earnings per share if we had applied the fair value recognition provisions of FASB Statement No. 123, "Accounting for Stock-Based Compensation," using our valuation method to stock-based employee compensation:



|                                                                                                                                                | For the three months ended March 31,
|----------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------
|                                                                                                                                                | 2003                                
|                                                                                                                                                | (In thousands)                      
|Net income as reported                                                                                                                          | $   11,776                          
|Deduct: Total stock-based employee compensation expense
  determined under fair value based method for all awards,
  net of related tax effects | (647)                               
|Pro forma net income                                                                                                                            | $   11,129                          
|Basic earnings per share
  As reported                                                                                                          | $       0.42                        
|Pro forma                                                                                                                                       | $       0.40                        
|Diluted earnings per share
  As reported                                                                                                        | $       0.41                        
|Pro forma                                                                                                                                       | $       0.39                        

Recent Accounting Developments
     In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" which requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved.  The primary beneficiary is the party that absorbs a majority of expected losses, receives a majority of expected residual returns, or both, as a result of holding variable interests, which are the ownership, contractual, or other pecuniary interests in the entity.  They are required to disclose the (a) nature, purpose, size, and activities of the variable interest entity, (b) the carrying amount and classification of assets that are collateral, and (c) any lack of recourse by creditors to the primary beneficiary.  If a primary interest is not held, but a significant variable interest is held, disclosure requirements include (1) the nature, purpose, size and activities of the variable interest entity, (2) exposure to loss, (3) the date and nature of involvement with the entity.  This interpretation applies immediately to variable interests created or obtained after January 31, 2003 for interim periods beginning after June 15, 2003.  Prior to 2002, we used securitization structures involving qualified special purpose entities (QSPEs) which are exempt from the requirements of this interpretation.  As a result, management does not believe the implementation of Interpretation No. 46 will have a material effect on our earnings or financial position.
     Reclassifications:Certain amounts in the 2002 consolidated financial statements have been reclassified to conform to the 2003 presentation.  These changes had no impact on previously reported net income or shareholders' equity.  Note 2 - Loans and LeasesLoans and leases are summarized as follows:



|                                       | March 31,      | December 31, 
|-------------------------------------- | -------------- | -------------
|                                       | 2003           | 2002         
|                                       | (In thousands)
|Commercial, financial and agricultural | $   1,362,750  | $   1,347,962
|Real estate-construction               | 326,711        | 314,851      
|Real estate-mortgage                   | 883,558        | 777,865      
|Consumer                               | 33,296         | 27,857       
|Direct financing leases
     Domestic  | 315,943        | 291,711      
|Foreign                                | 151,372        | 133,784      
|Unearned income
     Domestic          | (64,483)       | (59,287)     
|Foreign                                | (22,117)       | (19,467)     
|Total                                  | $   2,987,030  | $   2,815,276

Note 3 - Allowance for Loan and Lease Losses



|                                    | As of and for the three months ended | As of and for the year ended
|----------------------------------- | ------------------------------------ | ----------------------------
|                                    | March 31,
2003                       | December 31, 2002           
|                                    | (In thousands)                      
|Balance at beginning of period      | $              50,936                | $              22,283       
|Provision for loan and lease losses | 9,243                                | 43,996                      
|Foreign currency adjustment         | 132                                  | 17                          
|Recoveries                          | 725                                  | 2,870                       
|Charge-offs                         | (6,852)                              | (18,230)                    
|Balance at end of period            | $              54,184                | $              50,936       

Note 4 - Servicing Assets
     Included on the consolidated balance sheet at March 31, 2003 and December 31, 2002 are $211.6 million and $174.9 million, respectively, of capitalized servicing assets.  These amounts relate to the principal balances of mortgage and home equity loans serviced by us for investors.  Changes in our capitalized servicing assets, net of valuation allowance, are shown below:



|                              | As of and for the three months ended | As of and for the year ended
|----------------------------- | ------------------------------------ | ----------------------------
|                              | March 31,
2003                       | December 31, 2002           
|                              | (In thousands)                      
|Beginning balance             | $            174,935                 | $            228,624        
|Additions                     | 70,541                               | 180,627                     
|Amortization                  | (30,842)                             | (62,191)                    
|Impairment                    | (3,022)                              | (146,370)                   
|Reduction for servicing sales | --                                   | (25,755)                    
|                              | $             211,612                | $            174,935        

We have established a valuation allowance to record servicing assets at their fair value.  Changes in the allowance are summarized below:



|                               | March 31,           | December 31,         
|------------------------------ | ------------------- | ---------------------
|                               | 2003                | 2002                 
|                               | (In thousands)     
|Balance at beginning of period | $           159,865 | $              13,495
|Provision for impairment       | 3,022               | 146,370              
|Balance at end of period       | $          162,887  | $            159,865 



Note 5 - Short-term Borrowings
     Short-term borrowings are summarized as follows:



|                                                 | March 31,      | December 31, 
|------------------------------------------------ | -------------- | -------------
|                                                 | 2003           | 2002         
|                                                 | (In thousands)
|Drafts payable related to mortgage loan closings | $     286,682  | $     200,701
|Commercial paper                                 | 16,612         | 14,121       
|Federal Home Loan Bank borrowings                | 407,000        | 527,000      
|Federal funds                                    | 33,000         | 30,000       
|Lines of credit and other borrowings             | 67,380         | 221,302      
|                                                 | $     810,674  | $     993,124

Drafts payable related to mortgage loan closings are related to mortgage closings that have not been presented to the banks for payment.  When presented for payment, these borrowings will be funded internally or by borrowing from the lines of credit.
     The majority of our commercial paper is payable to a company controlled by a significant shareholder and director of the Corporation.
     Federal Home Loan Bank borrowings are collateralized by loans and loans held for sale.
     We also have lines of credit available to fund loan originations and operations.  Interest on the lines of credit is payable monthly or quarterly with variable rates ranging from 1.5% to 2.5% at March 31, 2003.

Note 6 - Collateralized Debt
     Beginning in the second quarter of 2002, we began securitizing loans using secured financing structures at our home equity lending line of business.  In 2003, we also began securitizing leases at our commercial finance line of business using secured financing structures.  Sale treatment was precluded on these transactions as we maintained effective control over the loans and leases securitized.  This type of securitization structure results in cash being received, debt being recorded, and the establishment of an allowance for credit losses.  The notes associated with these transactions are collateralized by $0.7 billion in leases and home equity loans and home equity lines of credit classified on the balance sheet as loans and leases held for investment (Note 2).  The principal and interest on these debt securities are paid using the cash flows from the underlying loans and leases.  Accordingly, the timing of the principal payments on these debt securities is dependent on the payments received on the underlying collateral.  The interest rates on the bonds are at a floating rate.  We also received $7.1 million for an interest only senior note on both securitizations at the home lending line of business which as of March 31, 2003 had a combined notional balance of $61.7 million.  These senior notes pay interest at 10%, and mature on December 25, 2004 and September 25, 2005. 
     Collateralized debt is summarized as follows:



|                                        | Contractual
Maturity | Weighted 
Average
Interest Rate 
at 
March 31, 
2003 | March 31,
2003 | December 31,
2002   
|--------------------------------------- | -------------------- | ---------------------------------------------------- | -------------- | --------------------
|                                        | (In thousands)      
|Commercial finance line of business     |                      |                                                      |                |                     
|2003 asset backed note                  | 7/4/2010             | 2.30                                                 | $   58,962     | $                 --
|                                        |                      |                                                      |                |                     
|Home equity lending line of business    |                      |                                                      |                |                     
|2003-1 asset backed notes:              |                      |                                                      |                |                     
|Combined variable rate senior note      | 2/28/2028            | 1.86                                                 | 231,800        | --                  
|Combined variable rate subordinate note | 2/28/2028            | 3.38                                                 | 61,763         | --                  
|Unamortized premium                     |                      |                                                      | 5,726          | --                  
|                                        |                      |                                                      |                |                     
|2002-1 asset backed notes:              |                      |                                                      |                |                     
|Combined variable rate senior note      | 7/25/2023-
6/25/2029 | 1.59                                                 | 274,794        | 312,997             
|Combined variable rate subordinate note | 2/25/2029            | 2.87                                                 | 72,551         | 72,551              
|Unamortized premium                     |                      |                                                      | 5,471          | 5,877               
|Total                                   |                      |                                                      | $711,067       | $      391,425      

Note 7 - Earnings per Share
     Earnings per share calculations are summarized as follow:



|                                                                                                       | Basic
Earnings
Per Share                 | Effect of
Stock
Options | Effect of
Preferred
Shares | Effect of
Convertible
Shares | Diluted
Earnings
Per Share
|------------------------------------------------------------------------------------------------------ | ---------------------------------------- | ----------------------- | -------------------------- | ---------------------------- | --------------------------
|                                                                                                       | (In thousands, except per share amounts)
|Three Months Ended March 31, 2003Net income                                                            | $       11,776                           | $            --         | $            --            | $             700            | $       12,476            
|Shares                                                                                                 | 27,786                                   | 202                     |                            | 2,610                        | 30,598                    
|Per-Share Amount                                                                                       | $           0.42                         | $            --         | $            --            | $          (0.01)            | $         0.41            
|                                                                                                       |                                          |                         |                            |                              |                           
|Three Months Ended March 31, 2002Net income before cumulative effect of change in accounting principle | $         9,451                          | $            --         | $            --            | $             700            | $     10,151              
|Shares                                                                                                 | 24,221                                   | 135                     | 96                         | 2,610                        | 27,062                    
|Per-Share Amount                                                                                       | $           0.39                         | $            --         | $            --            | $          (0.02)            | $         0.37            
|Cumulative effect of change in
    accounting principle                                                | 495                                      |                         |                            |                              | 495                       
|Per-Share Amount                                                                                       | $           0.02                         |                         |                            |                              | $         0.02            
|Net income                                                                                             | 9,946                                    |                         |                            |                              | 10,646                    
|Per-Share Amount                                                                                       | $           0.41                         |                         |                            |                              | $         0.39            

At March 31, 2003 and 2002, 769,534 and 1,011,473 shares, respectively, related to stock options, were not included in the dilutive earnings per share calculation because the options' exercise price was greater than the market price of the common stock.Note 8 - Industry Segment InformationWe have five principal segments that provide a broad range of financial services.  The mortgage banking line of business originates, sells, and services residential first mortgage loans throughout the United States.  The commercial banking line of business provides commercial banking services in seven Midwestern and Rocky Mountain states.  The home equity lending line of business originates and services home equity loans throughout the United States.  The commercial finance line of business originates leases and loans against commercial equipment and real estate throughout the United States (U.S.) and Canada.  The venture capital line of business invests in early-stage U.S. technology companies focusing on financial services.  Our other segment primarily includes the parent company and eliminations.
     The accounting policies of each segment are the same as those described in the "Summary of Significant Accounting Policies." Below is a summary of each segment's revenues, net income, and assets for three months ended March 31, 2003, and 2002:



|                                                             | Mortgage
Banking | Commercial
Banking | Home Equity
Lending | Commercial
Finance | Venture
Capital | Other        | Consolidated    
|------------------------------------------------------------ | ---------------- | ------------------ | ------------------- | ------------------ | --------------- | ------------ | ----------------
|                                                             | (In thousands)  
|For the Three Months Ended March 31, 2003Net interest income | $         16,065 | $         19,757   | $          26,412   | $          4,807   | $            7  | $    (2,657) | $         64,391
|Intersegment interest                                        | --               | (730)              | --                  | --                 | --              | 730          | --              
|Provision for loan and
  lease losses                        | 53               | (1,580)            | (4,880)             | (2,864)            | --              | 28           | (9,243)         
|Other revenue                                                | 80,983           | 5,129              | (14,981)            | 835                | (2,262)         | (105)        | 69,599          
|Intersegment revenues                                        | --               | --                 | --                  | --                 | 150             | (150)        | --              
|Total net revenues                                           | 97,101           | 22,576             | 6,551               | 2,778              | (2,105)         | (2,154)      | 124,747         
|Other expense                                                | 64,522           | 13,454             | 21,415              | 3,218              | 108             | 2,883        | 105,600         
|Intersegment expenses                                        | 691              | 451                | 966                 | 110                | --              | (2,218)      | --              
|Net income before
     taxes                                 | 31,888           | 8,671              | (15,830)            | (550)              | (2,213)         | (2,819)      | 19,147          
|Income taxes                                                 | 12,249           | 3,460              | (6,332)             | (290)              | (885)           | (831)        | 7,371           
|Net income (loss)                                            | $         19,639 | $           5,211  | $          (9,498)  | (260)              | $   (1,328)     | $    (1,988) | $         11,776
|Assets at March 31, 2003                                     | $    1,922,008   | $    2,069,174     | $     1,064,626     | $      381,026     | $     3,762     | $  (74,664)  | $    5,365,932  



