##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended
    
    Commission File NumberJune 30, 2005
    
    000-21329
 TIB FINANCIAL CORP.
  FLORIDA
    
    65-0655973(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 th
 
    
   þ o
 þ o
  Common Stock, $0.10 Par Value
    
    5,747,540Class
    
    Outstanding as of July 31, 2005
   1




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TABLE OF CONTENTS  Part I. FINANCIAL INFORMATIONItem 1. Financial StatementsItem 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSItem 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKItem 4. CONTROLS AND PROCEDURESPart II. OTHER INFORMATIONItem 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSItem 5. OTHER INFORMATIONItem 6. EXHIBITSSIGNATURESEx-31.1 Section 302 CEO CertificationEx-31.2 Section 302 CFO CertificationEx-32.1 Section 906 CEO CertificationEx-32.2 Section 906 CFO Certification    Table of Contents  
 Part I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 TIB FINANCIAL CORP.
 CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
 June 30, 2005
    
    December 31, 2004(Unaudited)ASSETSCash and due from banks
    
    $
    20,488
    
    
    $
    27,410Federal funds sold
    
    
    77,550
    
    
    
    15,528Cash and cash equivalents
    
    
    98,038
    
    
    
    42,938Investment securities available for sale
    
    
    86,992
    
    
    
    77,807Loans, net of deferred loan costs and fees
    
    
    775,759
    
    
    
    655,678Less: allowance for loan losses
    
    
    7,013
    
    
    
    6,243Loans, net
    
    
    768,746
    
    
    
    649,435Premises and equipment, net
    
    
    25,810
    
    
    
    27,559Goodwill
    
    
    155
    
    
    
    155Intangible assets, net
    
    
    1,247
    
    
    
    1,392Accrued interest receivable and other assets
    
    
    31,897
    
    
    
    30,039TOTAL ASSETS
    
    $
    1,012,885
    
    
    $
    829,325LIABILITIESDeposits:Noninterest-bearing demand
    
    $
    213,328
    
    
    $
    152,035Interest-bearing
    
    
    656,881
    
    
    
    535,824Total Deposits
    
    
    870,209
    
    
    
    687,859Federal Home Loan Bank (FHLB) advances
    
    
    25,000
    
    
    
    35,000Short-term borrowings
    
    
    17,593
    
    
    
    12,157Long-term borrowings
    
    
    17,000
    
    
    
    18,250Accrued interest payable and other liabilities
    
    
    12,343
    
    
    
    7,945TOTAL LIABILITIES
    
    
    942,145
    
    
    
    761,211SHAREHOLDERS EQUITYPreferred stock  no par value: 5,000,000
shares authorized, 0 and 0 shares
issued
    
    
    
    
    
    
    Common stock  $.10 par value: 20,000,000
and 7,500,000 shares authorized, 5,712,264
and 5,679,239 shares issued
    
    
    571
    
    
    
    568Additional paid in capital
    
    
    38,715
    
    
    
    38,284Retained earnings
    
    
    31,386
    
    
    
    28,968Accumulated other comprehensive income
    
    
    68
    
    
    
    294TOTAL SHAREHOLDERS EQUITY
    
    
    70,740
    
    
    
    68,114TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY
    
    $
    1,012,885
    
    
    $
    829,325
  2




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##### Table of Contents



TIB FINANCIAL CORP.
 CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands, except earnings per share amounts)
 Three months ended
    
    Six months endedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004INTEREST AND DIVIDEND INCOMELoans, including fees
    
    $
    12,934
    
    
    $
    8,960
    
    
    $
    24,244
    
    
    $
    17,560Investment securities:Taxable
    
    
    708
    
    
    
    633
    
    
    
    1,344
    
    
    
    1,044Tax exempt
    
    
    161
    
    
    
    172
    
    
    
    321
    
    
    
    325Interest bearing deposits in other bank
    
    
    2
    
    
    
    4
    
    
    
    6
    
    
    
    5Federal Home Loan Bank Stock
    
    
    31
    
    
    
    9
    
    
    
    58
    
    
    
    24Federal funds sold
    
    
    389
    
    
    
    41
    
    
    
    598
    
    
    
    79TOTAL INTEREST AND DIVIDEND INCOME
    
    
    14,225
    
    
    
    9,819
    
    
    
    26,571
    
    
    
    19,037INTEREST EXPENSEDeposits
    
    
    3,895
    
    
    
    1,980
    
    
    
    6,996
    
    
    
    3,872Federal Home Loan Bank advances
    
    
    193
    
    
    
    70
    
    
    
    368
    
    
    
    164Short-term borrowings
    
    
    110
    
    
    
    12
    
    
    
    183
    
    
    
    21Long term borrowings
    
    
    391
    
    
    
    396
    
    
    
    774
    
    
    
    791TOTAL INTEREST EXPENSE
    
    
    4,589
    
    
    
    2,458
    

    
    
    8,321
    
    
    
    4,848NET INTEREST INCOME
    
    
    9,636
    
    
    
    7,361
    
    
    
    18,250
    
    
    
    14,189PROVISION FOR LOAN LOSSES
    
    
    730
    
    
    
    649
    
    
    
    1,316
    
    
    
    1,018NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
    
    
    8,906
    
    
    
    6,712
    
    
    
    16,934
    
    
    
    13,171NON-INTEREST INCOMEService charges on deposit accounts
    
    
    567
    
    
    
