./2 HC d 1$&%*3'IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES-'CONSOLIDATED BALANCE SHEET (Unaudited)('(In thousands, except for shares)^June 30, ^Dec 31, 'Assets: ^2000 ^1999'Cash and due from banks"$51,999"$47,215'Federal funds sold "10,000 "0 'Cash and cash equivalents  "61,999  "47,215< 'Interest-bearing deposits with financial institutions  "34,595  "26,785 'Trading assets  "96,094  "59,025; 'Investment securities (Market value: $36,400 in 2000  "36,754  "37,508$ 'and $37,464 in 1999) - Note 2#'Loans held for sale - Note 3"543,673"508,9978'Loans and leases, net of unearned income - Note 4"939,025"733,4249'Less: Allowance for loan and lease losses - Note 5"(10,054)"(8,555)"928,971"724,869 'Servicing assets - Note 6"139,876"138,500'Accounts receivable "54,016 "49,415"'Accrued interest receivable "12,488 "8,430'Premises and equipment "27,540 "23,368'Other assets "57,005 "56,735"$1,993,011"$1,680,847,'Liabilities and Shareholders' Equity:'Deposits'Noninterest-bearing"$263,661"$218,402'Interest-bearing"487,017"411,400,'Certificates of deposit over $100,000"479,821"240,516"1,230,499"870,318$'Short-term borrowings- Note 7"410,971"473,103'Long-term debt- Note 8 "29,585 "29,784 'Other liabilities "101,032 "100,275!'Total liabilities!"1,772,087!"1,473,4800"'Company-obligated mandatorily redeemable 7#'preferred securities of subsidiary trust- Note 9 $"48,107 $"48,071%'Shareholders' equityC&'Preferred stock, no par value - authorized 4,000,000 shares;+'' issued 96,336 shares as of June 30,,('2000 and none as of December 31, 1999(" ("  )"1,386)"0A*'Common stock; no par value - authorized 40,000,000 shares;/+' issued 23,402,080 shares as of June 30,;,'2000 and December 31, 1999; including 2,430,488 and 2-'2,297,303 shares in treasury as of June 30,..'2000 and December 31, 1999 respectively /"29,965 /"29,965!0'Additional paid-in capital 0"4,334 0"4,25011'Unrealized losses on investment securities 1"(105) 1"(70)2'Retained earnings2"185,5702"171,1013"221,1503"205,246#4'Less treasury stock, at cost4"(48,333)4"(45,950)!5'Total shareholders' equity5"172,8175"159,2966"$1,993,0116"$1,680,847.8'The accompanying notes are an integral 59'part of the consolidated financial statements.3;'IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES3<'CONSOLIDATED STATEMENT OF INCOME (Unaudited)>^Three Months Ended>^Three Months Ended?^June 30,?^June 30,+@'(In thousands, except for per share) @^2000 @^1999A'Interest income:B'Loans and leasesB"$19,322B"$12,450C'Investment securities:D'Taxable D"999 D"981E'Tax-exempt E"64 E"69F'Loans held for sale F"19,610 F"14,972G'Trading Account G"2,682 G"1,589H'Federal funds sold H"47 H"274I'Total interest income I"42,724 I"30,335J'Interest expense:K'Deposits K"11,550 K"5,755L'Short-term borrowings L"9,050 L"5,612M'Long-term debt M"580 M"1,186N'Total interest expense N"21,180 N"12,553O'Net interest income O"21,544 O"17,7823P'Provision for loan and lease losses - Note 5 P"1,119 P"2,330.Q'Net interest income after provision forR'loan and lease losses R"20,425 R"15,452S'Other income:T'Loan origination fees T"9,052 T"12,613U'Gain from sales of loans U"21,718 U"25,834V'Loan servicing fees V"14,802 V"15,9436W'Amortization and impairment of servicing assets W"6,708 W"4,573%X'Net loan administration income X"8,094 X"11,370)Y'Gain on sale of mortgage servicing Y"5,471 Y"478Z'Trading gains (losses) Z"4,902 Z"(639)%['Brokerage fees and commissions ["497 ["411\'Trust fees \"683 \"544*]'Service charges on deposit accounts ]"472 ]"445/^'Insurance commissions, fees and premiums ^"1,363 ^"976 _'Other _"627 _"1,444 `"52,879 `"53,476a'Other expense:b'Salaries b"29,527 b"28,808*c'Pension and other employee benefits c"5,256 c"4,511d'Office expense