Mortgage
Banking
Commercial
Banking
Home Equity
Lending
Commercial
Finance
Venture
Capital
Other
Consolidated(In thousands)For the Three Months Ended March 31, 2002Net interest income
$        8,174
$        16,235
$          18,133
$          3,395
$            11
$     (1,533)
$         44,415Intersegment interest
--
(144)
--
(2)
--
146
--Provision for loan and
  lease losses
(150)
(2,170)
(6,578)
(1,434)
--
--
(10,332)Other revenue
45,469
4,169
2,545
786
(1,474)
55
51,550Intersegment revenues
--
196
--
--
201
(397)
--Total net revenues
53,493
18,286
14,100
2,745
(1,262)
(1,729)
85,633Other expense
35,878
11,839
18,361
2,853
164
1,064
70,159Intersegment expenses
534
194
589
--
--
(1,317)
--Net income before taxes
17,081
6,253
(4,850)
(108)
(1,426)
(1,476)
15,474Income taxes
6,742
2,424
(1,940)
7
(571)
(639)
6,023Income before cumulative effect of change in
accounting principle
10,339
3,829
(2,910)
(115)
(855)
(837)
9,451Cumulative effect of
change in accounting
principle
--
--
--
495
--
--
495Net income (loss)
$      10,339
$          3,829
$          (2,910)
$             380
$        (855)
$     (837)
9,946Assets at March 31, 2002
$    921,754
$   1,699,165
$       650,745
$      279,130
$       6,167
$(15,037)
$    3,541,924


Note 9 - Contingencies
     Our indirect subsidiary, Irwin Mortgage Corporation, is a defendant in a class action lawsuit in the United States District Court for the Northern District of Alabama alleging that Irwin Mortgage violated the federal Real Estate Settlement Procedures Act (RESPA) relating to Irwin Mortgage's payment of broker fees to mortgage brokers.  In June 2001, the Court of Appeals for the 11th Circuit upheld the district court's certification of a plaintiff class and the case was remanded for further proceedings in the federal district court.  In September 2001, a second suit sought class status and consolidation with this suit.
     In November 2001, by order of the district court, the parties filed supplemental briefs analyzing the impact of a new policy statement from the Department of Housing and Urban Development (HUD) that explicitly disagrees with the judicial interpretation of RESPA by the Court of Appeals for the 11th Circuit in its ruling upholding class certification in this case.  In response to a motion from Irwin Mortgage, in March 2002, the district court granted Irwin Mortgage's motion to stay proceedings in this case until the 11th Circuit decided the three other RESPA cases originally argued before it with this case.  The second suit seeking consolidation with this one was similarly stayed.
     The 11th Circuit has now decided all of the RESPA cases pending in that court.  In one of those cases, the 11th Circuit concluded that the trial court had abused its discretion in certifying a class action under RESPA.  Further, in that decision, the 11th Circuit expressly recognized it was, in effect, overruling its previous decision upholding class certification in this case.  In March 2003, Irwin Mortgage filed a motion to decertify the class and the plaintiffs filed a renewed motion for summary judgment.
     If the class is not decertified and the district court finds that Irwin Mortgage violated RESPA, Irwin Mortgage could be liable for damages equal to three times the amount of that portion of payments made to the mortgage brokers that is ruled unlawful.  Based on notices sent by the plaintiffs to date to potential class members and additional notices that might be sent in this case, we believe the class is not likely to exceed 32,000 borrowers who meet the class specifications.
     In addition to this case and the case seeking consolidation with it, three other lawsuits were filed against Irwin Mortgage in 2002 in the Circuit Court of Calhoun County, Alabama seeking class action status and allege claims based on payments similar to those at issue in this case.  Another case filed in 2002 in the United States District Court for the Northern District of Alabama alleges RESPA violations both similar to and different from those in this case in connection with payments made to mortgage brokers.  In April, 2003, Irwin Mortgage and the plaintiffs reached an agreement in principle to settle the three cases in Calhoun County, Alabama, for a nonmaterial amount.
     Irwin Mortgage intends to defend this and the related lawsuits vigorously and believes it has numerous defenses to the alleged RESPA and similar violations.  Irwin Mortgage further believes that the 11th Circuit's recent RESPA decisions provide grounds for reversal of the class certification in this case.  We have no assurance, however, that Irwin Mortgage will be successful in defeating class certification in this case or will ultimately prevail on the merits in this or the other cases.  However, we expect that an adverse outcome in this or the related cases could result in substantial monetary damages that could be material to our financial position.  We have not established any reserves for this or the related cases and are unable at this stage of the litigation to form a reasonable estimate of potential loss that we could suffer.
     In January 2001, we and Irwin Leasing Corporation (formerly Affiliated Capital Corp.), our indirect subsidiary, and Irwin Equipment Finance Corporation, our direct subsidiary (together, the Irwin companies), were served as defendants in an action filed in the United States District Court for the Middle District of Pennsylvania.  The suit alleges that a manufacturer/importer of certain medical devices made misrepresentations to health care professionals and to government officials to improperly obtain Medicare reimbursement for treatments using the devices, and that the Irwin companies, through Affiliated Capital's financing activities, aided in making the alleged misrepresentations.  The Irwin companies filed a motion to dismiss on February 12, 2001.  On August 10, 2001, the court granted our motion in part by dismissing Irwin Financial and Irwin Equipment Finance as defendants in the suit.  We have not established any reserves for this case.  At this stage of the litigation, we are unable to form a reasonable estimate of the amount of potential loss, if any, that Irwin Leasing could suffer.
     Our subsidiary, Irwin Union Bank and Trust Company, is a defendant in a purported class action lawsuit, filed in the U.S. District Court in Massachusetts in July 2001.  The case involves loans purchased by Irwin Union Bank and Trust from an unaffiliated third-party originator.  The plaintiffs allege that the loan documents did not comply with certain provisions of the Truth in Lending Act relating to high rate loans.  The complaint seeks rescission of the loans and other damages.  On September 30, 2002, the court granted plaintiffs' motion for certification of a class, subject to certain limitations.  We filed a motion for reconsideration with the district court and a petition for permission to appeal the class certification decision with the Court of Appeals for the 1st Circuit.  Discovery has not yet commenced.  If the class is ultimately upheld, the actual number of plaintiff borrowers will be determined only after a review of loan files.  We believe that out of approximately 200 loans acquired directly from the third-party originator and approximately 7,800 loans acquired from others through bulk acquisitions, only a portion of these loans will qualify for inclusion in the class.  Because this case is in the early stages of litigation, we are unable to form a reasonable estimate of potential loss, if any, and have not established any reserves related to this case.
     Our indirect subsidiary, Irwin Mortgage Corporation, is a defendant in a case filed in August, 1998 in the Baltimore, Maryland, City Circuit.  On January 25, 2002, a jury in this case awarded the plaintiffs damages of $1.434 million jointly and severally against defendants, including Irwin Mortgage.  The nine plaintiff borrowers alleged that a home rehabilitation company defrauded the plaintiffs by selling them defective homes at inflated prices and that Irwin Mortgage, which provided the plaintiff borrowers mortgage loans on the home purchases, participated in the fraud.  Irwin Mortgage filed an appeal with the Maryland Court of Special Appeals.  Oral argument was held on January 7, 2003.  We have reserved for this case based upon advice of our legal counsel.  Although we believe Irwin Mortgage has justifiable grounds for appeal, we cannot predict at this time whether the appeal will ultimately be successful.
     We and our subsidiaries are from time to time engaged in various matters of litigation, including the matters described above, other assertions of improper or fraudulent loan practices or lending violations, and other matters, and we have a number of unresolved claims pending.  In addition, as part of the ordinary course of business, we and our subsidiaries are parties to litigation involving claims to the ownership of funds in particular accounts, the collection of delinquent accounts, challenges to security interests in collateral, and foreclosure interests, that is incidental to our regular business activities.  While the ultimate liability with respect to these other litigation matters and claims cannot be determined at this time, we believe that damages, if any, and other amounts relating to pending matters are not likely to be material to our consolidated financial position or results of operations, except as described above.  Reserves have been established for these various matters of litigation, when appropriate, based upon the advice of legal counsel.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.About Forward-looking Statements
     You should read the following discussion in conjunction with our consolidated financial statements, footnotes, and tables.  This discussion and other sections of this report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of invoking these safe harbor provisions.  Words such as "anticipated," "assume," "assumptions," "attempt," "believe," "continues," "could," "estimate," "estimated," "expect," "expectations," "expected," "forecasts," "forward," "future," "judgment," "likely," "may," "objectives," "possible," "projected," "projections," "strategy," "unlikely," "will," "would," and similar expressions are intended to identify forward-looking statements, which may include, among other things:

- statements and assumptions relating to projected growth, earnings, earnings per share, and other financial performance measures as well as management's short-term and long-term performance goals;
- statements relating to the anticipated effects on results of operations or financial condition from recent and expected developments or events;
- statements relating to our business and growth strategies, including potential acquisitions; and
- any other statements, projections or assumptions that are not historical facts.

Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from our expectations of future results, performance or achievements expressed or implied by these forward-looking statements.  In addition, our past results of operations do not necessarily indicate our future results.  Actual future results may differ materially from what is projected due to a variety of factors, including, but not limited to, potential changes in interest rates, which may affect consumer demand for our products and the valuation of our servicing portfolio; staffing fluctuations in response to product demand; the relative profitability of our lending operations, including our correspondent mortgage loan originations; management of our servicing portfolios, including short-term swings in valuation of such portfolios due to quarter-end secondary market interest rates, which are inherently volatile; borrowers' refinancing opportunities, which may affect the prepayment assumptions used in our valuation estimates; unanticipated deterioration in the credit quality of our assets; difficulties in delivering products to the secondary market as planned or in securitizing our products as planned; difficulties in expanding our businesses or raising capital and other funding sources as needed; competition from other financial service providers for experienced managers as well as for customers; changes in the value of companies in which we invest; changes in variable compensation plans related to the performance and valuation of lines of business where we tie compensation systems to line-of-business performance; legislative or regulatory changes, including changes in the interpretation of regulatory capital rules, disclosure or consumer lending rules or rules affecting corporate governance; changes in applicable accounting policies or principles or their application to our business; or governmental changes in monetary or fiscal policies.  Further, geopolitical uncertainty may negatively impact the financial services industry or cause changes in or exaggerate the effects of the factors described above.  We undertake no obligation to update publicly any of these statements in light of future events, except as required in subsequent periodic reports we file with the Securities and Exchange Commission (SEC).Consolidated Overview

|                               | For the three months ended March 31,
|------------------------------ | ------------------------------------
|                               | 2003                                
|Net income (millions)          | $11.8                               
|Basic earnings per share (1)   | 0.42                                
|Diluted earnings per share (1) | 0.41                                
|Return on average equity       | 12.92%                              
|Return on average assets       | 1.00                                

