##### 



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 Number
|MARCH 31, 2003                 |  | 000-21329             

|                                                      
|------------------------------------------------------
|TIB FINANCIAL CORP                                    
|                                                      
|(Exact name of registrant as specified in its charter)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|FLORIDA                                                        |  | 65-0655973                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

|                                                                                                         
|---------------------------------------------------------------------------------------------------------
|99451 OVERSEAS HIGHWAY, KEY LARGO, FLORIDA 33037-7808
(Address of principal executive offices) (Zip Code)

Registrants telephone number, including area code: 305-451-4660

|                                                                                  
|----------------------------------------------------------------------------------
|Not Applicable                                                                    
|                                                                                  
|(Former name, former address and former fiscal year,
if changed since last report)

Check whether the issuer (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 issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. Yes X or No

Indicate by check mark whether the issuer is an accelerated filer (as defined
in Rule 12b-2 of the Act). Yes      or No X

Indicate the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date:

|                              |  |                              
|----------------------------- |  | -----------------------------
|Common Stock, $0.10 Par Value |  | 4,116,325                    
|                              |  |                              
|Class                         |  | Outstanding as of May 1, 2003





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##### 



Part I.     FINANCIAL INFORMATION

Item 1.     Financial Statements

TIB FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS

|                                                                                                  |                                            |                            |             |                |             |                   |             |             |             | 
|------------------------------------------------------------------------------------------------- | ------------------------------------------ | -------------------------- | ----------- | -------------- | ----------- | ----------------- | ----------- | ----------- | ----------- | 
|                                                                                                  |                                            |                            |             | March 31, 2003 |             | December 31, 2002
|                                                                                                  |                                            |                            |             |                |             |                  
|                                                                                                  |                                            |                            |             | (Unaudited)    |             |                   |             |            
|ASSETS                                                                                            |                                            |                            |             |                |             |                   |             |            
|Cash and due from banks                                                                           |                                            | $                          | 19,599,507  |                |             | $                 | 18,397,659  |            
|Federal funds sold                                                                                |                                            |                            | 47,488,000  |                |             |                   | 5,672,000   |            
|Investment securities available for sale                                                          |                                            |                            | 52,514,286  |                |             |                   | 55,753,890  |            
|Loans, net of deferred loan costs and fees                                                        |                                            |                            | 459,176,975 |                |             |                   | 442,527,934 |            
|Less: allowance for loan losses                                                                   |                                            |                            | 4,513,397   |                |             |                   | 4,416,499   |            
|                                                                                                  |                                            |                            |             |                |             |                   |             |            
|                                                                                                  | Loans, net                                 |                            |             | 454,663,578    |             |                   |             | 438,111,435 |            
|Premises and equipment, net                                                                       |                                            |                            | 19,910,400  |                |             |                   | 19,457,150  |            
|Goodwill                                                                                          |                                            |                            | 2,234,024   |                |             |                   | 2,234,024   |            
|Intangible assets, net                                                                            |                                            |                            | 1,905,901   |                |             |                   | 1,978,918   |            
|Other assets                                                                                      |                                            |                            | 23,206,474  |                |             |                   | 25,399,570  |            
|                                                                                                  |                                            |                            |             |                |             |                   |             |            
|                                                                                                  | TOTAL ASSETS                               |                            | $           | 621,522,170    |             |                   | $           | 567,004,646 |            
|                                                                                                  |                                            |                            |             |                |             |                   |             |            
|LIABILITIES                                                                                       |                                            |                            |             |                |             |                   |             |            
|Deposits:                                                                                         |                                            |                            |             |                |             |                   |             |            
|                                                                                                  | Noninterest-bearing demand                 |                            | $           | 120,379,914    |             |                   | $           | 105,199,483 |            
|                                                                                                  | Interest-bearing demand and money market   |                            |             | 192,004,960    |             |                   |             | 186,426,703 |            
|                                                                                                  | Savings                                    |                            |             | 33,270,463     |             |                   |             | 31,440,801  |            
|                                                                                                  | Time deposits of $100,000 or more          |                            |             | 93,365,421     |             |                   |             | 73,509,232  |            
|                                                                                                  | Other time deposits                        |                            |             | 106,988,522    |             |                   |             | 86,107,232  |            
|                                                                                                  |                                            |                            |             |                |             |                   |             |            
|                                                                                                  |                                            | Total Deposits             |             |                | 546,009,280 |                   |             |             | 482,683,451 | 
|Federal Home Loan Bank advances                                                                   |                                            |                            | 10,000,000  |                |             |                   | 20,000,000  |            
|Short-term borrowings                                                                             |                                            |                            | 5,004,201   |                |             |                   | 4,578,959   |            
|Notes payable                                                                                     |                                            |                            | 5,250,000   |                |             |                   | 5,250,000   |            
|Trust preferred securities                                                                        |                                            |                            | 13,000,000  |                |             |                   | 13,000,000  |            
|Other liabilities                                                                                 |                                            |                            | 7,502,885   |                |             |                   | 7,986,159   |            
|                                                                                                  |                                            |                            |             |                |             |                   |             |            
|                                                                                                  | TOTAL LIABILITIES                          |                            |             | 586,766,366    |             |                   |             | 533,498,569 |            
|                                                                                                  |                                            |                            |             |                |             |                   |             |            
|STOCKHOLDERS EQUITY                                                                              |                                            |                            |             |                |             |                   |             |            
|Common stock  $.10 par value: 7,500,000 shares
authorized, 4,114,425 and 4,035,625 shares
issued |                                            |                            | 411,443     |                |             |                   | 403,563     |            
|Additional paid in capital                                                                        |                                            |                            | 9,413,981   |                |             |                   | 8,965,816   |            
|Retained earnings                                                                                 |                                            |                            | 23,758,380  |                |             |                   | 23,021,698  |            
|Accumulated other comprehensive income                                                            |                                            |                            | 1,172,000   |                |             |                   | 1,115,000   |            
|                                                                                                  |                                            |                            |             |                |             |                   |             |            
|                                                                                                  |                                            | TOTAL STOCKHOLDERS EQUITY |             |                | 34,755,804  |                   |             |             | 33,506,077  | 
|                                                                                                  |                                            |                            |             |                |             |                   |             |            
|                                                                                                  | TOTAL LIABILITIES AND STOCKHOLDERS
EQUITY |                            | $           | 621,522,170    |             |                   | $           | 567,004,646 |            
|                                                                                                  |                                            |                            |             |                |             |                   |             |            

(See notes to consolidated financial statements)

1



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##### 



TIB FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

|                                                    |                                                     |                                               |           |                    |         |      |           |           |         | 
|--------------------------------------------------- | --------------------------------------------------- | --------------------------------------------- | --------- | ------------------ | ------- | ---- | --------- | --------- | ------- | 
|                                                    |                                                     |                                               |           | Three months ended
|                                                    |                                                     |                                               |           | March 31,         
|                                                    |                                                     |                                               |           |                   
|                                                    |                                                     |                                               |           | 2003               |         | 2002
|                                                    |                                                     |                                               |           |                    |         |     
|INTEREST INCOME                                     |                                                     |                                               |           |                    |         |      |           |          
|Loans, including fees                               |                                                     | $                                             | 7,578,275 |                    |         | $    | 6,637,969 |          
|Investment securities:                              |                                                     |                                               |           |                    |         |      |           |          
|                                                    |                                                     | U.S. Treasury securities                      |           |                    | 1,889   |      |           |           | 40,783  | 
|                                                    |                                                     | U.S. Government agencies and corporations     |           |                    | 526,960 |      |           |           | 589,809 | 
|                                                    |                                                     | States and political subdivisions, tax-exempt |           |                    | 61,326  |      |           |           | 66,868  | 
|                                                    |                                                     | States and political subdivisions, taxable    |           |                    | 62,977  |      |           |           | 77,865  | 
|                                                    |                                                     | Other investments                             |           |                    | 16,282  |      |           |           | 67,439  | 
|Interest bearing deposits in other bank             |                                                     |                                               | 576       |                    |         |      | 1,714     |          
|Federal funds sold                                  |                                                     |                                               | 41,798    |                    |         |      | 58,916    |          
|                                                    |                                                     |                                               |           |                    |         |      |           |          
|                                                    | TOTAL INTEREST INCOME                               |                                               |           | 8,290,083          |         |      |           | 7,541,363 |        
|                                                    |                                                     |                                               |           |                    |         |      |           |          
|INTEREST EXPENSE                                    |                                                     |                                               |           |                    |         |      |           |          
|Interest-bearing demand and money market            |                                                     |                                               | 403,478   |                    |         |      | 483,859   |          
|Savings                                             |                                                     |                                               | 47,325    |                    |         |      | 52,787    |          
|Time deposits of $100,000 or more                   |                                                     |                                               | 735,598   |                    |         |      | 684,065   |          
|Other time deposits                                 |                                                     |                                               | 793,159   |                    |         |      | 850,980   |          
|Long term debt  trust preferred securities         |                                                     |                                               | 278,976   |                    |         |      | 285,517   |          
|Federal Home Loan Bank advances                     |                                                     |                                               | 68,947    |                    |         |      | 98,771    |          
|Notes payable                                       |                                                     |                                               | 118,618   |                    |         |      | 118,618   |          
|Short-term borrowings                               |                                                     |                                               | 10,762    |                    |         |      | 4,879     |          
|                                                    |                                                     |                                               |           |                    |         |      |           |          
|                                                    | TOTAL INTEREST EXPENSE                              |                                               |           | 2,456,863          |         |      |           | 2,579,476 |        
|                                                    |                                                     |                                               |           |                    |         |      |           |          
|                                                    | NET INTEREST INCOME                                 |                                               |           | 5,833,220          |         |      |           | 4,961,887 |        
|PROVISION FOR LOAN LOSSES                           |                                                     |                                               | 330,000   |                    |         |      | 135,000   |          
|                                                    |                                                     |                                               |           |                    |         |      |           |          
|                                                    | NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |                                               |           | 5,503,220          |         |      |           | 4,826,887 |        
|OTHER INCOME                                        |                                                     |                                               |           |                    |         |      |           |          
|Service charges on deposit accounts                 |                                                     |                                               | 572,615   |                    |         |      | 532,685   |          
|Investment securities gains, net                    |                                                     |                                               | 5,337     |                    |         |      | 74,284    |          
|Merchant bank card processing income                |                                                     |                                               | 1,378,073 |                    |         |      | 1,333,336 |          
|Gain on sale of government guaranteed loans         |                                                     |                                               | 87,470    |                    |         |      |          |          
|Fees on mortgage loans sold                         |                                                     |                                               | 601,752   |                    |         |      | 359,611   |          
|Commissions on sales by Keys Insurance Agency, Inc. |                                                     |                                               | 436,420   |                    |         |      | 399,893   |          
|Retail investment services                          |                                                     |                                               | 86,958    |                    |         |      | 89,653    |          
|Other income                                        |                                                     |                                               | 345,796   |                    |         |      | 351,914   |          
|                                                    |                                                     |                                               |           |                    |         |      |           |          
|                                                    | TOTAL OTHER INCOME                                  |                                               |           | 3,514,421          |         |      |           | 3,141,376 |        
|OTHER EXPENSE                                       |                                                     |                                               |           |                    |         |      |           |          
|Salaries and employee benefits                      |                                                     |                                               | 3,453,621 |                    |         |      | 2,744,329 |          
|Net occupancy expense                               |                                                     |                                               | 1,082,022 |                    |         |      | 963,283   |          
|Other expense                                       |                                                     |                                               | 2,639,429 |                    |         |      | 2,423,333 |          
|                                                    |                                                     |                                               |           |                    |         |      |           |          
|                                                    | TOTAL OTHER EXPENSE                                 |                                               |           | 7,175,072          |         |      |           | 6,130,945 |        
|                                                    | INCOME BEFORE INCOME TAX EXPENSE                    |                                               |           | 1,842,569          |         |      |           | 1,837,318 |        
|INCOME TAX EXPENSE                                  |                                                     |                                               | 653,300   |                    |         |      | 646,400   |          
|                                                    |                                                     |                                               |           |                    |         |      |           |          
|                                                    | NET INCOME                                          |                                               | $         | 1,189,269          |         |      | $         | 1,190,918 |        
|                                                    |                                                     |                                               |           |                    |         |      |           |          
|BASIC EARNINGS PER SHARE:                           |                                                     | $                                             | 0.29      |                    |         | $    | 0.30      |          
|DILUTED EARNINGS PER SHARE:                         |                                                     | $                                             | 0.28      |                    |         | $    | 0.29      |          