    637
    
    
    
    1,175
    
    
    
    1,281Investment securities gains, net
    
    
    
    
    
    
    52
    
    
    
    
    
    
    
    96Merchant bankcard processing income
    
    
    1,762
    
    
    
    1,534
    
    
    
    3,658
    
    
    
    3,294Fees on mortgage loans sold
    
    
    582
    
    
    
    645
    
    
    
    1,074
    
    
    
    1,043Other income
    
    
    668
    
    
    
    463
    
    
    
    1,066
    
    
    
    890TOTAL NON-INTEREST INCOME
    
    
    3,579
    
    
    
    3,331
    
    
    
    6,973
    
    
    
    6,604NON-INTEREST EXPENSESalaries and employee benefits
    
    
    4,410
    
    
    
    3,614
    
    
    
    8,622
    
    
    
    7,056Net occupancy expense
    
    
    1,349
    
    
    
    1,191
    
    
    
    2,625
    
    
    
    2,313Other expense
    
    
    3,311
    
    
    
    3,348
    
    
    
    6,876
    
    
    
    6,578TOTAL NON-INTEREST EXPENSE
    
    
    9,070
    
    
    
    8,153
    
    
    
    18,123
    
    
    
    15,947INCOME BEFORE INCOME TAX EXPENSE
    
    
    3,415
    
    
    
    1,890
    
    
    
    5,784
    
    
    
    3,828INCOME TAX EXPENSE
    
    
    1,231
    
    
    
    633
    
    
    
    2,053
    
    
    
    1,298NET INCOME
    
    $
    2,184
    
    
    $
    1,257
    
    
    $
    3,731
    
    
    $
    2,530BASIC EARNINGS PER SHARE:
    
    $
    0.38
    
    
    $
    0.23
    
    
    $
    0.66
    
    
    $
    0.51DILUTED EARNINGS PER SHARE:
    
    $
    0.37
    
    
    $
    0.22
    
    
    $
    0.64
    
    
    $
    0.49
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TIB FINANCIAL CORP.
 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
(Unaudited)
(dollars in thousands, except per share amounts)
 AccumulatedAdditional
    
    
    
    
    
    Other
    
    TotalCommon
    
    Paid in
    
    Retained
    
    Comprehensive
    
    ShareholdersShares
    
    Stock
    
    Capital
    
    Earnings
    
    Income (Loss)
    
    EquityBalance,April 1, 2005
    
    
    5,706,939
    
    
    $
    571
    
    
    $
    38,629
    
    
    $
    29,859
    
    
    $
    (780
    )
    
    $
    68,279Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,184
    
    
    
    
    
    
    
    2,184Other comprehensive income, net of tax
expense of $509:Net market valuation adjustment on
securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    848Other comprehensive income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    848Comprehensive income
    
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,032Exercise of stock options
    
    
    5,325
    
    
    
    
    
    
    
    58
    
    
    
    
    
    
    
    
    
    
    
    58Income tax benefit from stock options exercised
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    28Cash dividends declared, $.115 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (657
    )
    
    
    
    
    
    
    (657
    )Balance,June 30, 2005
    
    
    5,712,264
    
    
    $
    571
    
    
    $
    38,715
    
    
    $
    31,386
    
    
    $
    68
    
    
    $
    70,740
 AccumulatedAdditional
    
    
    
    
    
    Other
    
    TotalCommon
    
    Paid in
    
    Retained
    
    Comprehensive
    
    ShareholdersShares
    
    Stock
    
    Capital
    
    Earnings
    
    Income (Loss)
    
    EquityBalance,April 1, 2004
    
    
    4,489,064
    
    
    $
    449
    
    
    $
    14,797
    
    
    $
    26,971
    
    
    $
    1,058
    
    
    $
    43,275Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,257
    
    
    
    
    
    
    
    1,257Other comprehensive income, net of tax
benefit of $1,290:Net market valuation adjustment on
securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,106
    )Less: reclassification adjustment for gainsincluded in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33
    )Other comprehensive income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,139
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (882
    )Public offering of 1,150,000 shares
    
    
    1,150,000
    
    
    
    115
    
    
    
    23,115
    
    
    
    
    
    
    
    
    
    
    
    23,230Exercise of stock options
    
    
    18,893
    
    
    
    2
    
    
    
    105
    
    
    
    
    
    
    
    
    
    
    
    107Income tax benefit from stock options exercised
    
    
    
    
    
    
    
    
    
    
    73
    
    
    
    
    
    
    
    
    
    
    
    73Cash dividends declared, $.1125 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (637
    )
    
    
    
    
    
    
    (637
    )Balance,June 30, 2004
    
    
    5,657,957
    
    
    $
    566
    
    
    $
    38,090
    
    
    $
    27,591
    
    
    $
    (1,081
    )
    
    $
    65,166
  4




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##### Table of Contents



AccumulatedAdditional
    
    
    
    
    
    Other
    
    TotalCommon
    
    Paid in
    
    Retained
    
    Comprehensive
    
    ShareholdersShares
    
    Stock
    
    Capital
    
    Earnings
    
    Income (Loss)
    
    EquityBalance,January 1, 2005
    
    
    5,679,239
    
    
    $
    568
    
    
    $
    38,284
    
    
    $
    28,968
    
    
    $
    294
    
    
    $
    68,114Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,731
    
    
    
    
    
    
    