_________

Consolidated Income Statement Analysis



|                                                             | Three Months Ended March 31,
|------------------------------------------------------------ | ----------------------------
|                                                             | 2003                        
|                                                             | Average Balance             
|                                                             | (Dollars in thousands)      
|Assets                                                       |                             
|Interest-earning assets                                      |                             
|Interest-bearing deposits with banks                         | $       47,083              
|Federal funds sold                                           | 19,101                      
|Trading assets                                               | 146,155                     
|Taxable investment securities                                | 51,838                      
|Tax-exempt investment securities                             | 5,997                       
|Loans held for sale                                          | 1,172,443                   
|Loans and leases, net of unearned income (1)                 | 2,899,186                   
|Total interest earning assets                                | $  4,341,803                
|Noninterest-earning assets                                   |                             
|Cash and due from banks                                      | $93,705                     
|Premises and equipment, net                                  | 32,348                      
|Other assets                                                 | 348,690                     
|Less allowance for loan and lease losses                     | (52,031)                    
|Total assets                                                 | $  4,764,515                
|Liabilities and Shareholders' Equity                         |                             
|Interest-bearing liabilities                                 |                             
|Money market checking                                        | $     144,746               
|Money market savings                                         | 788,475                     
|Regular savings                                              | 63,659                      
|Time deposits                                                | 1,008,944                   
|Short-term borrowings                                        | 708,683                     
|Long-term                                                    | 30,069                      
|Collateralized debt                                          | 446,454                     
|Trust preferred securities                                   | 233,000                     
|Total interest-bearing liabilities                           | $  3,424,030                
|Noninterest-bearing liabilities                              |                             
|Demand deposits                                              | $     786,196               
|Other liabilities                                            | 191,731                     
|Shareholders' equity                                         | 362,558                     
|Total liabilities and shareholders' equity                   | $  4,764,515                
|Net interest income                                          |                             
|Net interest income to average interest-
     earning assets |                             

__________

Provision for Loan and Lease Losses

Noninterest Income
     Noninterest income during the first quarter of 2003 totaled $69.6 million, compared to $51.6 million for the first three months of 2002.  The increase in 2003 versus 2002 was primarily a result of a 137.3% increase in gain from sale of loans at the mortgage banking line of business as a result of market conditions and increased production resulting in increased secondary market deliveries.  Partially offsetting these increases were higher amortization and impairment expense related to mortgage servicing rights as a result of declining interest rates and higher trading losses related to our residual assets due to increased prepayment speed and expected credit losses.Noninterest ExpenseNoninterest expenses for the three months ended March 31, 2003 totaled $105.6 million, compared to $70.2 million for the same period in 2002.  The increase in consolidated noninterest expense in 2003 is primarily related to higher personnel costs associated with our increased production at the mortgage banking line of business.Consolidated Balance Sheet AnalysisTotal assets at March 31, 2003 were $5.4 billion, up 9.3% from December 31, 2002.  However, we believe that changes in the average balance sheet are a more accurate reflection of the actual changes in the level of activity on the balance sheet.  Average assets for the first quarter of 2003 were $4.8 billion, up 18.9% from the average assets in 2002.  The growth in the consolidated balance sheet reflects increases in portfolio loans and leases at the commercial banking, home equity lending and commercial finance lines of business.  Also, there was significant growth in loans held for sale at the mortgage banking line of business during the first quarter of 2003.Loans and LeasesOur commercial loans and leases are originated throughout the United States and Canada.  At March 31, 2003, 4.3% of our loan and lease portfolio was with our Canadian operation.  We also extend credit to consumers in the United States through mortgages, installment loans and revolving credit arrangements.  The majority of the remaining portfolio consists of residential mortgage loans (1-4 family dwellings) and mortgage loans on commercial property.  Loans by major category for the periods presented were as follows:

|                                       | March 31,           | December 31,       
|-------------------------------------- | ------------------- | -------------------
|                                       | 2003                | 2002               
|                                       | (In thousands)     
|Commercial, financial and agricultural | $         1,362,750 | $         1,347,962
|Real estate construction               | 326,711             | 314,851            
|Real estate mortgage                   | 883,558             | 777,865            
|Consumer                               | 33,296              | 27,857             
|Direct lease financing:                |                     |                    
|Domestic                               | 315,943             | 291,711            
|Canadian                               | 151,372             | 133,784            
|Unearned income:                       |                     |                    
|Domestic                               | (64,483)            | (59,287)           
|Canadian                               | (22,117)            | (19,467)           
|Total                                  | $         2,987,030 | $        2,815,276 

Investment SecuritiesThe following table shows the composition of our investment securities at the dates indicated:

|                                                 | March 31,      | December 31,
|------------------------------------------------ | -------------- | ------------
|                                                 | 2003           | 2002        
|                                                 | (In thousands)
|U.S. Treasury and government obligations         | $    61,316    | $    60,868 
|Obligations of states and political subdivisions | 3,950          | 4,210       
|Mortgage-backed securities                       | 1,343          | 1,738       
|Other                                            | 1,191          | 1,132       
|Total                                            | $    67,800    | $    67,948 

DepositsTotal deposits for the first quarter of 2003 averaged $2.8 billion compared to deposits for the year 2002 that averaged $2.4 billion.  Demand deposits for the first quarter of 2003 averaged $786.2 million, a 36.2% increase over the average balance for the year 2002.  A significant portion of demand deposits is related to deposits at Irwin Union Bank and Trust, which are associated with escrow accounts held on loans in the servicing portfolio at the mortgage banking line of business.  During the first quarter of 2003, these escrow accounts averaged $587.1 million compared to an average of $409.4 million for the year 2002. 
     Irwin Union Bank and Trust utilizes institutional broker-sourced deposits as funding from time to time to supplement deposits solicited through branches and other wholesale funding sources.  At March 31, 2003, institutional broker-sourced deposits totaled $432 million compared to a balance of $337 million at December 31, 2002.  The increase in brokered deposits in 2003 relates to the increased funding needed to support the balance sheet growth in loans and loans held for sale, coupled with a desire to maintain a laddering of longer term wholesale funding.Short-Term BorrowingsShort-term borrowings during the first quarter of 2003 averaged $708.7 million compared to an average of $600.8 million for the year 2002.  The increase in 2003 relates to the increased use of Federal Home Loan Bank advances to support the increase in first mortgages held for sale. Long-Term and Collateralized DebtLong-term debt totaled $30.1 million at March 31, 2003, relatively unchanged from December 31, 2002.  Collateralized debt totaled $711.1 million at March 31, 2003, compared to $391.4 million at December 31, 2002.  The increased debt relates to secured financing transactions in the first quarter at our home equity lending and commercial finance lines of business.  These securitization structures result in loans remaining as assets and debt borrowings being recorded on the balance sheet.  The securitization debt represents match-term funding for these loans and leases.CapitalShareholders' equity averaged $362.6 million during the first quarter of 2003, up 13.3% compared to the average for the year 2002.  Shareholders' equity balance of $371.5 million at March 31, 2003 represented $13.35 per common share, compared to $12.98 per common share at December 31, 2002.  We paid $1.9 million in dividends in the first quarter of 2003, reflecting an increase of $0.0025 per share compared to a year ago.
     The following table sets forth our capital and capital ratios at the dates indicated:



|                                       | March 31,        | December 31,    
|-------------------------------------- | ---------------- | ----------------
|                                       | 2003             | 2002            
|                                       | (In thousands)  
|Tier 1 capital                         | $        475,308 | $        462,064
|Tier 2 capital                         | 195,302          | 196,092         
|Total risk-based capital               | $        670,610 | $        658,156
|Risk-weighted assets                   | $     4,993,540  | $     4,996,891 
|Risk-based ratios:                     |                  |                 
|Tier 1 capital                         | 9.5 %            | 9.2 %           
|Total capital                          | 13.4             | 13.2            
|Tier 1 leverage ratio                  | 9.8              | 9.7             
|Ending shareholders' equity to assets  | 6.9              | 7.4             
|Average shareholders' equity to assets | 7.8              | 8.0             

At March 31, 2003, our total risk-adjusted capital ratio was 13.4% compared to the 10.0% required to be considered "well-capitalized" by the regulators and our internal minimum target of 11.0%.  At December 31, 2002, our total risk-adjusted capital ratio was 13.2%.  Our ending equity to assets ratio at March 31, 2003 was 6.9% compared to 7.4% at December 31, 2002.  However, as previously discussed, temporary conditions that may have existed at year end make the average balance sheet ratio a more accurate measure of capital.  Our average equity to assets for the quarter ended March 31, 2003 was 7.8% compared to 8.0% for the year 2002.  Our Tier 1 capital totaled $475.3 million as of March 31, 2003, or 9.5% of risk-weighted assets. Cash Flows AnalysisOur cash and cash equivalents decreased $25.4 million during the first quarter of 2003 compared to a decrease of $35.4 million during the same period in 2002.  Cash flows from operating activities resulted in a use of $305.8 million in cash and cash equivalents in the first quarter of 2003 compared to the first quarter of 2002 when our operations provided $27.7 million in cash and cash equivalents.  Changes in loans held for sale impact cash flows from operations.  In the first quarter of 2003, our loans held for sale increased $317.0 million, thus increasing the cash used by operating activities.Earnings Outlook 
     Due to our recent mortgage origination activity and our diversified revenue strategy, we expect at the time of this filing that we will have consolidated earnings per share (diluted) in 2003 of at least $2.25 per share.  This estimate is based on various factors and current assumptions management believes are reasonable, including current industry forecasts of a variety of economic and competitive factors.  However, projections are inherently uncertain, and our actual earnings may differ significantly from this estimate due to uncertainties and risks related to our business.  Our transition off securitization gain-on-sale accounting in our home equity line of business will have had a two-year history at the end of 2003.  We believe that this transition, coupled with the continued growth of our other lines of business, will enable us over time to produce earnings growth and return on equity aligned with our long-term targets of 12% or better growth in earnings per share and 15% or better return on equity.
     A meaningful amount of our earnings comes from activities and mark-to-market accounting requirements tied directly or indirectly to market activities, particularly movements in the bond market (e.g., the valuation of our mortgage servicing portfolio).  We attempt to manage the impact of short-term movements in interest rates on the valuation of our mortgage servicing rights through a combination of financial derivatives and the changes in income from production of new mortgages likely to be driven by those same movements in interest rates.  However, the correlation within short periods of time (such as a single quarter) between interest rate movements that impact the reported value of our mortgage servicing rights at quarter end and the production effects of those interest rate movements -- which may not be reflected until the following quarter -- can be low.  It is possible, therefore, that our balanced revenue strategy may be successful as measured over several quarters or years, but may have market-based variances if measured over short periods.  We also have a large amount of income that is subject to assumptions and pricing for credit risks.  We use a variety of methods for estimating the effects of and accounting for credit losses, but ultimately, we need to make estimates based on imperfect knowledge of future events.  For example, if the pace of economic recovery in the U.S. is slower in 2003 than currently anticipated by consensus estimates, our credit related costs may increase beyond our current estimates.Earnings by Line of BusinessIrwin Financial Corporation is composed of five principal lines of business:

- Mortgage Banking
- Commercial Banking
- Home Equity Lending
- Commercial Finance
- Venture Capital

The following table summarizes our net income (loss) by line of business for the periods indicated:

|                                        | Three Months Ended March 31,
|--------------------------------------- | ----------------------------
|                                        | 2003                        
|                                        | (In thousands)              
|Net income (loss):                      |                             
|Mortgage Banking                        | $      19,639               
|Commercial Banking                      | 5,211                       
|Home Equity Lending                     | (9,498)                     
|Commercial Finance                      | (260)                       
|Venture Capital                         | (1,328)                     
|Other (including consolidating entries) | (1,988)                     
|                                        | $      11,776               