(See notes to consolidated financial statements)

2



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##### 



TIB FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
(Unaudited)

|                                        |                                                            |                                                                    |            |           |        |        |   |               |        |               |            |               |  |         |           |                    |  |   |         |  |  |   |           |  |  | 
|--------------------------------------- | ---------------------------------------------------------- | ------------------------------------------------------------------ | ---------- | --------- | ------ | ------ | - | ------------- | ------ | ------------- | ---------- | ------------- |  | ------- | --------- | ------------------ |  | - | ------- |  |  | - | --------- |  |  | 
|                                        |                                                            |                                                                    |            |           |        |        |   |               |        |               |            |               |  |         |           | Accumulated        |  |   |         |  |  |   |           | 
|                                        |                                                            |                                                                    |            |           |        |        |   |               |        |               |            |               |  |         |           | Other              |  |   |         |  |  |   |           | 
|                                        |                                                            |                                                                    |            |           |        |        |   | Comprehensive |        | Retained      |            | Comprehensive |  | Common  |           | Additional Paid in
|                                        |                                                            |                                                                    |            | Total     |        | Income |   | Earnings      |        | Income (Loss) |            | Stock         |  | Capital
|                                        |                                                            |                                                                    |            |           |        |        |   |               |        |               |            |               |  |        
|Balance at December 31, 2002            |                                                            | $                                                                  | 33,506,077 |           |        |        |   |               |        | $             | 23,021,698 |               |  | $       | 1,115,000 |                    |  | $ | 403,563 |  |  | $ | 8,965,816 | 
|Comprehensive Income                    |                                                            |                                                                    |            |           |        |        |   |               |        |               |            |               |  |         |           |                    |  |   |         |  |  |   |           | 
|                                        | Net Income                                                 |                                                                    |            | 1,189,269 |        |        | $ | 1,189,269     |        |               |            | 1,189,269     |  |         |           |                    |  |   |         |  |  |   |           |  | 
|                                        | Other comprehensive income, net of tax
expense of $35,000: |                                                                    |            |           |        |        |   |               |        |               |            |               |  |         |           |                    |  |   |         |  |  |   |           |  | 
|                                        |                                                            | Net market valuation adjustment on
securities available for sale   |            |           | 60,331 |        |   |               | 60,331 |               |            |               |  |         |           |                    |  |   |         |  |  |   |           |  |  | 
|                                        |                                                            | Less: reclassification adjustment
for gains included in net income |            |           | (3,331 | )      |   |               | (3,331 | )             |            |               |  |         |           |                    |  |   |         |  |  |   |           |  |  | 
|                                        |                                                            |                                                                    |            |           |        |        |   |               |        |               |            |               |  |         |           |                    |  |   |         |  |  |   |           | 
|                                        | Other comprehensive income, net of tax                     |                                                                    |            |           |        |        |   | 57,000        |        |               |            |               |  |         |           | 57,000             |  |   |         |  |  |   |           |  | 
|                                        |                                                            |                                                                    |            |           |        |        |   |               |        |               |            |               |  |         |           |                    |  |   |         |  |  |   |           | 
|                                        | Comprehensive income                                       |                                                                    |            |           |        |        | $ | 1,246,269     |        |               |            |               |  |         |           |                    |  |   |         |  |  |   |           |  | 
|                                        |                                                            |                                                                    |            |           |        |        |   |               |        |               |            |               |  |         |           |                    |  |   |         |  |  |   |           | 
|Exercise of stock options               |                                                            |                                                                    | 456,045    |           |        |        |   |               |        |               |            |               |  |         |           |                    |  |   | 7,880   |  |  |   | 448,165   | 
|Cash dividends declared, $.11 per share |                                                            |                                                                    | (452,587   | )         |        |        |   |               |        |               | (452,587   | )             |  |         |           |                    |  |   |         |  |  |   |           | 
|                                        |                                                            |                                                                    |            |           |        |        |   |               |        |               |            |               |  |         |           |                    |  |   |         |  |  |   |           | 
|Balance at March 31, 2003               |                                                            | $                                                                  | 34,755,804 |           |        |        |   |               |        | $             | 23,758,380 |               |  | $       | 1,172,000 |                    |  | $ | 411,443 |  |  | $ | 9,413,981 | 
|                                        |                                                            |                                                                    |            |           |        |        |   |               |        |               |            |               |  |         |           |                    |  |   |         |  |  |   |           | 

|                                          |                                                             |                                                                  |                                                                    |   |          |         |           |           |               |         |               |   |               |   |          |          |                    |   |         |  |  |   |           |  |  |  | 
|----------------------------------------- | ----------------------------------------------------------- | ---------------------------------------------------------------- | ------------------------------------------------------------------ | - | -------- | ------- | --------- | --------- | ------------- | ------- | ------------- | - | ------------- | - | -------- | -------- | ------------------ | - | ------- |  |  | - | --------- |  |  |  | 
|                                          |                                                             |                                                                  |                                                                    |   |          |         |           |           |               |         |               |   |               |   |          |          | Accumulated        |   |         |  |  |   |           |  | 
|                                          |                                                             |                                                                  |                                                                    |   |          |         |           |           |               |         |               |   |               |   |          |          | Other              |   |         |  |  |   |           |  | 
|                                          |                                                             |                                                                  |                                                                    |   |          |         |           |           | Comprehensive |         | Retained      |   | Comprehensive |   | Common   |          | Additional Paid in
|                                          |                                                             |                                                                  |                                                                    |   | Total    |         | Income    |           | Earnings      |         | Income (Loss) |   | Stock         |   | Capital 
|                                          |                                                             |                                                                  |                                                                    |   |          |         |           |           |               |         |               |   |               |   |         
|Balance at December 31, 2001              |                                                             | $                                                                | 28,672,092                                                         |   |          |         |           |           |               | $       | 20,019,145    |   |               | $ | 36,400   |          |                    | $ | 394,610 |  |  | $ | 8,221,937 | 
|Comprehensive Income                      |                                                             |                                                                  |                                                                    |   |          |         |           |           |               |         |               |   |               |   |          |          |                    |   |         |  |  |   |           | 
|                                          | Net Income                                                  |                                                                  | 1,190,918                                                          |   |          | $       | 1,190,918 |           |               |         | 1,190,918     |   |               |   |          |          |                    |   |         |  |  |   |           | 
|                                          | Other comprehensive income, net of tax
benefit of $104,900: |                                                                  |                                                                    |   |          |         |           |           |               |         |               |   |               |   |          |          |                    |   |         |  |  |   |           |  | 
|                                          |                                                             | Net market valuation adjustment on
securities available for sale |                                                                    |   | (127,047 | )       |           |           | (127,047      | )       |               |   |               |   |          |          |                    |   |         |  |  |   |           |  |  | 
|                                          |                                                             |                                                                  | Less: reclassification adjustment
for gains included in net income |   |          | (46,353 | )         |           |               | (46,353 | )             |   |               |   |          |          |                    |   |         |  |  |   |           |  |  |  | 
|                                          |                                                             |                                                                  |                                                                    |   |          |         |           |           |               |         |               |   |               |   |          |          |                    |   |         |  |  |   |           | 
|                                          | Other comprehensive income, net of tax                      |                                                                  |                                                                    |   |          |         |           | (173,400  | )             |         |               |   |               |   |          | (173,400 | )                  |   |         |  |  |   |           |  | 
|                                          |                                                             |                                                                  |                                                                    |   |          |         |           |           |               |         |               |   |               |   |          |          |                    |   |         |  |  |   |           | 
|                                          | Comprehensive income                                        |                                                                  |                                                                    |   |          |         | $         | 1,017,518 |               |         |               |   |               |   |          |          |                    |   |         |  |  |   |           |  | 
|                                          |                                                             |                                                                  |                                                                    |   |          |         |           |           |               |         |               |   |               |   |          |          |                    |   |         |  |  |   |           | 
|Exercise of stock options                 |                                                             |                                                                  | 211,784                                                            |   |          |         |           |           |               |         |               |   |               |   |          |          |                    |   | 3,080   |  |  |   | 208,704   | 
|Cash dividends declared, $.1075 per share |                                                             |                                                                  | (427,516                                                           | ) |          |         |           |           |               |         | (427,516      | ) |               |   |          |          |                    |   |         |  |  |   |           | 
|                                          |                                                             |                                                                  |                                                                    |   |          |         |           |           |               |         |               |   |               |   |          |          |                    |   |         |  |  |   |           | 
|Balance at March 31, 2002                 |                                                             | $                                                                | 29,473,878                                                         |   |          |         |           |           |               | $       | 20,782,547    |   |               | $ | (137,000 | )        |                    | $ | 397,690 |  |  | $ | 8,430,641 | 
|                                          |                                                             |                                                                  |                                                                    |   |          |         |           |           |               |         |               |   |               |   |          |          |                    |   |         |  |  |   |           | 

3



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##### 



TIB FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(Unaudited)

|                                                                                           |                                                     |   |                                  |             |   |  |  |  |      |   |             |             |  
|------------------------------------------------------------------------------------------ | --------------------------------------------------- | - | -------------------------------- | ----------- | - |  |  |  | ---- | - | ----------- | ----------- | -
|                                                                                           |                                                     |   | For the three month period ended
|                                                                                           |                                                     |   | March 31,                       
|                                                                                           |                                                     |   |                                 
|                                                                                           |                                                     |   | 2003                             |             |   |  |  |  | 2002
|                                                                                           |                                                     |   |                                  |             |   |  |  |  |     
|CASH FLOWS FROM OPERATING ACTIVITIES                                                       |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|Net Income                                                                                 |                                                     | $ | 1,189,269                        |             |   |  |  |  |      | $ | 1,190,918   |            
|Adjustments to reconcile net income to net cash provided by operating activities:          |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|                                                                                           | Net amortization of investments                     |   |                                  | 14,959      |   |  |  |  |      |   |             | 14,262      |  
|                                                                                           | Amortization of intangible assets                   |   |                                  | 73,017      |   |  |  |  |      |   |             | 73,973      |  
|                                                                                           | Depreciation of premises and equipment              |   |                                  | 422,842     |   |  |  |  |      |   |             | 382,082     |  
|                                                                                           | Provision for loan losses                           |   |                                  | 330,000     |   |  |  |  |      |   |             | 135,000     |  
|                                                                                           | Deferred income tax provision (benefit)             |   |                                  | (11,717     | ) |  |  |  |      |   |             | (138,535    | )
|                                                                                           | Deferred net loan fees/costs                        |   |                                  | (35,434     | ) |  |  |  |      |   |             | (39,194     | )
|                                                                                           | Investment securities (gains), net                  |   |                                  | (5,337      | ) |  |  |  |      |   |             | (74,284     | )
|                                                                                           | Net gain on sale/disposal of premises and equipment |   |                                  | (726        | ) |  |  |  |      |   |             | (891        | )
|                                                                                           | Gain on sales of government guaranteed loans, net   |   |                                  | (87,470     | ) |  |  |  |      |   |             |            |  
|                                                                                           | Gain on sale of servicing rights                    |   |                                  |            |   |  |  |  |      |   |             | (477        | )
|                                                                                           | Net proceeds received from servicing rights sale    |   |                                  |            |   |  |  |  |      |   |             | 36,088      |  
|                                                                                           | Decrease in other assets                            |   |                                  | 2,169,813   |   |  |  |  |      |   |             | 1,458,517   |  
|                                                                                           | (Decrease)/increase in other liabilities            |   |                                  | (491,943    | ) |  |  |  |      |   |             | 135,974     |  
|                                                                                           |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|                                                                                           | NET CASH PROVIDED BY OPERATING ACTIVITIES           |   |                                  | 3,567,273   |   |  |  |  |      |   |             | 3,173,433   |  
|                                                                                           |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|CASH FLOWS FROM INVESTING ACTIVITIES                                                       |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|Purchases of investment securities available for sale                                      |                                                     |   | (1,801,082                       | )           |   |  |  |  |      |   | (11,909,634 | )          
|Repayments of principal and maturities of investment securities available for sale         |                                                     |   | 5,123,064                        |             |   |  |  |  |      |   | 1,147,894   |            
|Sales of investment securities available for sale                                          |                                                     |   |                                 |             |   |  |  |  |      |   | 3,236,250   |            
|Proceeds from sales of government guaranteed loans                                         |                                                     |   | 2,241,119                        |             |   |  |  |  |      |   |            |            
|Loans originated or acquired, net of principal repayments                                  |                                                     |   | (19,000,358                      | )           |   |  |  |  |      |   | (9,953,467  | )          
|Purchases of premises and equipment                                                        |                                                     |   | (876,653                         | )           |   |  |  |  |      |   | (310,433    | )          
|Sales of premises and equipment                                                            |                                                     |   | 1,287                            |             |   |  |  |  |      |   | 11,666      |            
|                                                                                           |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|                                                                                           | NET CASH USED IN INVESTING ACTIVITIES               |   |                                  | (14,312,623 | ) |  |  |  |      |   |             | (17,777,724 | )
|                                                                                           |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|CASH FLOWS FROM FINANCING ACTIVITIES                                                       |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|Net increase in federal funds purchased and securities sold under agreements to
repurchase |                                                     |   | 425,242                          |             |   |  |  |  |      |   | 1,574,437   |            
|Net decrease in FHLB advances                                                              |                                                     |   | (10,000,000                      | )           |   |  |  |  |      |   | (5,000,000  | )          
|Net increase in demand, money market and savings accounts                                  |                                                     |   | 22,588,350                       |             |   |  |  |  |      |   | 27,928,919  |            
|Net increase in time deposits                                                              |                                                     |   | 40,737,479                       |             |   |  |  |  |      |   | 11,223,713  |            
|Proceeds from exercise of stock options                                                    |                                                     |   | 456,045                          |             |   |  |  |  |      |   | 211,784     |            
|Cash dividends paid                                                                        |                                                     |   | (443,918                         | )           |   |  |  |  |      |   | (424,205    | )          
|                                                                                           |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|                                                                                           | NET CASH PROVIDED BY FINANCING ACTIVITIES           |   |                                  | 53,763,198  |   |  |  |  |      |   |             | 35,514,648  |  
|                                                                                           |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                                  |                                                     |   | 43,017,848                       |             |   |  |  |  |      |   | 20,910,357  |            
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                           |                                                     |   | 24,069,659                       |             |   |  |  |  |      |   | 21,269,909  |            
|                                                                                           |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                 |                                                     | $ | 67,087,507                       |             |   |  |  |  |      | $ | 42,180,266  |            
|                                                                                           |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|SUPPLEMENTAL DISCLOSURES OF CASH FLOWS:                                                    |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|Cash paid for:                                                                             |                                                     |   |                                  |             |   |  |  |  |      |   |             |            
|                                                                                           | Interest                                            |   | $                                | 3,357,811   |   |  |  |  |      |   | $           | 3,501,473   |  
|                                                                                           | Income taxes                                        |   |                                  |            |   |  |  |  |      |   |             | 31,000      |  