    3,731Other comprehensive income, net of tax
benefit of $136:Net market valuation adjustment on
securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (226
    )Other comprehensive income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (226
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,505Exercise of stock options
    
    
    33,025
    
    
    
    3
    
    
    
    338
    
    
    
    
    
    
    
    
    
    
    
    341Income tax benefit from stock options exercised
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    
    
    
    
    
    
    
    
    93Cash dividends declared, $.23 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,313
    )
    
    
    
    
    
    
    (1,313
    )Balance,June 30, 2005
    
    
    5,712,264
    
    
    $
    571
    
    
    $
    38,715
    
    
    $
    31,386
    
    
    $
    68
    
    
    $
    70,740
 AccumulatedAdditional
    
    
    
    
    
    Other
    
    TotalCommon
    
    Paid in
    
    Retained
    
    Comprehensive
    
    ShareholdersShares
    
    Stock
    
    Capital
    
    Earnings
    
    Income (Loss)
    
    EquityBalance,January 1, 2004
    
    
    4,431,328
    
    
    $
    443
    
    
    $
    14,255
    
    
    $
    26,203
    
    
    $
    345
    
    
    $
    41,246Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,530
    
    
    
    
    
    
    
    2,530Other comprehensive income, net of tax
benefit of $859:Net market valuation adjustment on
securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,366
    )Less: reclassification adjustment for gainsincluded in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (60
    )Other comprehensive income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,426
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,104Public offering of 1,150,000 shares
    
    
    1,150,000
    
    
    
    115
    
    
    
    23,115
    
    
    
    
    
    
    
    
    
    
    
    23,230Exercise of stock options
    
    
    76,629
    
    
    
    8
    
    
    
    526
    
    
    
    
    
    
    
    
    
    
    
    534Income tax benefit from stock options exercised
    
    
    
    
    
    
    
    
    
    
    194
    
    
    
    
    
    
    
    
    
    
    
    194Cash dividends declared, $.225 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,142
    )
    
    
    
    
    
    
    (1,142
    )Balance,June 30, 2004
    
    
    5,657,957
    
    
    $
    566
    
    
    $
    38,090
    
    
    $
    27,591
    
    
    $
    (1,081
    )
    
    $
    65,166
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TIB FINANCIAL CORP.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE IN CASH AND CASH EQUIVALENTS
(Unaudited)
(dollars in thousands)
 For the six month period endedJune 30,2005
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESNet Income
    
    $
    3,731
    
    
    $
    2,530Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    1,235
    
    
    
    1,072Provision for loan losses
    
    
    1,316
    
    
    
    1,018Deferred income tax benefit
    
    
    (402
    )
    
    
    (360
    )Investment securities net gains
    
    
    
    
    
    
    (96
    )Net (gain) loss on sale/disposal of premises and equipment
    
    
    (312
    )
    
    
    6Mortgage loans originated for sale
    
    
    (66,210
    )
    
    
    (62,472
    )Proceeds from sale of mortgage loans
    
    
    66,645
    
    
    
    60,150Fees on mortgage loans sold
    
    
    (1,074
    )
    
    
    (1,043
    )Increase in accrued interest receivable and other assets
    
    
    (522
    )
    
    
    (628
    )Increase in accrued interest payable and other liabilities
    
    
    4,488
    
    
    
    444NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    8,895
    
    
    
    621CASH FLOWS FROM INVESTING ACTIVITIESPurchases of investment securities available for sale
    
    
    (10,000
    )
    
    
    (38,368
    )Repayments of principal and maturities of investment securities available for sale
    
    
    411
    
    
    
    1,960Sales of investment securities available for sale
    
    
    
    
    
    
    5,099Net sale of FHLB stock
    
    
    129
    
    
    
    325Proceeds from sales of government guaranteed loans
    
    
    
    
    
    
    569Loans originated or acquired, net of principal repayments
    
    
    (119,774
    )
    
    
    (52,751
    )Purchases of premises and equipment
    
    
    (738
    )
    
    
    (4,317
    )Sales of premises and equipment
    
    
    609
    
    
    
    4NET CASH USED BY INVESTING ACTIVITIES
    
    
    (129,363
    )
    
    
    (87,479
    )CASH FLOWS FROM FINANCING ACTIVITIESNet increase in federal funds purchased and securities sold under agreements to repurchase
    
    
    5,436
    
    
    
    2,832Net increase (repayment) of FHLB short-term advances
    
    
    (10,000
    )
    
    
    3,500Repayments of FHLB long-term advances
    
    
    
    
    
    
    (10,000
    )Repayments of notes payable
    
    
    (1,250
    )
    
    
    Net increase in demand, money market and savings accounts
    
    
    91,829
    
    
    
    49,120Net increase in time deposits
    
    
    90,521
    
    
    
    21,461Proceeds from exercise of stock options
    
    
    341
    
    
    
    534Proceeds from public offering of common stock
    
    
    
    
    
    
    23,230Cash dividends paid
    
    
    (1,309
    )
    
    
    (1,004
    )NET CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    175,568
    
    
    
    89,673NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    55,100
    
    
    
    2,815CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    42,938
    
    
    
    33,681CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    98,038
    
    
    $
    36,496SUPPLEMENTAL DISCLOSURES OF CASH FLOWS:Cash paid for:Interest
    
    $
    7,259
    
    
    $
    5,993Income taxes
    
    
    1,737
    
    
    