Mortgage BankingThe following table shows selected financial information for our mortgage banking line of business:



|                                              | Three Months Ended March 31,
|--------------------------------------------- | ----------------------------
|                                              | 2003                        
|                                              | (In thousands)              
|Selected Income Statement Data:               |                             
|Net interest income                           | $                16,065     
|(Provision for) recovery of loan losses       | 53                          
|Gain on sales of loans                        | 91,228                      
|Loan servicing fees                           | 16,755                      
|Amortization of servicing assets              | (27,235)                    
|(Impairment) recovery of servicing assets     | (1,954)                     
|Gain (loss) on derivatives                    | 321                         
|Gain on sales of mortgage servicing assets    | 4                           
|Other income                                  | 1,864                       
|Total net revenue                             | 97,101                      
|Operating expense                             | (65,213)                    
|Income before taxes                           | 31,888                      
|Income taxes                                  | (12,249)                    
|Net income                                    | $             19,639        
|Selected Operating Data:                      |                             
|Mortgage loan originations                    | $        5,477,292          
|Servicing sold as a % of originations         | 4.5 %                       
|                                              |                             
|Selected Balance Sheet Data at End of Period: | March 31,                   
|                                              | 2003                        
|Total assets                                  | $        1,922,008          
|Mortgage loans held for sale                  | 1,517,671                   
|Mortgage servicing assets                     | 184,789                     
|Short-term debt                               | 958,258                     
|Shareholder's equity                          | 99,798                      
|Selected Operating Data:                      |                             
|Servicing portfolio:                          |                             
|Balance at end of period                      | 20,402,080                  
|Weighted average coupon rate                  | 6.37 %                      
|Weighted average servicing fee                | 0.35                        

Overview



|                        | Three Months Ended March 31,
|----------------------- | ----------------------------
|                        | 2003                        
|                        | (Dollars in thousands)      
|Total originations      | $          5,477,292        
|Percent retail loans    | 27.06 %                     
|Percent wholesale loans | 49.54                       
|Percent correspondent   | 20.72                       
|Percent brokered (1)    | 2.68                        
|Percent refinances      | 70.27                       

__________



|                               | Three Months Ended March 31,
|------------------------------ | ----------------------------
|                               | 2003                        
|                               | (Dollars in thousands)      
|Salaries and employee benefits | $     18,097                
|Incentive and commission pay   | 23,014                      
|Other expenses                 | 24,102                      
|Total operating expenses       | $    65,213                 
|Number of employees(1)         | 2,055                       

__________(1)  On a full time equivalent basis. 
     Operating expenses for the three months ended March 31, 2003 totaled $65.2 million, a 79.1% increase over the same period in 2002.  Salaries and employee benefits including incentive and commission pay increased 91.5% during the first quarter of 2003 compared to the same period in 2002.  These fluctuations reflect significant increases in production activities in 2003.Mortgage ServicingThe following table shows information about our managed mortgage servicing portfolio, including mortgage loans held for sale, for the periods indicated:



|                                                                                     | Three Months Ended 
March 31, | Year Ended 
December 31,
|------------------------------------------------------------------------------------ | ----------------------------- | ------------------------
|                                                                                     | 2003                          | 2002                    
|                                                                                     | (Portfolio in billions)      
|Beginning servicing portfolio                                                        | $            16.8             | $           12.9        
|Mortgage loan closings                                                               | 5.3                           | 10.8                    
|Sales of servicing rights                                                            | (0.1)                         | (2.9)                   
|Run-off(1)                                                                           | (1.6)                         | (4.0)                   
|Ending servicing portfolio                                                           | $          20.4               | $          16.8         
|Number of loans (end of period)                                                      | 163,083                       | 137,738                 
|Average loan size                                                                    | $    125,102                  | $    121,917            
|Percent Government National Mortgage Association
  (GNMA) and state housing programs | 32  %                         | 37  %                   
|Percent conventional and other                                                       | 60                            | 55                      
|Percent warehouse                                                                    | 8                             | 8                       
|Delinquency ratio                                                                    | 4.2                           | 5.3                     
|Mortgage servicing assets to related servicing portfolio(2)                          | 0.9                           | 0.9                     

__________

Our mortgage servicing portfolio, including mortgage loans held for sale, totaled $20.4 billion at March 31, 2003, a 21.5% increase from the December 31, 2002 balance of $16.8 billion.  The increase in 2003 reflects the strong mortgage production we have experienced along with greater retention of servicing on loans sold over the past year.  We believe that the relative growth of the conventional portion of the portfolio is the result of heavy refinance activity in 2003 where conventional loans made up a higher than normal portion of our originations. 
     We record originated mortgage servicing assets at allocated cost basis when the loans are sold and record purchased servicing assets at fair value.  Thereafter servicing rights are accounted for at the lower of their cost or fair value.  We record a valuation allowance for any impairment on a strata-by-strata basis.  We determine fair value on a monthly basis based on a discounted cash flow analysis.  These cash flows are projected over the life of the servicing using prepayment, default, discount rate and cost to service assumptions that we believe market participants would use to value similar assets.  At March 31, 2003, we estimated the fair value of these assets to be $187.4 million in the aggregate, or $2.7 million greater than the carrying value on the balance sheet.  At December 31, 2002, we estimated the fair value of these assets to be $150.8 million in the aggregate, or $4.4 million greater than the carrying value on the balance sheet.  Fair value declined relative to carrying value as a result of the higher prepayment trends from declining interest rates and decreasing cushion in a number of valuation strata.Commercial BankingThe following table shows selected financial information for our commercial banking line of business:

|                                             | Three Months Ended March 31,
|-------------------------------------------- | ----------------------------
|                                             | 2003                        
|                                             | (Dollars in thousands)      
|Selected Income Statement Data:              |                             
|Interest income                              | $            27,630         
|Interest expense                             | (8,603)                     
|Net interest income                          | 19,027                      
|Provision for loan and lease losses          | (1,580)                     
|Noninterest income                           | 5,129                       
|Operating expense                            | (13,905)                    
|Income before taxes                          | 8,671                       
|Income taxes                                 | (3,460)                     
|Net income                                   | $             5,211         
|                                             |                             
|                                             |                             
|                                             | March 31,                   
|Selected Balance Sheet Data at End of Period | 2003                        
|Total assets                                 | $          2,069,174        
|Loans                                        | 1,849,778                   
|Allowance for loan and lease losses          | 21,359                      
|Deposits                                     | 1,867,174                   
|Shareholder's equity                         | 145,119                     
|                                             |                             
|                                             | March 31,                   
|Daily Averages:                              | 2003                        
|Assets                                       | $          1,979,833        
|Loans                                        | 1,837,066                   
|Allowance for loan and lease losses          | 21,433                      
|Deposits                                     | 1,763,608                   
|Shareholder's equity                         | 141,400                     
|Shareholder's equity to assets               | 7.14 %                      

Overview
     Our commercial banking line of business focuses on providing credit, cash management and personal banking products to small businesses and business owners.  We offer commercial banking services through our banking subsidiaries, Irwin Union Bank and Trust, an Indiana state-chartered commercial bank, and Irwin Union Bank, F.S.B., a federal savings bank.Net IncomeCommercial banking net income increased to $5.2 million during the first quarter of 2003, compared to $3.8 million for the same period in 2002.  Results in 2003 reflect growth of $2.9 million in net interest income over 2002.Net Interest IncomeThe following table shows information about net interest income for our commercial banking line of business:

|                                | Three Months Ended March 31,
|------------------------------- | ----------------------------
|                                | 2003                        
|                                | (Dollars in thousands)      
|Net interest income             | $           19,027          
|Average interest earning assets | 1,916,236                   
|Net interest margin             | 4.03 %                      

Net interest income was $19.0 million for the first quarter of 2003, an increase of 18.2% over first quarter of 2002.  The 2003 improvement in net interest income resulted primarily from an increase in our commercial banking loan portfolio as a result of growth and expansion efforts.  Net interest margin is computed by dividing net interest income by average interest earning assets.  Net interest margin for the three months ended March 31, 2003 was 4.03%, compared to 4.09% for the same period in 2002.  The line of business increased its core deposits to $1.6 billion, an increase of 3.6% since year end, reflecting success in deposit gathering initiatives. Noninterest IncomeThe following table shows the components of noninterest income for our commercial banking line of business:

|                                                | Three Months Ended March 31,
|----------------------------------------------- | ----------------------------
|                                                | 2003                        
|                                                | (Dollars in thousands)      
|Trust fees                                      | $                477        
|Service charges on deposit accounts             | 1,217                       
|Insurance commissions, fees and premiums        | 608                         
|Gain from sales of loans                        | 2,312                       
|Loan servicing fees                             | 284                         
|Amortization and impairment of servicing assets | (774)                       
|Brokerage fees                                  | 262                         
|Other                                           | 743                         
|Total noninterest income                        | $             5,129         
|Total noninterest income to total net revenues  | 22. 7%                      

Noninterest income during the first quarter of 2003 increased 17.5% over 2002.  This increase was due primarily to higher gains from sales of loans related to increased mortgage production.  These increases were partially offset by increased impairment and amortization charges recorded against mortgage servicing assets in this line of business.  The commercial banking line of business has a first mortgage servicing portfolio totaling $387.4 million, principally a result of mortgage loan production in its south-central Indiana markets.  Those servicing rights are carried on the balance sheet at the lower of cost or market, estimated at March 31, 2003 to be $2.4 million.

Operating Expenses
     The following table shows the components of operating expenses for our commercial banking line of business:



|                                     | Three Months Ended March 31,
|------------------------------------ | ----------------------------
|                                     | 2003                        
|                                     | (Dollars in thousands)      
|Salaries and employee benefits       | $           8,925           
|Other expenses                       | 4,980                       
|Total operating expenses             | $        13,905             
|Number of employees at period end(1) | 467                         

__________(1)  On a full time equivalent basis.
     Operating expenses for the three months ended March 31, 2003 totaled $13.9 million, an increase of 15.5% over the same period in 2002.  While operating expenses increased 15.5%, net revenues increased 23.5% in the first quarter of 2003 compared to 2002, indicative of improved operating efficiency.Balance SheetYear-to-date total assets as of March 31, 2003 averaged $2.0 billion compared to $1.8 billion for the year ended December 31, 2002.  Year-to-date average earning assets as of March 31, 2003 averaged $1.9 billion compared to $1.6 billion for the year 2002.  The most significant component of the increase in 2003 was an increase in commercial loans as a result of the commercial bank's continued growth and expansion efforts into new markets.  Average core deposits for the first quarter of 2003 totaled $1.5 billion, an increase of 1.1% over average core deposits in the fourth quarter 2002.Credit QualityNonperforming loans and the allowance for loan losses have increased in 2003 over 2002 reflecting general economic conditions and portfolio growth.  In addition, a single credit placed in non-accrual status during the quarter accounted for a significant portion of the increase.  We believe we are adequately reserved for potential losses on this loan considering the collateral and workout plans in place.  Nonperforming loans are not significantly concentrated in any industry category.  The following table shows information about our nonperforming assets in this line of business and our allowance for loan losses:

|                                            | March 31,              | December 31,       
|------------------------------------------- | ---------------------- | -------------------
|                                            | 2003                   | 2002               
|                                            | (Dollars in thousands)
|Nonperforming loans                         | $            20,833    | $          14,970  
|Other real estate owned                     | 1,036                  | 96                 
|Total nonperforming assets                  | $           21,869     | $          15,066  
|Nonperforming assets to total assets        | 1.06 %                 | 0.76 %             
|Allowance for loan losses                   | $           21,359     | $          20,725  
|Allowance for loan losses to total loans    | 1.15 %                 | 1.14 %             
|                                            |                        |                    
|For the Period Ended:                       | March 31,              | March 31,          
|                                            | 2003                   | 2002               
|Provision for loan losses                   | $              1,580   | $            2,170 
|Net charge-offs                             | $                 946  | $               715
|Annualized net charge-offs to average loans | 0.21 %                 | 0.22 %             