(See notes to consolidated financial statements)

4



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##### 



TIB FINANCIAL CORP.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2003
(Unaudited)

NOTE 1  BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements for TIB Financial
Corp. (the Company) have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statement
presentation. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended March 31, 2003 are
not necessarily indicative of trends or results to be expected for the year
ended December 31, 2003. For further information, refer to the Companys
consolidated financial statements and footnotes thereto for the year ended
December 31, 2002.

The consolidated statements include the accounts of TIB Financial Corp. and its
wholly-owned subsidiaries, TIB Bank of the Keys, TIB Software and Services,
Inc., TIBFL Statutory Trust I, TIBFL Statutory Trust II, and Keys Insurance
Agency, Inc. and the Banks two subsidiaries, TIB Government Loan Specialists,
Inc. and TIB Investment Center Inc., collectively known as the Company. All
significant intercompany accounts and transactions have been eliminated in
consolidation.

As used in this document, the terms we, us, our, TIB Financial, and
Company mean TIB Financial Corp. and its subsidiaries (unless the context
indicates another meaning), and the term Bank means TIB Bank of the Keys and
its subsidiaries (unless the context indicates another meaning).

Certain amounts previously reported on have been reclassified to conform with
current period presentation.

NOTE 2  INVESTMENT SECURITIES

Securities available for sale are securities which management believes may be
sold prior to maturity for liquidity or other reasons and are reported at fair
value, with unrealized gains and losses, net of related income taxes, reported
as a separate component of stockholders equity. Securities held to maturity
are those securities for which management has both the ability and intent to
hold to maturity and are carried at amortized cost.

In June 2002, the Company transferred all investments securities in the held to
maturity category with a book value totaling $18,507,916 to the available for
sale category. The difference between amortized historical cost and fair value
for this portfolio of $433,461 was recorded net of tax in other comprehensive
income. Therefore, there were no securities classified as held-to-maturity at
March 31, 2003.

The amortized cost and estimated fair value of investment securities available
for sale at March 31, 2003 and December 31, 2002 are presented below:

|                                             |  |                |            |            |  |            |           |       |  |   |        |  |  |   |            | 
|-------------------------------------------- |  | -------------- | ---------- | ---------- |  | ---------- | --------- | ----- |  | - | ------ |  |  | - | ---------- | 
|                                             |  | March 31, 2003
|                                             |  |               
|                                             |  | Amortized      |            | Unrealized |  | Unrealized |           | Fair 
|                                             |  | Cost           |            | Gains      |  | Losses     |           | Value
|                                             |  |                |            |            |  |            |           |      
|U.S. Treasury securities                     |  | $              | 211,641    |            |  | $          | 9,297     |       |  | $ |       |  |  | $ | 220,938    | 
|U.S. Government agencies and corporations    |  |                | 25,325,915 |            |  |            | 791,804   |       |  |   |       |  |  |   | 26,117,719 | 
|States and political
subdivisions-tax-exempt |  |                | 6,833,862  |            |  |            | 327,216   |       |  |   | 21,706 |  |  |   | 7,139,372  | 
|States and political subdivisions-taxable    |  |                | 3,959,047  |            |  |            | 82,618    |       |  |   | 29,718 |  |  |   | 4,011,947  | 
|Mortgage-backed securities                   |  |                | 12,679,061 |            |  |            | 719,489   |       |  |   |       |  |  |   | 13,398,550 | 
|Other investments                            |  |                | 1,625,760  |            |  |            |          |       |  |   |       |  |  |   | 1,625,760  | 
|                                             |  |                |            |            |  |            |           |       |  |   |        |  |  |   |            | 
|                                             |  | $              | 50,635,286 |            |  | $          | 1,930,424 |       |  | $ | 51,424 |  |  | $ | 52,514,286 | 
|                                             |  |                |            |            |  |            |           |       |  |   |        |  |  |   |            | 

|                                             |  |                   |            |            |  |            |         |       |  |   |       |  |  |   |            | 
|-------------------------------------------- |  | ----------------- | ---------- | ---------- |  | ---------- | ------- | ----- |  | - | ----- |  |  | - | ---------- | 
|                                             |  | December 31, 2002
|                                             |  |                  
|                                             |  | Amortized         |            | Unrealized |  | Unrealized |         | Fair 
|                                             |  | Cost              |            | Gains      |  | Losses     |         | Value
|                                             |  |                   |            |            |  |            |         |      
|U.S. Treasury securities                     |  | $                 | 212,412    |            |  | $          | 10,978  |       |  | $ |      |  |  | $ | 223,390    | 
|U.S. Government agencies and corporations    |  |                   | 28,333,379 |            |  |            | 883,621 |       |  |   |      |  |  |   | 29,217,000 | 
|States and political
subdivisions-tax-exempt |  |                   | 5,171,944  |            |  |            | 382,444 |       |  |   |      |  |  |   | 5,554,388  | 
|States and political subdivisions-taxable    |  |                   | 4,380,149  |            |  |            | 88,347  |       |  |   | 8,521 |  |  |   | 4,459,975  | 

5



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##### 



|                           |  |                   |            |            |  |            |           |       |  |   |       |  |  |   |            | 
|-------------------------- |  | ----------------- | ---------- | ---------- |  | ---------- | --------- | ----- |  | - | ----- |  |  | - | ---------- | 
|                           |  | December 31, 2002
|                           |  |                  
|                           |  | Amortized         |            | Unrealized |  | Unrealized |           | Fair 
|                           |  | Cost              |            | Gains      |  | Losses     |           | Value
|                           |  |                   |            |            |  |            |           |      
|Mortgage-backed securities |  |                   | 14,382,946 |            |  |            | 430,131   |       |  |   |      |  |  |   | 14,813,077 | 
|Other investments          |  |                   | 1,486,060  |            |  |            |          |       |  |   |      |  |  |   | 1,486,060  | 
|                           |  |                   |            |            |  |            |           |       |  |   |       |  |  |   |            | 
|                           |  | $                 | 53,966,890 |            |  | $          | 1,795,521 |       |  | $ | 8,521 |  |  | $ | 55,753,890 | 
|                           |  |                   |            |            |  |            |           |       |  |   |       |  |  |   |            | 

Other investments consist of stock in the Independent Bankers Bank of Florida
and the Federal Home Loan Bank of Atlanta.

NOTE 3  LOANS

Loans are reported at the gross amount outstanding, reduced by net deferred
loan costs and fees and an allowance for loan losses. Interest income on loans
is recognized over the terms of the loans based on the unpaid daily principal
amount outstanding. If the collectibility of interest appears doubtful,
accrual thereof is discontinued and all unpaid interest is reversed. Loan
origination fees and direct loan origination costs are deferred and recognized
as an adjustment to income over the life of the related loan on a level-yield
basis. Gains on sales of government guaranteed loans are recognized as income
when the sales occur.

Major classifications of loans are as follows:

|                                                   |                                   |  |                |             |                   |  |            |             | 
|-------------------------------------------------- | --------------------------------- |  | -------------- | ----------- | ----------------- |  | ---------- | ----------- | 
|                                                   |                                   |  | March 31, 2003 |             | December 31, 2002
|                                                   |                                   |  |                |             |                  
|Real estate mortgage loans:                        |                                   |  |                |             |                   |  |            |            
|                                                   | Commercial                        |  | $              | 272,975,416 |                   |  | $          | 265,112,947 | 
|                                                   | Residential                       |  |                | 68,842,399  |                   |  |            | 68,389,247  | 
|                                                   | Farmland                          |  |                | 439,132     |                   |  |            | 442,707     | 
|                                                   | Construction                      |  |                | 16,377,591  |                   |  |            | 14,892,626  | 
|Commercial loans                                   |                                   |  | 48,223,208     |             |                   |  | 48,691,856 |            
|Consumer loans                                     |                                   |  | 8,658,678      |             |                   |  | 9,364,144  |            
|Indirect auto dealer loans                         |                                   |  | 24,867,170     |             |                   |  | 16,854,612 |            
|Agricultural production and other loans to farmers |                                   |  | 508,701        |             |                   |  | 520,537    |            
|Home equity loans                                  |                                   |  | 17,465,527     |             |                   |  | 17,475,539 |            
|                                                   |                                   |  |                |             |                   |  |            |            
|                                                   | Total loans                       |  |                | 458,357,822 |                   |  |            | 441,744,215 | 
|Net deferred loan costs                            |                                   |  | 819,153        |             |                   |  | 783,719    |            
|                                                   |                                   |  |                |             |                   |  |            |            
|                                                   | Loans, net of deferred loan costs |  | $              | 459,176,975 |                   |  | $          | 442,527,934 | 
|                                                   |                                   |  |                |             |                   |  |            |            

NOTE 4  ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is established through a provision for loan
losses charged to expense. The allowance represents an amount which, in
managements judgment, will be adequate to absorb probable losses on existing
loans that may become uncollectible. Managements judgment in determining the
adequacy of the allowance is based on evaluations of the collectibility of
loans and takes into consideration such factors as current economic conditions
that may affect the borrowers ability to pay, overall portfolio quality,
review of specific problem loans, and changes in the nature and volume of the
loan portfolio. Periodic revisions are made to the allowance when
circumstances which necessitate such revisions become known. Recognized losses
are charged to the allowance for loan losses, while subsequent recoveries are
added to the allowance.