    1,135
  6




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TIB FINANCIAL CORP.
 UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(In thousands except for share and per share amounts)
 NOTE 1  BASIS OF PRESENTATION & ACCOUNTING POLICIES
     CRITICAL ACCOUNTING POLICIES
   NOTE 2  ACQUISITIONS AND DIVESTITURES
  7




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NOTE 3  INVESTMENT SECURITIES
  June 30, 2005Amortized
    
    Unrealized
    
    Unrealized
    
    Estimated(dollars in thousands)
    
    Cost
    
    Gains
    
    Losses
    
    Fair ValueU.S. Treasury securities
    
    $
    5,180
    
    
    $
    3
    
    
    $
    55
    
    
    $
    5,128U.S. Government agencies and corporations
    
    
    64,187
    
    
    
    80
    
    
    
    768
    
    
    
    63,499States and political
subdivisions-tax-exempt
    
    
    9,595
    
    
    
    216
    
    
    
    3
    
    
    
    9,808States and political subdivisions-taxable
    
    
    2,690
    
    
    
    78
    
    
    
    
    
    
    
    2,768Marketable equity securities
    
    
    3,000
    
    
    
    490
    
    
    
    
    
    
    
    3,490Mortgage-backed securities
    
    
    2,232
    
    
    
    67
    
    
    
    
    
    
    
    2,299$
    86,884
    
    
    $
    934
    
    
    $
    826
    
    
    $
    86,992
 December 31, 2004Amortized
    
    Unrealized
    
    Unrealized
    
    Estimated(dollars in thousands)
    
    Cost
    
    Gains
    
    Losses
    
    Fair ValueU.S. Treasury securities
    
    $
    5,178
    
    
    $
    5
    
    
    $
    29
    
    
    $
    5,154U.S. Government agencies and corporations
    
    
    54,228
    
    
    
    104
    
    
    
    869
    
    
    
    53,463States and political
subdivisions-tax-exempt
    
    
    9,596
    
    
    
    246
    
    
    
    26
    
    
    
    9,816States and political subdivisions-taxable
    
    
    2,862
    
    
    
    17
    
    
    
    23
    
    
    
    2,856Marketable equity securities
    
    
    3,000
    
    
    
    987
    
    
    
    
    
    
    
    3,987Mortgage-backed securities
    
    
    2,473
    
    
    
    58
    
    
    
    
    
    
    
    2,531$
    77,337
    
    
    $
    1,417
    
    
    $
    947
    
    
    $
    77,807
 NOTE 4  LOANS
  (dollars in thousands)
    
    June 30, 2005
    
    December 31, 2004Real estate mortgage loans:Commercial
    
    $
    411,504
    
    
    $
    351,346Residential
    
    
    75,540
    
    
    
    67,204Farmland
    
    
    4,550
    
    
    
    4,971Construction and vacant land
    
    
    85,134
    
    
    
    49,815Commercial and agricultural loans
    
    
    62,864
    
    
    
    64,622Indirect auto dealer loans
    
    
    108,178
    
    
    
    91,890Home equity loans
    
    
    16,056
    
    
    
    13,856Other consumer loans
    
    
    10,022
    
    
    
    9,817Total loans
    
    
    773,848
    
    
    
    653,521Net deferred loan costs
    
    
    1,911
    
    
    
    2,157Loans, net of deferred loan costs
    
    $
    775,759
    
    
    $
    655,678
 NOTE 5  ALLOWANCE FOR LOAN LOSSES
  (dollars in thousands)
    
    2005
    
    2004Balance, January 1
    
    $
    6,243
    
    
    $
    5,216Provision for loan losses charged to expense
    
    
    1,316
    
    
    
    1,018Loans charged off
    
    
    (604
    )
    
    
    (436
    )Recoveries of loans previously charged off
    
    
    58
    
    
    
    8Balance, June 30
    
    $
    7,013
    

    
    $
    5,806
 8




---



##### Table of Contents



NOTE 6  EARNINGS PER SHARE AND COMMON STOCK
  2005
    
    2004For the three months ended June 30:Basic
    
    
    5,708,745
    
    
    
    5,434,532Dilutive effect of options outstanding
    
    
    176,850
    
    
    
    163,310Diluted
    
    
    5,885,595
    
    
    
    5,597,842For the six months ended June 30:Basic
    
    
    5,693,090
    
    
    
    4,948,550Dilutive effect of options outstanding
    
    
    178,405
    
    
    
    180,072Diluted
    
    
    5,871,495
    
    
    
    5,128,622
  NOTE 7  STOCK-BASED COMPENSATION
   For the three months ended June 30,(dollars in thousands, except per share amounts)
    
    2005
    
    2004Net income, as reported
    
    $
    2,184
    
    
    $
    1,257Stock-based compensation expense determined under fair
value based method, net of tax
    
    
    64
    
    
    
    47Pro forma net income
    
    $
    2,120
    
    
    $
    1,210Basic earnings per share as reported
    
    $
    0.38
    
    
    $
    0.23Pro forma basic earnings per share
    
    
    0.37
    
    
    
    0.22Diluted earnings per share as reported
    
    
    0.37
    
    
    
    0.22Pro forma diluted earnings per share
    
    
    0.36
    
    
    
    0.22
 For the six months ended June 30,(dollars in thousands, except per share amounts)
    
    2005
    
    2004Net income, as reported
    
    $
    3,731
    
    
    $
    2,530Stock-based compensation expense determined under fair
value based method, net of tax
    
