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

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF  1934

           For the quarterly period ended June 30, 1998

                                 OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF  1934

         For the transition period from                   to

                      Commission file number   0-6835

                          IRWIN FINANCIAL CORPORATION
          (Exact name of registrant as specified in its charter)

INDIANA                                                35-1286807
(State or other jurisdiction of                    (I.R.S.Employer
incorporation or organization                      Identification No.)
                                
           500 Washington Street, Columbus, IN  47201
            (Address of principal executive offices)
                           (Zip Code)
                                
                          812/376-1020
           __________________________________________
       Registrant's telephone number, including area code)
       (Former name, former address and former fiscal year
                  if changed since last report)
                                
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes  X      No

        APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
           PROCEEDINGS DURING THE PRECEDING FIVE YEARS

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

Yes        No

As of July 31, 1998, there were outstanding 21,688,277 common
shares, no par

<TABLE>
<CAPTION>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET  (UNAUDITED)

                                                                  June 30,          December 31,
Assets:                                                             1998                1997
<S>                                                              <C>                 <C>
Cash and due from banks                                             $74,848,941         $56,523,723
Federal funds sold                                                   13,000,000                   0
   Cash and cash equivalents                                         87,848,941          56,523,723
Interest-bearing deposits with financial institutions                14,362,409          18,240,229
Investment securities  (Market value:$86,526,043
in 1998 and $78,028,672 in 1997)-Note 2                              86,061,759          77,341,443
Loans held for sale                                                 756,601,116         641,081,704
Loans and leases, net of unearned income - Note 4                   553,042,449         498,749,925
 Less: Allowance for loan and lease losses - Note 5                  (9,463,893)         (8,811,645)
                                                                    543,578,556         489,938,280
Servicing assets  - Note 6                                           98,621,320          83,043,939
Accounts receivable                                                  59,734,370          54,260,792
Accrued interest receivable                                          15,573,569          14,778,885
Premises and equipment                                               18,908,350          21,040,206
Other assets                                                         47,179,658          40,544,715
                                                                 $1,728,470,048      $1,496,793,916
Liabilities and Shareholders' Equity:
Deposits
   Noninterest-bearing                                             $368,188,852        $287,555,280
   Interest-bearing                                                 399,749,843         346,012,401
   Certificates of deposit over $100,000                            105,513,002          86,027,844
                                                                    873,451,697         719,595,525
Short-term borrowings- Note 7                                       582,840,369         512,275,185
Long-term debt- Note 8                                                9,715,824           7,095,718
Other liabilities                                                    82,636,222          81,917,591
Total liabilities                                                 1,548,644,112       1,320,884,019

Company-obligated mandatorily redeemable
  preferred securities of subsidiary trust- Note 9                   47,962,556          47,926,556

Shareholders' equity
   Preferred stock, no par value - authorized
      50,000 shares; none issued                                              0                   0
   Common stock; no par value - authorized 40,000,000 shares;
      issued 23,402,080 shares in 1998 and 1997; including
      1,719,529 and 1,401,280 shares in treasury in 1998 and 1997,
      respectively                                                   29,965,287          29,965,287
   Additional paid in capital                                         1,194,541             779,976
   Unrealized gains on investment securities                             61,717              54,895
   Retained earnings                                                127,783,809         115,413,986
                                                                    159,005,354         146,214,144
   Less treasury stock, at cost                                     (27,141,974)        (18,230,803)
   Total shareholders' equity                                       131,863,380         127,983,341
                                                                 $1,728,470,048      $1,496,793,916
</TABLE>
The accompanying notes are an integral part of the consolidated financial 
statements.
<TABLE>
<CAPTION>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)                             Three Months Ended
                                                                             June 30,
Interest income:                                                    1998                1997
<S>                                                                 <C>                 <C>
 Loans and leases                                                   $13,976,216         $14,882,560
 Investment securities:
   Taxable                                                            1,443,121           1,185,675
   Tax-exempt                                                            79,532              70,832
 Loans held for sale                                                 15,310,301           7,667,524
 Federal funds sold                                                      67,267              40,738
    Total interest income                                            30,876,437          23,847,329
Interest expense:
 Deposits                                                             5,720,639           4,553,903
 Short-term borrowings                                                8,267,373           5,977,334
 Long-term debt                                                         199,172             227,100
    Total interest expense                                           14,187,184          10,758,337
 Net interest income                                                 16,689,253          13,088,992
 Provision for loan and lease losses - Note 5                         1,056,063           2,018,821
 Net interest income after provision for
   loan and lease losses                                             15,633,190          11,070,171
Other income:
 Loan origination fees                                               14,037,549          10,683,699
 Gain  from sales of loans                                           16,735,407          10,243,428
 Loan servicing fees                                                 13,623,522          13,461,005
 Gain on sale of mortgage servicing                                  10,056,745           6,849,323
 Brokerage fees and commissions                                         291,844             260,627
 Trust fees                                                             559,737             487,289
 Service charges on deposit accounts                                    394,163             299,052
 Insurance commissions, fees and premiums                               466,043             375,274
Net loss on trading securities                                         (913,166)                  0
 Other                                                                  655,107             749,838
                                                                     55,906,951          43,409,535
Other expense:
 Salaries                                                            28,791,665          21,287,488
 Pension and other employee benefits                                  4,061,905           3,435,283
 Office expense                                                       3,159,201           2,582,285
 Premises and equipment                                               4,602,164           4,302,353
 Amortization of mortgage servicing asset                             5,803,620           3,577,379
 Marketing and development                                            3,034,731           1,891,843
 Other                                                                9,239,256           6,612,623
                                                                     58,692,542          43,689,254
Income before income taxes                                           12,847,599          10,790,452
Income taxes                                                          4,627,202           3,850,896
                                                                      8,220,397           6,939,556
Distribution on company-obligated mandatorily
  redeemable preferred securities of subsidiary trust                 1,174,250           1,171,163
Net income available to common shareholders                          $7,046,147          $5,768,393