As indicated above, the determination of the allowance for loan losses rests
upon managements judgment. Managements judgment is based upon a number of
assumptions about future events, which are believed to be reasonable, but which
may or may not prove valid. Thus there can be no assurance that charge-offs in
future periods will not exceed the allowance for loan losses or that additional
increases in the allowance for loan losses will not be required. In addition,
various regulatory agencies, as an integral part of their examination process,
periodically review our allowance for loan losses. Such agencies may require
us to recognize additions to the allowance based on their judgments about
information available to them at the time of their examination.

Activity in the allowance for loan losses for the three months ended March 31,
2003 and March 31, 2002 follows:

|                                           |  |      |           |      |  |   |           | 
|------------------------------------------ |  | ---- | --------- | ---- |  | - | --------- | 
|                                           |  | 2003 |           | 2002
|                                           |  |      |           |     
|Balance, January 1                         |  | $    | 4,416,499 |      |  | $ | 3,793,842 | 
|Provision charged to expense               |  |      | 330,000   |      |  |   | 135,000   | 
|Loans charged off                          |  |      | (235,171  | )    |  |   |          | 
|Recoveries of loans previously charged off |  |      | 2,069     |      |  |   | 4,474     | 
|                                           |  |      |           |      |  |   |           | 
|Balance, March 31                          |  | $    | 4,513,397 |      |  | $ | 3,933,316 | 
|                                           |  |      |           |      |  |   |           | 

6



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##### 



NOTE 5  EARNINGS PER SHARE AND COMMON STOCK

Basic earnings per share have been computed based on the weighted average
number of common equivalent shares outstanding during the period. Stock
options are considered to be common stock equivalents for purposes of
calculating diluted earnings per share.

The reconciliation of basic earnings per share to diluted earnings per share is
as follows:

|                                           |                                  |                                   |   |              |           |               |  |                  |           |  |   |       |      | 
|------------------------------------------ | -------------------------------- | --------------------------------- | - | ------------ | --------- | ------------- |  | ---------------- | --------- |  | - | ----- | ---- | 
|                                           |                                  |                                   |   | Net Earnings |           | Common Shares |  | Per Share Amount
|                                           |                                  |                                   |   |              |           |               |  |                 
|For the three months ended March 31, 2003: |                                  |                                   |   |              |           |               |  |                  |           |  |   |      
|                                           | Basic earnings per common share  |                                   | $ | 1,189,269    |           |               |  | 4,050,186        |           |  | $ | 0.29  |     
|                                           | Effect of dilutive stock options |                                   |   |             |           |               |  | 177,043          |           |  |   | (0.01 | )   
|                                           |                                  |                                   |   |              |           |               |  |                  |           |  |   |      
|                                           |                                  | Diluted earnings per common share |   | $            | 1,189,269 |               |  |                  | 4,227,229 |  |   | $     | 0.28 | 
|                                           |                                  |                                   |   |              |           |               |  |                  |           |  |   |      
|For the three months ended March 31, 2002: |                                  |                                   |   |              |           |               |  |                  |           |  |   |      
|                                           | Basic earnings per common share  |                                   | $ | 1,190,918    |           |               |  | 3,952,229        |           |  | $ | 0.30  |     
|                                           | Effect of dilutive stock options |                                   |   |             |           |               |  | 149,828          |           |  |   | (0.01 | )   
|                                           |                                  |                                   |   |              |           |               |  |                  |           |  |   |      
|                                           |                                  | Diluted earnings per common share |   | $            | 1,190,918 |               |  |                  | 4,102,057 |  |   | $     | 0.29 | 
|                                           |                                  |                                   |   |              |           |               |  |                  |           |  |   |      

NOTE 6  STOCK BASED COMPENSATION

Under the Banks 1994 Incentive Stock Option and Nonstatutory Stock Option Plan
(the Plan) as amended and restated as of August 31, 1996, the Company may
grant stock options to persons who are now or who during the term of the Plan
become directors, officers, or key executives as defined by the Plan. Stock
options granted under the Plan may either be incentive stock options or
nonqualified stock options for federal income tax purposes. The Companys
Board of Directors may grant nonqualified stock options to any director, and
incentive stock options or nonqualified stock options to any officer, key
executive, administrative, or other employee including an employee who is a
director of the Company. Subject to the provisions of the Plan, the maximum
number of shares of Company common stock that may be optioned or sold is
978,000 shares. Such shares may be treasury, or authorized but unissued,
shares of common stock of the Company. If options granted under the Plan
expire or terminate for any reason without having been exercised in full, the
shares not purchased shall again be available for option for the purposes of
the Plan.

Total options granted, exercised, and cancelled/expired during the three months
ended March 31, 2003, were 19,500, 78,800, and 0, respectively. As of March
31, 2003, 507,905 options for shares were outstanding.

As permitted by Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation (Statement No. 123), the Company
accounts for its stock option plan under the recognition and measurement
principles of Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB 25), and its related interpretations. Because all
options granted under the Companys plan had an exercise price equal to the
market value of the underlying common stock on the date of grant, no
stock-based compensation cost is reflected in net income under the Companys
application of APB 25. Additionally, the Company did not issue any options to
non-employees who were not directors for the three months ended March 31, 2003
and 2002.

The following table presents the effect on net income and net income per share
if the Company had recognized compensation expense under the fair value
recognition provisions of Statement No. 123 for the three months ended March
31:

|                                                                                                     |                       |   |           |      |      |   |           |      | 
|---------------------------------------------------------------------------------------------------- | --------------------- | - | --------- | ---- | ---- | - | --------- | ---- | 
|                                                                                                     |                       |   | 2003      |      | 2002
|                                                                                                     |                       |   |           |      |     
|Net income, as reported                                                                              |                       | $ | 1,189,269 |      |      | $ | 1,190,918 |     
|Stock-based employee and director compensation
expense determined under fair value basis, net
of tax |                       |   | 23,505    |      |      |   | 14,063    |     
|                                                                                                     |                       |   |           |      |      |   |           |     
|Pro forma net income                                                                                 |                       | $ | 1,165,764 |      |      | $ | 1,176,855 |     
|                                                                                                     |                       |   |           |      |      |   |           |     
|Earnings per share:                                                                                  |                       |   |           |      |      |   |           |     
|                                                                                                     | Basic  as reported   |   | $         | 0.29 |      |   | $         | 0.30 | 
|                                                                                                     | Basic  pro forma     |   |           | 0.29 |      |   |           | 0.30 | 
|                                                                                                     | Diluted  as reported |   |           | 0.28 |      |   |           | 0.29 | 
|                                                                                                     | Diluted  pro forma   |   |           | 0.28 |      |   |           | 0.29 | 

7



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##### 



The fair value of each option is estimated as of the date of grant using the
Black-Scholes Option Pricing Model and the following weighted average
assumptions for options granted in the three months ended March 31:

|                                                           |  |         |      |         |  |              |      |  
|---------------------------------------------------------- |  | ------- | ---- | ------- |  | ------------ | ---- | -
|                                                           |  | 2003    |      | 2002   
|                                                           |  |         |      |        
|Dividend yield                                             |  |         | 2.8  | %       |  |              | 3.2  | %
|Risk-free interest rate                                    |  |         | 4.0  | %       |  | 4.4% to 5.4%
|Expected lives                                             |  | 9 years |      | 9 years
|Volatility                                                 |  |         | .28  |         |  |              | .29  |  
|Weighted average fair value of options granted during year |  | $       | 4.69 |         |  | $            | 3.61 |  

NOTE 7  RECENT ACCOUNTING PRONOUNCEMENTS

During October 2002, the Financial Accounting Standards Board issued SFAS 147,
Acquisitions of Certain Financial Institutions. This statement removes
acquisitions of financial institutions, except for transactions between two or
more mutual enterprises, from the scope of SFAS 72 and Interpretation 9 and
requires these transactions to be accounted for in accordance with SFAS 141,
Business Combinations, and SFAS 142, Goodwill and Other Intangible Assets.
In addition, the provisions of this statement amend the scope of SFAS 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, to include
long-term customer-relationship intangible assets such as depositor- and
borrower-relationship intangible assets and credit cardholder intangible
assets. This statement is effective for acquisitions on or after October 1,
2002. The provisions related to the impairment and disposal accounting for
certain acquired long-term customer-relationship intangible assets were
effective on October 1, 2002. Transition provisions for previously recognized
unidentifiable intangible assets were effective on October 1, 2002. The
Company has determined that adoption of this statement will not have a material
impact on its financial statements.

In December 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure (Statement No. 148). Statement No.
148 amends Statement No. 123, to provide alternative methods of transition to
Statement No. 123s fair value method of accounting for stock-based employee
compensation. Statement No. 148 also amends the disclosure provision of
Statement No. 123 and Accounting Principles Board Opinion No. 28, Interim
Financial Reporting, to require disclosure of the effects of an entitys
accounting policy with respect to stock-based employee compensation on reported
net income and earnings per share in the summary of significant accounting
policies within annual and interim financial statements. While Statement No.
148 does not amend Statement No. 123 to require companies to account for
employee stock options using the fair value method, the disclosure provisions
of Statement No. 148 are applicable to all companies with stock-based employee
compensation, regardless of whether they account for that compensation using
the fair value method of Statement No. 123 or the intrinsic value method of APB
25. The Company has adopted the required disclosures in the Notes herein.

In November 2002, the Financial Accounting Standards Board issued FASB
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others
(Interpretation No. 45), which addresses the accounting for and disclosures
of guarantees. Interpretation No. 45 requires a guarantor to recognize a
liability for the fair value of a guarantee at inception. The recognition of
the liability is required even if it is not probable that payments will be
required under the guarantee. The disclosure requirements are effective for
interim and annual financial statements ending after December 15, 2002. In
accordance with Interpretation No. 45, the Company will apply the initial
recognition and measurement provisions on a prospective basis for all
guarantees within the scope of Interpretation No. 45 issued or modified after
December 31, 2002. The Company has determined that adoption of this statement
will not have a material impact on its financial statements.

NOTE 8  SEGMENT REPORTING

TIB Financial Corp. has three reportable segments: community banking, merchant
bankcard processing, and insurance sales. The community banking segments
business is to attract deposits from the public and to use such deposits to
make real estate, business and consumer loans in its primary service area. The
merchant bankcard processing segment processes credit card transactions for
local merchants. The insurance agency offers a full line of commercial and
residential coverage as well as life, health and annuities.

Segment information is presented in accordance with SFAS 131, Disclosures
about Segments of an Enterprise and Related Information. This standard is
based on a management approach, which requires segmentation based upon the
Companys internal organization and disclosure of operating results based upon
internal accounting methods.

8



---



##### 



The results of the Companys segments are as follows:

|                              |  |           |             |            |  |          |           |           |  |        |           |  |  |   |          |   |  |   |             | 
|----------------------------- |  | --------- | ----------- | ---------- |  | -------- | --------- | --------- |  | ------ | --------- |  |  | - | -------- | - |  | - | ----------- | 
|                              |  |           |             |            |  | Merchant |           | Insurance |  | Parent |           |  |  |  
|Three months ended            |  | Community |             | Bankcard   |  | Agency   |           | And       |  |        |           | 
|March 31, 2003                |  | Banking   |             | Processing |  | Sales    |           | Other     |  | Totals
|                              |  |           |             |            |  |          |           |           |  |       
|Interest income               |  | $         | 8,290,083   |            |  | $        |          |           |  | $      |          |  |  | $ |         |   |  | $ | 8,290,083   | 
|Interest expense              |  |           | 2,059,269   |            |  |          |          |           |  |        |          |  |  |   | 397,594  |   |  |   | 2,456,863   | 
|                              |  |           |             |            |  |          |           |           |  |        |           |  |  |   |          |   |  |   |             | 
|Net interest income           |  |           | 6,230,814   |            |  |          |          |           |  |        |          |  |  |   | (397,594 | ) |  |   | 5,833,220   | 
|Other income                  |  |           | 1,612,970   |            |  |          | 1,378,073 |           |  |        | 436,420   |  |  |   | 86,958   |   |  |   | 3,514,421   | 
|Depreciation and amortization |  |           | 469,832     |            |  |          | 11,246    |           |  |        | 13,561    |  |  |   | 1,220    |   |  |   | 495,859     | 
|Other expense                 |  |           | 5,357,916   |            |  |          | 1,128,237 |           |  |        | 378,994   |  |  |   | 144,066  |   |  |   | 7,009,213   | 
|                              |  |           |             |            |  |          |           |           |  |        |           |  |  |   |          |   |  |   |             | 
|Pretax segment profit (loss)  |  | $         | 2,016,036   |            |  | $        | 238,590   |           |  | $      | 43,865    |  |  | $ | (455,922 | ) |  | $ | 1,842,569   | 
|                              |  |           |             |            |  |          |           |           |  |        |           |  |  |   |          |   |  |   |             | 
|Segment Assets                |  | $         | 618,663,944 |            |  | $        | 61,652    |           |  | $      | 2,207,871 |  |  | $ | 588,703  |   |  | $ | 621,522,170 | 