    
    126
    
    
    
    119Pro forma net income
    
    $
    3,605
    
    
    $
    2,411Basic earnings per share as reported
    
    $
    0.66
    
    
    $
    0.51Pro forma basic earnings per share
    
    
    0.63
    
    
    
    0.49Diluted earnings per share as reported
    
    
    0.64
    
    
    
    0.49Pro forma diluted earnings per share
    
    
    0.61
    
    
    
    0.47
 9




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##### Table of Contents



NOTE 8  CAPITAL ADEQUACY
  Well
    
    AdequatelyCapitalized
    
    Capitalized
    
    June 30, 2005
    
    December 31, 2004Requirement
    
    Requirement
    
    Actual
    
    ActualTier 1 Capital (to Average Assets)Consolidated
    
    
    35
    %
    
    
    34
    %
    
    
    8.5
    %
    
    
    10.0
    %Bank
    
    
    35
    %
    
    
    34
    %
    
    
    8.9
    %
    
    
    10.5
    %Tier 1 Capital (to Risk Weighted Assets)Consolidated
    
    
    36
    %
    
    
    34
    %
    
    
    9.8
    %
    
    
    10.9
    %Bank
    
    
    36
    %
    
    
    34
    %
    
    
    10.3
    %
    
    
    11.4
    %Total Capital (to Risk Weighted Assets)Consolidated
    
    
    310
    %
    
    
    38
    %
    
    
    11.2
    %
    
    
    12.6
    %Bank
    
    
    310
    %
    
    
    38
    %
    
    
    11.2
    %
    
    
    12.4
    %
  NOTE 9  SEGMENT REPORTING
   Merchant
    
    ParentSix months ended
    
    Community
    
    Bankcard
    
    AndJune 30, 2005
    
    Banking
    
    Processing
    
    Other
    
    TotalsInterest and dividend income
    
    $
    26,571
    
    
    $
    
    
    
    $
    
    
    
    $
    26,571Interest expense
    
    
    7,547
    
    
    
    
    
    
    
    774
    
    
    
    8,321Net interest and dividend income
    
    
    19,024
    
    
    
    
    
    
    
    (774
    )
    
    
    18,250Other income
    
    
    3,295
    
    
    
    3,658
    
    
    
    20
    
    
    
    6,973Depreciation and amortization
    
    
    1,231
    
    
    
    4
    
    
    
    
    
    
    
    1,235Other expense
    
    
    14,944
    
    
    
    3,035
    
    
    
    225
    
    
    
    18,204Pretax segment profit (loss)
    
    $
    6,144
    
    
    $
    619
    
    
    $
    (979
    )
    
    $
    5,784Segment Assets
    
    $
    1,012,233
    
    
    $
    242
    
    
    $
    410
    
    
    $
    1,012,885
 10




---



##### Table of Contents



Merchant
    
    ParentSix months ended
    
    Community
    
    Bankcard
    
    andJune 30, 2004
    
    Banking
    
    Processing
    
    Other
    
    TotalsInterest and dividend income
    
    $
    19,037
    
    
    $
    
    
    
    $
    
    
    
    $
    19,037Interest expense
    
    
    4,057
    
    
    
    
    
    
    
    791
    
    
    
    4,848Net interest and dividend income
    
    
    14,980
    
    
    
    
    
    
    
    (791
    )
    
    
    14,189Other income
    
    
    3,104
    
    
    
    3,294
    
    
    
    206
    
    
    
    6,604Depreciation and amortization
    
    
    1,049
    
    
    
    21
    
    
    
    2
    
    
    
    1,072Other expense
    
    
    12,595
    
    
    
    2,745
    
    
    
    553
    
    
    
    15,893Pretax segment profit (loss)
    
    $
    4,440
    
    
    $
    528
    
    
    $
    (1,140
    )
    
    $
    3,828Segment Assets
    
    $
    760,068
    
    
    $
    30
    
    
    $
    422
    
    
    $
    760,520
 Merchant
    
    ParentThree months ended
    
    Community
    
    Bankcard
    
    AndJune 30, 2005
    
    Banking
    
    Processing
    
    Other
    
    TotalsInterest and dividend income
    
    $
    14,225
    
    
    $
    
    
    
    $
    
    
    
    $
    14,225Interest expense
    
    
    4,198
    
    
    
    
    
    
    
    391
    
    
    
    4,589Net interest and dividend income
    
    
    10,027
    
    
    
    
    
    
    
    (391
    )
    
    
    9,636Other income
    
    
    1,807
    
    
    
    1,762
    
    
    
    10
    
    
    
    3,579Depreciation and amortization
    
    
    616
    
    
    
    2
    
    
    
    
    
    
    
    618Other expense
    
    
    7,649
    
    
    
    1,460
    
    
    
    73
    
    
    
    9,182Pretax segment profit (loss)
    
    $
    3,569
    
    
    $
    300
    
    
    $
    (454
    )
    
    $
    3,415
 Merchant
    
    ParentThree months ended
    
    Community
    
    Bankcard
    
    andJune 30, 2004
    
    Banking
    
    Processing
    
    Other
    
    TotalsInterest and dividend income
    
    $
    9,819
    
    
    $
    
    
    
    $
    
    
    
    $
    9,819Interest expense
    
    
    2,062
    
    
    
    
    
    
    
    396
    
    
    
    2,458Net interest and dividend income
    
    
    7,757
    
    
    