Earnings per share of common stock:
Basic - Note 10                                                           $0.32                 0.26
Diluted - Note 10                                                         $0.32                 0.25
Dividends per share of common stock                                       $0.04                0.035
</TABLE>
The accompanying notes are an integral part of the consolidated financial 
statements.
<TABLE>
<CAPTION>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)                             Six Months Ended
                                                                             June  30,
Interest income:                                                    1998                1997
<S>                                                                 <C>                 <C>
 Loans and leases                                                   $30,388,803         $27,607,014
 Investment securities:
   Taxable                                                            3,344,864           3,201,266
   Tax-exempt                                                           154,988             142,263
 Loans held for sale                                                 27,048,981          14,580,249
 Federal funds sold                                                     414,101             365,418
    Total interest income                                            61,351,737          45,896,210
Interest expense:
 Deposits                                                            11,030,249           9,598,360
 Short-term borrowings                                               19,111,356          10,046,832
 Long-term debt                                                         412,633             532,032
    Total interest expense                                           30,554,238          20,177,224
 Net interest income                                                 30,797,499          25,718,986
 Provision for loan and lease losses - Note 5                         2,673,713           2,821,544
 Net interest income after provision for
    loan and lease losses                                            28,123,786          22,897,442
Other income:
 Loan origination fees                                               27,009,209          19,272,045
 Gain  from sales of loans                                           31,012,584          18,394,930
 Loan servicing fees                                                 27,500,756          26,345,799
 Gain on sale of mortgage servicing                                  20,013,321          13,668,135
 Brokerage fees and commissions                                         510,527             607,454
 Trust fees                                                           1,106,260           1,067,434
 Service charges on deposit accounts                                    797,491             801,662
 Insurance commissions, fees and premiums                               863,074             742,649
Netloss on trading securities                                          (913,166)                  0
 Other                                                                3,111,423           1,444,555
                                                                    111,011,479          82,344,663
Other expense:
 Salaries                                                            54,296,231          40,182,279
 Pension and other employee benefits                                  8,504,938           7,226,313
 Office expense                                                       6,078,687           5,226,397
 Premises and equipment                                               9,321,003           8,185,202
 Amortization of mortgage servicing asset                            11,073,023           7,113,634
 Marketing and development                                            6,326,019           4,916,736
 Other                                                               17,569,453          11,960,865
                                                                    113,169,354          84,811,426
Income before income taxes                                           25,965,911          20,430,679
Income taxes                                                          9,507,051           7,341,130
                                                                     16,458,860          13,089,549
Distribution on company-obligated mandatorily
redeemable preferred securities of subsidiary trust                   2,348,500           2,124,878
Net income available to common shareholders                         $14,110,360         $10,964,671

 Earnings per share of common stock:
 Basic - Note 10                                                          $0.65                0.49
 Diluted - Note 10                                                        $0.64                0.48
 Dividends per share of common stock                                      $0.08                0.07
</TABLE>
The accompanying notes are an integral part of the consolidated financial 
statements.
<TABLE>
<CAPTION>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
                                                                      Accumulated
                                                                         Other                           Additional
                                                      Retained       Comprehensive       Common           Paid in          Treasury
                                       Total          Earnings          Income            Stock           Capital           Stock

<S>                                 <C>                <C>              <C>             <C>             <C>           <C>
Balance at April 1, 1998            $130,097,346       $121,605,947        $61,673      $29,965,287       $986,324    ($22,521,885)
Comprehensive Income:  Note 1
  Net Income                                              7,046,147
  Other Comprehensive Income                                                    44
    Total                              7,046,191
Cash dividends                          (868,285)          (868,285)
Purchase of treasury stock            (5,041,987)                                                                       (5,041,987)
Sales of treasury stock                  630,115                                                           208,217         421,898
Balance June 30, 1998               $131,863,380       $127,783,809        $61,717      $29,965,287     $1,194,541    ($27,141,974)

Balance at April 1, 1997            $120,910,416        $98,488,716       ($60,653)     $29,965,287        $53,880     ($7,536,814)
Comprehensive Income:  Note 1
  Net Income                                              5,768,395
  Other Comprehensive Income                                             1,503,038
    Total                              7,271,433
Cash dividends                          (780,175)          (780,175)
Purchase of treasury stock            (5,407,183)                                                                       (5,407,183)
Sales of treasury stock                 (153,999)          (387,264)                                       (53,880)        287,145
Balance June 30, 1997               $121,840,492       $103,089,672     $1,442,385      $29,965,287             $0    ($12,656,852)
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997

                                                                      Accumulated
                                                                         Other                          Additional
                                                      Retained       Comprehensive       Common           Paid in      Treasury
                                       Total          Earnings          Income            Stock           Capital       Stock

<S>                                 <C>                <C>              <C>             <C>             <C>           <C>
Balance at January 1, 1998          $127,983,341       $115,413,986        $54,895      $29,965,287       $779,976    ($18,230,803)
Comprehensive Income:  Note 1
  Net Income                                             14,110,360
  Other Comprehensive Income                                                 6,822
    Total                             14,117,182
Cash dividends                        (1,740,537)        (1,740,537)
Purchase of treasury stock            (9,488,188)                                                                       (9,488,188)
Sales of treasury stock                  991,582                                                           414,565         577,017
Balance June 30, 1998               $131,863,380       $127,783,809        $61,717      $29,965,287     $1,194,541    ($27,141,974)

Balance at January 1, 1997           118,902,080         94,083,540         56,523       29,965,287              0      (5,203,270)
Comprehensive Income:  Note 1
  Net Income                                             10,964,671
  Other Comprehensive Income                                             1,385,862
    Total                             12,350,533
Cash dividends                        (1,571,275)        (1,571,275)
Purchase of treasury stock            (8,191,372)                                                                       (8,191,372)
Sales of treasury stock                  350,526           (387,264)                                             0         737,790
Balance June 30, 1997               $121,840,492       $103,089,672     $1,442,385      $29,965,287             $0    ($12,656,852)
</TABLE>
The accompanying notes are an integral part of the consolidated financial 
statements.
<TABLE>
<CAPTION>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
                                                                             Six Months Ended
                                                                                 June 30,
                                                                           1998                1997

<S>                                                                <C>                 <C>
Net income                                                          $14,110,360         $10,964,671
Adjustments to reconcile net income to cash provided
   by operating activities:
Depreciation and amortization                                        13,513,581          12,853,344
Provision for loan and lease losses                                   2,673,713           2,692,000
Amortization of premiums, less accretion of discounts                 1,125,932             579,979
(Increase) decrease in loans held for sale                         (115,519,412)         47,122,403
Gain on sale of mortgage servicing                                  (20,013,321)        (13,668,135)
Other, net                                                          (13,060,316)         (2,784,303)
   Net cash (used) provided by operating activities                (117,169,463)         57,759,959

Lending and investing activities:
Proceeds from maturities/calls of investment securities:
   Held-to-Maturity                                                   5,715,000             110,000
   Available-for-Sale                                                 3,792,543          18,745,042
Proceeds from sales of investment securities:
   Available-for-Sale                                                 1,000,000                   0
Purchase of investment securities:
   Held-to-Maturity                                                  (3,640,000)         (1,987,500)
   Available-for-Sale                                                (4,090,798)        (12,951,867)
Net trading securities                                              (12,622,993)         (9,974,594)
Net decrease in interest-bearing
   deposits with financial institutions                               3,877,820             857,160
Net increase in loans, excluding sales                             (264,254,243)       (106,269,341)
Sale of loans                                                       207,940,254         124,970,000
Additions to mortgage servicing assets                              (49,521,483)        (26,384,430)
Proceeds from sale of mortgage servicing assets                      42,884,400          32,341,018
Other, net                                                              573,862          (2,485,340)
   Net cash (used) provided by lending and investing activiti       (68,345,638)         16,970,148