d"3,244 d"3,058e'Premises and equipment e"7,048 e"5,804 f'Marketing and development f"3,934 f"2,337 g'Other g"9,026 g"10,263 h"58,035 h"54,781!i'Income before income taxes i"15,269 i"14,147!j'Provision for income taxes j"5,590 j"5,360 k"9,679 k"8,7874l'Distribution on company-obligated mandatorily:m'redeemable preferred securities of subsidiary trust m"1,174 m"1,1742n'Net income available to common shareholders n"$8,505 n"$7,613Do'Earnings per share of common stock available to shareholders:p'Basic - Note 10 p"$0.41 p"$0.35q'Diluted - Note 10 q"$0.40 q"$0.35*r'Dividends per share of common stock r"$0.06 r"$0.05-t'The accompanying notes are an integral6u' part of the consolidated financial statements.3w'IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES3x'CONSOLIDATED STATEMENT OF INCOME (Unaudited)z^Six Months Endedz^Six Months Ended{^June 30,{^June 30,+|'(In thousands, except for per share) |^2000 |^1999}'Interest income:~'Loans and leases~"$39,532~"$24,230'Investment securities:'Taxable "1,928 "1,987'Tax-exempt "127 "141'Loans held for sale "31,648 "32,413'Trading Account "5,166 "2,875'Federal funds sold "93 "417'Total interest income "78,494 "62,063'Interest expense:'Deposits "20,010 "11,420'Short-term borrowings "15,498 "12,457'Long-term debt "1,163 "2,478'Total interest expense "36,671 "26,355'Net interest income "41,823 "35,7083'Provision for loan and lease losses - Note 5 "2,254 "3,5317'Net interest income after provision for loan and'lease losses "39,569 "32,177'Other income:'Loan origination fees "16,566 "26,028'Gain from sales of loans "40,320 "57,416'Loan servicing fees "29,923 "31,3756'Amortization and impairment of servicing assets "12,809 "5,902%'Net loan administration income "17,114 "25,473)'Gain on sale of mortgage servicing "5,723 "2,829'Trading gains (losses) "8,291"(10,386)%'Brokerage fees and commissions "1,032 "763'Trust fees "1,165 "1,120*'Service charges on deposit accounts "912 "847/'Insurance commissions, fees and premiums "2,555 "1,402 'Other "9,339 "2,569"103,017"108,061'Other expense:'Salaries "55,482 "57,407*'Pension and other employee benefits "10,924 "9,984'Office expense "6,513 "6,415'Premises and equipment "13,105 "11,472 'Marketing and development "8,712 "5,138 'Other "17,236 "19,413"111,972"109,829!'Income before income taxes "30,614 "30,409!'Provision for income taxes "11,279 "11,476 "19,335 "18,9334'Distribution on company-obligated mandatorily:'redeemable preferred securities of subsidiary trust "2,348 "2,3482'Net income available to common shareholders"$16,987"$16,585D'Earnings per share of common stock available to shareholders:'Basic - Note 10 "$0.81 "$0.77'Diluted - Note 10 "$0.80 "$0.76*'Dividends per share of common stock "$0.12 "$0.10\'The accompanying notes are an integral part of the consolidated financial statements.^Unrealized3'IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES^Gains/Losses@'CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY ^on^Additional8'FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999^Retained^Investment ^Common^Paid in^Treasury^Preferred'(Unaudited) ^Total^Earnings^Securities ^Stock^Capital ^Stock ^Stock'(In thousands)'Balance at April 1, 2000"$165,256"$178,324 "($112)"$29,965 "$4,387"($48,695) "$1,387!'Comprehensive Income: Note"1'Net Income "8,505!'Other Comprehensive Income"7 'Total "8,512'Cash dividends"(1,259)"(1,259)!'Purchase of treasury stock "(332) "(332)'Sales of treasury stock "641 "(53) "694'Preferred stock issued "(1) "(1)'Balance June 30, 2000"$172,817"$185,570 "($105)"$29,965 "$4,334"($48,333) "$1,386'Balance at April 1, 1999"$153,566"$150,119 "$44"$29,965 "$2,881"($29,443) "$0!'Comprehensive Income: Note"1'Net Income "7,613!'Other Comprehensive Income "(53) 'Total "7,560'Cash dividends"(1,077)"(1,077)!'Purchase of treasury stock"(7,119)"(7,119)'Sales of treasury stock "(180)"(1,362) "1,182'Balance June 30, 1999"$152,750"$156,655 "($9)"$29,965 "$1,519"($35,380) "$0-'The accompanying notes are an integral6' part of the consolidated financial statements.