    
    
    
    
    (396
    )
    
    
    7,361Other income
    
    
    1,690
    
    
    
    1,534
    
    
    
    107
    
    
    
    3,331Depreciation and amortization
    
    
    534
    
    
    
    10
    
    
    
    1
    
    
    
    545Other expense
    
    
    6,586
    
    
    
    1,312
    
    
    
    359
    
    
    
    8,257Pretax segment profit (loss)
    
    $
    2,327
    
    
    $
    212
    
    
    $
    (649
    )
    
    $
    1,890
 NOTE 10  SUBSEQUENT EVENT
  11




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##### Table of Contents



Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 FORWARD-LOOKING STATEMENTS
   QUARTERLY SUMMARY
      12




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##### Table of Contents



THREE MONTHS ENDED JUNE 30, 2005 AND 2004
 RESULTS OF OPERATIONS
   NET INTEREST INCOME
     PROVISION FOR LOAN LOSSES
    13




---



##### Table of Contents



NON-INTEREST INCOME
  NON-INTEREST EXPENSE
  INCOME TAXES
  SIX MONTHS ENDED JUNE 30, 2005 AND 2004
 RESULTS OF OPERATIONS
   NET INTEREST INCOME
   14




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15




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##### Table of Contents



2005
    
    2004Average
    
    Income/
    
    Yields/
    
    Average
    
    Income/
    
    Yields/(dollars in thousands)
    
    Balances
    
    Expense
    
    Rates
    
    Balances
    
    Expense
    
    RatesInterest-earning assets:Loans (1)(2)
    
    $
    716,103
    
    
    $
    24,246
    
    
    
    6.83
    %
    
    $
    558,197
    
    
    $
    17,562
    
    
    
    6.33
    %Investment securities (2)
    
    
    77,381
    
    
    
    1,630
    
    
    
    4.25
    %
    
    
    60,830
    
    
    
    1,355
    
    
    
    4.48
    %Marketable equity securities  90% tax
exempt (2)
    
    
    3,562
    
    
    
    193
    
    
    
    10.93
    %
    
    
    3,448
    
    
    
    175
    
    
    
    10.23
    %Interest-bearing deposits in other banks
    
    
    463
    
    
    
    6
    
    
    
    2.53
    %
    
    
    948
    
    
    
    5
    
    
    
    0.98
    %Federal Home Loan Bank stock
    
    
    2,669
    
    
    
    58
    
    
    
    4.38
    %
    
    
    1,518
    
    
    
    24
    
    
    
    3.21
    %Federal funds sold
    
    
    43,732
    
    
    
    598
    
    
    
    2.76
    %
    
    
    17,038
    
    
    
    79
    
    
    
    0.94
    %Total interest-earning assets
    
    
    843,910
    
    
    
    26,731
    
    
    
    6.39
    %
    
    
    641,979
    
    
    
    19,200
    
    
    
    6.01
    %Non-interest-earning assets:Cash and due from banks
    
    
    22,263
    
    
    
    
    
    
    
    
    
    
    
    19,781Premises and equipment, net
    
    
    27,272
    
    
    
    
    
    
    
    
    
    
    
    20,776Allowances for loan losses
    
    
    (6,531
    )
    
    
    
    
    
    
    
    
    
    
    (5,405
    )Other assets
    
    
    30,879
    
    
    
    
    
    
    
    
    
    
    
    28,504Total non-interest-earning assets
    
    
    73,883
    
    
    
    
    
    
    
    
    
    

    
    63,656Total assets
    
    $
    917,793
    
    
    
    
    
    
    
    
    
    
    $
    705,635Interest-bearing liabilities:Interest-bearing deposits:NOW accounts
    
    $
    92,846
    
    
    
    385
    
    
    
    0.84
    %
    
    $
    74,269
    
    
    
    120
    
    
    
    0.32
    %Money market
    
    
    167,087
    
    
    
    1,560
    
    
    
    1.88
    %
    
    
    126,115
    
    
    
    494
    
    
    
    0.79
    %Savings deposits
    
    
    48,079
    
    
    
    115
    
    
    
    0.48
    %
    
    
    42,860
    
    
    
    82
    
    
    
    0.39
    %Time deposits
    
    
    303,483
    
    
    
    4,937
    
    
    
    3.28
    %
    
    
    213,760
    
    
    
    3,176
    
    
    
    2.99
    %Total interest-bearing deposits
    
    
    611,495
    
    
    
    6,997
    
    
    
    2.31
    %
    
    
    457,004
    
    
    
    3,872
    
    
    
    1.70
    %Other interest-bearing liabilities:Short-term borrowings & FHLB advances
    
    
    40,431
    
    
    
    551
    
    
    
    2.75
    %
    
    
    32,052
    
    
    
    185
    
    
    
    1.16
    %Long-term borrowings
    
    
    17,104
    
    
    
    774
    
    
    
    9.13
    %
    
    
    18,250
    
    
    
    791
    
    
    
    8.71
    %Total interest-bearing liabilities
    
    
    669,030
    
    
    
    8,322
    
    
    
    2.51
    %
    
    
    507,306
    
    
    
    4,848
    
    
    
    1.92
    %Non-interest-bearing liabilities and
shareholders equity:Demand deposits
    
    
    168,787
    
    
    
    
    
    
    
    
    
    
    
    138,656Other liabilities
    
    
    11,166
    
    
    