Home Equity Lending
     The following table shows selected financial information for the home equity lending line of business:

|                                                                            | Three Months Ended March 31, 
|--------------------------------------------------------------------------- | -----------------------------
|                                                                            | 2003                         
|                                                                            | (Dollars in thousands)       
|Selected Income Statement Data                                              |                              
|Net interest income                                                         | $                     26,412 
|Provision for loan losses                                                   | (4,880)                      
|Gain on sales of loans                                                      | 1,971                        
|Loan servicing fees                                                         | 4,673                        
|Amortization and impairment of servicing assets                             | (3,901)                      
|Trading (losses) gains                                                      | (17,789)                     
|Other income                                                                | 65                           
|Total net revenues                                                          | 6,551                        
|Operating expenses                                                          | (22,381)                     
|Income before taxes                                                         | (15,830)                     
|Income taxes                                                                | 6,332                        
|Net income (loss)                                                           | $                     (9,498)
|Selected Operating Data:                                                    |                              
|Loan volume (quarterly):                                                    |                              
|Lines of credit                                                             | $73,459                      
|Loans                                                                       | 205,091                      
|Gain on sale of loans to loans sold                                         | 2.29 %                       
|                                                                            |                              
|Selected Balance Sheet Data:                                                | March 31,
2003               
|Home equity loans and lines of credit (1)                                   | $                    739,399 
|Allowance for loan losses                                                   | (23,203)                     
|Home equity loans held for sale                                             | 112,429                      
|Residual assets -- trading (2)                                              | 132,020                      
|Short-term debt                                                             | 43,532                       
|Collateralized borrowings                                                   | 652,105                      
|Shareholders' equity                                                        | 154,233                      
|Selected Operating Data:                                                    |                              
|Total managed portfolio balance at end of period (3)                        | 1,843,266                    
|Delinquency ratio                                                           | 5.5%                         
|Total managed portfolio including credit risk sold balance at end of period | $2,548,166                   
|Weighted average coupon rate:                                               |                              
|Lines of credit                                                             | 10.38 %                      
|Loans                                                                       | 13.08                        
|Net home equity charge-offs to average managed portfolio                    | 3.57                         

__________

For most of our home equity product offerings, we offer customers the choice to accept an early repayment fee in exchange for a lower interest rate.  A typical early repayment option provides for a fee equal to up to six months' interest that is payable if the borrower chooses to repay the loan during the first three to five years of its term.  Approximately 80.6%, or $1.5 billion, of our home equity managed portfolio at March 31, 2003 has early repayment provisions.
     Generally we either sell loans through whole loan sales or we securitize them as financings.  We normally retain the servicing rights for the loans we sell.  To address new capital rules, in 2002 we began using securitizations accounted for as on-balance sheet financing and whole loan sales, while eliminating our use of securitization structures requiring gain-on-sale accounting and the creation of residual interests.
     As we discussed in our 2002 annual report on Form 10-K, we responded to economic weakness and rising consumer delinquencies and defaults by implementing a new origination and underwriting strategy in late 2002.  Our objective was to increase focus on customers whose credit history would suggest lower risk of default on loans we extended.  It is our expectation that over time, our loss rates on this new production will be lower than that for our production up to that point and our overall risk-adjusted profitability will improve.  While our originations during the first quarter of 2003 still reflect a transition from previous to revised underwriting guidelines and, as such, current originations may not reflect the impact of these changes, the table below is illustrative of the changes we see in customer profile.

|                                                     | For the Three Months Ended
|---------------------------------------------------- | --------------------------
|                                                     | March 31,
2003            
|Total Originations (in thousands)                    | $        278,550          
|Weighted Average Coupon                              | 9.60%                     
|Loans up to 100% CLTV                                | 9.44                      
|Lines of credit up to 100% CLTV                      | 7.32                      
|Loans up to 125% CLTV                                | 11.46                     
|Lines of credit up to 125% CLTV                      | 10.60                     
|First mortgage loans to 100% LTV                     | 7.19                      
|Weighted Average FICO score                          | 681                       
|Loans up to 100% CLTV                                | 673                       
|Lines of credit up to 100% CLTV                      | 673                       
|Loans up to 125% CLTV                                | 682                       
|Lines of credit up to 125% CLTV                      | 696                       
|First mortgage loans to 100% LTV                     | 687                       
|Weighted Average Disposable Income  (in dollars) (1) | $            4,717        
|Loans up to 100% CLTV                                | 4,711                     
|Lines of credit up to 100% CLTV                      | 5,937                     
|Loans up to 125% CLTV                                | 4,162                     
|Lines of credit up to 125% CLTV                      | 4,330                     
|First mortgage loans up to 100% LTV                  | 4,949                     

_____________

Portfolio Mix

|State                        | March 31,
2003 | December 31,
2002
|---------------------------- | -------------- | -----------------
|California                   | 19.3 %         | 20.1 %           
|Florida                      | 7.6            | 7.4              
|Virginia                     | 5.6            | 5.5              
|Maryland                     | 5.6            | 5.2              
|Ohio                         | 5.2            | 5.3              
|All other states             | 56.7           | 56.5             
|Total                        | 100.0  %       | 100.0  %         
|Total managed (in thousands) | $  1,843,266   | $  1,830,339     

The following table provides a breakdown of our home equity lending managed portfolio by product type, outstanding principal balance and weighted average coupon as of March 31, 2003:



|                                          | Amount         | % of Total | Weighted
Average
Coupon
|----------------------------------------- | -------------- | ---------- | -----------------------
|                                          | (In thousands)
|Home equity loans < = 100% CLTV           | $    245,183   | 13.30 %    | 11.31 %                
|Home equity lines of credit < = 100% CLTV | 405,284        | 21.99      | 9.15                   
|Total <= 100% CLTV                        | 650,467        | 35.29      | 9.96                   
|Home equity loans > 100% CLTV             | 717,784        | 38.94      | 14.23                  
|Home equity lines of credit > 100% CLTV   | 387,169        | 21.00      | 11.91                  
|Total > 100% CLTV                         | 1,104,953      | 59.95      | 13.42                  
|First mortgages                           | 42,582         | 2.31       | 7.88                   
|Other (including Immediate Credit)        | 45,264         | 2.46       | 13.94                  
|Total                                     | $ 1,843,266    | 100.00 %   | 12.08 %                

At March 31, 2003, key economic assumptions and the sensitivity of the current fair value of residuals based on projected cash flows to immediate 10% and 25% adverse changes in those assumptions are as follows:



|                                                                | March 31,
2003           | December 31,
2002      
|--------------------------------------------------------------- | ------------------------ | -----------------------
|                                                                | (dollars in thousands)  
|Balance sheet carrying value of residual interests - fair value | $                132,020 | $               157,065
|Weighted-average life (in years)                                | 1.62                     | 1.91                   
|                                                                |                          |                        
|Prepayment speed assumptions (annual rate)                      | 36.16%                   | 32.37%                 
|Impact on fair value of 10% adverse change (39.78%)             | ($952)                   |                        
|Impact on fair value of 25% adverse change (45.20%)             | (3,141)                  |                        
|                                                                |                          |                        
|Expected credit losses (annual rate)                            | 4.86%                    | 3.57%                  
|Impact on fair value of 10% adverse change (5.35%)              | ($6,391)                 |                        
|Impact on fair value of 25% adverse change (6.08%)              | (15,876)                 |                        
|                                                                |                          |                        
|Residual cash flows discount rate (average annual rate)         | 18.65%                   | 18.69%                 
|Impact on fair value of 10% adverse change (20.52%)             | ($3,507)                 |                        
|Impact on fair value of 25% adverse change (23.31%)             | (8,463)                  |                        



|Managed Portfolio Including Credit Risk Sold | March 31,
2003        | December 31,
2002    
|-------------------------------------------- | --------------------- | ---------------------
|Total Loans                                  | $          2,548,166  | $           2,502,685
|30 days past due                             | 4.74%                 | 5.12%                
|90 days past due                             | 2.41                  | 2.40                 
|Annualized QTD Net Chargeoff Rate            | 2.96                  | 2.42                 
|Loan Loss Reserve                            | $              23,203 | $              21,689
|                                             |                       |                      
|Managed Portfolio                            |                       |                      
|Total Loans                                  | $         1,843,266   | $         1,830,339  
|30 days past due                             | 5.55%                 | 6.01%                
|90 days past due                             | 2.83                  | 2.80                 
|Annualized QTD Net Chargeoff Rate            | 3.57                  | 2.78                 
|Loan Loss Reserve                            | $              23,203 | $              21,689
|Residual Undiscounted Losses                 | 80,610                | 79,746               
|                                             |                       |                      
|Unsold Loans                                 |                       |                      
|Total Loans (1)                              | $           855,986   | $            706,899 
|30 days past due                             | 2.66%                 | 3.01%                
|90 days past due                             | 1.36                  | 1.38                 
|Annualized QTD Net Chargeoff Rate            | 1.74                  | 1.34                 
|Loan Loss Reserve                            | $             23,203  | $              21,689
|                                             |                       |                      
|Owned Residual                               |                       |                      
|Total Loans                                  | $           987,280   | $         1,123,440  
|30 days past due                             | 8.05%                 | 7.89%                
|90 days past due                             | 4.10                  | 3.69                 
|Annualized QTD Net Chargeoff Rate            | 4.95                  | 3.70                 
|Residual Undiscounted Losses                 | $             80,610  | $              79,746
|                                             |                       |                      
|Credit Risk Sold                             |                       |                      
|Total Loans                                  | $           704,900   | $            672,346 
|30 days past due                             | 2.62%                 | 2.71%                
|90 days past due                             | 1.32                  | 1.32                 
|                                             |                       |                      
|Whole Loan Sales                             |                       |                      
|Total Loans                                  | $           601,701   | $           552,660  
|30 days past due                             | 1.22%                 | 0.89%                
|90 days past due                             | 0.41                  | 0.31                 
|                                             |                       |                      
|Sold Residuals                               |                       |                      
|Total Loans                                  | $           103,199   | $           119,686  
|30 days past due                             | 10.80%                | 11.12%               
|90 days past due                             | 6.62                  | 5.97                 
|                                             |                       |                      

____________

|                                                | Three Months Ended March 31,
|----------------------------------------------- | ----------------------------
|                                                | 2003                        
|                                                | (Dollars in thousands)      
|Net interest income                             | $          26,412           
|Provision for loan losses                       | (4,880)                     
|Gain on sales of loans                          | 1,971                       
|Loan servicing fees                             | 4,673                       
|Amortization and impairment of servicing assets | (3,901)                     
|Trading losses                                  | (17,789)                    
|Other income                                    | 65                          
|Total net revenue                               | $            6,551          

Net interest income increased to $26.4 million for the three months ended March 31, 2003, compared to $18.1 million for the same period in 2002.  This line of business earns interest income on loans held on the balance sheet and the accretion of the discount applied to its residual interests, which accretion totaled $7.0 million during the first three months of 2003 versus $9.3 million in 2002 for the same period.
     Gains on sales of loans for the three months ended March 31, 2003 totaled $2.0 million, compared to $7.7 million during the same period in 2002.  The significant decline in gains in 2003 relates to the transition away from securitization structures requiring gain-on-sale accounting.  We had a securitization of $0.3 billion of loans during the first quarter of 2003 that we accounted for as a secured financing with no gain on sale.  See further discussion of this subject in the section titled, "Securitizations." We completed whole loan sales during the first quarter of 2003 of $86.1 million resulting in a gain of $2.0 million.  We do not record a residual interest as a result of these whole loan sales.  These are cash sales for which we receive a premium, record a servicing asset, and monetize any points and fees at the time of sale.  We securitized $31.7 million of loans in the first quarter of 2002 using gain-on-sale securitization accounting.