Financing activities:
Net increase in deposits                                            153,856,172          27,027,225
Net increase (decrease) in short-term borrowings                     70,565,184        (145,708,655)
Proceeds (Repayment) of long-term debt                                2,620,106          (7,853,038)
Sale of company-obligated manditorily redeemable
   preferred securities of subsidiary trust                              36,000          47,950,178
Purchase of treasury stock                                           (9,488,188)         (8,191,372)
Proceeds from sale of stock for employee benefit plans                  991,582             350,526
Dividends paid                                                       (1,740,537)         (1,571,275)
   Net cash provided  (used) by financing activities                216,840,319         (87,996,411)
Net increase (decrease) in cash and cash equivalents                 31,325,218         (13,266,304)
Cash and cash equivalents at beginning of year                       56,523,723          71,365,788
Cash and cash equivalents at end of year                            $87,848,941         $58,099,484

Supplemental disclosures of cash flow information:
Cash paid during the period:
     Interest                                                       $30,104,474         $19,449,504
     Income taxes                                                    $6,103,100          $5,609,375
</TABLE>
The accompanying notes are an integral part of the consolidated financial 
statements.

NOTES TO THE FINANCIAL STATEMENTS  (UNAUDITED)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:  The unaudited financial statements included herein have
been prepared by the Corporation pursuant to the rules and regulations of the
Securities and Exchange Commission but do not include all information and
footnotes required by generally accepted accounting principles.  In the opinion
of management, the financial statements reflect all material adjustments
necessary for a fair presentation.  The accompanying financial statements should
be read in conjunction with the financial statements and related notes included
with the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997.

Reclassifications:  Certain amounts in the 1997 consolidated financial 
statements have been reclassified to conform to the 1998 presentation.

Comprehensive Income:  On January 1, 1998, the Corporation adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income."  This
statement established standards for reporting comprehensive income in financial
statements.  Comprehensive income is defined as the change in equity during
a period from transactions and other events from nonowner sources.

Derivatives:  On June 15, 1998, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (FAS 133).  FAS 133 is effective
beginning January 1, 2000 for the Corporation.  FAS 133 requires that all
derivative instruments be recorded on the balance sheet at their fair value.
Changes in the fair value of derivatives are recorded each period in current
earnings or other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and, if it is, the type of hedge
transaction.  The Corporation is evaluating what impact the adoption of FAS 133
will have on its earnings or statement of financial position.

NOTE 2 - INVESTMENT SECURITIES

The carrying amounts of investment securities, including net unrealized gains of
$102,862 and $76,708 on available-for-sale securities at June 30, 1998 and
December 31, 1997, respectively, are summarized as follows:
<TABLE>
                                                                    June 30,            December 31,
                                                                    1998                1997

<S>                                                                 <C>                 <C>
Held-to-Maturity
    US Treasury and Government obligations                          $21,832,100         $35,732,672
     Obligations of states and political subdivisions                 5,708,413           4,813,919
     Mortgage-backed securities                                       3,591,107           5,968,340
Total Held-to-Maturity                                               31,131,620          46,514,931

Trading:
      Interest -only strips                                          29,031,248         22,133,793
      US Treasury options and other                                   5,725,538                  0
Total Trading                                                        34,756,786         22,133,793

Available-for-Sale
    US Treasury and Government obligations                           14,574,662           6,052,952
    Mortgage-backed securities                                        5,133,939           2,617,804
    Other                                                               464,752              21,963
Total Available for Sale                                             20,173,353           8,692,719

Total Investments                                                   $86,061,759         $77,341,443
</TABLE>
Securities which the Corporation has the positive intent and ability to hold 
until maturity are classified as "held-to-maturity" and are stated at cost 
adjusted for amortization of premium and accretion of discount.  Securities 
that might be sold prior to maturity are classified as "available-for-sale" 
and are stated at fair value.  Unrealized gains and losses on available-for-
sale securities, net of the future tax impact, are reported as a separate 
component of shareholders' equity until realized.

Trading securities are stated at fair value. Unrealized gains and losses on
trading securities are included in earnings. Interest-only strips are generated
through the securitization of home equity loans.

NOTE 3 - LOANS HELD FOR SALE

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


NOTE 4 - LOANS AND LEASES
<TABLE>
<CAPTION>
Loans and leases are summarized as follows:
                                                                   June 30,             December 31,
                                                                    1998                1997

<S>                                                                <C>                 <C>
Real estate-mortgage                                               $113,263,080        $110,475,095
Commercial, financial and agricultural                              244,241,243         212,094,742
Real estate-construction                                             82,319,080          73,279,176
Consumer                                                             41,003,160          39,984,692
Lease financing                                                      89,223,641          78,079,206
Unearned income                                                     (17,007,755)        (15,162,986)

                                                                   $553,042,449        $498,749,925
</TABLE>

NOTE 5 - ALLOWANCE FOR LOAN AND LEASE LOSSES
<TABLE>
<CAPTION>
Changes in the allowance for loan and lease losses are summarized as follows:

                                                                  June 30,          December 31,
                                                                    1998                1997

<S>                                                                  <C>                 <C>
Balance at beginning of year                                         $8,811,645          $6,874,944

Provision for loan and lease losses                                   2,673,713           6,238,000
Reduction due to sale of loans                                         (942,408)         (1,694,316)
Recoveries                                                              250,981             538,213
Charge-offs                                                          (1,330,038)         (3,145,196)

Balance at end of period                                             $9,463,893          $8,811,645
</TABLE>


NOTE 6- SERVICING ASSETS

Included on the consolidated balance sheet at June 30, 1998 and December 31, 
1997 are $98,621,320 and $83,043,939, respectively, of servicing assets.  
These amounts relate to the principal balances of loans serviced by the 
Corporation for investors.  Although they are not generally held for 
purposes of sale, there is an active secondary market for servicing assets. 
The Corporation has periodically sold servicing assets.




NOTE 7- SHORT-TERM BORROWINGS
<TABLE>
<CAPTION>
Short-term borrowings are summarized as follows:
                                                                  June 30,          December 31,
                                                                    1998                1997

<S>                                                                <C>                 <C>
Repurchase agreements and drafts payable related to
     mortgage loan closings                                        $279,202,842        $240,659,463
Lines of Credit                                                     107,163,866         112,590,484
Federal funds                                                       169,977,355         142,650,000
Commercial paper                                                     26,496,306          16,375,238

Total                                                              $582,840,369        $512,275,185
</TABLE>
Repurchase agreements at June 30, 1998 and December 31, 1997, include
$119,743,892 and $141,919,483 respectively, in mortgage loans sold under
agreements to repurchase which are used to fund mortgage loans sold prior
to sale in the secondary market.  These repurchase agreements are collateralized
by mortgage loans held for sale.