|                              |  |           |             |            |  |          |           |           |  |        |           |  |  |   |           |   |  |   |             | 
|----------------------------- |  | --------- | ----------- | ---------- |  | -------- | --------- | --------- |  | ------ | --------- |  |  | - | --------- | - |  | - | ----------- | 
|                              |  |           |             |            |  | Merchant |           | Insurance |  | Parent |           |  |  |  
|Three months ended            |  | Community |             | Bankcard   |  | Agency   |           | and       |  |        |           | 
|March 31, 2002                |  | Banking   |             | Processing |  | Sales    |           | Other     |  | Totals
|                              |  |           |             |            |  |          |           |           |  |       
|Interest income               |  | $         | 7,532,564   |            |  | $        |          |           |  | $      |          |  |  | $ | 8,799     |   |  | $ | 7,541,363   | 
|Interest expense              |  |           | 2,174,668   |            |  |          |          |           |  |        |          |  |  |   | 404,808   |   |  |   | 2,579,476   | 
|                              |  |           |             |            |  |          |           |           |  |        |           |  |  |   |           |   |  |   |             | 
|Net interest income           |  |           | 5,357,896   |            |  |          |          |           |  |        |          |  |  |   | (396,009  | ) |  |   | 4,961,887   | 
|Other income                  |  |           | 1,318,494   |            |  |          | 1,333,336 |           |  |        | 399,893   |  |  |   | 89,653    |   |  |   | 3,141,376   | 
|Depreciation and amortization |  |           | 431,471     |            |  |          | 10,500    |           |  |        | 12,781    |  |  |   | 1,303     |   |  |   | 456,055     | 
|Other expense                 |  |           | 4,254,447   |            |  |          | 1,082,664 |           |  |        | 349,549   |  |  |   | 123,230   |   |  |   | 5,809,890   | 
|                              |  |           |             |            |  |          |           |           |  |        |           |  |  |   |           |   |  |   |             | 
|Pretax segment profit (loss)  |  | $         | 1,990,472   |            |  | $        | 240,172   |           |  | $      | 37,563    |  |  | $ | (430,889  | ) |  | $ | 1,837,318   | 
|                              |  |           |             |            |  |          |           |           |  |        |           |  |  |   |           |   |  |   |             | 
|Segment Assets                |  | $         | 527,293,330 |            |  | $        | 83,849    |           |  | $      | 2,260,005 |  |  | $ | 1,016,561 |   |  | $ | 530,653,745 | 

The Company discontinued separate reporting of its government guaranteed loan
sales and servicing segment in 2003. This segment is now included as part of
the Community Banking segment above.

NOTE 9  GOODWILL AND INTANGIBLE ASSETS

In accordance with SFAS 142, the following information is presented on the
Companys goodwill and intangible assets:

|                            |       |                |           |              |  |                |           |           |  |   |           |           | 
|--------------------------- | ----- | -------------- | --------- | ------------ |  | -------------- | --------- | --------- |  | - | --------- | --------- | 
|Amortized Intangible Assets |       | Gross Carrying |           | Accumulated  |  |                |           |          
|at March 31, 2003:          |       | Amount         |           | Amortization |  | Net Book Value
|                            |       |                |           |              |  |               
|Core Deposit Intangible     |       | $              | 2,941,234 |              |  | $              | 1,071,584 |           |  | $ | 1,869,650 |          
|Excess Servicing Fees       |       |                | 88,917    |              |  |                | 52,666    |           |  |   | 36,251    |          
|                            |       |                |           |              |  |                |           |           |  |   |           |          
|                            | Total |                | $         | 3,030,151    |  |                | $         | 1,124,250 |  |   | $         | 1,905,901 | 
|                            |       |                |           |              |  |                |           |           |  |   |           |          

Intangible amortization expense totaled $73,017 for the three months ended
March 31, 2003.

There were no changes in the carrying amount of goodwill for the three months
ended March 31, 2003. The components of goodwill were as follows:

9



---



##### 



|                                                 |  |                     |         |                  |  |                    |           |        |  |   |        |  |  |   |           | 
|------------------------------------------------ |  | ------------------- | ------- | ---------------- |  | ------------------ | --------- | ------ |  | - | ------ |  |  | - | --------- | 
|                                                 |  | Government          |         |                  |  |                    |           |        |  |   |        |  |  |  
|                                                 |  | Guaranteed Loan     |         | Insurance Agency |  | Investment in ERAS |           |        |  |  
|                                                 |  | Sales and Servicing |         | Sales            |  | JV (a)             |           | Totals
|                                                 |  |                     |         |                  |  |                    |           |        | 
|Balance as of
January 1, 2003 and
March 31, 2003 |  | $                   | 155,232 |                  |  | $                  | 2,010,211 |        |  | $ | 68,581 |  |  | $ | 2,234,024 | 
|                                                 |  |                     |         |                  |  |                    |           |        |  |   |        |  |  |   |           | 



---

|(a) |  | Investment in ERAS JV is reported as Parent and Other in the
segment reporting table in Note 8.
|--- |  | -------------------------------------------------------------------------------------------------

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

Certain of the matters discussed under the caption Managements Discussion and
Analysis of Financial Condition and Results of Operations and elsewhere in
this Form 10-Q may constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act and as such may involve known
and unknown risk, uncertainties and other factors which may cause the actual
results, performance or achievements of TIB Financial Corp. to be materially
different from future results described in such forward-looking statements.
Actual results may differ materially from the results anticipated in these
forward-looking statements due to a variety of factors, including, without
limitation: the effects of future economic conditions; governmental monetary
and fiscal policies, as well as legislative and regulatory changes; the risks
of changes in interest rates on the level and composition of deposits, loan
demand, and the values of loan collateral, and interest rate risks; the effects
of competition from other commercial banks, thrifts, consumer finance
companies, and other financial institutions operating in the Companys market
area and elsewhere. All forward-looking statements attributable to the Company
are expressly qualified in their entirety by these cautionary statements. The
Company disclaims any intent or obligation to update these forward-looking
statements, whether as a result of new information, future events or otherwise.

The following discussion addresses the factors that have affected the financial
condition and results of operations of TIB Financial Corp. (the Company) as
reflected in the unaudited consolidated statement of condition as of March 31,
2003, and statement of income for the three months ended March 31, 2003.

The Companys net income of $1,189,269 for the first quarter of 2003 was a 0.1%
decrease compared to $1,190,918 for the same period last year. The $1,649
decrease in net income is attributed to the net of the following: an increase
of $676,333 or 14.0%, in net interest income after provision for loan losses;
an increase of $373,045, or 11.9%, in other income; an increase in other
expense of $1,044,127, or 17.0%; and an increase in income tax expense of
$6,900 or 1.1%. Basic and diluted earnings per share for the first quarter of 2003 were $0.29
and $0.28 respectively as compared to $0.30 and $0.29 per share in the previous
years quarter.

Book value per share increased to $8.45 at March 31, 2003 from $8.30 at
December 31, 2002. The Company paid a quarterly dividend of $0.11 per share
in the first quarter of 2003 and $0.1075 per share in the first quarter of
2002.

Performance of banks is often measured by various ratio analyses. Two widely
recognized indicators are return on average equity and return on average
assets. Annualized return on average equity for the three months ended March
31, 2003 was 13.91% on average equity of $34,199,000, compared to 16.27% on
average equity of $29,286,000 for the same period in 2002. Annualized return
on average assets of $582,528,000 for the three months ended March 31, 2003 was
0.82%, compared to 0.94% on average assets of $508,007,000 for the same period
in 2002.

The Companys expansion into Southwest Florida began in 2001 with the opening
of two new branch facilities. On July 16, 2001, its office on J & C Boulevard
in Naples opened and is located in an industrial park and trade center. This
facility is targeted to serve the small to midsize commercial customer and
houses the commercial lending support offices for the area. On December 3,
2001, a full service retail branch opened in Bonita Springs and is situated in
the fast growing area north of Naples in southern Lee County. On November 25,
2002, we opened our headquarters office for Southwest Florida at 599 Ninth
Street North in Naples, Florida. Opening new branch facilities is dilutive to
earnings in the near term but is a factor in achieving sustainable long-term
growth.

Net interest income is one measurement of how management has balanced the
Companys interest rate sensitive assets and liabilities. The Companys net
interest income is its principal source of income. Interest earning assets for
the Company include loans, federal funds sold, interest bearing deposits in
other banks, and investment securities. The Companys interest-bearing
liabilities include its deposits, federal funds purchased, notes payable
related to Company shares repurchased, trust preferred securities, advances
from the Federal Home Loan Bank, and other short-term borrowings. Net interest
income increased $871,333, or 17.6%, to $5.8 million, in the three months ended
March 31, 2003 as compared to the same period last year. The prime rate as
published in the Wall Street Journal began 2002 at 4.75% and by November 2002
it had declined to 4.25%. Many of the Banks loans are indexed to this
floating rate which has been stable at 4.25% since November 2002. The lower
level of prime rate in the first quarter of 2003 compared to the comparative
quarter in 2002 did result in a lower average yield in the loan portfolio,
however, increased volumes more than compensated for this allowing for the
reported increase in

10



---



##### 



interest income. In addition to this increase in interest income, the Company
has been able to reprice maturing high-rate certificates of deposit and other
funding sources resulting in a reduction in interest expense compared to the
prior year. The average yield on interest earning assets for the first three
months of 2003 was 6.47% which was a decrease of 28 basis points compared to
the 6.75% yield earned during the first three months of 2002. The average cost
of interest bearing deposits declined 41 basis points from 2.45% during the
first three months of 2002 to 2.04% for the comparable period in 2003, and the
rate of all interest bearing liabilities decreased 43 basis points, from 2.73%
in 2002 to 2.30% in 2003. The Companys net interest margin increased to 4.56%
in the first three months of 2003 compared to 4.45% in the first three months
of 2002.

The following table presents average balances of the Company, the
taxable-equivalent interest earned, and the rate paid thereon during the three
months ended March 31, 2003 and March 31, 2002.