Amortization and impairment of servicing assets includes amortization expenses and valuation adjustments relating to the carrying value of servicing assets.  Our home equity lending business determines fair value of its servicing asset using discounted cash flows and assumptions as to estimated future servicing income and cost that we believe market participants would use to value similar assets.  At March 31, 2003, net servicing assets totaled $24.4 million, compared to a balance of $26.4 million at December 31, 2002.  Servicing asset amortization and impairment expense totaled $3.9 million during the first quarter of 2003, compared to $1.7 million for the three months ended March 31, 2002.
     Trading gains (losses) represent unrealized gains (losses) as a result of adjustments to the carrying values of our residual interests.  Trading losses totaled $17.8 million in the first quarter of 2003 compared to $7.3 million for the same period in 2002.  Residual interests had a balance of $132.0 million at March 31, 2003 and $157.1 million at December 31, 2002.  Included in the valuation are assumptions for estimated prepayments, expected losses, and discount rates that we believe market participants would use to value similar assets.  Management continually evaluates these assumptions to determine the proper carrying values of these items on the balance sheet.  To the extent our expectations of future loss rates, prepayment speeds and other factors change as we gather additional data over time, these residual valuations may be subject to additional adjustments in the future, up or down.  These adjustments could have a material effect on our earnings.  The increased unrealized trading losses in the first quarter of 2003 principally reflect higher expected loss rates and prepayment speeds.  These higher expected loss rates are reflective of the continued weakness in the economy and a slower rate of recovery in the delinquency of the portfolio than we had anticipated.  Our forward loss assumptions are reevaluated monthly and, as such, our residual asset valuations will be adjusted continuously to reflect changes in actual and expected loss rates in our portfolio.Operating ExpensesThe following table shows operating expenses for our home equity lending line of business for the periods indicated:

|                                  | Three Months Ended March 31,
|--------------------------------- | ----------------------------
|                                  | 2003                        
|                                  | (Dollars in thousands)      
|Salaries and employee benefits    | $     13,062                
|Other                             | 9,319                       
|Total operating expenses          | $     22,381                
|Number of employees at period end | 686                         

Operating expenses were $22.4 million for the three months ended March 31, 2003, compared to $19.0 million for the same period in 2002.  Salaries expense in 2002 included the reversal of approximately $2.3 million due to the decline in the value of the minority ownership interest during that period.   In 2003, there was a $31 thousand similar reversal included in salaries expense.

Commercial Finance
     The following table shows selected financial information for our commercial finance line of business for the periods indicated:

|                                                                          | Three Months Ended March 31,
|------------------------------------------------------------------------- | ----------------------------
|                                                                          | 2003                        
|                                                                          | (Dollars in thousands)      
|Selected Income Statement Data:                                           |                             
|Net interest income                                                       | $          4,807            
|Provision for loan and lease losses                                       | (2,864)                     
|Noninterest income                                                        | 835                         
|Total net revenues                                                        | 2,778                       
|Salaries, pension, and other employee expense                             | (2,606)                     
|Other expense                                                             | (722)                       
|Loss before taxes and cumulative effect of change in accounting principle | (550)                       
|Income taxes                                                              | 290                         
|Loss before cumulative effect of change in accounting principle           | (260)                       
|Cumulative effect of change in accounting principle                       | --                          
|Net income (loss)                                                         | $           (260)           
|Selected Operating Data:                                                  |                             
|Net charge-offs                                                           | $         1,812             
|Net interest margin                                                       | 5.47%                       
|Total fundings of loans and leases                                        | $       57,609              
|                                                                          |                             
|Selected Balance Sheet Data at End of Period:                             | March 31,
2003              
|Total assets                                                              | $     381,026               
|Loans and leases                                                          | 379,985                     
|Allowance for loan and lease losses                                       | (8,840)                     
|Shareholders' equity                                                      | 33,552                      

Overview

|                       | March 31,              | December 31,
|---------------------- | ---------------------- | ------------
|                       | 2003                   | 2002        
|                       | (Dollars in thousands)
|Franchise loans        | $   116,547            | $   95,753  
|Weighted average yield | 8.79%                  | 9.01%       
|Delinquency ratio      | 0.20                   | 0.30        
|Domestic leases        | $   134,182            | $ 135,775   
|Weighted average yield | 10.22%                 | 10.37%      
|Delinquency ratio      | 1.54                   | 1.41        
|Canadian leases (1)    | $   129,255            | $ 114,316   
|Weighted average yield | 10.80%                 | 10.95%      
|Delinquency ratio      | 1.04                   | 1.03        

__________

|                                              | Three Months Ended March 31,
|--------------------------------------------- | ----------------------------
|                                              | 2003                        
|                                              | (In thousands)              
|Selected Income Statement Data:               |                             
|Net interest income                           | $             7             
|Mark-to-market adjustment on investments      | (2,259)                     
|Noninterest income                            | 147                         
|Total net revenues                            | (2,105)                     
|Operating expense                             | (108)                       
|Loss before taxes                             | (2,213)                     
|Income tax benefit                            | 885                         
|Net loss                                      | $     (1,328)               
|                                              |                             
|Selected Balance Sheet Data at End of Period: | March 31,
2003              
|Investment in portfolio companies (cost)      | $    13,964                 
|Mark-to-market adjustment                     | (10,381)                    
|Carrying value of portfolio companies         | $      3,583                

Overview
     In our venture capital line of business, we make minority investments in early stage companies in the financial services industry and related fields that intend to use technology as a key component of their competitive strategy.  We provide Irwin Ventures' portfolio companies the benefit of our management experience in the financial services industry.  In addition, we expect that contacts made through venture activities may benefit management of our other lines of business through the sharing of technologies and market opportunities.  Our venture capital line of business had investments in seven private companies as of March 31, 2003, with an aggregate investment cost of $14.0 million and a carrying value of $3.6 million.
     During the three months ended March 31, 2003, the venture capital line of business recorded a net loss of $1.3 million, compared to a net loss of $0.9 million for the first quarter in 2002.  The decline in net income is primarily due to valuation adjustments to reflect the company's portfolio investments at market value.Parent and OtherResults at the parent company and other businesses totaled a net loss of $2.0 million for the three months ended March 31, 2003, compared to a loss of $0.8 million during the same period in 2002.  These losses at the parent company primarily relate to operating expenses in excess of management fees charged to the lines of business and interest income earned on intracompany loans.  Included in the 2002 first quarter loss at the parent was a $0.9 million benefit related to the reversal of a portion of a liability associated with key employee retention initiatives at the home equity lending line of business, compared with a $45 thousand benefit in the first quarter of 2003.Risk ManagementWe are engaged in businesses that involve the assumption of financial risks including:

- Credit risk

- Liquidity risk

- Interest rate risk

- Operational risk

Each line of business that assumes financial risk uses a formal process to manage this risk.  In all cases, the objectives are to ensure that risk is contained within prudent levels and that we are adequately compensated for the level of risk assumed.
     Our Chairman, Executive Vice President, Senior Vice President, Chief Financial Officer, Vice President Financial Risk Management, and Vice President Operational Risk Management meet on a monthly basis (or more frequently as appropriate) as an Executive Risk Management Committee (ERMC), reporting to the Board of Directors' Audit and Risk Management Committee.  The ERMC and its subcommittees oversee all aspects of our financial, credit, and operational risks, although these risks are typically managed at the line of business level.  The ERMC provides independent review and enhancement of those lines of business' risk management processes and establishes independent oversight of our risk reporting, surveillance and model parameter changes.
     Credit Risk.The assumption of credit risk is a key source of earnings for the home equity lending, commercial banking and commercial finance lines of business.  In addition, the mortgage banking line of business assumes some credit risk although its mortgages typically are insured.
     The credit risk in the loan portfolios of the home equity lending, commercial finance and commercial banking lines of business have the most potential to have a significant effect on our consolidated financial performance.  These lines of business manage credit risk through the use of lending policies, credit analysis and approval procedures, periodic loan reviews, servicing activities, and personal contact with borrowers.  Loans over a certain size are reviewed by a loan committee prior to approval.
     The allowance for loan and lease losses is an estimate based on our judgment applying the principles of SFAS 5, "Accounting for Contingencies," SFAS 114, "Accounting by Creditors for Impairment of a Loan," and SFAS 118, "Accounting by Creditors for Impairment of a Loan -- Income Recognition and Disclosures." The allowance is maintained at a level we believe is adequate to absorb probable losses inherent in the loan and lease portfolio.  We compute the allowance based on an analysis that incorporates both a quantitative and qualitative element.  The quantitative component of the allowance reflects expected losses resulting from analysis developed through specific credit allocations for individual loans and historical loss experience for each loan category.  The specific credit allocations are based on a regular analysis of all loans over a fixed-dollar amount where the internal credit rating is at or below a predetermined classification.  The historical loan loss component is applied to all loans that do not have a specific reserve allocated to them.  Loans are segregated by major product type, and in some instances, by aging, with an estimated loss ratio applied against each product type and aging category.  The loss ratio is generally based upon historic loss experience for each loan type. 
     The qualitative portion of the allowance reflects management's estimate of probable inherent but undetected losses within the portfolio.  This assessment is performed via the evaluation of eight specific qualitative factors as outlined in regulatory guidance.  We perform the quantitative and qualitative assessments on a quarterly basis.  Loans and leases 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 and leases previously charged off. 
     Net charge-offs for the three months ended March 31, 2003 were $6.1 million, or 0.86% of average loans, compared to $4.0 million, or 0.71% of average loans during the same period in 2002.  At March 31, 2003, the allowance for loan and lease losses was $54.2 million or 1.81% of outstanding loans and leases, compared to $50.9 million or 1.81% at year-end 2002.  The increase in charge-offs and allowance is a result of loan growth, deteriorating credit quality, as well as the new balance sheet retention of home equity loans.
     Total nonperforming loans and leases at March 31, 2003, were $38.6 million, compared to $31.1 million at December 31, 2002.  Nonperforming loans and leases as a percent of total loans and leases at March 31, 2003 were 1.29%, compared to 1.11% at December 31, 2002.  The 2003 increase occurred primarily at the commercial banking line of business where nonperforming loans increased to $20.8 million at March 31, 2003, compared to $15.0 million at the end of 2002. 
     Other real estate we owned totaled $4.8 million at March 31, 2003, down from $5.3 million at December 31, 2002.  The decrease in 2003 was primarily attributable to both the home equity lending and mortgage banking lines of business.  Total nonperforming assets at March 31, 2003 were $43.4 million, or 0.81% of total assets compared to nonperforming assets at December 31, 2002, of $36.4 million, or 0.75% of total assets.
     The following table shows information about our nonperforming assets at the dates shown:

|                                                         | March 31,            | December 31,      
|-------------------------------------------------------- | -------------------- | ------------------
|                                                         | 2003                 | 2002              
|                                                         | (In thousands)      
|Accruing loans past due 90 days or more:                 |                      |                   
|Commercial, financial and agricultural loans             | $                251 | $               30
|Real estate mortgages                                    | --                   | --                
|Consumer loans                                           | 647                  | 688               
|Lease financing:                                         |                      |                   
|Domestic                                                 | 45                   | 220               
|Canadian                                                 | 163                  | 143               
|                                                         | 1,106                | 1,081             
|Nonaccrual loans and leases:                             |                      |                   
|Commercial, financial and agricultural loans             | 19,597               | 13,798            
|Real estate mortgages                                    | 13,106               | 11,308            
|Consumer loans                                           | 337                  | 454               
|Lease financing:                                         |                      |                   
|Domestic                                                 | 2,964                | 3,415             
|Canadian                                                 | 1,507                | 1,077             
|                                                         | 37,511               | 30,052            
|Total nonperforming loans and leases                     | 38,617               | 31,133            
|Other real estate owned:                                 |                      |                   
|Other real estate owned                                  | 4,773                | 5,272             
|Total nonperforming assets                               | $          43,390    | $       36,405    
|Nonperforming loans and leases to total loans and leases | 1.29%                | 1.11%             
|Nonperforming assets to total assets                     | 0.81%                | 0.75%             

Loans that are past due 90 days or more are placed on nonaccrual status unless, in management's opinion, there is sufficient collateral value to offset both principal and interest.  The $43.4 million of nonperforming assets at March 31, 2003, were concentrated at our lines of business as follows (in millions):

|Mortgage banking    | $    3.3
|------------------- | --------
|Commercial banking  | 21.9    
|Home equity lending | 13.5    
|Commercial finance  | 4.7     