    
    
    
    
    
    
    
    
    8,265Shareholders equity
    
    
    68,810
    
    
    
    
    
    
    
    
    
    
    
    51,408Total non-interest-bearing liabilities and
shareholders equity
    
    
    248,763
    
    
    
    
    
    
    
    
    
    
    
    198,329Total liabilities and shareholders equity
    
    $
    917,793
    
    
    
    
    
    
    
    
    
    
    $
    705,635Interest rate spread (tax equivalent basis)
    
    
    
    
    
    
    
    
    
    
    3.88
    %
    
    
    
    
    
    
    
    
    
    
    4.09
    %Net interest income (tax equivalent basis)
    
    
    
    
    
    $
    18,409
    
    
    
    
    
    
    
    
    
    
    $
    14,352Net interest margin (3) (tax equivalent
basis)
    
    
    
    
    
    
    
    
    
    
    4.40
    %
    
    
    
    
    
    
    
    
    
    
    4.50
    %
 
 (1)
    
    Average loans include non-performing loans.(2)
    
    Interest income and rates include the effects of a tax equivalent adjustment using a Federal
tax rate of 34% in adjusting tax exempt interest on tax exempt investment securities and loans
to a fully taxable basis.(3)
    
    Net interest margin is net interest income divided by average total interest-earning assets. 16




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##### Table of Contents



2005 compared to 2004 (1)Due to changes inNet(dollars in thousands)
    
    Average
    
    Average
    
    IncreaseVolume
    
    Rate
    
    (Decrease)Interest incomeLoans (2)
    
    $
    5,266
    
    
    $
    1,418
    
    
    $
    6,684Investment securities (2)
    
    
    352
    
    
    
    (77
    )
    
    
    275Marketable equity securities (2)
    
    
    6
    
    
    
    12
    
    
    
    18Interest-bearing deposits in other banks
    
    
    (4
    )
    
    
    5
    
    
    
    1Federal Home Loan Bank Stock
    
    
    23
    
    
    
    11
    
    
    
    34Federal funds sold
    
    
    231
    
    
    
    288
    
    
    
    519Total interest income
    
    
    5,874
    
    
    
    1,657
    
    
    
    7,531Interest expenseNOW accounts
    
    
    36
    
    
    
    229
    
    
    
    265Money market
    
    
    203
    
    
    
    863
    
    
    
    1,066Savings deposits
    
    
    11
    
    
    
    22
    
    
    
    33Time deposits
    
    
    1,436
    
    
    
    325
    
    
    
    1,761Short-term borrowings and FHLB advances
    
    
    60
    
    
    
    306
    
    
    
    366Long-term borrowings
    
    
    (59
    )
    
    
    42
    
    
    
    (17
    )Total interest expense
    
    
    1,687
    
    
    
    1,787
    
    
    
    3,474Change in net interest income
    
    $
    4,187
    
    
    $
    (130
    )
    
    $
    4,057
 
 (1)
    
    The change in interest due to both rate and volume has been allocated to the volume and rate
components in proportion to the relationship of the dollar amounts of the absolute change in
each.(2)
    
    Interest income includes the effects of a tax equivalent adjustment using a federal tax rate
of 34% in adjusting tax exempt interest on tax exempt investment securities and loans to a
fully taxable basis. PROVISION FOR LOAN LOSSES
   NON-INTEREST INCOME
  17




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##### Table of Contents



NON-INTEREST EXPENSE
  INCOME TAXES
  BALANCE SHEET
     NON-PERFORMING ASSETS
   (dollars in thousands)
    
    June 30, 2005
    
    December 31, 2004Total nonaccrual loans
    
    $
    482
    
    
    $
    704Accruing loans delinquent 90 days or more (a)
    
    
    
    
    
    
    Total non-performing loans
    
    $
    482
    
    
    $
    704Repossessed personal property (indirect auto dealer loans)
    
    
    673
    
    
    
    688Other real estate owned (b)
    
    
    190
    
    
    
    882Other assets (b)
    
    
    2,705
    
    
    
    2,665Total non-performing assets
    
    $
    4,050
    
    
    $
    4,939Allowance for loan losses
    
    $
    7,013
    
    
    $
    6,243Non-performing assets as a percent of total assets
    
    
    0.40
    %
    
    
    0.60
    %Non-performing loans as a percent of gross loans
    
    
    0.06
    %
    
    
    0.11
    %Allowance for loan losses as a percent of non-performing loans
    
    
    1,455.0
    %
    
    
    886.8
    %
 18




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##### Table of Contents



(a)
    

    Non-performing loans exclude the $1.6 million loan discussed below that is
guaranteed for both principal and interest by the U.S. Department of Agriculture
(USDA).(b)
    