Drafts payable related to mortgage loan closings totaled $159,458,950 and
$93,615,694 at June 30, 1998 and December 31, 1997.  These borrowings are
related to mortgage closings at the end of the period which have not been
presented to banks for payment.  When presented for payment these borrowings
will be funded internally or by borrowing from the lines of credit.

The Corporation has lines of credit available to fund mortgage loans held for
sale.  Interest on the lines of credit is payable monthly at variable rates
ranging from 5.79% to the lender's prime rate.



NOTE 8 -- LONG-TERM DEBT

Long-term debt at June 30, 1998 of $9,715,824 consists of various notes payable
at annual interest rates ranging from 6.3% to 9.6% and maturity dates ranging
from September 30, 1998 through April 30, 2002.  Long -term debt as of
December 31, 1997 was $7,095,718 and consisted of various notes payable at
annual interest rates ranging from 6.3% to 9.6% and maturity dates through
April 30, 2002.



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

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

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



NOTE 10 -- EARNINGS PER SHARE

On April 30, 1998, the Corporation's Board of Directors approved a two-for-one
stock split effective May 27, 1998, for all shareholders of record on
May 15, 1998.  Earnings per share calculations have been adjusted to reflect
the stock split.
<TABLE>
<CAPTION>
Earnings per share calculations are summarized as follows:

<S>                                              <C>                  <C>             <C>
                                              Basic Earnings     Effects of       Diluted Earnings
Three months ended June 30, 1998:                 Per Share      Stock Options         Per Share

Net income                                       $ 7,046,147               $0         $  7,046,147
Shares                                            21,738,305          245,708           22,129,272
Per-Share Amount                                       $0.32               $0                $0.32

Six months ended June 30, 1998:

Net income                                       $14,110,360               $0          $14,110,360
Shares                                            21,799,884          329,388           22,129,272
Per-share Amount                                       $0.65           $(0.01)               $0.64

Three months ended June 30, 1997:

Net income                                       $ 5,768,393               $0          $ 5,738,393
Shares                                            22,332,852          348,374           22,681,226
Per-share Amount                                       $0.26           $(0.01)               $0.25

Six months ended June 30, 1997:

Net income                                       $10,964,671               $0          $10,964,671
Shares                                            22,507,216          369,038           22,876,252
Per-Share Amount                                       $0.49           ($0.01)               $0.48
</TABLE>


NOTE 11 -- CONTINGENCIES

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

As of  June  30, 1998, Irwin Mortgage Corporation (IMC) was a defendant to
four separate class action lawsuits relating to the following:  IMC's
administration of mortgage escrow accounts, IMC's right to require its
borrowers to pay premiums for private mortgage insurance, IMC's right to pay
broker fees to mortgage brokers, and IMC's participation in a housing 
opportunity program.

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

                                
                                
                             Item 2
                                
              MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Overview

     Net income for the second quarter ended June 30, 1998, was
$7,046,147, up 22.2% from the second quarter 1997 net income of
$5,768,395.  Net income per share(diluted) was $0.32 for the
second quarter of 1998 as compared to $0.25 for the same period
in 1997.  Return on equity for the second quarter of 1998 was
21.69% compared to 19.11% in 1997.

      For the year to date, the Corporation recorded net income
of $14,110,360, up 28.7% from 1997.  Net income per share
(diluted) was $0.64, up from $0.48 a year earlier.  Return on
equity for the year to date was 21.86% as compared to 18.21% for
the same period in 1997.

Lines of Business

     Irwin Financial Corporation has four lines of business:

    Mortgage banking (includes Irwin Mortgage Corporation and
    the related activities of Irwin Union Bank)
    Community banking (Irwin Union Bank and Irwin Union Advisory
    Services)
    Home equity lending (includes Irwin Home Equity and the
    related activities of Irwin Union Bank)
    Equipment leasing (includes Irwin Equipment Finance and the
    related activities of Irwin Union Bank)

     Listed below are the earnings by line of business for the
quarter and year to date, as compared to the same periods in
1997:

                                  Three Months                 Six Months
                                  Ended June 30,             Ended June 30,
                               1998          1997          1998          1997

Mortgage banking          7,565,353    $5,074,349   $13,216,871    $8,994,200
Community banking         1,509,562     1,279,973     3,056,147     2,630,796
Home equity lending     (2,141,560)       515,421    (1,345,953)    1,701,832
Equipment leasing            72,624        65,868        82,218        71,140
Parent (including                                                       
consolidating entries)       40,168    (1,167,216)     (898,923)   (2,433,297)
                         $7,046,147    $5,768,395   $14,110,360   $10,964,671

Mortgage Banking

Selected Financial Data (shown in thousands):

                                       Three Months            Six Months
                                      Ended June 30,         Ended June 30, 
                                                                
                                    1998        1997        1998        1997
                                                                            
 Selected Income Statement
 Data:
                                                                 
 Revenues:                                                                  
 Loan origination fees           $13,890     $10,571     $26,734     $19,050
 Gain from sales of loans         12,965       4,808      23,481       8,199
 Loan servicing fees              12,438      12,369      25,178      24,580
 Net interest income               6,827       4,409      11,475       8,242
 Provision for loan losses         (109)       (415)       (390)       (657)
 Gain on sale of servicing        10,057       6,849      20,013      13,668
 Other income                        341         276         720         588
 Total net revenues               56,409      38,867     107,211      73,670
 Expenses:                                                                  
 Salaries and employee            23,601      17,463      45,075      32,950
 benefits
 Amortization of servicing         5,535       3,452      10,575       6,944
 asset
 Servicing asset impairment,                                                
 net of hedging                    1,121          80       2,821          80
 Other operating expenses         13,439       9,305      26,480      18,512
 Income before tax                12,713       8,567      22,260      15,184
 Income tax                        5,148       3,493       9,043       6,190
 Net income                       $7,565      $5,074     $13,217      $8,994
                                                                            
                                                                            
 Return on average equity         36.10%      29.60%      31.50%      26.30%
 Mortgage loan originations    2,052,999  $1,292,805  $4,049,659  $2,394,020

                                                        
 Selected Operating Data:          June 30,       December 31,
                                       1998           1997
                                                        
 Servicing portfolio            $10,929,750    $10,713,549
 Mortgage loans held for sale       492,686        435,123
 Mortgage servicing asset            95,766         81,610


      Net income for the second quarter was $7.6 million, up
49.1% from the same period in 1997.  Year to date, net income was
$13.2 million compared to $9.0 million in 1997.

      As a result of a favorable interest rate environment,
mortgage loan originations of $2.1 billion were 58.8% above the
second quarter of 1997.  For the year, originations totaled $4.0
billion, up 69.2% from 1997.  Refinances accounted for 39.1% of
loan production in the second quarter of 1998 and 47.0% year to
date.  This compares to 14.4% and 18.5%, respectively, in 1997.
Higher production volume caused mortgage loan origination income
to increase 31.4% in the second quarter to $13.9 million. Year to
date it was up 40.3% to $26.7 million.