For the periods presented, the balances of any restructured loans are reflected in the table above either in the amounts shown for "accruing loans past due 90 days or more" or in the amounts shown for "nonaccrual loans and leases."
     No loan concentrations existed of more than 10% of total loans to borrowers engaged in similar activities that would be similarly affected by economic or other conditions.
     Generally, the accrual of income is discontinued when the full collection of principal or interest is in doubt, or when the payment of principal or interest has become contractually 90 days past due unless the obligation is both well secured and in the process of collection.
     Liquidity Risk.Liquidity is the availability of funds to meet the daily requirements of our business.  For financial institutions, demand for funds results principally from extensions of credit and withdrawal of deposits.  Liquidity is provided through deposits and short-term and long-term borrowings, by asset maturities or sales, and through equity capital.
     The objectives of liquidity management are to ensure that funds will be available to meet current and future demands and that funds are available at a reasonable cost.  We manage liquidity via daily interaction with the lines of business and periodic liquidity planning sessions.  Since loans are less marketable than securities, the ratio of total loans to total deposits is a traditional measure of liquidity for banks and bank holding companies.  At March 31, 2003, the ratio of loans and loans held for sale to total deposits was 153%.  We are comfortable with this relatively high level due to our position in first mortgage loans held for sale ($1.6 billion) and second mortgage loans financed through matched-term secured financing ($0.7 billion).  The first mortgage loans carry an interest rate at or near current market rates for first mortgage loans and are generally sold within a short period.  Excluding these two items, our loans to deposit ratio at March 31, 2003 was 74.3%.
     The mortgage banking line of business sells virtually all of its mortgage loan originations within 30 days of funding, taking them off our balance sheet.  Therefore, the on-balance sheet funding of first mortgage loans is for the brief period of time from origination to sale/securitization.  In the first quarter of 2003, the home equity lending line of business produced $0.3 billion and the sum of home equity loan sales and secured financings totaled $0.4 billion.
     Deposits consist of three primary types: non-maturity transaction account deposits, certificates of deposit and escrow account deposits.  Non-maturity transaction account deposits are generated by our commercial banking line of business and include deposits made into checking, savings, money market and other types of deposit accounts by our customers.  These types of deposits have no contractual maturity date and may be withdrawn at any time.  While these balances fluctuate daily, a large percentage typically remain for much longer.  At March 31, 2003, these deposit types totaled $1.2 billion, relatively unchanged from December 31, 2002.
     Certificates of deposit (CDs) differ from non-contractual maturity accounts in that they do have contractual maturity dates.  We issue CDs both directly to customers and through brokers.  As of March 31, 2003, CDs issued directly to customers totaled $0.7 billion, which was an increase of $0.1 billion from December 31, 2002.  Brokered CDs are typically considered to have higher liquidity risk than CDs issued directly to customers since brokered CDs are often done in large blocks and since a direct relationship does not exist with the depositor.  In recognition of this, we manage the size and maturity structure of brokered CDs closely.  CDs issued through brokers totaled $0.4 billion at March 31, 2003, and had an average remaining life of 19 months as compared to $0.3 billion outstanding with a 22 month average remaining life at December 31, 2002.
     Escrow account deposits are related to the servicing of our originated first mortgage loans.  When a first mortgage borrower makes a monthly mortgage payment, consisting of interest and principal due on the loan and often a real estate tax portion, we hold the payment on a non-interest earning basis, except where otherwise required by law, until the payment is remitted to the current owner of the loan or the proper tax authority.  At March 31, 2003, these balances totaled $0.7 billion, which was a $0.1 billion increase from December 31, 2002.
     Short-term borrowings consist of borrowings from several sources.  Our largest borrowing source is the Federal Home Loan Bank of Indianapolis (FHLBI), of which we are an active member.  We utilize their collateralized borrowing programs to help fund qualifying first mortgage, home equity and commercial real estate loans.  As of March 31, 2003, FHLBI borrowings outstanding totaled $0.4 billion, a $0.1 billion decrease from December 31, 2002.  We had sufficient collateral pledged to FHLBI at March 31, 2003 to borrow an additional $0.6 billion, if needed, and a total facility with the FHLBI of $1.1 billion.
     In addition to borrowings from the FHLBI, we use other lines of credit as needed.  At March 31, 2003, the amount of short-term borrowings outstanding on our major credit lines and the total amount of the borrowing lines were as follows:

- Warehouse lines of credit to fund first mortgages and home equity loans: none outstanding on a $300 million borrowing facility
- Warehouse borrowing facilities to fund first mortgage loans: $282 million outstanding on a $600 million committed borrowing facility
- Lines of credit with correspondent banks, including fed funds lines:  $73 million outstanding out of $225 million available

Interest Rate Risk.  Because all of our assets are not perfectly match funded with like-term liabilities, our earnings are affected by interest rate changes.  Interest rate risk is measured by the sensitivity of both net interest income and fair market value of net interest sensitive assets to changes in interest rates.
     An asset/liability management committee (ALMC) at each of our lines of business monitors the repricing structure of assets, liabilities and off-balance sheet items and uses a financial simulation model to measure interest rate risk over multiple interest rate scenarios.  Our parent company ALMC oversees the interest rate risk profile of all of our lines of business as a whole and is represented on each of the line of business ALMCs.  We incorporate many factors into the financial model, including prepayment speeds, net interest margin, fee income and a comprehensive mark-to-market valuation process.  We reevaluate risk measures and assumptions regularly and enhance modeling tools as needed.
     Our commercial banking, home equity lending, and commercial finance lines of business assume interest rate risk in the pricing structure of their loans and leases, and manage this risk by adjusting the duration of their interest sensitive liabilities and through the use of hedging.
     Our mortgage banking line of business assumes interest rate risk by entering into commitments to extend loans to borrowers at a fixed rate for a limited period of time.  We hold closed loans only temporarily until a pool is formed and sold in a securitization or under a flow sale arrangement.  To mitigate the risk that interest rates will rise between loan origination and sale, the mortgage bank buys commitments to deliver loans at a fixed price.
     Our mortgage, commercial banking and home equity lending lines of business also are exposed to the risk that interest rates will decline, increasing prepayment speeds on loans and decreasing the value of servicing assets and residual interests.  Some offsets to these exposures exist in the form of strong production operations, selective sales of servicing rights, match-funded asset-backed securities sales and the use of financial instruments to manage the economic performance of the assets.  Since there are accounting timing differences between the recognition of gains or losses on financial derivatives and the realization of economic gains or losses on certain offsetting exposures (e.g., strong production operations), our decisions on the degree to which we manage risk with derivative instruments to insulate against short-term price volatility depends on a variety of factors, including:

- the type of risk we are trying to mitigate;
- offsetting factors elsewhere in the Corporation;
- the level of current capital above our target minimums;
- time remaining in the quarter (i.e., days until quarter-end);
- current level of derivative gain or loss relative to accounting and economic basis;
- basis risk: the degree to which the interest rates underlying our derivative instruments might not move parallel to the interest rate driving our asset valuation; and
- convexity: the degree to which asset values, or risk management derivative instrument values, do not change in a linear fashion as interest rates change.

This strategy may, at times, result in variability in inter-quarter results that are not reflective of underlying trends for the Corporation.
     The following tables reflect our estimate of the present value of interest sensitive assets, liabilities, and off-balance sheet items at March 31, 2003.  In addition to showing the estimated fair market value at current rates, they also provide estimates of the fair market values of interest sensitive items based upon a hypothetical instantaneous move both up and down 100 and 200 basis points in the entire yield curve.
     The first table is an economic analysis showing the present value impact of changes in interest rates, assuming a comprehensive mark-to-market environment.  The second table is an accounting analysis showing the same net present value impact, adjusted for expected GAAP treatment.  Neither analysis takes into account the book values of the noninterest sensitive assets and liabilities (such as cash, accounts receivable, and fixed assets), the values of which are not directly determined by interest rates.
     The analyses are based on discounted cash flows over the remaining estimated lives of the financial instruments.  The interest rate sensitivities apply only to transactions booked as of March 31, 2003, although certain accounts such as "Official Checks and Due From" are normalized whereby the three- or six-month average balance is included rather than the quarter-end balance in order to avoid having the analysis skewed by a significant increase or decrease to an account balance at quarter-end.
     The net asset value sensitivities do not necessarily represent the changes in the lines of business' net asset value that would actually occur under the given interest rate scenarios, as sensitivities do not reflect changes in value of the companies as a going concern, nor consider potential rebalancing or other hedging actions that might be taken in the future under asset/liability management.
     Specifically, the volume of derivative contracts entered into to manage the risk of mortgage servicing rights (MSRs) fluctuates from quarter to quarter, depending upon market conditions, the size of our MSR portfolio and various additional factors.  We monitor derivative positions frequently and rebalance them as needed.  It is unlikely that the volume of derivative positions would remain constant over large fluctuations in interest rates, although the tables below assume they do.  MSR risk management derivative contracts appear under the category "Interest Sensitive Financial Derivatives" in the tables below.

Economic Value Change Method



|                                         | Present Value at March 31, 2003,
Change in Interest Rates of:
|---------------------------------------- | -------------------------------------------------------------
|                                         | -2%                                                          
|                                         | (In thousands)                                               
|Interest Sensitive Assets                |                                                              
|Loans and other assets                   | $     3,381,443                                              
|Loans held for sale                      | 1,639,847                                                    
|Mortgage servicing rights                | 121,313                                                      
|Residual interests                       | 107,079                                                      
|Interest sensitive financial derivatives | 111,196                                                      
|Total interest sensitive assets          | $     5,360,878                                              
|Interest Sensitive Liabilities           |                                                              
|Deposits                                 | (3,058,338)                                                  
|Short-term borrowings                    | (873,911)                                                    
|Long-term debt                           | (964,285)                                                    
|Total interest sensitive liabilities     | (4,896,534)                                                  
|Net market value as of March 31, 2003    | $        464,344                                             
|Change from current                      | $            9,517                                           
|Net market value as of December 31, 2002 | $        449,493                                             
|Potential change                         | $          (7,017)                                           

GAAP-Based Value Change Method



Present Value at March 31, 2003,
Change in Interest Rates of:-2%
-1%
Current
+1%
+2%(In thousands)Interest Sensitive AssetsLoans and other assets (1)
$                   --
$                  --
$                   --
$                   --
$                   --Loans held for sale
1,631,829
1,631,829
1,631,829
1,627,986
1,623,980Mortgage servicing rights
121,313
147,034
211,612
299,683
336,012Residual interests
107,079
119,347
132,020
144,986
157,032Interest sensitive financial derivatives
111,196
66,498
17,852
(26,587)
(81,066)Total interest sensitive assets
1,971,417
1,964,708
1,993,313
2,046,068
2,035,958Interest Sensitive LiabilitiesDeposits (1)
--
--
--
--
--Short-term borrowings (1)
--
--
--
--
--Long-term debt (1)
--
--
--
--
--Total interest sensitive liabilities (1)
--
--
--
--
--Net market value as of March 31, 2003
$    1,971,417
$    1,964,708
$    1,993,313
$    2,046,068
$    2,035,958Potential change
$       (21,896)
$        (28,605)
$                  --
$         52,755
$         42,645Net market value as of December 31, 2002
$   1,618,460
$    1,629,506
$    1,656,461
$    1,722,027
$    1,715,012Potential change
$       (38,001)
$       (26,955)
$                  --
$         65,566
$         58,551


__________

We own foreign currency forward contracts to protect the U.S. dollar value of intercompany loans made to Onset Capital Corporation that are denominated in Canadian dollars.  We had a notional amount of $104.6 million in forward contracts outstanding as of March 31, 2003.  Notional amounts do not represent the amount at risk.  For the three months ended March 31, 2003, we recognized losses on these contracts of $6.8 million.  These contracts are marked-to-market with gains and losses included in other expense on the income statement.  The foreign currency transaction gain on the intercompany loans was also $6.8 million during the three months ended March 31, 2003.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

The quantitative and qualitative disclosures about market risk are reported in the Interest Rate Risk section of Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations found on pages 38 through 39.Item 4.  Controls and Procedures.As of March 31, 2003, we performed an evaluation under the supervision and with the participation of our management, including the CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c)).  Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of March 31, 2003 to provide reasonable assurance that material information relating to the Corporation would be made known to them by others within the Corporation, particularly during the period in which the Form 10-Q was being prepared.  There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to our most recent evaluation of these controls, nor any significant deficiencies or material weaknesses in such controls requiring corrective actions.  As a result, no corrective actions were required or taken.

PART II.  Other Information.