|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |      |      |      |  
|--------------------------------------------------------------- | --------------------------------------- | -------------------------- | ---------------------------------------- | ------- | ------- | ------- | ------- | -------- | ------ | ------- | ------- | ----- | ------- | ---- | ------- | ------ | ------- | ------- | ----- | --- | ----- | ----- | ---- | ---- | ---- | ---- | -
|                                                                |                                         |                            |                                          |         |         |         |         |          | 2003   |         |         |       |         |      |         |        |         |         | 2002  |     |       |       |     
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |     
|                                                                |                                         |                            |                                          |         | AVERAGE |         | INCOME/ |          | YIELDS |         | AVERAGE |       | INCOME/ |      | YIELDS 
|(Dollars in thousands)                                          |                                         | BALANCES                   |                                          | EXPENSE |         | RATES   |         | BALANCES |        | EXPENSE |         | RATES
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |      
|                                                                | Interest-earning assets:                |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |      |     
|                                                                |                                         |                            | Loans (1)(2)                             |         | $       | 452,579 |         |          | $      | 7,579   |         |       |         | 6.79 | %       |        | $       | 384,315 |       |     | $     | 6,644 |      |      |      | 7.01 | %
|                                                                |                                         |                            | Investment securities  taxable          |         |         | 48,931  |         |          |        | 608     |         |       |         | 5.04 | %       |        |         | 50,908  |       |     |       | 776   |      |      |      | 6.18 | %
|                                                                |                                         |                            | Investment securities  tax exempt (2)   |         |         | 5,382   |         |          |        | 93      |         |       |         | 7.00 | %       |        |         | 5,596   |       |     |       | 101   |      |      |      | 7.34 | %
|                                                                |                                         |                            | Interest bearing deposits in other banks |         |         | 154     |         |          |        | 1       |         |       |         | 1.51 | %       |        |         | 406     |       |     |       | 2     |      |      |      | 1.71 | %
|                                                                |                                         | Federal funds sold         |                                          |         | 14,644  |         |         |          | 42     |         |         |       | 1.16    | %    |         |        | 14,263  |         |       |     | 59    |       |      |      | 1.68 | %   
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Total interest-earning assets                                   |                                         |                            | 521,690                                  |         |         |         | 8,323   |          |        |         | 6.47    | %     |         |      | 455,488 |        |         |         | 7,582 |     |       |       | 6.75 | %   
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Non-interest-earning assets:                                    |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|                                                                | Cash and due from banks                 |                            |                                          | 16,120  |         |         |         |          |        |         |         |       |         |      |         | 13,875 |         |         |       |     |       |       |      |      |     
|                                                                | Investment in ERAS                      |                            |                                          | 124     |         |         |         |          |        |         |         |       |         |      |         | 255    |         |         |       |     |       |       |      |      |     
|                                                                | Premises and equipment, net             |                            |                                          | 18,340  |         |         |         |          |        |         |         |       |         |      |         | 17,559 |         |         |       |     |       |       |      |      |     
|                                                                | Allowances for loan losses              |                            |                                          | (4,447  | )       |         |         |          |        |         |         |       |         |      |         | (3,841 | )       |         |       |     |       |       |      |      |     
|                                                                | Other assets                            |                            |                                          | 30,701  |         |         |         |          |        |         |         |       |         |      |         | 24,671 |         |         |       |     |       |       |      |      |     
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Total non-interest earning assets                               |                                         |                            | 60,838                                   |         |         |         |         |          |        |         |         |       |         |      | 52,519  |        |         |         |       |     |       |       |      |     
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Total assets                                                    |                                         | $                          | 582,528                                  |         |         |         |         |          |        |         |         |       |         | $    | 508,007 |        |         |         |       |     |       |       |      |     
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|                                                                | Interest-bearing liabilities:           |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |      |     
|                                                                |                                         | Interest bearing deposits: |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |      |      |     
|                                                                |                                         | NOW accounts               |                                          | $       | 53,796  |         |         |          | 58     |         |         |       | 0.44    | %    |         | $      | 49,987  |         |       |     | 71    |       |      |      | 0.57 | %   
|                                                                |                                         | Money market               |                                          |         | 130,597 |         |         |          | 345    |         |         |       | 1.07    | %    |         |        | 128,584 |         |       |     | 412   |       |      |      | 1.30 | %   
|                                                                |                                         | Savings deposits           |                                          |         | 32,198  |         |         |          | 47     |         |         |       | 0.60    | %    |         |        | 27,826  |         |       |     | 53    |       |      |      | 0.77 | %   
|                                                                |                                         | Other time deposits        |                                          |         | 176,583 |         |         |          | 1,529  |         |         |       | 3.51    | %    |         |        | 136,960 |         |       |     | 1,535 |       |      |      | 4.55 | %   
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Total interest-bearing deposits                                 |                                         |                            | 393,174                                  |         |         |         | 1,979   |          |        |         | 2.04    | %     |         |      | 343,357 |        |         |         | 2,071 |     |       |       | 2.45 | %   
|                                                                | Other interest-bearing liabilities:     |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |      |     
|                                                                | Notes payable                           |                            |                                          | 5,250   |         |         |         | 119      |        |         |         | 9.16  | %       |      |         | 5,250  |         |         |       | 119 |       |       |      | 9.16 | %   
|                                                                | Short-term borrowings and FHLB advances |                            |                                          | 22,419  |         |         |         | 80       |        |         |         | 1.44  | %       |      |         | 21,555 |         |         |       | 104 |       |       |      | 1.95 | %   
|                                                                | Trust preferred securities              |                            |                                          | 13,000  |         |         |         | 279      |        |         |         | 8.70  | %       |      |         | 13,000 |         |         |       | 285 |       |       |      | 8.91 | %   
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Total interest-bearing liabilities                              |                                         |                            | 433,843                                  |         |         |         | 2,457   |          |        |         | 2.30    | %     |         |      | 383,162 |        |         |         | 2,579 |     |       |       | 2.73 | %   
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Non-interest bearing liabilities and
stockholders equity:      |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|                                                                | Demand deposits                         |                            |                                          | 107,180 |         |         |         |          |        |         |         |       |         |      |         | 90,105 |         |         |       |     |       |       |      |      |     
|                                                                | Other liabilities                       |                            |                                          | 7,306   |         |         |         |          |        |         |         |       |         |      |         | 5,454  |         |         |       |     |       |       |      |      |     
|                                                                | Stockholders equity                    |                            |                                          | 34,199  |         |         |         |          |        |         |         |       |         |      |         | 29,286 |         |         |       |     |       |       |      |      |     
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Total non-interest bearing liabilities and
stockholders equity |                                         |                            | 148,685                                  |         |         |         |         |          |        |         |         |       |         |      | 124,845 |        |         |         |       |     |       |       |      |     
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Total liabilities and stockholders equity                      |                                         | $                          | 582,528                                  |         |         |         |         |          |        |         |         |       |         | $    | 508,007 |        |         |         |       |     |       |       |      |     
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Interest rate spread                                            |                                         |                            |                                          |         |         |         |         |          |        |         | 4.17    | %     |         |      |         |        |         |         |       |     |       |       | 4.02 | %   
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Net interest income                                             |                                         |                            |                                          |         |         | $       | 5,866   |          |        |         |         |       |         |      |         |        |         | $       | 5,003 |     |       |       |      |     
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     
|Net interest margin (3)                                         |                                         |                            |                                          |         |         |         |         |          |        |         | 4.56    | %     |         |      |         |        |         |         |       |     |       |       | 4.45 | %   
|                                                                |                                         |                            |                                          |         |         |         |         |          |        |         |         |       |         |      |         |        |         |         |       |     |       |       |      |     



---

|(1) |  | Average loans include non-performing loans.
|--- |  | -------------------------------------------

11



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##### 



|(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.                                                                                                                         

The table below details the components of the changes in net interest income.
For each major category of interest-earning assets and interest-bearing
liabilities, information is provided with respect to changes due to average
volumes, changes due to rates, with the changes in both volumes and rates
allocated to these two categories based on the proportionate absolute changes
in each category.

|                                         |                        |         |                           |         |  |            |        |        |   |   |      |      |  
|---------------------------------------- | ---------------------- | ------- | ------------------------- | ------- |  | ---------- | ------ | ------ | - | - | ---- | ---- | -
|                                         |                        |         | 2003 compared to 2002 (1)
|                                         |                        |         | Due to changes in        
|                                         |                        |         |                          
|                                         |                        |         |                           |         |  |            |        |        |   |   | Net 
|(In thousands)                           |                        | Average |                           | Average |  | Increase  
|INTEREST INCOME                          |                        | Volume  |                           | Rate    |  | (Decrease)
|                                         |                        |         |                           |         |  |           
|Loans (2)                                |                        | $       | 2,231                     |         |  | $          | (1,296 | )      |   | $ | 935  |     
|Investment Securities (2)                |                        |         | (33                       | )       |  |            | (143   | )      |   |   | (176 | )   
|Interest bearing deposits in other banks |                        |         | (1                        | )       |  |            |       |        |   |   | (1   | )   
|Federal Funds sold                       |                        |         | 10                        |         |  |            | (27    | )      |   |   | (17  | )   
|                                         |                        |         |                           |         |  |            |        |        |   |   |      |     
|                                         | Total interest income  |         |                           | 2,207   |  |            |        | (1,466 | ) |   |      | 741  |  
|                                         |                        |         |                           |         |  |            |        |        |   |   |      |     
|INTEREST EXPENSE                         |                        |         |                           |         |  |            |        |        |   |   |      |     
|NOW Accounts                             |                        |         | 30                        |         |  |            | (43    | )      |   |   | (13  | )   
|Money Market                             |                        |         | 42                        |         |  |            | (109   | )      |   |   | (67  | )   
|Savings deposits                         |                        |         | 37                        |         |  |            | (43    | )      |   |   | (6   | )   
|Other time deposits                      |                        |         | 1,588                     |         |  |            | (1,594 | )      |   |   | (6   | )   
|Notes payable                            |                        |         |                          |         |  |            |       |        |   |   |     |     
|Trust preferred securities               |                        |         |                          |         |  |            | (6     | )      |   |   | (6   | )   
|Short-term borrowings and FHLB advances  |                        |         | 26                        |         |  |            | (50    | )      |   |   | (24  | )   
|                                         |                        |         |                           |         |  |            |        |        |   |   |      |     
|                                         | Total interest expense |         |                           | 1,723   |  |            |        | (1,845 | ) |   |      | (122 | )
|                                         |                        |         |                           |         |  |            |        |        |   |   |      |     
|Change in net interest income            |                        | $       | 484                       |         |  | $          | 379    |        |   | $ | 863  |     
|                                         |                        |         |                           |         |  |            |        |        |   |   |      |     



---

|(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.

Based on managements evaluation of specific loans and inherent losses within
the loan portfolio and other factors, the provision for loan losses was
$330,000 for the first quarter of 2003 as compared to $135,000 for the first
quarter of 2002. Gross charged off loans for the first quarter of 2003 were $235,171 with
recoveries of $2,069, compared to $0 in charge offs and $4,474 in recoveries in
the first quarter of 2002. $120,000 of the current year charge off relates to
one commercial loan. The allowance for loan losses amounted to $4,513,397 and
$4,416,499 at March 31, 2003 and December 31, 2002, respectively.

The Companys formalized process for assessing the adequacy of the allowance
for loan losses and the resultant need, if any, for periodic provisions to the
allowance charged to income, includes both individual loan analyses and loan
pool analyses. Individual loan analyses are periodically performed on loan
relationships of a significant size, or when otherwise deemed necessary, and
primarily encompass commercial real estate and other commercial loans. The
result is that commercial real estate loans and commercial loans are divided
into the following risk categories: Pass, Special Mention and Substandard or
worse. When appropriate a specific reserve will be established for individual
loans. Otherwise, the Company allocates an allowance for each risk category.
The allocations are based on factors including perceived economic conditions
(local, national and global), perceived strength of the Companys management,
recent trends in loan loss history, and concentrations of credit.

Home equity loans, residential loans and consumer loans generally are not
analyzed individually. These loans are grouped into pools and assigned risk
categories based on their current payment status and managements assessment of
risk inherent in

12



---



##### 



the various types of loans. As above, when appropriate, a specific reserve
will be established for individual loans. Otherwise, the Company allocates an
allowance for each loan classification. The allocations are based on the same
factors mentioned above.

Based on an analysis performed by management at March 31, 2003, the allowance
for loan losses is considered to be adequate to cover loan losses in the
portfolio as of that date. However, because of the inherent uncertainty of the
assumptions we use in our loan analyses, management cannot assure that loan
losses in future periods will not exceed the allowance for loan losses or that
additional allocations to the allowance will not be required.

Non-performing assets include non-accrual loans, accruing loans contractually
past due 90 days or more, restructured loans and other real estate. Loans are
placed on non-accrual status when management has concerns relating to the
ability to collect the loan principal and interest and generally when such
loans are 90 days or more past due. A loan is considered impaired if it is in
a nonaccruing status. Non-performing assets for the periods ended March 31,
2003 and December 31, 2002 were as follows:

|                                                       |  |                |           |                   |  |   |           |  
|------------------------------------------------------ |  | -------------- | --------- | ----------------- |  | - | --------- | -
|                                                       |  | March 31, 2003 |           | December 31, 2002
|                                                       |  |                |           |                  
|Loans on nonaccrual                                    |  | $              | 206,176   |                   |  | $ | 545,523   |  
|Loans 90 days past due (a)                             |  |                |          |                   |  |   |          |  
|Other real estate owned (b)                            |  |                | 508,190   |                   |  |   | 550,000   |  
|Other assets (b)                                       |  |                | 2,456,445 |                   |  |   | 2,519,022 |  
|                                                       |  |                |           |                   |  |   |           |  
|Total non-performing assets                            |  | $              | 3,170,811 |                   |  | $ | 3,614,545 |  
|                                                       |  |                |           |                   |  |   |           |  
|Percentage of non-performing assets
to total loans (c) |  |                | 0.69      | %                 |  |   | 0.81      | %



---

|(a) |  | Loans 90 days past due exclude loans on nonaccrual that are reported
separately.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | The Bank has made a loan originally totaling $10,000,000 to construct a
lumber mill in northern Florida. Of this amount, $6,400,000 had been sold by
the Bank to other lenders. The loan was partially guaranteed as to principal
and interest by the U.S. Department of Agriculture (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. At
December 31, 2000, the loan was past due greater than 90 days but was still
maintained as an accruing loan because of the USDA guarantee and collateral
value. 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 $1,886,000) based on the fair
value of the underlying-collateral.