      As a result of increased loan production and a more favorable
market, gains on the sale of loans increased 169.7% in the
second quarter to $13.0 million.  Year to date, gains on the sale
of loans totaled $23.5 million compared with $8.2 million in
1997.

      Mortgage servicing fees increased 0.6% in the second
quarter and 2.4% year to date to $12.4 million and $25.2 million,
respectively. The servicing portfolio totaled $10.9 billion at
June 30, 1998, up 4.0% from a year earlier and up 2.0% from December
31, 1997.  Mortgage servicing assets totaled $95.8 million at
June 30, 1998, up 17.3% from December 31, 1997.

      Revenues from the sale of mortgage servicing were up 46.8%
from the second quarter of 1997 to $10.1 million.  Year to date
servicing sale revenues totaled $20.0 million, up from $13.7
million in 1997.  This improvement corresponds with the increased
loan volume in 1998.

      Also a result of the increase in mortgage loan closings
from 1997, net interest income was up in the second quarter and
year to date.  Net interest income for the three months ended
June 30, 1998 was $6.8 million, up 54.8% from the second quarter
1997.  Year to date, net interest income totaled $11.5 million,
compared to $8.2 million in 1997.

       The increased production activities in mortgage banking
caused an increase in operating expenses.  Salaries and employee
benefits increased 35.1% to $23.6 million for the second quarter
of 1998.  Year to date, they totaled $45.1 million, up 36.8% from
a year earlier.  Other operating expenses increased 44.4% and
43.0% for the quarter and year to date, respectively.

      An increase in the balance of mortgage servicing assets
combined with declining interest rates resulted in an increase in
the amortization of mortgage servicing assets in 1998.
Amortization expense totaled $5.5 million in the second quarter
and $10.6 million year to date, compared with $3.5 million and
$6.9 million in the same periods in 1997.

      The declining interest rate environment also caused a
significant increase in the mortgage servicing asset impairment
expense.  Due to the higher levels of mortgage refinancings, the
mortgage bank recorded $1.1 million of servicing asset
impairment, net of hedging offsets, in the second quarter of
1998.  Year to date, servicing asset impairment, net of hedging
offsets, totaled $2.8 million.  This compares with $80.0 thousand
in the second quarter and year to date in 1997.

Community Banking

Selected Financial Data (shown in thousands):

                                    Three Months         Six Months
                                   Ended June 30,       Ended June 30,
                                                                     
                                1998         1997       1998     1997
Selected Income Statement                                    
Data:
                                                             
Net interest revenue          $6,067       $5,395    $12,072  $10,473
Provision for loan and                                               
lease losses                    (480)        (553)    (1,050)    (995)
Other income                   2,801        2,227      5,705    4,654
Operating expense             (5,959)      (5,058)   (11,824)  (9,951)
Income before tax              2,429        2,011      4,903    4,181
Income tax                      (919)        (731)    (1,847)  (1,550)
Net income                    $1,510       $1,280     $3,056   $2,631
                                                                     
                                                                     
                            June 30,     December 31,
Selected Balance Sheet          1998         1997                    
Data:
                                                                     
Securities and short-term                                            
investments                  $57,579      $95,367
Loans and leases             456,023      410,272                    
Allowance for loan and                                               
lease losses                 (6,183)      (5,525)
All other assets              74,164       39,119                    
Total assets                $581,583     $539,233                    
                                                                     
Deposits                    $511,996     $486,481                    
All other liabilities         27,538       14,362                    
Total liabilities            539,534      500,843                    
Shareholder's equity          42,049       38,390                    
                            $581,583     $539,233                    

     Community banking activities are conducted by Irwin Union
Bank through locations in eight counties in central Indiana. Net
income was up in the second quarter to $1.5 million from $1.3
million a year earlier.  Year to date, net income was $3.1
million, up from $2.6 million in 1997.  Net interest income
improved 12.4% to $6.1 million in the second quarter of 1998.
Year to date, it was up 15.3% to $12.1 million.  The increase
reflects the community bank's continued expansion into new
markets in central Indiana.  The provision for loan and lease
losses decreased 13.2% to $480.0 thousand in the second quarter
compared with a provision of $553.0 thousand a year earlier.
However, year to date, it increased 5.6% to $1.1 million.
     Following is an analysis of net interest income and net
interest margin computed on a tax equivalent basis:


For the Three                                                
Months Ended June 30,            1998                       1997

                  Average            Yield/    Average           Yield/
(In thousands)    Balance    Interest   Rate     Balance  Interest  Rate
                                                                  
Interest -                                                        
earning assets    $526,967   $11,415   8.69%     $475,821   $10,207    8.60%
                                                    
Interest -                                                        
bearing           $412,975     5,305   5.15%     $412,042     4,733    4.61%
liabilities                                                    
                                                                 
Net interest         *         6,110     *          *        $5,474      *
income
                                                               
Net interest         *          *      4.65%         *           *     4.61%
margin


For the Six                                                  
Months Ended June            1998                       1997
30,
                  Average            Yield/    Average           Yield/
(In thousands)    Balance    Interest   Rate     Balance  Interest  Rate
                                                                  
Interest -                                                        
earning assets    $520,580   $22,539   8.73%     $470,930 $19,846   8.50%
                                       
Interest -                                                        
bearing           $407,505    10,350   5.12%     $409,053   9,218   4.54%
liabilities
                                                                 
Net interest         *       $12,189     *          *     $10,628     *
income
                                                               
Net interest         *          *      4.72%        *        *      4.55%
margin

     Other income in the second quarter was up 25.8% to $2.8
million from $2.2 million in 1997.  For the year to date, other
income increased 22.6% to $5.7 million.  Other expenses increased
17.8% from the second quarter of 1997 to $6.0 million.  For the
year, these expenses were up 18.8% to $11.8 million.  The
continued expansion of operations in new markets has increased
non-interest expense in 1998.

Home Equity Lending

Selected Financial Data (shown in thousands):


                                        Three Months        Six Months
                                       Ended June 30,     Ended June 30,
                                                                       
                                     1998        1997      1998      1997
Selected Income Statement                                       
Data:
Revenues:                                                       
Net interest revenue               $1,498      $1,399    $3,750    $3,279
Provision for loan and lease          (67)       (813)     (466)     (732)
losses
Gain from sale of loans             5,578       5,336    10,759     9,995
Loan servicing fees                   784         908     1,514     1,340
Other revenue                          95          73       219       120
Total net revenues                  7,888       6,903    15,776    14,002
Expenses:                                                              
Impairment of interest only         1,942           0     1,942         0
strip
Operating expense                   8,088       6,388    15,180    12,300
Pre-tax income (loss)             $(2,142)       $515   $(1,346)   $1,702
                                                                       
                                                                       
Other Selected Financial Data:    June 30,      December 31,
                                     1998              1997                  
                                                                       
Home equity loans                $108,184          $111,779                  
Interest only strip                29,031            22,134                  
Servicing portfolio               437,516           358,166                  

      The home equity lending business markets home equity loans
through direct mail and telemarketing and currently markets in 24
states.  The home equity lending business recorded a pre-tax loss
of $2.1 million during the second quarter of 1998 and $1.3
million year to date.  These results are compared to 1997
quarterly and year to date pre-tax income of $0.5 million and
$1.7 million, respectively.