Item 1.  Legal Proceedings.Culpepper and related cases.
     As described in our Annual Report on Form 10-K for the Year Ended 2002, our indirect subsidiary, Irwin Mortgage Corporation, is a defendant in Culpepper v. Inland Mortgage Corporation, a class action lawsuit in the United States District Court for the Northern District of Alabama.  The suit alleges that Irwin Mortgage violated the federal Real Estate Settlement Procedures Act (RESPA) in connection with certain payments Irwin Mortgage made to mortgage brokers.  
     In connection with Culpepper, our Report of Form 10-K described three other lawsuits pending against Irwin Mortgage in the Circuit Court of Calhoun County, Alabama (Cook v Irwin Mortgage, Ford v. Irwin Mortgage,and Hill v. Irwin Mortgage) seeking class action status and alleging claims based on payments similar to those at issue in Culpepper.  In April, 2003, Irwin Mortgage and the plaintiffs reached an agreement in principle to settle Cook, Ford and Hill for a nonmaterial amount.
     We and our subsidiaries are from time to time engaged in various matters of litigation including the matters described above and those disclosed in our Annual Report on Form 10-K for the Year Ended 2002, other assertions of improper or fraudulent loan practices or lending violations, and other matters, and we have a number of unresolved claims pending.  In addition, as part of the ordinary course of business, we and our subsidiaries are parties to litigation involving claims to the ownership of funds in particular accounts, the collection of delinquent accounts, challenges to security interests in collateral, and foreclosure interests, that is incidental to our regular business activities.  While the ultimate liability with respect to these other litigation matters and claims cannot be determined at this time, we believe that damages, if any, and other amounts relating to pending matters are not likely to be material to our consolidated financial position or results of operations, except as described above and in our Annual Report on Form 10-K.  Reserves have been established for these various matters of litigation, when appropriate, based upon the advice of legal counsel.Item 2.Changes in Securities and Use of Proceeds.
     (c)  The Corporation issued shares of common stock pursuant to elections made by four out of the eight of our outside directors to receive board compensation under the 1999 Outside Director Restricted Stock Compensation Plan in lieu of cash fees as indicated in the table below.  All of these shares were issued in reliance on the private placement exemption from registration provided in Section 4(2) of the Securities Act.



|Date Issued    | Number of Shares
|-------------- | ----------------
|March 31, 2003 | 755             

Item 6.  Exhibits and Reports on Form 8-K.
     (a)  Exhibits.



ExhibitNumber
Description of Exhibit3.1
Restated Articles of Incorporation of Irwin Financial Corporation. (Incorporated by reference to Exhibit 3(a) to Form 10-K Report for year ended December 31, 2000, File No. 0-06835.)3.2
Articles of Amendment to Restated Articles of Incorporation of Irwin Financial Corporation dated March 2, 2001. (Incorporated by reference to Exhibit 3(b) to Form 10-K Report for year ended December 31, 2000, File No. 0-06835.)3.3
Code of By-laws of Irwin Financial Corporation. (Incorporated by reference to Exhibit 3 to Form 10-Q for period ended March 31, 2001, File No. 0-06835.)4.1
Specimen Common Stock Certificate. (Incorporated by reference to Exhibit 4(a) to Form 10-K report for year ended December 31, 1994, File No. 0-06835.)4.2
Certain instruments defining the rights of the holders of long-term debt of Irwin Financial Corporation and certain of its subsidiaries, none of which authorize a total amount of indebtedness in excess of 10% of the total assets of the Corporation and its subsidiaries on a consolidated basis, have not been filed as Exhibits. The Corporation hereby agrees to furnish a copy of any of these agreements to the Commission upon request.4.3
Rights Agreement, dated as of March 1, 2001, between Irwin Financial Corporation and Irwin Union Bank and Trust. (Incorporated by reference to Exhibit 4.1 to Form 8-A filed March 2, 2001, File No. 0-06835.)4.4
Appointment of Successor Rights Agent dated as of May 11, 2001 between Irwin Financial Corporation and National City Bank. (Incorporated by reference to Exhibit 4.5 to Form S-8 filed on September 7, 2001, File No. 333-69156.)10.1
*Amended 1986 Stock Option Plan. (Incorporated by reference to Exhibit 10(b) to Form 10-K Report for year ended December 31, 1991, File No. 0-06835.)10.2
*Irwin Financial Corporation 1992 Stock Option Plan.  (Incorporated by reference to Exhibit 10(h) to Form 10-K Report for year ended December 31, 1992, File No. 0-06835.)10.3
*Irwin Financial Corporation 1997 Stock Option Plan. (Incorporated by reference to Exhibit 10 to Form 10-Q Report for period ended June 30, 1994, File No. 0-06835.)10.4
*Amendment to Irwin Financial Corporation 1997 Stock Option Plan. (Incorporated by reference to Exhibit 10(i) to Form10-Q Report for period ended June 30, 1997, File No. 0-06835.)10.5
*Irwin Financial Corporation 2001 Stock Plan. (Incorporated by reference to Exhibit 10.18 to Form S-1/A filed February 14, 2002, File No. 333-69586.)10.6
*Amended Irwin Financial Corporation Outside Directors Restricted Stock Compensation Plan. (Incorporated by reference to Exhibit 10(g) to Form 10-K Report for year ended December 31, 1991, File No. 0-06835.)10.7
*Irwin Financial Corporation Outside Directors Restricted Stock Compensation Plan. (Incorporated by reference to Exhibit 10(i) to Form 10-K Report for year ended December31, 1995, File No. 0-06835.)10.8
*1999 Outside Director Restricted Stock Compensation Plan. (Incorporated by reference to Exhibit 10(b) to Form 10-Q Report for period ended June 30, 1999, File No. 0-06835.)10.9
*Irwin Financial Corporation Employees' Stock Purchase Plan. (Incorporated by reference to Exhibit 10(d) to Form 10-K Report for year ended December 31, 1991, File No. 0-06835.)10.10
*Employee Stock Purchase Plan II. (Incorporated by reference to Exhibit 10(f) to Form 10-K Report for year ended December 31, 1994, File No. 0-06835.)10.11
*Employee Stock Purchase Plan III. (Incorporated by reference to Exhibit 10(a) to Form 10-Q Report for period ended June 30, 1999, File No. 0-06835.)10.12
*Long-Term Management Performance Plan. (Incorporated by reference to Exhibit 10(a) to Form 10-K Report for year ended December 31, 1986, File No. 0-06835.)10.13
*Long-Term Incentive Plan-Summary of Terms. (Incorporated by reference to Exhibit 10(a) to Form 10-K Report for year ended December 31, 1986, File No. 0-06835.)10.14
*Inland Mortgage Corporation Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10(j) to Form 10-K Report for year ended December 31, 1995, File No. 0-06835.)10.15
*Amended and Restated Management Bonus Plan. (Incorporated by reference to Exhibit 10(a) to Form 10-K Report for year ended December 31, 1986, File No. 0-06835.)10.16
*Limited Liability Company Agreement of Irwin Ventures LLC. (Incorporated by reference to Exhibit 10(a) to Form 10-Q/A Report for period ended March 31, 2001, File No. 0-06835.)10.17
*Limited Liability Company Agreement of Irwin Ventures Co-Investment Fund LLC, effective as of April 20, 2001. (Incorporated by reference to Exhibit 10.17 to Form S-1/A filed February 14, 2002, File No. 333-69586.)10.18
*Irwin Home Equity Corporation Shareholder Agreement and Amendments. (Incorporated by reference to Exhibit 10(b) to Form 10-Q/A Report for period ended March 31, 2001, File No. 0-06835.)10.19
*Promissory Note dated January 30, 2002 from Elena Delgado to Irwin Financial Corporation. (Incorporated by reference to Exhibit 10.19 to Form S-1/A filed February 14, 2002, File No. 333-69586.)10.20
*Consumer Pledge Agreement dated January 30, 2002 between Elena Delgado and Irwin Financial Corporation. (Incorporated by reference to Exhibit 10.20 to Form S-1/A filed February 14, 2002, File No. 333-69586.)10.21
*Irwin Financial Corporation Short Term Incentive Plan effective January 1, 2002. (Incorporated by reference to Exhibit 10.21 to Form 10-Q Report for period ended March 31, 2002, File No. 0-06835.)10.22
*Irwin Union Bank Short Term Incentive Plan effective January 1, 2002. (Incorporated by reference to Exhibit 10.22 to Form 10-Q Report for period ended March 31, 2002, File No. 0-06835.)10.23
*Irwin Home Equity Short Term Incentive Plan effective January 1, 2002. (Incorporated by reference to Exhibit 10.23 to Form 10-Q Report for period ended March 31, 2002, File No. 0-06835.)10.24
*Irwin Mortgage Corporation Short Term Incentive Plan effective January 1, 2002. (Incorporated by reference to Exhibit 10.24 to Form 10-Q Report for period ended March 31, 2002, File No. 0-06835.)10.25
*Irwin Capital Holdings Short Term Incentive Plan effective January 1, 2002. (Incorporated by reference to Exhibit 10.25 to Form 10-Q Report for period ended March 31, 2002, File No. 0-06835.)10.26
*Onset Capital Corporation Employment Agreement. (Incorporated by reference to Exhibit 10.26 to Form 10-Q Report for period ended June 30, 2002, File No. 0-06835.)10.27
*Irwin Financial Corporation Restated Supplemental Executive Retirement Plan for Named Executives. (Incorporated by reference to Exhibit 10.27 to Form 10-Q Report for period ended June 30, 2002, File No. 0-06835.)10.28
*Irwin Financial Corporation Supplemental Executive Retirement Plan for Named Executives. (Incorporated by reference to Exhibit 10.28 to Form 10-Q Report for period ended June 30, 2002, File No. 0-06835.)10.29
*Onset Capital Corporation Shareholders Agreement (Incorporated by reference to Exhibit 10.29 to Form 10-K Report for year ended December 31, 2002, File No. 0-06835.)11.1
Computation of earnings per share is included in the footnotes to the financial statements.99.1
Certification of the Chief Executive Officer under Section 906 of the Sarbanes - Oxley Act of 2002.99.2
Certification of the Chief Financial Officer under Section 906 of the Sarbanes - Oxley Act of 2002.


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* Indicates management contract or compensatory plan or arrangement.

(b)  Reports on Form 8-K.



|8-K | January 3, 2003   | Attaching news release announcing increase in guidance on 2002 earnings.                  
|--- | ----------------- | ------------------------------------------------------------------------------------------
|8-K | January 22, 2003  | Attaching news release announcing 2002 fourth quarter and annual earnings conference call.
|8-K | January 24, 2003  | Attaching news release announcing 2002 fourth quarter earnings and management succession. 
|8-K | February 26, 2003 | Attaching news release announcing first quarter dividend.                                 
|    |                   |                                                                                           



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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 CORPORATIONDATE:May 13, 2003
BY: _____/s/ Gregory F. Ehlinger______________________GREGORY F. EHLINGER                            CHIEF FINANCIAL OFFICERBY: ___/s/ Jody A. Littrell___________________________JODY A. LITTRELL                                       
CORPORATE CONTROLLER                      
(Chief Accounting Officer)




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CERTIFICATIONS

I, William I. Miller, certify that:
     1. I have reviewed this quarterly report on Form 10-Q of Irwin Financial Corporation;
     2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
     3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operation and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
     4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
          a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
          b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
          c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
     5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
          a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
          b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
     6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

/s/ WILLIAM I. MILLER                                                                                                                                      WILLIAM I. MILLER
                                                                                                                                      Chairman and Chief Executive Officer

Date:  May 13, 2003

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I, Gregory F. Ehlinger, certify that:
     1. I have reviewed this quarterly report on Form 10-Q of Irwin Financial Corporation;
     2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
     3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operation and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
     4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
          a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
          b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
          c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
     5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
          a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
          b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
     6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
                                                                                                                                     /s/ GREGORY F. EHLINGER                                                                                                                                     GREGORY F. EHLINGER
                                                                                                                                     Senior Vice President and Chief Financial Officer

Date: May 13, 2003