The Bank has capitalized liquidation costs and protective advances which they
expect will be fully reimbursed by the USDA. The Bank has sold certain
pieces of equipment associated with the lumber mill property. Proceeds from
these sales were used to reduce the other real estate amount and liquidation
cost amounts recorded on the Banks books. Other real estate recorded on the
Banks books totaled $508,190 and $550,000 at March 31, 2003 and December 31,
2002, respectively. The non guaranteed principal and interest ($1,961,000 at
March 31, 2003 and December 31, 2002) and the capitalized liquidation costs
and protective advance costs totaling approximately $495,000 and $558,000 at
March 31, 2003 and December 31, 2002, respectively are included as other
assets in the table above.

The portion of this loan guaranteed by the USDA was approximately $1.6
million at March 31, 2003 and December 31, 2002, and is accruing interest.
Accrued interest on this loan totals approximately $526,000 and $505,000 at
March 31, 2003 and December 31, 2002, respectively. Under the USDA program,
eligible portions of both principal and interest are covered under the USDA
guarantee. Management believes the present value of all assets pledged as
collateral for this loan exceeds the unpaid amount.

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 property on June 12, 2001, and,
therefore, 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 repossessed
personal property on the Banks books. The Florida Department of Financial
Services granted an extension to the Bank to carry the personal property on
its books until December 11, 2002. The Department has since extended this to
June 11, 2003. There is no assurance that an extension will be granted for
any additional periods, and, therefore, the possibility exists that the non
guaranteed principal and interest totaling $1,961,000 at March 31, 2003, may
need to be charged off for regulatory purposes in June 2003 if the property
has not yet been liquidated. Since we believe this amount is ultimately
realizable, we do not anticipate that this amount will be required to be
written off for financial statement purposes under generally acceptable
accounting principles. Even if the amount was required to be charged off for
regulatory purposes on March 31, 2003, the Bank and

13



---



##### 



Company would have remained well capitalized under the capital adequacy
guidelines established by the federal bank regulators as of that date.



---

|(c) |  | For the purpose of this computation, total loans include other real
estate owned and other assets.
|--- |  | --------------------------------------------------------------------------------------------------

Other income increased $373,045 to $3,514,421 for the three month period ended
March 31, 2003 from $3,141,376 in the comparable period last year. The 11.9%
increase in non interest income is attributable to an increase of $39,930 in
service charges on deposit accounts; an increase of $44,737 in merchant bank
card processing income; a $87,470 increase in gain on sale of government
guaranteed loans; a $242,141 increase in fees on mortgage loans sold; a $36,527
increase in commissions on sales by Keys Insurance; offset by a $68,947
decrease in net investment security gains; a $2,695 decrease in retail
investment services and a $6,118 decrease in other income. The increases in
merchant bank card, commissions on sales by Keys Insurance and fees on mortgage
loans sold are primarily a result of volume increases. The net gain from the
sale of securities will vary based upon the sales and calls of the individual
securities in the investment portfolio. In the first quarter of 2002, the
Company sold two corporate securities which netted a gain of approximately
$65,000.

Other expense increased $1,044,127 or 17.0% to $7,175,072 in the first three
months of 2003 as compared to the prior year period. The increase in non
interest expense is attributable to salaries and employee benefits increasing
$709,292, net occupancy expense increasing $118,739, and other expense
increasing $216,096. A significant portion of these increases are a result of
the continuing expansion in the Southwest Florida market. The Bank added two
new locations in the second half of 2001 and one new location was added in the
fourth quarter of 2002. The addition of these facilities and their continued
growth has caused the Bank to hire additional personnel and incur additional
operating costs.

Total assets at March 31, 2003 were $621,522,170, up 9.6% from total assets of
$567,004,646 at December 31, 2002. Loans net of deferred loan costs increased
$16,649,041 to $459,176,975 for the first three months of 2003 from year end
2002. Also, in the same period, federal funds sold increased $41,816,000, and
investment securities decreased $3,239,604. Asset growth was primarily funded
by an increase in deposits of $63,325,829, or 13.1%. At March 31, 2003, the
Company had $5,004,201 in short-term borrowings compared to $4,578,959 at
December 31, 2002. Short-term borrowings consist of securities sold under
agreements to repurchase and Treasury tax deposits. Advances from the Federal
Home Loan Bank totaled $10 million at March 31, 2003 as compared to $20 million
at December 31, 2002.

On October 31, 2000, the Company purchased Keys Insurance Agency of Monroe
County, Inc. from a Company director. Keys Insurance Agency, Inc. (the new
name subsequent to the purchase) has three offices in the Florida Keys and one
office in Naples. Keys Insurance Agency, Inc. offers a full line of commercial
and residential hazard insurance coverage as well as life and health insurance
and annuities. Total consideration paid at closing for the agency was
$1,870,000. This was comprised of $220,000 in the Companys common stock and
$1,650,000 in cash paid at closing. Under the purchase agreement, annual cash
payments of $110,000 are to be made following each of the first three
anniversaries of the closing date, subject to the agencys ability to achieve
certain earning thresholds. Any of this additional consideration that is paid
at the end of each contingency period, will at that time be recorded as
goodwill and increase the total recorded purchase price of the agency. No
amount was required to be paid in 2001 or 2002.

On September 25, 2001, Keys Insurance Agency, Inc. purchased BonData Group
Limited, Inc., a Ft. Myers, Florida based insurance agency specializing in
surety bond underwriting and placement. Total consideration paid at closing
for the agency was $273,000. This was comprised of approximately $68,000 in
the Companys common stock and approximately $205,000 in cash. Under the
purchase agreement, annual cash payments of $24,000 are to be made following
each of the first two anniversaries of the closing date, subject to the
agencys ability to achieve certain earning thresholds. Any of this additional
consideration that is paid at the end of each contingency period, will at that
time be recorded as goodwill and increase the total recorded purchase price of
the agency. No amount was required to be paid in 2002.

In furtherance of our efforts to generate higher relative yielding assets, the
Bank began a program to acquire indirect automobile loans. After significant
study, we began in April 2002 to put together a department that we feel could
safely acquire and service this type of product. We predominately buy loans
from auto dealers in southwest Florida and they are for the purchase of new or
late model used cars. We serve customers over a broad range of
creditworthiness and the required terms and rates are reflective of those risk
profiles. By the end of 2002, we were buying approximately $4 million per
month of indirect automobile paper and as of March 31, 2003, we had
approximately $24.9 million of indirect loans outstanding.

CAPITAL ADEQUACY

Federal banking regulators have established certain capital adequacy standards
required to be maintained by banks and bank holding companies. The minimum
requirements established in the regulations are set forth in the table below,
along with the actual ratios at March 31, 2003 and December 31, 2002:

14



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##### 



|                                         |              |  |             |     |             |  |                |    |                   |  |  |      |   |  |  |      |  
|---------------------------------------- | ------------ |  | ----------- | --- | ----------- |  | -------------- | -- | ----------------- |  |  | ---- | - |  |  | ---- | -
|                                         |              |  | Well        |     | Adequately  |  |                |    |                   |  |  |      |  
|                                         |              |  | Capitalized |     | Capitalized |  | March 31, 2003 |    | December 31, 2002
|                                         |              |  | Requirement |     | Requirement |  | Actual         |    | Actual           
|                                         |              |  |             |     |             |  |                |    |                  
|Tier 1 Capital (to Average Assets)       |              |  |             |     |             |  |                |    |                   |  |  |      |   |  |  |     
|                                         | Consolidated |  |             | >5  | %           |  |                | >4 | %                 |  |  | 7.1  | % |  |  | 7.1  | %
|                                         | Bank         |  |             | >5  | %           |  |                | >4 | %                 |  |  | 8.1  | % |  |  | 8.3  | %
|Tier 1 Capital (to Risk Weighted Assets) |              |  |             |     |             |  |                |    |                   |  |  |      |   |  |  |     
|                                         | Consolidated |  |             | >6  | %           |  |                | >4 | %                 |  |  | 8.3  | % |  |  | 8.3  | %
|                                         | Bank         |  |             | >6  | %           |  |                | >4 | %                 |  |  | 9.5  | % |  |  | 9.8  | %
|Total Capital (to Risk Weighted Assets)  |              |  |             |     |             |  |                |    |                   |  |  |      |   |  |  |     
|                                         | Consolidated |  |             | >10 | %           |  |                | >8 | %                 |  |  | 10.6 | % |  |  | 10.9 | %
|                                         | Bank         |  |             | >10 | %           |  |                | >8 | %                 |  |  | 10.4 | % |  |  | 10.8 | %

Management believes, as of March 31, 2003, that the Company and the Bank met
all capital requirements to which they are subject. The Company has included
in Tier 1 Capital a portion of the trust preferred securities that were issued
in September 2000 and July 2001.

LIQUIDITY

The goal of liquidity management is to ensure the availability of an adequate
level of funds to meet the loan demand and deposit withdrawal needs of the
Companys customers. The Company manages the levels, types and maturities of
earning assets in relation to the sources available to fund current and future
needs to ensure that adequate funding will be available at all times.

The Bank has invested in Federal Home Loan Bank stock for the purpose of
establishing credit lines with the Federal Home Loan Bank. The credit
availability to the Bank is equal to 14 percent of the Banks total assets as
reported on the most recent quarterly financial information submitted to the
regulators. The credit availability approximated $86.6 million at March 31,
2003, under which $10 million was outstanding. Any advances are secured by the
Banks one-to-four family residential mortgage loans.

The Bank has an unsecured overnight federal funds purchased accommodation up to
a maximum of $7.5 million from its principal correspondent bank. The Bank also
has securities sold under agreements to repurchase with commercial account
holders whereby the Bank sweeps the customers accounts on a daily basis and
pays interest on these amounts. These agreements are collateralized by
investment securities chosen by the Bank.

COMMITMENTS

The Bank is party to financial instruments with off-balance-sheet risk in the
normal course of business to meet the financing needs of its customers. These
financial instruments include commitments to extend credit and standby letters
of credit. These instruments involve, to varying degrees, elements of credit
and interest rate risk in excess of the amount recognized in the consolidated
balance sheets.

The Banks exposure to credit loss in the event of nonperformance by the
customer on the financial instrument for commitments to extend credit and
standby letters of credit is represented by the contractual amounts of those
instruments. The Bank uses the same credit policies in making commitments and
conditional obligations as it does for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require the payment of a fee. At March 31, 2003, total commitments to extend
credit were approximately $56.9 million in unfunded loan commitments.

Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loan facilities to customers. Since most of the letters of credit
are expected to expire without being drawn upon, they do not necessarily
represent future cash requirements. At March 31, 2003, commitments under
standby letters of credit aggregated approximately $2.1 million.

15



---



##### 



The Bank evaluates each customers creditworthiness on a case-by-case basis.
The amount of collateral obtained, if deemed necessary by the Bank upon
extension of credit, is based on managements credit evaluation of the
borrower. Collateral held varies but may include accounts receivable,
inventory, property, plant and equipment, residential real estate and
income-producing commercial properties on those commitments for which
collateral is deemed necessary.

The Company believes the likelihood of the unfunded loan commitments and
unfunded letters of credit either needing to be totally funded or funded at the
same time is low. However, should significant funding requirements occur, we
have available borrowing capacity from various sources as discussed in the
Liquidity section above.