      During the second quarter of 1998, the home equity business
originated $99.6 million of loans, up 75.9% from the same period
a year earlier.  Year to date originations totaled $154.8
million, 52.6% higher than 1997.  Gains from the securitization
and delivery of $75.0 million of home equity loans totaled $5.6
million in the second quarter, up 4.5% from the previous year when
$64.9 million of loans were delivered. Year to date, securitization
gains totaled $10.8 million on the delivery of $125.0 million in 1997.

      Higher loan production resulted in increased net interest
income during 1998.  For the second quarter net interest income
was up 7.1% over 1997, while year to date it was up 14.4%.

       Interest only strips are carried at their market values
which are determined using assumptions about the duration and
performance of the securitized loans.  At June 30, 1998, the
assumed annual loss rates ranged from 0.50% to 1.00%, prepayment
speeds ranged from 30% to 44% CPR (constant prepayment rate)
per year, and the discount rate was 15.0%.  In the second quarter
of 1998, as a result of increased prepayment activity, the home
equity business recorded an impairment charge of $1.9 million to
write down the value of the interest only strips to market value.

     Operating expenses were $8.1 million in the second quarter
of 1998, up 26.6% from 1997.  Year to date, they increased 23.4%
to $15.2 million.  The increase is reflective of the increased
production activities of the company in 1998.

Equipment Leasing

      The equipment leasing business recorded pre-tax income for
the quarter and for the year of $72.6 thousand and $82.2
thousand, respectively. This compares to pre-tax income of $65.9
thousand and $71.1 thousand in the second quarter and year to
date 1997, respectively.  Net revenues were up 10.1% for the
quarter to $1.2 million and 9.6% year to date to $2.4 million.
Lease volume was $13.3 million in the second quarter of 1998, up
33.9% from a year earlier.  Year-to-date volume was $24.4
million, up 33.5%.

Parent Company (Including Consolidating Entries)

     For the quarter ended June 30, 1998, the parent company
recorded net income of $40.2 thousand, compared with net loss of
$1.2 million a year earlier.  Year to date, the parent company's
net loss totaled $898.9 thousand compared with net loss of $2.4
million in 1997. The parent company records the income tax
expense or benefit generated at the home equity lending and
equipment leasing businesses until such time that all net
operating losses carried forward are fully used.  In the second
quarter and year to date 1998, the parent recorded $827.6
thousand and $505.5 thousand, respectively, of income tax
benefits related to these lines of business.  This compares with
$232.5 thousand and $709.2 thousand of income tax expense
recorded in the second quarter and year to date, respectively, in
1997.

Consolidated Income Statement Analysis

     Net interest income for the second quarter of 1998 totaled
$16.7 million, up 27.5% from the second quarter of 1997.  For the
year, it increased 19.7% to $30.8 million.  The increase was the
result of the increased loan production at each of the
Corporation's lines of business during 1998.

     The loan and lease loss provision was $1.1 million for the
second quarter of 1998, as compared with $2.0 million for the
same period in 1997.  For the year, it totaled $2.7 million, down
from $2.8 million a year earlier.  The decline was due to two
factors.  First, the home equity line of business reclassified
its loans from a portfolio to a held-for-sale classification
during the second quarter.  Loans held for sale are carried at
the lower of cost or market in the aggregate, with market value
taking into consideration loss expectations.  Thus, in making the
reclassification, $500.0  thousand was reversed through the current
year loan loss provision.  The second factor in the decline in the
loan and lease loss provision was a reduction of loan charge-offs in
the second quarter of 1998.  See the section on credit risk for additional
information on this subject.

     Other income was up $12.5 million or 28.8% in the second
quarter of 1998.  Year to date other income increased $28.7
million or 34.8%.  This increase was driven primarily by mortgage
banking activities.  Total income from mortgage loan
originations, sales, servicing, and servicing sales was $47.2
million in the second quarter of 1998 and $91.6 million year to
date.  This compares to 1997 revenues of $34.5 million and $65.4
million in the second quarter and year to date, respectively.

      Other expenses also increased in 1998 as the second quarter
was up $15.0 million or 34.3% from 1997.  For the year, other
expenses increased $28.4 million or 33.4%.  This increase is due
in part to the increased production activities at all of the
Corporation's lines of business.  Salaries and benefits expense
increased $8.1 million or 32.9% in the second quarter and $15.4
million or 32.5% year to date.  Also contributing to the increase
was additional amortization expense associated with servicing
assets on the balance sheets of the mortgage bank and home equity
lending business.  Amortization expense increased $2.2 million in
the second quarter to $5.8 million.  Year to date, the expense
grew to $11.1 million from $7.1 a year earlier.  The increase in
amortization reflects both an increase in the balance of
servicing assets as well as faster amortization caused by
declining interest rates.

     The effective income tax rate for the Corporation was 39.6%
in the second quarter of 1998 and 40.3% year to date.  This is
compared with 40.0% in the second quarter of 1997 and 40.1% year
to date 1997.


Consolidated Balance Sheet Analysis

     Total assets of the Corporation at June 30, 1998, were $1.7
billion, up from December 31, 1997 total assets of $1.5 billion.
The increase was due to an increase in loans and loans held for
sale of $0.2 billion.

      The increase in assets was accompanied by an increase in
deposits of $153.9 million, or 21.4%.   A portion of noninterest
bearing deposits is associated with escrow accounts held on loans
in the servicing portfolio of Irwin Mortgage.  These escrow
accounts totaled $299.7 million at June 30, 1998, up from $218.7
million at December 31, 1997.

     Shareholders' equity grew to $131.9 million or $6.08 per
share, an increase over the $123.5 million or $5.62 per share at
the end of 1997. Treasury stock purchases totaled $9.5 million
through the second quarter of 1998.   The Corporation's equity to
assets ratio ended the quarter at 7.63% compared to 8.55% at the
end of 1997.

     Prior to the adoption of new mortgage banking accounting
standards in the second quarter of 1995, mortgage banking
accounting did not allow the full value of mortgage servicing
rights to be reflected on the balance sheet.  Since a significant
portion of the Corporation's mortgage servicing portfolio was
generated prior to the adoption of the new accounting standards,
it represents substantial economic value which is not recorded on
the balance sheet.  The following table demonstrates the
estimated after-tax value at June 30, 1998 and December 31, 1997
and 1996.