^Unrealized^Gains/Losses ^on^Additional6'FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999^Retained^Investment ^Common^Paid in^Treasury^Preferred'(Unaudited) ^Total^Earnings^Securities ^Stock^Capital ^Stock ^Stock'(In thousands)!'Balance at January 1, 2000"$159,296"$171,101 "($70)"$29,965 "$4,250"($45,950) "$0#'Comprehensive Income: Note 1'Net Income "16,987!'Other Comprehensive Income "(35) 'Total "16,952'Cash dividends"(2,518)"(2,518)!'Purchase of treasury stock"(3,384)"(3,384)'Sales of treasury stock "1,085 "84 "1,001'Preferred stock issued "1,386 "1,386'Balance June 30, 2000"$172,817"$185,570 "($105)"$29,965 "$4,334"($48,333) "$1,386!'Balance at January 1, 1999"$145,233"$142,232 "$85"$29,965 "$2,595"($29,644) "$0#'Comprehensive Income: Note 1'Net Income "16,585!'Other Comprehensive Income "(94) 'Total "16,491'Cash dividends"(2,162)"(2,162)!'Purchase of treasury stock"(7,119)"(7,119)'Sales of treasury stock "307"(1,076) "1,383'Balance June 30, 1999"$152,750"$156,655 "($9)"$29,965 "$1,519"($35,380) "$0.'The accompanying notes are an integral 5'part of the consolidated financial statements.3'IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES7'CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)('For the six months ended June 30, ^2000 ^1999'(In thousands)'Net income"$16,987"$16,585B'Adjustments to reconcile net income to cash provided (used)'by operating activities$'Depreciation and amortization "4,103 "1,2606'Amortization and impairment of servicing assets "12,809 "1,298*'Provision for loan and lease losses "2,254 "3,531<'Amortization of premiums, less accretion of discounts "(72) "1,0821'(Increase) decrease in loans held for sale"(34,676)"361,641)'Gain on sale of mortgage servicing"(5,723)"(22,340)%'Net increase in trading assets"(37,069)"(15,441)'Other, net"(9,419) "17,1927'Net cash provided (used) by operating activities"(50,806)"364,808('Lending and investing activities:?'Proceeds from maturities/calls of investment securities:'Held-to-Maturity "802 "5,222'Available-for-Sale "17 "190)'Purchase of investment securities:'Held-to-Maturity "(51)"0'Available-for-Sale"0"(2,940)''Net increase in interest-bearing+'deposits with financial institutions"(7,810)"(10,003)-'Net increase in loans, excluding sales"(213,609)"(82,631)'Sale of loans "7,253 "22,928-'Additions to mortgage servicing assets"(27,655)"(69,884)6'Proceeds from sale of mortgage servicing assets "19,193 "75,726 'Other, net "(6,969) "(2,448)8 'Net cash used by lending and investing activities "(228,829) "(63,840) 'Financing activities:* 'Net increase (decrease) in deposits "360,181 "(101,108)7 'Net increase (decrease) in short-term borrowings "(62,132) "(209,192)#'Repayments of long-term debt "(199) "(356)"'Issuance of preferred stock "1,386"0!'Purchase of treasury stock"(3,384)"(7,119)='Proceeds from sale of stock for employee benefit plans "1,085 "307'Dividends paid"(2,518)"(2,162)7'Net cash provided (used) by financing activities"294,419"(319,630);'Net increase (decrease) in cash and cash equivalents "14,784"(18,662)7'Cash and cash equivalents at beginning of period "47,215 "77,5221'Cash and cash equivalents at end of period"$61,999"$58,8609'Supplemental disclosures of cash flow information:#'Cash paid during the period:'Interest"$34,208"$26,227'Income taxes "$4,239 "$8,219-'The accompanying notes are an integral6' part of the consolidated financial statements.