    The Bank made a $10.0 million loan to construct a lumber mill in northern
Florida. Of this amount, $6.4 million had been sold by the Bank to other lenders. The
loan was partially guaranteed as to principal and interest by the USDA. In addition to
business real estate and equipment, the loan was collateralized by the business
owners interest in a trust. Under provisions of the trust agreement, beneficiaries
cannot receive trust assets until November 2010.During 2001, upon completion of foreclosure on the underlying collateral, the
non-guaranteed portion of this loan and interest accrued through the foreclosure date
was reclassified into other real estate ($550,000) and other assets (approximately $1.9
million) based on the fair value of the underlying-collateral. The portion of this loan
guaranteed by the USDA was approximately $1.6 million at June 30, 2005 and December 31,
2004, and is accruing interest. Accrued interest on this loan totals approximately
$731,000 and $677,000 at June 30, 2005 and December 31, 2004, respectively.The Bank is pursuing a sale of the property and equipment and has incurred various
expenditures. The Bank capitalized the liquidation costs and a portion of the
protective advances which it expects will be fully reimbursed by the USDA. Other real
estate recorded on the Banks books related to this property totaled $190,000 at June
30, 2005 and December 31, 2004. The non-guaranteed principal and interest ($2.0 million
at June 30, 2005 and December 31, 2004) and the reimbursable capitalized liquidation
costs and protective advance costs totaling approximately $744,000 and $704,000 at June
30, 2005 and December 31, 2004, respectively, are included as other assets in the
financial statements.The Bank sold certain pieces of equipment associated with the lumber mill property.
Proceeds from the sales were used to reduce the other real estate amount and liquidation
cost amounts recorded on the Banks books. In 2003, the Bank wrote down the carrying
amount of the other real estate by $262,000 based upon anticipated proceeds from the
sale of the property and remaining equipment.Florida law requires a bank to liquidate or charge off repossessed real property within
five years, and repossessed personal property within six months. The Bank was awarded
title to the real property on June 12, 2001, and an adjudicated interest in the owners
trust proceeds. The time constraints imposed by Florida law required that the personal
property be disposed of or charged off by December 2001. The Bank applied to the State
of Florida for an extension to carry the personal property on the Banks books and was
granted an extension to carry the personal property on its books until June 11, 2003.
Since the property had not been liquidated as of such date, the Bank charged-off the non
guaranteed principal and interest totaling $2.0 million at June 30, 2003, for regulatory
purposes. Since we believe this amount is ultimately realizable, we did not write off
this amount for financial statement purposes under generally accepted accounting
principles.    19




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##### Table of Contents



LIQUIDITY
     ASSET AND LIABILITY MANAGEMENT
  20




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##### Table of Contents



3 Months
    
    4 to 6
    
    7 to 12
    
    1 to 5
    
    Over 5(dollars in thousands)
    
    or Less
    
    Months
    
    Months
    
    Years
    
    Years
    
    TotalInterest-earning assets:Loans
    
    $
    350,509
    
    
    $
    27,327
    
    
    $
    43,434
    
    
    $
    284,072
    
    
    $
    68,507
    
    
    $
    773,849Investment securities-taxable
    
    
    1,072
    
    
    
    
    
    
    
    10,180
    
    
    
    38,578
    
    
    
    23,864
    
    
    
    73,694Investment securities-tax exempt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,617
    
    
    
    5,191
    
    
    
    9,808Marketable equity securities
    
    
    3,490
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,490Federal Home Loan Bank stock
    
    
    2,781
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,781Federal funds sold
    
    
    77,550
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77,550Interest bearing deposit in other
bank
    
    
    201
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    201Total interest-bearing assets
    
    
    435,603
    
    
    
    27,327
    
    
    
    53,614
    
    
    
    327,267
    
    
    
    97,562
    
    
    
    941,373Interest-bearing liabilities:NOW accounts
    
    
    85,479
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85,479Money Market
    
    
    179,815
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    179,815Savings Deposits
    
    
    49,884
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,884Time deposits
    
    
    35,143
    
    
    
    92,673
    
    
    
    114,991
    
    
    
    98,891
    
    
    
    5
    
    
    
    341,703Notes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,000
    
    
    
    4,000Subordinated debentures
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,000
    
    
    
    13,000Other borrowings
    
    
    42,593
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,593Total interest-bearing liabilities
    
    
    397,914
    
    
    
    92,673
    
    
    
    114,991
    
    
    
    98,891
    
    
    
    12,005
    
    
    
    716,474Interest sensitivity gap
    
    $
    37,689
    
    
    $
    (65,346
    )
    
    $
    (61,377
    )
    
    $
    228,376
    
    
    $
    85,557
    
    
    $
    224,899Cumulative interest sensitivity gap
    
    $
    37,689
    
    
    $
    (27,657
    )
    
    $
    (89,034
    )
    
    $
    139,342
    
    
    $
    224,899
    
    
    $
    224,899Cumulative sensitivity ratio
    
    
    4.0
    %
    
    
    (2.9
    )%
    
    
    (9.5
    )%
    
    
    14.8
    %
    
    
    23.9
    %
    
    
    23.9
    %
     COMMITMENTS
     21




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##### Table of Contents



Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
 Item 4. CONTROLS AND PROCEDURES
 (a) Evaluation of Disclosure Controls and Procedures
  
 Part II. OTHER INFORMATION
 
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  DIRECTORS
    
    FOR
    
    AGAINST
    
    ABSTAINEdward V. Lett
    
    
    4,955,687
    
    
    
    21,130
    
    
    
    
   FOR
    
    AGAINST
    
    ABSTAIN4,925,154
    
    
    38,307
    
    13,356
  
 Item 5. OTHER INFORMATION
  22




---



##### Table of Contents



Item 6. EXHIBITS
 (a)
    
    Exhibits
     
 SIGNATURES
  TIB FINANCIAL CORP./s/ Edward V. LettDate: August 9, 2005
    Edward V. LettPresident and Chief Executive Officer /s/ David P. JohnsonDavid P. JohnsonExecutive Vice President and Chief Financial Officer 23