(In thousands)                   June 30,        Dec. 31,         Dec. 31,
                                    1998            1997             1996
                                            
Servicing portfolio           $10,929,750     $10,713,549      $10,810,988
balance
                                                                                
Value @1.5%                      $163,946        $160,703         $162,165
Less: mortgage servicing asset     95,766          81,610           70,551      

      Tax liability at 40%         27,272          31,637           36,646      

                                                                                
Net value not on balance          $40,908         $47,456          $54,968
sheet
                                                                                
Per share of common stock           $1.89           $2.16            $2.42

      In January 1997, the Corporation issued $50.0 million of
trust preferred securities through a trust created and controlled
by the Corporation.  The securities, which are publicly traded,
were issued at $25 per share with a cumulative dividend rate of
9.25%, payable quarterly.  They have an initial maturity of 30
years with a 19-year extension option which the Corporation can
exercise at any point during the first 30 years.  The securities
are callable at par after five years, or immediately, in the
event of an adverse tax development affecting the Corporation's
classification of the securities for federal income tax purposes.
The securities are not convertible into common stock of the
Corporation.


Credit Risk

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

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

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

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

      As of June 30, 1998, the allowance for loan and lease
losses as a percentage of total loans and leases was 1.71%
compared to 1.44% at December 31, 1997.  For the three months
ended June 30, 1998, the provision for loan and lease
losses totaled $1.1 million, a 47.7% decrease from the amount
recorded in the second quarter of 1997.  Year to date, the
provision totaled $2.7 million, down from $2.8 million a year
earlier. Net charge-offs for the quarter were $554.0 thousand as
compared to $981.2 thousand in 1997.  Year to date net charge-
offs totaled $1.1 million, down from $1.4 million a year earlier.

     Nonperforming assets (loans 90 days past due, nonaccrual,
and owned real estate) were $12.6 million or 0.73% of total
assets at June 30, 1998, up from $9.5 million or 0.64% at
December 31, 1997 and $9.4 million or 0.72% at December 31, 1996.
The most significant increases occurred at the mortgage bank
where nonperforming assets were up $2.9 million from year end
1997. Although most mortgages are either government-insured or
conform to the underwriting guidelines of the government-
sponsored agencies that support the secondary mortgage market,
the mortgage bank has credit risk on those loans that are not
eligible for government insurance or that must be repurchased from
agencies due to lack of conformity to underwriting guidelines.
Over the last two years, the government-sponsored agencies which
provide credit enhancement on the loans underwritten by the
mortgage bank have become more stringent in their adherence to
their right to seek recourse from the originator of loans.  As
such, the mortgage bank has had an increase in the number of
loans it has repurchased from the agencies.  This has resulted in
an increase in the nonperforming loans and other real estate
owned at the mortgage bank.  The mortgage bank seeks to cure the
underwriting defect in these loans and resell them to the
agencies or sell them to alternative investors.

      Additionally, during 1997 the mortgage bank entered into
the nonprime mortgage market which is comprised of borrowers who
do not qualify under the underwriting guidelines established by
the government-sponsored agencies for conforming first mortgages.
The majority of these loans are sold on a non-recourse, service
released basis to private investors.  However, the mortgage bank
retains the credit risk on any loans that are not sold.


Nonperforming Assets     June 30,   December 31,   December 31,
(In Thousands)               1998           1997           1996
                                                               
Accruing loans past              
due
90 days or more:
     Real Estate             $332           $534           $234
     Commercial               735            382            256
     Leasing                    0              0              0
     Consumer                 182             86            205
          Subtotal          1,249          1,002            695
                                                               
Nonaccrual loans:
     Real Estate            6,012          5,333          2,481
     Commercial             1,151            777          2,739
     Leasing                1,054            506          1,261
     Consumer                 310             63              0
          Subtotal          8,527          6,679          6,481
Total nonperforming         9,776          7,681          7,176
loans
                                                               
Other real estate           2,817          1,828          2,239
owned
                                                               
Total nonperforming                                            
assets                    $12,593         $9,509         $9,415
                                                               
Nonperforming assets                                           
to                          0.73%          0.64%          0.72%
total assets


Liquidity

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

Interest Rate Sensitivity

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

The following table shows in summary form the Corporation's
interest rate sensitivity based on expected interest rate
repricing intervals for the balance sheet as of June 30, 1998 (a
"gap" analysis).  For example, a 30-year adjustable rate
residential mortgage held in the portfolio of Irwin Union Bank is
included in the "4-12 month" category since that is the time
frame over which the asset will reprice.  Fixed rate assets and
liabilities such as mortgage servicing rights and the escrow
deposits associated with them are analyzed based on their
expected maturities which reflect estimated pre-payment
characteristics, rather than their maximum contractual
maturities.  Some items, such as certain deposit accounts, are
non-interest bearing, but will vary in balance due to interest
rate changes.  Since the Corporation relies on such accounts in
its operations and would need to replace them with "at market"
liabilities should the non-interest bearing ones be unavailable,
they are included in the gap table and in simulations as "non-
market" items.

<TABLE>
<CAPTION>
<S>               <C>       <C>       <C>       <C>        <C>        <C>       <C>
                  Within      4-12       1-5       Over 5    Subtotal    Non-       Total
                     3       Months     Years       Years              market
                  Months      
(In Thousands)                                                          

Assets:                                                                          
Interest-bearing   $9,359     $4,209       $794        0     $14,362         0    $14,362
deposits with
banks
Federal Funds      13,000          0          0        0      13,000         0     13,000
Sold
Taxable            32,721     13,078     28,671    5,884      80,354         0     80,354
investment
securities
Tax-exempt            470        501          0    4,737       5,708         0      5,708
investment
securities
Mortgages held    684,620     71,981          0        0     756,601         0    756,601
for sale                 
Loans, net of     256,737     43,100    151,270  101,935     553,042         0    553,042
unearned                
income
                  996,907    132,869   180,735   112,556   1,423,067         0  1,423,067
Total interest-                                                                
earning assets
                                                                                 
 Liabilities:                                                                    
Non-interest            0          0         0         0           0  $368,189   $368,189
bearing deposits                                                     
                   27,872          0    45,278    11,396      84,546         0     84,546
Money Market
checking
Money Market        1,695          0     4,712         0       6,407         0      6,407
savings
Regular savings    26,693      1,915    10,212     7,890      46,710         0     46,710
Time deposits     229,164     79,622    58,351       463     367,600         0    367,600
                                                                   
Short-term        582,840          0         0         0     582,840         0    582,840
borrowings              
Long-term debt        852      2,026     6,838         0       9,716         0      9,716
Total interest-   869,116     83,563   125,391    19,749   1,097,819   368,189  1,466,008
bearing                                                                        
liabilities
Trust preferred         0          0         0    50,000      50,000         0     50,000
securities
                  127,791     49,306    55,344    42,807     275,248  (368,189)  (92,941)
Interest                                                           
sensitivity gap
                                                                                 
Cumulative        $127,791  $177,097  $232,441  $275,248              $(92,941)           
interest                                                       
sensitivity gap                   
</TABLE>

As the above table shows, the consolidated one-year gap at June
30, 1998 was a positive $177.1 million.  This compares to a
positive gap of $215.4 million at March  31, 1998.