RATE SENSITIVITY

The Companys interest rate sensitivity position at March 31, 2003 is presented
in the table below:

|                                       |  |          |         |        |  |         |        |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|-------------------------------------- |  | -------- | ------- | ------ |  | ------- | ------ | ------ |  | ------ | ------- | ----- |  | - | ------- | - |  | - | ------ | - |  | - | ------- | -
|                                       |  | 3 months |         | 4 to 6 |  | 7 to 12 |        | 1 to 5 |  | Over 5 |         |       |  |  
|(Dollars in thousands)                 |  | or less  |         | Months |  | Months  |        | years  |  | Years  |         | Total
|                                       |  |          |         |        |  |         |        |        |  |        |         |      
|Interest-earning assets:               |  |          |         |        |  |         |        |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Loans                                  |  | $        | 203,501 |        |  | $       | 29,270 |        |  | $      | 36,511  |       |  | $ | 121,165 |   |  | $ | 67,911 |   |  | $ | 458,358 |  
|Investment securities-taxable          |  |          | 7,647   |        |  |         |       |        |  |        | 10,269  |       |  |   | 10,946  |   |  |   | 16,513 |   |  |   | 45,375  |  
|Investment securities-tax exempt       |  |          |        |        |  |         | 128    |        |  |        | 238     |       |  |   | 1,250   |   |  |   | 5,523  |   |  |   | 7,139   |  
|Federal funds sold                     |  |          | 47,488  |        |  |         |       |        |  |        |        |       |  |   |        |   |  |   |       |   |  |   | 47,488  |  
|Interest bearing deposit in other
bank |  |          | 138     |        |  |         |       |        |  |        |        |       |  |   |        |   |  |   |       |   |  |   | 138     |  
|                                       |  |          |         |        |  |         |        |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Total interest-bearing assets          |  |          | 258,774 |        |  |         | 29,398 |        |  |        | 47,018  |       |  |   | 133,361 |   |  |   | 89,947 |   |  |   | 558,498 |  
|                                       |  |          |         |        |  |         |        |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Interest-bearing liabilities:          |  |          |         |        |  |         |        |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|NOW accounts (A)                       |  |          | 23,520  |        |  |         |       |        |  |        |        |       |  |   |        |   |  |   | 35,280 |   |  |   | 58,800  |  
|Money Market                           |  |          | 133,205 |        |  |         |       |        |  |        |        |       |  |   |        |   |  |   |       |   |  |   | 133,205 |  
|Savings Deposits (B)                   |  |          |        |        |  |         |       |        |  |        | 33,270  |       |  |   |        |   |  |   |       |   |  |   | 33,270  |  
|Other time deposits                    |  |          | 34,451  |        |  |         | 27,894 |        |  |        | 34,921  |       |  |   | 103,088 |   |  |   |       |   |  |   | 200,354 |  
|Notes payable                          |  |          |        |        |  |         |       |        |  |        |        |       |  |   |        |   |  |   | 5,250  |   |  |   | 5,250   |  
|Trust preferred securities             |  |          | 5,000   |        |  |         |       |        |  |        |        |       |  |   |        |   |  |   | 8,000  |   |  |   | 13,000  |  
|Other borrowings                       |  |          | 15,004  |        |  |         |       |        |  |        |        |       |  |   |        |   |  |   |       |   |  |   | 15,004  |  
|                                       |  |          |         |        |  |         |        |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Total interest-bearing liabilities     |  |          | 211,180 |        |  |         | 27,894 |        |  |        | 68,191  |       |  |   | 103,088 |   |  |   | 48,530 |   |  |   | 458,883 |  
|                                       |  |          |         |        |  |         |        |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Interest sensitivity gap               |  | $        | 47,594  |        |  | $       | 1,504  |        |  | $      | (21,173 | )     |  | $ | 30,273  |   |  | $ | 41,417 |   |  | $ | 99,615  |  
|                                       |  |          |         |        |  |         |        |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Cumulative interest sensitivity gap    |  | $        | 47,594  |        |  | $       | 49,098 |        |  | $      | 27,925  |       |  | $ | 58,198  |   |  | $ | 99,615 |   |  | $ | 99,615  |  
|                                       |  |          |         |        |  |         |        |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  
|Cumulative sensitivity ratio           |  |          | 8.5     | %      |  |         | 8.8    | %      |  |        | 5.0     | %     |  |   | 10.4    | % |  |   | 17.8   | % |  |   | 17.8    | %
|                                       |  |          |         |        |  |         |        |        |  |        |         |       |  |   |         |   |  |   |        |   |  |   |         |  



---

|(A) |  | 40% of outstanding balance
considered repriceable immediately and 60%
repriceable in the furthest time period.
|--- |  | --------------------------------------------------------------------------------------------------------------
|   
|(B) |  | Savings Deposits considered
repriceable in the one year time horizon.                                         

The Company is cumulatively asset sensitive in each of the timeframes above.
Certain liabilities such as NOW and passbook savings accounts, while
technically subject to immediate repricing in response to changing market
rates, historically do not reprice as quickly nor to the extent as other
interest sensitive accounts. Therefore, to include the entire balance of these
liability accounts in the earliest repricing period would be unrealistic. To
compensate for the fact that changes in general market interest rates will not
be fully reflected in changes in NOW rates, only 40% of NOW balances are
included as immediately rate sensitive based on the Companys own and industry
repricing experience. Also, passbook savings will not reprice as quickly as
market rates and therefore the repricing of savings deposits is included in the
7 to 12 month repricing period, based on the Companys repricing experience.
Because of non-interest bearing liabilities, total interest-earning assets are
substantially greater than the total interest-bearing liabilities and therefore
over time the effects on net interest income from changes in asset yield will
be greater than the change in expense from liability cost. Accordingly, if
market interest rates should decrease, the net interest margin would decrease.
Conversely, if rates increase the net interest margin would over time increase
and this is particularly true over longer time horizons since the Company has
more total assets subject to rate changes than total liabilities that are rate
sensitive.

Even in the near term, the $27.9 million one year cumulative positive
sensitivity gap exaggerates the probable effects on earnings in a rising rate
environment for two reasons. First, the liabilities subject to repricing are
predominately not indexed to

16



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##### 



any specific market rate and therefore offer the Company the opportunity to
delay or diminish any rate repricings. Further, in this current rate
environment, the Bank has been originating loans with interest rate floors.
The effect of this has been to decrease the volatility of net interest margin
and decrease asset sensitivity due to the fact that these loans behave similar
to fixed rate loans in periods over a significant range of interest rate
changes.

Interest-earning assets and other time deposits are presented based on their
contractual terms. It is anticipated that run off in any deposit category will
be approximately offset by new deposit generation. Since the Company has
experienced steady growth in deposits, no net run off in any deposit category
is assumed in the interest rate sensitivity table. It is the Companys policy
to maintain its cumulative one year gap ratio in the 20% to +10% range. At
March 31, 2003, the Company was within this range with a one year cumulative
sensitivity ratio of 5.0%.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

All financial institutions have financial instruments which are subject to
market risk comprised of interest rate risk, foreign currency exchange rate
risk, commodity price risk and other relevant market risks, such as equity
price risks. The Company has assessed its market risk as predominately
interest rate risk.

The following interest rate sensitivity analysis information as of March 31,
2003 was developed using simulation analysis of the Companys sensitivity to
changes in net interest income under varying assumptions for changes in market
interest rates. Specifically, the model derives expected interest income and
interest expense resulting from an immediate and parallel shift in the yield
curve in the amounts shown.

These rate changes are matched with known repricing intervals and assumptions
for new growth net of expected prepayments. The assumptions are based
primarily on experience in the Companys market under varying rate
environments. The imbedded options that the Companys loan customers possess
to refinance are considered for purposes of this analysis and cause the larger
decreases in income in a declining rate scenario versus the income increases in
the same size rising rate scenario.

This analysis intentionally exaggerates interest sensitivity. For the sake of
simplicity and comparability, an immediate change in rates is assumed.
However, any significant change in actual market rates would probably be phased
in over an extended period of time. This phase in would reduce the net
interest income effects for any absolute change in rates. Also, the Company
has been originating adjustable rate commercial loans with interest rate floors
that are currently at rates higher than the index and margin on the loans would
indicate. An example would be a loan at Prime plus 1% but with a 7.0% floor.
The Company currently has in excess of $136 million of these types of loans
where the loan rates are at the floors. The effects of this are twofold.
First, this has benefited our margins currently since we have assets earning
yields higher than would be the case absent the floor rates. Second, in a
declining rate environment and in a limited rising rate environment those
adjustable rate loans act like fixed rate loans. This limits the Companys
loss of interest income when rates decline but does constrain income gains in a
rising rate market. In general, having this significant amount of loans at
their floors reduces the Companys overall rate sensitivity.

The Company attempts to retain interest rate neutrality by generating mostly
adjustable rate loans and managing the securities and Fed Funds positions to
offset the repricing characteristics of the deposit liabilities.

|                                                 |  |                         |        |                |  |                         |        |        |  |       |        |  |  |   |        |   |  |   |        | 
|------------------------------------------------ |  | ----------------------- | ------ | -------------- |  | ----------------------- | ------ | ------ |  | ----- | ------ |  |  | - | ------ | - |  | - | ------ | 
|(Dollars in thousands)                           |  | Interest Rates Decrease |        | Interest Rates |  | Interest Rates Increase
|                                                 |  | 200 BP                  |        | 100 BP         |  | Remain Constant         |        | 100 BP |  | 200BP
|                                                 |  |                         |        |                |  |                         |        |        |  |      
|2003 Interest Income                             |  | $                       | 31,874 |                |  | $                       | 34,152 |        |  | $     | 36,631 |  |  | $ | 38,903 |   |  | $ | 41,508 | 
|2003 Interest Expense                            |  |                         | 7,104  |                |  |                         | 8,210  |        |  |       | 10,257 |  |  |   | 12,652 |   |  |   | 15,047 | 
|                                                 |  |                         |        |                |  |                         |        |        |  |       |        |  |  |   |        |   |  |   |        | 
|Net Interest Income                              |  |                         | 24,770 |                |  |                         | 25,942 |        |  |       | 26,374 |  |  |   | 26,251 |   |  |   | 26,461 | 
|                                                 |  |                         |        |                |  |                         |        |        |  |       |        |  |  |   |        |   |  |   |        | 
|Change in net income
after tax vs
constant rates |  | $                       | (1,001 | )              |  | $                       | (270   | )      |  |       |        |  |  | $ | (77    | ) |  | $ | 54     | 

17



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##### 



Part II.     OTHER INFORMATION

Item 4.     CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

The Company maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the Company files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and
forms of the Securities and Exchange Commission. Based upon their evaluation of
those controls and procedures performed within 90 days of the filing date of
this report, the Chief Executive Officer and Chief Financial Officer of the
Company concluded that the Companys disclosure controls and procedures were
adequate. No significant deficiencies or material weaknesses in the design or
operation of internal controls which could adversely affect the Companys
ability to record, process, summarize, and report financial data have been
identified.

Changes in internal controls

The Company made no significant changes in its internal controls or in other
factors that could significantly affect these controls subsequent to the date
of the evaluation of those controls by the Chief Executive Officer and Chief
Financial Officer; including any corrective actions with regard to
significant deficiencies and material weaknesses.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K



| | (a) |  | Exhibit 99.1  Report of Independent Certified Public
Accountants                                                        
| | --- |  | -------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Exhibit 99.2  Chief Executive Officers certification required
under Section 906 of Sarbanes-Oxley Act of 2002          
|
| | (c) |  | Exhibit 99.3  Chief Financial Officers certification required
under Section 906 of Sarbanes-Oxley Act of 2002          
| | (d) |  | On February 26, 2003, the Company issued a press release announcing
certain financial results and additional information.

SIGNATURES

In accordance with 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.

|      |  |             |  |                                                                                          
|----- |  | ----------- |  | -----------------------------------------------------------------------------------------
|      |  |             |  | TIB FINANCIAL CORP.                                                                      
|     
|Date: |  | May 9, 2003 |  | /s/ Edward V. LettEdward V. Lett
President and Chief Executive Officer                   
|     
|      |  |             |  | /s/ David P. JohnsonDavid P. Johnson
Executive Vice President and Chief Financial Officer

18



---



##### 



CERTIFICATIONS

I, Edward V. Lett, President and CEO, certify that:



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

|      |  |             |  |                                                                        
|----- |  | ----------- |  | -----------------------------------------------------------------------
|Date: |  | May 9, 2003 |  |                                                                        
|     
|      |  |             |  | /s/ Edward V. LettEdward V. Lett,
President and Chief Executive Officer

19



---



##### 



I, David P. Johnson, Executive Vice President and CFO, certify that:



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

|                  |  |                                                                                           
|----------------- |  | ------------------------------------------------------------------------------------------
|Date: May 9, 2003 |  |                                                                                           
|                 
|                  |  | /s/ David P. JohnsonDavid P. Johnson,
Executive Vice President and Chief Financial Officer

20