Since the gap was positive at June 30, 1998, it means that the
Corporation's net interest income was positioned to benefit from
rising rates, or to be harmed by declining rates. While
traditional interest rate risk focuses on the changes in net
interest income due to interest rate changes, the Corporation
engages in other activities which are also affected by interest
rate changes.  Principal among these are mortgage loan
origination and servicing. Through the use of simulations using
regression modeling and option-adjusted valuation techniques for
modeling expected customer behavior, the Corporation attempts to
analyze and mitigate the interest rate risks associated with the
negatively correlated activities of mortgage loan origination and
servicing.  For example, if interest rates decline, management
expects an increase in mortgage loan origination income and a
decline in the value of mortgage servicing rights.  Management
attempts to monitor this exposure to traditional interest rate
risk as well as interest rate influences on production and
servicing value in a comprehensive manner.


Capital Adequacy

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

                     Ratio                                        
                  required to       June     December     December
                 be considered       30,          31,          31,
                     well-          1998         1997         1996
                  capitalized

Equity to Assets          n/a       7.63%        8.55%        9.15%
Risk-Based Capital       10.0%     14.41%       14.85%       12.88%
Tier I Capital            6.0%     13.24%       13.56%       12.20%
Tier I Leverage           5.0%     10.65%       12.06%        9.84%
                                                                  

Year 2000

     The Year 2000 issue is the result of practices within the
information technology industry initiated years ago to program
software and computer chips to store dates in a six digit,
shortcut format.  For example, January 15, 1998, may be written
as 01/15/98 and the computer is programmed to assume that the
first two digits of the year are "19".  As a result, certain
computer systems will not accurately interpret dates beyond
December 31, 1999, and will consider dates beginning January 1,
2000 to represent January 1, 1900.  This could result in a
computer failure or miscalculations, causing operating
disruptions, including an inability to process transactions, send
invoices or engage in similar normal business activities.  The
Year 2000 issue exists across all industries and could affect all
businesses that use computers, but is particularly relevant in
the financial services industry served by the Corporation.
     
     The Corporation is actively addressing its exposure to the
Year 2000 issue and has five teams (one at each of its four
operating entities and at the parent company) focusing on the
issue.  The Corporation has developed a six-stage project plan
that is expected to culminate in final testing and implementation
by mid-1999.  The six stages include:  (i) an awareness campaign
throughout the Corporation to raise the level of importance and
attention beyond that of a typical "information technology"
issue; (ii) assessment of the Corporation's Year 2000 problem,
including contract review, a technical audit and an estimation of
remediation costs;  (iii) remediation of non-compliant systems
through repairs, upgrades or replacements of computer programs
and chips; (iv) testing of the Corporation's systems for Year
2000 compliance; (v) implementation of the remediated systems and
(vi) auditing of the completed processes and remediation for post-
year 2000 compliance.  The Corporation has engaged a leading
technology-consulting firm to increase its level of confidence
that the methods and standards it employs to address the Year
2000 issue are appropriate and comprehensive.
     
     The Corporation, together with its consultants, is currently
in varying stages of the assessment, remediation and testing
steps of its plan and cannot definitively estimate the extent of
the problem for the Corporation or the cost to remedy it.
However, the Corporation does not currently believe that the
costs of the remediation will have a material impact on the
Corporation's results of operations, liquidity and capital.
     
     The Corporation has developed a technology strategy that
primarily uses systems developed by third parties and has very
few internally developed applications.  Consequently, the
Corporation's principal focus is on assuring Year 2000 compliance
from its commercial application vendors.  In those instances
where the Corporation believes a vendor may not be compliant in a
timely manner, the Corporation is taking additional steps to
address its needs with alternative systems.

     Financial services require exact calculations and prompt
delivery.  If the Corporation's products are not accurate and
timely, it increases its exposure to risks such as client service
failure, regulatory compliance problems and disruption of third
party operations when it interacts with third parties.
     
     The Corporation currently expects to implement the necessary
changes to ensure that its internal operations are Year 2000
compliant prior to December 31, 1999.  To achieve this goal, the
Corporation is reliant upon its information system vendors to
provide Year 2000 compliant systems sufficiently before December
31, 1999 to allow ample time to test the systems.  There can be
no assurance that all of the Corporation's key suppliers will
achieve Year 2000 compliance in a timely manner. The failure of
the Corporation's vendors to successfully address the Year 2000
issue in a timely manner would have a materially adverse effect
on the Corporation's ability to successfully address the Year
2000 issue.  In addition, if the Year 2000 issue adversely
affects the Corporation's customers, this in turn could have a
material adverse effect on the Corporation's ability to collect
and service outstanding loans. Finally, even if the Corporation's
internal operations and customers are Year 2000 compliant, the
Corporation's operations can be materially adversely affected if
agencies and third parties (such as the Federal Reserve) with
whom the Corporation interacts fail to address the Year 2000
issue successfully.
     
     Any of the failures mentioned above could have a material
adverse effect on the financial condition and results of
operations of the Corporation.


PART II
                                
                        Other Information
                                
                                
Item 4.  Submission of Matters to a Vote of Security Holders


a.   The Annual Meeting of Shareholders of Registrant was held on
April 30, 1998.

b.   The following directors were elected at the meeting:


                        Affirmative  Negative     Votes      Votes
                              Votes     Votes  Withheld  Abstained
                                                        
     Sally A. Dean       10,275,813    69,456        93     18,824
     David W. Goodrich   10,275,763    69,456       143     18,824
     John T. Hackett     10,275,773    69,456       133     18,824
     William H. Kling    10,233,143    69,456    42,763     18,824
     Brenda J. Lauderback10,234,704    69,456    41,202     18,824
     John C. McGinty     10,238,296    69,456    37,610     18,824
     Irwin Miller         9,983,240    69,456   292,666     18,824
     William I. Miller   10,273,906    69,456     2,000     18,824
     John A. Nash        10,275,906    69,456         0     18,824
     Lance R. Odden      10,236,468    69,456    39,438     18,824
     Theodore M. Solso   10,275,633    69,456       273     18,824
                                                        

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

     Confirmation of independent auditors, Coopers & Lybrand, of
the Registrant.  10,258,361 affirmative, 65,255 negative, 40,230
abstained

                                
                                
                             PART II
                                
                             Item 6

(a)  Exhibits to Form 10-Q

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

(2)                 No Exhibit

(3)                 No Exhibit

(4)                 No Exhibit

(10)                No Exhibit

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

(15)                No Exhibit

(18)                No Exhibit

(19)                No Exhibit

(22)                No Exhibit

(23)                No Exhibit

(24)                No Exhibit

(27)                Financial Data Schedule
 
(99)                No Exhibit



(b)  Reports on Form 8-K

None




                           SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

                              IRWIN FINANCIAL CORPORATION

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


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